User Support Forum

I read the previous posts regarding this; however, am new and have questions. Matt said to have two debit and credit accounts on the Contributions items - one for the contribution itself and one for the fee. Where is the fee amount entered when the contribution is made? Will someone explain in more detail Thanks

The way I accomplish this is to:

1. Setup a PayPal Contribution Fund which debits account 01-1140 (PayPal Bank account) and credits account 01-4025 (income account).

2. When a donation via PayPal is received, I enter to total donation through the Contributions.

3. Then I move the "fee" by crediting account 01-1140 (bank) and debiting account 01-5450 (expense) by the amount of the fee.

I am sure this in not the only way to set this up, but it works great for me.

The question you want to answer is "who pays the fee"?

If someone gives $100 via Pay pal, the fee is something like $3.50 .

We enter $100 in Contributions for the donor, and give them a tax deduction of $100.

We figure it is our church that encounters the $3.50 fee as an expense of collection. Therefore, we make that entry in Fund Accounting, only, which seems to be what jwdick is suggesting.

The other way is to give the donor a tax deduction for $96.50.

Our church will pay the fee. My problem is I don't know where to enter it. will I enter the transaction through fund accounting or what.

Move the fee through Fund Accounting > Enter Transactions

If I can add an illustration to jwdick's suggestion, here's what the move in Fund Accounting would look like:

In Contributions, you have these accounts setup for a $100 contribution:
CR 01-4110-000 general tithes $100
DB 01-1110-000 checking $100

In Fund Accounting, your checking account only receives $96.50 from Paypal, so you have to decrease your checking account and show the Paypal fee as an expense:
CR 01-1110-000 checking $3.50
DB 01-5875-000 Paypal fee $3.50

Even though the $3.50 never really passed through your church, you technically received it and paid it out again, because the donor willfully made a $100 contribution to the church. Therefore, it is not incorrect to show $100 in income and $3.50 in expense on this donation.

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When you use PowerChurch's reconciliation, it will be a little tricky, because you have to match a deposit of $96.50 on the bank statement with $100.00 in the deposit window and $3.50 in the check window. It becomes even trickier if someone lumps a bunch of Paypal deposits together when they make the transfer to your bank account.

Therefore, I recommend putting this REFERENCE in your transaction window: PAYPAL FEE
CR 01-1110-000 checking $3.50
DB 01-5875-000 Paypal fee $3.50

This will help you find it in the reconciliation window later.

JohnDMeyers wrote:
When you use PowerChurch's reconciliation, it will be a little tricky, because you have to match a deposit of $96.50 on the bank statement with $100.00 in the deposit window and $3.50 in the check window. It becomes even trickier if someone lumps a bunch of Paypal deposits together when they make the transfer to your bank account.

Therefore, I recommend putting this REFERENCE in your transaction window: PAYPAL FEE
CR 01-1110-000 checking $3.50
DB 01-5875-000 Paypal fee $3.50

This will help you find it in the reconciliation window later.

That is why I setup a second asset (bank) account 01-1140. Makes bank reconciliation a lot simpler. Then I can move money from PayPal to checking( CR 01-1140 & DB 01-1110) and the bank statement matches exactly.

jwdick: you have a good suggestion, so let me work that through.

In Contributions, you have these accounts setup for a $100 contribution:
CR 01-4110-000 general tithes $100
DB 01-1140-000 Paypal $100

In Fund Accounting, you make this transaction for the fee:
CR 01-1140-000 Paypal $3.50
DB 01-5875-000 Paypal fee $3.50

When you transfer the money from Paypal to checking:
CR 01-1140-000 Paypal $96.50
DB 01-1110-000 checking $96.50

Looks like I need to set this up in our PowerChurch. Thanks!