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Use the PayPal Connector by QuickBooks app

by Intuit•13• Updated 4 days ago

Learn how to connect and manage PayPal transactions in QuickBooks Online. You can edit, categorize, and match transactions, customers, and products to keep your books on track.

Save time and improve bookkeeping accuracy with the PayPal Connector by QuickBooks. This app syncs data from PayPal directly into QuickBooks Online, reducing the need for manual data entry.

Note: At this time, PayPal transactions originating from Shopify can't be imported.

These videos show how to use PayPal in QuickBooks Online.

Learn about:

How to connect

An active PayPal account is required to use the PayPal Connector by QuickBooks. If you haven't already, create a PayPal account before continuing.

  1. Sign in to your QuickBooks Online account.
  2. Go to Apps, then the Find apps tab.
  3. In the search bar, search for PayPal Connector by QuickBooks.
  4. Select Get app now.
  5. Follow the on-screen instructions. When prompted, enter your PayPal account email address and password, then select Log in.
  6. To authorize the PayPal to send your transactions to QuickBooks, select Agree and Connect.
  7. After your transactions finish syncing, select Go to App Transactions.
  8. Confirm the PayPal balance account where you'll find your PayPal transactions, then select Next.
    • Note: Generally, this is separate from your bank account and is automatically created for you upon setup.
  9. If you have historical transactions, select the date you would like to start importing from, then select Done.
    Note: You can import up to 6 months’ worth of historical transactions.

You’re ready to go! You'll see the PayPal app and list of transactions on QuickBooks App transactions (Take me there).

Data synced from PayPal

With PayPal Connector, you’ll see most transaction details in QuickBooks that you’d expect to see in PayPal.

Image showing PayPal transactions on the App transactions screen of QuickBooks Online.

How to review transactions

  • Categorizing transactions: QuickBooks suggests categories for some transactions you'll find on the App transactions (Take me there) page. Check that it’s correct, then select Confirm or Add. Sometimes we’ll need more info from you before you can add the transaction. In that case, select Review, and add details as needed.
  • Matching transactions: If the transaction already exists in QuickBooks, you may have the option to match it. In some cases QuickBooks will suggest one or matching records. Select the one that’s correct, then Match.

The table below guide you on how PayPal transactions are handled within QuickBooks Online:

Transaction Type/ItemWhat you'll see in QuickBooks
Income / SalesYou'll see the gross amount, net amount, and fees for each income transaction. Quickbooks imports detailed line item level data from PayPal. Each product/service on the sales receipt will be associated with its own income account within QuickBooks Online. You can also match a transaction to existing invoices and sales receipts if they have already been entered into your QuickBooks Online account.
ExpensesWhen you use your PayPal account for a purchase, an expense transaction appears in the list of transactions on the App transactions (Take me there) page to allow you to categorize the transaction.
FeesFees associated with sales transactions import as an expense transaction with the Sales Receipt.
Note: Fees are included in the compound deposit. You won't see the fees separately in the transaction list. Fees are categorized into a PayPal Fees account. Fees aren’t added to the PayPal Fees expense account until a Sales transaction is added to QuickBooks or matched to an existing transaction.
Funding transactionsTransfers: Money movement between your bank account and your PayPal account will appear as a transfer.
Purchases paid through PayPal that are funded with a bank account or credit card will also appear as transfers in your transactions list.
CustomersThe suggested customer is shown in the bank transaction list, but if it’s not yet in QuickBooks, QuickBooks will prompt you to create a new customer.
VendorsThe suggested vendor is shown in the bank transaction list, but if it’s not yet in QuickBooks, QuickBooks will prompt you to create a new vendor.
Items (Products / Services)Products/services will sync as line items on the sales receipt if the item name within PayPal and QuickBooks Online match.
Otherwise, the items will appear as “PayPal Sales” on the sales receipt line details and you will be prompted to match the item name in the PayPal transaction to an item that already exists in your Products and Services list or create a new item.
  • The PayPal balance account is what QuickBooks uses to track how much money you have in your PayPal account at any given time.
  • The deposit account is the primary bank account you use to move money in to and out of PayPal.

