Negative Balance PayPal Bank Reconciliation

crisstax · ‎April 23, 2021

I am trying to reconcile my PayPal Bank account for last year, but there is a negative amount on the PayPal Bank Balance. It says your account is not ready to reconcile yet, and it takes me to where I can see the transactions that I deleted previously in the audit log. Those transactions amount to the negative amount that is shown on the balance and they are all deposits. It asks me to enter those transactions again, but I believe I already did it because my P&L statement shows the income correctly along with the Bal Sheet PayPal Account with 0 at YE.

When I check on any of the transactions on the PayPal Bank from the BS the transaction is matched to one of the sales receipts in QB along with the negative amount for the fees. So, it seems right to me. When I check the audit log, the transaction is separated into three entry rows, one PayPal Bank with the net amount, the other one with the undeposited funds amount negative, and the last one with the undeposited fund's fee positive amount.

Undeposited funds is also showing these amounts and I am not sure they even go there. Do the amounts that I received from PayPal go on Undeposited funds? They are recorded as decreasing the balance.

How do I fix this negative amount?

JessT · ‎June 20, 2021

Hi crisstax,

It's okay. You can reply at any time. Everyone can see your response and help you, so now I'm here to continue helping you with your PayPal reconciliation.

As QuickBooks shows you, the negative amounts were coming from the deleted deposits. This means those deposits were already marked as reconciled before you deleted them. Therefore, if you've replaced them, the replacement transactions should also be marked as reconciled (marked with R). This will correct the beginning balance.

From the PayPal register, locate the transactions you just recreated and click each of them.
Under the Reconcile (✓) column, click on the blank field to mark the transactions as reconciled (R).
Click Save and select Yes to confirm the action.

Let me know if you need more help with reconciling your account. Have a good day ahead!

View solution in original post

TirzahC · ‎April 23, 2021

I appreciate you for reaching out to us here on the Community page, crisstax.

You'll need to review the opening balance if you're reconciling an account for the first time. To start a reconciliation, you'll have to make sure that you have your monthly bank or credit card statement. Then, reconcile them one statement at a time starting with your oldest statement.

Possible amounts that you receive from Paypal should be in Undeposited funds that's why it shows negative.

Follow these steps to clear out the negative entries:

Select + New.
Under Other, select Journal Entry.
Enter the transaction date in the Journal date field.
On the first line, in the Account column, select the Undeposited Funds account.
In the Debit column, enter the single-line deposit amount.
On the second line, in the Account column, select the bank account.
In the Credit column, re-enter the single line deposit amount (if it does not already appear).
Select Save.

Here's how to offset the negative value:

Select + New.
Under Other, select Bank Deposit.
Select the payment and the Journal Entry you created.
The total should be zero.
Select Save.

For an additional guide when reconciling accounts in QBO, you can use this article: Reconcile your accounts to match bank statements.

If you have further clarifications as you work on your PayPal bank reconciliation, please know that I'm always here to help you out. Take care and have a nice day!

crisstax · ‎June 20, 2021

I apologize it took me a while to reply. I had to take a long break due to study, but I am back to try to solve this pending issue.

So, When you say on step 6 select bank account is that PayPal bank account or the Checking account?

I also wanted to show you in the attached files what the issue is.

I have gone over every transaction on the bank, and on PayPal, and they're all recorded.

JessT · ‎June 20, 2021

Hi crisstax,

It's okay. You can reply at any time. Everyone can see your response and help you, so now I'm here to continue helping you with your PayPal reconciliation.

As QuickBooks shows you, the negative amounts were coming from the deleted deposits. This means those deposits were already marked as reconciled before you deleted them. Therefore, if you've replaced them, the replacement transactions should also be marked as reconciled (marked with R). This will correct the beginning balance.

From the PayPal register, locate the transactions you just recreated and click each of them.
Under the Reconcile (✓) column, click on the blank field to mark the transactions as reconciled (R).
Click Save and select Yes to confirm the action.

Let me know if you need more help with reconciling your account. Have a good day ahead!

crisstax · ‎June 21, 2021

Thank you! It solved my issue.

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Negative Balance PayPal Bank Reconciliation