To effectively record Square sales in QuickBooks Online (QBO) when transactions involve multiple payment types, you’ll want to follow a systematic approach. Here’s a detailed method:
Set Up Product/Service Items in QBO: Ensure that all your products or services are set up in QBO, matching what you have in Square for easier reconciliation.
Create a “Square Clearing” Account: This account acts as a temporary holding account for your sales before the funds move to your bank. Set it up as a bank or current asset account.
Record Daily Sales Summary:
At the end of each day, enter a Sales Receipt in QBO. This summary should capture the total sales, including details for each payment type (cash, credit card, etc.).
Use the “Square Clearing” account as the ‘Deposit to’ account for the sales receipt to ensure that all transactions initially populate there.
Separate Payment Types:
Break down the Sales Receipt by different payment methods. Document cash, credit card, and any other payment type separately to ensure accurate tracking and reconciliation.
Match in Bank Feeds:
When bank deposits hit your account (usually reflecting the net deposits from Square after fees), use the QBO Bank Feeds to match and reconcile records.
For cash sales, create a journal entry transferring funds from the “Square Clearing” to your actual cash account.
Recording Fees:
Square fees are deducted before deposits hit your account. Record these fees separately in QBO.
Regularly create an Expense or a Journal Entry reflecting fees from the “Square Clearing” to your Square Fees Expense account.
Regular Reconciliation:
Consistently reconcile your “Square Clearing” and bank accounts in QBO against your Square reports to catch discrepancies early and ensure everything balances.
This structured approach will help maintain accurate financial records and provide a clear picture of your sales through Square within your overall Accounting in QuickBooks Online.
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