How To Enter Square Sales into QuickBooks Online

[@shivanischeinman7123]

Thank you SOOO much for this video. I have a new bookkeeping client and am setting up their books. This is exactly what I needed and you expalined it so throroughly.

[@essentiallyintentional]

Glad to help, thank you for watching!

[@aaronwaynepodcast]

This was fantastic. Clear, thorough teaching. I signed up for the free course on your website. I’ve been fairly lost with all of this, so I’m grateful for the resource. Well done.

[@essentiallyintentional]

Thank you for watching, thank you for this comment and feedback, and thank you for signing up for my Free Course! I'm glad that I've been able to help thus far.

[@chasejordanlive]

Could you do a quick video of what it looks like from the bank feed and the workflow of reducing clearing accounts etc. I have not seen anything like that. I'm assuming they are simple transfers for Visa/Mastercard and cash and 3rd party like door dash? Great work by the way! Just looking to see how we close the loop on this workflow from journal entry to matching bank feed.

[@essentiallyintentional]

I like this idea! I've written it down, so you may be seeing a video on this in the near future. Yes, probably simple transfers, but it depends on which stage merchant fees are taken and if check deposits are sometimes included with cash deposits. Thanks for the feedback! I also think it would be beneficial for me to cover in that video on how to audit the clearing account accuracy after these transfers to make sure the whole workflow is operating correctly.

[@glenw.3813]

Thank you Gunnar for the video! I agree, Square reports are very user friendly.

[@user-ku5ed7pi6t]

This was perfectly what I needed. Thank you for making this video!

[@outsidenomad]

Thanks this is worth gold! I also just completed your course which was fantastic.

[@essentiallyintentional]

Thank you! Glad to hear about the course completion as well. Glad you enjoyed it (as much it is possible to enjoy an Accounting course). Great channel by the way, I lived in a CamperVan full-time myself for a few years. I could have used your Starlink 12V video back then as the invertor use with my Starlink really sucked my battery up pretty dry most days. Anyways, thanks again!

[@jseskin3]

Hi Gunner, I am loving your videos. I'm a new bookkeeper (as in new car smell new HAH) and the NPO I'm working with uses square. Thankfully they only have registration sales, so the only deductions from that amount are the square fees as all payments are CC. Any checks get mailed in. One thing I'm having trouble with is when Square is integrated it lists all of the app transactions as "undeposited funds". However my bank feed shows the deposits (less fees) in the checking account (non square). So after I match the app transactions to the bank transactions I have this large Undeposited funds amount sitting on the books. Per the JE in you video I'd debit the bank account and credit the undeposited account. That would clear that amount, but then the bank account would be overstated. So how do I zero that undeposited funds account? I feel like I've watched every video out there on square integration and non talk about this. I would love your thoughts on it! Thanks!

[@yopaulo]

great video as always,keep it up . thanks

[@jenniferliedel-ez6sw]

Could you please explain why the Square Clearing Account is getting an Allowance for Bad Debts detail type? Or point me to where I may find this information. Thank you

[@cheri121975]

Gunner the je balances until I put in the fees then it is off by that amount. any help would be appreciated.

[@keristenfranklin2452]

So my client has square and Shopify integrated to QBO. There are transactions in the App Transaction feed. For recording sales in QBO, if I decide to do it this way… so I disregard the app transactions that need to be recorded? If doing it this way, is an integration needed?

[@BadEgge]

Thank you great Video! What do you do about house accounts and the house account payments?

[@essentiallyintentional]

Thanks for watching! It is more involved for me to provide a full answer without further investigating your specific business and how the reporting and invoicing and everything looks, however, here’s a general idea: A House Asset Account can be used twice in the Journal Entry template. It can be debited during house account purchases and credited during house account payments, here’s an example: Day numbers: $500 in sales, $100 of these sales was for a House Account, $200 of an outstanding house account invoice was paid for and collected, all via Square CC funds: Debit: $600 Square Clearing Account (Asset) Debit: $100 House Account (Asset) Credit: $500 Sales Credit: $200 House Account (Asset) Let me know if you’d like further assistance, thanks again!

[@AssuredBookkeeping]

Hi Gunner!!! The best video out there for Square without a doubt. In this example..what do u do with the tips once it goes to the tips liability. Do u reclass it to payroll expense by customer (employee)? Since it’s not included in Sales originally, would reclassify it as an expense be deducting it twice?

