Smart Reasons to Save, Use and Invest Money

Using Paypal As A Simplified Bookkeeping System

As a personal finance blogger, my business transactions are at a minimum, but around tax periods, I agonize over the involved bookkeeping task.  I would meticulously copy the transactions from PayPal, my Chase Freedom credit card and my bank into my custom excel business spreadsheet that I use to calculate my taxes.  Things have changed recently, now I’m using PayPal to create a simplified bookkeeping system for blogging.

My Old Record-keeping System

I created an excel spreadsheet that had 13 tabs. Twelve tabs for each month, and one tab that represented a year end summary sheet.  For each month I would copy the transactions from the various sources and paste them into each month’s tab.  The Year End page would automatically update with revenue, expenses, profit, etc.

Of course I had a template to make this process easier by enabling me to just make a copy of the blank template and rename it to the current year (ex. moneyreasons_BK2012.xls).  This was highly functional and much cheaper than paying for an excellent program like Quickbooks, especially since blogging transactions are very simple and repetitive in nature.  Quickbooks (while awesome) is overkill for my simplified book-keeping requirements.

PayPal

 

My New PayPal Simplified System

First, let me mention what enabled me to do this new (nearly automated) simplified bookkeeping system!  I applied for a new PayPal credit card!  Yep just that simple change has enabled me to drastically simplify my bookkeeping process.  You see, now I can now track both my revenue and expenses within PayPal.  I use my PayPal credit card (which is a rewards card by the way), to pay for all my expense that I can’t pay with my paypal account, then I pay the credit card balance with my PayPal account directly.  That way I don’t have to send any check for my previous credit card bill anymore via snail mail anymore.

Now all I do is export my data from PayPal into a one sheet spreadsheet.  Next, I add any non-PayPal transactions (which are few at this point in time),  and that’s it!  Since the revenue is positive, and the expense are negative, I don’t have to do any special formula, just a sum at the end!  I do purge and clean up some statement that I export from Paypal, but that’s a pretty quick and painless process.

I’m actually pretty excited about the process.  I love to automate things as much as possible, and this will cut my time working on bookkeeping by hours!

Bests,
Don

8 Responses to Using Paypal As A Simplified Bookkeeping System

  1. Greetings Don! What a great idea. How do the rewards compare to the Chase Freedom card? I still am hooked on my Amex Blue, which gives me great rewards. However, if Paypal can compare, I would consider switching over.

    Hope things are great!