Bank and paypal entries that are part invoice part client money

Hi,

I was wondering if you could help. I have transactions coming into my paypal and bank account that are part invoice part client funds. How should i account for that on quickfile?

I.e. Paypal transaction for £500, 20% is my fee so £100 is my sales invoices. The other £400 will be transferred to my bank and from there is will be transferred to the clients account.

Any suggestions would be much appreciated.

Kind Regards,
Hugo

Presumably though the £500 is getting transferred into your current account (less the PayPal fee)? I understand £100 is getting logged against an invoice but what happens to the other £400? are you storing this in a separate bank account?

Hi Glen, The remaining £400 is for my client. If I rent his holiday home then I collect the money take my fee and send him the difference. I could raise a sales invoice for £500 and raise a purchase invoice showing a COS of £400 but that wouldn’t technically be correct at the £500 just represents a deposit in my account where on £100 is sales and the remainder needs to be sent to my client. Any help would be greatly appreciated.

Thanks

You are correct, the £400 should not be lodged against a purchase. Ordinarily you would treat the £400 as a liability on the accounts, you can do this by creating a separate bank account called something like “Client funds”, you can then transfer the £400 from the client account.