Reconciling paypal statments in QB?

[Coloradomom]

My client accepts payment through Paypal (also check, cash too). I am ALMOST done entering all her 2009 history so that we can get to a 'maintence' level of bookkeeping. I'm wondering what you do for paypal reconciling in QB. Do you set it up as a separate bank account, accept payments into that account, then transfer funds into your operating account? or do you just accept a payment into your operating account, and for payment type select EFT or OTHER and list it as a paypal transaction?

[Assistance By Faye]

What I did for the company I work for was enter a Sale Receipt using PayPal as the payment type. And then when funds were transferred into the bank account I made a seperate deposit for those paypal tranacations including entering a line on the deposit for the merchant fees taken. So the deposit matches what was deposited into the checking or savings account.

[debhowardgreenleaf]

The best way, by far, to handle PayPal transactions is to setup up a separate "Bank"-type account called PayPal. When you receive a payment from a client, you "deposit" that payment into the PayPal account. At the same time, you can record the PayPal fee in the PayPal register. If and when you transfer money from PayPal to your business checking account, you simply use the "Transfer Funds" screen (Banking > Transfer Funds).

The problem with using any other method becomes obvious when you have lots of transactions. What if you have six payments over two days that add up to $601.50. For the sake of simplicity, you want to transfer $600 over to your checking account. Only if PayPal is setup as a separate bank account can you leave that $1.50 sitting in PayPal. This method will also allow you to "reconcile" your PayPal account in QB against your PayPal account to make sure that you both agree on the balance.

HTH!
Deb

[tgrant]

I think it would depend on the amount of transactions through Paypal but I agree with DebHowardGreanleaf, my first thought would be to set it up as a separate bank account for the simplicity of reconciliation.

[Assistance By Faye]

Deb's posting does make a lot of sense, the company I worked for was a very small company... maybe 10 transactions a quarter and always transferred the full amount to their checking accounting. Good Luck with whichever method you choose.

[bluewaterbusiness]

I agree with Deb, using Paypal as a separate bank account in QB will simplify future transactions and work flow for you. It will also allow you to reconcile easily - no matter how many Paypal transactions the business does now or in the future.