Overview
We know how much of a headache accounting can be, which is why we take care of recording the data correctly in QuickBooks. Spend more time thinking about how to develop your business, and less time on fixing your books!
In this help article, we’ll detail a key features of recording deposits as liabilities ensure transactions appear correctly in QuickBooks Online.
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.
What is the Deposit Sync Feature?
Deposit sync is a feature in Housecall Pro that allows synchronising the deposits collected for the jobs in Housecall Pro to be synchronised to QuickBooks Online as liability and released upon issuing the final invoice, instead of recording these as income prematurely.
This feature is being rolled out gradually and is currently not available for Pros who are using progressive invoicing in Housecall Pro.
How to Enable Sending Deposits as Liability
Follow the steps in this section to change how deposits are recorded in QuickBooks - meaning making them appear in QuickBooks initially as liability and applied to the final invoice.
To update the deposit sync preferences in Housecall Pro:
Select Settings from the Housecall Pro navigation bar
Select QuickBooks
Click the Syncing tab
In the new Syncing tab, you will see a new section called Deposit Sync. In this section, you will see two settings:
Record as income - If this option is selected, the deposits will be recorded in QuickBooks as income (this is the current behaviour of the integration)
Treat as liability - If this option is selected, the deposits will be recorded in QuickBooks as liability and reclassified to income when the final invoice is issued and paid.
If you would like to have deposits recorded as liability in QuickBooks Online, simply select the Treat as liability option
Next, confirm your selection by clicking Save.
📌 Note: If you navigate away from the page without saving the changes, the settings will not be changed.
Once the setting is changed, you should see the confirmation at the bottom of the screen
Now you can just use the Add deposit feature on the job to start recording the deposits as liability in QuickBooks and follow the regular flow. Housecall Pro will take care of the QuickBooks part.
📌 Note: If you navigate away from the page without saving the changes, the settings will not be changed.
If there are any connection issues during the attempt to change the trigger setting, the change will not be saved, and you will see the information at the bottom of the screen
How Will the Transactions Appear in QuickBooks?
When you enable recording deposits as liability in QuickBooks Online you will see the following information.
Upfront Deposit Line Item & Liability Account Creation
Once you enable Treat as liability, start with creating first invoice using the Add deposit feature - define the amount you want to collect upfront and send the invoice to your customer.
After the invoice is sent, Housecall Pro will synchronize the invoice to QuickBooks Online. During that first operation, we will automatically create a new dedicated ‘Upfront Deposit’ service in your Products & Services catalogue.
Dedicated item created in QuickBooks to be used for managing deposits as a liability flow in QuickBooks.
The item will be configured with a new, dedicated liability account called Customer Deposits (via Housecall Pro).
Dedicated liability account associated with the Upfront Deposit service item.
Deposit Invoice Creation
Once the invoice is sent to your customer, we will create a corresponding invoice in QuickBooks Online. The invoice will be slightly different from what you can see in Housecall Pro. The invoice contains products and services used in Housecall Pro, but the amount is reduced to zero dollars. The full amount requested as prepayment is associated with the Upfront Deposit line item.
In the example above, the QuickBooks invoice contains products and services used on the job, with the amounts reduced to zero (purple) and a line item which represents the deposit collected, representing the invoice total (teal). Sales tax is not applied.
Final Invoice Creation
When you complete the work and are ready to invoice the final amount, simply create an invoice in Housecall Pro and send it to your customer. Similarly to the previous step, we will take care of managing your QuickBooks transactions.
The invoice in QuickBooks contains the products and services used in Housecall Pro, with the full amount as used on the job. We will also auto-apply the collected deposit to the invoice to reduce the amount due.
In the example above, the QuickBooks invoice contains products and services used on the job with the amounts in full (purple) and line item which applies the previously collected deposit to the invoice in the form of a negative line item, reducing the invoice total (teal). Sales tax is recorded at this point.
Liability Account
The short-term liability account will help you keep track of all the deposits you collect and from whom. The balance will increase whenever a deposit is collected.
You will also clearly see when the deposit was applied to the final invoice. The balance on this account will decrease each time the deposit is applied to the final invoice.
In this example, the deposit collected from the customer increased the balance on the account (purple), and the same deposit applied to the invoice decreased the balance (teal).
FAQs
I am using progressive invoicing. Can I have access to this feature as well?
This feature is being rolled out gradually and is currently not available for Pros who are using progressive invoicing in Housecall Pro. In your account, you will see the following:
I was using simple invoicing and enabled liability treatment; now I want to start using progressive invoicing. Will I still have deposits recorded in QuickBooks Online as liability?
No. If you enabled progressive invoicing, the liability treatment will be switched off automatically.
You will also see a reminder in this section that the settings were changed.
I am using the new HCP feature to request a deposit to be paid when the estimate is approved. Will that deposit behave the same way as described in this document when copied to a job?
Yes, when an estimate is approved and copied to a job, the invoice generated as part of that conversion will follow the same deposit principles and configuration as if it were simply captured on a job. The only condition is that the job needs to be created using the simple invoicing flow for the time being.
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.