Automated PayPal Sales & Fee Reconciliation (Zapier)

1. **Create the Zap**: Log into Zapier and click 'Create Zap'. Name it 'PayPal Sales to Xero Ledger'. 2. **Set Trigger**: Select **PayPal** as the App and **Successful Sale** as the Event. Connect your PayPal account using your IPN (Instant Payment Notification) URL if prompted. 3. **Test Trigger**: Pull in a recent transaction. Note the `Gross Amount` and the `Transaction Fee` fields. 4. **Calculate Net Amount (Formatter)**: Add a 'Formatter by Zapier' step. Choose **Numbers** and the **Math** transform. Subtract the `Transaction Fee` from the `Gross Amount` to ensure you have the clean revenue figure if needed, or simply pass the gross to the invoice. 5. **Find or Create Contact (Xero)**: Add a **Xero** step. Choose **Find Contact**. Search by `Payer Email`. Check the box 'Create Xero Contact if it doesn't exist yet' and map `Payer Name` and `Email`. 6. **Create/Find Invoice**: Add a **Xero** step for **Create Sales Invoice**. Map the `Item Name` to the line item, `Gross Amount` to the unit price, and set 'Status' to **Draft** or **Authorized**. Use the PayPal `Transaction ID` in the Reference field to prevent duplicates. 7. **Record PayPal Fee (The Reconciliation Step)**: Add a **Xero** step for **Create Bank Transaction**. Set the Type to 'Spend Money'. Map the `Transaction Fee` amount here, coding it to a 'Bank Fees' or 'Merchant Fees' account in your Chart of Accounts. This ensures the net deposit matches your bank statement. 8. **Map Payment**: Use the **Add Payment to Invoice** action in Xero. Map the `Invoice ID` from Step 6 and the `Gross Amount` from Step 2. 9. **Setup Error Handling**: Click the '+' between steps to add a **Filter by Zapier** if you only want to process specific currencies (e.g., 'Only continue if Currency Code exactly matches USD'). 10. **Publish**: Turn on the Zap and monitor the 'Task History' for the first three live transactions.

| PayPal Field | Xero Field | Zapier Logic / Transformation | | :--- | :--- | :--- | | `Payer Email` | `Contact Email` | Used in 'Find Contact' step to prevent duplicate customers. | | `Gross Amount` | `Line Item Amount` | Direct mapping; ensure 'Tax Inclusive' setting matches PayPal settings. | | `Transaction Fee` | `Amount (Spend Money)` | Handled via second Xero step to record the expense. | | `Transaction ID` | `Reference` | **Critical**: Use this in the Reference field to enable Xero's Auto-matching. | | `Item Name` | `Description` | Default to 'PayPal Sale' if the item name is null. | | `Currency Code` | `Currency` | Optional: Use a Lookup Table if Xero codes differ from PayPal ISO codes. |

* **Task Usage**: This workflow uses 4-5 tasks per sale (Formatter, Find Contact, Create Invoice, Create Expense). Ensure your Zapier plan covers your monthly transaction volume. * **Bank Feed Duplication**: If you have a live PayPal bank feed in Xero, this Zap might create duplicate entries. **Solution**: Map these Zapier actions to a 'PayPal Clearing Account' rather than the main feed, or use the 'Reference' field specifically so Xero identifies the match. * **Multi-Currency**: Xero requires the 'Premium' plan for multi-currency. If the PayPal transaction is in EUR but your Xero is USD, the Zap will fail unless you have multi-currency enabled or add a 'Currency Converter' Formatter step. * **Standard vs. Guest Checkout**: Some PayPal transactions won't provide a full address, only an email. Ensure your Xero 'Create Contact' step only requires Email as a mandatory field.

- [ ] **Run a Test**: Use the 'Test Step' functionality in Zapier for a recent transaction and verify the contact appears in Xero. - [ ] **Check the Reference**: Ensure the PayPal Transaction ID is visible in the Xero Invoice 'Reference' field. - [ ] **Verify Fee Recording**: Confirm that a 'Spend Money' transaction exists for the PayPal fee amount. - [ ] **Check Task History**: Ensure no 'Data Out' errors occur due to missing fields like 'Account Code'. - [ ] **Reconciliation Check**: Log into Xero after 24 hours and ensure the Zapier-created transactions are waiting to be matched against your PayPal bank statement lines.