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Free Accounting Software Forum - Pay Pal payment

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31/01/2012
Hi Glen
My question today is and I think this one will make me look like the total newbie I am. What is a simple way of entering a Pay Pal payment? Do I just put in the net amount and forget about the Pay Pal fee for the transaction. Also do I also need to separate out the postage charge that was part of the payment?
Dave
01/02/2012
Hi Dave,

Good question and the answer is: depends.

I think you mean you have sold something on ebay and want to enter the cash received, as if it was a purchase there would not be a fee.

If pay pal are going to transfer it into your business bank account you can:
1. Just enter a normal receipt for the full amount.
2. Enter a payment for the fee.

Whilst you could enter a receipt for the net by adding a line with the negative amount I am suggesting a separate payment so that you can send the pdf receipt to the customer.

If it's a personal pay pal account you could enter it as a journal. An example journal with the suggested accounts is:
Loan from owners $200
Fees $10 - if this has GST on it you can add the GST Taxable Purchase tax code to this.
Sales revenue -$210 - if it's got GST on it you put the GST Taxable Sale tax code on this.

If it's a personal pay pal account and you still want to use the Cash Received because you want to send a pdf receipt to the customer then you can enter Cash Received and a Cash Payment as in the first option above, but in addition you need to enter a Cash Payment (for the net) to yourself as you have the funds in your personal account.

For the postage you can add another line and separate the Sales Revenue into the amount for the item sold and the postage. You would do this if you want to show the postage separately on the invoice. You could also create a revenue account for "Sales Revenue - Postage".

Regards,

Glen
10/02/2012
I thought I might just post what I do in a case like that, let's say I sold something for $100, the customer paid $8 postage, PayPal charged a $2 fee, and when I posted the parcel Australia Post charged me $7.

My entries would be (omitting the fact that things might be GSTable or not):

CASH RECEIVED:
Income - sales: $100
Income - postage: $8

CASH PAYMENTS:
Expense - bank charges (PayPal fee): $2
Expense - postage: $7

Hopefully that helps too
 

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