Using PayPal | PayPal Tips for QBO and Xero

Using PayPal | PayPal Tips for QBO and Xero | Ecommerce Accounting

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6 жыл бұрын

Every accountant seems to hate using PayPal and can't figure out... how does PayPal work with bank accounts. But I kinda like it. If you know the right reports to pull, it's not much more complicated than working with a bank account. The right .csv file will essentially give you a PayPal register that outlines ins and outs and PayPal business fees. If you're using QuickBooks PayPal now has a new app, "Connect to PayPal" that will give you the details you need to properly do your accounting.
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💡✔️Helpful Resources
Hector Garcia CPA's video on Connect to PayPal app:
• QuickBooks Online and ...
Xero accounting software:
www.xero.com/us/?type=partner...
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Пікірлер: 66

@AcuityEcommerce 6 жыл бұрын

Thanks for watching! I hope this helped demystify PayPal for you. Any questions? Comment below!

@bugeye234 6 жыл бұрын

Great video!

@AcuityEcommerce 6 жыл бұрын

Thanks!

@hilaryjl1 2 жыл бұрын

The MOST helpful of all PayPal videos I have watched. Thank you so much!

@AcuityEcommerce 2 жыл бұрын

You are so welcome!

@Essays4College 3 жыл бұрын

Nice delivery on your video. Thanks!

@AcuityEcommerce 3 жыл бұрын

Thanks for watching!

@vikeshparmar8429 2 жыл бұрын

Thanks for the video. It's really helpfull to complete accounts😊

@AcuityEcommerce 2 жыл бұрын

You're welcome!

@daviddoernbach446 4 жыл бұрын

What a wonderful job. I have a doctorate in adult education and I couldn't have done a better explanation of specialist material.

@AcuityEcommerce 4 жыл бұрын

That's very sweet. Thank you!

@chandrakhatri3473 4 жыл бұрын

Great videos on Xero and cloud accounting. Keep it up ✌️

@AcuityEcommerce 4 жыл бұрын

Thanks!

@BellaKamodo 2 жыл бұрын

Thank you!!! 🤗

@AcuityEcommerce 2 жыл бұрын

You are so welcome!

@sharonmiller9407 6 жыл бұрын

Hot mess is a bit of an understatement - thank you so much for posting this!!

@AcuityEcommerce 6 жыл бұрын

My pleasure!

@kevin-9726 4 жыл бұрын

I have connected my paypal account with Xero. However, the statement balance shown in the year end reconciliation report is not the same as my paypal statement. It seems that the feeds are not working correctly. I have two sets of data to do comparison now, the paypal statement and the paypal account transaction exported from Xero. How can I identify the differences through a google sheet?

@krissyzilli509 2 жыл бұрын

Hi Patty! I see a similar comment below and I think your answer might be that we should book a manual entry rather than use the XERO-->PayPal integration. When I integrate Stripe, the customer data and item description is pulled in automatically. With paypal the description is missing. If it were included in the automation, I would just go to Cash coding and confirm my bank rules. Why is this available in Stripe and not Paypal? It seems like an easy thing to fix!

@AcuityEcommerce 2 жыл бұрын

One would think so, but unfortunately, we have no control over what PayPal includes in their feed, so we can only do what we can do. :)

@karendunroe2531 6 жыл бұрын

Hi, great video. Thanks How would you deal with payments on hold that have come through on Xero?

@AcuityEcommerce 6 жыл бұрын

Karen Dunroe We record them to a reserve account (current asset). When the funds are released, they go from the reserve account bank to cash (PayPal).

@robeenlam4797 4 жыл бұрын

Thank you for Video. Just wondering how can we track the sales as GST sales or GST free sales If sales volume is too big?

@AcuityEcommerce 4 жыл бұрын

Great question that I don't have a good answer for. We only do US accounting for US businesses. Maybe someone else can jump in and answer this for you?

@buckshotmanufacturing9233 5 жыл бұрын

The question I have is connected to how a refund flows and if it should flow through Quickbooks. When I upload transactions from my ecommerce I don't see refunds and they are intiated in my ecommerce web page. Shows on the invoice in ecommerce, shows in paypal but does not come through to QB when transactions are uploaded

@AcuityEcommerce 5 жыл бұрын

Yep. Ecommerce data is notoriously garbled. With many systems, the refunds will affect previous transactions... which have already been downloaded and recorded. It's one of the many reasons why ecommerce accounting can be such a nightmare!

