PayPal - Payment Allocation when Handling Charges are added


I’ll try to keep this as simple as possible! I have tested using both PayPal & GoCardless and have set up merchant accounts for both and have no issue with the principles that have been discussed in relation to managing them. However with PayPal I have added a 2.5% handling charge which customers must pay.

When Quickfile downloads the transactions from PayPal, it recognises and matches the payment to the invoice thereby automatically flagging the invoice as paid. All invoices therefore show no outstanding balance. However because the amount paid by the customer is higher than the actual invoice value, I am ending up with credit balances on my client accounts whereas what I need to happen is for the extra income to be offset against merchant fees.

Because all of the above happens automatically, I can’t work out how to correct it even though I am probably missing something very simple and fundamental! Clearly I don’t want customers believing they have credit balances on their accounts either.

I would be grateful for any assistance on this matter as it is preventing me from rolling out using PayPal.

Many thanks


Hi @HealthE

There is no automatic handling of the merchant charges you pass on to your customers, although they would need to be classed as income in some form. We leave these as client credit as various users of QuickFile use different methods of accounting for them. For example, 2 of these methods are:

  1. Amend the original invoice to include a line for the fee. By clicking “Log Payment” on the invoice preview screen, you can then use their credit to pay this down and balance everything out.

  2. If you have many merchant transactions, then you may find it easier just to account for this at the end of the month or week, and issue a new invoice to your client(s) for this.

For reference, you can also view a list of all clients and their credits by going to Sales >> View all clients, and performing an Advanced Search with “Show credits” ticked.

I hope this helps!

Excellent, thanks for your help!


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