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AliN
February 23, 2018
Solved

PayPal Fees

  • February 23, 2018
  • 1 reply
  • 34 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

        D
        Demliew
        September 3, 2018

        Hi John,

         

        I’ve literally tried asking this question to 3 diff customer representatives online and no one seemed to have understood my issue. 

         

        I haven’t tried your method yet but I will on my next invoice I get paid with PayPal. My question is, what do you mean by accept green match? And where am I recording the deposit in? The PP bank account or the account in which my money has been manually transferred to (I.e. actual bank account linked to my QBO)? 

         

        Thanks!

        Demie 

         

        D
        David-212915
        Level 5
        September 4, 2018

        Hello Demliew,

         

        It's nice to have you in the Community.  I'm here to assist with recording your PayPal transactions. 

         

        The instruction of accepting the green match is referring to matching the deposit in QuickBooks Online with the one downloaded from the bank, since the amounts are now the same.  I'm including a helpful link with additional information on this: Add and Match Downloaded Banking Transactions.  Additionally, the transaction would be recorded into the bank account that the money is deposited into.  The following link contains further insight on this process: Enter a Bank Service Fee While Using a Third-Party Merchant Service.

         

        Please let me know if you have any questions about these steps or anything else.  I hope you have a pleasant rest of your week. 
         

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