Continue - Creating 1 invoice for multiple PayPal refunds

Accounting
1

Hi,

In this thread (Creating 1 invoice for multiple PayPal refunds), I asked the community on how to handle paypal refunds the best and most effective way.

I got this answer from [Paul_Courtier]:

"Neither of those methods are best practice.

All you need to do is create a new bank account, create transactions for the full invoice amount, and for the fees, tag full amount to invoice, fees as whatever nominal you use for fees.

The balance left is the amount less fees, tag that as a transfer and match it up to the entry in your PayPal merchant account.

To shorten the amount of entries you could have one entry for PayPal fees which is the group total of fees for the month.
—
I’m trying to interpret this method and working it out. My fees are included in the sales figures already, this is how I imported it."

So, if I get it right, I should:

  1. Create a new bank account (ie. PayPal EUR Refunds)
  2. “Create transactions for the full invoice amount” - I have 122 refunds. Should I create 122 refund transactions in the new bank account? Should I create 122 invoices, or only 1? Let’s say that the balance is -1000 eur.
  3. “The balance left is the amount less fees, tag that as a transfer and match it up to the entry in your PayPal merchant account.” - Should I tag the transactions in the “Refunds” account to the sales transactions in the “Sales” account and see if the balance is 0?

Thanks for your help.