Handling PayPal Fees in WorkingPoint
Topic: Double-entry Bookkeeping,How-to,Tips & Tricks | Comments (5)
Lately, we have gotten several support inquires on the best way to account for PayPal fees in WorkingPoint. PayPal integration is definitely on our roadmap but until then, here is a quick and easy way to record your PayPal transactions in your WorkingPoint account.
PayPal and other merchants (like VISA, MasterCard and AMEX providers) charge a fee for their service, usually a percentage of the sale. These are often called “Merchant Discounts” because they take the percentage off the top of the sale and deposit the remaining cash into your account. These discounts can make recording customer payments a little more complicated then cash or check payments, since there are additional steps required to accurately record the transaction.
To record PayPal transactions in WorkingPoint:
- Create a PayPal Bank Account – Go to Accounts, click New Account, choose Bank Account and name the account PayPal, click Save. This is the account you will use to record the full payment made by your customers, so you can update the invoice status to Paid in Full and accurately track your Accounts Receivable.
- When you receive a PayPal customer payment, select Receive Payment from the Invoice View, fill in the payment details, including the full amount of the payment, and select the PayPal account as the Deposit to account. This deposits the full amount to your PayPal bank account in WorkingPoint. The balance of your PayPal account in WorkingPoint should always match the balance PayPal has on their records for you.
- PayPal requires that you transfer over the payment from PayPal to your actual bank account. This is when they take their discount. After you transfer money from PayPal to your bank, record in hand, record the transfer in WorkingPoint. From the PayPal bank account, select Record Transactions > Funds Transfer. The transfer from account will default to PayPal, select the account you had PayPal transfer your funds to as the “to” account and the amount of the funds you transferred. Click Save.
- Finally, record the discount that PayPal charged you for the service. From the PayPal bank account, click Record Transaction > Payment or Purchase, enter PayPal as “Paid To”, enter a method (optional), select your “Merchant Fee/Discounts” account or another account you use to track merchant discounts as the bookkeeping account, enter the amount of the discount and click Save.
Still stuck? Shoot me an email at support@workingpoint.com.
Kelli
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