A common task for firms that use Paypal is accounting for Paypal's fees. When Paypal makes a deposit, it is net of Paypal's fees. What you charged the customer on your invoice is thus more than what you actually receive to your account.
This walkthrough will show you how to split that deposit transaction to account for Paypal's fee and have a deposit transaction to match to your invoice if you wish.
In this example, you have charged your customer $205 dollars and Paypal has kept $5 for their fee and deposited $200 to your account.
Follow these steps to split deposits to account for service fees (like Paypal):
1) Click on "Banking" in the top nav.
2) Select the bank account linked to the transactions you wish to split. If you only have one bank account synced, this account will be selected by default.
3) Click on the dropdown on the far right to see the available options.
4) Choose "Split." Note: you will not be able to use split if you have already applied any attributes or matched the transaction.
5) Type how many child transactions you want to split the parent transaction into and click "Apply" to create new rows. In this example, we want to split the parent transaction into 2 child transactions.
6) Adjust one row to the amount you charged your customer. For this example, that should be $200. Note: This number should be positive. You'll get to reconcile this amount to an invoice if desired at the end.
Adjust the other row to the amount that Paypal kept. Note: Paypal's fee should be a negative, so input "-5" in the second row.
7) Use the dropdown arrow to open the general ledger pick. Choose "Expense" and then choose "Paypal Fees" or "Bank Fees" or the GL account where you want to keep track of Paypal fees.
8) Click "Confirm Split" and you'll be taken back to the bank register page.
9) Optional: You now have the two split transactions visible on the banking tab. Click the row of the full deposit to see the expanded view.
10) Optional: Once you have child transactions, you an add attributes and/or apply to receivables and payables.
You May Also Be Interested In:
- Bank Transactions: How To Import
- Bank Transactions: Adding Attributes
- Bank Transactions: Categorizing with Chart of Accounts
- Bank Transactions: How to Add Old Transactions
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