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How to tag seller fees

Hi,
I sell on a marketplace that accepts PayPal for customers. When I sell something I get the PayPal payment paid into my bank account with the marketplace seller fee already taken out.

How do I now account for this seller fee? The fee also includes VAT that I need to claim back.

I upload all bank transactions into Quickfile, but not sure how to tag the PayPal payment and the seller fee against one bank transfer.

Thanks

Hi jlee6588,
You could open a merchant account in your banking section. The money (whole amount) for your sold product is a money in transaction. Then record a money out transaction for the paypal fee, another one for the seller fee including the vat part of the seller fee. Create an invoice for both, the paypal fee and the seller fee. On the invoice for the seller fee you create 2 lines, one for the net seller fee and one for the vat. The amount left on your merchant account should be the same as you have on your bank account received from the marketplace. Go to your bank account and tag the amount you received from the marketplace as a transfer between accounts and chose the merchant account. This merchant account should show zero now.

PayPal fees are not subject to VAT, if you are referring to the market place seller fee, then they will invoice you once a month, or so with a vat invoice.

A PayPal merchant account setup in quickfile will basically do all the work for you, specially if you have feeds on. Mine work a treat with PayPal, automatically tagging fees.

Hope it helps,

Yes thanks. Sounds like merchant account is the way to go.

Yes I get a monthly VAT invoice from the marketplace. But obviously that is already paid, and doesn’t show on my bank statement (as taken from paypal)

That’s exactly why you need to represent it as a merchant account. You create invoices for the full amount of your sales (without deduction of fees), those are paid into the merchant bank account. You create purchases for the monthly fee invoices, those are paid from the merchant account. The difference between the two is what arrives in your PayPal account, and that would be tagged as a bank transfer from the merchant account to PayPal, the PayPal fees come out of there, and when you finally withdraw your PayPal funds that is another bank transfer from PayPal to your current account.

Only the very first step (full invoice amounts into the merchant account) is actually “payment from a customer”, the rest is just shuffling around money that you’ve already earned.

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