Setting Up QuickBooks

Learning Outcome

On successful completion of this lesson, students will understand how EVE can be used to export sales data to QuickBooks.

Lesson

Introduction to QuickBooks

EVE can export sales data to the QuickBooks accounting program from Intuit.

EVE exports data by 3 categories:  profit centers, payment method, and tax band.  When the export is run, EVE first groups together all sales information based on the profit centers of each item sold in the period.  It then groups together all payments in the period based on the payment method. Finally, it groups together all tax items in the period based on the tax band.  You can link each profit center, payment method and tax band to those accounts you have pre-defined in QuickBooks.  When data is exported, it is added as a number of general journal entries in QuickBooks.

QuickBooks expects all sales data to be imported as a series of “transaction” lines.  Each transaction line will have one or more “distribution” lines associated with it.  The sum of the values on the distribution lines will balance the value on the associated transaction line.  Each transaction line and each distribution line will reference a (usually different) QuickBooks account.

Note: a QuickBooks “transaction” in this case is an import record and should not be confused with an EVE transaction (i.e. an invoice, refund, etc) – for example, a QuickBooks “transaction” may represent the sum of all diving equipment sales on invoices in the period all grouped together into one line for import.

For example, imagine an invoice is created for a Wetsuit and a Course.  The Wetsuit costs $150 and the course costs $300.  Let us assume that the Wetsuits stock type is in a Diving Equipment profit center which is linked to a Product Sales account in QuickBooks and the Courses stock type is in a Course Revenue profit centers in EVE which is linked to a Dive Lessons account in QuickBooks.

Imagine the customer paid $200 on his visa card and $250 in cash. Let us assume that the Cash payment method has been linked to a Cash account and the Visa payment method has been linked to a Credit Card account in QuickBooks.  In this case there is no way for EVE to tell how much of the cash amount went towards paying for the Wetsuit and how much went towards paying for the Course.  The same applies to the Visa payment.  The way that EVE produces its QuickBooks transaction and distribution lines is as follows:

• The transaction line for all sales information credits an accounts receivable account. The associated distribution line debits the appropriate account (governed by the Profit Centers -> account link) by the same amount.
• The transaction line for all payments debits the same accounts receivable account. The associated distribution line credits the appropriate account (governed by the payment method -> account link) by the same amount.

In the example given above:

The accounts receivable account acts as a “storage area”.  In each transaction/distribution combination one half of the equation credits or debits the accounts receivable account and the other half credits or debits a different account by the same amount.  The end balance on each account in this example is shown below: