Whether you handle sales directly through PayPal or accept PayPal as an online invoice payment method through QuickBooks, it’s important to account for your business’ PayPal transactions so you have a complete understanding of your income.
Before you can sync your PayPal data with QuickBooks or enable online payments, you should create an account specifically for PayPal Transactions. But what account should you use?
You heard it straight from the pros - “PayPal 👏🏻 Is 👏🏻 A 👏🏻Bank 👏🏻 Account/”
Thank you, Stacy, for your awesome advice!
The best ways to add PayPal to QuickBooks
Method 1: PayPal Bank Connection integration
Method 2: Sync with PayPal App
* Note: There are slight variances between how these two methods handle transaction details, learn more about the difference between PayPal Bank Feeds and Sync with PayPal app.
How to add a PayPal account in your Chart of Accounts if you don't want to sync
Join the conversation:
What do you use PayPal for and why do you prefer it as a payment method?
I use PayPal for Business because it's super basic and easy. I'm an independent contractor with a small client base so it works fine for me (for now), but I can definitely see how PP's limited functionality would make it hard to scale to a fast-growing business. It's great to know that PayPal can be integrated into a larger accounting platform like this - for future reference.
@Anonymous Paypal is considered a bank account and should be treated as such. Therefore, the best way to add it is through the Banking Page, not the COA. Then let the transactions automatically download and accept that way.
I should have given the subsection a better title - it was meant to nudge members to check how their current PayPal account is categorized! Since Stacy said PayPal is a bank account, I assumed users would go to the Banking Tab automatically ><.
I should have been more clear! Always appreciate the feedback :).
Love, Love, Love @stacykidall I call her the QBO Goddess! Yes, create the bank account, call it paypal. I recommend hooking it up via bank feed method not the app unless you only use paypal for vendor transactions or you only use paypal for customer transactions...not both. Bank feed method is more effective.
until they give us the new app! Cannot wait for that!
How do you treat the bank connected to PayPal? PayPal will transfer the money to your bank account. How will we show that bank account? We also need to resolve PayPal charges and deductions. Anyone any insights into this?
I recently added PayPal Connect...it's so confusing all the different types...I "THINK" it does what I want with the exception of one thing. Transfer from PayPal to Debit card...those include a $.25 fee. I have rules set up for all of the other transfers, but how would you handle this particular transfer?
Great question. Is it the same fee every month? Is this a fee imposed on you or imposed on those you send invoices to?
If it's the prior, there should be a bank rule you can set for a specific amount. If it's the latter, there may be some legal implications about passing on those expenses.
So it's a $.25 fee every time there is a transfer of funds directly to the bank debit card instead of bank account. I guess because the money is avaialble within 30 minutes they charge a fee. A workaround was to go ahead and do a transfer from paypal to bank....then in bank, find match, resolve difference with a negative to the fee account. Only issue about this is during the bank recs it doesn't show the net amount. It shows the full amount and the fee separately. Any other ideas?