How to Use Paypal With QuickBooks - What You Need to Know

QuickBooks is an accounting software developed by Intuit that is used by many small and medium-sized enterprises (SMEs). This software helps businesses keep track of their financial health by managing their income and expenses. Many SMEs use it as an all-in-one solution where they can pay bills, invoice customers, prepare taxes, and generate financial reports.

To transact with QuickBooks, you need to link a bank or credit card account. Some SMEs use other online bank wallets, such as PayPal, for easy and convenient transactions. Like debit and credit bank accounts, every transaction through PayPal account is recorded and included in your business accounting records. Businesses who wish to elect PayPal as payment vehicles on their website should use the Intuit Payment Network in QuickBooks. This option allows you to transact regularly with relatively lower fees.

If you want to use PayPal in Quickbooks for managing your business’ financial health and records, here are some of the things that you should know:

1. You should reconcile Paypal every month

Regularly reconciling your accounts will make your financial statements more credible. It will also track any unusual transactions and accounting errors, keeping your accounting records organized, detailed, and up-to-date.

To download your Monthly Account Statements on your business PayPal account for reconciliation with QuickBooks, here are the steps that you should follow:

  1. Log in to your account and go to the settings under “My Account”

  2. Go to “History,” then click on “Reports”

  3. Tap on the “Monthly Financial Summary” to get an overview of all of your financial records

  4. If you want to review each transaction’s full breakdown, simply click on the hyperlinks on the dollar amount

  5. Download the financial statement onto your device, save it as a PDF file for quicker and easier review

Once you have your Monthly Financial Summary or Monthly Account Statements, you should reconcile and review it and fill in missing transactions.

2. You should record a transfer from Paypal business account to a bank account as a “Transfer”

Most accounting programs use a general journal, a list of financial records in order by date, when transferring between balance sheet accounts. QuickBooks also has the functionality, but this feature works a little differently.

You can record these transactions as a “Transfer” through following these steps:

  1. Go to QuickBooks “Banking,” then select “Transfer Funds”

  2. Fill out the correct date and amount on the form

  3. Indicate your PayPal account as the sender

  4. Indicate your bank account as the receiver

  5. Click send to receive a record of transfer

3. There are two ways you can record payments out of PayPal to your vendors

You can record payments either through the “Vendors-Pay Bills” or “Banking Write Checks” options. Use the Pay Bills option if you have entered the bill on QuickBooks ahead of payment. To do that, you should follow this instruction:

  1. Select PayPal account placed in the lower right-hand corner

  2. Fill in your check number to record the payment

However, if you haven’t entered your bill yet, you should perform the Banking Write Checks option by following these steps:

Select PayPal as your bank account in the upper left-hand corner

  1. Fill in the form with the correct information, including the account, amount, class, and vendor

Conclusion

PayPal is one of the online bank accounts that you can link to QuickBooks for more efficient transactions and transferring of funds. Doing so allows you to record financial statements and track your financial health more effectively. Although some processes are time-consuming, their results are well worth the effort. To ensure that you record your income and expenses correctly, you should consult a QuickBooks expert who can teach you how to use the software to its fullest potential.

If you need professional and trusted bookkeeping services in New York, get in touch with us today. Our QuickBooks bookkeeper will help ensure that your accounts are always up-to-date, secure, and organized to improve your business performance and services.

Kelly Gonsalves