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QuickBooks Journal Entries

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If you are integrating Fishbowl with QuickBooks, it is necessary to know what accounts are being affected in QuickBooks each time you export from Fishbowl. Invoices, Bills, Credit Memos, and Inventory Adjustments will be created in QuickBooks depending on the function completed in Fishbowl. In addition, Fishbowl must also modify the accounts associated with these functions. These accounts may range from Cost Of Goods Sold, Sales Retail, Inventory Asset, and Accounts Receivable to name a few. The information shown below provides detailed descriptions of each function and how completing this function in Fishbowl affects the accounting aspect in QuickBooks. Please note, however, that the below information is given using the standard Fishbowl created accounts in QuickBooks. If you have mapped Fishbowl to different accounts than the default settings, your accounting results may vary slightly from the information given on these pages. See the {{Module|Accounting Integration}} for more information about the QuickBooks integration.
== Debits and Credits==
Debits and credits are a system of notation used in accounting to keep track of money movements (transactions) into and out of an account. Traditionally, an account's transactions are recorded in two columns of numbers: debits in the left hand column, credits in the right. Keeping the debits and credits in separate columns allows each to be recorded and totaled independently. The smaller of the two totals is then subtracted from the larger to give the account balance. An account may thus have a balance either the debit or credit side.
In double-entry bookkeeping, assets and expense accounts are debit accounts. Their balance increases with entries made in the debit column and decreases with entries in the credit column. Liability, owner's equity, and revenue or income accounts, are credit accounts. Their balance increases with entries in the credit column and decreases with entries in the debit column.
Each transaction within Fishbowl consists of debits and credits; for every debit transaction the credit must be equal. Every Transaction Value of Debits = Value of Credits. This means when exporting to QuickBooks, the total value of debits will equal the total value of credits.
The extended accounting equation is true and must balance:
* Assets + Expenses = Liabilities + Owner's Equity + Revenues
* Therefore, Debit Accounts (Assets + Expenses) = Credit Accounts (Liabilities + Owner's Equity + Revenue)
On a [[Accounting_Process#T_Charts|T-Chart]], debits are on the left and credits are on the right. Debits increase a debit account and reduce a credit account. Credits increase a credit account and decrease a debit account.
== T Charts==
The term '''T Chart (or T account)''', derived from the distinctive T shape, is mainly used when discussing or analyzing accounting or business transactions. T accounts are used to represent general ledger accounts. A general ledger account name or number is written above each T, with debit entries recorded on the left side of the T, and credit entries recorded on the right side of the T.
[[File:Fulfilling a SO paid for in FB.JPG]]
== Inventory Adjustments==
=== Cycle Count Adjustment: Increasing Inventory ===
When inventory has been ''increased'' via cycle count, the '''Inventory Asset''' account will be debited with the offset '''Inventory Adjustment''' account credited.
[[File:Inventory_increase_Journal_Entry.JPG]]
=== Cycle Count Adjustment: Decreasing Inventory ===
When '''Cycle Counting Down''' inventory, a debit will be made to the '''Inventory Adjustment,''' with the offset credit made to the '''Inventory Asset''' account.
[[File:JE_inventory_decrease.JPG]]
=== Scrapping Inventory ===
When '''Scrapping''' inventory, a debit will be made to the '''Scrapped Inventory''' account, with an offset credit made to the '''Inventory Asset''' account.
[[File:JE_scrap_inventory.JPG]]
=== Adding Initial Inventory ===
When inventory has been initially entered and then exported to QuickBooks, the '''Inventory Asset''' account will be debited, with the offset '''Inventory Adjustment''' account credited.
[[File:JE_add_initial_inventory.JPG]]
== Sales Order==
=== Standard Inventory items ===
For a standard Sales Order with regular inventory items (not including a shipping line item) the following process takes place when exporting a fulfilled order to QuickBooks:
[[File:JE_SO_paid_for_in_FB.JPG]]
=== Non-Inventory Items ===
The following debits and credits are recorded when exporting a Sales Order with non-inventory items to QuickBooks:
[[File:TDBA non-inventory item.png]]
=== Service Items ===
When a sales order with a service item is exported, an invoice will be created in QuickBooks. A debit will be made to '''Accounts Receivable''' with an offsetting credit to the '''Sales Retail''' account. If the service item has a cost, a debit will be made to the '''COGS''' account, with an offsetting credit to the '''Service''' account.
