The line entries you need are the completed ones (status completed) as you will also have lines for when the money has been requested which are not actual payments.
Foreign tranaction translations take four lines. I actually move the GBP value to the relevant line and delete the other three as I don't need them.
Best advice that I can give is take everything to Excel and copy to a second worksheet so that you never corrupt the original as your deleting the chaff and moving figures from one line to another.
Also, treat Paypal as a seperate bank account.
HTH,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
PayPal does NOT record VAT in any useful way - if your client is VAT registered you will need them to duplicate all invoices to you for the VAT breakdown. You can't get it any other way. This is a first rate nightmare, because while it can be automated, the process for doing so is apparently somewhat convoluted and requires a PhD in Volution, EBay, Etsy or whatever on-line shop they are selling from.
If your client is a standard 20% then probably, yes - mine sells diet products, most of which are zero rated but a few of which contain chocolate or are otherwise classed as luxury and therefore 20% VAT, with the added complication that if the proportion of sales that contain 'luxury' items within the invoice is under 5% then the VAT is discounted anyway (I'll dig out the reference on that later today if you want)..... I have to see each invoice and calculate actual VAT where needed. Absolute pain in the wherever!
But Paypal is becoming very common and well beyond the likes of Ebay shops (I have no-one that sells on Ebay but I have people that use PayPal especially for international payments).
If you pass this one up when do you say, ok, I can handle this client.
Paypal is a pain for us but it's not an insummountable one.
There will be the occassional entry that you cannot suss even with the relevant invoices but clients are approachable.
Actually, seems that its so difficult to decipher that even paypal don't have a running balance from entry to entry!
As I say, drop the paypal extract to Excel and work through it. Reconcile every movement in and out of the Paypal account to the real business bank account, put your own total in the spreadsheet and tally that to the actual balance at a given date that the client will be able to tell you.
If they don't tally then you've done something wrong.
On the bright side of course if Paypal gives us this much hassle then HMRC will be equally bambuzzled by what is really going in and out of the account.
With practice and patience it will unravel itself to you.
It will never be as simple as a bank account but you will understand it.
Right, just wanted to write this as I wouldn't like to see you give the client up especially for something that you will need to use more and more with clients as PayPal is growing and seemingly appearing in businesses where you would not expect to see PayPal payments. (Such as service businesses working internationally).
Good luck with the client Georgie and if there is any line entry giving you serious jip post on here (with the amounts and recipient changed) and we'll tell you how to handle it.
kindest regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Shaun
Thank you for the kind words of encouragement... There are a years worth of Paypal transactions, 1000 to be exact and 900 sales invoices, still seems a lot to take on for a first Paypal client
My first one was 529 transactions that boiled down to under 300 (under 200 invoices) when I took out all of the currency translations and filler lines so really about a third of the size of yours.
At the ratio's your talking 900/1000 I'm guessing that the transactions are pretty much all sterling which does simplify thing somewhat.
Don't let the volume put you off, just make sure that you charge enough for the time that it will take you to sort that lot out. (I underestimated my first PayPal one but just put in down to a loss leader for the experience).
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I have two clients who regularly use paypal - one I have already described - the other is less of a problem in terms of volume but more by way of identification as they buy and sell. This can leave credits on the paypal account so tracking to actual amounts is time consuming - and guess what - having put this client onto a fixed contract which is now due a review - he is arguing the toss about my time....
-- Edited by Unwize Owl on Monday 10th of March 2014 02:12:41 PM
Hmmm...yes I think I should make the client aware before hand how long this is going to take me approximately as I have agreed an hourly rate and I don't want to get into the scenario of arguing about the time taken to do the job.
So, (smiling) any idea how long you think it will take me? A best guess?? Days, Weeks, Months, Years???
Apart form the obvious statement that the first couple of times it will take longer as you need to get used to the way the reports look.....
How long is a piece of string? Extracting to excel - minutes, identifying the start and end of a single transaction - between 30 sec and 5 mins depending how many lines are involved, if there are multiple payment elements, are there currency conversions - did he buy or sell, blah, blah, blah..... I'm currently averaging about 1 min per 2 to 4 line transaction multiply by the expected number of transactions. Add in converting back (via csv or what have you) into you bookkeeping software or worst case manually retyping into your software and add a jigger factor.
My diet shop client is around 120 transactions a month, between 3 and 5 a day. The other client is only a quarter of that but they are all complex! They both take about the same amount of time!
Edited to add the sentence I thought I had typed but totally missed!
-- Edited by Unwize Owl on Monday 10th of March 2014 04:21:05 PM
And after all that... the reason they take about the same time - diet shop only wants weekly sales totals transferred - they keep individual records another way - the other client is a full retype of each transaction.
depends on the complexity of the Paypal transactions, what software you are using etc.
I've developed a rule of thumb that I quote based on 20p per transaction (#1). Doesn't matter if its an inter account transfer or an invoice as they all balance each other out.
So, 1000 transactions I would be thinking of (0.2*1000) / hourly rate = approximate number of hours.
For example 200/25 = 8 hours, or a day which would probably not too far out. That method automatically factors in that the longer you take the lower the hourly rate is. So, if you took two days to do a thousand PayPal transactions thats £12.50 an hour.
Obviously that gives you a seld rewarding goal to speed up throughput by finding better, faster ways of doing things.
kind regards,
Shaun.
#1 my VAT exclusive current way of calculating quotes is £25 per month (£300 p.a) covering up to 1000 transactions a year and up to £25k turnover. I then add 20p per transaction plus £5 per £1k of additional turnover.
I also add £120 for limited companies.
Go on, play with that equation and tell me it doesn't come out pretty close to the actual rate that your charging clients (For VAT inclusive its £30, 24p, £6 & £144 respectively).
Thats just used to formulate my quote, I don't bill by transaction/turnover. Those are just the things that feed into my calculation to come up with something that I feel is the right amount for the job (Can you hear me doing the plumbers whistle as I quote, lol).
I'm adverse to taking on any clients for less than the base £300 (£360 VAT inclusive) as its really wasting my time where I could be making more money on other clients, (Official term for that is the opportunity cost).
Just my way of quoting, everyone has their own methods. I just like to keep everything to what I believe is simple and fair.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
wasn't ignoring you, was just multiprocessing (don't tell any other women out there that we men do actually know how to do that!) so took a while to send.
I times myself a couple of months back and over a couple of hours going at normal speed but without any interuptions I averaged entering 144 invoices an hour so I think that we're about the same sort of throughput.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I've encouraged all my clients with a paypal account to pay a Kashflow subscription. Kashflow can be set up to import all the transactions. It cuts the amount of work needed substantially, including doing the VAT correctly too.
100 transaction takes about 5 seconds.
-- Edited by YLB-HO on Monday 10th of March 2014 05:32:46 PM
That info could almost convert me to KashFlow! Shame I've just set the diet shop up with QBO+ :)
Shaun! Multi-tasking for men! Good grief! Thank heavens I was sitting down to read that.
By the way - just worked out what I should be billing by your method - came out within a pound or so to what I am charging. Nice to know the numbers come up fairly similar, one of us is likely to be right
I am also just about to take on a client who sells though Ebay and therefore PayPal. I am hoping that though it will be a steep learning curve, I will find a system that will work for me. I intend to try several different ways of importing the reports into different software. I have asked my potential client if I can be added as a user to PayPal (restricted to reports) which he is happy with. It will be interesting to share notes a couple of months down the line.
Thank you for all the replies here, it is very helpful. Thank you Shaun for sharing your pricing with us.
