 Zero Accounting Software 2023 Paypal Bank Feeds Get ready to become an accountant hero with Zero 2023 Here we are in our custom Zero homepage going into the company file we set up in a prior presentation, The Bank Feed File First a word from our sponsor Well, actually these are just items that we picked from the YouTube Shopping Affiliate Program But that's actually good for you Because these aren't things that were just given to us from some large corporation which we don't even use in exchange for us selling them to you These are things that we actually researched, purchased, and used ourselves Bayer Dynamic? Not sure if I said that right, but this is the DT770 Pro 250 OHM Studio Reference Closed Back Headphones I wear headphones basically every day for a large part of the day, they are important to me Therefore, I've gone through many different kinds of headphones I've had these for some time and they've worked quite well They fit over my ears, but I'm still able to put my glasses on under the headphones The headphones not pinching too tight on the glasses to give me a headache, which is nice The quality of the patting is good and it has lasted for some time I've had these for some time now and they haven't gotten all torn up on me or anything like that I also like that I have a cord when I'm doing my recordings as opposed to a USB centered headphone Because that frees up a USB port and I find the USB headphones to be less reliable They come with an audio jack that looks like this, which is useful for me because that plugs into my audio interface However, if you want to use the headphones for some other purpose, I believe it's fairly easy to get a converter to other types of audio jacks If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com Where we have many different courses, you can purchase one at a time Or have a subscription model, giving you access to all the courses Courses which are well organized, have other resources like Excel files and PDF files to download and no commercials We're going to duplicate some tabs to put the reports in like we do every time Right click it on the tab up top so we can duplicate it Right click it on the tab up top so we can duplicate it Back to the tab to the middle, accounting drop down, opening up the balance sheet report Then we're going to tab to the right, accounting drop down, this time opening up the income statement Date range change, we're going to go to the drop down, we're looking 2022 January 1st We're going to the end of 2022, that being December 31st Updating the report, let's go down to the first tab And then accounting drop down and look at our bank accounts Now in prior presentations, we've been looking at our bank feeds, we looked at the checking account We looked at the credit card account Now we want to consider some of those intermediary tools that you might be using In particular, we're looking at PayPal So if you have a PayPal system set up Then it used to be that something that a PayPal was used for many small businesses Primarily as a format to help collect payments and then transfer those payments into our checking account So if that's how you're using PayPal Then you've got to think well what's the easiest method that I could use And this comes down to again the industries that we're going to be in And we want to really think about our particular situation to try to come up with the cleanest, easiest system That we can use often remembering when we're looking at this system That there's going to be some sort of trade off between a lot of detail versus less detail But more simplicity in order to track our information So if you're using like a PayPal for example as a system of collecting I'm looking at a flow chart now This is a QuickBooks desktop flow chart But we're looking at just simply the flow which is the same for basically any kind of accounting system And we're primarily looking at the revenue cycle here So we talked about in prior presentations If we're trying to construct our books directly from the bank feeds Then the easiest system is just to wait till something clears the bank to record it as revenue But that only works in certain industries That would work in like gig work industry if you get paid by YouTube or something like that If you're in an industry where you're at a cash register Then you can't really do that because often times the internal controls of tracking the cash Foreshoot of want to record the transactions as you're making them And then deposit into the bank and use the bank recs to match And if you are in a cruel type of system where you're invoicing clients You have to track the accounts receivable So we've talked about those systems in the past What if you're in a system where you're getting paid through an intermediary type of financial institution If you're doing online work for example with a Shopify or something like that Or you have your own website and you're getting paid for something online Then they might not be depositing directly into your checking account They might want to use these third party facilitator tools to help to collect the deposits Such as a PayPal as a classic one or it might be like a stripe Or many other kind of intermediary payment processors That are going to be kind of getting in between the payment that's coming to you from the platform And what's actually going to go into your bank account Now so if for example you work like you have a Shopify store or something like that Then it might like you might get paid through different of these intermediary platforms Then the question is well how do I want to record the sales on my side The easiest thing to do is just to wait until it clears the intermediary platforms to my actual checking account And when it hits my checking account I've recorded at that