How to capture Paypal transaction fees?

harryz

I am the Treasurer for a club, and am getting started with Quicken to keep track of club income / expenses. I'm using Quicken Deluxe R32.12 on Windows 10. I have the club checking account set up in Quicken and download transactions from the bank. I do NOT have Paypal setup in Quicken.

So, here's my question: when someone pays for their membership via Paypal, they pay $30. When I transfer the funds from Paypal to the checking account, we get $28.83 ($30.00 - $1.17 Paypal fee). So what gets imported into Quicken when I download transactions from the bank is $28.83.

What I can't figure out is how do I capture both the $30 income and the $1.17 Paypal fee expense for this transaction so I can include it in my income/expense reports? Do I need to set up an account for Paypal within Quicken? And if I do, then how do I download the transactions from my bank without duplicating things?

Thanx,

Harry Zisko

harryz

@Frankx, @Chris_QPW, and @Boatnmaniac : Mahalo (Thank you) for the quick responses. I have decided to go ahead and create a Quicken account for Paypal. I've downloaded my transactions into the account now have some questions on what do I do now.

First, One Step Update only seems to go back to Feb. 6, so I had to download everything before that as a .QIF file from the Paypal website. Transactions look different based on which method they were downloaded with.

The transactions from the QIF file, show up in the account register as split transaction:
$30.00 categorized as 'Express Checkout Payment'
$1.17 categorized as 'Fee'

The items imported via One Step Update show up as two separate items in the register:
$30.00 categorized as 'Other Inc'
$1.17 categorized as 'Fees and Charges'

Questions:

1) I prefer the format of the transactions in the register from the One Step Update, but I cannot find a way to force OSU to download all the way back to June of 2020. Is this possible?

2) What do I do now to get these transactions reflected in the checking account register? Sorry, I don't "speak" Quicken very well, so a link to a tutorial or step-by-step instructions would be greatly appreciated.

Mahalo,

Harry Z

Frankx

Hi @harryz,

You don't have to add a PayPal account to Quicken, if you don't want to.  You can simply edit each of the downloaded transactions from the bank to add the PayPal fee to the transaction. This will require to use a "split transaction" with the $1.17 posted to a PayPal fee expense category.
As another option, you can leave each downloaded transaction as is, but record one transaction per month to the "Membership Fee" income account to "gross-up" the fee income and also record the PayPal fees. 

But if you do decide to setup the PayPal account in your Quicken file, the downloaded transactions from the bank and PayPal will easily cancel each other out in Quicken. 

Let me know if you have any follow-ups. 

Frankx

Chris_QPW

I believe that you will find setting up the PayPal account for downloading would be your best bet.
I use to have people pay for software using PayPal and what it would download is two transactions, one with the payee’s name for the gross amount, and one for the fees.  So with this you can run various reports against the PayPal account for how much the club members have paid, and for how much you have paid PayPal in fees.

And the transfers don’t have to “line up” with every single payment by a club member, instead it is just a transfer to the checking account.

Boatnmaniac

Hi @harryz .  Additional comments to consider:

When I used to sell on Ebay I would get multiple Paypal transactions downloaded for each sale including:

• Gross revenue from the sale.
• Transaction fee.
• Ebay listing fee.
• Ebay sales fee.
• The net revenue transfer from Paypal to my checking account.

So, unless something has changed, I think you will get multiple transactions downloaded for each membership, too.

The important things for you to do with Quicken, in my mind, would be:

• Make sure you have the categories set up properly in Quicken so you can track them in Quicken reports.
  
• Make sure you have a clear and consistent process for how to identify which transactions are for which members.  For this you might want to use the Memo field.  For instance, you could enter the member's name or membership number in the Memo field for each related transaction.  You could also use Tags for this but I'm not sure how well this will work if you have hundreds or thousands of members since I've never have more than a dozen or so Tags, myself.
  
• Make sure that the net revenue transaction downloaded into Paypal is categorized as a transfer to the checking account (i.e., the Quicken checking account name in brackets...ex:  [Checking Account]).  This will then show in Paypal as a debit transaction and a credit transaction in the checking account.    When the transaction is then downloaded into the checking account Quicken will then attempt to match it to the Paypal transfer transaction.  If it does not, then you will be able to manually match them.  As long as the matches are done, there will be no double counting of the transaction.
  

What you might want to consider doing is to backup your data file for quick retrieval in case something goes wrong or you do not like the results.  Then set up your Paypal account in Quicken and identify or create the categories you will religiously use.  Then start downloading and see if it works out the way you want/need.  I think you will find that it will but you can only be sure by trying it out.  If after a few weeks you decide it is not working the way you want/need you can always restore that backup data file and discontinue using or delete the file with the Paypal account in it.  If you need some help reverting to the old way just come back to Community and post it making sure to refer to this post thread.  (I suggest not waiting months to make the final determination as that can complicate the reversion process.)

harryz

@Frankx, @Chris_QPW, and @Boatnmaniac : Mahalo (Thank you) for the quick responses. I have decided to go ahead and create a Quicken account for Paypal. I've downloaded my transactions into the account now have some questions on what do I do now.

First, One Step Update only seems to go back to Feb. 6, so I had to download everything before that as a .QIF file from the Paypal website. Transactions look different based on which method they were downloaded with.

The transactions from the QIF file, show up in the account register as split transaction:
$30.00 categorized as 'Express Checkout Payment'
$1.17 categorized as 'Fee'

The items imported via One Step Update show up as two separate items in the register:
$30.00 categorized as 'Other Inc'
$1.17 categorized as 'Fees and Charges'

Questions:

1) I prefer the format of the transactions in the register from the One Step Update, but I cannot find a way to force OSU to download all the way back to June of 2020. Is this possible?

