Accounting Network News

By David H. Ringstrom, CPA

Built-in integration with PayPal sets Microsoft Office Accounting apart from its competition. This feature works in both the free Office Accounting Express and the upgrade Office Accounting Professional. In this article I'll discuss how to include a PayPal link in e-mailed invoices, as well as how to import the resulting payments into Office Accounting. This technique is a great way to nudge your clients off the sidelines into the world of e-commerce, and to allow those without merchant accounts to start accepting credit cards today.

Important: Customers do not have to establish a PayPal account to pay an invoice online. However, your clients must establish a business account with PayPal — personal account activity cannot be imported into Office Accounting.

Software Requirements: The PayPal add-in requires Microsoft Office Outlook 2007 and Microsoft Office Word 2007 — a free 60-day trial is available for immediate download. Earlier versions of Outlook and Word are not compatible. In addition, Microsoft Office Small Business Accounting users must upgrade to Office Accounting 2007.

Enable the Add-In

If a PayPal Payments choice doesn't appear on the main Office Accounting menu, users will need to activate the add-in:

Choose File, Utilities, and then Manage Add-In Packs.
Click the checkbox to enable PayPal Payments, and then click OK.
Restart the software when prompted to finish enabling the add-in.

Enable PayPal Payments

Users must configure PayPal to work with their accounting records:

Choose PayPal Payments, and then PayPal Settings.
Click Next after reading the introduction page of the wizard.
Enter the PayPal account e-mail, or click the Need a PayPal Business Account link shown in
Figure 1.

Figure 1: Your clients can initiate a new account with PayPal from within Office Accounting.
Choose the PayPal payments button image to include with invoices sent by e-mail, and then click Next.
Read through the overview on the Setup Complete screen, and then click Finish. Office Accounting is now PayPal-enabled.

There's no ongoing charge for using the PayPal add-in, but do note that PayPal's standard fees apply whenever a customer utilizes the PayPal link on an invoice to submit payment. Users can change their PayPal options at any time by choosing PayPal Payments, and then PayPal Settings.

Add PayPal Button to Invoice Template

Most users will need to configure Microsoft Word to display the PayPal icon on their templates:

Start Word 2007, click the Microsoft Office button (the large Office logo button in the top left corner), and then click Word Options.
Choose Add-Ins.
Choose COM Add-Ins, and then click Go.
Select this add-in from the COM Add-Ins dialog box:
Microsoft.BusinessSolutions.SmallBusinessAccounting.AddOn.PayPal.UI.WordAddin.Connect Friendly Name
Click OK. Invoicing through PayPal is now enabled.

Troubleshooting: A support document is available if the PayPal add-in doesn't appear in the COM Add-In dialog box.

Invoice Online

Users can invoice online several ways. Create customer invoices in the usual fashion, and then choose one of these options:

Click the E-mail icon on the toolbar in the Invoice window.
Choose Actions, and then E-mail Invoice from the Invoice window.
Right click on an invoice in the Invoice List and choose E-mail.

Speed tip: Make sure that Microsoft Word is open in the background before initiating an e-mail from within Office Accounting.

Any of the above actions will cause the Select Word Template dialog box to appear. Click on an invoice template, and then click Select. If the PayPal button doesn't appear as shown in Figure 2, click Add-Ins, and then Show/Hide Button. Complete the e-mail and click Send.

Figure 2: The PayPal logo should appear automatically on invoices.

PayPal link: The PayPal link that Office Accounting inserts into e-mailed invoices is crafted in such a way that customers can only pay the invoice in full to the sender's Business PayPal account.

Import Payments

Your clients can import PayPal invoice payments into their accounting records:

Visit www.paypal.com and provide the requested credentials.
Accept any unclaimed payments in the Recent Activity section, if necessary.
Unconfirmed addresses: Customers that opt not to establish a PayPal account will have their transactions marked with “unconfirmed address” — such transactions must be manually accepted or declined in PayPal. Alternatively users can modify their PayPal profile to automatically accept payments from unconfirmed addresses.
Click the History link on the My Account tab.
Click Download My History.
Choose Comma Delimited – All Activity in the File Types for Download field.
Click Download History.
Save the file in an easy to remember location on your computer, such as your My Documents folder.
In Office Accounting choose PayPal Payments, and then Import Payments.
Click Next to move to the Payment File screen once the Wizard begins.
Click the Browse button and select the file saved in Step 6 above.
Click Next to move to the Apply Payments screen of the wizard.
Users will encounter the prompt shown in Figure 3 if none of the PayPal payments correspond to Office Accounting invoices. Otherwise the wizard will advance and present the screen shown in Figure 4.

Figure 3: PayPal imports are limited to payment of Office Accounting invoices.

Figure 4: The Apply Payments step displays payments that Office Accounting accepted.
The Apply Payments to Invoices step allows you to adjust invoices by entering a write-off amount if needed. Click Next to proceed to the next step.
Click Next on the Match Payments step. This screen is used for accepting eBay payments, but is included as part of the process of importing PayPal invoice payments.
The Transaction Summary completes the PayPal wizard. Detailed documentation of the import process is provided in the log file shown in Figure 5.

Figure 5: Office Accounting generates a detailed import log for PayPal payments.
Imported deposits are posted to Undeposited funds, so the final step is to choose Banking, and then Make Deposit. Choose a bank account, select the payments to post, and then click Save and Close.

Critical: If your clients are posting the deposit to their checking account at their local bank, remind them to initiate a funds transfer from PayPal to their bank.

Convenient: Office Accounting automatically generates a Cash Payment to record PayPal's fees, which results in a net deposit to the checking account.

The views and opinions expressed in this column are those of the author and do not necessarily reflect the opinions of Microsoft.

Enable Your Clients to Pay Online with PayPal