This tutorial assumes that you know how to reconcile a checking account using Quickbooks, and also that you are familiar with Microsoft Excel.
I know that a lot of people don’t take the time to reconcile their accounts, but when you are running a business it is a mandatory chore that has to get done. Whether it’s you the business owner that does it, or your accountant, someone has to do it. Especially if you are required to collect sales tax and turn them over to your county, city or state. I learned my lesson with Mr. A’s business one month when I filed his taxes before I reconciled the bank account. As it turns out, a deposit had been made but I did not get a copy of the invoice, so the transaction had not been entered into Quickbooks. I ended up having to resubmit, and you cannot do that online, it has to be done on paper. It’s not that big of a deal, just one more hassle and taught me an important lesson. NEVER pay sales tax without reconciling the accounts!
I’ve been struggling with reconciling my business PayPal account… I have tried several ways to reconcile and have finally settled upon a process which is working for me. If you have a better way, please do share!
With a regular bank or credit union, every month you get a statement which tells you how much money was in the account at the beginning of the month, as well as on the last day. The statement also includes a record of every transaction which occurred during the month.
You can obtain this information from PayPal, but not very easily. Not only is the information hard to get at, but once you have it on your screen, don’t dare print it out as it will be so tiny you’ll need a magnifying glass. There are also duplicate and triplicate transactions which will confuse you to no end, especially if you have amounts that recur on a regular basis.
All right, let’s get started. First you’ll want to log into PayPal.
Now click on History, and on the drop down menu, click on Reports as shown in the screenshot below.
Once you get there, you’ll want to click on the Monthly Financial Summary.
Choose a month from the drop down menu. And click on the orange button titled View Report.
Okay, this section is where you will be able to get the beginning and ending balances.
Look to the right and you’ll see a link that says View Details.
While you are viewing the details, you will have a few options. You can choose to view the details 10 lines at a time (clicking the arrow to go to the next 10) or you can download the report. The default option is PDF which I would not advise using for two reasons. First, I have 20/20 vision with my prescription glasses but it is very difficult to see this report in size 6 or smaller font on paper. Second, there is extraneous data will be confusing as you are attempting to reconcile.
I suggest you download the report as an Excel spreadsheet.
It will help if you are familiar with Excel for this next step.
Create a new column on the far right and name it SortNo. Then fill the cells all the way down with 1, 2, 3, 4, and so on. This will allow you to re-sort the spreadsheet back to the correct order.
Select All, and sort by Type. Delete all “Funds Released” and “Authorized Funds”. I have found that these are just extraneous negative and positive numbers and they just confuse matters.
I find that they occur because of a debit card purchase. If I shop at Amazon, a local grocery store, etc., these additional transactions will show up. First you’ll see Authorized Funds Held, this happens when you make the purchase. Usually the next day (but sometimes not for a couple days) you’ll see the Debit Card Payment Completed and perhaps that day or a couple days later you’ll see the Funds Released. I delete all of the Authorized Funds Held and Funds Released (these are greyed out in the screenshot below) from the spreadsheet.
Use the SortNo column to sort back into the correct order.
Now you have basically a statement which will allow you to reconcile your PayPal business account.
As far as I know, this process would also work for a personal PayPal account. To be honest with you, my personal PayPal account is one of the few accounts that I manage that I do not reconcile. I use it so little there is really no need.
Do you reconcile your PayPal Business or Premier account?
This post was included at:
Carnival of MoneyPros at Money Life and More
Finance Carn. for Young Adults at Mom and Dad Money
Carnival of Tortoise Banker at Carnival of Tortoise Banker
Yakezie Carnival at Debt Roundup
Carn of Financial Independence at Carnival of Financial Independence
Carnival of Financial Planning at FITnancials