@heroicwhisper 6 жыл бұрын

Would have liked to have demonstrated how to reconcile an invoice that was paid via PayPal considering the fees showing up on the bank fees as well as the reduced invoice amount

@AcuityEcommerce 6 жыл бұрын

Thanks for the feedback. I'll consider that for a future video.

@nikkaandkirin9010 3 жыл бұрын

Hi! Thank you so much for making these videos, I've learned so much and you make things so easy to understand for an accounting dummy like me. I've integrated Square with Zero and have set up clearing account for it. Should I also create a fake bank account for Square before it gets transfer to the bank account?

@AcuityEcommerce 3 жыл бұрын

You should really only need one clearing account. Detailed deposits go there, and the transfers from what lands in your bank account would wash those details out to zero. I'm glad you've found our channel helpful!

@florak1087 Жыл бұрын

HI there. Great video!. I am doing some books for a friend and he does the PayPal reconciliation but then when it comes over into QBO I see that it is uncategorized. Mostly the fees and looks like refunds. There is no account name and I do want to add these in. Being new to PayPal, I want to do it correctly. Do you have a video on categorizing transactions after they have been reconciled from PayPal? I am pretty new to PayPal and just need some guidance. Thanks so much.

@AcuityEcommerce Жыл бұрын

Our online course talks more about that, but I'm not sure I have a KZfaq video that dives into what you're asking. You might want to poke around on KZfaq a bit more.

@habibulislamchowdhury3932 3 жыл бұрын

Hi, thank you for this video. This was very helpful for me. I have one question : If we upload PayPal transactions by using a CSV file which contains Gross, Fee, Net etc. ; do we need to use a Holding Account or we can match our Bill with PayPal Lines directly???? TIA, Habib

@AcuityEcommerce 3 жыл бұрын

You may be able to match them directly, but be careful that the volume doesn't overwhelm the system. (Less than ~ 1,000 transactions per month should be fine.)

@catherinepabon1263 2 жыл бұрын

Thank you for all your amazing content! Based on what I'm hearing in this training, you would not recommend PayPal being connected as a Bank Feed when a business has consistently between 500-1000 transactions in a month? Would you then JE the activity once a month?

@AcuityEcommerce 2 жыл бұрын

I'm assuming most of those come from marketplace sales. If yes, I would use A2X to post the revenue and filter the PayPal transactions to only post the non-revenue transactions.

@nicolelandau319 5 жыл бұрын

What do I do with Pending Transactions that are "Bank Deposit with PP Account"? They don't come from the bank feed, but are throwing off my reconciliation because they aren't on the books. Do I do a JE and if so, to what accounts?

@AcuityEcommerce 5 жыл бұрын

Without looking at what you're doing.... it sounds like you're double-recording payments that are in the PayPal account. People have banks and credit cards tied to PayPal, and if there's not enough money in the PayPal account, PayPal will get the money by pulling money from the bank or credit card. It's possible that you're recording the PayPal transaction (the original payment out) but then you're ALSO recording the draft from the bank account to that same expense INSTEAD OF recording the original payment out and then recording the draft from the bank account as a transfer to PayPal. Example: You pay $30 to Joe Schmo for commissions using PayPal. There's no money in PayPal to cover it, so PayPal pulls $30 from your bank. You'll see a total of three transactions: one in the bank account and two in the PayPal account. The two in the PayPal account are: payment out to Joe Schmo and deposit from your bank. Those two should offset each other to get back to a zero balance. The one in the bank account is a payment out that looks like "PAYPAL - Joe Schmo." I suspect you're coding BOTH payments to Joe Schmo as payments, but the one in the bank account is just a transfer of cash to PayPal to cover the payment that's being sent out of PayPal, so it should be recording as a transfer, not an expense. Super hard to explain, and I'm not even sure it's the problem you're having, but hoping it helps.

