For A2X for PayPal to work as expected, it is essential that the bank accounts nominated in the PayPal movement section are set up correctly and have the correct opening balance (which matches to the opening balance in the PayPal statement).

But what if the balances for the PayPal accounts do not reconcile - how will you ensure the new system set up for A2X for PayPal will work properly?

We highly recommend that you start with the correct opening balance for PayPal when using A2X even if that balance does not match your closing balance used by the legacy process.

Let's work through an example:
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Computers R Us has a PayPal account with four currencies as shown below. They use Xero as their accounting system, and prior to using A2X they used native bank feeds set up in Xero.

Judy, the bookkeeper, has decided to disconnect the native bank feed and instead use A2X for PayPal starting on 1 September 2024 to import the daily summarized transactions. She checks the PayPal statement and Xero to check if the two balances agree as at 31 August 2024.

Balance per PayPal:

Balance per Xero:
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Judy notices two of the PayPal accounts balance, and two of the PayPal accounts do not balance:

Judy works through the instructions in this article, and creates four new accounts for PayPal in Xero, type non current asset. These accounts are set up with the following names
1. PayPal A2X (AUD)

2. PayPal A2X (CAD)

3. PayPal A2X (GBP)

4. PayPal A2X (USD)

She is unsure of whether she should use the value per PayPal or the value per Xero to move the closing balance from the old PayPal accounts to the new PayPal accounts.

We recommend that Judy should move the balance per the PayPal account. Therefore, Judy creates four receive money entries in Xero as follows:

After the spend money transactions have been recorded, Judy checks the balances in Xero. The legacy bank accounts for CAD and USD have a final bank balance which represents the difference between the PayPal statement balance and the Xero balance.
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The new accounts show the correct starting balance (refer right hand side - Account Watchlist) - please note these balances are re-stated in the Xero home currency.
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The final step of the process will be for Judy to prepare a full reconciliation of the CAD and USD PayPal balances to identify the reason for the difference. Judy decides to ask for the help of the accountant, and together they determine the following:
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On 15 July, the owner transferred funds to the PayPal account of 15.69 CAD. This transaction was mistakenly not recorded by Judy.

On 1 July, a payment was made from PayPal for an Uber ride for 8.75 USD. This transaction was missed by Judy.
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Judy enters these transactions, and reconciles the final balances to Xero.
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Computers R US is now ready to commence syncing summarized, daily statements from A2X for PayPal.