Process to setup PayPal account to make PayPal reconciliation easier - Xero Bridge app
PayPal reconciliation process is explained in this article. Reconciliation is a feature that is internal to Xero. Paypal Payment account is the accounts receivable or Bank account where you receive the Payments for orders paid by Paypal.
PayPal payments for the orders will be deposited directly to the "PayPal account" selected on the 4th tab of our app settings.
There will be no journal entries created by the app. In this case, you will have to reconcile the entry from the bank feed to the multiple relevant orders (Salesreceipts/Payments) in Xero.
- If your actual PayPal account is connected as a feed to PayPal account you have selected in our app settings then you have selected the right account. When PayPal account is connected as a bank feed, the payment made through this mode will also auto match to an entry in the Paypal account and will be very helpful in bank reconciliation.
- If your actual PayPal account is not connected as a feed, then have your Xero account connected to PayPal Feed and select that account in our app settings in PayPal account field.
PayPal fees will be synced to the account selected under the "Xero Account for PayPal Fee". You can create a separate account to track Paypal fees separately or you can choose the same account where you track all (Shopify, Paypal) fees collectively.
Once the correct PayPal Account and PayPal Fee Account are selected, the charges and the fees for PayPal will match automatically and hence the reconciliation will become very easy. You will have to just click on the 'OK' button on the reconciliation page in Xero.