Level 1

PayPal reconciliation

Hi, I'm having an issue with reconciling a PayPal account and hope that somebody might be able to clear up some confusion for me.

 

On my PayPal statements, when I made a purchase, it only shows the *minus* money amount- so if I made a purchase for $5, it only shows -$5. However, in QBO, my PayPal feed shows both the -$5 for the purchase and the +$5 that PayPal receives from my bank account when I made the purchase.

 

Because of this, I have 'in process' transfers at the end of the month, which leaves me with a negative balance and discrepancy. My PayPal statement only shows the subtractions for purchases, not the payments it pulls from my bank account when I make those purchases. So my PayPal monthly statement always starts with $0 and ends with $0 since I don't keep money *in* my PayPal account, only use it with my bank account.

 

So, I made a $5 purchase on January 31st. However, my checking account didn't 'send' the money over until February 2nd, for example. My PayPal statement *should* reflect a -$5 ending balance. However, it does not. The ending balance is $0 on every single one. Then, on my February PayPal statement, the $5 bank payment is finally processed and shows up. But because the beginning balance on my February PayPal statement is also $0, I now have another discrepancy because I have the money coming in but not going out. I hope that makes sense. :/

 

So I'm not sure what to do when the PayPal statements reflect a $0 balance when there is, in fact, an outstanding balance that hasn't been processed/received by PayPal yet. The statements don't seem to acknowledge this and automatically zero out at the end of the month if no money is kept in PayPal and it is just used together with a bank account.

 

How can I properly reconcile this if the PayPal statements don't reflect this information? The only thing I can think to do is to enter a -$5 balance as the ending balance so the discrepancy goes away and the reconciliation is correct. However, the PayPal statements show the balance as $0.

 

Any advice on how to handle this situation?