Hi there

I've read the instruction on how to set up a Paypal account and create invoices for each and every transaction but I sell low value items and many of them and to create individual invoices for each transaction would take ages. I had been recording Paypal income as simply income received going into cheque account and grouping one month's worth of transactions (and fees) together. Does that sound ok to do or should I be creating an invoice for one month's worth of Paypal transactions and then showing a transfer from paypal account to cheque account?

Many thanks!

Hi Deborah,

You don't need to create invoices to record income - it's fine to group your sales and create a single Money Received transaction each month. However, you should still create a PayPal asset account in Solar Accounts to represent the money owed to you by PayPal. This will allow you to accurately record income when your customer makes a payment (as required by HMRC) rather than waiting to receive the money in your bank account.

Regards

I have a follow on to this.... what is the best way of dealing with dollar and euro sales in PayPal? I know they can't be recorded as dollars and euros in Solar Accounts. I've looked at recording them at the point they are converted to GBP, but sometimes they never get converted to pounds at any point (ie the dollar balance in Paypal is used when buying US products using paypal).

Hi Ian,

It gets a little tricky when you have accounts denominated in foreign currency. You will need to choose an appropriate exchange rate and enter the balance of the account into Solar Accounts in UK pounds. If you make a payment from the account in US dollars you will need to apply the appropriate exchange rate and record the transaction in pounds. Also, you should periodically record a gain or loss on your foreign-currency accounts due to exchange rate fluctuations.

Regards,