Making FreshBooks and an Accounting Package (like QuickBooks) Work Together Part 3: Workflow #2 – Entering in Each Transaction

3^rd part of a three part series on using FreshBooks with a double ledger accounting program. Check out Part 1: Overview and Rules and Part 2: Workflow #1 -  Using General Account Entries.

This is the second workflow of two. This workflow is good if you want detailed reporting in your accounting program – more than a general FreshBooks income account. You can still use FreshBooks to track all of your receivables, but with this workflow, you can have client based or item based reporting in your accounting program. This may or may not be important for your business.

As reminder, you may not need an Accounting package in addition to FreshBooks. You should read these two posts when deciding: Do I really need an Accounting Package and Part 1: Overview and Rules

With this workflow, you basically recreate every invoice or transaction that you recorded in FreshBooks into your accounting program. Most of our accounting integrations work this way as it provides a higher level of detail that is already available via your FreshBooks account.

The Reports You Will Need from FreshBooks:

Suggested Workflow 2 (Invoice by Invoice or Transaction by Transaction):
QuickBooks 2008 will be used as an example of an Accounting package throughout the workflow

1. Setup a Client in your accounting program for each of your FreshBooks Clients– this way you can run reports on individual clients and transactions
   1. If you get new clients over a time period – add them in
2. Pull your “invoice details” report from FreshBooks for your time period based on “Invoice Date”. Limit the report between the current date and your last reconciliation date.
3. Scroll to transaction you want to add into your accounting program

1. Select make Journal Entry (usually under “Company”)
   1. Alternatively create an invoice for that client based on the data
2. Select Accounts Receivable under Account  – Enter in Total of the first invoice for under Debit – attribute to Client and write Memo
3. Select Income under Account – Enter in Invoice amount under Credit – attribute to appropriate client
4. Select Sales Tax Payable under Account – Enter in Sales tax on invoice under Credit
5. Select Income under Account – Enter in Sales tax on invoice under Debit

1. Save Journal Entry
2. Repeat Steps 4-8 until you have entered in all your invoices
3. Pull “Payments Collected” report for individual payments throughout your time period (good for other time periods)

1. Select make Journal Entry (usually under “Company”)
   1. Alternatively, you lookup the invoice in your accounting program and mark it as paid
2. Select Accounts Receivable under Account  – Enter in amount collected for specific transaction under Credit – attribute to the specific client
3. Select Cash under Account – Enter in amount collected for transaction under Debit – attribute to the specific client
   1. Sales taxes were covered in your initial transaction

1. Save Journal Entry
2. Repeat steps 2-15 on the time interval you choose – remember this is an on going balance so your collected amounts will be attribute to invoices from previous time periods.

One More Tip – Bank Reconciliations

I always recommend doing bank reconciliations every period. Your bank statement is rarely wrong and will always have what should be in your total cash account. If there is a discrepancy, it is good to note what it is and why it is there.

Basic entries:

Invoice/Total Income = Revenue/Income (credit, right) – A/R (debit, left)
Paid Invoice / Total Collected = A/R (credit, right) – Cash (debit, left)

For another suggested FreshBooks to QuickBooks workflow, we recommend you take a look at IAC’s workflow.