Auto Bookkeeping for QuickBooks Online

Auto Bookkeeping automatically helps you reconcile Resolve payouts with your QuickBooks Online accounting system. This is an optional feature you can enable to save time and avoid having to download our payouts data and manually create records within QuickBooks. 

Payouts data will be recorded into your QuickBooks as soon as the bank automatically confirms that the transaction was successful (2 business days).

Below is a summary of the record types that are synchronized with the payout sync enabled.

How do I turn on Auto Bookkeeping?

A basic example

Let's say you have a customer who is approved with an advance rate of 75%. You then want to send an invoice to them for $100 and receive an advance for this invoice. 

Chronology

• Day 1:
  • You send the invoice for $100.
    • Resolve issues an advance for $75 ("advance" payout transaction)
    • Resolve charges a fee of $1 ("advance" fee payout transaction) 
  • The customer pays this invoice in full e.g. $100 (usually they pay closer to the terms due date)
    • Resolve pays out the remaining $25 on this invoice ("payment" payout transaction)
  • Resolve bundles these transactions into a "payout" with a net amount of $99 and executes this payout via ACH
• Day 3:
  • You should receive the net payout of $99 within the bank account linked to Resolve
• Day 4
  • Resolve marks the payout as paid.
  • For the net payout and for each transaction within the payout Resolve attempts to create relevant transactions. See diagram and table below.
    • Payout
      • Journal Entry of $99 for the net payout
        • Debit bank account $99
        • Credit a user defined clearing account $99
      • Payment of $75 against the invoice for the advance payout transaction
        • Debits clearing account $75
        • Credits accounts receivable $75
      • Payment of $25 against the invoice for the payment payout transaction
        
        • Debits clearing account $25
        • Credits accounts receivable $25
      • Journal Entry of $1 for the advance fee
        • Debits fee account $1
        • Credits Clearing account $1
  • You can match the Journal entry of $99 between the bank account and the clearing account with the $99 that appears within your bank statement.

You can view a more complex example for payout journal entries in the second tab on this sheet.

Below is a diagram outlining the payout and the associated records we would create within QuickBooks on Day 4 when the payout is mark paid. Please note: Resolve first moves everything into the clearing account and then from the clearing account into the relevant asset and expense accounts.

What is the general ledger impact?

This spreadsheet outlines the general ledger impact in this example - General ledger impact 

What will this look like in QuickBooks?

Below is a series of screenshots from Resolve and QuickBooks for the relevant records involved in this example.

Resolve invoice

Resolve payout

QuickBooks invoice

QuickBooks payment

QuickBooks chart of accounts - Bank account

QuickBooks chart of accounts - Resolve clearing account

QuickBooks chart of accounts - Accounts receivable

QuickBooks chart of accounts - Resolve fees account

QuickBooks - Bank statement reconciliation (bank match)

FAQs

What happens if I turn Auto Bookkeeping off?

If you change your mind you can simply turn this setting off, at which point we stop writing records to your QuickBooks account. The 1-way sync will still occur syncing customers and invoices. If you don't want anything to sync, you can of course also disconnect QuickBooks.

Will this write old payout data to QuickBooks?

No. We only start writing data when this is turned on and configured. We won't write data from payouts previously marked paid.

Why do you use a clearing account?

The main reason we use a clearing account is to isolate Resolve related transactions. Each payout can consist of many transactions. It simplifies things to have a single journal entry between the bank account and the clearing account so that:

1. The Journal entries from the bank account are 1:1 with Resolve payouts.
2. It's easier to match the line item on your bank statement with the single Journal entry.
3. The bank account register is cleaner

Credit notes and merchant payments will be recorded as journal entries between accounts receivable and the clearing account. 

What do I do with merchant_payment and credit_note journal entries

1. merchant_payment - These are created when you click "Forward payment to resolve". This happens when the customer pays you directly. In this case you can apply this journal entry to the payment record that you created when the customer paid you directly. Do not apply the customer payment to the invoice but apply the journal entry that we create to the customer payment. This step is required to clear the balance on the customer account in QuickBooks.
2. credit_note - These are created when you click "Issue credit note" in resolve. In this case you can apply the journal entry to the Credit memo in QuickBooks via "Receive payment". If you haven't created a Credit memo in QuickBooks you can. This step is required to clear the balance on the customer account in QuickBooks.

Limitations

There are currently some limitations with the payout sync namely. 

1. We currently don't support different credit and debit bank accounts. e.g. if you have 2 bank accounts linked - one for credits and one for debits. 
2. We currently only support a single clearing account and a single expense account. 
3. We don't support not writing specific transactions. e.g. if you don't want us to create a journal entry for the monthly subscription fee this can't be turned off. 
4. We create these records when we recognize the payout as paid. This is subtly different from when you will actually receive the money. We have a single business day buffer to cover cases where the payout might fail to credit / debit. This could happen due to a variety of reasons e.g. NSF's - "Non sufficient funds", bank accounts closing / changing etc.