How to Record PayPal Transactions in QuickBooks

In this article, you learn how to record PayPal transactions in QuickBooks. Paypal is one of the best money transfer platforms used worldwide. If most of your transactions go through Paypal then you would need to have a well-trusted platform that will help you in bookkeeping.

Well, that’s where QuickBooks Pro comes in. This accounting software integrates well with PayPal and helps you save much of your time in manually recording transactions.

How to Record PayPal Transactions in QuickBooks

Learn how to get started to know how to record PayPal transactions in QuickBooks.

• Firstly you would need to log into your Paypal account
• Select a date range
• Select my account tab and go to history then download the history
• When you get the downloading options select the .iif format.
• Then click on the download history.
• Keep in mind when you are filling in the account name and the other details fill in the details only that appear in the company account.
• Then save the .iif file.
• Then from the QuickBooks file menu, select utilities and import the IIF files.
• Click on the .iif file and then open it.
• Congrats you have finally imported your Paypal transactions in QuickBooks.

Setup QuickBooks to Import from Paypal

Create a new bank account named “PayPal account” in QuickBooks: You have to create this account so that you can keep track of your online transactions. With all the transactions for your bank accounts, you can even keep track of your business activities.

Create an expense account named “PayPal fees”: In this account, all the expenses PayPal would be saved and you have to be sure that this account should not be used as a sub-account otherwise it will be turned into a bank account when it is being imported.

Create an income account named “PayPal sales”: All the sales would be saved in this account. Be sure that the income account should not be used as the sub-account otherwise, it will be turned into a bank account when it is being imported.

What is .IIF File within Paypal

.IIF is the file extension given to files that can only be opened in QuickBooks. Because of the popularity of QuickBooks Pro the accounting software used worldwide, PayPal can save files in this format if needed. To import the transactions to your QuickBooks you can use the .iif file within Paypal. This imported file can be used in QuickBooks for more editing. When you import the PayPal transactions using .iif then the credit amount is recorded on the income side of QuickBooks and the debit side is recorded on the expenses side.

Use .CSV File:

If you are interested in manually entering the transactions that didn’t import you would have to download the PayPal file in a .csv format.

Steps of how you can Import .CSV for QuickBooks

• Log in to your PayPal account.
• Go to my Accounts tab and choose “History tab”.
• Select the date for which you want to download data.
• Then click on the download history.
• Now your file will be downloaded.
• If it does not happen immediately then PayPal will send you an email notification notifying you when it will be done. This usually happens because of the large file size.

By now you would already know how to record PayPal transactions in QuickBooks. But if you want QuickBooks to automatically monitor your PayPal transactions then you would need to sync both of them together. Still facing issues related to recording Paypal transactions in QuickBooks and reconciling Paypal transactions in QuickBooks Online. We are here to assist you to connect now on the QuickBooks Consultant team.