Paypal income and accounting

4thfrog

Hi,

I’m a sole trader and I sell products from my own website. I had been counting the money I received from my paypal account as it entered the current account I use for my business. after reading some of the posts on here it seems this was wrong and I should have been counting the total including fees and them deducting the fees as expenses.

I think the best way for me to do this is to use the paypal monthly statements and enter the total sales into income and total fees, and total refunds, into expenses. Is it OK to do it once a month like this? and as the paypal monthly statements are only available for the previous 3 months, is it OK to leave the fist part of the tax year (mine starts in April) as it was?

fengirl_2

Your accounts need to be consistant for the whole year, so you would need to go back and record your gross takings and Paypal fees. Refunds are not expenses, they need to be deducted from your takings.
You can do your book keeping as often as you want - best not to leave it too long as it gets boring!

4thfrog

fengirl wrote: »

Refunds are not expenses, they need to be deducted from your takings.

Thanks. Can all refunds be deducted from income? or does it depend on whether it is a refund for something being out of stock, of a refund for good being lost in the post?

justpaper

4thfrog wrote: »

Is it OK to do it once a month like this? and as the paypal monthly statements are only available for the previous 3 months, is it OK to leave the fist part of the tax year (mine starts in April) as it was?

it seems they may owe you money, based on how you worked it out, so yes you could just leave it as it is (your call),

asl for the refund issue, it would be the same regardless of the refund reason,

If the item got lost in the post you would refund in full, and claim the Sold price, so you still would be making a profit/income off the item,

you could just download all your paypal transaction via csv and open it up in excel and use the sum tool to calc the total fees monthly, giving you a grand total of Fees, then give totals per quarter, on one side and sales on the other, just remember you got postage aswell to think off,