Customer paid by Paypal. Paypal sent us a check for the payment, minus a small fee. How do I receive the payment in full, not charging the customer for the fee?

Thanks for reaching out to the Community about your concern, M1Jones1.

Let me help and guide you in the right direction on how to record the PayPal payment.

In situations like the, you’ll have to use a sales receipt or manually receive the payment to record the full amount. Then deposit it in the Undeposited Funds.

When you transfer the fund from PayPal, create a bank deposit transaction to move from the Undeposited Funds to the actual bank. From there, enter the processing fee as a negative amount.

1. In QuickBooks Online (QBO) tap the New menu in the upper-right and select Bank Deposit.
2. On the Bank Deposit page, navigate to the Add funds to this deposit section.
3. In the Received From column, enter the correct name.
4. Then add the expense account for the transaction fee in the Account column.
5. Enter -$1.50 in the Amount field.
6. Make sure the deposit matches the net bank deposit amount.
7. Click Save and close.

To learn more on how QBO handles deposits, check this article for more details: Record and make bank deposits in QuickBooks Online. It includes instructions on how to combine multiple transactions into a single record, as well as steps to include bank or processing fees.

Also, the links below contain answers to common questions on how QBO handles PayPal transactions. From there, you'll see solutions to resolve unexpected results and errors when using the app. These resources also provide information about matching and classifying downloaded data.

• Connect to PayPal FAQ 
• Categorize and match online bank transactions in QuickBooks Online 

If you have additional questions about recording fees and other customer-related concerns, drop a comment below. I’ll get back to help and make sure this is taken care of for you.

Thanks, this is a good start but I got lost along the way.  Here's where I'm at:

1. In QuickBooks Online (QBO) tap the New menu in the upper-right and select Bank Deposit.
2. On the Bank Deposit page, navigate to the Add funds to this deposit section.
3. In the Received From column, enter the correct name.
4. Then add the expense account for the transaction fee in the Account column.  By expense account, do you mean "undeposited funds?
5. Enter -$1.50 in the Amount field. Done
6. Make sure the deposit matches the net bank deposit amount. I'm lost here.  Do I do a second line entry under "add funds to this deposit," such that I have the $-1.50 (for the paypal fee) and a second line indicating the invoice amount?  Again, I'm trying to get to a place where the accounting (1) reflects the $1.50 fee paid to Paypal but also (2) shows that that the customer paid his invoice in full despite the fee Paypal charged us.
7. Click Save and close.

You're just about through, @M1Jones1. G. Happy to provide clarification on this matter. 

I'm glad to hop in and answer your questions one at a time. This way, you can deposit the fund into an accurate account in QuickBooks Online. 

In the Account column, you have the option to use the old expense account (not the Undeposited funds) or create a new one for that specific fee. This way, you can quickly track the PayPal charges. 

Follow the step-by-step instructions below:

1. Open Bank Deposit window and in the Account field, choose the account you want to put the money into.
2. Check the payment you've recently created. 
3. Choose the customer name in the box. 
4. To the Account drop-down, select old expenses account or +Add new. 

• In the Account Type field, select Expenses. 
• In the Detail Type, pick Bank Charges or any appropriate type. 
• Enter a unique name in the field and hit Save and close. 

     5. Enter the fee amount in the field. 

     6. You don't need to enter a second line indicating the invoice amount. 

     7.  Review the details and click Save and close. 

For more information about the process, visit the bank deposit article provided by my colleague above. 

After that, you can run a quick report for your PayPal fee. Let me show you how: 

1. Go to the Accounting tab on the left side. 
2. Choose Chart of Accounts. 
3. Click the small drop-down arrow perpendicular to the account and select Run report. 

Additionally, check out these articles below on how to manage your chart of accounts and customer transactions in QuickBooks: 

• Learn about the chart of accounts in QuickBooks
• Sales and customers

I hope you'll have a wonderful experience with QuickBooks, M1Jones1. Don't hesitate to mention my name in the thread if you have follow-up questions. I'm happy to help you anytime.