I have a customer who runs an ebay business and they have a separate `bank` to account for paypal and elavon receipts, downloading monthly statements and reconciling.
Ebay is giving you evidence of sales. PayPal is giving you evidence of receipts and payments.
PayPal statements (the long form ones of about 40 columns accross) can get a liottle unwieldy when you have foreign currency translations in there as one entry will take three plus lines.
Accross the right hand side there's a balance that you need to keep an eye on as occassionally PayPal will tell you that a transaction has gone through but accross the right hand side its obvious that the balance has not changed. Similarly sometimes you are told that a transaction has failed but the balance has still changed!
I've got a client who processes quite litterally thousands of PayPal transactions and each year it takes a good few hours with the statement in Excel getting to one line, one transaction.
Once you've created your PayPal bank statement then match off to the Ebay sales and question everything that doesn't look right... There will be quite a lot that doesn't look right such as attempting to match up refunds with often quite limited information.
You can always tell the people who sell through Ebayt because they will use words such as "it's self documenting" and "You just need to"... The reality is that Ebay / PayPal can be some of the most time consuming clients so be prepared to charge a premium to sort out the spaggetti of transaction that you will find.
On a positive note, it is all there and it is all documented so matter how despondant you get when you are going through it remember that it is fixable and you will get to a position where the running total that you are greating agree's to the one of the far right hand side of the PayPal data dump that you need to sift through.
When playing with PayPal you will soon discover that Pivot Tables are your friend.
The other thing to be aware of with PayPal is the charges which can be quite substantial and you need to seperate those out as an expense (similar to bank charges).
You won't realise what I mean until you've dealth with PayPal / Ebay sales and purchases yourself. It won't take you too long to get on top of it but just be prepared for the learning curve.
HTH,
Shaun.
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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.
Are Ebay sales treated as cash sales? As the obvious set up with Ebay is, you pay before you get the goods.
Regarding the reconciliation, is it a case of tick and bash the transactions, level it all off -
Then if I'm using sage, is there a need to write up an excel sheet showing what I've added and taken off to get to the balanced figures or is using sage bank reconciliation feature enough proof of what I've gone?
Thanks
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
whilst I concur on Ebay = Invoices, PayPal is a bank account in its own right and needs to be treated as such.
Its one of the thing that some entry level bookkeepers get wrong in that they look at the amount transferred out of PayPal to the banks, not the amount that is still in PayPal.
I've also seen it where the transaction fee's are not taken into account because people look at the Ebay sales and they look at the amount transferred out but that isn't telling the whole story not least as PayPal fee's can be substantial for some businesses.
Go with the Sage approach if you like but I will have money on it that within a day you have dropped the entries to Excel to work through them before putting them into / reconciling them in other software.
Actually, rereading what you've written I may have confused you over the Excel side of things. I am not talking about entering data into Excel, I'm talking about dumping PayPal to Excel and then beating the data into submission.
When I do that its usually to get to totals for the accounts rather than entering individual transactions into a bookkeeping package.
Oh the many happy hours that I've spent holding a rules against the screen reconciling Ebay against PayPal!
Although we may be talking slightly at cross purposes I guarantee that this will be a lot more complex than you are expecting it to be.
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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.
Ebay is more akin to payments without invoices - via Bank payments and Bank receipts, in my book and as a sage user.
Also create an account for the charges - some are like Bank charges so can just go to that range. But each transaction has a charge so I park those elsewhere. Also you may have a separate charge by your client for postage, although its rolled up to the end user.
Care re VAT.
I always prep everything before I start to key. But you can get software to talk between the two - tradebox. Never used it mind.
Hope you can actually get csv type reports as my client wont let me have admin access and just sends me everything on word or pdf, despite telling him every bloody month how to get the right reports.
I for one will not take on another ebay client unless Im charging a lot more, as I really cant be bothered with it!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I've had that Joanne with clients sending the me wrong type of report. No matter how many times you ask, no matter how many times you give them exact instructions as to how to give you the report you need, at best they just send you the same incorrect report again.
Reminds me of a joke.
Q) Whats the differente between a computer and a client?
A) You only have to punch requests into a computer once.
Your last sentence says everything about Ebay sellers and echoes my statements about them truly believing that they are really simple cases that we should be charging a pitance to service where the reality is that Ebay / PayPal clients are without doubt the most time consuming that I've come across and thats not only when they have embedded foreign currency translations in the PayPal statements.
Rule of thumb with PayPal clients. Whatever time you expect it to take at first glance, multiply it by your shoe size and you'll be closer to reality.
Where the PayPal statements come on PDF rather than CSV files if I cannot get the right info out of the client then I generally use Wondershare to convert the PDF to Excel then play around with it but the problem is that you are never going to get the info from the columns off to the right of the CSV extract from PayPal where you can find linked names to give you some clue as to who is actually being paid / where the payment is coming from. And also that balance which is the only thing that I believe after the number of times I've come accross rejected payments and receipts that in reality were not.
By the way, if you do go with WondersharePDF it creates one excel spreadsheet per PayPal page which for small files isn't too bad but the last one that I had to play with was over 900 pages of PayPal statements which took best part of a day of collating and hacking to sort out (still much better than typing in the figures from the statements though!).
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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.
never fails to amaze me how un-user friendly paypal reports are bearing mind the number of businesses that rely on it. luckily I only have 1 client who uses it and there are only about 20 transactions each month.
luckily I only have 1 client who uses it and there are only about 20 transactions each month.
Same here Alison
All I do is enter the total sales per month, assign the paypal charges to expenses, take account of any refunds, any purchases made from Paypal, then do the transfers to and from the main bank account. I use the monthly financial report for my figures, but before that I was using the monthly sales report and I couldn't reconcile it at all. It's not ebay sales but reading the thread I feel I should be doing more?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
What if a business has nominals for individual items - 400X tables 400X chairs, 400X towels - is this where it becomes a mare? Am I correct to assume EBAY is equal to cash sales? I'm not sure I want to ask about chargebacks, held funds, lost in post, together with selling to Europe and the US - yeah eBay is simple ... Lol
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
