Accounting for Clients Money

Accounting
1

Hi, I am collecting payments on behalf of various clients. I have 2 different scenarios:

  1. Payments paid directly into my “client account”.
  2. Payments taken via my website using Credit/Debit cards, processed by PayPal.

Under (1), when money is paid into the account, I presume I need to create a nominal code per client (I read this http://www.qfaccounting.co.uk/detail.aspx?id=4687657) and tag each transaction to that nominal. Then when I pay them out reduce the nominal by the same.

However, when I receive monies from PayPal as in (2), I import the CSV with the gross amount and fees from PayPal (I have set up the feed for future payments). I then tag the net amount which has been paid into my client account as a transfer from the PayPal account, reducing the balance so just the fees are left. I am absorbing the fees, so I then need to do a bank transfer from my current account to the client account for the fees. How do I account for all this correctly in QuickFile? For example, how to integrate this with the client funds nominals as in (1)? How to tag all the transactions on the PayPal merchant account?

Does anyone have any experience with this? I would appreciate some insight…

Thanks

2

Do you need to distinguish the way the money was received (scen. 1 or 2)? You could just tag the PayPal payments (the same way as it is described in the link) to the client’s nominal accounts that you have set up.
Not sure if I got your question though…

3

Sorry for the late response. What I ended up doing was:

For PayPal. Import or have the feed running so the transactions appear in the merchant account. Tag the transactions in the merchant account to a nominal for client money.

In the client bank account, tag the incoming bulk payment as a transfer from the merchant account.

Transfer the fees amount from the current account to the client account (client gets the full value of the payment, we stand the fees). Tag this as a transfer.

Create an invoice for the fees and pay it using the remaining balance on the merchant account.

For other client monies, just tag them to the client money nominal.

When I pay out to the client, I tag that to reduce the same client money nominal.

Thanks for your help.