WSW - PayPal and Multi-Currency Podcast
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[00:00:00] [00:00:30]
[00:00:38] Introduction and Casual Setup
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[00:00:38] Dan DeLong: welcome to another Workshop Wednesday brought to you by Schoolbookkeeping. com where it's casual conversations for serious workflows and nothing more casual than me just hanging out by my trailer here. This is how committed we are to to bringing you a workshop live. [00:01:00] Every week when we can, I am literally outside of my trailer.
It's already hitched up, ready to go because they are very strict on thou shalt not, I think it's the 11th commandment thou shalt not be in your site past
[00:01:19] Rachel Dauchy: 1130.
[00:01:24] Dan DeLong: Yeah. So we are We're going to try to be as brief as we can with our casual [00:01:30] conversation today, so that we can, when we close out, we'll hop in and get out of here before the
[00:01:37] Meet Ozzy: The New Puppy
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[00:01:37] Rachel Dauchy: exciting But I do have to introduce my new puppy.
[00:01:40] Dan DeLong: Oh!
[00:01:41] Rachel Dauchy: This is Ozzy.
[00:01:44] Dan DeLong: How adorable.
[00:01:45] Rachel Dauchy: And he's a mini golden doodle and he's very cute.
[00:01:49] Dan DeLong: And he's going to be well behaved.
[00:01:51] Rachel Dauchy: Yep, he just stays on my lap. So yep, I wanted a lap dog.
[00:01:57] Dan DeLong: And you got one. [00:02:00] Fantastic. Because we have a lot to unpack here, we might actually do the demonstration because obviously I don't have my laptop.
[00:02:09] Intuit Layoffs and AI Investments
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[00:02:09] Dan DeLong: Dual monitors and everything ready to go to share what it is that we're going to be talking about when it comes to multi currency paypal e commerce unpacking that and then of course, there's a lot of news I just saw the article or the news today that intuit is [00:02:30] laying off 10 of its workforce Because of its investment in ai they do this Regularly, right?
I was, I was impacted by such a thing. My wife also worked that Intuit She was impacted. It's a July, it's a fourth quarter for them. so the end of July is there is the end of their fiscal year. So they make a lot of these announcements, during the month of July. So it's, [00:03:00] It's common.
And what is uncommon about Intuit's, layoff practices is that rather than, traditional companies will, they will, they will look at their, workforce and rather than, lay them off, they'll, they'll look, traditional company will say, we like you. Would you rather do this instead, or maybe real realign work with workers, [00:03:30] but, Intuit takes a different stance on that and they'll, release the, the workers that, that, they do a reorganizational structuring, right?
And, then, they'll eliminate the positions. But then oftentimes they'll hire back, right? And so the article that I, read earlier this morning was talking about, they planned on [00:04:00] rehiring the 1800 jobs that they're letting go. They're just a different position. And by, I think the logic, if, there is one, the logic is this.
Yeah.
[00:04:12] Rachel Dauchy: I'm not,
seeing any logic, so I'm listening very
[00:04:14] Dan DeLong: heavily. . The logic is that they can, get the talent that they're looking for, right? rather than trying to play well, we think you would be good doing this. They would rather. Eliminate the [00:04:30] position and allow those people to apply for the positions that they feel like they would be best suited for.
[00:04:35] Rachel Dauchy: But then also take in other candidates.
[00:04:39] Dan DeLong: Exactly. Exactly. So they're restructuring, of course, because of the impending AI tsunami, and they've already invested a lot of, dollars and time and energy into, They're generative AI, so they're doubling down on that with the people that [00:05:00] can help them do that.
so that may not be the talent that they currently have. it may, right? So they'll find that, they'll find that out. So they would rather Recycle old employees. I always said that Intuit was a very green company because they recycle people. They call it a revolving door, because they take very good care of people as they let them go But they also make it possible for them to come back [00:05:30] So that's, the chit chat that I wanted to talk about with, regards to that, which is interrupting
[00:05:40] Rachel Dauchy: that announcement, Dan.
[00:05:42] Dan DeLong: I saw it early this morning.
[00:05:44] Rachel Dauchy: Oh, you did. Oh, yeah. See, that's part of the problem is this morning. We had our meeting and then I'm wrapped up in an implementation and then now we have this. So I haven't. Looked at anything, no email. Yeah,
[00:05:57] Dan DeLong: so that's, likely, but, [00:06:00] don't feel bad for the folks.
my heart does go out to them because they are real people and it's never a great news, especially with, I've been involved with a few rear restructurings and, the, real people and they have real lives and those types of things, but Intuit does take really good care of the people that are impacted.
so they have, something to fall on to, [00:06:30] and also keep the door open so that they can, come back. Yeah, that
[00:06:36] Rachel Dauchy: is good. not all major corporations do that. And, Yeah, it's, that's always not, it's more of an inconvenience for anything because then, Oh, okay.
