What are the best practices to reconcile orders in QuickBooks?

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Introduction

Many customers have asked us what are the best practices in reconciling orders in QuickBooks. Our answer is that it depends on the number of orders and your specific business needs.

Payment Processor Duplicates

In QuickBooks Online, click apps > my apps. Disconnect any payment processor apps like PayPal or Authorize.Net. This will prevent their sync tool and Cloud Cart Connector from syncing the same orders twice:

Your bank account will contain the bulk deposits from your payment processor, so there is no need to connect to them directly.

Expenses Per Order

Adding the fees per order is a bad idea:

  1. If you give away products for free and your total fees exceed the order total, making the order negative, the sync will fail. QuickBooks cannot accept negative orders. By missing orders, reconcilation will be more difficult. 
  2. If a customer calls and requests a copy of the invoice, you can't send it because it has the merchant account fees on it.
  3. Reconciliation will be difficult because the order totals will fail to match.
  4. It is easier to track expenses if they are entered in bulk. The expenses will have one line item in QuickBooks as opposed to several hundred in a report.

Expenses

Payment processors take two to three percent of each transaction as processing fee. All of the orders the payment processor collects are transferred, in bulk, to your bank account. You must match this bulk deposit to orders in QuickBooks. These orders are located in the plus sign > show more > bank deposits area of QuickBooks.

In this image, you'll see that PayPal fees have been recorded. Orders from January 9th to January 20th have been matches to a bulk deposit of 6909.47:

To see a close up of the bank deposits area, click here

Matching

Click transactions on the left of QuickBooks Online. Click banking. When you download the bank records, you'll be asked to match:

 

This will prevent the PayPal transfer from the bank and the transfer from Cloud Cart Connector duplicating deposits in your bank register. 

Changing your Deposit Account

To deposit orders into the undeposited funds account, follow these steps:

  1. Login to cloudcartconnector.com
  2. On the my connections page, choose your connection. If you only have one, click submit.
  3. On the configure page, scroll down to accounts
  4. Change the last drop down to say undeposited funds: 

Orders will now appear under bank deposits in QuickBooks Online.

Downloading PayPal and Authorize.Net Transactions

When someplace places an order on your website, it goes to your merchant account provider and to your order management system. There is no need to download orders from your merchant account provider and your order management system at the same time. We recommend depositing funds each week or two into your bank. In QuickBooks, check off the date range of the last deposit. 

Reconcile Amazon Fees

Print a transaction detail summary from Amazon. Highlight the rows with the fees and you'll see a sum on the bottom right. Enter the fees in the bank deposits item deposits area of QB. For instruction, see this video.

Unable to Reconcile

There are times when you're missing orders or they are inaccurate. If you have several transactions, it could take several hours to find the error and move onto the next task.

A shorthand way of reconciliation is journal entries. In the example above, the bookkeeper created a journal entry for $78 to decrease the bank deposits to match the bank deposit. To create a journal entry, go to the plus sign > other > journal entry. Here is an example journal entry:

 

Location Reconciliation

If you are selling from multiple locations, we recommend using location tracking. If you are selling from Amazon and WooCommerce, you will need to separate the orders. In this example, we will place some orders inside of the web order location and filter them. Here are the steps:

  1. In QuickBooks, click the gear > company settings.
  2. Under the sales tab, enable location tracking.
  3. Go to cloudcartconnector.com.
  4. At the configure page, go to the field mapping tab.
  5. Under the location drop down, select store name.
  6. Click save and sync.

Here is an example:

 

Reconcile Checks

Payments for invoices should be recorded with the date payment was received. These payments can be directly deposited into the bank account:

If you received multiple checks in one day, you can deposit each one into undeposited funds. From there, check off the payment that match your bulk deposit for the day.

Reconcile Using Multiple Clearing Accounts

You can insert Amazon orders into an asset account called Amazon and other orders into Undeposited Funds. You must set up your default deposit account, then create a rule map Amazon orders.

  1. At the configure page of Cloud Cart Connector, scroll down to accounts.
  2. Adjust the last drop down to undeposited funds.
  3. Hover over the gear and click rules engine.
  4. Add this rule:
     
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