My small club is going to use PayPal Here for its members to make payments by card. With PPH, the transactions come to the bank account as a bulk funds transfer from paypal and not as individual transactions.How should I set all this up so as to record the bulk income and then disperse the paymemnts. I will need to refer to the PPH activity report to apply the individual amounts receiced to members invoices. Is it better to record the payments made at the end of the day prior to receiving the money from PPH or wait for the money and then record the payments. I will also need to account for the associated transaction fee taken by PPH. Thanks in advance
Have you searched the Forum, PayPal has been discussed many times.
However, if you can download / import the PayPal transactions in detail, then create PayPal as a bank account and disperse the deposits received from there. Then to match (transfer) the PayPal payment to your bank account and the deposit into your bank account you can use either the Inter Account Transfer tab or a clearing account - read here
Transfers between Bank on hand accounts
You have two choices, (1) the simplest being, if you have used the Inter Account Transfer for the transaction then delete the imported bank/PayPal account entry, or, (2) if you want to use the imported statement entry then you need to process the Bank Rule via a clearing account. .
Bank on hand Transfers are two separate accountings transactions not a single transaction.
1.PayPal: Spend Money - Credit Bank and Debit ???
2.Bank: Receive Money - Debit PayPal and Credit ???
The Inter Account Transfer feature in Manager allows you to truncate that to a single entry - Credit PayPal > Debit Bank
However, when importing bank statements and using Bank Rules, the processing of two transactions is still required because (rightfully) Manager’s Bank Rules prevents any allocation directly between Bank on hand accounts otherwise you would have duplicate transactions as demonstrated below.
If you substituted the ??? for the opposing Bank/Cash account you would now have:
1.PayPal: Spend Money - Credit PayPal and Debit Bank
2.Bank: Receive Money - Debit Bank and Credit PayPal
The PayPal account now has two credit entries and the Bank account now has two debit entries - hence the duplication. So to use Import Bank Statement you just need in the Bank Rule to post the opposing debit/credit entry to a clearing account, where the contra from the transaction will cancel themselves out.
1.PayPal: Spend Money - Credit PayPal and Debit Clearing Account
2.Bank: Receive Money - Debit Bank and Credit Clearing Account
The Clearing Account can be created as either a Current Asset or Current Liability
In my opinion, it is always better to wait until the transaction occurs. The value of the amounts invoiced to your members will reside in Accounts receivable until they pay via PPH. If you know they have paid, but the transaction doesn’t show up yet, just show it as pending (assuming you have set PayPal up as a bank account). When it shows up, edit to cleared status.