@dustinjackson9502 4 жыл бұрын

I'm a total beginner when it comes to bookkeeping, but I would like to learn how to do it for my Shopify dropshipping store with my quickbooks online that I already have. Do you have any videos or know of any books where I can start to understand this and learn how to keep my ecommerce business organized?

@AcuityEcommerce 4 жыл бұрын

Here's the thing. Yes, we have an Accounting for Shopify course (academy.catchingclouds.net/) that gives you a blow-by-blow of how to do accounting for your Shopify store (on both QuickBooks Online and Xero), but it assumes that you have a basic understanding of bookkeeping. (It is also in the process of being updated for A2X for Shopify which will help you tremendously - all students will have access to any future updates.) If I were you, I'd take a little time to familiarize yourself with some basic accounting concepts like how to read a balance sheet, an income statement (aka Profit & Loss statement), understand the difference between assets and expenses as well as inventory and cost of goods sold... stuff like that. Then a course like ours will make enough sense for you to be able to tackle the rest. Tip: since you're a dropshipping business, your cost of goods sold calculation is much easier because you never hold onto inventory. When people buy your products, you'll expense those to cost of goods sold straightaway. P.S. My best advice, if you can afford it, is to align yourself with an ecommerce accountant to help you get your books squared away and get you on the right track. Acquiring this knowledge on your own can be a deep investment of your time. I would argue it's invaluable to understand accounting when you're running your own business, but... there are definitely trade-offs in getting there. Good luck!

@Maria-ic1zp Жыл бұрын

Our organization uses Xero for the bookkeeping and use Paypal to accept payments on sales only and not linked to Xero. I've setup where paypal will payout the sales transactions to the organization's bank account periodically. How would I manually reconcile the bank account when paypal transfers the money as net (paypal fees already deducted) from the sales? What would the journal entry look like? Your help is greatly appreciated...

@AcuityEcommerce Жыл бұрын

I would check out my video on clearing accounts. It'll definitely help you out here. kzfaq.info/get/bejne/mpmDmNylptKadIk.html

@sheerbravado7393 5 жыл бұрын

Good to see someone who is comfortable with PayPal. I would like help adding more than one PayPal account to Xero. I have tried but Xero just seems to think you are referring to the one already set up.

@AcuityEcommerce 5 жыл бұрын

Hi Sheer - that sounds like an excellent question for Xero's tech support. :)

@DerekIwasiuk 4 жыл бұрын

I can't handle the in and outs in paypal for currency conversions, I see sometimes 5 transactions for one payment. Lazy someone here at end of year, screws it all up.

@AcuityEcommerce 4 жыл бұрын

I feel your pain.

@guineapigscotland 4 жыл бұрын

Hi! I am wondering if you offer any service for a 1on1 call or short training on how to add manually once per month all my paypal transactions in QBO. I started selling on ebay last month and there is probably hundreds of transactions and I don't know where to begin. Thank you!!

@AcuityEcommerce 4 жыл бұрын

Sorry, nope. I simply don't have time at the moment. I'm considering doing an online course about this, though....

@jacquelineh5865 5 жыл бұрын

Hi, I set up Paypal in Xero and it's now asking to reconcile each order that come in, it's asking me to do over 2000 of them and asking to enter each customers name, is this the case or is there a quicker way. Thank you in advance if I get a reply.

@AcuityEcommerce 5 жыл бұрын

When I say (at about 1:24) that we don't always use the integration, I mean that we virtually *never* use the integration for the exact reason you're talking about. There's too much data. If you're even remotely successful online, it'll crush your accounting system. We summarize the data and reconcile and post it that way. This video shows what the PayPal data looks like under the hood. If you want to see the process in action, our Accounting for Shopify course is good at showing the methodology we use for that. The course uses Shopify Payments, but PayPal will essentially be the same. The combo of this video and the course should put you on the right track. academy.catchingclouds.net/p/accounting-for-shopify P.S. There's a discount code in the notes above!

@jenniferlowe4515 4 жыл бұрын

@@AcuityEcommerce When you say summarize, how exactly do you do that?

