Paypal charges

Hi Pauline

The correct way to do it is to treat each transaction as two entries, a sale for the gross sum and a payment of an expense for the charge.

A short cut, is to treat the charges as a negative sale so if you import the Paypal statements manually, as a bank statement, when you come to explain say £98 you first enter a negative £2 to the Paypal charge account then the £100 to the Sales account. You will have to make sure the charge account is available to sales in the account code list in settings.

This method, whilst far quicker is not in strict accordance with accounting or VAT treatment but the sums are usually very small.

With all of my clients with Paypal accounts I enable the direct integration with Paypal, so that CB imports the transactions in as a bank feed requiring you to explain each transaction. The main benefit is that it uses the second method and automatically enters the negative charge leaving you to explain just the Gross sale.

In case you're not using this, here's the guide: https://www.clearbooks.co.uk/support/guides/bank-accounts-bank-accounts/new-navigationhow-use-automatic-paypal-import-tool/

Having said all that