how to deal with paypal fees

[Beth Leonard]

On Sat, Oct 31, 2009 at 09:17:01AM +0100, Geert Janssens wrote:
> Ok, this compensates for the loss in real world. But I think the original 
> poster's actual question is: how do I book this in GnuCash using the business 
> accounting features ?

Here's another way to do it.

I have Assets -> Current Assets -> Paypal account set up as an asset
account like any other bank account.  If an invoiced customer pays,
I make the "process payment" dialog create a transaction for the
full $250 between accounts receivable and my Paypal asset account.

Next you have to manually take out the paypal fees.  Create a new
transaction between your Paypal account and your "Expenses:Merchant processing fees"
account for $13.

Now all your books balance, you income is still $250, your expenses
on the sale are $13, and your assets went up by $237.

Note: for non-invoiced customers, I download the data from Paypal
directly, but Paypal doesn't give me the splits I need.  I have two
accounts called "Income:Paypal downloaded sales" and "Sales:Paypal Downloaded Sales".
I download the transactions using those two accounts (and the merchant
fees account) and then I manually alter each transaction to include
all the splits for:
  Income:Sales:Taxable
  Income:Sales:Shipping Income
  Liabilities:Sales Tax Payable
  Expenses:Merchant account fees
  Assets:Current Assets:Paypal Account

I find that method easier than entering everything 100% by hand, but your
needs may vary.  After I'm done fixing everything up by hand, my
paypal downloaded accounts are empty.

--Beth
Beth Leonard
http://www.LeonardFamilyVideos.com