# Connect PayPal to QuickBooks Online as a Bank Feed - Author: SimpleBankConvert (https://www.simplebankconvert.com) - Published: 2024-11-25 - Updated: 2024-11-25 - Category: Bank accounts and feeds - Canonical: https://www.simplebankconvert.com/blog/connect-paypal-to-quickbooks-online > How to connect PayPal to QuickBooks Online as a bank feed, what the feed brings in, and when a downloaded PayPal file works better than the connection. To connect PayPal to QuickBooks Online, create a bank account in QuickBooks for the PayPal balance, then link PayPal from the Bank transactions screen the way you would link a bank, and pick a start date. Check the first downloads against PayPal's own history. If the feed misses months or detail, upload a PayPal activity file instead. ## Setting up a PayPal account in QuickBooks Online before connecting A PayPal balance should have its own bank-type account in the QuickBooks Online chart of accounts, named so nobody confuses it with checking. PayPal holds money for you, so it behaves like a bank account: sales raise the balance, purchases and withdrawals lower it, and the balance should match what PayPal shows. ### Naming and opening balance Use a plain name such as "PayPal Business". If you run two PayPal accounts, give each one its own QuickBooks account. Set the opening balance to PayPal's balance at the end of the day before your first transaction in QuickBooks. A wrong opening figure here makes every later reconciliation fail by the same amount. Creating the account yourself before connecting has one more benefit. When the connection screen asks which QuickBooks account the feed belongs to, you can pick this one instead of letting QuickBooks make a new entry with a name you did not choose. ## Connecting PayPal through the QuickBooks Online bank connection screen Connecting PayPal uses the same screens as connecting a bank. Intuit's [guide to connecting bank and credit card accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/connect-bank-credit-card-accounts-quickbooks/L4yDAHMNH_US_en_US) lays them out: go to Bank transactions, choose to connect an account, search for the institution, sign in, select the accounts and set the start date. ### Steps 1. In QuickBooks Online, open Bank transactions and choose to connect or link an account. 2. Search for PayPal in the list of institutions. 3. Sign in with your PayPal login and complete any security check PayPal asks for. 4. Tick the PayPal balance you want in the books. 5. Link it to the PayPal account you created, not a new one. 6. Choose the start date. If you already entered PayPal activity by hand, use the day after the newest entry. 7. Connect, then wait for the first download. Once connected, PayPal lines arrive on the same schedule as bank lines. [How often QuickBooks Online updates bank transactions](/blog/how-often-does-quickbooks-online-update-bank-transactions) explains that nightly refresh and the manual Update button. ## What does a PayPal bank feed bring into QuickBooks? A PayPal bank feed brings in the activity PayPal sends to QuickBooks for that balance: payments received, payments sent and money moved in or out. How much detail arrives, such as whether a fee shows as its own line, depends on what PayPal sends. The only reliable answer for your account is a side-by-side check. ### A first-week check Pick one week after the feed starts and compare it with PayPal's activity screen. The lines below are examples, not real data. - **A sale.** PayPal shows a payment received of 120.00 with a fee of 4.13. Does the feed show 120.00 and a separate fee, or one line of 115.87? - **A refund.** PayPal shows a refund sent. Did a matching negative line arrive? - **A withdrawal.** PayPal shows 500.00 moved to your bank. Is there a matching line in the feed? - **Held money.** If a payment is on hold, note whether it appears now or later. - **The balance.** Does the feed's total for the week change the QuickBooks balance by the same amount PayPal's balance changed? If the feed shows net amounts only, your sales and fees will be understated as separate figures, even though the balance matches. That matters if you report fees as an expense. Lines PayPal has not finished may also behave like pending card charges, covered in [pending transactions in the QuickBooks Online bank feed](/blog/pending-transactions-in-quickbooks-online-bank-feed). ## PayPal withdrawals that show up in two feeds A withdrawal from PayPal to your bank appears twice once both are connected: as money leaving the PayPal feed and as money arriving in the checking feed. It is one movement of your own money, so it must be recorded once, as a transfer between the two accounts, never as an expense on one side and income on the other. ### Recording it once In the PayPal feed, categorise the withdrawal as a transfer to checking. When the matching deposit downloads in the checking feed, find it in For review and match it to that transfer instead of adding it. Intuit's page on [transferring funds between accounts](https://quickbooks.intuit.com/learn-support/en-us/help-article/banking/transfer-funds-accounts/L9E8Kvsoy_US_en_US) describes this match from the receiving account's side. If you add both sides separately, the transfer shows as income in checking and your profit is overstated by every payout you made. ## When is a downloaded PayPal activity file better than the feed? A downloaded PayPal activity file is better when you need more history than the feed reaches, when you want gross sales and fees on separate lines, or when the connection keeps breaking. A file is also a fixed record you can check before anything touches the books. ### What PayPal's download offers PayPal's help page on [downloading your transaction history](https://www.paypal.com/us/cshelp/article/how-do-i-download-my-transaction-history-help145) says you can request activity for up to the past seven years, with each request limited to 12 months. It lists CSV among the formats. Large files can take time to prepare, and PayPal emails you when one is ready. ### Using the file Upload the file to the same PayPal account in QuickBooks, covering only dates the feed did not bring. [Importing missing bank transactions into QuickBooks Online](/blog/import-missing-bank-transactions-into-quickbooks-online) shows how to trim a file to the exact gap. The column layout for PayPal itself is in [importing PayPal transactions into QuickBooks Online](/blog/import-paypal-transactions-into-quickbooks-online). If the books are in Xero, [the Xero bank statement CSV import](/blog/xero-bank-statement-import-csv) is the matching route there. For a PayPal statement saved only as a PDF, [SimpleBankConvert](/) is being built to turn it into an upload-ready CSV.