Am i Bank Transfering Correctly?

Hi All

I am getting myself a little confused when doing my accounting.

We regularly have payments(Income) from Amazon which hit our bank account when our money is processed from Amazon to the bank account this happens twice a month.

At the minute i am logging ‘Amazon Sales’ lets say of £1,000 and then ‘Amazon Fee’s’ of £300 which come directly from amazon monthly reports.

Then when i do my bank statements into my bank account i notice the amazon payment (which is after fee’s) so i mark this as a transfer from my bank in quickfile which is named Amazon… Is this correct?

Secondly we send payments from PayPal where sometimes, if there are not enough funds in PayPal it will take the remainder from my main bank.

For example:

PayPal Sale x of £300
PayPal Payment taken from Bank: £100 (since only £200 was in my paypal).

Would i tag the paypal transaction in my paypal bank as a normal payment out and then mark the £100 from my normal bank as a transfer between accounts (PayPal)? Just this don’t sound right to me?
Hope this makes sense!

For the first part this guide should be of some help.

http://community.quickfile.co.uk/t/handling-payments-from-merchant-accounts/8865

The latter part sounds correct, the purchase invoice is marked as paid in full from the PayPal account and then the other £100 is a transfer from your current account to the PayPal account. It probably doesn’t look right because the payment reference on the PayPal entry on your current account makes reference to the supplier you made the payment to, although in reality it is just a transfer to the PayPal account as the supplier will only see a payment from PayPal. You could split the payment and mark the invoice as paid in part from both accounts but it won’t make any difference to the totals on the balance sheet etc, and everything is all tied together for auditing purposes either way.

Thanks for the quick reply on a sunday!

I think we have cleared up the latter however the first part still needs some clarification.

Reading through it a second time i think that is pretty much what i do. I simply get a total sales minus refunds etc and input this as a sales transaction and then my fee’s of course inside my own bank which i have named Payal. I then just do a transfer on my current bank to the PayPal.

However in the back of my mind i was thinking i needed to show the transfers out of my PayPal bank into my current bank too? Is this not the case?

So really you are just using at like a till rather than accounting for every transaction as you go. So maybe this guide will be of more use?

http://community.quickfile.co.uk/t/accounting-for-daily-takings/8911

Although you are somewhere between the two so it will probably still need some manual tweaking. The general thing is to make sure you have records available, I do pretty much everything through Quickfile so I have a single point of reference for auditing if required. However, you could just add a single entry as you do now as long as you keep copies of the reports and sales to fill in the blanks if required.

As for transfers between accounts, what do you do now with the money in PayPal? If it is transferred to the current account then when it is tagged from there then it will show in the PayPal account also. If you don’t take any money out of the PayPal account then you don’t need to show any transfers.

Thanks for the reply.

Regarding this:

As for transfers between accounts, what do you do now with the money in PayPal? If it is transferred to the current account then when it is tagged from there then it will show in the PayPal account also. If you don’t take any money out of the PayPal account then you don’t need to show any transfers.

Each day PayPal withdraws the total amount to our current bank (random amounts) and yes that is what we do, we tag it as a transfer from PayPal bank account. It then shows as a negative value inside there but obviously a positive in our current account. I am just making sure it is OK to do this and it was the right thing more than anything.

We sometimes make business payments with the monies but this is reflected and accounted for in the PayPal bank anyway.

It looks like i was doing it the right way?
James

It would appear to be (from my PoV as some random person on the internet). There’s usually several ways of doing things so as long as you’re not doing it incorrectly is the main thing, the right way can be subjective!

As always I would say if you are at all unsure then it is always worth running it past your accountant.

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