The easier way to approach this is to ask yourself, "what happens in the
real world?"
Then model that in your accounts and transactions.
Thus, do you transmit funds in advance to the PayPal account?
If so, make that transaction, with PayPal as an asset (just like another
Bank account) then make payments from it as you finalize purchases.
If not, and PayPal auto-debits in some fashion as you make purchases,
then you have the option to do so as separate or in the same
transaction, or simply putting 'via PayPal' in the Description, Notes or
Memo as preferred.
If PayPal extends credit that you then have to 'cover', then treat that
as a Liability account, similar to a credit card.
If the answer is, "it depends on the situation, but one or more of the
above" then put the account wherever you 'normally' have a non-contra
balance and proceed as above.
That way, if ever you end up with a contra-balance, you'd know things
are not 'normal', though that condition may be expected depending on
circumstances.
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I would only use Bills for actual vendors that I routinely owe for a
particular purpose, not occasional or one-off purchases/charges.
Utilities, Rent, Professional Services, Insurances, Inventory, et cetera
are good candidates here.
Even regular 'grocery' or other purchases don't quite fit the concept of
'vendor'. (an accountant can give you actual guidance for your
particular use case—I'm speaking in very generic terms.)
You don't have to stick to a hard and fast rule concerning accruals,
just keep it simple.
For example, I pay my insurance in advance, but treat them as a 'vendor'.
But when I buy from Wal-Mart, that's just an expense, even though it may
happen more frequently than the insurance payment. (and in that case,
without accrual either)
If you regularly pay your Internet service for example with PayPal, the
ISP would be the vendor for which you raise a Bill, not PayPal. (and in
that case 'PayPal' would be equivalent to 'VISA' or 'Checking' as an
example - the source of funds, but not a vendor)
Regards,
Adrien
On 12/10/22 12:25 PM, Dr. David Kirkby wrote:
I'm intending to use the Vendors and Customers under the Business menu. Do
I need to make two totally separate transactions (one bill, one invoice) to
fund the PayPal account from the bank account, and the other for PayPal to
pay the vendor? In which case, does PayPal need to be entered as a vendor
so I can pay PayPal?
Sorry, I'm really confused, and it seems multiple people have different
ways of doing this - most not using the Customer/Vendor facility.
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