Record Etsy transactions
This article explains how to manage Etsy transactions in FreeAgent.
The way to record the transactions in FreeAgent depends on whether Etsy Payments or PayPal has been chosen as the checkout method. Alternatively, you can record the income into Etsy separately. Please see below for more details on each scenario.
In a hurry?
- If you use Etsy Payments as the checkout method, record the income as it's imported into the FreeAgent bank account by explaining it as ‘Sales’ and splitting the bank transaction to account for fees.
- If you use PayPal as the checkout method, add a PayPal bank account, record the income as it's imported into FreeAgent and split the bank transaction to account for fees if necessary.
- Alternatively, to record the income into Etsy separately, you can follow a few extra steps as detailed below.
Etsy Payments
It’s our understanding that Etsy processes each payment via Etsy Payments into a payment account. Etsy then deducts its transaction fee for each sale from the balance in the payment account and sends the remaining income to the designated bank account based on the chosen bank deposit schedule (daily, weekly etc).
As invoicing would be handled on Etsy's side, you likely wouldn’t need to create any sales invoices in FreeAgent. Therefore, you’d be able to record the income as it’s imported into your FreeAgent bank account by explaining it as ‘Sales’. Find out how to record income without creating invoices.
In order to record the full amount of income and the Etsy fee separately within the FreeAgent bank account, you’ll likely have to account for the fee manually by splitting the bank transaction.
You can create custom income and cost categories if you wish.
PayPal
If you’ve chosen PayPal as the checkout method, it’s our understanding that you’ll have to account for the payment processor fees as well as any Etsy 'seller' fees. Any remaining funds will then be deposited into your PayPal account.
If you’ve not already done so, you’ll first need to add a PayPal bank account in FreeAgent to record the transactions coming into PayPal.
If the business has a PayPal business account, we’d recommend setting up a feed to automate the process of populating this account with transactions. If the business has a personal PayPal account, you’ll need to upload bank statements instead.
Either way, we'd recommend that you tick the ‘Guess bank transactions’ checkbox when doing so as this will ensure that the PayPal fees are split out and explained automatically for you.
You'll then be able to record the sales income directly in the PayPal account without having to add sales invoices.
You can create custom income and cost categories if you wish.
Recording the income into Etsy separately
Alternatively, if you'd like to account for the income into Etsy separately, first add a dummy bank account and give it a suitable name, such as ‘Etsy Sales’.
You’ll then need to obtain an export file from Etsy that clearly includes the sales and fees for a given period (specifically this file needs to include dates, amounts and descriptions). You’ll then likely need to amend the format of this file to the required CSV format before uploading it into the 'Etsy Sales' bank account in FreeAgent.
Once uploaded, you can then explain the income and fees directly in the 'Etsy Sales' bank account. You can create custom income and cost categories if you wish.
Any money that's then transferred from Etsy into the business bank account or PayPal account will need to be recorded as a transfer from the Etsy account, not as income. Please note that explaining this money in as ‘Sales’ again would risk double accounting for the sales. You may also still need to account for any fees via PayPal.