Question about Intuit QuickBooks Pro 2007 Full Version (299116)
A. I bill the customer 239.95 on the ProductName account.
b. The customer pays the bill through PayPal.
c. I record that the customer has paid the full 239.95 (an increase to the ProductName account), so the customer's account will be clear, and I mark that money as having been deposited to the PayPal account.
d. PayPal sends me a check for 228.79 (11.16 in fees deducted from the 239.95 they received), and I deposit that 228.79 from the PayPal into the Checking account.
MY PROBLEM: I need to decrease the ProductName account by 11.16 so it shows the true value (to me) of the sale. I can record an 11.16 bill from PayPal and list ProductName on the Expenses tab to keep the ProductName account straight; but then, when it's time to record the bill as paid, I can only choose Checking or Savings as the source of the payment funds, when they've actually come from the PayPal account.
Actually, you do not want to reduce the product name. When you make the deposit from PayPal, you want it to be for the full amount the customer paid. Then add a second line with a minus amount for the fees, and the account of paypal fees (expense). This way, you split off the fees paid to paypal as an expense, and the bank reconcile matches.
Attempting to reduce the ProductName will only result in tax liability issues, as you have to charge sales tax on the full amount the customer was originally charged.
Using a negative line on the deposit to split the paypal fees off is a much cleaner process, and causes no confussion for the accountants.
Posted on Nov 16, 2008
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Posted on Jan 02, 2017
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