Did you know there is a report that can help to easily reconcile the PayPal account in QuickBooks Online?
The Financial Summary, in conjunction with the Activity Log, enables bookkeepers and accountants to reconcile the PayPal account in the same fashion as a traditional checking account.
The report has all key areas covered, including:
- Starting balance
- Ending balance
- Sales (Money in*)
- Refunds and/or chargebacks
- Refunded fees
- Currency conversions
- Transfers In/Out
- Online Payments Sent (Money out*)
- Refunds received
- Debit card cash back
*The incoming and outgoing money is shown as a total vs. individual transactions. If there’s a discrepancy when reconciling, you’ll need to use the Activity Log as an aid.
TBA Tip: It’s typically easiest (and most efficient) to record a Journal Entry for the total of the PayPal fees for the month.
Oddly, PayPal has a few different design layouts. Finding the Financial Summary will vary based on your specific design. These video instructions on how to download a bank statement from PayPal will work for most PayPal accounts. Send me a note if you need more help or have a personal PayPal account and don’t have the “Reports” menu option as shown in the screenshot below.
I prefer the PDF option, but PayPal does offer CSV and Excel, as well.
With your PayPal statement in hand, you can now reconcile the account in QuickBooks Online as you would any other bank and credit card account.
Handling PayPal transactions in QuickBooks Online is often tricky. Anyone who regularly works within QuickBooks Online has undoubtedly noticed how often features and the workflow change. I feel that the actual act of reconciling PayPal is probably the easiest part. Properly handling the individual transactions, such as the transfers between checking and PayPal, recording the fees, currency conversions and more, are considerably more frustrating and prone to errors.
So many small businesses use PayPal and it can be super confusing. Reach out if you need help!