point in time However if you do that you're going to lose some of the detail in your zero system from the actual sales transactions Because by the time it hits your bank account it might be grouping multiple sales transactions that have happened And if it's a Shopify store or an Amazon kind of thing Then you might have other costs that are kind of grouped into that deposit you put in your account Such as the fees and what not related to the Shopify store and that kind of stuff Now you might be okay with that You might say well that's the easiest system I don't need all that added detail I have what I need so I'm going to wait till it hits my bank account and just record it as revenue That's the easiest thing to do when I want to look at the more detail I can look at the customers on the Shopify side or on the PayPal side Or on the Stripe side that made the actual transactions You could have a similar situation where you do gig work for multiple platforms let's say And this will be kind of like our example here And those multiple platforms then might be paying you through some kind of third party processor Like a Stripe or like a PayPal And you might say well I'm just going to take it out of Stripe or PayPal and put it into my account And then I will just call it revenue once it hits my account What you're going to miss on the detail if you do that is the fact that the payments that went through the processors Came from different sources if they were different sites Like if you had a teaching platforms that came from different teaching platforms or something like that Then you're not going to have all that added detail in your account You're just going to call it teaching revenue So again the question is that good enough? Is that enough detail? Is that all the detail you need? It might be good enough to just do your taxes if that's all you need Although it doesn't give you that added detail of breaking out the source of the revenue That it came from Now your other option then is to say what I'm going to do is I'm going to try to connect to the third party platforms I'm going to try to pull the information This is a little bit more difficult often times on like a Stripe type of thing If you're using that because usually you have to use different integrations to kind of connect those accounts You can do it but you have to be very careful if you're doing those integrations Because if you have something like a Shopify store then you probably don't want all the customer data in your zero account Because the Shopify store is just usually often one time sales of bulk sales And they already have all that information on the Shopify side So you don't really want to be careful not to use apps or think about whether you need to use an app That's going to pull all the information into zero which might be redundant Because you might already have that information if you do that and you add a whole bunch of transactions into zero That you don't need it could end up slowing down the zero system So just be careful with that With PayPal the other thing with PayPal is that you might start using PayPal because it's quite convenient to pay for expenses as well In which case you're now using PayPal as a kind of checking account So PayPal has kind of morphed from just like a thing to just transfer transactions Oftentimes businesses for getting payments to something that is used to make payments and therefore it's acting more as a checking account So PayPal in particular has the capacity to connect to the bank feeds So that's another option with that particular intermediary platform You could connect to PayPal, right? So if you connect to PayPal what's going to happen is you make the sales, they come through PayPal And then you're going to be able to have interbank fee transactions as you transfer from PayPal to the checking account And then you might have payments that come out of PayPal as well in a similar way as another checking account So this is kind of similar to another checking account as well if we had two checking accounts or savings account So we could just add PayPal So what I'm going to do is I'm going to add another account But we're actually going to upload the information from a CSV file But go through the connection process as if we're going to connect directly So we're in the banking area, I can add a bank account And if I search in here it's going to try to connect So I could search for PayPal and you can see that it does have a PayPal So we select the PayPal and zero is going to say automatically import your PayPal transaction So normally you would want to do that if you want to connect directly to PayPal But because this is an example problem I'm going to skip this and upload from a CSV file Which you might want to do in practice as well if you want to go further back Then possibly you can pull in from a direct connection and then connect going forward So I'm going to skip this bit And I'm going to then say the account name, PayPal, US Dollars That's what I'm in so I'm going to save that and it looks good And so now in our banking information we've got the check-in, the credit card And we've got PayPal, PayupPal So if I go into PayPal now I'm going to upload my transaction So we have the same kind of format here as other bank feeds We've got the reconcile tab, nothing's in it, nothing's in any of them And we've got the cash coding, nothing's in it If you don't have cash coding you can go into your user profile And add the cash coding if you want to use that bit and you don't really have to I'm going to stop saying bit and then we've got the account transactions Now if you wanted to upload or practice with the bank feeds You could hit the drop down here and say that I want to import a statement So when you say statement, the first thing