FREE GUIDE · SIMPLE CASH RECORDS
How to record PayPal sales and fees in a cashbook
A customer pays $100, but only $97 remains after a $3 payment fee. Record the sale and its fee once, so your cashbook shows the same movement of money as your payment statement.
The gross amount is the payment before fees. The net amount is what remains after the fee. PayPal’s captured-payment documentation reports these separately as gross amount, PayPal fee and net amount.
A three-transaction example
You receive a $50 cash sale and a $100 PayPal sale, then spend $40 on supplies. For this example, assume the PayPal fee is $3.
| Transaction | Amount recorded | Fee | Cash impact |
|---|---|---|---|
| Cash revenue | $50.00 | $0.00 | +$50.00 |
| PayPal revenue, before fees | $100.00 | $3.00 | +$97.00 |
| Supplies expense | $40.00 | $0.00 | −$40.00 |
$150 revenue − $40 expenses − $3 fees = $107 cash surplus
An opening balance is separate from the surplus. If you began with $200, the resulting balance would be $307. These are worked-example figures; the cashbook’s editable opening balance starts at zero.
The mistake that deducts fees twice
If you enter the $97 net receipt as revenue and also deduct a $3 fee, the PayPal transaction contributes only $94. You have deducted the same fee twice.
For a cashbook that calculates payment fees, enter the $100 gross payment as revenue and let its fee calculation subtract the $3 once. Do not add that same calculated fee again as an expense.
The fee settings in Small Business Cashbook start at zero. Enter the percentage and fixed fee that apply to your own account and transactions. The result remains an estimate: compare it with your actual payment statement.
Keep the monthly check simple
- Use one currency per file. USD, EUR and GBP amounts cannot simply be added together. A currency label changes no exchange rates.
- Enter a date and choose the matching report year. Use YYYY-MM-DD so dates are clear across countries. Undated entries do not appear in the monthly summary.
- Compare gross revenue, fees and net receipts. Investigate differences against your payment-provider statement rather than treating estimates as confirmed fees.
- Read the result as cash surplus. This simple subtraction does not calculate full accounting profit, VAT or a tax return.