Processing PayPal Remittance files for Multiple Business Units

PayPal has been around since the late 90’s and impressively was the most used method of secure payment for online shoppers in the last 12 months. PayPal has over 300 million active users worldwide, and 87.5% of all online shoppers have used PayPal. The three main users by country are the US (44%), Germany (18%) and the UK (14%). Its usage has increased dramatically in 2020, as more individuals, both businesses and consumers alike, were forced to conduct business online.

When a consumer purchases a product online and pays for it with PayPal. That payment is processed and will be delivered to the retailer’s bank account, minus a commission fee. The retailer will then have to go to the PayPal website where they will retrieve their remittance file from a portal. The remittance file will include all of the online sales transactions made through PayPal for their company. This file will then have to be processed by the Accounts Receivable financial team of the retailer.

After downloading the remittance file from the portal, the retailer will see all of the transactions mixed together on one CSV Excel file. The file will include multiple different business units, various currency types, and it will have to be manually processed across each financial unit within the company. This can be a severe headache for the Cash Application team of large retailers with an online presence.

Take for example, an online retailer that has multiple products for sale across different sections – Homeware, Kitchenware, Ladieswear, Babywear, Menswear, etc. These sections may have their own financial teams that are responsible for each one. If one PayPal remittance file has to be manually processed by each team separately. It becomes a long and arduous process to separate and do them individually. Usually, there would be one remittance file for one entity but not with PayPal. Unfortunately, there is one file for multiple entities. Cashbook has developed an automated solution to this specific problem for our clients.

At Cashbook, we take the PayPal remittance file and set it up as one format. We import the remittance file into the Cashbook software, and we can drill down into the data to see each – business unit, customer number, transaction amount and currency type individually. The data can be filtered by each business unit across the organization if necessary. Data is grouped by item; we can map the business unit to the purchase order. Cashbook can identify the invoice number and then apply the monetary amount to that.

All remittance items can be checked against the company general ledger (GL) data, and be ready and waiting to apply to the cash on the bank statement when payment is received from PayPal. When the bank statement is received, it is imported to the Cashbook software. Remittance transactions are then auto-matched against all open invoices and cash on the bank statements. Cashbook will then subsequently update your GL automatically to complete the process.

If you want to discuss how Cashbook can automate your PayPal remittance files or other areas of the Cash Application process for your company. You can get in touch with our team by calling us on +353 61 338 400 (International) or 630-352-2228 (North America). Alternatively, you can email info@cashbook.com. We look forward to helping your company realize the benefits of Cash Application automation software.