[@essentiallyintentional]

Thank you! I always recommend for tips paid to first consult the tax person to see how they prefer it be handled then go from there. I will say though that generally you either want to first record it as income (in a separate income account ideally), and then count it as an expense. Or, count it only as first a liability increase, and then a liability decrease. But definitely not a first increase as a liability and then counted as an expense, that would not work and would be incorrect.

[@AssuredBookkeeping]

@@essentiallyintentional soooo been thinking about this too. This is a new company I’m working in so still learning. The tips are being paid out of square by them taking the cash. The tips are then reported on payroll. I’m thinking that this is a pass thru and should hit the cash clearing account and reconcile against the deposits. Ur comment above reflects the pass thru. I should probably pay the consultation fee. Would luv to pick ur brain. Ur video rocks!!!!

[@AssuredBookkeeping]

@@essentiallyintentional 🌹

[@AssuredBookkeeping]

@@essentiallyintentional also…. I want to let u know that I found an app to post JE from square to QBO. It’s called Bookkeepp. U may have heard about it.

[@dwmccall1]

Thank you so much! One question: What if the actual cash deposit isn't the same as what shows on the square report, due to an over/short situation? The holding account and the bank deposit will never match. How do I account for overages/shortages?

[@essentiallyintentional]

Hi Deborah, you can go into your QBO Chart of Accounts and create either an “Other Income” account called “Cash Over / Short” or “Cash OS” or “Cash O/S” and add this new account to your Square JE template. Then, when entering the sales, put in the actual cash to be deposited or actually deposited already in your cash on hand asset account, and the difference, whether higher or lower in this new Cash Over Short income account. This will allow you cash deposits to match, and the over short will show on your P&L as either a positive or negative income amount, based on whether the actual cash collected was higher or lower. Hope this helps!

[@2hanhughes]

Thank you... your video is very clear and easy to understand what you are doing. I am a new bookkeeper. There are so many ways to do things I am condused on what way I should be doing them. Will this method work with a medical office? How do you track A/R and A/P in QBO when the software (POS) can run these reports?

[@essentiallyintentional]

Thank you for watching and thank you for this feedback. Yes, this method can work with a medical office, that is why I like this method so much vs a direct integration as it is extremely flexible and should be able to be customized to meet most needs of small business industries and situations. I think it would be good for you to check out my bookkeeping online course. You mentioned the number of options and wanting to know the “why” of what you are doing. This course covers exactly that. You can learn about journal entries and debits and credits to learn the why these methods work and will be able to customize this workflow to make it work for you. Here’s a link if interested: www.essentially-intentional.com/bookkeepingcourse

[@upanotchlasercreationslase2672]

Question, Great video! But what if I was not doing it that way all year and I need to so some entry to record all the fees from square for the year as a total?

[@essentiallyintentional]

Thank you! Honestly, it’s hard to say without taking a closer look. However I will say this: I will assume (but you need to verify on your end) that the way you were recording Square Sales all year were Net Fees (Total Sales minus Square Fees). The reason I assume this is I’m assuming you have been recording Square sales via the Square Bank Deposits into your Bank Feed (which are net fees). If this is the case, then you can create a Journal Entry as of 12/31/23 that debits your Square Fees Expense account and credits your Square Income account for the amount being the total 2023 Square fees. What this will do is add in your year’s Square merchant fees expense, and it will also increase your Square income for the year by the same amount. This will keep your net profit the same, this will only increase your income and expenses by the same exact amount. This will essentially bring your Square sales back up to actual “Gross” (before fees) amount and include the merchant fees expense separately. Again, you will need to verify this on your end as I am guessing your situation here and can’t say for sure. Hope this helps!

[@upanotchlasercreationslase2672]

Thank you so much! Yes I enter in my sales minus the fees. @@essentiallyintentional

[@kellyeno5273]

This is a great video! My question is, where or how would you account for deferrals held? Would these be their own JE? I assume a separate entry maybe because those monies are coming out of a different days sales. I ask because 99% of the time if my bank deposit is off its is because of a deferral held. I tend to check the deferrals held on the square balance transfer page to figure out my discrepancy, before completing my bank deposits. Deferrals can take up to 90 days to settle and we win some and we lose some another reason I think perhaps a separate JE.

[@essentiallyintentional]

To fully answer this I would need to take a closer look. But, in similar situations I’ve seen in the past, I’ve helped set up a solution within the same Journal entry because even though the timing of the sales is on another day, the Square balance that will be transferred is affected that day (I’m assuming), so you will want to ideally reflect in the same journal entry that actual Square amount collected that day (or month or whatever) that will be deposited, no matter when the sale will ultimately be recorded. Please feel free to book a one-on-one session with me if you would like to get this solved definitively (link in video description and I’ll also link below). Thanks for watching and for the feedback! calendly.com/essentially-intentional/training-with-gunnar-1-hour

[@Amy-nt1]

When there is Square deposit the payment on bank fee every few days, I categorize it into Square clearing account. Then, when I do the journal entry for the whole month at the beginning of next month, how to close the clearing account (make the Square Clearing into zero)? Transfer the amount in Square Clearing account into Bank account?

