Explaining Paypal transactions

[aubreymg]

Hi - I have the following questions for Paypal:

1. Should one tag/explain the transactions from with the paypal bank account?
2. I have a couple of transfers of income from Paypal to my main bank account, where should these be explained/tagged?

thanks

[QFMathew]

Hi @aubreymg

You should ideally tag all transactions in all bank accounts, or they end up sitting on a suspense account nominal code (9998) which may show up incorrectly on any reports (e.g. balance sheet).

You would treat these as you would any other transaction, such as tagging them to an invoice.

@aubreymg

I have a couple of transfers of income from Paypal to my main bank account, where should these be explained/tagged?

Do you mean the transactions that would be the deposits from paypal (the withdrawals)? If so, these should be tagged as a transfer from your PayPal bank account.

There’s a guide to the bank account setup below, which you may find useful:

Accounting for income from a payment service provider

Introduction This guide will help you to reconcile payments from the likes of PayPal, GoCardless, Stripe along with any credit card PDQ service provider and more broadly any payment provider that collects income on your behalf and pays you the net amount, minus their fee. It’s a very common scenario in accounting and it’s very useful to know how to account for these types of transactions. The Basics Obviously the key thing here is that the amounts received don’t exactly match your invoices, and…

[aubreymg]

Thanks very much - hopefully all sorted!