It is always better to follow the industry's best approach to avoid the reconciliation nightmare.
Step 1: QuickBooks Setup
1. Create a Bank Account named "Paypal Bank Account" (or name it as needed) in QuickBooks. This account will be used to record your PayPal sales & PayPal fees.
2. CHECKING ACCOUNT/CURRENT ACCOUNT should not be used directly to record your Paypal sales as it will create numerous issues in reconciling the Paypal fees.
Step 2: PayTraQer Setup
3. Configure the sync settings for Sales, Expense, Fees, Items & Payout (How to?).
4. Record (Sync) the transactions from Paypal to QuickBooks (How to?).
While providing the settings, you need to select the same bank account ("Paypal Bank Account" or created Bank Account) for Sales, Expense, Fees, Items & Payout.
Step 3: QuickBooks Bank Review
Navigate to the Banking Section in QuickBooks, you could see that the TRANSFER transactions of "Paypal Bank Account" is matched against your deposits. These TRANSFER transactions won't be created if you have not enabled Payout processing in PayTraQer.
Click the "Match" link to accept the transactions.
You can also create TRANSFER transactions directly in the Bank Review screen if it is not available.
Step 4: QuickBooks Reconciliation
- Navigate to bank reconciliation page in QuickBooks
- Provide statement balance amount and statement date.
- Start the Reconciliation Process.
QuickBooks automatically matches the transfers and deposits and marks the transactions as reconciled. Now QuickBooks Paypal sales ( Invoices, Sales Receipts) and Paypal Expenses (Fees, Expenses) are properly matched with your checking account.