You've been let go. Oh, great. Now I found another job and now I'm settling that and now, Oh, here's an invite to potentially go back, that's That doesn't put anybody in a good position.
[00:06:59] Dan DeLong: [00:07:00] Yeah. Yeah. the first time I was impacted, was in 2008, right before the big recession. they laid off several hundred people, but they also, opened up several positions.
They gave us two months notice. And, because of the big restructuring, I never left. I never had to turn in my badge. I was, I found another, position before, before the end date actually occurred. [00:07:30] hopefully that's going on as well. But, there's Time, time will tell.
The second time I would have volunteered, right? So I was ready to go.
[00:07:42] Rachel Dauchy: and now I think, the, it's probably turned out to be a blessing in disguise, right?
[00:07:47] The Impact of AI on Accounting Firms
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[00:07:47] Rachel Dauchy: Where now, you're a business owner and entrepreneur and, yeah, I know you're really into AI and so am I.
And, that's, we can stay on the edge of,
everything that's [00:08:00] coming, from a different perspective. And so it's, really cool and exciting, actually. I'm really interested to see, what they have coming. And, there's just so many other companies now in, in the mix.
That, that I'm, I hate to say it, but not gonna completely marry myself to Intuit And so I am really interested in seeing what, all these other companies come up with. And [00:08:30] it's, I think it's a really exciting time to be, an accounting firm owner and really understand what's going on with AI, I think.
[00:08:38] Dan DeLong: Yeah, I was, we just, posted a blog on School of Bookkeeping, about the Intuit Technology Survey that was just, released as well, and a vast majority, I think it was like 94%, you gotta check out our blog, because I don't have it up handy here, obviously. I am a little unprepared for that.
I'll [00:09:00] definitely
[00:09:00] Rachel Dauchy: check it out and then I'll repost
[00:09:01] Dan DeLong: it. But I, think it's, it's 94 percent of accounting firms, are, going to make an investment in technology in the, coming year. And just about the same amount, are, are feeling that if they don't, they are going to be swap, essentially swallowed up by the, coming wave, of, so [00:09:30] it's got, to invest in technology and, or.
or find something else to do is really
[00:09:38] Rachel Dauchy: what I think I said last week that I had heard at scaling new heights was, accounting professionals. Jobs aren't going to be taken over by AI. They're going to be taken over by other firms that understand and utilize AI. and part of it is, I also see it as then, [00:10:00] I'm really excited and super into automation and AI and technology, and then there's people that are doing it reluctantly.
I'm, I happen to be one of those people that I really love it. And, I, can't wait to see actually where it takes my firm and it's, pretty cool.
[00:10:19] Multi-Currency Challenges with PayPal and Shopify
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[00:10:19] Dan DeLong: And our scheduled topic of what we were supposed to be talking about with multi currency PayPal and e commerce, this is a prime [00:10:30] example of where.
technology and integrations. I don't know what the best way to describe it is, but it's they really have to understand the whole end to end workflow. And oftentimes one of those parties does not, and that's where accounting bookkeeping professionals can really lean into [00:11:00] being that source of.
of knowledge and resource for their clients when they really grasp and understand it. And as we were preparing for the topic that we're going to be talking about, I was looking for resources that weren't out there. And from the sales side of things I didn't, find it. And the challenge is how do you search for these things?
And there's a lot of [00:11:30] terms that have dual meaning, right? So if you just search for multi currency PayPal, what I was finding was there was a lot of resources and some really good ones about multi currency has, as it deals with. Recording expenses, but there really wasn't anything when it comes to multi currency and dealing with sales, right?
And
[00:11:56] Rachel Dauchy: [00:12:00] Systems
[00:12:00] Dan DeLong: in place to be able to do that. And do you have rachel, do you have A smattering of clients that deal with sales in different currencies not just with PayPal but just they, take money and sell to international customers.
[00:12:20] Rachel Dauchy: Yes. And I do in Shopify. So Shopify has something called, Oh, am I breaking up?
[00:12:28] Dan DeLong: I'm not using,
[00:12:28] Rachel Dauchy: okay. Shopify [00:12:30] has something called Shopify markets. So what that is Shopify's. ability to have your business here in the United States, but sell around the world. So Shopify markets is the product. And that basically allows you to market it in with a customer facing website in that country, let's say Greece in Greek.
