We understand how much of a headache keeping your books accurate can be. That’s why we are taking care of reconciling your Invoice Funding 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
When a selected invoice is funded via Invoice Funding 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 a selected invoice is funded, you'll see a new liability account in your Chart of Accounts.
Checking Account
As mentioned above, when a selected invoice is funded, 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 $3.00 when the invoice is funded and the advance is paid out.
In this example, a Pro's checking account balance is increased by $3.00 when a $3.00 invoice is funded. The newly created 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 $1,000.00 when your advance is paid out. 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 $2.83 left to be repaid after $0.17 total repayment against the advance amount
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
Invoice funding is offered by Housecall Pro directly; therefore, when you take the invoice funding, the vendor used to support the transactions will be Housecall Pro Vendor which is used, for example, when credit card fees are processed.
Advance Repayment
When you take payments through HCP, repayment towards the Invoice Funding advance will get automatically and seamlessly updated in your newly created QuickBooks Online accounts. 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).
⚠️ At the moment, due to technical limitations, the advance pay-outs and repayments are tracked in individual deposits. Engineering is actively working on merging these details into the global deposit. This document describes the desired end state.
Example:
In this screenshot, a $3.00 invoice funding is being paid out to the Pro.
In this screenshot, $0.06 is being paid towards the invoice funding advance taken. When this deposit goes through, the Pro’s invoice funding liability account balance will decrease by $0.06, and the invoice funding fee expense account balance will increase. In this section of a deposit, there may be additional line items for things like credit card processing fees, but these are independent of any repayment calculations.
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 use the invoice funding offer multiple times?
It is possible to draw funding for multiple invoices and 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.
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 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 your 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.