hey it's patti scharf CPA and co-founder of catching clouds the leader in
e-commerce accounting today we're going to talk about PayPal PayPal has been the
bane of everybody's existence for years I've been hearing people complaining
about PayPal and actually I don't mind it I actually works pretty well for me
and I think it's because I really understand how it's working behind the
scenes one thing I recently realized is that just this week I heard about
QuickBooks Online working with this PayPal app called connect to PayPal I
think PayPal put it out and I took a look at it actually there's a link to
Hector Garcia's video down below it's pretty good walks through the ins and
outs of the app if you're looking for something to help you in QuickBooks
Online and what I realized is QuickBooks Online must have been a hot mess before
this because Xero has had a connection with PayPal that's worked really well
for a long time I want to say five years maybe even since I started using it in
2012 I just I don't remember a time when the PayPal connection wasn't there so
this kind of gets them up to speed who are the where 0 has been for a really
long time but with that said we don't always use the the integration for
PayPal and it goes back to all the things that I'm just I've been telling
you guys forever which is the volume of transactions if you have a high-volume
business that's going to crush your system but I want to give you an insight
into how it works on a lower scale so that if you just have a few transactions
and you want to have that connection so that you have automation I want you guys
to have the opportunity to use that so let's take a look at PayPal and see
what's going on under the hood and how it all works
so PayPal is a lot like a bank it's not FDIC insured so I wouldn't keep a lot of
money there but the way it works is really similar to a bank
it has bank statements it has things that you can reconcile to you so I
really in that regard so if you log into your
PayPal account and you go down to even though it has statements here I wouldn't
go to statements go down to financial summaries go to financial summary and
pick the month that you're looking for I'm gonna pick April when you click
create report it'll give you a summary of all the ins and outs
how much are fees how much are transfers and all of that it also gives you a
beginning balance and an ending balance just like a bank statement so this is
the part that you really care about this is what I use when I am reconciling the
account at the end of the month or end of week or whenever it is I'm
reconciling it okay so so this is invaluable make sure you use this you
can get a PDF copy and you're good to go all right
but then the other report that you need is under activity download and you're
going to go to transaction type balance effecting so you don't want completed
payments you don't want all transactions that's gonna give you all this stuff
that drives people insane it's gonna give you holding transactions that are
on hold or pending or things that aren't really changing the balance but you want
the balance affecting transactions these are the ones that are going to show up
on that financial summary that I just showed you okay when you get the bounce
affecting transactions do it for the last month or year or whatever you want
to do actually I think it might only go back six months well maybe if you put I
don't know how long it goes back I know the integration with QuickBooks Online
and and PayPal will go back 18 months so I'm hoping that you could get 18 months
here but I haven't tested out recently okay so anyway grab the period that you
want click create report it'll add it to the list down here and
you can download a report okay it is going to look something like this so
I've downloaded I don't know like six months or something I've hidden some
rows or some columns just to kind of keep privacy and stuff but so here are
all the transactions this is what is making your balance go up and down on
your monthly statement okay it includes gross
transactions so let's say you have some cut so any of these that say Express
Checkout these are going to be sales usually you'll see that with Shopify or
whatever it is WooCommerce or whatever eBay things like
that PayPal because they are being the payment processor they will charge a fee
for enacting that transaction for you okay so here are actually the columns
you care about you care about these two columns gross transactions and fees what
most people pay attention to is the net you don't want to these are the
transactions if you were to put this on a bank register if you're doing the
accounting for it and you were pretending it was a bank your gross
positive numbers would be money coming in fees and payments going out ins and
outs just like any other financial account okay now let me show you how
this looks in zero zero has a bank feed that's already set up you you go in you
you log in and it will automatically suck this stuff in you don't need any
third-party extension or tool or anything
it just works okay so you log in and it will pull in all of these individual
transactions okay and it ends up looking something like this so I added this
column here to show you what's going on so so this fee for 1188 is line to the
three ninety nine coming in is line three number four I'm forty four fifty
so you could literally just go through and go make sure that you've got
everything by looking at this detailed CSV report that you're pulling down so
it's it's really much more straightforward than people are telling
you and so so once you have all the transactions and you've identified and
and everything's clear oh one more thing to talk about general withdrawals so a
lot of people keep their balance at zero or low and so
you'll see things like withdrawals you just need to find out where is that
money going when they pull it out of paypal usually it lands in a bank so if
you have that it's just going to be a transfer to your bank account and you
should be able to go to your bank statement and see exactly what lands in
your bank so it's really not that mysterious you guys it's it's actually
pretty straightforward you can go up to reconciliation report and pick the date
that you want to check out to see what the ending balance is and you should be
able to see oh my balance is 387 13 on April 30th yep that works so it's it's
really not a big deal hopefully this helps if you have
additional questions or you're running into problems leave a comment down below
and I hope you like this video if you did please like share comment and if you
haven't already subscribe and I will catch you later