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Using bank rules in QuickBooks to speed up Shopify-PayPal reconciling
Using bank rules in QuickBooks to speed up Shopify-PayPal reconciling

When using the PayPal bank feed in QuickBooks, it's wise to set up bank rules to help speed up your workflow

Daniel Little avatar
Written by Daniel Little
Updated over a week ago

If you've read our help article on Reconciling Shopify Sales & Fees – Other Payment Gateways then this help article will help you to further automate the process of reconciling your non-Shopify Payments sales and fees including those from PayPal.

Please note that bank rules are only suitable if all incoming payments to PayPal are from your Shopify store. If you are receiving payments on PayPal from other locations please contact support for further advice.

πŸ‘‰ Looking for Xero bank rules setup? They're here.

1) Send Shopify-Paypal invoice for the month from Link My Books

Each month Link My Books generates a summary invoice for Shopify sales through the PayPal payment gateway.

The first step is to send those to QuickBooks:

2) Allocate all PayPal order payments to the Shopify Gateway Clearing account (via rule)

Set up a bank rule in QuickBooks matching the below:

  1. Name the rule Shopify - PayPal Gateway Clearing

  2. Bank text contains Payment

  3. Select the Shopify Gateway Clearing "category"

  4. Set the Payee as Shopify

  5. Set the tax rate as No VAT (0%)

  6. Turn on Auto-add (optional)

You should also set up a rule to automatically assign PayPal fees to your chosen fee account as follows:

  1. Name the rule PayPal Fees

  2. Description contains Fee

  3. Select the Bank Charges or PayPal Fees "category" (depending on what account you want to use)

  4. Set the Payee as PayPal

  5. Set the tax rate as No VAT (0%)

  6. Turn on Auto-add (optional)

If you turned on Auto-add then you're done.

If you opt not to turn on Auto-add, any payments for Shopify orders paid via PayPal and their corresponding fees, should look like this on the PayPal bank reconciliation page:

All you need to do now is click Add on each of them and they will be allocated to the Shopify Gateway Clearing account and the fees into your chosen fees account.

This should speed up considerably the monthly task of reconciling your PayPal sales from Shopify.

β€‹πŸ‘‰ If you have any follow up questions after reading this article then please get in touch with support via the blue message widget at the bottom right of this page.

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