![]() I hope it helps and would be very interested to see how other bookkeepers handle these types of transactions. This is just a quick and dirty summary of how I approach PayPal data entry and reconciliation. You may want to check that the flow through of credit card payments to PayPal has been properly reflected in the books. ![]() If someone pays by eCheck, there could be timing issues regarding the physical receipt of the funds.ĥ. Refunds can create a problem when the purchase is made in one month and refunded in the following month.Ĥ. I normally confirm these "odd" transactions with the site owner to get the " background story" on the problem transaction.ģ. When this happens, usually the shopping cart sale was booked manually (or with some kind of work around) by the site owner. When this happens, the payment is sitting in PayPal with "no sale" in the shopping cart. ![]() Sometimes things can go awry in the shopping cart. I manually book the events pertaining to this transaction.Ģ. Where things can get mucked up is when a credit card is dinged for only part of the purchase price. These are the most common things I have found that can make a monthly reconciliaton difficult:ġ. Potential Problem Areas You May Want To Audit Again I obtain this information from the Monthly Statement and cross check that my Excel download file agrees to the amount. In my reconciliation window, I enter all the PayPal fees paid in the month into the merchant service charges line. I formally reconcile each PayPal account utilizing the statements downloaded in the previous step to obtain my opening and closing balances. ![]() I download a pdf of the PayPal Monthly Financial Statement - Summary and Detail FOR EACH CURRENCY.Ĩ. not the date the shopping cart sent it.)ħ. Having booked "in transit" items separately, as discussed above, allows me to deposit the "in transit" payment on the date PayPal received it (i.e. I deposit the payments received into the PayPal bank account using "Make Deposits". Affiliate invoices would have been booked in the prior month.Ħ. again my data source for this is the PayPal Excel file. I "receive payment" on any affiliate payments. I record separate "receive payments" for "in transit" items to facilitate the bank reconciliation.ĥ. If there are no timing differences due to "in transit" items between the shopping cart and PayPal, each invoice should show paid once you complete this step. I totally ignore PayPal fees attached to individual transactions at this point. one payment for each currency invoice for the period being booked. If there is more than one currency, there will be more than one payment to book. from the PayPal Excel file data) to the invoice(s) booked in step 3. I "receive payment" as a lump sum payment (daily, weekly, monthly, etc. For example, the site may sell their product to Canadians in USD.Ĥ. It is important to note that Canadian sales can be in a foreign currency. Foreign sales normally attract zero sales tax so I like to capture this information in a separate invoice. Because we have sales tax to account for in Canada, one of "my sorts" is by country so that I can capture Canadian sales and the associated sales tax by province/territory. i.e PayPal is the only place to get the sales information for a particular product. The only time PayPal would be my source for this step is if the sales are not captured by a shopping cart. My source document(s) for this entry is usually the shopping cart reports/data. whatever is most appropriate for your organization) of any sales received. I book a summary invoice (daily, weekly, monthly. I massage the data (do multiple sorts) to break the information down to sales, affiliate payments received, transfers and purchases.ģ. Instead I download the PayPal data for the period I am working on in Excel format. My preference is to not download PayPal transactions. I don't merge it all into one PayPal account.Ģ. I setup a separate "bank" type account for each PayPal currency. I'm sure there are other ways to setup but I have found this works best for me.ġ. I'm not conversant in audit procedures but what I can do is explain how I setup and reconcile PayPal accounts in QuickBooks. What is the best way to keep track of a "PayPal" account?
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