Bookkeeper’s Guide to PayPal for Small Business

An excellent way to start learning about PayPal and its use is by understanding what the platform is actually about. PayPal is a business that has become increasingly important and relevant in recent years. There might still be a few people who do not know what it is, though, so the best way to start this would be with an explanation.

If you continue to read this article, you will learn more about the platform, what it is used for, and how to use it.

What Is PayPal?

PayPal, in simple terms, is just an online bank account. It performs the same functions as a regular bank account which you can open at a bank. Its primary use, though, is to process payments. It is usually linked to a real bank account, and from there, you can pay or receive payments for a job.

It can also be used a day Mena’s to accept online payments like online clothing, accessories, or gadgets. It is the most widely used this type of service. To use PayPal as a bookkeeper, there are several things that you must know. We will explain these things below.

Basics

There are four steps to be followed here. These are outlined below.

• Step One: The PayPal bank feed is first. It would be best if you chose PayPal bank online.
• Step Two: The next step is to arrange your expenses into categories. You need to ensure that you have assigned the proper account categories, then click on “add.”
• Step Three: You need to match your income with your expenditures. Apps like QuickBooks Online can quickly help you do this.
• Step Four: Lastly, you need to record your transactions from your main bank into the PayPal account.

Adding Versus Matching

Matching is creating a copy of your transactions from your bank onto your PayPal account. Matching will ensure that these are the same and help you avoid Adding, which is essential as it sounds; addition of transactions, leading to duplicates. Again, QuickBooks Online can help you match properly. Be sure to go over your transactions again so as not to add or create copies.

Best Settings

The first setting you’ll need to tweak is the default payment. It has to go right to either your bank or credit card. It should not be set to go to your PayPal balance. You can also set up an auto-transfer which takes your money straight from your PayPal balance and into your bank account as it comes in.

Next, you will need to separate your PayPal account into one that gets your income and pay your expenses out of it.

Lastly, make sure that your clients also do the same. It will avoid any confusion on their part and save you from a lot of stress.

Reports

The Activity download report, which you can get, is one of the best ways to keep tabs on your transactions. It is a file that contains the details of all your transactions made.

Conclusion

It is probably a lot more information than you had initially prepared to receive, but a good and thorough understanding of PayPal will be an invaluable investment in your future. As a bookkeeper, you will need to use PayPal frequently. Hopefully, these tips provided here will be helpful for your everyday needs. Need help with PayPal bookkeeping? Contact a small business accounting firm that specialises in PayPal bookkeeping.