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PayPal + QuickBooks Online – Best Practices

One of the most popular payment processors for WooCommerce is PayPal, allowing your customers to place a WooCommerce order and pay you with PayPal. Our QuickBooks Online Sync integration has excellent support for PayPal, and when configured correctly both in our settings and in QuickBooks Online – you can achieve seamless accounting for PayPal sales.

Connecting in QuickBooks Online

The most crucial step to get right when working with PayPal is correctly connecting your PayPal account to your PayPal bank account in QuickBooks Online.

QuickBooks has launched a new PayPal app called “Connect to PayPal”, as of Q4, 2018. If you connected to PayPal earlier than this time period, you may be running an older version of their app called Sync with PayPal, or PayPal Bank Feed. This should be disconnected, and reconnected using “Connect to PayPal”.

  1. First, follow the QuickBooks tutorial to connect your bank account to QuickBooks.
  2. Note: In part of the connection process above, it will ask you if you’d like to import historical transactions from PayPal into QuickBooks. We recommend you choose no here, as it’s much more accurate to use our sync to push historical orders directly from WooCommerce to QuickBooks.
  3. Once you follow the steps above, you can visit the Banking Tab in the left of QuickBooks and see that you have a new account called PayPal. Each sale in PayPal will bring in transactions like the below screenshot, so you can match the sale to the invoice/sales receipt from our sync, and record the transaction fee.

Mapping in WooCommerce

To map your PayPal gateway in WooCommerce to your PayPal account in QuickBooks Online, simply visit MyWorks Sync > Map > Payment Methods. This page shows one section for each WooCommerce payment gateway you have activated, and you’ll be able to choose a QuickBooks Online bank account to record payments to for WooCommerce orders paid with your PayPal gateway. Read more about mapping here.

Syncing/Handling Fees

Now that PayPal is correctly connected in QuickBooks Online, the most common question we’re asked is how best to handle the accounting for PayPal fees. We have an article on the recommended way to handle PayPal fees here.


Updated on December 29, 2018

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