And then they can buy with the Greek dollar online and then it converts it and everything comes in us [00:13:00] dollar. So one thing that I loved hearing Alison and, Jason talk about a couple of weeks ago when they were here is they put it in a term that I, that really helped me and what I really like. And it's going to stick with me is.
Basically, in this sort of world of integration and we're dealing with sending information from one place to the next, we really have to think about things. And is this system collecting data? Or is this [00:13:30] system generating data? I just said data and data. I don't know.
[00:13:36] Dan DeLong: At least you didn't say it like the New Englanders who had that extra R at the end of data.
[00:13:41] Rachel Dauchy: Yeah. And I know people that speak that way. It makes me laugh. But anyway I, yeah, so now I, a lot of times because our clients are doing stuff and all kinds of other platforms, we are really using QBO as a data collection bucket [00:14:00] and making sure that everything is communicating there correctly.
And all of the places are going, all the things are going to all the places that it needs to. And then not necessarily going into QuickBooks and then using the sales tax center or using, the multi currency feature in it, but we're doing all those things ahead of time and then dumping all the data and collecting it for the general ledger use for creating financial statements.
That's literally the [00:14:30] reason to use it. We're dealing with a client right now that's a manufacturer in Los Angeles, but she imports half of her raw materials from, and also co packing and private labeling stuff directly from Italy. So all of her purchasing is in Euro. So everything goes in the system in Euro converts instantly to the U.
S. dollar, syncs everything to QBO as U. S. [00:15:00] dollar. So if it did not have that function, do you know how long it would take us to do these conversions? Line by line. It is, So complicated and just to be able to be using a system that converts it just like that It shows you the amount in US dollar shows you the amount in euro and then to bring it back to Allison and Jason I had another client that yes was selling had a Shopify store in [00:15:30] Canada, and an Amazon store in Canada and so All of the transactions were Canadian dollar.
It wasn't doing a conversion into QBO. So their bookkeep connection, the bookkeep connection will actually convert it. And then it will post to QBO in U. S. dollar and then match with the bookkeep.
[00:15:53] Practical Solutions for Multi-Currency Transactions
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[00:15:53] Rachel Dauchy: The payout that's coming in through their bank in us dollar So I guess what i'm trying to say is there's a [00:16:00] lot of different cool features that are very exciting That'll do these processes automated But it still doesn't change the fact that it can get really complicated And so like you were just saying My definition of the advisory is really this world now of these external apps, what will convert the currency correctly, what will bring the sales and correctly, when we're talking [00:16:30] about moving data from somewhere else into QuickBooks.
And so that's an incredible opportunity to be able to provide advisory and then also. Connect with other folks that are doing the same thing and then we can share our knowledge. So that's become really big
[00:16:47] Dan DeLong: Yeah, so to what you just said, if you're just solely selling on shopify and you Are selling internationally on shopify and you're connect you're collecting through [00:17:00] shopify payments.
[00:17:01] Rachel Dauchy: Yes All
[00:17:03] Dan DeLong: of that is done through shopify, right and everything will come in to your Shopify payments and payouts in US dollars. Now you have to trust, that their exchange rate is the real exchange rate. They will list that on the sale so that they'll you know what the exchange rate was, doesn't [00:17:30] necessarily mean that's what you would have used or what QuickBooks would use or any other thing doing the foreign currency exchange.
But. Everything will be in U. S. dollars. It will show up in your payout. End of story, right? PayPal gets, gets wonky, I guess is the best way to describe it because they will have, [00:18:00] various foreign currency, Basically sub accounts of your, PayPal account in each currency. And what happens when you in, in this situation where it's, they're selling on Shopify but they're using PayPal as the payment method and the customer is a foreign customer outside of the, U.
S., they will pay in PayPal [00:18:30] using their credit card. PayPal account in their currency,
[00:18:34] No One: which
[00:18:34] Dan DeLong: will ultimately come into the recipient's PayPal account in that currency.
[00:18:42] No One: It sure will.
[00:18:45] Dan DeLong: British pounds, right? So what'll ultimately happen, and you'll see it on the statement you were showing it when we were looking at reconciling PayPal a couple weeks ago, that You'll see the PayPal USD and then you'll [00:19:00] see the PayPal GBR.
Yes. Written pound or whatever. The .
[00:19:05] No One: Yeah.
