Just started using a PayPal account linked to my business account, BUT I linked the PayPal payment method to my personal credit card, rather than my business bank account. I didn’t think anything of it at the time as I often pay for things on my personal account then just pay myself back.
In this case I see that the PayPal account feed in QF shows the payments being made already from my credit card for the purchases, so like Go-cardless the account balance becomes zero.
If I mark the Purchase receipt/entry to the Paypal account am I going to end up with an ever increasing balance difference or am I looking at this the wrong way??
Alternative do I have to link the Business Debit card to Paypal and just leave it at that??
You would treat this as you lending the funds to the business.
As a sole trader, you would have a “Proprietor Drawings Account”, or as a limited company you would have a “Directors Loan Account”. Instead of tagging the payment from a credit card or current bank account, you would tag the transfer from your drawings/loan account to the PayPal account.
So for example, let’s say I spent £100.00 on PayPal, which in turn took £100 from my personal credit card. We’ll assume I’m a sole trader for this.
My PayPal account have a £100 payment out tagged to the supplier invoice, as normal. Then, when the money leaves my credit card or hits the PayPal account, I would have a transfer tagged as a transfer between the two. In effect, this would leave the business showing as owing you money.