A Product/Service item within QuickBooks is tied to an income/expense account. This allows you to attribute different line items to different accounts.

When importing transactions from PayPal, QuickBooks matches the items in a transaction to products/services within QuickBooks. The match criteria is based on item name.

  • If the items in the transaction match: QuickBooks Online uses the matched product/service.
  • If the item in the transaction doesn't match: QuickBooks Online uses the default item called PayPal Sales and updates the description line with the name of the item provided by PayPal.

In certain cases, even when the item name matches, QuickBooks Online may not be able to use the item from the transaction for one of two reasons:

  1. The matching product/service in QuickBooks is not selected as a sellable product/service. If the “I sell this product/service to my customers” checkbox is not selected, the PayPal Connector by QuickBooks will not import the sales transaction. Learn more about adding and editing products and services.
  2. The matching product/service in QuickBooks is not a product, but is a product category instead. Product category is a feature used to group a list of related products/services in QuickBooks Online. Even if the item/product name in QuickBooks Online matches with the PayPal transaction, it can't be used as a product item within a Sale transaction.

In these cases, you’ll see the default PayPal Sales line item and the description with the item name from PayPal. This way, the transaction is still imported with details provided.

When you review incoming PayPal transactions, you can match products and services that appear the same in QuickBooks and PayPal. Doing this prevents duplicate inventory tracking across both apps.

  1. Go to Transactions, then the App transactions (Take me there) tab.
  2. Select the PayPal tile, then the For review tab.
  3. Select a transaction to expand the details.
  4. In the Products and services section, you may notice the Select match button for a particular item. Select this button to view potential matches.
  5. In the drawer that displays, you’ll see the PayPal product details side-by-side with potential item matches we found in QuickBooks. Review these to verify a match.
  6. Once reviewed, choose the QuickBooks item that best matches the PayPal item, then select Next.
  7. Select Done. The items are now matched and you won’t need to do this process again for this item going forward.

You can bulk select incoming PayPal transactions to add or match them in QuickBooks, saving you time.

  1. Go to Transactions, then the App transactions (Take me there) tab.
  2. Select the PayPal tile, then the For review tab.
  3. On the left-side of the table, select the check boxes for any transactions you’d like to add to your books.
  4. A pop-up asks you to Confirm or Exclude the selected transactions. Choose Confirm to move all of the selected transactions to the Reviewed tab.
    Note: The Confirm button may be unselectable if one or more of the transactions needs Review under the Actions column. In this case, review and confirm these transactions individually.
  1. Sign in to your QuickBooks Online account.
  2. Go to Apps, then the Overview tab.
  3. Find the PayPal app card, select more options Vertical ellipses icon., then select Settings.
  4. Select Disconnect.

Every time you expense an item while your PayPal account is not funded, Quickbooks needs to draw funds from your bank account in order to pay for the item. There you see two lines for this type of transaction: 1. The expense itself is money movement from PayPal account to the vendor, 2. The transfer of funds from your bank account to your PayPal account.

Rules are not available at the moment for this PayPal integration. Our teams are working on providing automation options so you can add your transactions quicker.

At the moment, this integration does not support multiple PayPal integrations at once. Our teams are working on enabling this feature.

When the transaction is fully pre-filled, you can choose to add it with one click. You can also decide to still verify the details of the transaction by clicking on the line. 

When an incoming transaction does not have all the necessary information pre-filled, Quickbooks needs your input to complete the transaction, so that you can then confirm it and add it to the books.

You can find the settings by clicking on the three dots on the right of the PayPal tile.

Yes, upon initial setup, you will be asked if you would like to import up to 6 months of historical transactions. Once you determine the starting date, click import, and your transactions will start coming into your QuickBooks account.

Once a transaction is fully processed/completed through PayPal, it will appear in the “For Review” tab of the banking screen, usually within 2 hours. There isn’t an ability to update on demand, however we are constantly monitoring throughout the day for changes to your PayPal account.

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