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AliN
February 23, 2018
Solved

PayPal Fees

  • February 23, 2018
  • 1 reply
  • 35 views

Hello,

 

I have a question about PayPal Fees and how to record them properly.

 

Here my question and workflow:

 

 

  1. Customer calls and places an order (invoice) or places an order directly via online store (bigcommerce). For an item that cost $100.00. (Example)

 

  1. I or BigCommerce record this sale with the customers full set of details, Invoice for manual order, sales receipt for bigcommerce automation.

 

  1. Customer pays via PayPal Invoice or Automatically during BigCommerce PayPal Express checkout.

 

  1. We login to PayPal and see that we have $97 per transaction (-$3 less PayPal fee) and transfer the funds over to the bank on a per transaction basis.

 

  1. 2-3 days later our bank shows each fund has been recieved and quickbooks online syncs the payments for $97.

 

 

6. Recording the PayPal Fee per Transaction is the issue, how do you match these amount to the Invoice or Sales receipt and account for the PayPal fees in Quickbooks online? I've seen others with the same question but i don't believe the solutions provided are uptodate and or the appropriate way of accounting for the fees.

      Best answer by john-pero

      Does not matter if it is QB online ir desktop, the procedure is exactly same, correct and up to date.

      1. Sell item for $100

      2. Record received payment of $100 posted to Undeposited Funds

      3. Create deposit selecting the $100 item (or all that are in one deposit as is case with Square)

      4. Add line item negative processing fee for $3

      5. Save net deposit of $97

      6. Accept green match

      Works every time AND IS proper and accepted accounting

      1 reply

      john-pero
      john-peroAnswer
      Level 12
      February 24, 2018

      Does not matter if it is QB online ir desktop, the procedure is exactly same, correct and up to date.

      1. Sell item for $100

      2. Record received payment of $100 posted to Undeposited Funds

      3. Create deposit selecting the $100 item (or all that are in one deposit as is case with Square)

      4. Add line item negative processing fee for $3

      5. Save net deposit of $97

      6. Accept green match

      Works every time AND IS proper and accepted accounting

        R
        redbaron40987
        March 20, 2018

        but what expense category would you use? 

          MichaelDL
          MichaelDL
          Level 4
          August 6, 2018

          Did they answer what expense category?


          Hello and welcome to the Community, @eve.

           

          I'd like to make sure you're on the right path to getting those PayPal fees categorized. Every company is different, and the correct placement of that expense might change based on the nature of your company. While some users might choose a Miscellaneous Expense, a company that uses PayPal quite frequently may consider a dedicated PayPal Fees expense account.

           

          I encourage you to reach out to an accounting professional for help choosing the right account for your business. The Find-A-ProAdvisor site at this link allows you to get in touch with QuickBooks experts in proximity to your ZIP code. Individuals with their profiles published here are certified, knowledgeable, and will certainly have the answers you're looking for.

           

          Please know I'm also available here in the Community should you need anything else at all. Thanks for reaching out, here's to a productive and successful week.

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