Configuring accounts and products
After connecting to QuickBooks successfully, the section under Accounting > QuickBooks > Account Settings will become available to configure.
This section informs Crystal which accounts to use on transactions that it creates in QuickBooks based on sales and inventory data entered by users of the point of sale. When connecting to QuickBooks, Crystal downloaded the current preferences and chart of accounts for the company file. Any available accounts for each configuration will be listed in the dropdown menu for each setting. We’ll walk through exactly how each selected account or product is used by Crystal, as well as what to expect during a sync that includes that information.
I need to create an account or update my company preferences
If you missed configuring an account, want to add a new account to QuickBooks to use in Crystal’s configuration, or want to update a company preference, it’s easy to correct that now. In another browser window or tab, navigate to your QuickBooks company file and create any missing account or change any company preference. Back inside of Crystal, click Refresh settings and Crystal will retrieve the most updated information from your QuickBooks file. Any newly created accounts will appear in their associated dropdown menu.
To sync sales and refund data from the point of sale to QuickBooks, Crystal needs to know what bank account sales should deposit funds to, and from which account refunds to customers should be issued.
As mentioned in the setting up QuickBooks article, most often this should be an account of the type Bank. It is also possible to use an Other Current Asset account here, but it is not recommended. This should be the operating account that the business uses every day to deposit credit card transactions and issue refunds to customers.
When a customer buys a product or service and pays for the transaction immediately with a single payment method, Crystal will create a Sales Receipt when that transaction is synced to QuickBooks, and will deposit the payment to the selected deposit to account
If a customer buys a product or service with two or more payment methods or pays over time for a transaction with multiple payments, Crystal will create an invoice and attach payments for each payment made on the specified date.
On the return and refund side, if a customer requests a refund for cash, check, or to the credit card that was used during the sale on a transaction that was fully paid, Crystal will create a refund receipt to the customer, paid from the same deposit account. On a transaction that was partially paid, Crystal will create a credit memo to cancel out the open invoice and will refund the payment to the customer by check, clearing the accounts receivable balance.
When a customer requests a refund as store credit, a credit memo will be created, closing out any remaining invoice balance and leaving the requested refund amount as a credit on account to be used on a future purchase.
Payables and Receivables
This section covers assigning the Accounts Receivable (A/R) and Accounts Payable (A/P) accounts used by Crystal.
Typically, the default A/R and A/P accounts in QuickBooks are used by most businesses. By default, Crystal will try to use these accounts if no other selection is made. If you have configured an alternative receivable or payable account type in QuickBooks, it will be listed here for selection.
As mentioned briefly in the banking section, the Accounts Receivable account is used by Crystal on the invoices created for sales that are being paid over time, such as on layaways or special orders. Additionally, refunds on partial payments or issued to store credit will use this account to create credit memos on a customer account. Unused store credit will remain on the customer account until it is applied to a future sale, and unpaid invoice balances will appear and be paid down as the transactions progress in Crystal to keep your QuickBooks in lock step with daily point of sale activity.
The Accounts Payable account is used by Crystal when inventory is received via a Merchandise Received receipt. When a point of sale user receives new inventory, they’ll create a Merchandise Received receipt in Crystal that includes the products and their cost, as well as any freight charges included in the bill. The sum of the product charges and freight will be entered as part of a journal entry for each inventory receipt as a credit and a debit, signifying the bill and bill payment by the company. We’ll cover the other details of inventory receipts in the inventory section.
Accounts assigned in this section are used to track inventory asset value and cost of goods sold for inventory in and out of the point of sale.
Both the inventory asset account and the cost of goods sold (COGS) account are default accounts available in QuickBooks that many businesses use to track asset value and cost of products sold and received. By default, Crystal will use these accounts unless some other selection is made. All accounts of Other Current Asset type and Cost of Goods Sold type available in QuickBooks will appear in the dropdown, and will be able to be selected for the preferred Inventory Asset and COGS accounts respectively.
The inventory asset and COGS accounts are used on journal entries created by Crystal. On sales and returns where physical inventory is transacted, Crystal will create a corresponding journal entry to increase or decrease the asset and COGS values in line with the transaction that was performed. The value of asset and cost used is based on the cost associated with the product as it is recorded in Crystal. Similarly, when inventory is received, and a product is recorded on a Merchandise Received receipt, the asset value of the product is recorded on the associated journal entry to adjust the inventory asset account for each product received.
