PayPal fee

[rawandmoreshack]

Hello, can anyone offer some advice, I am sure it’s fairly simple but some of my invoices get paid via PayPal but PayPal takes a fee, how do I account for the fee when tagging the invoice as paid, an invoice is produced for £40, the customer pays via PayPal but when I say it’s paid in full it’s for the £40, but how do I account for the fee

[ian_roberts]

The way to deal with this is to have a “merchant” bank account in QuickFile to represent your PayPal account. When you’re paid by PayPal for an invoice you mark the invoice as paid in full into your PayPal merchant account, you tag the money you actually received in your current account as a bank transfer from the PayPal merchant account, and this leaves the fee as a residual balance in the PayPal account which you can clear by creating a “purchase” for the amount of the fee and marking that as paid from the same merchant account.

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…