This year we moved away from our hacked together Google Sheets document where we tracked our finances. Our finances were no longer simple and managing them with multiple Sheets was becoming stressful, crazy, and not giving us the big picture we wanted to have. We tried out a few different options and settled on Quickbooks Online (Essentials plan). Having proper accounting software has made our lives much easier, with the notable exception of how we accept payments. The big question is, how do you use Quickbooks and Stripe together?Having proper accounting software has made our lives much easier. Click To Tweet
For the moment we do double the work. We create invoices in Quickbooks and also in InvoiceNinja (here are some other tools we use all the time) . Why? Because we need to accept payments in both USD and CAD. Quickbooks forces us to choose one or the other, which we aren’t prepared to do. This means we can’t use Quickbooks online payments option, and we’re still using Stripe (which we love, by the way) as our online payment option. This is important because the majority of our clients pay us online.
So how do you accept payments in Stripe and account for them properly in Quickbooks?
In hindsight, the solution is obvious and simple, but we were still figuring out Quickbooks and it took us a while (and a lot of Googling) to figure it out.
So for everyone after us who will encounter this dilemma, here’s a simple-to-follow tutorial.
The first thing we have to clear up is the payment workflow:
- You create an invoice somewhere and it’s connected to Stripe.
- Your client pays you and the payment ends up in your Stripe account. Stripe shows you your balance with their transaction fee subtracted.
- If you’re in Canada, the payment is held for 7 days, after which you transfer the money to your bank account.
So how do you make this happen in Quickbooks properly? You follow these exact same steps. Visualize your money moving each time, and re-create each step in Quickbooks.
1: Create Stripe Account in Quickbooks
First you’re going to go into Accounting and you’ll create an Account called Stripe. This account will be a Bank and the detail type will be Chequing.
2: Set up Stripe as a Supplier*
*Supplier = someone you pay money to, as in expenses
Next you will create a new Supplier and also call it Stripe. If you’re in Canada, make sure the currency for this Supplier is set to Canadian, or wherever you are, because Stripe charges you their transaction fee in your home currency regardless of the currency you got paid in.
These are the new pieces you need to create in Quickbooks to make this process work.
3: Create Invoice
When you create an invoice connected to Stripe, you should recreate that invoice in Quickbooks as well.
4: Receive Payment to Stripe Account
When you get paid, you’ll receive payment on that invoice in Quickbooks, and deposit the payment into the Stripe account.
5: Add Payment Processing Fee as an Expense
Once this happens, Stripe subtracts their fee. So now, in Quickbooks, you’re going to create an expense. Click the big plus sign at the top and choose Expense under Suppliers.
The Payee will be Stripe and the Account will be Stripe as well. Add the credit card processing fee and then save the expense.
Now if you go into the Account History of your Stripe account, you’ll notice that a payment came in and then a transaction fee was subtracted. At this time, your Stripe total balance (note: you’ll need to add up both your available and pending balance to find the total balance) should be the same balance in your Quickbooks Stripe account.
Now, in our case, we do not immediately transfer the money from Stripe to our bank account. We transfer all the payments we receive once a month. Whether you choose to do it the way we do or not, the next step is the same.
6: Transfer Money from Stripe to your Bank
You transfer the funds from Stripe to your bank account. Once the funds show up in your actual bank account, here’s what you do:
You click the big plus sign at the top, and select Transfer under Other. You are going to transfer the funds from your Stripe account to your bank account within Quickbooks. Make sure this transfer is the same amount as your actual Stripe payout, and make sure the date is the same.
Now you’ll be able to match the transfer! The money is in your bank account and reflected accurately in your Quickbooks records.
Once that happens, you can do whatever you need to do to the money. For example, once the money is in our bank account, within Quickbooks we separate out GST, a percentage we save for our expenses, a percentage we save for taxes, and a percentage that will be our wages.
We have sub-accounts set up within Quickbooks to keep track of the money we have set aside for Expenses, Taxes + GST, and Wages. This way, we have the organization of money we need without creating a bunch of separate accounts at the actual bank.A simple-to-follow tutorial to manage @Stripe payments in @Quickbooks without breaking a sweat. Click To Tweet
And that’s it! That’s how simple it is to make your Stripe payments show up properly in Quickbooks – or any other accounting software.