@maryelmsagols6248 4 жыл бұрын

Hello! I have a doubt about this. I have my PayPal account linked to my bank account, so when I make the bank reconciliation in Xero, do I need to make both reconciliations (PayPal and bank account)? I think I am just repeating the work as it is all in the bak account already... Can you please help me? Thanks 😊

@AcuityEcommerce 4 жыл бұрын

Yes, you will need to reconcile it in both. Let's pretend the transaction is a transfer of funds from PayPal to the bank account. When you reconcile it in PayPal, you're verifying that the money left PayPal (according to PayPal). When you reconcile it in the bank account, you're verifying that the money was deposited in the bank account (according to the bank). If the transaction shows up one place but not the other, you know something went wrong... and that's the ENTIRE POINT of reconciling the accounts. :) P.S. For PayPal specifically, I often see people record PayPal transactions in the bank account when what is *actually* happening is that the payment was made out of PayPal but that PayPal funded it by doing a transfer of money from the bank account to PayPal. So there are TWO transactions there, not just one: 1) a payment out of PayPal and 2) a transfer from the bank to PayPal.

@maryelmsagols6248 4 жыл бұрын

Wow thanks! And that PayPal withdrawal (when I reconcile PayPal) should be entered as Sales? Or how?

@AcuityEcommerce 4 жыл бұрын

This is where accounting knowledge comes in. :) The PayPal withdrawal will be coded for whatever purpose you spent that money. Could be for anything! Supplies, outside services, advertising. You'll know better than me since you're the one who spent the money on PayPal. :D

@marklicc 4 жыл бұрын

Do I even need to integrate PayPal with Xero? PayPal is just a transfer vehicle for me, I mainly use it to pay via Credit Card and may have a very occasional payment or invoice to someone. Either way, the transaction will show up on my credit card statement or bank account. Accounting for PayPal transactions seems redundant.

@AcuityEcommerce 4 жыл бұрын

People use PayPal in different ways. We typically don't integrate PayPal unless our client is using it only for payments (i.e., paying affiliates, paying for tools). For those who use it exclusively as a payment processor, connecting it just muddies the waters, in my opinion.

@marklicc 4 жыл бұрын

@@AcuityEcommerce As I thought. Thank you. I am not resetting up my account because of all the mistakes I make the first time. I will forgo this step.

@amandacroxon702 4 жыл бұрын

Hi, I have imported PayPal as separate bank account but when it imports the transactions into the feed its only giving me the net sales figure and not the gross therefore underestimating the true sales figure and meaning that I have to amend every transaction - have I missed something - I am pulling my hair out with this one any help would be greatly appreciated :-)

@AcuityEcommerce 4 жыл бұрын

You need to troubleshoot that by diving into the sales data in the store that the sales are coming from.

@amandacroxon702 4 жыл бұрын

@@AcuityEcommerce Hi thanks for the reply the store is Ebay - are you saying that this has been set up incorrectly? I have no experience in this field - so way out of my depth :-)

@luigyabreu9938 3 жыл бұрын

Using this manual method, do you need a PayPal clearing account?

@AcuityEcommerce 3 жыл бұрын

Well... I think it depends on your situation and what you're trying to do. If you have international transactions... yes, a clearing account for each currency. If you have a ton of online revenue transactions, I would look to a tool that would summarize all that for you (i.e., A2X for Amazon, eBay, Walmart, Shopify). Otherwise, it's just like a bank account.

@TacticalMove 3 жыл бұрын

I have 2 separate PayPal accounts linked to 2 bank accounts held by my one Business. It would seem I am only able to have 1 PayPal account linked to Xero??? is this true?

@AcuityEcommerce 3 жыл бұрын

I believe it's only 1 PayPal account per login. So if the second PayPal account has a separate login (i.e., different email address and password), you should be able to add it. You also might be able to get around this if you have a second user on the Xero account... you add one PayPal account, they add the other, but they should both work. (Even if you're the only person, you could create a separate Xero login with a personal email address or something like that.) I hope this helps!

@TacticalMove 3 жыл бұрын

@@AcuityEcommerce :) Fantastic. It was a little of a fiddle but thus far it's good. I have at least been able to create the second GBP Paypal Bank Account and link it to Paypal (lets see if the transactions come over). Thank you very much. I am going to be watching more of your channel videos!