Paypal liability showing?

Hi all, i make quite a lot of purchases and pay a lot by PayPal however, Paypal takes money direct from my debit card and not from a PayPal balance, it appears in my banking as "PAYPAL Whoever REF XX XXXXX BDC and i can tag that to a reciept. I have set up a PayPal feed.

The problem arises when checking the PayPal section in BANKING, it shows a negative figure (in the PayPal section it shows the money out), if i check Balance Sheet it shows current liablities, one of them somehow is “1252 PayPal” and shows i owe the money i’ve been spending?

How do i cure this or do i not need to worry about it?

Regards,
Simon

You dont need paypal account setup in quickfile if payments are going through your main bank account. Only transactions that should appear in quickfile paypal account are those dealt with from actual paypal balance. Treat it as another bank account. If initial payment is tagged to paypal a/c then money out from main bank should be tagged as interbank transfer between paypal a/c and main bank

Thanks for replying.
So i should delete the PayPal Feed? what would happen if people pay me in to PayPal? all these transactiosn would show again as a liability when i try to open the feed again?

If you want to keep audit trail then no need to delete paypal feed, tag your customers and suppliers through paypal feed as usual and any money movement from your main bank to and from paypal treat it as interbank transfers

Hmmm seems complicated, the only use i have right now is for purchases and they’re causing it to look like i have a liability to paypal, i’ll delete the feed for now - thanks.

You may find our knowledgebase guide on ‘Handling Payments from Merchant Accounts’ useful.

Thanks Joe, i’d already created a merchant account with the paypal feed, tagging what the bank feed reports as a bank transfer to the merchant account for a particular payment cures the issue but then without going in to PayPal it leaves the reciept i uploaded untagged. Also the only explanation in the merchant account is “transfer from xxxxx to PayPal” which isn’t as descriptive as the previous entry before tagging.

What should i do, should i carry on and tag a transfered payment from my bank account to paypal or should i be importing reciepts and tagging them?

Whats the best way going forward bearing in mind that i MAY get paid in future via PayPal?

lets try one simple example
you make sale to customer 1, 2 & 3 and receive money in paypal as follows
Customer1 £50
Customer2 £30
Customer3 £20
total sales £100 , this money you transfer to your main bank account

Now you can import both paypal and main bank feeds and start tagging as follows
from paypal account tag each receipt against relevant customers and on payment sid eof paypal tag 100 as interbank transfer to main account.

Similarly if you paid through paypal to suppliers 1,2 &3 £ 5, £10 and £15
you will tag payments against relevant suppliers and thats it
If you transfer any fund to paypal account from main bank account that would be interbank transfer tagging from paypal account

Hope that helps

I haven’t transfered funds, i just use paypal as a way of not giving bank or card details out, i get what you’re saying but it was much easier to delete the PayPal feed and keep the purchases tagged with the reciepts i uploaded.

Thanks for the replies though :smile:

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