We understand how much of a headache keeping your books accurate can be. That's why we are taking care of reconciling your Pipe Capital advances payout and repayment in QuickBooks Online, so that you can focus on running your business and not on manually tracking the repayments.
⚠️ DISCLAIMER: Nothing in this article or related to your QuickBooks Online integration with Housecall Pro is intended to be accounting or tax advice. We highly recommend you work with an accountant for any tax or accounting questions, including any related to this product. There may be slight discrepancies between what you see in your Housecall Pro dashboard and what you see in QuickBooks Online.
Advance Payout & General Ledger Account Creation
Once your application for advance with Pipe Capital is approved and funds are paid out, we will increase the balance of your default checking account by the amount of the advance.
We will also automatically create a new account in QuickBooks Online's Chart of Accounts - a liability account for recording the amount of your advance (and how much you have left to pay against the balance).
When your application for advance with Pipe Capital is approved, you'll see a new liability account in your Chart of Accounts.
Checking Account
As mentioned above, when funds are paid out by Pipe Capital, we will increase the balance of your default checking account by your advance amount.
If we use the example above, the balance of your checking account would increase by $2.00 when the invoice is funded and an advance is paid out.
In this example, a Pro's checking account balance increases by $2.00 when a $2.00 advance is paid out. The vendor and liability account associated with this deposit are outlined in purple and teal, respectively, in the example for illustration purposes.
Liability Account
This short-term liability account will help you keep track of how much of your loan amount remains to be repaid. The balance will decrease as you repay the advance, and increase as you fund more invoices.
If we use the example above, the balance would be $2.00 when your advance is paid out and $5.00 when additional funds are released. The balance would be $0 when you are done repaying your advance.
In the example above, the newly created liability account had an initial balance of $3.00. The account shows $5.00 left to be repaid after an additional $2.00 advance was taken.
Expense Account
The expense account will help you keep track of how much of the fee has been collected. The balance will increase as you repay your advance.
In this example, as the advance repayments happen, the balance on the fee account will increase.
Vendor
When your advance is paid out, we will create a vendor called Pipe Capital (via Housecall Pro) - Vendor.
This vendor will be associated with both the loan payout and any repayment bank deposits.
At the time of loan disbursement, you’ll see this newly created vendor, Pipe Capital (via Housecall Pro) - Vendor, pop up in your QuickBooks Online account:
Pipe Capital (via Housecall Pro) - Vendor in the list of Vendors in QuickBooks.
Advance Repayment
When you take payments through HCP, repayment towards the Pipe Capital advance will get automatically updated in your newly created QuickBooks Online accounts.
⚠️ At the moment, due to technical limitations, the advance payouts and repayments are tracked in individual deposits. Engineering is actively working on merging these details into the global deposit. This document describes the current state and will be updated once the changes are done.
You will see that the amount received in your bank account matches the amount specified in the My Money page in Housecall Pro as a payout amount.
Example:
In this example, we can see that the payout amount displayed in Housecall Pro exactly matches the amount Pro received in their bank account.
However, if you look at the deposit total created automatically in QuickBooks Online, it will slightly vary from the amount specified in the My Money page in Housecall as a payout amount. This is because the processing of your Pipe Capital repayment has not been completed yet. This usually takes a couple of days.
In this example, we can see that the amount received does not match the amount of the initial, main deposit created in QuickBooks.
Once the processing is completed, additional negative deposits are created in QuickBooks. You will see line items in your bank deposits detailing how much of each payment you take went to repayment of the liability (primary advance amount) and the expense (processing fees amount) for each of the repayment events.
In this screenshot, we see an additional deposit that indicates that $0.55 is being paid towards the Pipe Capital advance taken. When this deposit goes through, the Pro’s Pipe Capital liability account balance will decrease by $0.55. In the same deposit the we can also see that the Pipe Capital fee expense account balance increased by $0.08.
⚠️ At this point, there may be problems with matching the deposits with your bank feed information. It can be fixed by adding the details from the additional, negative deposits into the original, main deposit for the day. If you decide to modify the deposit, please make sure you right accounts for each of the lines Pipe Capital (via Housecall Pro) and Pipe Capital (via Housecall Pro) - Fees respectively.
Special Cases & FAQ
What if I accidentally delete an account that was created for me?
The account will be recreated.
How should I report these funds on my taxes?
Tax reporting is often dependent on your specific situation, so we encourage you to talk with a tax advisor to ensure appropriate accounting and tax reporting.
Why are my repayments separated into two accounts (liability account and expenses account)?
This is to reflect the amount paid against your invoice funding advance and the amount paid toward the processing fee. Please discuss the appropriate accounting treatment with an accountant or tax advisor.
Why is my liability account of type “Other Current Liabilities” (aka a short-term loan)?
This is because the anticipated repayment period for any of the invoice funding advances is less than 12 months.
What if I apply for or draw Pipe Capital funds multiple times?
It is possible to draw funding multiple times within the available limit. Each time you draw additional funds, the balance in the liability account will increase.
ℹ️ We will NOT create new liability and new expense accounts for recording advances, repayments, and collection of fees. Repayment of the advance and fee collection will populate to the same account we created with your first advance.
I made a manual payment to Pipe. Does this get automatically reflected in QuickBooks Online?
No. At the moment, reconciliation of manual repayments against your advance is not automatically recorded in QuickBooks Online. You would need to create a proper manual entry in your books to reflect the date, the amount, and the accounts involved in the transaction.
What if I connect to QuickBooks Online after taking an invoice funding?
Unfortunately, your loan payout and repayment will not automatically reconcile if you connect your HCP account to QuickBooks Online after taking an invoice funding. Please discuss with an accountant or tax advisor how to reflect this in your QuickBooks Online account.
📌 Note: Alternatively, you can reach out to Housecall Pro Support and request to generate a support ticket for engineering to retroactively push the missing transactions.
⚠️ This should only be done IF you have NOT yet taken any actions together with their accountant. If you have already taken actions with an accountant, a retroactive push will only multiply the transactions in QuickBooks, which should be avoided at all costs.
Need help or have questions?
We're here for you! Chat with Support using the Blue Chat Bubble in your Housecall Pro account, or give us a call at (858) 842-5746.