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Use the PayPal Connector by QuickBooks app
Learn how to connect and manage PayPal transactions in QuickBooks Online. You can edit, categorize, auto-add, and match transactions, customers, vendors, and products to keep your books on track.
If you need help with transactions, you can partner with a dedicated bookkeeping expert to feel more confident. Find out more about QuickBooks Live.
This app syncs the majority of data for each transaction 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.
This video will go over how to record new transactions downloaded from the PayPal Connector app and how to match them to transactions already in QuickBooks. Before you can download and add transactions from PayPal, you must connect it to QuickBooks.
Video transcript
[0:00] If you use PayPal to process your sales and purchases, you can save time by automatically downloading your app transactions into QuickBooks. Let's go over how to record new transactions downloaded from the PayPal Connector app and how to match them to transactions already in QuickBooks. Before you can download and add transactions from PayPal, you must connect it to QuickBooks.
[0:24] Select Accounting and then Integration Transactions. Transactions listed under the For Review tab are awaiting your approval and don't appear on your reports or financial statements until you confirm them. Select a row to see additional details about a transaction. Let's look at a sale. First, you confirm who the transaction was with.
[0:47] If QuickBooks recognizes the customer or vendor, it automatically fills them in. You can also add a new customer or vendor…or use PayPal Connector defaults. Then you see an overview of the transaction, including taxes and fees. You'll see a list of all the products and services you sold. QuickBooks tries to match what you sold to products and services in QuickBooks.
[1:12] When you or QuickBooks selects a product or service, the income category it's assigned to increases by the amount of the sale. If QuickBooks couldn't find an exact match, you'll see a list of possible matches. Select it from the list…or Create a new product or service. If you want to split the total of a sale between multiple categories, select different products and services for each line item.
[1:38] Because each product and service has an income account assignment, if you select multiple products and services, you'll affect the income categories for each product and service you choose. After you've reviewed the details, select Confirm. After you confirm the sale, QuickBooks learns from your selections and assigns the same product or service to other transactions with the same item.
[2:03] You find confirmed transactions in the Categorized tab. They stay here unless you undo them, which moves them back to the For Review tab. You may receive transactions that are already in QuickBooks. In that case, you'll match the transaction with one already in QuickBooks, which helps prevent duplication.
[2:23] You'll see the matches QuickBooks found…and a link to what QuickBooks suggests matching it to. If this isn't right, select Find other matches to pick something else. Once everything looks right, select Confirm. You might also see Transfers. These happen when you transfer money between PayPal and your bank account. Make sure you assign the right bank account…and Confirm it.
[2:49] If you've connected the bank account involved in the transaction, you'll also confirm and match it there to prevent duplication. QuickBooks may fill out some of the details for you, like vendor name. Just fill in the remaining details about the purchase, such as category or product/service, and select Confirm to add it to QuickBooks.
[3:10] If you ever need to change how the PayPal Connector works with QuickBooks, select PayPal Settings. This is where you assign accounts the app uses when it records transactions. The PayPal balance account tracks how much money you have in your PayPal account at any given time. And the deposit account is the bank account PayPal deposits money to. You can change any of these accounts from this window.
[3:37] Select Advanced to see other accounts the PayPal Connector app sets up and automatically uses. Like the expense account PayPal uses to categorize the fees you're charged for processing sales…the liability account that tracks sales tax you've collected from customers you processed using PayPal…and more. Now you're ready to use the PayPal Connector App in QuickBooks.
Learn about:
Connecting the PayPal Connector by QuickBooks app
An active PayPal account is required to use the PayPal Connector by QuickBooks. If you haven't already, create a PayPal account before continuing.
Sign in to your QuickBooks Online account.
Go to My integrations
, then the Find apps tab.In the search bar, search for PayPal Connector by QuickBooks.
Select Get app now.
Follow the on-screen instructions. When prompted, enter your PayPal account email address and password, then select Log in.
To authorize the PayPal to send your transactions to QuickBooks, select Agree and Connect.
After your transactions finish syncing, select Go to App Transactions.
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.
If you have historical transactions, select the date you would like to start importing from, then select Done.
Note: You can import up to 2 years’ worth of historical transactions.
Video transcript
[0:00] If you use PayPal to process customer payments or pay company expenses, you can download sales and expense transactions into QuickBooks with the PayPal Connector by QuickBooks app. We'll go over the steps to connect QuickBooks to PayPal and start syncing PayPal transactions with QuickBooks. In the search bar, type in find integrations.
[0:22] The next step is to look for the PayPal Connector by QuickBooks app. Select Get Integration Now. You'll see a list of steps on how to connect your PayPal account to QuickBooks. Select Continue. Enter your PayPal username and password. Then Log in.
[0:39] The next step is to confirm some settings… 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 bank account you transfer money to after you've received payments through PayPal. When you connect PayPal to QuickBooks, you can receive historical transactions from PayPal.
[1:04] Choose how far back you want PayPal to go when it sends your historical transactions to QuickBooks. You can receive the last six months of transactions…or enter a custom date. Word of caution, if you select the date for the transactions which are already added to your books, this may cause duplication.
[1:24] Then, finally, you can choose whether or not you want PayPal to record your transactions automatically. With this option turned on, you won't manually confirm the details of any transactions. QuickBooks will record everything automatically. With this option turned off, you'll have an opportunity to confirm transaction details before they're added to your books.
[1:48] Note you can change this option later. Select Save. Your connection is ready! Navigate to Integration Transactions to see the transactions PayPal processed and sent to QuickBooks. From here, you can review and confirm new transactions or match them with transactions you've already recorded. To learn the steps to use the app with QuickBooks, check out this video.
