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A
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
        Rrgoode311
        March 13, 2021

        But what account does said 'negative processing fees' go to? 

        MaryLandT
        MaryLandT
        Level 10
        March 13, 2021

        Allow me to step in and share what account to use for the bank fee, Rrgoode311.

         

        The fee as a negative amount is entered as another line item when making a bank deposit. See the attached screenshot for your visual guide.

         

         

        To track bank or PayPal fees, you need to create an expense account to allocate these charges Let me show you how:

        1. Go Accounting in the left hand menu, then select Chart of Accounts.
        2. Click New on the right hand side.
        3. Create an Expense account and name it Bank Service Charge/Fees.
        4. Select Save.

        I'm adding this article  in case you need to match transactions in QuickBooks Online: Match and categorize your downloaded bank transactions.

         

        As always, you can browse our QuickBooks Community help website if you need tips and related articles in the future.

         

        Keep in touch with me here for all of your QuickBooks needs, I'm always happy to help. Have a great day.

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