In A2X, you need to map an account and tax rate for each PayPal transaction so that the entries posted to your accounting software arrive already coded and ready to reconcile.

The Accounts and Taxes feature allows you to map your PayPal transactions to your accounting ledger. This is done by accessing your Chart of Accounts or by creating accounts specific to PayPal transactions directly from A2X within your accounting system.

Start by visiting the Accounts and Taxes page.

You have two options for setting up your accounts and taxes:

On the Accounts and Tax Mapping page, you can choose Enabled Auto Setup. A2X will automatically suggest the required Chart of Accounts.

A2X will create the following accounts and all transactions will be mapped to the appropriate account.

Then you will just need to select your tax rates and click Save Mappings. Note: All accounts are set up as 'current asset' accounts, except for PayPal Fees, which is categorized as an 'expense' account.

If you prefer not to use default accounts, you can select your own accounts for any transaction type:

Always remember to click the Save Mapping button at the bottom of the page.
Your account mapping will now apply to your settlements consistently.

Note: If you create accounts in your accounting software with A2X open, refresh your Cache in Settings > Connections.

Learn the ins and outs of the mapping page and other features available for advanced mapping, tips, and tricks HERE. (Note: This guide uses Shopify as an example, but the principles are the same.)

The second step in mapping involves selecting a tax rate for each transaction. Ensure all transaction lines are completed by choosing a tax rate or selecting "no tax" (or its regional equivalent). Choose a tax rate if you want your accounting software to calculate tax on the transaction.

Important:

Remember that PayPal functions as a unique type of bank account. If the account you are mapping relates to a bank receipt or payment already recorded as an account receivable or payable in your ledger, the tax collected or paid could have been accounted for in the prior entry. In these cases, it might be best to assign a "no tax" code on the PayPal side.

Rather than applying tax rates to individual lines, you can apply the same tax rate to multiple lines, with bulk actions.

2. Select the Tax Rate: Update accounts or tax rates for all selected lines in bulk.

PayPal organizes transactions into categories and subcategories, grouped by each foreign currency held. This structure is reflected in the monthly statements provided to all PayPal business users.
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An example of a monthly statement is shown below.

A2X generates daily PayPal statements using the same grouping.

The Accounts and Taxes page guides A2X on which ledger codes and tax rates to apply to each subcategory.

Users can make a choice when mapping general ledger accounts to each PayPal subcategory.

1. They can start with our Enabled Auto Setup, which creates a set of suggested ledger accounts within the users ledger.

2. Or they implement a customized set up whereby each individual account is mapped by selecting the desired ledger account.

We recommend that you work with your bookkeeper or accountant if you are unsure of what account to choose for each subcategory.

If you are unsure of what each subcategory represents, you can view PayPal documentation that lists each type of transaction here.

Are you struggling with setting up your Accounts and Taxes page and you would like some help from an accountant or bookkeeper? We have a directory full of expert accounting/bookkeeping partners around the world who are ready to assist with your e-commerce accounting and A2X.

Please click HERE to find an expert

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