[[File:QB Invoice Service items.JPG]]
=== Discount Items ===
Upon exporting your Sales Order (containing a Discount Item) from Fishbowl, an Invoice will be created in QuickBooks. Your Discount item will affect QuickBooks accounts in the following ways: A credit will be made to the '''Sales Retail''' account, while a debit is made to the '''Discount Expense''' account. Please note the following image:
[[File:Invoice discount item.JPG]]
=== Credit Return ===
Upon exporting your credit return Sales Order from Fishbowl, a Credit Memo will be created in QuickBooks. Your credit return will affect QuickBooks accounts in the following ways: A credit will be made to the Accounts Receivable and Cost of Goods Sold accounts, while a debit is made to the Inventory Asset and Sales Retail accounts. Please note the following image:
[[File:Credit Memo credit return.JPG]]
=== Drop Shipping ===
Upon exporting your Sales Order (with a drop shipped item) from Fishbowl, both a Bill and Invoice will be created in QuickBooks. An Invoice will be created for the Sales Order, while a Bill will be created for the Purchase Order. When drop shipping an item, you must first place the item on a Sales Order. After issuing the Sales Order, a Purchase Order will automatically be created for your vendor. Upon Receiving your Purchase Order, your Sales Order will also auto-fulfill. You may then export to QuickBooks to have both a Bill and Invoice created. Your drop shipped order will affect QuickBooks accounts in the following ways: A debit is made to the '''Accounts Receivable''' and '''Cost of Goods Sold''' accounts, while a credit is made to the '''Accounts Payable''' and '''Sales Retail''' accounts. Please note the following image:
[[File:Bill drop ship.JPG]]
=== Misc Items ===
Upon exporting your Sales Order (containing a Misc Item) from Fishbowl, an Invoice will be created in QuickBooks. Your Misc item will affect QuickBooks accounts in the following ways: A credit will be made to the '''Sales Retail''' account, and is offset by a Debit made to the '''Accounts Receivable'''. Please note the following image:
[[File:Invoice_misc_sale.JPG]]
=== Misc Credits ===
If a miscellaneous credit is the only item on a sales order (or if the total order amount is negative), a credit memo will be created in QuickBooks with a credit to '''Accounts Receivable''' and a debit to '''Sales Retail'''.
'''NOTE''' - If the sales order also contains items that were sold, the entries created by those items will be identical to those of [[#Standard_Inventory_items|standard inventory items]]. If the order amount is positive, an invoice will be created in QuickBooks.
=== Standard Shipping ===
For a standard Sales Order that includes a Shipping line item, the following process takes place when exporting to QuickBooks:
[[File:Add Shipping In Shipping Module QB.png]]
=== Carton Based Shipping ===
Upon exporting your Sales Order with Carton Based Shipping from Fishbowl, an Invoice will be created in QuickBooks. Carton Based Shipping will affect QuickBooks accounts in the following ways: A credit will be made to the '''Shipping Accrual''' and '''Shipping Income''' accounts, while a debit is made to the '''Accounts Receivable''' and '''Cost of Goods Sold''' accounts. Please note the following image:
[[File:Invoice_carton_based_shipping.JPG]]
=== Handling prepayments ===
'''NOTE:''' Fishbowl has a module option to [[Accounting_Integration#Module_Options_General_tab|Send payment when order is fulfilled]], that may fit the needs of some companies.
'''NOTE:''' Fishbowl has a module option to [[Accounting_Integration#Module_Options_General_tab|Send payment when order is fulfilled]], that may fit the needs of some companies.
== Purchase Order==
=== Purchase Order Standard Inventory Items ===
Upon exporting your Purchase Order from Fishbowl, a Bill will be created in QuickBooks. Your Standard Inventory item will affect QuickBooks accounts in the following ways: A credit will be made to the Accounts Payable account, with an offset Debit made to the Inventory Asset account. Please note the following image:
[[File:Bill standard inventory items.JPG]]
=== Purchase Order Shipping Items ===
Purchase Order shipping items can be handled in a few different ways. The shipping charge can be paid to the vendor, or the charge can be accrued and paid to the carrier. Additionally, the expense of shipping can be landed to inventory items.
== Pay Shipping To Vendor ==
The shipping charge will be paid to the vendor if the shipping item was placed on the original Purchase Order, or if the shipping item was added during reconcile with the '''Add item to Vendor bill''' box checked. '''Accounts Payable''' will be increased by the shipping amount because the shipping charge will be paid to the vendor.
[[File:Add Item To Vendor Bill.png]]{{PrintBreak}}[[File:Pay Shipping to Vendor.png|top]]
== Accrue Shipping ==
If the '''Add item to Vendor bill''' box is unchecked during reconcile, the shipping charge will be placed in '''Shipping Accrual''' so that it can later be paid directly to the carrier. This option is sometimes used when the customer has an account with the carrier, making it advantageous to pay the carrier directly. The next section describes the process of paying the carrier after the shipping charge has been accrued.
