How are credit card and PayPal payments recorded in my account?
You won’t generally need to create a manual payment when a customer pays an invoice with a credit card or through PayPal. ZipBooks will automatically create that transaction in your account for you.
When you set up ZipBooks to receive credit card payments, ZipBooks creates something called your ZipBooks Merchant Account. When a customer receives an invoices from you and pays with a credit card, ZipBooks creates a transaction in your account that shows the amount that came in from the customer, and where that amount was applied. Generally, you’ll credit your accounts receivable account, but you’ll also want to credit any amount that you had to pay to the merchant for that credit card charge.
You sent an invoice for $996.76 to a customer. Your customer pays his invoice with a credit card, and within a few days you see a transaction in your ZipBooks account for this payment. It shows a payment to your ZipBooks Merchant Account for $996.76. ZipBooks records a credit to Accounts Receivable for $996.76, but also, a debit to Expenses for 29.21, which is the amount your credit card merchant company charged you for this transaction. So, the actual deposit made to your account (debit) was only $967.55.
Note: ZipBooks does not record any PayPal fees since we don’t have that information. You’ll need to remember to separate and record the fees.