Quickbooks & Your eBay Business

Great idea, I would love to hear similar tips from small non-profit perspective as well.

I know there is a QB community on Intuit's site, but their Q&A is very scattered, where this would be more focused.

One of the biggest questions I've seen out there is the tracking of Paypal fees and eBay fees. This seem to question continually asked because eBay fees are charged on a monthly basis whereas Paypal is charged on a per item basis.

If you want to see the profit you made per month with your items, then tracking paypal fees, per item is a given. But if you want to see your profit per month, per item, then you would have to track the eBay fees at the per item as well, potentially creating more manual entries. But this level of detail would be good for reporting out on how you are doing on an item.

Any idea if any software can connect to amazon, paypal, ebay, etc... to show all of the fees and such. I use a spreedsheet now to track profits on sales and the worst part is going through and sorting out the fees...

Quote from jp1979 : Any idea if any software can connect to amazon, paypal, ebay, etc... to show all of the fees and such. I use a spreedsheet now to track profits on sales and the worst part is going through and sorting out the fees...

Quickbooks can hook up to eBay, Paypal, and Amazon via third party applications. This is one example of the third party applications out there for eBay and Paypal, for a fee.

http://www.webgility.com/quickboo...n-ebay.php

Quote from blackblaze : There are a lot of folks who do business on the side on eBay, have some extra cash in their pockets. Some as hobby, some, more than hobby or continues to grow more than expected. Since the IRS now tracks Paypal income received, Im thinking there has been an increase in finding bookkeeping / accounting ways to keep everything in check. This thread is dedicated to those who use or may want to use Quickbooks for the accounting / bookkeeping needs and answer questions on scenarios. Me personally, at the moment, a rookie, but hoping to be a pro in the next month

You underestimate the ability of people to not pay taxes. The IRS turned on the light and the roaches just scattered.


Quickbooks for ebay selling? That seems like a waste over gnumeric/excel/oocalc unless you manufacturer or move serious volumes.

General question, then how to enter the solution into QB.

Example
Purchase a laptop for $400, sold for $600
Payment was done with $300 with your credit card
Payment was done with $100 Staples rewards

Since the Staples rewards does not have to be paid back, is the value of the purchase $300, or $400?

If $300, essentially, you are using the Staples rewards as a discount on the laptop, and your net profit is $300 after you pay back the credit card the $300 debt you have? This scenario has you being taxed on the Staples rewards as now a part of profit.
If $400, then you are accounting for the $100 Staples rewards as asset/cash? And your net profit is $200? You paid $300 back to the credit card, but still need to balance out the use of the $100 Staples rewards to leave you with $200 profit.

Im thinking the $100 is asset/cash because if you return the item, you get back $400 total, $300 to your CC and $100 certificate to use again.

Overall, question is how is the $100 Staples reward treated/classified when entering this type of purchase (discount/credit/cash). You would have to split payment type I assume when entering as well.

$300.

You are also confusing gross profit and net profit.

You can waste a lot of time drilling down the details in QB and my belief is "simpler is better. I would recommend recording all the fees and rewards to general expense accounts (basically as additional overhead) but if you really want to do what you're asking here's how you should record it.

You'd have to create a current asset account on the Balance Sheet and every time you purchased something from Staples you would have to record the amount of Staples rewards earned. Lets say you purchased the computer above and assume the reward is 3%, the entry would be something like this:

credit cash - $400
debit reward asset account - $12
debit COGS - $388

This way the reward earned is spread out over all purchases not just the one when it is used.

Let's say you purchased $100 envelopes then
credit cash - $100
debit reward asset account - $3
debit office supplies - $97

Once you've accrued enough rewards (say $100) and you want to use it to purchase the computer to sell then:
credit cash - $300
credit reward asset account - $100
debit COGS - $388
debit reward account - $12

If you accrued rewards for a non-business related purchase then:

debit reward asset account for the amount of reward only
credit an owner equity account (like owner draws) the same amount

With ebay you just set up the free monthly reporting and print that little piece of paper that breaks everything down.

With paypal you pull the financial report that breaks everything down on one sheet of paper.

Quote from afratki : You can waste a lot of time drilling down the details in QB and my belief is "simpler is better. I would recommend recording all the fees and rewards to general expense accounts (basically as additional overhead) but if you really want to do what you're asking here's how you should record it. You'd have to create a current asset account on the Balance Sheet and every time you purchased something from Staples you would have to record the amount of Staples rewards earned. Lets say you purchased the computer above and assume the reward is 3%, the entry would be something like this: credit cash - $400 debit reward asset account - $12 debit COGS - $388 This way the reward earned is spread out over all purchases not just the one when it is used. Let's say you purchased $100 envelopes then credit cash - $100 debit reward asset account - $3 debit office supplies - $97 Once you've accrued enough rewards (say $100) and you want to use it to purchase the computer to sell then: credit cash - $300 credit reward asset account - $100 debit COGS - $388 debit reward account - $12 If you accrued rewards for a non-business related purchase then: debit reward asset account for the amount of reward only credit an owner equity account (like owner draws) the same amount

that is what I was thinking, if a rewards is used for purchase of an item for resale, you should have an asset/income account to debit the amount. Essentially, that rewards amount would be tax since it would now be a part of profit. So the lesson here is, don't use rewards for resale purchases if you don't want it taxed as profit.

Quote from blackblaze : that is what I was thinking, if a rewards is used for purchase of an item for resale, you should have an asset/income account to debit the amount. Essentially, that rewards amount would be tax since it would now be a part of profit. So the lesson here is, don't use rewards for resale purchases if you don't want it taxed as profit.

No matter what the rewards are used for, it increases your net profit. Being taxed on it doesn't necessarily make it a bad thing because you still made more money.

Speaking of taxes, I always tell my clients figure 35-40% in taxes on the net profit (SE + federal + state taxes) unless you're over the Social Security limit at you salaried job and/or you live in a state that doesn't have income taxes.

Quote from afratki : No matter what the rewards are used for, it increases your net profit. Being taxed on it doesn't necessarily make it a bad thing because you still made more money. Speaking of taxes, I always tell my clients figure 40% in taxes on the net profit (SE + federal + state taxes) unless you're over the Social Security limit at you salaried job and/or you live in a state that doesn't have income taxes.

That was the conclusion I was coming to as well about using earned rewards on purchases that has a net profit. Don't want to be taxed on rewards, so will leave them for personal use. Appreciate the helpful information. Repped