[@essentiallyintentional]

Whenever you are categorizing the Square deposits in your Bank Feed, you are actually transferring the funds out of Square Clearing into your bank account at that stage of the process, so no other step should be necessary.

[@DanielBaker-sx7mt]

I didn't see you mention afterpay? what account would you use for that?

[@essentiallyintentional]

I usually add it in with the regular Square CC payments/clearing account

[@cfmultiservicecorp]

Hi. I have clover account for my restaurant business and I use Doordash and uber eats, how I can make the journal entry include this items.

[@essentiallyintentional]

I have a separate video for Clover to check out, I’ll link it below. And you can include any items including Uber and/or Doordash in this Journal Entry template with knowing what types of accounts they should be reflected as (Asset, liability, equity, income or expense) and whether they should be debited or credited based on Accounting rules. Thanks for watching! Here’s link to Clover video: kzbin.info/www/bejne/hn-8eZmNncqUjbc

[@dwmccall1]

Thanks for getting back to me. I have another question: Why do you do this in a journal entry versus a sales receipt? My bank transactions download automatically into my feed, and then I manually match -- I do not have the integration set up due to poor reviews for that service. When I create this journal entry, will Quickbooks be able to see the different components of my journal entry, such as cash deposits and credit card deposits, and suggest matches for those downloaded transactions from my bank, match sales tax paid with the tax in the journal entry, etc?

[@essentiallyintentional]

A Sales Receipt can work as well, but I prefer to teach Journal Entries because they eliminate the added complexity of introducing Products/Services and linking the correct account as you can’t add these Chart of Account Accounts directly into a Sales Receipt and also because it takes away the added check of making sure the entries are entered correctly and balance, because a Journal Entry won’t let you save and close if debits and credits don’t match, but you can save and close a “non-$0” Sales Receipt. In regard to the Bank Feed, no, it will not, for either the Journal Entry or the Sales Receipt for the most part. This is why I teach to add Bank Rules for Transfers for these transactions becuase usually the Square CC Deposits look generally the same in your Bank Feed so you can easily know what they are and to just bulk transfer them from Square CC Clearing to your Bank Account. The Bank Feed will not read Square CC and Cash/Check Deposits because you are not entering deposits (or any debits or credits at all in/out of the bank account) during the entry stage, you are only putting numbers into these clearing accounts, which will not queue the Bank Feed to pick these up. Also, it won’t for the sales tax either because you are just crediting (increasing) the sales tax liability, so there would be no reason for the Bank Feed to match a credit of the bank account for the same dollar amount because it wouldn’t have a need to “match” two credits and no debits. Hope this makes sense!

[@dwmccall1]

@@essentiallyintentional Thank you, yes, it does. I appreciate so much the time you took to answer :)

[@curltocurl671]

Yay! I was going to ask this same question. If there was an advantage of JE vs. Sales Receipt and you nailed it. As a new bookkeeper I am also liking the JE method because I could sign clients up for QB Ledger and still be able to record daily sales. QB Ledger saves them at least $20 per month vs. other QB subscriptions. But it doesn't have a sales receipt option. Thank you so much for your videos @@essentiallyintentional they are so helpful & you explain things so well.

[@glenw.3813]

So Gunnar, how are you matching the daily deposits that Square makes when you do a massive JE? This is where I get confused on using JE vs sales receipt or invoice methods.

[@essentiallyintentional]

Hi Glen, in this case, I don't. I take the trade-off of losing the ability to match the daily deposits with the ability to enter one entry to capture all sales. The Square deposits in this case are entered as new transfers in QBO and not matched. I still perform audits but it's not as straightforward. I run the registers of the Square Clearing Account and if it runs back down to $0, I mark it as reconciled up to that point. I also sometimes am able to play around in the POS reporting to find the actual amount of undeposited funds as of a certain date and compare that to the Square Clearing balance as of that day. If you decide to use this same workflow but add the entries in daily then at that point, you can run the Square clearing register and convert it to Excel to get a real view of the daily in's and out's. The alternative would be sales receipts and/or invoices that debit the bank accounts per day via Square numbers and forego the Square clearing account altogether, this method would then entail matching the daily square deposits in the Bank Feed. This method could obviously work as well, it is just not the method that I prefer or use for any of my clients at this time.

