How to Reconcile PayPal

[michael1060]

We are in desperate need of a solution in regards to reconciling our Paypal statement. We process over 1500 transactions monthly via Paypal. Additionally, we issue various refunds and pay various vendors with Paypal. To complicate things further, instead of taking out a once-a-month fee, Paypal takes a fee at each transaction.

To reconcile all this data line-by-line is too time consuming. We have been making one journal entry with the data from the monthly statement. But it is not matching our balance in our system,

Does anyone have any ideas how to effectively reconcile Paypal?

[skier]

Wow, you have that many transactions and now you're looking for a quick solution. Unfortunately that's bad planning on your part as there is no quick solution.   But that is history and you have to move on.

Just thought we share some experience with you. We learned sometime back that the both the Account Reporting functions are data exporting features are quite limited both function and customization. If you want to make a career out trying to get the transaction information you need, then using the Account Reporting tools is the right tool to use.

Seems that PayPal certainly could have done a much better job but, unfortunately, it is what it is. You may have some luck by using the Business Report Portal but, there's still a lot of room for improvement. For example, we would love to see PayPal and Quickbooks actually work together to come with a real working export/import function. Perhaps some day.

Having said that, we learned not to rely on PayPal's Business Reporting functions and simply input all of sales transaction information directly into Quick Book Pro. Yes, it does take a minor effort to do this, but you can't complain about the end results. We can access our customer database and sales transaction info anytime and can run any type of report when we need it. And it makes doing taxes a breeze. We now only use our PayPal Account Reporting for transactions double checks when needed but, that's very rare.

 Regards,

 skier

[michael1060]

Hey,

Thanks for the response. How do you guys record the Paypal fees? Do you manually adjust each transaction?

We currently use Netsuite and we are considering doing a monthly CSV import to Netsuite. However,  we are unsure how our system will handle all the Paypal fees.

[GlassMan]

I have found no other option than to enter each item and split out the fees for each transaction.  PayPal is easy to use as a selling tool, but falls very short when it comes to reporting for income taxes.  I plan to use the card a lot less, the time involved with reconciling the accounts is not worth the cash back.

[wseyller]

I do not know about any automation methods with the amount of transactions you have, but this is the best way in my opinion to account for the paypal transactions in your financial software.  The method I use works in quickbooks anyway I assume it will in the software you use.

Paypal is essentially a bank account.  Technically this is true.  Create a bank account in your financial software labeled as "PayPal".

Create an expense account named "PayPal Fees".

Create a payment type as "PayPal".

Record your sale as normal.  In the sale use the full price that your customer paid for the items.  Do not worry about the ebay fees at the moment.

When you receive the payments in your financial software, choose the "PayPal" payment type.  This way when you do the deposit it helps to keep you from accidentally depositing cash payments in to paypal bank, and paypal payments into your normal checking account.  When you receive the PayPal payments also choose to deposit them into the "PayPal" bank account.

Next is to decide how often you withdrawel paypal funds to your checking account.  For example if you do it once a month, then you can export to  CVS file all transactions after the previous withdrawal to current withdrawal.  Use an excel formula  to quickly add up all of the paypal fees.

Using the "PayPal" expense you can record the total fees by writing a check from the "PayPal" bank account to a vendor you can create called "PayPal".

Once I see the withdrawal is received into my checking account I will then do a bank transfer from "PayPal" to the "Checking Account"

If you are making purchases or paying ebay seller fees using your account, then you can write checks from "PayPal" bank account.  Either enter each payee as a vendor or create a general expense to write the check to.  There are many ways to do it all.

[kaimana]

Hi there -

Wow - I beg to differ but you really don't need to input all those transactions as the other posters have mentioned.  Just use SimplePort software.   There are others too (like that from BigRedConsulting - I use two other versions of their conversion software), but per the recommendation of fellow bookkeepers in the know, SimplePort is/was the way to go for the PayPal stuff into Quickbooks.  (I use the BigRedConsulting software to convert data from banks and credit cards for importing to Quickbooks.)

I was in exactly the same boat as you for the last few weeks, wrestling with the same amount of data.  In the end, it took a bit, but I'm officially on the other side.  SimplePort works, enters all the sales transactions, with fees, refunds, etc.

In any case, I'd highly recommend contacting the folks at SimplePort.   All that time I took trying to do it every other way with what PayPal offers was a TOTAL waste of time.  I wish I had the good sense to figure out SimplePort was really the direct answer I was looking for.

And no, I don't work for them.  Nowhere near.

Best of luck!  You can do it!

[jdq]

i appreciate the fact that simpleport is doing this and love a scrappy smart company filling a niche -- but it is insane that Paypal doesn't have its act together. They should buy Simpleport from the people who were smart enough to make it and then give us this basic service for free -- it's only in Paypal's best interest. At this moment I'm sorry I've added Paypal option to our customers...