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shau's avatar
shau
Experienced Cover User
5 years ago
Solved

The correct configuration for a PayPal account on MYOB AccountRight

My business relies heavily on a PayPal account by which to receive payments from customers, but also to make payments to suppliers.  It is used as a clearing account also, since funds from payments are oftened relayed on to various bank accounts.  When setting up a new account for PayPal what would be the correct account type:

 

  1. Bank
  2. Accounts Receivable
  3. Other Current Access
  4. Fixed Asset
  5. Other Asset

Further, what tax code classification should be given to this account?

Accounts
accounts type
paypal
tax code
  • bungy15's avatar
    bungy15
    5 years ago

    Hi shau 

     

    It’s a bank account...money gets deposited, withdrawn and transferred between other bank accounts. It also needs to be reconciled.  So it’s bank with tax code N-T.

     

    Cheers

    Tracey

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  • bungy15's avatar
    bungy15
    Ultimate Cover User
    5 years ago

    Hi shau 

     

    It’s a bank account...money gets deposited, withdrawn and transferred between other bank accounts. It also needs to be reconciled.  So it’s bank with tax code N-T.

     

    Cheers

    Tracey

    • shau's avatar
      shau
      Experienced Cover User
      5 years ago
      bungy15 wrote:

      Hi shau 

       

      It’s a bank account...money gets deposited, withdrawn and transferred between other bank accounts. It also needs to be reconciled.  So it’s bank with tax code N-T.

       

      Cheers

      Tracey

      Thank you for your reply.  So why would the tax code not be FRE in this case?  Is there an advantage in having N-T?  Or a disadvantage in having FRE?

      • bungy15's avatar
        bungy15
        Ultimate Cover User
        5 years ago

        Hi shau 

         

        N-T is not Reportable so it doesn’t get reported on your BAS.

        FRE is gst free, it does get reported on your BAS.

         

        When a customer pays you, the transaction to receive that money deposits it into your PayPal account and allocates it to your income account with the tax code gst. So the income account side of that transaction reports it on your BAS. If your PayPal account had the code FRE, it would be reported twice, inflating your income. 

         

        All bank accounts and credit cards are N-T because you are reporting the income or expense when you allocate it to an income, COGS or expense account. 

         

        And just to add to your first question, you can only pay to, pay from, transfer between and reconcile accounts with the type bank or credit card.

         

        Cheers

        Tracey