[[File:Don't Add Item To Vendor Bill.png]]{{PrintBreak}}[[File:Accrue Shipping.png|top]]
== Pay Shipping to Carrier ==
Once the shipping charge is in the '''Shipping Accrual''' account as described above, the carrier needs to be paid. Create a new bill for the carrier in QuickBooks, enter the amount to be paid, and select '''Shipping Accrual''' on the '''Expenses''' tab. When the bill is paid, the funds from the '''Bank Account''' will be used to decrease '''Shipping Accrual'''.
[[File:Shipping Accrual Bill.png]]{{PrintBreak}}[[File:Pay Shipping to Carrier.png|top]]
== Land Shipping ==
Regardless of whether the shipping charge is paid to the vendor or to the carrier, the shipping expense can optionally be included in the cost of inventory by landing the cost during [[Receiving#Reconcile an order|Reconcile]]. The expense will be moved from '''Shipping Expense''' to '''Inventory Asset'''.
[[File:Land Shipping Expense Wizard.png]]{{PrintBreak}}[[File:Land Shipping.png|top]]
=== Purchase Order Non-Inventory Items ===
Non-Inventory Items are, obviously, not stored within the Inventory module in Fishbowl. In fact, placing non-inventory items on orders is more to just create a paper-trail that may hold records of the item if needed at any future date. Using the Fishbowl created accounts, non inventory items are defaulted to adjust the Accounts Payable and non inventory account (which is an expense account). Remember, however, that accounts may be mapped to the desire of your company by using QuickBooks created accounts during the [[QuickBooks#Integration|QuickBooks integration]].
[[File:Bill_non_inventory_items_on_PO.JPG]]
=== Purchase miscellaneous items ===
The purchase of miscellaneous items will debit the miscellaneous expense account and credit accounts payable, or whichever accounts are selected in the [[QuickBooks#Accounts|Accounting integration wizard]].
[[File:TDBA_PO_misc_items.png]]
=== Purchase Order Credit Return ===
Upon exporting your Purchase Order from Fishbowl, a Credit Memo will be created in QuickBooks. Your Credit Return will affect QuickBooks accounts in the following ways: A debit will be made to the '''Accounts Payable''' account, with an offset credit made to the '''Inventory Asset''' account. Please note the following image:
[[File:Bill credit return.JPG]]
== Manufacturing==
=== Work orders ===
There are a few different scenarios where Work Orders can be recorded. This page will discuss two of the most common practices when manufacturing a Work Order:
[[File:JE_WO_with_different_asset_accounts.JPG]]
=== Labor ===
Using Labor is very similar to previous given examples of Raw and Finished goods; however in this case we add a Labor Type item to the Bill of Materials (Remember Labor types are not an inventory type in Fishbowl; therefore they will not be assigned to an asset account, but instead will be assigned to a Labor account).
[[File:JE_WO_with_labor_and_same_asset_accounts.JPG]]
=== Overhead ===
Overhead is typically used to account for fixed costs or indirect expenses that need to be factored into the cost of a manufactured part. For example, the cost of renting a warehouse, or the cost of paying administrative staff may be split across manufactured parts. Overhead is typically mapped to an overhead expense account in QuickBooks. When overhead is included on a work order, the expense account will be credited and the inventory asset will be debited.
[[File:Overhead transactions.png]]
== Costing Methods==
=== '''Using Average/LIFO/FIFO Costing Method'''s ===
When using Average Cost, LIFO, or FIFO for your Fishbowl Costing Methods the following process takes place when exporting a fulfilled Sales Order to QuickBooks:
[[File:JE_Average_costing.JPG]]
=== '''Using a Standard Costing Method''' ===
When using Standard Costing for your Fishbowl Costing Method an adjustment will be made to the '''Cost Variance''' account when an item is either received at a different cost than the Standard Cost, or is built on a Work Order for a different cost than the set Standard Cost.
'''Cost Variance''' is the difference between an '''actual cost''' and the '''associated budgeted''' or '''estimated cost.''' Negative cost variances are unfavorable indicating that more money was spent to complete a task than was budgeted for the task. Positive cost variances are favorable indicating that work was completed under budget. For example, Cost Variance (CV) equals Earned Value (EV) minus Actual Cost (AC). Or, in other words, '''CV = EV minus AC'''
Upon receiving an item for more or less than the Standard Cost, a bill will be created in QuickBooks, with an adjustment made to the '''Accounts Payable, Inventory Asset''', and '''Cost Variance''' accounts.
[[File:Bill cost variance.JPG]]
== Account types==
The following table shows some of the account types used by Fishbowl.
|}
== Import/Export==
The following mapping information can also be found on the [[QuickBooks#Mapping|QuickBooks]] page.
{{QuickBooks Mapping}}

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