[GNC] Buying with PayPal - how do I split the transaction?

[Dr. David Kirkby]

On Fri, 9 Dec 2022 at 20:20, <list+gnucash at jdlh.com> wrote:

> Hello, David:
>
> I have the same kind of transactions in my small business bookkeeping as
> you describe here. My responses are interleaved below.


I think most businesses will use PayPal at some point.

>
> > *If I were NOT using PayPal, this is the process I would go through.*
> >
> > *Under Business -> Vendor -> New Bill*
> > Create a bill and post that to these accounts
> > *Expense Account:* Expenses -> Utilities -> Internet
> > *Post to Account: * Liabilities -> Accounts Payable -> GBP
> >
> > *Under Business -> Vendor -> Process Payment*
> > Process the payment
> > *, using these accounts*
> > *Post to*: Liabilities -> Accounts Payable -> GBP
> > *Transfer Account:* Assets ->  Bank account
> >
> > Am I doing that all correctly done, if not using PayPal ?
>
> I do not use the Business -> Vendor features to handle such
> transactions, even for business expenses. If the funds are leaving my
> possession as part of the payment, I do not see a reason to involve
> Accounts Payable.


I can understand that. But I asked another question the other day, and was
told that vendor reports (or similar wording / implications) we possible if
one went via Accounts Payable. Can you generate reports for specific
vendors with your system?

So I follow this process:
>
> Create a simple transaction with these accounts
> *Asset Account:* Assets ->  Bank account
> *Other Account:* Expenses -> Utilities -> Internet
>
> > ...how can I modify the process so the  account* Assets ->
> > PayPal -> GBP* account gets used?
> If I am using Paypal, which keeps a zero balance, then as soon as I pay
> for something with Paypal, Paypal funds that amount by charging my bank
> account (or credit card, sometimes). I follow a process with two simple
> transactions:


I like to keep a zero PayPal balance, but find it’s not always possible.
Also, if one buys and sells  multiple currencies, as I do, it saves on
currency conversion fees if one keeps USD and GBP separately.

>
> *Asset Account:* Assets ->  Paypal account -> GBP
> *Expense Account:* Expenses -> Utilities -> Internet
>
> *Asset Account:* Assets ->  Paypal account -> GBP
> *Other Account:* Assets ->  Bank account
>
> This means that the expense is recorded in the Expense Account, the
> Paypal ledger has two matching transactions to reconcile against my
> Paypal statement, and the Bank account ledger has a single transaction
> to reconcile against the Bank statement.


I have not tried reconciling PayPal yet. That looks to be tricky, as you
can not go back and see the balance at some time in the past.

I would be interested to hear from others about this. I would rather not
put two entirely separate transactions - I thought splits was a way around
that, but I might be wrong.

>
>
> Hope this helps!


Yes, it does. If nobody else comes up with another way, I will do two
transactions like you.

>
>
>        —Jim DeLaHunt
>
>
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-- 
Dr. David Kirkby,
Kirkby Microwave Ltd,
drkirkby at kirkbymicrowave.co.uk
https://www.kirkbymicrowave.co.uk/
Telephone 01621-680100./ +44 1621 680100

Registered in England & Wales, company number 08914892.
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