Best accounting practice for PayPal and FreeAgent

[tbon]

Hi, we have a small web business with hundreds of customers each paying us a small fee using PayPal. We want to do our bookkeeping and accounting with FreeAgent. What's the best way to connect the two? Do we have to represent the PayPal account in FreeAgent as a bank account and import all the transactions so that every detail is available in FreeAgent? Or rather just record a montly sum? I'm wondering what the best practices are to make the end of year accounts as easy as possible.

 

[MyAccountantOnline]

Hi, we have a small web business with hundreds of customers each paying us a small fee using PayPal. We want to do our bookkeeping and accounting with FreeAgent. What's the best way to connect the two? Do we have to represent the PayPal account in FreeAgent as a bank account and import all the transactions so that every detail is available in FreeAgent? Or rather just record a montly sum? I'm wondering what the best practices are to make the end of year accounts as easy as possible.

You can enable an automatic feed for PayPal to FreeAgent (I have several clients using it) have a read here

https://support.freeagent.com/hc/en-gb/articles/115001223544-How-to-set-up-the-PayPal-API-and-enable-automatic-feeds

 

[tbon]

You can enable an automatic feed for PayPal to FreeAgent

Thanks this works fine now.

Now, as I have hundreds of small customers (each paying a small annual amount), I'm wondering if it's a good idea to create a separate contact in FreeAgent for each? This way I could follow their individual balance in FreeAgent. Or is it better to just assign their payments to one generic contact and follow their individual balances somewhere else in a different software?

I'm just wondering what the best practices are, if anyone has a similar business?

 

[MyAccountantOnline]

Thanks this works fine now.

Now, as I have hundreds of small customers (each paying a small annual amount), I'm wondering if it's a good idea to create a separate contact in FreeAgent for each? This way I could follow their individual balance in FreeAgent. Or is it better to just assign their payments to one generic contact and follow their individual balances somewhere else in a different software?

I'm just wondering what the best practices are, if anyone has a similar business?

It's going to be very time consuming setting up a large number of customers but it very much depends on how much detail you need. Certainly for accounts and tax I see no reason not to use one contact.

 

[tbon]

It's going to be very time consuming setting up a large number of customers but it very much depends on how much detail you need.

It seems I will be able to import them from a CSV file, so setting up shouldn't be too bad.

On the other hand, if I understand correctly, I will have to create an invoice in FreeAgent for each PayPal payment to be able to match them to contacts (i.e. customers). Do you think my understanding is correct or you know a way around?

 

[Vasquez65]

Yes, you need an invoice to match to each contact’s payment, it’s the only way to follow them individually.
It may even become compulsory once Making tax digital comes in - if anyone knows this is the case it would be helpful. I know my Wife assigns a photo attachment of the invoice to the payment too.
You don’t have to send it to them, I have customers who don’t want an invoice so I just send it to myself on a separate email address to the one registered on freeagent.
Once you create the contacts list it gets a lot easier, I know my Wife hates creating new contacts.

 

[MyAccountantOnline]

Yes, you need an invoice to match to each contact’s payment, it’s the only way to follow them individually.
...

In the ideal world yes but realistically with hundreds of customers it's not always realistic.

 

[MyAccountantOnline]

Yes, you need an invoice to match to each contact’s payment.....
It may even become compulsory once Making tax digital comes in ....

I can not for one moment see that ever happening.

 

[tbon]

In the ideal world yes but realistically with hundreds of customers it's not always realistic.

It definitely sounds like an effort to set it up and maintain it. On the other hand, when done, FreeAgent could be used as a tool to follow payments and refunds on each customer's account, as it aggregates various methods of payments. As I don't have a good tool for this yet, I'm considering to take a deep breath and just do it.

 

[MyAccountantOnline]

It definitely sounds like an effort to set it up and maintain it. On the other hand, when done, FreeAgent could be used as a tool to follow payments and refunds on each customer's account, as it aggregates various methods of payments. As I don't have a good tool for this yet, I'm considering to take a deep breath and just do it.

FreeAgent is good - I use it for clients and have several clients using it. It'll certainly (like most bookkeeping software) enable you to keep track of sales.

 

[Paul Kelly ICHYB]

Why do you NEED to record every transaction and who is making it?

If you need the data, you have it vis PP/downloads.

How are you initiating the PP transaction?