[00:19:06] Dan DeLong: Whatever it turns out to be. Or you EUR For. For euro or CAD for Canadian dollar. So you'll see all these extra accounts and they are legitimately separate bank accounts to pay
[00:19:20] Rachel Dauchy: for. Yeah. Yeah. And so you, one thing that we learned is. Oh, shoot. If those don't get converted over to U.
S. [00:19:30] dollar and then swept out, that'll hold a balance on your balance sheet of that foreign currency, and so we've realized that Oh, let's not do that now. And by the way, so your U. S. dollar, you can put that on auto sweep, auto transfer into a checking account, but you can't do that with the foreign currency.
You have to manually go in there. And you have to convert the currency into U. S. [00:20:00] dollar first. And then if you have your U. S. currency balance on auto sweep, it'll sweep that over. But you gotta do that manually. And we've definitely paid the price for not doing that because then it holds that amount.
Every single month and it's a total pain
[00:20:18] Dan DeLong: So therein lies the lies of the challenge, right? The shopify will show the sale in u. s. Dollars, but the payout from paypal
[00:20:29] No One: [00:20:30] Is now
[00:20:30] Dan DeLong: in the foreign currency, right? So now trying to reconcile those two because now you have you know in my client's case They sell stuff for two hundred dollars.
It's now You know, but if pounds or whatever it is, it's two shows up as 270 us dollars, which when I was trying to get caught up to speed with this client, I was like, wait a minute. I thought you sold everything at one 99. Like where did this sale of [00:21:00] 200 comes in and then come to find out, Oh it was someone from great Britain.
And then that's the us dollar conversion of that. Now I can't. Tell where everything is whether it's sold on Amazon, cause he marks it up on Amazon. He calls it the Jeff Bezos retirement fund pricing, as opposed to when he sells on Shopify, but, but I could tell, okay this sell was from [00:21:30] Amazon, this sale was from, cause he only sells one thing.
So that was even better. But then you get these random amounts of 2. 75 or 2. 50 and oh my goodness. So what, to your point, that's what happens is the PayPal puts it in that foreign currency and it stays there. Until someone does something with it, right? So without something like bookies in the mix here, you would want to turn [00:22:00] on multi currency, which is why we talked about the functionality,
You can bring it in and reconcile that.
And then whenever you do that sweep, there's a foreign currency exchange at that point, and then you can do the transfer of the. PayPal, Euro, for example, to US dollar and you can keep that in alignment so that when The money actually gets [00:22:30] deposited then that will come in appropriately, right?
But the shopify sale will be in us dollars as opposed to The actual dollar amount so yeah
[00:22:41] Rachel Dauchy: exactly now I have to point out something that just drives me cuckoo crazy now this what we're talking about is when And I always usually use the example of shopify because i'm a shopify partner and I have a lot of clients in shopify You my own websites and [00:23:00] Shopify and I sell accounting merch and things like that.
But, now, when your client is using Shopify payments. They can't, let's say your website is based in the U. S. and somebody in Canada is buying off of your website and they're entering it in their Canadian dollar and you have Shopify payments turned on as your method of customer paying. Not PayPal, [00:23:30] just Shopify payments.
And you accept that Canadian currency, it'll convert it and go into Shopify payments, payout, no problemo.
[00:23:38] No One: But
[00:23:40] Rachel Dauchy: that's only letting your customer pay by Visa or MasterCard or Amex. Now with the, it's not really a problem for them, but it's, the problem is for us, is when they say, That's not good enough.
I want my clients to be able to pay by PayPal, and then when they go into [00:24:00] PayPal, then they can pay in their home currency. That's really what it translates to customer facing. I wanted to point that out because, really, if you're just using Shopify payments, as a store owner and all of your customers are paying through Shopify payments, and like I said, all that means is with a Visa, a MasterCard, or Amex that, or Apple Pay or any of the other thing things that mean Shopify [00:24:30] payments.
That is no problem, everything's converted, but the second they decide that they wanna turn on PayPal, it defaults to, you can only pay an US dollar. But what they do is they go into their PayPal settings and they turn on accept multi currency, that's what does it. Now we realized that we had clients that were going in and doing that, but then without telling us.
And I was like, what are these foreign amounts? [00:25:00] Now I know. So that's why I usually always have my clients now in the list of Things I require them to tell me when they make a change, make sure you let me know if number one, you're adding PayPal onto your Shopify as a payment method. And then better yet, make sure you let me know if you're enabling that foreign currency ability, because what that means is I want my clients not to just have the ability of pay me foreign through Visa [00:25:30] MasterCard, but I want them to be able to pay me foreign when they check PayPal.
