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

[Phyllis Bruce]

I'm looking at paypal as identical to venmo.  If I do not pull payments out
immediately, venmo will use the balance to pay anyone I owe.

That said, I continue to use venmo as a method of payment or cost in the
checking account which pays the bills.  I see no reason to treat paypal
differently.

If I pay someone using venmo, I go to the checking account and use venmo as
the "check number" , enter the debit and I'm done.  If someone pays me on
venmo I use venmo as the "check number" and enter the credit in the
checking account that accepts the deposit.  Voila.  KISS!

On Sat, Dec 10, 2022 at 7:29 PM David Cousens <davidcousens49 at gmail.com>
wrote:

>
> Dave,
>
> The different approaches with this mainly reflect different circumstances.
>
> PayPal to some extent acts a bit like a bank so my first thought would be
> to
> treat them the same as you would treat a bank account, but the appropriate
> way
> to treat it depends on how you actually use your account with them.
>
> If you maintain a positive balance in the Paypal account from which
> payments are
> made to vendors then it is reasonable to treat a PayPal account as an asset
> account of type bank as they are not extending credit to you.
>
> If they extend credit to you, i.e. they pay the vendors immediately and
> then you
> pay out the balance owing to them at the end of the month, i.e. the account
> balance is negative the majority of the time, then they are functioning
> more as
> a credit provider and a Liability account is a more appropriate way to
> treat the
> account.
>
> I chose to treat my Paypal account as a liability account, more for
> historical
> reasons than the current use of the account, but I could equally have
> treated it
> as an asset account for my purposes ( All that does is reverse the debit
> and
> credit entries to the relevant accounts), as I indicate in my reply to
> Michael.
> The function for me is primarily to make reconciliation and matching to
> receipts
> simpler.
>
> You wouldn't necessarily need to raise an invoice to cover a payment to
> PayPal
> just as you wouldn't when you pay off your credit card with a bank.
>
> The main purpose of Customers and Vendors and the business features around
> them
> is to avoid having to maintain individual accounts receivable and accounts
> payable accounts for each customer or vendor you interact with and to
> provide
> the information to manage the credit that is extended to you by vendors
> and the
> credit you extend to your customers and the effect it has on cash flow.
>
> Hope this clarifies things a bit.
>
> David
>
>
>
>
> On Sat, 2022-12-10 at 18:25 +0000, Dr. David Kirkby wrote:
> > On Sat, 10 Dec 2022 at 17:09, Chris Skudder <cskudder at earthlink.net>
> wrote:
> >
> > >    When you BUY something using paypal, the SELLER pays their fees, not
> > >    you.
> > >    So recording a purchase for which you paid using paypal is no
> different
> > >    than any other purchase:
> > >    Debit: expense (or asset, if you're buying something that you'll
> > >    recognize as an asset on your balance sheet)
> > >    Credit: your paypal asset account if you carry a balance in it; or
> > >    credit a credit card account if your paypal purchases pull money
> > >    directly from a credit card.
> > >    Chris
> > >
> >
> > I'm intending to use the Vendors and Customers under the Business menu.
> Do
> > I need to make two totally separate transactions (one bill, one invoice)
> to
> > fund the PayPal account from the bank account, and the other for PayPal
> to
> > pay the vendor? In which case, does PayPal need to be entered as a vendor
> > so I can pay PayPal?
> >
> > Sorry, I'm really confused, and it seems multiple people have different
> > ways of doing this - most not using the Customer/Vendor facility.
> >
> > Dave
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