Ebay Managed Payments

[snappyfish]

Hi, So I am using Bokio to connected to my bank account. I sell an item via eBay and the NEW eBay managed payments pays you via transfer less their fees.

Item sold £20
Fee £5
Imported via bank feed £15

How would I account for this because money I'm receiving is £15 not £20 less fees etc?

 

[Mr D]

You account for it as £20 income and £5 in fees as a cost.

 

[snappyfish]

You account for it as £20 income and £5 in fees as a cost.

But actually in terms of how to do it.. as money does not hot my bank account, where is it recorded?

 

[paulears]

My accountant has been trying to get my solution to ebay's system sorted and essentially - I simply have to trust ebay pay me the right amount. It is IMPOSSIBLE to track any specific fees - for instance, I just had £105 fees taken from my bank account - yet all I see on ebay are the individual amounts - I cannot find the 'cluster' of fees that amounted to £105 and considering the payments have fees deducted its a lot of money to have accumulated from listing fees and things like that - or it could possibly have been a refund? I have no idea at all. Accounting wise - using free agent - it is a real pain.

I generate an invoice for each item. I now have an ebay account set up in the banking section an day real current account. I clear the invoice in full - even though I did not get the full amount, from the main account when I sell the item. This gets rid of the invoice. When funds arrive from ebay, I transfer them in free agent to the ebay account. This keeps the invoice clearance correct and fees, as they arrive also go out of the main account, but I have to create a bill entry for the fees so they clear. It's hugely difficult/impossible to check for errors. There is of course a huge phantom discrepancy in the ebay account section - because ins and outs simply don't balance. I guess at tax time next year, they will just do a big adjustment to put things right-is.

I hate this system - although I note payments do now come through quicker in the changes in the past few days. The old system was so transparent - how people who sell thousands of small items can cope with the accounting is beyond me. I should also have notice that the Royal Mail postage was NOT coming from the fees deductions. It's my own fault but they were charging the postage to my credit card and I didn't notice. It did explain why this account was always a bit heavy - but I'd assume this was just normal expenditure.

Much of the problem is the vagueness of their payments system. You sell something for £200, in a couple of days £165 appears in your account. However if you've sold multiple items the amount is a random figure, that's virtually impossible to de-construct. Hence why I clear an invoice as soon as it's created. I suppose I should really clear only what arrives, then generate a bill for the missing fees component, then use a balancing payment to clear that, then another to clear the missing invoice component. I can't do that for every sale.

 

[LPB 123]

Much of the problem is the vagueness of their payments system. You sell something for £200, in a couple of days £165 appears in your account. However if you've sold multiple items the amount is a random figure, that's virtually impossible to de-construct. Hence why I clear an invoice as soon as it's created. I suppose I should really clear only what arrives, then generate a bill for the missing fees component, then use a balancing payment to clear that, then another to clear the missing invoice component. I can't do that for every sale.

So you deconstruct every payout and create a bill for the fees for every single payout?

I think you're making it longer than it needs to be as they give you an invoice at the end of the month with all the fees that are taken and the VAT breakdown?

For us, this is how it works:

We've set up a new bank account called "eBay Seller Account" in our accounts software. All the sales from eBay pull through to this account (via software). When eBay make payouts this transfers the money from our "eBay Seller Account" to our main bank account.

At the end of the month we put the ebay invoice into our software and make the payment from the "eBay Seller Account". Our accounts software matches the end of the month balances that eBay provide in their end of the month statement.

This is the same way that we used to do it with Paypal at the end of the month with their fees, to be honest the only thing that's changed is the bank account rather than being "Paypal" it's now "eBay".

Hopefully that makes sense and could be helpful.

 

[LPB 123]

But actually in terms of how to do it.. as money does not hot my bank account, where is it recorded?

Using your example:

Create a new bank account called "eBay" which is where the £20 sale would go. Then the £15 will go from the eBay account to your bank account leaving £5 in the eBay account.

At the end of the month eBay will give you an invoice for the £5 and you'll mark the payment from the eBay bank account. This will balance your eBay account to zero and the £15 will be in your bank account.

 

[paulears]

That’s what I initially did but the system matches incoming payments to invoices and outgoing payments to bills so the other system falls down. Each sale has its own invoice so as the value doesn’t match the income 170 in doesn’t clear a 200 quid invoice. If you create a manual solution then that makes another problem to solve later. The old system paid you 200 to clear a 200 invoice and then the fees were totally separate. Now some fees are separate and some deducted from payments. If they also freeze certain payments then subsequently release them or you do refunds it’s even messier.

 

[Mr D]

But actually in terms of how to do it.. as money does not hot my bank account, where is it recorded?

You record sales of £20. You record expenses of £5.
What goes into your bank account will - for many sites - not reflect your actual sale total. Even before managed payments we had paypal taking their fees first.

 

[snappyfish]

You record sales of £20. You record expenses of £5.
What goes into your bank account will - for many sites - not reflect your actual sale total. Even before managed payments we had PayPal taking their fees first.

Bokio imports PayPal fees in previous scenario. All I'm asking is how to record it for the NEW managed payments.

As mentioned. Imported daily bank transactions don't show the turnover with fees importing later via PayPal etc..

 

[Mr D]

I give up

 

[LPB 123]

That’s what I initially did but the system matches incoming payments to invoices and outgoing payments to bills so the other system falls down. Each sale has its own invoice so as the value doesn’t match the income 170 in doesn’t clear a 200 quid invoice. If you create a manual solution then that makes another problem to solve later. The old system paid you 200 to clear a 200 invoice and then the fees were totally separate. Now some fees are separate and some deducted from payments. If they also freeze certain payments then subsequently release them or you do refunds it’s even messier.

So there no way to mark the £200 invoice as £200 paid in to the "eBay" account for you in your accounting software, then deal with the all fees at the end of the month?

That does sound like a mess, hopefully you can find a way to make it easier.

 

[paulears]

No - not that me and the accountant can find. The nice thing about free agent is it detecting ins and outs and allocating them - it all falls down when amounts don't match. The need to create payments that don't exist or debits that don't show is more work. The thing that really annoys me is how you just cannot find out what a sum paid to ebay is actually for. You can see how much the fees are for a certain product - but if there is a mistake somewhere - how do you know which transaction it is? I don't trust ebay, but now I just have to. Was that £100 the recovery of a payment made but cancelled by the customer? Who knows?

 

[snappyfish]

I give up

Probably best if your struggling.