[2:13] Now you're ready to use the app with your QuickBooks company.
You’re ready to go! You'll see the PayPal app and list of transactions on QuickBooks App transactions (Take me there).
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 Exclude. 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.
PayPal transactions overview
The table below guide you on how PayPal transactions are handled within QuickBooks Online:
| Transaction Type/Item | What you'll see in QuickBooks |
| Income / Sales | You'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. |
| Expenses | When you use your PayPal account for a purchase, an expense transaction appears in the list of transactions on the Integration transactions (Take me there) page to allow you to categorize the transaction. |
| Fees | Fees 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 transactions | Transfers: 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. |
| Customers | The 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. |
| Vendors | The 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. |
Matching items in the PayPal Connector by QuickBooks app
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:
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.
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.
Availability of "Customer Name / Vendor Name" for Sales Receipts / Expenses in match options
QuickBooks Online will now automatically suggest the "Customer Name" or "Vendor Name" for matched transactions, based on our advanced algorithms and scoring. This enhancement provides greater accuracy and efficiency in matching transactions, allowing you to focus on your core business activities.
Note: This is possible once you turn on customer and vendor tracking through the Paypal setting option.
Extended Invoice Matching Period
You now have the ability to match invoices for up to 90 days from the original invoice date. It considers name, amount and date for matching cases. This improves your experience with flexibility and convenience when matching invoices.
Matching duplicate items in the PayPal Connector by QuickBooks
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.
Go to All apps
, then Accounting, then Integration transactions (Take me there).Select the PayPal tile, then the For review tab.
Select a transaction to expand the details.
In the Products and services section, you may notice the Select match button for a particular item. Select this button to view potential matches.
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.
Once reviewed, choose the QuickBooks item that best matches the PayPal item, then select Next.
Select Done. The items are now matched and you won’t need to do this process again for this item going forward.
Bulk Matching transactions in the PayPal Connector by QuickBooks
You can bulk select incoming PayPal transactions to add or match them in QuickBooks, saving you time.
Go to All apps
, then Accounting, then Integration transactions (Take me there).Select the PayPal tile, then the For review tab.
On the left-side of the table, select the check boxes for any transactions you’d like to add to your books.
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.
Money-in transactions (Sales receipt / Deposit)
Money in transactions will come in as "Sales receipts" when transferred over from PayPal. You have the ability to change that to a "Deposit" within the drop down option in the Transaction Details page for each transaction. After this adjustment is made manually, the system will eventually understand that you are wanting to categorize the transaction this way. It will then begin to automatically do it for you.
Disconnecting the PayPal Connector by QuickBooks app
Go to Integrations
and select Manage integrations (Take me there).Find the PayPal app card, select more options
, then select Settings.Select Disconnect.
Note: Disconnecting and reconnecting the integration for troubleshooting does not help resolve issues and in some cases can restrict connection for up to 7 days
Set up app rules to categorize integration transactions
App rules automatically categorize downloaded transactions from third-party integrations, ensuring they enter the correct accounts.
The more the app uses the rules you create, the better it gets at categorizing.
Here's how to manage integration rules.
Create an app rule
Select Create rule from the transactions action menu. Or go to the Rules tab and select Integration rule, then New rule.
Enter a name for What do you want to call this rule?
Apply the rule to transactions with the ▼ dropdown. Select Money in or Money out.
From the ▼ dropdown, select an app/integration account, or select All accounts.
Set the rule's conditions. A single rule can have up to 5 conditions. Select + Add a condition to do so.
In the Conditions fields, specify whether the rule applies to transaction details or amount. Details contain info received from the integrated app like customer name, address, email, or phone number. Then select Contains, Doesn't contain, or Is exactly to decide how QuickBooks applies the rule.
To apply rule settings. select the Transaction type, Category, Customer Name, Class and the Payee to apply.
When you’re done, select Save.
The newly created rule will be automatically applied to all newly imported transactions. It won’t apply to existing transactions in the For review tab.
Pro Tips:
To add a rule for transactions in For review, select a transaction, then Create a rule to open the Rule Window and start setting conditions for the rule.
Copy, Disable/Enable, or Delete app/integration rules from the Actions ▼ dropdown on the Rules page.
Frequently asked questions
Why am I seeing so many transfers?
Every time you expense an item using your PayPal account while it has no balance, it will need to draw the funds from your bank in order to pay for that item. In this case, you will see two line items for this type of transaction.
The transfer of funds from your bank account to your PayPal account
The transfer of funds from your PayPal account to the vendor for the expense
Can I add multiple PayPal accounts at once?
At the moment, this integration does not support multiple PayPal integrations at once. Our teams are working on enabling this feature.
Why do some lines have “confirm” and some lines have “review” action buttons?
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.
Where do I find the PayPal integration settings?
You can find the settings by clicking on the three dots on the right of the PayPal tile.
Can I import historical transactions? If so, what is the limit?
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.
How often are my PayPal transactions updated?
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.
What is Class Tracking?
Class Tracking is a feature that allows you to categorize your transactions into specific classes, such as departments, locations, or projects. This helps you track and analyze your financial performance by class, giving you a more detailed understanding of your business's financial health.
Start using Class Tracking
Sign in to your QuickBooks Online account.
Go to Settings
, then select Account and settings.Select Advanced, then Classes, if not already done.
Select the Class dropdown▼, then select New Class.
Assign classes to your individual transactions or split the transactions to assign a class.
Create a report
Go to Settings ⚙, then select All lists.
Select Classes.
Select Run Report.
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