PayPal foreign transaction woes and confusion

This issue is really holding me back and I’ve highlighted it a few years ago, and thats making and recieving paypal payments in dollars. How do this work? Do i import the transactions via the paypal fee and reconcile against the bank feed? How are the paypal fees calulated and the converison rate handled?

Hi @Paul_Cheetham

Sorry to hear that you’re having issues.

Each bank account on QuickFile, as like many other accounting systems, only supports one currency. The way foreign currency transactions are handled is tricky with PayPal as they don’t reveal their exchange rates.

If you use the feed, we can use the exchange rates to show the transaction in your account, which should at least give you a more accurate balance than without them. We introduced this back in March. You can see the full announcement, and more information in the original post here.

Hope that helps

Thanks, although paypal gives you a much worse exchange than the interbank rate that places like promote, so the numbers will be off?

That’s correct. Unfortunately, PayPal doesn’t provide their exchange rate. All we receive is the value in the original currency.

An alternative way may be to set up another bank account on QuickFile for that currency, and import a CSV of the transactions on a regular basis (daily, weekly, monthly etc.), or log the GBP values manually.

As per the thread I linked to above:

im still abit confused because I’ve been doing this manually, even though paypal doesnt give the conversion rate you can still calculate the rate yourself with the difference between how many pounds have been spent and how many dollars its been outputted to. All this data is available in the transactions log, paypal show this type of transaction with 2 records

With the feed, the actual currency value, or the exchange rate isn’t available until a few days afterwards. Unfortunately, it’s a common issue for accounting platforms.

The solution was introduced as a workaround, so at least there were no gaps in the feed when it was imported.

If you do have many foreign currency transactions, the easiest way to resolve it would be to bulk import your sales manually on a weekly/monthly basis.

We really wish it was easier so it could be more accurate, but unfortunately there isn’t another option at this moment in time.

How is kashflow or any of the other playforms able todo this?

Kashflow uses a public exchange rate like we do (see their notes here), although it would seem that they use a different provider.

Using this way, will it create a mismatch when reconciling paypal transactions?

Over time yes, as invariably the 3rd party exchange rates won’t exactly match the rates that PayPal use. This would mean that every now and then you would need to journal the differences to the currency loss/gain nominal.

It’s not ideal but unfortunately PayPal workout exchange rates on a 1-3 day deferment. We don’t get real time rates from PayPal, so it becomes impossible to effectively reconcile everything to the penny. We would love to be able to do this, but we can’t until PayPal supply this information on their API.

If you open the Paypal transaction in the Paypal account panel all the information is listed for each transaction this includes the transaction rate at the time.

It may be that they are adding the rate data retrospectively. Last week we pulled the raw feed data from PayPal on your account (I can forward this if you wish), there were cases where payments existed but with no exchange rate data. This would correlate with what we have seen before on other accounts trading in foreign currencies.

Also when the feed does supply some currency conversion debit/credit it does not explicitly state which transaction it relates to so we have no way to connect the dots.

I think many of us just love PayPal, they are one of a kind! :slight_smile: We have some client accounts with 1000+ PayPal transactions a month, sure fun to reconcile them. I think the guys at QuickFile are doing a great job integrating the feed, it is much better than what it used to be. We have seen all sorts in the past few years, including PayPal incorrectly calculating account balance… They have so many transaction types that it seems it even confuses their team. :laughing:


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