Do You “Square” With QuickBooks?
Some small business owners use QuickBooks to record their accounting data. Some small business owners accept credit cards as payment for services rendered or goods sold. Some small business owners use both! If you use QuickBooks and want to use Square as an option to accept credit card payments, here are some tips to record the information into QuickBooks:
Record Gross Sales – Some credit card processing firms take out a service fee before depositing the money into your bank account while others charge fees that are withdrawn separately from your bank account based on the transaction. Square is a firm that withdraws its service fee before you receive your money, so sales have to be recorded as well as the service fee. For example, if you received $47.51 from Square $47.51 is not your revenue. Of that $43.27 may be sales, $3.03 may be sales tax, and $1.21 may be the credit card processing fee. Do not record the net amount received as sales. Break the transaction into separate line items to properly record the deposit.
Download Transactions Into Excel – Square allows you to download transactions into Excel in monthly time frames. Why would you want to do this? I am glad you asked! The Excel file will show you total sales, sales tax, tips, total money received from the customer, the fee taken from Square, and the net amount deposited into your bank account.
Each individual transaction will be on the Excel file, so you may have 10 or more swipes a day and see multiple line items. One trick I use to save time is to sort the data by date and then by time. Depending on the time of day you swipe a credit card depends when the deposit will be made. For example, you may have total sales of $150 today but one credit card was swiped after 11PM for $35. The $35 payment may be deposited with your sales for the following day.
After sorting the data I use the subtotal feature. For the most part the subtotal for the day matches the amount deposited in the bank account. For those receipts that miss the cut-off for the day and are deposited with the following day’s sales, I put a thick box around the receipts that were deposited together from the two days so I know that matches the deposit made into the bank account.
Create an Import File – I do not know if the time spent creating an import file would be more cost effective than entering the transactions manually, but I wanted to let you know that the option exists. For QuickBooks Pro and Premier for the desktop version and QuickBooks for the MAC you could create an .iif file to import the details into QuickBooks (sorry, .iif files do not import into the QuickBooks Online program to the best of my knowledge).
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