Accounting and Bookkeeping With PayPal Integration
1. Starting a successful business is challenging. Entrepreneurs
need to focus on their market offering, their competitive
positioning, customer service and in addition maintain an
eye on the (potentially less interesting) administrative
tasks. These include bookkeeping - an area that serves to
store up problems if it is not dynamically addressed as
transactions flow.
2. Many 21st century businesses conduct a significant
proportion of their transactions online. A significant
number start life trading via online platforms such as eBay,
often taking payment via PayPal. Indeed PayPal is also a
prolific payment platform for online transactions
conducted directly (i.e. not via eBay), and provides not
only a convenient method of revenue receipt, but also for
purchases. PayPal records details of the transaction, the
buyer, the seller, the date and value of the transaction.
Indeed, more often than not all of the information
required to maintain effective bookkeeping.
3. The temptation is to commence using a simple Excel
spreadsheet to record all items of expenditure, expenses
and also sales. This has its merits, (e.g. low cost, highly
customisable), but necessitates manual entry of
information that is otherwise already electronically
recorded by PayPal. Manual entry of PayPal transactions
can actually avoided by electronically "lifting" the data
from PayPal records by exporting (CSV) files from the
PayPal account. The author's own experience found that
exporting bulk data over a period of more that a couple of
months at a time often resulted in a crash and/or
excessive waiting and/or retries on the PayPal site.
4. There are commercial solutions available that provide
accounting/bookkeeping functionality with PayPal
integration, although surprisingly we were surprised that
few incorporated this functionality. One of the big names
in small business accountancy does have an "add-on" that
delivers such integration, though a web search indicates
that many users find the package somewhat lacking with
regard to an intuitive interface. some vendors will offer a
free trial run of their software. There is clear merit in
trying before you buy, though some free trials are rather
crude demonstration platforms as opposed to a full
product trial. Some solutions provide a full hosted service,
and can therefore offer a genuine trial of the live software,
allowing users to use their real transactional data.
5. A genuine intuitive user interface can draw users into full
engagement with the free trial and can also integrate with
the user's PayPal account (granting read only access to
transactions). Frankly a very clever move by the
bookkeeping company as once a user invests the time in
loading their bank and transaction data, the usefulness of
the solution can become very apparent, (such that the
user may be loathed to write off the investment in time).
6. Solutions that provide the most useful PayPal integration
interrogate the PayPal account to solicit and record not
only the gross sales but also the PayPal fees. A hosted
service is accessed via secure username and password
authentication and some providers provide the additional
assurance of emailing a backup of accounts status every
week. A hosed service also offers the benefit or access to
accounts from any web enabled PC, or tablet device.
7. Utilising a professional bookkeeping/Accounts package
can save a lot of time compared to manual bookkeeping
and ensures that data is recorded in a manner that
accountants are happy to receive. In particular, adoption
of a "proper" accounts and bookkeeping system will
certainly assist if the business grows and breaches the VAT
threshold.
8. Whilst there are plenty of accounting packages out there,
online business transacting significant trades through
payment platforms such as PayPal need to accommodate
gross versus net sales values and how to account for
PayPal fees. A bookkeeping package with PayPal
integration can save significant time and avoid manual
entry of data that is otherwise already electronically
recorded.
