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AliN
February 23, 2018
Solved

PayPal Fees

  • February 23, 2018
  • 1 reply
  • 30 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
        radial
        August 28, 2019

        Hi We have a similar situation. Customer has been invoiced for $100 and had paid via paypal.

        the amount received is $67.88 how do we record that in QB AND resolve the $2.12 paypal fees.

        PreciousB
        PreciousB
        Level 6
        August 29, 2019

        Thanks for joining this thread, radial.

         

        I can guide you in matching the Paypal payment to the invoice in QuickBooks Online.

         

        If the invoice is still unpaid, you can use the Find Match and Resolve Difference features. This will let you enter the PayPal fees in the expense account.

         

        First, make sure that the invoice and payment amounts are the same. Then, enter a negative entry for the PayPal fees in the Add resolving transactions section. I'm glad to show you how:

        1. Locate and click the online banking transaction to see the details.
        2. Hit the Find match button.
        3. Select the invoice, then make sure that the Transaction and Payment amounts are the same.
        4. Turn on the Resolve Difference feature.
        5. Under the Add resolving transactions section, fill in the needed details such as the Payee name, Category and enter a negative amount.
        6. Ensure that the difference amount is zero and the Downloaded transaction and Total amounts match.
        7. Hit the Save button.

        To learn more about matching transactions, please visit this article: Add and match downloaded banking transactions.

         

        However, if the invoice is already paid, makes sure to deposit the payment to the Undeposited Funds account. Then, add the PayPal fee in the Add Funds to this Deposit section.

        I'll show you how:

        1. Go to the Plus sign icon, then choose Bank Deposit from the pop-window.
        2. Select the correct bank account in the first box a the top.
        3. Scroll down to the Add funds to this deposit section.
        4. Under the Account column, add the needed details such as the name and expense account.
        5. In the amount, make sure to use a negative entry (ex.-32.12).
        6. Ensure that the Amount at the top is the same with the one you receive.
        7. Hit Save and close.

        Once you go to the Banking page, it will automatically show as 1 Record found and you'll just need to click the Match button.

         

        I'm including this link for future references: How to record bank deposits.

         

        You can also check out the Firm of the Future site to learn more about product enhancements and tips to efficiently manage your business.

         

        Please leave a comment below if you need any further information. I'm always here to assist if you have other questions.

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