that comes to my mind is usually like an actual PDF file But that's not what we're talking about here We're talking about importing the transactions into the bank feeds Instead of connecting to the bank, once they're in zero We will have them in what I call bank feed limbo in a holding position That have not yet been fully processed into the final financial statements So we can upload with an OFX file, a QFX, a QIF, a QBO, a CSV Now if you go to your normal banking institutions Many banking institutions have like a format of these types of files Including oftentimes a QBO type of file which is an easy one to upload I do not believe at this point in time PayPal does however If you want it to manually upload But they do in most institutions have a CSV type of file So you could use that if you wanted to practice Now if you download the transactions from PayPal in a CSV file Then PayPal will give you a bunch of transactions that you don't need A bunch of columns you don't need And you'll have to delete the columns so just be aware of that But you can look at the template and see the columns that you do need By opening up their CSV template over here And if you wanted to just practice inputting information into a template Then you could use a template like this So it has date, amount, payee, description, reference and the check number So here's an example of that template with just some transactions in it Now again if you downloaded everything from PayPal What you could do is just copy those columns into your template So you could copy the date, the amount and then the description is really all you need Just like the normal bank transfers, the increases and decreases to the account It's what you want, if you want to make up your own data Just make sure remember that you're creating this in Excel But this is only opened in Excel when I save it, it's actually a CSV file If you create this in Excel you can convert it to a CSV file By going to the file dropdown, save as And then you'll say browse and just note that down here the file type is a comma deliminated As opposed to an Excel worksheet And so that's what you can upload It's basically an Excel file that's been stripped down to its core elements here So it doesn't have all the fancy Excel stuff that's going to mess up It's just trying to import the data file So let's go ahead and import this I'm just going to close this out and we'll say Let's select this, I have this on my desktop There's a lot of stuff on my desktop So I'm kind of ashamed of all the stuff on it But I know where everything is It's really organized actually So this is going to be, I think it's this one PayPal Bank Feed, that's the one There it is, so PayPal Bank Feed, CSV file Let's open it up This is just formatting the headers that were on the Excel sheet or the CSV file There's an example of it and that's the transaction date, that's correct This is the amount, that's the transaction amount, that's correct So we're just winding up the headers, payee, payee column That's correct, we didn't have anything in it Description, description column, that's correct Reference, there was nothing in it, but I'll just put reference column here Just so I have it, check number, we'll just say Okay, check number, we didn't have any check numbers And don't import the first line because they're column headings So we don't want to import the line that says date on it And amount and description, so that's cool This is the last transaction that we had imported So transaction, oh this is a preview So let's go ahead and say, next it's preview So I'm going to say, okay And so here's all the stuff, we're going to be importing into the system So that looks good, 15 transactions, okay Let's do it, let's do it man Import that stuff And so now we've got our PayPal has the information in it So this now would be the same position that we would be in As if we just connected to the PayPal And used it basically like another checking account So now instead of me waiting until I transfer this stuff out of PayPal Into the checking account before recording it as revenue I can get the more details So now in my case I'm like a gig worker And these are the platforms that are paying me So I could say, okay if this is teachable I can record that now Breaking it out to more detail as teachable income This is Udemy income This is skill success income And so on that I can now break out in more detail Instead of waiting until I just make a deposit Like of this 20,000 that would hit the bank account My checking account adds just one lump sum of 20,000 So the two methods I could use The easiest method would be for me to say Hey look I'm just going to wait until I transfer whatever is in my PayPal account The 20,000 here into the checking account And when I do I'm just going to record that amount as revenue And instead of breaking it out by platform I'm just going to call it gig work revenue or whatever But I don't get that detail By connecting to PayPal Then I have a little bit more detail And now I can break my revenue accounts out By what I actually collected when I collected it And then give me a little bit more detail So you can see either method might work depending on your circumstances So next time we'll just add some of these As we add them it'll be basically the same concept As having two checking accounts Now we're going to add this to like a checking account And then we'll have those inter account transfers That we should see in a similar fashion as we saw with the credit card And checking account when we paid off the credit card Which will have a transaction Which each side of the transaction will have a bank feed connection That we'll have to deal with So those will be the transfers that we'll have So we'll take a look at those in future presentations