[@user-zl5fn6ug6o]

Can I ask how to add in a Square loan payment into the Square sales journal entry? As the payment to the loan in auto removed by square at 20% of daily sales, so the net income that hits the bank is less than the square report shows. And square does not itemize out what the loan payment was on the summary report.

[@essentiallyintentional]

I would handle this separately from the sales entry as your Net Income is your Net Income, meaning your Net Income is not 20% lower because of these loan payments. I would do the sales entry as shown in the video, then separately create a Journal Entry for these loan payments debiting the loan liability account on your Balance Sheet and crediting the Square Clearing Account. This credit will be what lowers the Square Clearing Account from the original sales entry.

[@sheilaaviles102]

This has been super helpful but I have run into an issue with tax. When the tax is done like this it does not show up in the Tax centre. How can I fix that?

[@essentiallyintentional]

You could use a similar workflow that is hard to explain via a comment, it would be better off to explain via a video training session. But you could instead use this workflow but with Invoices instead of Journal Entries, but to do this you would first have to set up “Products and Services” in QBO and link them to the correct Chart of Accounts as you can’t in QBO invoices put in direct Chart of Account Accounts. Then, you would put in positives and negatives in the Invoice with no line for sales tax. Then, for the sales portion, you would check that as taxable, then the subtotal of the invoice will be $0 but the tax will be treated directly in QBO and show up in the tax center. This is covered a little more in my “How To Enter Daily Sales into QuickBooks Online” video here: kzbin.info/www/bejne/hGK2kJ-Ap56kb68 Look in the description of this video if you would be interested in booking an hour 1-1 video training call with me and we can go over this and get this set up for you!

[@kerriyoder8183]

Do you do one on one training for Square and Quick books?

[@essentiallyintentional]

I do! calendly.com/essentially-intentional It is the "Training/Consulting Call w/ Gunnar" Meeting event

[@deanbaton3703]

Hi Gunnar, thanks for the video. I have a quick question. So everytime you have a deposit in bank feed, you will "add" it immediatly and categorize it to the clearing account? Or create a rule as "transfer" from clearing account to "bank account"? In your example, you had two clearing account, 1 for cash to be deposited and another for checks to be deposited, hence you will monitor those two clearing account and check if its zero out from time to time?

[@essentiallyintentional]

In QBO, whether you add in a new Deposit transaction separately or in the Bank Feed or create a new “transfer” from the Bank Feed using a Rule, you are essentially creating the same transaction. Both scenarios create a debit (increase) to your bank account and a credit (decrease) to the clearing account(s). Even though they are essentially the same transactions, I wanted to introduce both options in QBO. I did this because creating “Transfer” rules within the Bank Feed is the easiest and most efficient way to create this debit/credit transaction. However, this is not possible if you want to credit two different clearing accounts in the same deposit (cash/checks), that is when creating a separate deposit entry would be needed, that would then be “matched” in the Bank Feed. And yes, if you decide to create two separate clearing accounts for cash and checks, then you would periodically audit these register balances to verify that they are periodically going back down to zero, unless of course you usually keep a cash balance, like in a cash drawer for example. Also remember that having separate cash / check clearing account is not 100% mandatory, if you don’t mind combining, then you can out all cash/check payments into an Undeposited Funds Clearing Account, then all the cash/check bank deposits could be “Transferred” in the Bank Feed. Hope this helps!

[@yshangot1009]

My client has no square account in her QB. Do I need to create one for her? Hope you notice my question. Thanks

[@nosensecomedy]

So what does your client have, what sales platform do they use?

[@essentiallyintentional]

If you want to use this particular workflow, then yes, you would create a new Square Clearing Asset account in their QBO Chart of Accounts

[@yshangot1009]

@@nosensecomedy i mean client has no square clearing account in her QBO, and her square is integrated though sometimes there are discrepancies on the sales receipts fed to quickbooks, there are missing items.

[@beyondyarn9166]

How do you enter square loans in the same journal entry?

[@essentiallyintentional]

I can't say for sure without knowing more. But, my guess would be within the Journal Entry a debit to the Square Loan liability account and that amount also subtracted out of what will go into the Square Clearing Account debit

[@beyondyarn9166]

@@essentiallyintentional thank you Gunnar.

[@MrStranger911]

It drives me crazy that they call it total sales on the top portion, I just can’t get over it it throws me off from some reason

[@essentiallyintentional]

I agree, I like to advise people to view it as "Total Collected" instead