Paypal reports and accounting for Fees etc

Support
1

Hello,
I want to simplify some things here and not use the automatic feed as i keep getting duplicates and errors due to holds.

Can i set up an account named: Paypal Fees then input all paypal fees as money in and out

Can i just take the figure from Amount received as my total income - Refunds

Then input any expenses as an out figure to suppliers

I will still input drawings manually etc - Basically more manual entry but with report having a balance in and out on the sheet i can use the reconcile to make sure the figures are correct.

1166×594 48.5 KB

I also see u can tag to an Account is this what i can do for the paypal fees?

I also tested the reconcile the balance on my quick file is 189.03 and says im GBP 2.11 OVER Why would this be?

2

Hi @Katie_Harvey

The correct way to deal with transactions and fees with a payment provider (such as PayPal, GoCardless, World pay etc.) is to account for the transaction in 3 parts:

  1. The full balance paid into the merchant account on QuickFile (e.g. £100.00), tagged to the client invoice
  2. The fee paid out, tagged to an invoice for the payment provider (e.g. £5.00)
  3. The balance which is paid to you, tagged as a transfer between accounts (e.g. £95.00)

There’s a more detailed explanation here which will hopefully help.

As you have several holds, this can cause a bit of a complication. Generally, they can be deleted, and only account for the income once the hold has been released.

You can, to make things easier, record your sales in bulk at the end of a week or month, and tag them to s generic client, such as ‘PayPal Sales’, and account for all the related fees at the same time.

Unfortunately, I’m not able to help with the recommendation, but compare small periods (e.g. a week) from QuickFile to your PayPal account to try and identify the issue. It’s likely to be fees, or even a hold.

I hope that helps!

3

Thanks, the balance is exactly the same as paypal thats why its confusing why reconile is saying i am 2.11 over.
Would i only transfer the balance paid to me if i am drawing? Why would i need to tag it as a transfer unless moving to current or another business account?
Also if the payment goes in after hold i am pretty sure it releases the payment - the fee. so if 15£ was sale it will just give 14 on release to quickfile on release not 15.

4

The only suggestion I can make with the reconciliation is to do small periods to try and identify it. While we’re not able to do this for you, we do have a panel of bookkeepers and accounts that you could contact if you’d prefer. These are accessible via the help button on your dashboard (you’ll find this in the top right hand corner).

If it is released without the fee, that wouldn’t make any difference. By deleting the hold transactions you can just use the gross figure which is shown before the hold occurs (I believe).

So in your case, you would have:

  1. £15.00 coming into the PayPal account, tagged to the invoice
  2. £1.00 tagged to a supplier invoice for PayPal
  3. £14.00 tagged as a transfer to whichever account it was withdrawn to.

If you leave the money in your PayPal account, then you would skip the third point, which would leave you with the net value in the account.

5

Excellent Thank you for the help! :slight_smile: I think i understand.
I did the reconciliation for just one week 01-06 or something as it was over although both balances are matching, I had taken the report from paypal. I dont think a few quid matter too much!
Ill let the accountant know at the end of the tax year.
Thanks again! Super good support here :slight_smile:

Edit: 1 More question please, If i have a personal purchase and it gets refunded back to me, do i just refund it back from the original purchase?

1 Like
6

1508×75 8.23 KB

Do i transfer both of the transactions to the Drawings account?
Thanks.

7

If you’re a sole trader, then tagging both of these to the drawings account should be fine :slight_smile:

8

Thanks ! :smiley: makes sense to me! :slight_smile: