Matching Invoices entered in QBO to Payments Made via Square

jdicostanzo · ‎July 16, 2024

Hi All,

Scenario:

NOTE: All my bank accounts and my Square account are connected and synched to QBO.

1. I enter an invoice in QBO and send it to the customer.

2. They ask me to charge it to their card on file (we use Square), which I do.

3. The next day, the payment transaction shows under Square in App Transactions for the net amount (invoice amount minus fees). Clicking for more detail I can see the gross amount and the fees broken out. The QBO customer and item show, but I cannot Match the QBO invoice to the transaction. The "Category or Match" column says "Miscellaneous."

4. My only option is to Add the transaction, which I do.

5. In the Bank transactions tab, I see the amount Square deposited and it say "Match Found." It matches the deposit to the Square transaction. The net amount is now available in the bank account to reconcile and the fees are coded to the appropriate account.

6. There is no way for me to clear the QBO invoice. I cannot match it to the Square transaction (this is where it should be matched) and if I mark it paid, it puts the gross amount into the bank rec (in addition to the Square amount).

I believe I was able to match QBO invoices to Square transactions in the past, but it's been about 6 months. This should be a standard function - otherwise how do you clear open invoices?

Any insight is appreciated.

AlverMarkT · ‎July 17, 2024

Hi, @jdicostanzo. Thanks for returning to this thread. Let me hop into this conversation and help you match your Square transactions with your QuickBooks Online (QBO) invoices.

When adding a Square transaction from the App transactions page, QBO automatically creates a sales receipt and a deposit that are linked to each other. To associate the Square transactions with the corresponding invoices, we'll need to record the invoice payments first. Then, edit the deposit to associate it with the invoice payments. I can help by sharing the details of accomplishing these steps in QBO.

Since you've matched the Square transactions in the Bank transactions page, let's record the invoice payments, posting each to the Undeposited Funds (or Payments to deposit) account. You can follow these steps:

Click on the +New button. Then, Receive payment.
Choose a Customer from the drop-down list.
Enter the Payment Date and choose the appropriate Payment Method.
Select Payments to deposit from the Deposit To drop-down list.
Place a checkmark for the corresponding invoice/s.
Hit Save and close.
Repeat these Steps 1 to 6 for the rest of the invoices.

Next, edit the deposit record posted in your bank account. In this process, we'll need to unlink the Sales Receipt associated with the deposit and link it to the recorded invoice payment.

Click on the Gear icon in the upper right corner.
Select Chart of accounts.
Find the bank account where the Square transactions are posted after the matching process. Then, select View register.
Find the corresponding deposit transaction at issue. To help in this task, click the Funnel icon and choose Deposit from the Transaction type drop-down list.
Select the deposit transaction. Then, hit Edit.
Uncheck the sales receipt linked to it and place a checkmark for the invoice payment.
Hit Save and close.

Lastly, proceed with deleting the sales receipt previously linked with the deposit. I've added a screenshot for a visual guide.

If you need to reconcile your accounts after this, let me add this article as a future guide: Reconcile an account in QuickBooks Online.

We'll be here in the Community if you have further questions about applying a Square payment to an invoice in QBO. We'll do our best to assist. Take care.

View solution in original post

jenop2 · ‎July 16, 2024

Thank you for the thorough explanation about how you handled the Square payments in QuickBooks Online, jdicostanzo

Based on the information you provided, the downloaded Square transaction has already been matched to the corresponding deposit in the Bank transactions tab.

Because of that, it can no longer be matched to the invoice since it has already been accounted for.

If the matched transaction is already posted in the correct bank and assigned to the appropriate income categories, you'll want to delete the invoice to avoid income duplication.

However, I would recommend reaching out to your accountant for situations like this to ensure any transactions are treated correctly from an accounting perspective.

Here's how to delete the invoice:

Go to the Sales menu and proceed to the Invoices tab.
Look for the invoice, then click the drop-down list beside Receive payment.
Choose Delete.
Click Delete once again.

Alternatively, you can also unmatch the downloaded deposit and Square transaction. Then, match the payment in the Bank transactions tab to the corresponding invoice to close them out.

Here's an article that will serve as a helpful guide: Unmatch Downloaded Bank Transactions Or Move Them To Another Account.

Once done, delete the Square transaction so it will not duplicate your income.

With regard to the inability to match Square transactions to invoices, I would recommend reaching out to our support team. They'll take a closer look at this and check why you are only seeing the Add option, rather than the ability to match the transaction.

Go to this article for the detailed steps on how to reach out to them: QuickBooks Online Support.

Furthermore, I would like to offer a few additional articles that can be useful in managing your bank transactions within the program:

Don't hesitate to reach out again if you have any more questions about recording or managing business transactions. We're always happy to help.

jdicostanzo · ‎July 17, 2024

Hello and thank you for the reply.

While I appreciate what you've suggested, there has to be a way to enter a QBO invoice, send it to a customer, and then have it associated with a square payment if they choose to pay that way. Otherwise I will lose visibility of the invoices I've sent to the customers as they've already recorded the invoice # in their system.

What is the suggested workflow for this?

jdicostanzo · ‎July 17, 2024

Hello and thank you for the reply.

While I appreciate what you've suggested, there has to be a way to enter a QBO invoice, send it to a customer, and then have it associated with a square payment if they choose to pay that way. Otherwise, I will lose visibility of the invoices I've sent to the customers as they've already recorded the invoice # in their system.

What is the suggested workflow for this?

AlverMarkT · ‎July 17, 2024

Hi, @jdicostanzo. Thanks for returning to this thread. Let me hop into this conversation and help you match your Square transactions with your QuickBooks Online (QBO) invoices.

When adding a Square transaction from the App transactions page, QBO automatically creates a sales receipt and a deposit that are linked to each other. To associate the Square transactions with the corresponding invoices, we'll need to record the invoice payments first. Then, edit the deposit to associate it with the invoice payments. I can help by sharing the details of accomplishing these steps in QBO.

Since you've matched the Square transactions in the Bank transactions page, let's record the invoice payments, posting each to the Undeposited Funds (or Payments to deposit) account. You can follow these steps:

Click on the +New button. Then, Receive payment.
Choose a Customer from the drop-down list.
Enter the Payment Date and choose the appropriate Payment Method.
Select Payments to deposit from the Deposit To drop-down list.
Place a checkmark for the corresponding invoice/s.
Hit Save and close.
Repeat these Steps 1 to 6 for the rest of the invoices.

Next, edit the deposit record posted in your bank account. In this process, we'll need to unlink the Sales Receipt associated with the deposit and link it to the recorded invoice payment.

Click on the Gear icon in the upper right corner.
Select Chart of accounts.
Find the bank account where the Square transactions are posted after the matching process. Then, select View register.
Find the corresponding deposit transaction at issue. To help in this task, click the Funnel icon and choose Deposit from the Transaction type drop-down list.
Select the deposit transaction. Then, hit Edit.
Uncheck the sales receipt linked to it and place a checkmark for the invoice payment.
Hit Save and close.

Lastly, proceed with deleting the sales receipt previously linked with the deposit. I've added a screenshot for a visual guide.

If you need to reconcile your accounts after this, let me add this article as a future guide: Reconcile an account in QuickBooks Online.

We'll be here in the Community if you have further questions about applying a Square payment to an invoice in QBO. We'll do our best to assist. Take care.

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Matching Invoices entered in QBO to Payments Made via Square