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A
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

        B
        Breezy17
        January 11, 2019

        When I follow these steps I am getting a double entry.

         

        I guess I am not understanding the steps.

        I create an Invoice

        The customer pays through PayPal and I deposit the funds in the Undeposited Funds account.

         

        Money is transferred to the business account.

         

        I create a bank deposit less the PayPal fee and associate this with the correct account for the P&L to categorize it. 

        This is where I am seeing entries into both the AR and categorized account, thus creating the double entry of income.

        Also, the transfer of funds from PayPal to the bank account are also creating a double income issue.

         

        I have tried to learn through the multiple responses and I am just turning in circles trying to get this completed.

        Any help would be great as I have tried to locate a step-by-step and have come up empty.

        Thanks so much.

         

         

        A
        AldrinS
        Level 4
        January 12, 2019

        I've got you covered, Breezy17.

         

        I'm here to provide some additional insight on your question regarding the double entry.

         

        I appreciate the details that you provided. However, I just want to clarify if you used the funds you deposited in the Undeposited Funds account when you transferred the money to the business account?

         

        If you didn't, then that would be the most likely reason why your income is doubling. To fix this, we'll need to delete this entry and recreate it using the right accounts. The steps below will walk you through the steps on how to do it:

         

        To delete the deposit

        1. From the List menu, select Chart of Accounts.
        2. Double-click the account where you created the deposit.
        3. Find the entry and double-click it.
        4. Once it's open, click the Edit menu, then select Delete Deposit. You can also press Ctrl + D.
        5. Hit OK when the Delete Transaction window shows up.

        To transfer the money to the business account with the PayPal fee

        1. From the Banking menu, select Make Deposits.
        2. In the Received From field, enter the name of the customer.
        3. When the Payments to Deposit window shows up, select the correct transaction in the Select Payments to Deposit section.
        4. Click OK.
        5. On another line, fill in the appropriate details in the following fields:
          - From Account: Enter the expense account where you record the fees.
          - Amount: Make sure to enter the fee as a negative amount.
        6. Click Save & Close.

         

        For more information about this process, I recommend following this article: Understand how the Undeposited Funds account works

         

        In addition, I also recommend getting in touch with an accounting professional for a personalized opinion. Every business is unique and they can make suggestions for handling these entries. Our Intuit Find-A-ProAdvisor site allows you to find certified professionals in your local area that are sure to have the answers you're looking for.

         

        Please let me know if this helps you correct the double entry, it's my top priority that this gets resolved. Thanks for reaching out, I look forward to hearing from you.

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