PayPal and Xero

[hmig89]

Hi Guys,

I am in need of a bit of help reconciling my PayPal account with xero, I have a problem entering the fees. At the moment they only way I can seem to do this is do the reconciliation for the full ammount of the PayPal sales, then go to my sales account and add a line on that invoice for bank fess. If there a way to do it at the actually reconcile page?

If anyone has done this, or knows how to please give me a hand?

Thanks
Hugo

 

[David Griffiths]

How have you set up Paypal in Xero? And do you import the individual transactions, or simply enter the monthly totals?

I would set up Paypal as a bank account. I wouldn't import the individual transactions, unless it's important to you to track stock or to track each individual customer - for many people it isn't.

That means that as money is transferred to your current account, you record that as a transfer in from Paypal. At the end of the month, you post one receive money transaction for the total sales, accounting for VAT if necessary. You do a spend money transaction for the total fees, and for any refunds. You won't need to enter the transfers to your main bank as they should already be in there.

 

[hmig89]

Hi David,

Thanks for your reply, I have added paypal using the automatic feeds option in Xero, I would prefer to have every separate transaction listed, as this way I will be able to measure certain expenses and profitable departments.

When I use the reconcile option in Xero, it finds all my paypal transactions, but im jsut not sure how to add in the paypal fees, there is an adjustment option but can't make the totals match.

 

[hmig89]

having a more detailed look, xero seems to now be picking up the fees in a seperate entry, take a look at my screen shot

http://i.imgur.com/riVr5.png

Only problem with this is it wont associate the fee with the transaction?

 

[hmig89]

Hi Guys,

Have figured it out, basically xero separates what you received from paypal and what fees you have into 2 transactions, so essentially you can, can reconcile your sales to the sales account and the the fees to the merchant fees account. Which is all straight forward nice and easy.

However, the slight issue I have with this, might just be me being picky is when I view my paypal account it shows the transaction and fees and separate transactions, which when I have more records can become a hassle so what I have is. Reconcile the sales transfer, then on the second line adds paypal fees and the amount of fees paid and link that to my merchant fees account.

This way when I am looking for a participator transaction I can see exactly what Fee's I paid with that transaction.

 

[Catherine-Xero]

Test response - having a lot of trouble responding so trying this small test response.

 

[Catherine-Xero]

Hi Hugo - great you found your way through the statement lines to figure out how PayPal was importing the transactions into Xero. Very useful screenshot! Are you also making use of bank rules to quickly process the PayPal fees? This will cut down your reconciliation time because you won't be processing 2 statements lines each time because the fees will be taken care of automatically with the rule.
I'm a little lost with your display suggestion - do you want the PayPal fee to be coded to a fees account but to use the payee as for the sales transaction? You can't match multiple imported statement lines to a single transaction in Xero so adding a fee line onto your sales transaction wouldn't help. Also, recording a fee that you paid to PayPal to the payee to keep track of it is probably not good accounting practice (but you'd need to get an accountant to advise you on that!). If you wanted to retain a relationship between the sales transaction and the fee transaction you could put something in the reference field of each during reconciliation (you would need to use the Add details link on the Create tab to get to the reference field). Do you have the financial adviser role for your organisation? The cash coding tab would be a really quick way to process these transactions if you want to deal with each one separately.
Hope something here helps! Thanks for posting your question. We also have a Xero Business Community where a few PayPal discussions have sprung up if you want to see what your peers are coming up against.

I'm not allowed to post URLs on this forum yet so I'm having trouble getting you some pages from our Help Center. If you want to post the same question on our Community (available from a tab in Help Center) I can re-post this response with links there.