And so really all that's doing is I want to collect my money all the ways, which is great, but you need to, that needs to be communicated to us. So we know. This is not surprising. Yeah. To do that accounting underneath because. Otherwise it can be a pain so
[00:25:49] Dan DeLong: right and another nuance with foreign currency and paypal is when you are giving money back, you're [00:26:00] returning money and you're doing it via PayPal or via PayPal.
I don't know which one is it niche or niche via. If you're doing it through, PayPal, PayPal will prefer to use a PayPal balance. First.
[00:26:18] No One: Yes.
[00:26:19] Dan DeLong: So this nuance of what you were saying of like with a foreign currency that will sit there and it is technically a PayPal balance. [00:26:30] Until someone manually puts it in
[00:26:32] No One: there, but
[00:26:33] Dan DeLong: I've seen, in this same client's case, they return did a return for through PayPal because that's how they paid.
And the only. Source of funds because they mean they automatically sweep the u. s dollar fund So there was no funds in the u. s dollar, but they didn't know that they had funds sitting in Pounds or euros paypal did So what [00:27:00] paypal does for their 199 return? Is they take it out of the? The foreign currency balance, which requires a foreign currency exchange to do that.
So I was seeing these random amounts being moved from, from the foreign currency one. I'm like, wait a minute, you didn't give the foreign currency customer a refund. You gave a U. S. Customer or refund, but through PayPal.
[00:27:27] Rachel Dauchy: Oh, because that's the only thing that was [00:27:30] available.
[00:27:31] Dan DeLong: So rather than pull it from the bank account, which is tied to the U.
S. dollar, they pull it from the available balance, which just happened to be the foreign currency, which
[00:27:43] No One: might, might.
[00:27:44] Dan DeLong: Might be more advantageous for PayPal to do that, I don't know, because again, PayPal's statement says nothing about the exchange rate that was used.
[00:27:54] Rachel Dauchy: That's what you were talking about before in this example.
I didn't quite get it when you were saying it before, but now I get that. [00:28:00] I just have to keep repeating
[00:28:01] Dan DeLong: myself and eventually you'll catch on.
[00:28:04] Rachel Dauchy: Yeah. And then by the way, so this one client I have, they collect lots of different foreign currencies. So they have Singapore dollar, Australian dollar, Euro, Canada, blah, blah, blah, blah.
So let's just say they've depleted their PayPal U S and then they need to issue a refund for some U S customer. Or let's say to a U, to an Australian dollar customer, It's not necessarily going to pull it from the Australian balance. [00:28:30] It may pull it from the top one, which is British pound. So what is it that's prompting them to pick that and not that if they're not going to say this client's an Australian dollar, we want to pull the same currency.
Are they thinking we're going to do whichever one is cheapest for us in transaction fee?
[00:28:52] Dan DeLong: Who knows? I'm sure that's hidden very discreetly under the terms of service, [00:29:00] rules and regulations of what it is that would happen. And I would be surprised if there actually is a setting to specifically say what where to pull that from.
[00:29:14] Rachel Dauchy: And this
[00:29:14] Dan DeLong: is one of those examples of, functionality doesn't necessarily tie to the accounting of all of that, right? Like they're not really, they're not truly concerned like Shopify, PayPal. They're not really concerned [00:29:30] about the, how the, how this is all going to settle out with the dust.
But we are, so that's where things get, as I said, it could, this could actually be an opportunity, right? So really understanding the nuances of all of this and being able to guide your client, through this process, is, a really valuable service that, that you can, offer to, to your customers as [00:30:00] that trusted advisor when you understand actually what's going on.
[00:30:04] Rachel Dauchy: Yeah, it's, that's so true because a lot of them don't necessarily even want to be guided through it. They're just like, I hate PayPal. Take it
[00:30:13] Dan DeLong: off my plate.
[00:30:14] Rachel Dauchy: They're like, I hate PayPal, but I like money. You do it.
[00:30:19] Dan DeLong: Exactly.
[00:30:21] Conclusion and Sign-Off
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[00:30:21] Dan DeLong: we are two minutes past our, our, time. Our time to leave here.
So I'm waiting for the
[00:30:28] Rachel Dauchy: [00:30:30] site
[00:30:32] Dan DeLong: police. Exactly. So we will we will show a little more of this next week when we when we can, when, and when I'm actually stationary and we will, we hope you all have a great week and we'll see you next time on the workshop Wednesday. If I could find the outro video, there it is. [00:31:00] [00:31:30] [00:32:00]
