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Journal Entries - An Overview for your Accountant

Journal Entries Guide:

Accountant Overview - Table of Contents

  1. Overview
  2. If I use QuickBooks, what am I importing?
  3. Principles Used
  4. Chart of Accounts Used
  5. Journal Entry Treatment for each type of Transaction
  6. How do I Import the .iif file and backup my QuickBooks file?

Still have questions? Please give us a call. If you have feedback, Let us know!

When are Journal Entries Created?

A FreshBooks user’s Journal Entries are generated whenever they create a financial transaction using the software. These include anything the user does with Invoices, Payments, Expenses, and Credits. Note these are all the possible transactions in FreshBooks, so therefore a Journal Entry export represents the entirety of a business’ activity.

If I use QuickBooks, what am I importing?

Important: .iif does not systematically prevent duplicates, so please backup your Quickbooks data before attempting the import for the first time. See how

Users can export the “general journal” .iif file type. This means that all your FreshBooks activity will be represented in QuickBooks as Journal Entries that you can import. The journal entries will be booked against a standard Chart of Accounts. If your accounts are named differently in your system, we recommend you rename the accounts in the exports or after importing to QuickBooks.

Journal Entries capture the amount, account, and customer for every entry. If a customer or account does not yet exist in your QuickBooks account, it will be automatically created when you import. We also provide the Invoice number and Item name (if applicable) in the “MEMO” field of the journal entry. Note the journal entries will not act as Items or Invoices in QuickBooks, they only represent the aggregate financial impact of those activities – if you still need Invoice level reporting, you should continue to use FreshBooks Reports for it and Journal Entries for higher level reporting.

Note that if your .iif file is large (>1MB), the import can take more than 10 minutes. Don’t be alarmed, just go grab a well deserved coffee!

What principles are used for Journal Entries?

  1. We book all entries to a standard Chart of Accounts. If your accounts are named differently in your system, we recommend you rename the accounts in the exports or after importing to QuickBooks.
  2. Whenever an amount is updated, we reverse the first entry, and then create new ones. We do not book the difference alone.
  3. Export date ranges refer to the recorded date of entries, and not the date of the invoice/payment/credit. For example, if a user updates an invoice from the month before, the relating reversal entry will show up in this month’s export because that is when the change was made. This ensures no user can affect prior periods that have been closed.
  4. For the QuickBooks export, we only export Journal Entries in the base currency of the account (.IFF files can only contain one currency).
  5. Expenses are by default in the base currency of the account that the user has configured.

Standard Chart of Accounts

All Journal Entries are booked to a standard Chart of Accounts, which consists of: Chart_of_Accounts

Specific Treatments


  1. An Invoice is created for a billed task, item sale, or re-billed expense
  2. An invoice is created with sales tax
  3. An Invoice has an amount updated (example from $10 to $12)
  4. The original entry is reversed

    A new entry is booked for the total updated amount

  5. An Invoice is deleted
  6. The original entry is reversed


  1. A Payment is made on an invoice
  2. A payment has an amount updated (example from $10 to $8)
  3. The original entry is reversed

    A new entry is booked for the total updated amount

  4. A payment is deleted
  5. The original entry is reversed


  1. Create an expense manually (considered cash)
  2. Create an expense manually with $1 tax (tax assumed recoverable, contra-asset)
  3. Expense created through connected credit card
  4. Expense created through connected bank account
  5. User updates an expense amount (e.g. $10 to $12)
  6. The original entry ($10) is reversed, new entry is booked

  7. Expense created if user assigned category to COGS
  8. When a user rebills an expense to the client

  9. *Could be bank/credit account, if applicable

Important: Duplicate expense lines if you have a bank account & credit card connected

When a FreshBooks user connects both their bank account or credit card to automate expense tracking, only the outflows of money are captured by the system. This can creates duplicate expenses.

Here’s a full example:

  • User A has two $100 expenses on their credit card - FreshBooks has recorded this as an expense.
  • User A pays the $200 off using their bank account. FreshBooks has now created another expense for $200 because it cannot differentiate between a credit card payment and normal cash outflow.
  • This means there are $400 of expenses logged when in fact the user should only have $200.
To fix this, we recommend that the users with both accounts connected delete all payments to their credit cards from their bank accounts in the expense section. This preserves the item level expense detail while removing the duplicates.


  1. A credit is created
  2. A credit has an amount updated ($10 to $12)
  3. The original entry is reversed

    A new entry is booked for the total updated amount

  4. A credit is deleted
  5. A credit is applied to an invoice

Draft Invoices

  1. A draft invoice is created
  2. No entry is made

  3. A draft invoice is partially paid (Example $5 payment on a $10 invoice)
  4. When the partial payment is made, both the invoice and the payment are booked

Entries from before the feature is enabled

We are allowing users to export Journal Entries as far back as Sept 1, 2012, but because we weren’t writing Journal Entries on accounts before we enable the feature, all entries exported between Sept 1, 2012 and Feb 13th, 2014 will use only the last updated value of any Invoice, Payment, or Credit.

Here’s an example that may help:
From Dec 2012 to April 2013, the FreshBooks user made an Invoice for $100 and updated it several times. The final value of the Invoice was $120. When the user exports her Journal Entries for the period of Nov 2012 to Aug 2013, the only entry they will see is for this Invoice is:

Debit A/R: $120
Credit Sales: $120

Note: The date of record will be the last updated date of the Invoice

We use this treatment because we know that the Invoice was both created and updated within the export period. Therefore we are confident in writing only the current state of the Invoice as the total effect of the Invoice to the Customer’s books. The same treatment applies to Payments and Credits.

If, however, the creation or update of the Invoice/Payment/Credit predates the export period, we will not know for sure what entries to make because the business may have already made entries for the Invoice in their books.

Here’s an example of that case:
In Aug 2012, a user creates an Invoice for $100. At the end of Sept 2012, they book their quarter end and include an entry (for example, in QuickBooks) for the sent Invoice of $100 as sales. In Dec 2012, they update the same Invoice in FreshBooks to $120.

When they export a period of Dec 2012 to Aug 2013, the correct (net) entry should be:

Debit A/R: $20
Credit Sales: $20

However, because we do not know that they actually booked the $100, we cannot make this entry. Therefore, what we have done is simply to book the entry the same way as in the first example, but we will flag the entry with an asterisk in the export.

Therefore, if you see a comment in the “Note to Accountant” column or the .csv or the memo field of the .iif in the export, it is a signal to you (the Accountant) to review that specific Invoice/Payment/Credit and adjust the entry based on what your client/business has already booked in the past.

How do I import the .iif file?

You can import your FreshBooks journal entries into QuickBooks using the IIF file.

  1. Open your Company File in QuickBooks
  2. Back up your Company File before importing so you have a safe copy…click here to learn how
  3. Go to “File -> Utilities -> Import -> IIF Files…” Finder

  4. Choose the IIF file that you downloaded from FreshBooks.

How do I backup my QuickBooks file?

Before importing your IIF file from FreshBooks into QuickBooks, we recommend that you back-up your current QuickBooks file. This way, if there is a mistake in your FreshBooks data, you can revert back to what was originally in your QuickBooks account.

  1. When in QuickBooks, go to “File -> Create Backup…” LittleSnapper

  2. Choose “Online Backup” or “Local Backup” depending on what you prefer. We recommend doing both to be as safe as possible.
  3. Click “Next”
  4. Save the file to a folder on your local device or online using “Intuit Data Protect” (that is a paid-subscription service)