2) What do I do now to get these transactions reflected in the checking account register? Sorry, I don't "speak" Quicken very well, so a link to a tutorial or step-by-step instructions would be greatly appreciated.

Mahalo,

Harry Z

harryz

Forgot to mention that if I've messed this up and need to start over again, that's not a problem. I may have to do this again anyway. I just noticed that it looks like what I imported into Quicken from Paypal includes both the original transaction, and also the transfers from Paypal to my checking account. So, things are in there twice. I'll play with this to see if I can figure out which transactions I want to keep and then how to download only them from Paypal.

Chris_QPW

No you can't force OSU to send older transactions than what they sent in the first place.

The main reason that OSU breaks up the fees into separate transactions is because it is downloading in OFX format, and in that format there isn't any syntax for split transactions or categories for that matter.  The QIF format does allow for split transactions so that is why they do it that way.  But there is also a "restriction" in that method.  The QIF format also allows for setting the category and they use that to set the categories they feel like they should be, which isn't what you want.  If you were OK with the splits you could just recategorized those, but to have them as a separate transactions will require doing in a different way.

Note that when downloading with OFX it is Quicken that is assigning the category based on your memorized payee list.

I looked at the CSV format and is looks like this:


I think you can do what you want in two passes using my CSV to QIF converter.
First you would set the column mapping to use the gross amount, for the Amount of the transaction, and then convert/import that.
Next you would edit the mapping and change the Amount field to the Fee and then convert/import that.

But starting with Quicken Subscription there is another problem with QIF imports.  Quicken will not do any processing of the imported transactions.  It just puts the transactions into the register.  This means that if the category isn't in the QIF transaction you will end up with uncategorized transactions.

As a workaround my program has "Map Payee", which is like the Renaming rules in Quicken, and "Map Category", which is like the Memorized Payee list used to fill in the category.  You can use these options to do these operations in ImportQIF so that the information is put in to the QIF file.

You could also do a find and replace in Quicken to fix these up after the fact.

You can get the converter (ImportQIF) from my website, which is in my signature below.

Boatnmaniac

@harryz - IMO you want all the transactions to be in Paypal, including the transaction for the transfer of cash to the checking account.  Paypal then becomes the account of record for those membership purchases, not the checking account.

Regarding the transaction for the transfer from Paypal to checking:  In the Paypal register make sure the category is a transfer category.  In this case the transfer category would be the Quicken name of the Checking Account in brackets...example, [Checking Account Name].  Once this is done, the transaction will show up in Paypal as a debit and it will also show up in the checking account as a credit. 

After the initial download is done and the transfer category is entered, it should be reflected that way in your Memorized Payees list so future downloads should enter the transfer category automatically provided you have your download preferences set to allow Quicken to automatically categorize transactions.

When the download into the checking account from the bank then downloads Quicken will try to match it to the transfer transaction.  If it does not do that you can manually match them.  For this to work properly it is important your download preferences to be set to not automatically enter transactions into the register.  This then allows you to review the transactions and make sure they are properly matched before accepting/entering them into the register.

Here are the key preferences settings (highlighted in yellow as shown in red circles) that IMO you should have to help ensure this works smoothly and properly with future downloads:

One other suggestion:  Go to the Checking Account Register > upper right Gear icon > Register Columns > check the box for Downloaded Posting Date > Done.  This will add a Posting Date column to the right of the Date column.  The Date column will have the transaction date from the Paypal transfer transaction.  The Posting Date column will show the date that the transfer transaction was posted at the bank (which can be 1-3 business days after the transaction date in Paypal).  I think you will find both dates to be helpful during future transaction reviews.

Chris_QPW

In my IMO I agree with everything @Boatnmaniac said except that I disagree that turning off of automatic transaction entry mode is needed.  The same results can be achieved by reviewing the transactions in the register using this mode, than can be use the Downloaded Transactions tab to accept them into the register.

Boatnmaniac

Chris_QPW said:

In my IMO I agree with everything @Boatnmaniac said except that I disagree that turning off of automatic transaction entry mode is needed.  The same results can be achieved by reviewing the transactions in the register using this mode, than can be use the Downloaded Transactions tab to accept them into the register.

Well, I guess that's why preferences are called "Preferences."  I don't think that turning off automatic transaction entry is necessary but I think it is easier to find and correct transaction matching and category issues before the transactions are entered into the register.

Tom Young

Seems like a lot of brouhaha for a simple (known) amount of fee when somebody pays for a $30.00 membership.

The direct answer to your direct question of "What I can't figure out is how do I capture both the $30 income and the $1.17 Paypal fee expense for this transaction so I can include it in my income/expense reports?" is:

1. You record a deposit of $28.83.  This deposit could be in the checking Account or the PayPal Account, doesn't really matter.
2. You split the transaction
3. In the split window you record $30.00 as "Membership" income
4. In the split window you record as a negative number $1.17 as a PayPal fee.
5. Save the transaction

As to the question about setting up PayPal as an Account in Quicken, that comes down to a question of utility that you get to decide.  PayPal "knows" about the payment first and has some identifying information about the identity of the payer, and you control the when that money actually gets transferred to the bank. 

Capturing the detail-level information over in the PayPal Account (basically, "who paid") and then just transferring the bulk dollars over to the bank (e.g., several people pay at once) probably is easier, and that's the way I'd probably go if the volume of transactions is high, but it's certainly not necessary.  If it's a onesie-twosie situation, i.e., pretty much an occasional thing, then you could simply transfer the money from PayPal and capture the detail over in the bank Account.