We do something similar in Sage 100 2014, but have the 'PayPal' payment type set up as 'Check' and then use PayPal's transaction ID as the 'Check No on the Sales Order'.

It may not be the best solution, but we have a 'Paypal Clearing" acct and a separate 'Paypal Cash' acct in GL.  The PAYPAL payment type is defined to record to the clearing account when the Sales Order is Invoiced. Then we go to the PayPal website and Capture the funds and then back in Sage 100 we do a 'Cash Receipt' to deposit/move the money from the clearing acct to the cash acct.   Works ok, but we only have a small volume of PayPal transactions.

Jerry, if the cash hits the bank Sage 100 doesn't care how it got there or how it was processed. If they pay with PayPal then I would just treat it as a normal cash receipt.

It still doesn't deal cleanly with the PP fees. When we could treat it like a credit card, the per-transaction fees would be automatically deducted, moving only the net amount to cash. Any thoughts?

In Payment Type Maintenance we defined a new type named "PAYPL", with Payment Method = "Check" and gave it the PayPal Clearing Account number to use.

When the S/O is invoiced and updated, it creates a zero-balance invoice in AR and the PayPal Clearing Account is debited with the full order amount. (The invoice # and PAYPL show up in the Posting remarks of these Clearing account entries)

When we capture the payment on the PP site, it deducts and displays the fee immediately. So, in Sage 100, I do a Cash Receipt for the net $ that PP is funding us with, ie, transaction amt - PP fee). I enter "Cash" as the customer, then do two GL distributions.

1st)  To Paypal Clearing  (Asset Acct)

2nd) To Merchant Fees (Expense Acct)

When the first entry is made, it's for the full amount that got posted in the PP Clearing Acct. Since this is more than the Cash Receipt (net) Deposit Amt, the difference is shown in the Distribution Balance field and should be a negative amount that matches the fee that PayPal showed being deducted following your capture.

Since the Cash Receipt is made to "CASH", there's not a good audit trail, so we add the Invoice # and Invoice date to the comments of the first distribution, and on the second we set the comment to: "PP Fee for Inv #xxxxxxx" so if we later have to audit things, it's only slightly less painful. Very susceptible to user-errors though.

At any rate, at the end, A/R is zero, true cash amt is in the bank, PP Clearing acct goes to zero and Merchant Fee is recorded.

This is probably not the best solution, but since we have very few PAYPAL payments, it's not too much of a hassle. I'm sure there are better ways to set all of this up, but I haven't been annoyed enough to figure one out. YMMV

Alan Rich

Thanks for sharing, Alan. I'm still hoping to find a way suitable for customers who do substantial selling through PayPal/ebay and/or Amazon.