How to classify personal expenses in quickbooks
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For clients who elect to receive payments through PayPal for services on their website and use QuickBooks should look into the Intuit Payment Network–payments are handled similarly and you should see lower fees on each transaction.įollow up question: So I have PayPal as a bank account, does that mean I have to reconcile it every month?įor your financial statements to be credible, all of your bank accounts must be reconciled at the end of each period. Having PayPal as its own bank account also allows you to track transfer fees in QuickBooks PayPal is convenient but a business account is not cheap by any means for businesses to have. Under-reported revenue is no laughing matter to the IRS. Since I don’t like to have PayPal as a true “Vendor” or “Customer” (you’re not actually selling or receiving funds to/from PayPal directly), having it as a bank account allows you to have the true Vendor or Customer listed in your accounting software.Īlso you would be surprised at how often, upon further review, that a balance still exists in these PayPal accounts! The clients have usually forgotten that it even existed in the first place, which also usually means that the revenue was never counted on your financial statements.
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However, when I’m running through to do the bank reconciliations, I’ll see both payments in and payments out with PayPal in the memo line. Many clients that I have had disregarded PayPal entirely on their chart of accounts and instead believe it is merely a vehicle for your funds to flow to and from your other (more brick-&-mortar) bank accounts. My first blog post I want to write involves a simple topic but is actually quite common: How should you treat a PayPal account in QuickBooks?