2 ways to enter Paypal payments into QuickBooks

Paypal is a great way to get paid from your clients.  Especially if you aren’t set up to take credit cards.   However recording the payments in QuickBooks is something I get asked about a lot.

If you invoice your clients out of QuickBooks:

1.  In the Chart of Accounts set up an expense called “Paypal processing fee”.

2. When you receive the payment, enter in the amount that Paypal gives you. This will leave an unpaid balance that is the same as the Paypal Fee.

3. “Write Off” the balance to the expense account “Paypal processing fee”.

If you don’t invoice your clients out of QuickBooks:

1. In the chart of accounts set up a bank account called “Paypal”
2. Also in the chart of accounts set up an expense account called “Paypal processing fees”.
 
3. Record the deposit like you would in any other bank account.  Record the full client payment amount.  The next transactions in the paypal register is the paypal processing fee, which gets coded to the “paypal processing fee” account  you just created.  
4. Lastly do a transfer from the paypal bank account to your checking account.
 
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2 ways to enter Paypal payments into QuickBooks

Handle your finances like following a diet

If your business finances need organizing, be sure to handle them like someone going on a diet. Little decisions help us lose or manage our weight and the same principle applies to getting your bookkeeping in order.

Step 1 Create folders

Separate receipts in the current month according to your spending categories. Take an envelope and mark it “travel/meals” for any travel-related expenses. Make an envelope in the same category for the coming month and then place the envelopes in designated folders.

Step 2 Use a bookkeeping ledger – either paper or online

For the busy individual business owner, starting a company or running an established company means receipts can get in disarray. Buy a ledger from an office supply store. Dome makes an easy-to-use ledger or begin implementing a Web-based solution from Zoho.com or Freshbooks.

Start with the present date in entering expenses and income.

Step 3 Set aside 30 minutes each week for finances

Block out the time just like you would for an important meeting. A Friday may be a logical time—or else Saturday morning from 9 to 9:30. Whenever you do it, be committed to spending 30 minutes once a week to tidy up your books.

If you need to hire a bookkeeper, you can use this free test from the American Institute of Professional Bookkeepers. The test is for companies using an accrual system. http://www.aipb.org/testrequest.php

Handle your finances like following a diet

Update on my Xero Accounting software transition from QuickBooks

I am a certified QuickBooks Pro Advisor and have been using QuickBooks Accounting Software for at least 7 years.    I have recently switched over to Xero Accounting System.  It is a cloud product based out of New Zealand.   I have been using this product for a few months and so far so good.   I am really liking it.

So what make this so great you ask, well, it works for my business because:

1)  I can access my information from my iPhone, (they have a nice app).

2)  Plays well with others, I use Workflowmax and the inegration between the two is nice and simple.   Plays well with Freshbooks as well, and the list gets longer.

3) Bank Feeds and import of bank transactions.   I have a Paypal feed which once I set up I don’t have to do a damn thing to it, information comes in.    You can import a .csv file easily from your bank.

4) Finally a decent cash flow report that I don’t have to manipulate.   The cashflow report in QuickBooks wasn’t my favorite, it took some work.  In Xero I ran the report and there it was.

5) Customer Service is great.   I asked a question, I got an answer the next day.   Usually when I go to QuickBooks tech support, they are trying to upsell me, or I know more about the software that the person reading from the script.

6) QuickBooks was trying to be all things to all businesses it got a little cluttered.   Xero sticks to the basics, clean and simple.

There is still some more work to do, like adding more US Bank Feeds to their roster and a small Paypal issue that they are working on.   Currently you cannot print checks out of the system, but I understand that it will soon.

It isn’t a solution for every business, but if you are a service provider/mobile warrior you should give it some consideration.

Update on my Xero Accounting software transition from QuickBooks