QB Issue Resolution:

Can I use PayPal with QuickBooks Online?
Answer ID: 1085

You can use PayPal and record it within QuickBooks Online but it’s a manual process. If you use online banking, you can match the manual entries with your online banking downloads from PayPal.

Not using Downloaded Transactions:

To manually enter your PayPal transactions:

Verify that both you and your customer have a PayPal account.
Put your PayPal email address on each invoice you’d like paid through PayPal.
Send the invoice either through email or regular mail.
Your customer should:
Go to www.PayPal.com and log in to their account.
Click the Send Money tab.
Follow the directions to send money to you by entering your email address in the Recipient’s Email field.
You’ll get an email from PayPal to inform you that payment has been made; open the email and click to confirm receipt. This takes you to the PayPal website.
Log in to your PayPal account and click the My Account tab. Find the customer’s payment and note the transaction fee.
Log in to your QuickBooks Online company. There are two ways to record your transactions:
Option 1 – If the payment and fee are recorded separately on your bank statement:
Enter the payment.
Click tCreate (+) > Receive Payment.
Select the customer.
Enter the full amount the customer sent and apply it to the appropriate invoice.
In the Deposit To: field, select your PayPal bank account, or you can deposit it straight into the bank account you’re already using within QuickBooks Online.
Click Save.
Enter the fee.
Click Create(+) > Check.
In the Bank Account: field, select your PayPal account.
In the Amount: field, enter the PayPal fee.
On the bottom left in the Account: select the expense account for these fees.
Click Save.
Option 2 – If the payment and fee are recorded as one entry on your bank statement:
Enter the payment.
Click Create (+) > Receive Payment.
Select the customer.
Enter the full amount the customer sent and apply it to the appropriate invoice.
Change the Deposit To field to Undeposited Funds.
Click Save.
Combine the fee with the payment as one deposit.
Click Create (+) > Deposit.
Make sure the appropriate Deposit To account is selected.
Under Payments, check the box next to the customer’s name.
In the Account field select the expense account for the PayPal fee.
In the Amount field enter the PayPal fee as a negative amount.
On the bottom right the Deposit Total: field will match your bank statement deposit.
Click Save.

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Using Downloaded Transactions:

You can use PayPal and record it within QuickBooks Online but it’s a manual process. Using online banking, you can match the manual entries with your online banking downloads from PayPal.

First make sure that you have set up PayPal as your financial institution in online banking; for steps on how to do this, see our Knowledgebase article KB 6504: How do I connect QuickBooks Online with a bank or credit card account? http://support.qbo.intuit.com/support/answers.cfm?faq_id=6504

Next, verify that both you and your customer have a PayPal account.

Put your PayPal email address on each invoice you’d like paid through PayPal.
Send the invoice either through email or regular mail.
Your customer should:
Go to www.PayPal.com and log in to their account.
Click the Send Money tab.
Follow the directions to send money to you by entering your email address in the Recipient’s Email field.
You’ll get an email from PayPal to inform you that payment has been made; open the email and click to confirm receipt. This takes you to the PayPal website.
Log in to your PayPal account and click the My Account tab. Find the customer’s payment and note the transaction fee.
Log in to your QuickBooks Online company and make sure you have your PayPal account connected:
Click Transactions > Banking.
Click on Add Account
Select PayPal
Follow the prompts
Record the payment and fee. There are two options you can use to record your transactions.
Option 1 – If the payment and fee are recorded separately on your bank statement:
Enter the payment.
Click Create (+) > Receive Payment.
Select the customer.
Enter the full amount the customer sent and apply it to the appropriate invoice.
In the Deposit To: field, select your PayPal bank account, or you can deposit it straight into the bank account you’re already using within QuickBooks Online.
Click Save.
Enter the fee.
Click Create (+) > Check.
In the Bank Account: field, select your PayPal account.
In the Amount: field, enter the PayPal fee.
On the bottom left in the Account: select the expense account for these fees.
Click Save.
Option 2 – If the payment and fee are recorded as one entry on your bank statement:
Enter the payment.
Click Create (+) > Receive Payment.
Select the customer.
Enter the full amount the customer sent and apply it to the appropriate invoice.
Change the Deposit To field to Undeposited Funds.
Click Save.
Combine the fee with the payment as one deposit.
Click Create (+) > Deposit.
Make sure the appropriate Deposit To account is selected.
Under Payments, check the box next to the customer’s name.
In the Account field select the expense account for the PayPal fee.
In the Amount field enter the PayPal fee as a negative amount.
On the bottom right the Deposit Total: field will match your bank statement deposit.
Click Save.

Note: Once the payment has been entered, it will automatically be matched with the transaction downloaded from the bank (as long as you entered them into QuickBooks Online with the same amount as what shows in your bank). Simply go to Transactions> Banking and click Match next to the transaction

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Details
Answer ID 1085
Products QuickBooks Online Simple Start (H)
QuickBooks Online Essentials (H)
QuickBooks Online Plus (H)
Categories Using This Product
Date Created 11/13/2006 12:30 PM
Date Updated 03/15/2015 08:18 AM
Allow Crawling? Yes

Resolution for Issue 'Can I use PayPal with QuickBooks Online?' available: Yes (Solved).
Source: Intuit Community forum.

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