Hello, David:
I have the same kind of transactions in my small business bookkeeping as
you describe here. My responses are interleaved below.
On 2022-12-09 12:00, Dr. David Kirkby wrote:
I have the following accounts, and am buying something in GBP.
Assets -> Accounts Receivable -> GBP
Assets -> Bank account
Assets -> PayPal -> GBP
Expenses -> Utilities -> Internet
Liabilities -> Accounts Payable -> GBP
I paid Google £15 for using some cloud storage (OneDrive) using PayPal. So
PayPal took the money from the bank account and paid Google.
*If I were NOT using PayPal, this is the process I would go through.*
*Under Business -> Vendor -> New Bill*
Create a bill and post that to these accounts
*Expense Account:* Expenses -> Utilities -> Internet
*Post to Account: * Liabilities -> Accounts Payable -> GBP
*Under Business -> Vendor -> Process Payment*
Process the payment
*, using these accounts*
*Post to*: Liabilities -> Accounts Payable -> GBP
*Transfer Account:* Assets -> Bank account
Am I doing that all correctly done, if not using PayPal ?
I do not use the Business -> Vendor features to handle such
transactions, even for business expenses. If the funds are leaving my
possession as part of the payment, I do not see a reason to involve
Accounts Payable. So I follow this process:
Create a simple transaction with these accounts
*Asset Account:* Assets -> Bank account
*Other Account:* Expenses -> Utilities -> Internet
...how can I modify the process so the account* Assets ->
PayPal -> GBP* account gets used?
If I am using Paypal, which keeps a zero balance, then as soon as I pay
for something with Paypal, Paypal funds that amount by charging my bank
account (or credit card, sometimes). I follow a process with two simple
transactions:
*Asset Account:* Assets -> Paypal account -> GBP
*Expense Account:* Expenses -> Utilities -> Internet
*Asset Account:* Assets -> Paypal account -> GBP
*Other Account:* Assets -> Bank account
This means that the expense is recorded in the Expense Account, the
Paypal ledger has two matching transactions to reconcile against my
Paypal statement, and the Bank account ledger has a single transaction
to reconcile against the Bank statement.
Hope this helps!
—Jim DeLaHunt
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