Paypal has changed the way it processes overseas payments and if you are experiencing that you bank feed is not making sense, it's because it's now showing transactions in $US.
If you have a look at the Paypal Statement, you will find that the $US line that was always there but $0 in the past, now has an opening and closing balance if you have made payment in $US.
Paypal has split overseas transactions and converts them to $US or GB instead of the one Paypal. The difference between the two amounts, is your conversion fee (no need for a journal entry, it's all done in the background by QuickBooks).
A couple of years ago, one of my clients had to stop $US transactions when he was switched over to QuickBooks. QuickBooks struggled to upload the feed with US transactions and nothing came through until he got in touch with Paypal and changed some settings. Now it just puts everything through, which is a good start because we can exclude/transfer when those transactions are actually in $US.
He can now go back to avoiding conversion fees by keeping a $US balance for $US payments. With a budget for recurring $US transactions it's easy to forecast what is usually paid in $US and save quite a bit in conversion fees. It is worth taking the time to change the the payment method for those $US payments that usually go through your $AU accounts, to be paid from your Paypal US account. If you receive payments from overseas, this is the one time that you would actually benefit from some of your earnings going though Paypal.
I've broken down the steps to handle these transactions and reconcile in the 5 points below:
In Chart of Accounts - Open a new bank account called Paypal US and make sure that the currency is US.
In Paypal - Download a CSV for the period you are wanting to work on.
On the spreadsheet - Separate the US transactions, save and upload in Banking to the new Paypal US (feed will not work so this has to be done manually until QuickBooks finds a way to make this work).
Based on the Paypal Statement - 1. Do the transfers between Paypal and Paypal US making sure that the conversion rate is correct by manually putting in the amount at the conversion bit. 2. Do the expense/bill payment to Supplier. Note: You will also need to do new Supplier accounts in $US to pay from there. If putting in a bill, copy and paste the conversion rate from the funds transfer because it will convert to AU at the bottom of the bill even though it's being paid in $US. So you want the AU part of the bill at the bottom to be the same as the $AU amount that was transferred by changing the conversion rate at the top of the bill.
Reconcile both accounts.
The GB conversion that happens every now and then is still a little glitchy with QuickBooks. Conversion from $US to GB is not possible even though Paypal does it.
It's definitely taking longer to reconcile Paypal and if you don't have your own log in, it's almost impossible to post these weekly/daily. You need to log in to figure out how the transaction was handled by Paypal to replicate in QB or wait to the end of the month to post/exclude/upload transactions if only given statements the next month (after a lot of nagging :D).
Please get in touch if you are experiencing this little subtle but major change,
and I will guide you through it.
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