| Almost no matter how big your eBay business grows, | | | | one or two differences between the instructions given |
| you'll find it relatively easy to use QuickBooks for your | | | | here and the precise steps you ultimately take. |
| eBay bookkeeping. Simply follow these five tips. | | | | Tip #4: Be sure to regularly reconcile your bank |
| Tip #1: Setup a separate bank account for your eBay | | | | accounts |
| business | | | | You want to regularly reconcile your business bank |
| As an organizational tool--just to keep your business's | | | | accounts including the PayPal account. By balancing |
| financial affairs well-organized--you'll want to setup a | | | | your bank accounts, you can probably spot and fix |
| separate bank account for your eBay business. Use | | | | dumb data entry mistakes. Account reconciliations let |
| this bank account for collecting the money you receive | | | | you clean up your financial and accounting information. |
| and for paying any of the businesses expenses. | | | | Tip #5: Simplify your inventory accounting |
| Tip #2: Treat PayPal as just another bank account | | | | The one complicating factor in a eBay business--at |
| From Quicken's perspective, PayPal is just another | | | | least in terms of the accounting--concerns the |
| bank account. So that's the way you want to treat it. | | | | inventory. The accounting rules say that you can't |
| Note: If you're using only PayPal as your "business | | | | simply write off as a deduction the amounts you pay |
| bank account," that's okay. But then be sure to pay | | | | for the inventory until you sell the items in, for example, |
| expenses from and make sales deposits to your | | | | an eBay auction. |
| PayPal account. | | | | QuickBooks can handle inventory accounting with quite |
| Tip #3: Download PayPal transactions automatically | | | | a bit of sophistication. But the usual QuickBooks |
| If your PayPal transaction volumes get large--say | | | | approach may be overkill with an eBay business |
| you've got hundreds of transactions a month--be sure | | | | where you're selling one or two of a bunch of different |
| to automatically download the transactions from your | | | | items. Fortunately, you can simplify your QuickBooks |
| PayPal account into QuickBooks. | | | | inventory accounting for an eBay business if you take |
| To automatically download transactions from PayPal | | | | a couple of simple steps: First, categorize your |
| into your QuickBooks data file, log on to PayPal, | | | | inventory purchases as, well, "purchases." |
| choose the Download History command from the | | | | Second, at the end of each year, do a physical count |
| History menu, specify the date range you want for | | | | and valuation of the items you're holding as inventory. |
| which you want to download transactions, and indicate | | | | You're interested in knowing what the inventory you |
| you want to use the QuickBooks download format. | | | | hold at year-end originally cost you. |
| After you download the PayPal transactions into the a | | | | With the year-end inventory balances and the annual |
| QuickBooks download file, start QuickBooks and | | | | purchases, either you or your accountant will easily be |
| choose the File Utilties Import command and, when | | | | able to calculate the cost of the goods you sell over |
| prompted, indicate you want to import the downloaded | | | | the course of the year using this formula: Last-years |
| PayPal transactions. | | | | ending inventory + Purchases - This-year's ending |
| Note: The precise procedures you use to export | | | | inventory |
| transactions from PayPal and then import the | | | | The preceding formula, by the way, is exactly what |
| transactions into QuickBooks vary over time and from | | | | the Schedule C Sole Proprietorship tax form does to |
| one version of QuickBooks to the other. You may see | | | | calculate a business's cost of goods sold. |