Back on 26 Sept I posted a help question about PayPal fees. Rather tardily, I am trying to implement the excellent help offered by user rhc at How to treat PayPal fees
However, I have a new question. If I follow rhc’s suggestion and post PayPal payments to a PayPal holding account, I lose the ability to tie each received payment to an invoice. I have created these invoices as a way of tying each payment to something purchased - in my case, a subscription.
Not sure if this is critical. Maybe I just dispense with the invoices?
Or maybe there is another way of dealing with the PayPal fee problem?
Why do you lose the ability? The point is you match the created payments at the time of creation.
Thanks for responding and for your question. It’s a sensible question. But the Quickfile system doesn’t seem to allow me to tag the transaction by linking it to an existing invoice, AND also to allocate the transaction to a holding account.
You would tag the invoice as being paid (in full) from the paypal holding account, you would also show the money coming in as coming into your paypal holding account and then when the money hits your actual bank account you would show it as a transfer from paypal to bank.
The shortfall in the paypal account would then be tagged as your fees
Thanks for trying to help me! But here’s what happens / I do:
The PayPal transaction arrives, waiting to be tagged.
I tag it using “something else” and allocate it to my PayPal Holding Account
The transaction is now visible in the PayPal holding account.
So where in this process do I link it to the invoice?
Have you read through this guide? It may help you to understand - Handling payments from merchant accounts
You may also find the automated feed for paypal useful more information can be found here: Setup PayPal automated feed
Have read those I think! But will re-read!
I think there is something wrong in your steps above. When you are in your bank account in quickfile and click the tag button next to your money from paypal, you should use “Transfer Between Accounts” and not “Something Else not on the List”
Have you created a Paypal Holding/Merchant Account in your banking section within quickfile?
If so, thats fine and you should see the money from Paypal, which you tagged in your current account as an tranfer between accounts) as a out-transaction. If you don’t use the paypal feed then you have to enter a £25 in-transaction on the date you received the money. After that you have to enter a second transaction as an out-transaction for the Paypal Fee. If you use a paypal feed, those transactions will come in automatically. Whatever method you use, after those three lines (One in-line - payment from your customer - and two out-lines - one as a transfer to your current account and one to your supplier Paypal) the balance in your paypal holding/merchant account should be 0 (zero).
Hope this helps
Thank you so much for some more help. Maybe my problem is this. I do have a PayPal Merchant Account. I have an automated feed for the PayPal transactions, but when I set it up I must have specified that the PayPal transactions should go straight to this Merchant Account.
I think you are saying that the incoming PayPal transactions should have first gone to the Current Account. Should I now change all this and then (somehow ?) re-route all these transactions to the Current Account?
In your paypal account paypal feed settings, you can tick a box “ignore transfers”
Thank you @rhc. t will take me a day or two to work on this as I have something else to attend to. If my posting expires I will start a new one as I must complete this since year-end accounting beckons! Your help much appreciated.
Can we restart this discussion, please? I fear I am going in circles.
It may help if I show you two pictures:
You can see I have two PayPal accounts. The one I called the “holding account” I created first. The second, listed under "Merchant and Online Payments Service Accounts I created more recently. The 17 transactions in there are Money In transactions direct from the PayPal automated feed; there are also Money Out transactions for PayPal fees in there.
Does this make sense? And what do I do next to get on the right track?
Hi, the PayPal account underneath the Reserve account - shouldn’t be there except you are using PayPal as a (current) bank account or you use that account to split transaction or so. If you only use it to get paid then your PayPal account in the merchant account section is the right one.
Click on View next to the PayPal account in your merchant account section. There should be the money in from your customers/clients. Click on Tag next to each in-transaction and tag/connect it to an invoice (which you may have to create) for a customer who paid that amount.
Do the same with each out-transaction. Click on Tag and tag it to the relevant supplier. If it is a PayPal fee then tag them to PayPal.
On the day when you withdraw the money from PayPal (all or just a part) to your current bank account, your feed for your current bank account should bring in that transaction automatically. If you see it in your current bank account click Tag and use Transfer between accounts and choose your PayPal account in your Merchant account section. Done.
I think I may be getting this!
However, I decided to delete the PayPal Holding Account which as you say is the wrong one. But I get an error to say that “one or more Bank Tagging Rules are associated with this account”, and until I remove the rules it won’t let me delete the account.
I realise now that Bank Tagging Rules don’t apply to any specific account.
Do I need to go through each and every existing transaction (all 154 of them) in the Merchant PayPal account to (somehow) change them so I can delete that original PayPal Holding Account?
You may have a rule set up that creates a transfer to/from the holding account.
It’s best to go through and check your rules
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