What's the best way to handle PayPal?

[Robert Heller]

*I* treat PayPal like just another "account", pretty much the same as a
"Checking Account".

When someone pays me via PayPal it looks something like (as a split):

Date       Num   Descr         (Account) Tot Deposit  Tot Withdrawal   Balance
                 Joe's payment   
12/03/2016 ---                 PayPal             95
                               Service Charges     5
                               Bank Account       95
                               PayPal                            95
                 Payment       Receiviables                     100
                               
("Receiviables" is a special account used by the invoicing system to record 
receiviables -- eg money you send an "invoice" for.)

What is going on is:

You get paid 100 to "Receiviables".  95 lands in your PayPal account, 5 lands 
in "Service Charges" (an account I set up to "catch" various service charges 
(banking, PayPal, whatever)).  Then 95 gets transfered from PayPal to my bank 
account.  PayPal net: 0, bank account net +95.
                               
Note: you don't actually create this transaction directly. You send an invoice
(for 100). When the person (Joe) pays you, you *process* the payment
(Business=>Customer=>Process Payment). You record that the payment was 100 and
the transfer account is PayPal. *Then* you go to your PayPal account, select
the created transaction, select "Split", and then edit the transaction to
adjust things for the PayPal fee (Service Charge): change the PayPal amount
from 100 to 95, add the 5 to the Service Charge account (restoring balance),
and record the transfer to your bank account: add the 95 withdrawal from
PayPal and the 95 deposit to bank account, causing the PayPal to net 0, and 
the bank account to net +95.

At Sat, 3 Dec 2016 14:14:47 +0000 "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
> 
> I can import the bank transactions, but are unsure how to handle the
> PayPal side of it. Should I set up a separate account for PayPal?
> Should the transaction be split? What the best way to handle this,
> which is least subject to human error.
> 
> Although I'm in the UK, very often I buy items from the USA, and so
> pay USD. PayPal does the conversion from USD to GBP.
> 
> Just to add one more complication, there's a good chance I will want
> to sell more on eBay in USD. I've sold the odd few things there before
> in USD. Despite charging more, some people would rather payin their
> own currency.
> 
> One further problem is that the Import of QIF files from PayPal seems
> to crash GnuCash
> 
> https://bugzilla.gnome.org/show_bug.cgi?id=775567
> 
> but the bug is not my biggest problem. My real problem is knowing how
> best to handle the use of another account (PayPal) in addition to a
> normal company bank account.
> 
> Dr. David Kirkby Ph.D CEng MIET
> Kirkby Microwave Ltd
> Registered office: Stokes Hall Lodge, Burnham Rd, Althorne, Essex, CM3 6DT, UK.
> Registered in England and Wales, company number 08914892.
> http://www.kirkbymicrowave.co.uk/
> Tel: 07910 441670 / +44 7910 441670 (0900 to 2100 GMT only please)
> 
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