Tips to Reconcile PayPal in QuickBooks
If you’ve ever tried to reconcile your PayPal business account in the Quick Books desktop software, there’s a good chance you’ve wanted to drop kick your computer and scream obscenities. Instead of one transaction for a sale or purchase, PayPal will complicate by having 3-4 transactions for every transaction ( i.e. – sent invoice, received payment, payment hold, payment approval, etc) To make this already difficult task worse, PayPal and Quick Books haven’t collaborated on a simple application to import PayPal into your accounting program. (Though you can purchase a third party software to do this, but more on that later) Also, if you’re some super eBay seller with hundreds of transactions every month, reconciling PayPal will take hours of your life that you’ve could have spent preparing for your fantasy football draft or powering though the entire five seasons of the Wire. (Both are good investments of your time in my opinion) Anyway, here are my solutions:
If you are willing to start using QuickBooks online, Intuit has created an online application that imports your PayPal activity directly into QB online. (Doug Sleeter at the Sleeter Report has written up a detailed critique of this application on their site) Personally, I find the online version of QuickBooks to be slow and clunky compared to the desktop program. But, if you’re willing to make the jump to the cloud, this application may solve your PayPal reconciliation headaches.
If you aren’t using QuickBooks online, you can login to your PayPal business account, click on the history tab, and download your monthly financial summary. This will provide you with the breakdown of sales, fees, dispute activities, transfers, etc. You can simply enter each item into your QuickBooks software to reconcile PayPal balance with data in QuickBooks. Let me tell you, I much prefer this method over tediously entering every transaction individually.
Alternatively, you can purchase a third party software such as Simple Port or software sold by Big Red Consulting to import your PayPal transactions into QuickBooks. Personally, I found this too complicated and opted to just reconcile PayPal with the monthly statements.
If you do want to tackle the formidable task of manually sorting through every PayPal transaction, you can export the transactions to an excel spreadsheet and work from there. Make sure you download the report with “balance-affecting transactions “, so you can keep it simple with only those transactions debited or credited to your PP account. Good luck and hope these tips help you