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PayPal fees invoiced to us from Contractor

PayPal fees invoiced to us from Contractor

Hi, We receive invoices from contractors that relate to COGS which we pay using PayPal. On the invoice the contractor charges an additional 5% to cover the PayPal fee they incur. Does this 5% PayPal fee they invoice us for also go to COGS? I assume it does since it is a cost they are invoicing us for. It is not a PayPal fee my company has directly incurred. Thanks a lot!


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11th Jan 2013 19:27

Tell your contractor to shove his PayPal fee and pay via BACS!

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14th Jan 2013 02:26

We pay using PayPal because it is very expensive to send international payments. We send a lot of very small amounts so PayPal works out cheaper.

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14th Jan 2013 11:56

A number of utilities charge ...

For paying them when invoices are presented rather than using direct debits/standing orders etc.

Presumably PayPal is your payment method of choice - so perhaps you can change it. However, the gist of your question is that PayPal is used to save you money. Unfortunately it is an expensive method of payment and someone needs to cover their fees; at the moment it would seem to be your supplier. So it costs them money to sell you goods!

One question would be - why do you expect the supplier to reduce his margins by clearing your payment?

In the same way as carriage - do they automatically subsidise the cost of this (order over £xx free etc.) or would they be expected to cover the cost for small one off quantities - i.e. a clothes peg=£0.25p postage=£0.40p supplier loss £0.15p to do business with you

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