The journal entries related to inventory and cost of goods sold include the description of the item that was associated to the change, and any related transaction link via the transaction ID. If classes are enabled per transaction line, as described in the setting up your QuickBooks article[Link] the associated product category will be used to allow for reporting by class at the product category level. This allows for easy access to inventory evaluation for subsections of the business.
We’ll cover more on why asset and cost value changes are handled through journal entries in the Transaction Line Item section below.
Shipping and freight accounts are assigned here to record the shipping expense related to receiving new merchandise, as well as the shipping income generated by any sales that a customer pays to ship.
The shipping expense account is used on the journal entry for Merchandise Received receipts to record the shipping charge paid to any vendor for product that is ordered by the business. All available accounts of the type Expense and Other Expense in QuickBooks display in the dropdown for selection.
The shipping income account is used on the journal entry for any sales where shipping is included. Most commonly, this would occur with online or ecommerce orders that are shipped to consumers outside of a store location. The payment from the customer is separated out from product charges and recorded as income to the selected account. All available accounts of the type Income and Other Income appear in the dropdown.
Note - Because Crystal is not connected to the shipping processor that labels are printed from, the shipping expense related to orders that are shipped to consumers must be recorded separately.
Transaction Line Items
The selections for Transaction Line Items affect all transactions created by Crystal that include inventory or services, such as sales, returns, and inventory reception.
Crystal uses a generic non-inventory type product for sales of physical inventory, a generic service type product for sales of services and other non-stock (i.e. repairs), and a generic non-inventory type product for returns and refunds. By default, Crystal will create generic product (inventory) sales, services, and return products in QuickBooks the first time a sync is requested that are labeled as Inventory Items, Services Rendered, and Refunds Given, respectively.
The Inventory Items (non-inventory type) product uses the default QuickBooks available income account Sales of Product Income to record income generated on sales transactions for physical inventory sold.
The Services Rendered (service type) product uses the default QuickBooks available income account Services to record income generated on sales transactions for any non-stock line items sold.
The Refunds Given (non-inventory type) product uses the default QuickBooks available income account Refunds-Allowances to record any refunds and returns issued to customers on transactions.
In all cases, the line item description for each line of a transaction is appropriately created to reflect the details of the line item that was purchased or refunded, including the Stock #, name, and description of the related goods. Additionally, if the preference for classes is enabled for per transaction line item classes, the associated category will be assigned as the class where applicable.
Why use generic non-inventory and service parts?
Crystal maintains high fidelity detail for each physical inventory product received and sold, including price, cost, serial numbers, assembled product raw materials, pictures, audit history, and of course quantity on-hand.
Using individual QuickBooks inventory products for each physical product in Crystal duplicates some of this information in QuickBooks unnecessarily. It also forgoes much of the important detail that QuickBooks is not equipped to maintain, such as serial numbers, assembled goods, and product history for unique or consignment pieces.
Further, QuickBooks inventory products create artificial limitations on physical goods. One important limitation is related to when the product was first created or received, a transaction that occurred before that date may not be allowed to be created. Another example is when a product is discontinued or an individual serial number is sold, once the inventory product is included on a transaction it cannot be deleted, causing QuickBooks to become inundated with an extremely long product list including deactivated inventory.
Using generic products for the sync between Crystal and QuickBooks allows Crystal to provide QuickBooks with the pertinent accounting information related to the sales income, cost of goods sold, inventory asset value, and product category class reporting that empowers it’s utility instead of slowing it to a crawl. When any minutiae of a physical good is required, the related details can be accessed in full within Crystal.
What if I want to change the accounts used on generic items? Or create my own generic products for Crystal to use?
The products created by Crystal (Inventory Items, Services Rendered, and Refunds Given) can be accessed in QuickBooks in your products and services list. There, you can edit the details of the product, such as the income account and save the changes. When Crystal uses that product, the selected income account will be used.
Alternatively, if you already have generic products in QuickBooks, or want to name the products something different, simply create your own non-inventory type products for Inventory Items and Refunds Given, as well as a service type product for Services Rendered. In Crystal, click Refresh settings at the top of the configuration screen and the products you created in QuickBooks will be available to select in Crystal in each given section.
Moving on to taxes…
After validating Crystal default selections or making your own selections for any accounts and items, click Save to lock in the current selections. Remember – you can always make changes to this later.
Once you’ve saved your selections the Account settings section will receive a green checkmark, and the tax mapping section will be enabled.