What's the best way to handle PayPal?

[John Morris]

As others have noted, I also use a separate account in GnuCash for my PayPal selling account. I don't use a separate account in GnuCash for my PayPal buying accounts because those accounts never hold a balance for long enough for it to be worthwhile. Those "accounts" are essentially electronic wallets rather than bank accounts.

  That said, I will mention that I strongly encourage anyone who uses PayPal for both buying and selling to keep the two functions completely separate. I still don't trust PayPal that much. There have been times when PayPal froze my selling proceeds because I had reversed a previous and unrelated sale where the seller did not complete the transaction properly and PayPal was unwilling to give me satisfaction. This is also the reason I never use a debit card through PayPal. I much prefer to know that my credit card issuer will stand behind me in the event a purchase goes sour.


  I do have one more question for Dr. Kirkby. Out of curiosity, does PayPal really charge 5% in the UK, or are you just using round figures for this example? We use PayPal extensively here in the US for our business because we like the accounting process, but we consider the fees to be high at 2.5%. Even with the monthly cost of the virtual terminal, our total cost barely tops 3%.

Best,
John

> On Dec 3, 2016, at 9:14 AM, Dr. David Kirkby (Kirkby Microwave Ltd) <drkirkby at kirkbymicrowave.co.uk> wrote:
> 
> If I sell something for £100 and someone pays £100 into the bank account, then its fairly easy to reconcile that, as one can import the bank transactions.
> 
> When PayPal get involved, I'm not sure how to handle this. In the simplest possible case
> 
> * Balance of PayPal is £0.00
> * Balance of bank is £2000.
> * Someone buys something for £100
> * PayPal take £5 commission
> * £95 is in my PayPal account
> * I transfer the £95 to the company bank account, bringing it up to £2000+£95=£2095