Preparing Your QuickBooks

Last Updated: Jun 18, 2014 02:12PM EDT

Overview


Before you can start using ProductCart Synchronizer for use with QuickBooks® and successfully synchronize inventory and import orders from your ProductCart-powered store into QuickBooks, there are a few steps that need to be taken to make sure that data can be correctly transferred between the two systems.

Please carefully review the following paragraphs. You will be asked to confirm that certain items exist in your QuickBooks Item List, or create new ones. You must prepare your QuickBooks company file before you begin configuring ProductCart Synchronizer in your ProductCart Control Panel. Otherwise, the Setup Wizard will detect that required items are missing and will not allow you to continue.
  • If you are new to QuickBooks and have not yet setup your company file, that's where you need to start. The next section provides some instructions on how to do so.
  • If you have been using QuickBooks, open your existing company file and skip the next section and go to Editing an Existing Company.
 

Creating a New Company


To create a new company file in QuickBooks, start the application and click on Create a New Company. QuickBooks' EasyStep Interview will take you through several, intuitive screens in which you will be asked to provide general company information. Simply follow the instructions on the screen as you fill out information about your company's name, address, basic tax information, and more.

Here are a few things to note as you answer questions during the EasyStep interview:
  • Select your industry - Unless one of the selections from the list is a direct match to your particular business, we recommend that you select: Retail Shop or Online Commerce. In some versions it may say Retail: General. QuickBooks will create your company file after you finish configuring your company. If you receive an error saving your company file make sure the selected folder has adequate file permissions.
  • Tracking inventory in QuickBooks - Make sure to select “Yes” if you want to synchronize inventory between QuickBooks and your ProductCart-powered store.
  • Using accounts in QuickBooks - You will be presented a predefined list of income and expense accounts, which is partially based on the type of business that you chose in the previous step. If you are unsure which accounts you will need or not need, then accept the default settings. We will come back to this later.
  • Preferences - When going through the EasyStep interview, please note the following:
    • Sales Tax. Select Yes. The sales tax option must be turned on in QuickBooks before importing orders from your ProductCart-powered ecommerce store, even if you do not collect sales tax in your business.
    • Sales Tax Information (if prompted)
      • Single or multiple sales tax. In most cases, you'll select the first option.
      • Enter a short name for the sales tax. E.g. “State Tax”.
      • Enter a sales tax description to be printed on invoices. E.g. “California Sales Tax”
      • Enter the name of the government agency to which you pay sales tax. E.g. “California State Board of Equalization”

Complete the rest of the interview by following the instructions on the screen. When you are done, skip the next section and go to the section entitled Adding Necessary Items to the QuickBooks Item List.

This User Guide was written using QuickBooks Premier 2008 as a reference. Menu items and feature names used in this document may be different in earlier or more recent version of QuickBooks. We apologize for the inconvenience that this may create.
 

Editing an Existing Company


If you have just created a new company file, skip this section. If you are using an existing company file, note that even if you don't charge sales taxes, your company file has to be setup to allow for sales taxes. To check that this is the case, open your QuickBooks company and select Preferences from the Edit menu. From the left-side navigation, select Sales Tax. On the window that appears, click on the Company Preferences tab. Look at the following settings:
  • Do You Charge Sales Tax? Select Yes. The sales tax option must be turned on in QuickBooks before importing orders from ProductCart, even if you do not collect sales tax in your business.
  • Sales Tax Items. Make sure you have at list one item listed in the drop-down menu (e.g. “Sales Tax”).
 

Adding Necessary Accounts to the QuickBooks Chart of Accounts


The next step is to review your existing Chart of Accounts to make sure that a number of required accounts are listed. It is important to set up the following accounts in QuickBooks prior to using the ProductCart Synchronizer. This is true regardless of whether you just created a brand-new company file or are using an existing company file.

Carefully review each of the following accounts. Your QuickBooks company file must contain a separate account for each of the following.

If any of the accounts listed below do not currently exist in your QuickBooks company file, you must add them now. Your QuickBooks company file must be setup correctly for you to be able to successfully use the ProductCart Synchronizer.
 
Accounts Receivable
Since you can import your orders as an invoice, you need an Accounts Receivable account in your QuickBooks company file to allocate unpaid invoices to. Select Lists and then Chart of Accounts to see if you already have an Accounts Receivable account in your QuickBooks company file. If not, you can add it in two ways:
  1. ​Automatically by creating an invoice.
    QuickBooks will automatically add an Accounts Receivable account to your company file when you create your first invoice.
  2. Manually
    You can manually add an Accounts Receivable account by following these instructions:
    • Select Lists and then Chart of Accounts.
    • Click on the New button and then select Other Account Types > Accounts Receivable.
    • Under Account Name enter “Accounts Receivable”.
    • Leave the rest of the fields “as is”.
    • Click Save & Close.
 
Income Account
Since all item types in QuickBooks (i.e. the product and services that your company sells) require an Income Account, you need an Income Account in your QuickBooks company file. This account is typically called “Merchandise Sales”. Select Lists and then Chart of Accounts to see if you already have an Income Account in your QuickBooks company file. If not, you must add one now:
 
  • Select Lists and then Chart of Accounts.
  • Click on the New button and then select Income.
  • Under Account Name enter “Merchandise Sales”.
  • Leave the rest of the fields “as is”.
  • Click Save & Close.
 
Cost of Goods Account
This account is only required if your QuickBooks company file is setup to track inventory. Select Lists and then Chart of Accounts to see if you already have a Cost Of Goods Account in your QuickBooks company file. If not, you must add one now:
  • Select Lists and then Chart of Accounts.
  • Click on the New button and then select Other Account Types > Cost Of Goods Sold.
  • Under Account Name enter “Cost of Goods Sold”.
  • Leave the rest of the fields “as is”.
  • Click Save & Close.
 
Asset Account
Select Lists and then Chart of Accounts to see if you already have an Asset Account account in your QuickBooks company file. If not, you can add it in two ways:
 
  1. ​Automatically by creating a new Sales Receipt.
    QuickBooks will automatically add an Asset Account to your company file when you create your first Sales Receipt. It is typically called Undeposited Funds.
  2. Manually
    You can manually add an Asset Account by following these instructions:​
    • Select Lists and then Chart of Accounts.
    • Click on the New button and then select Other Account Types > Other Current Asset.
    • Under Account Name enter “Undeposited Funds”.
    • Leave the rest of the fields “as is”.
    • Click Save & Close.
 
Inventory Asset Account
Since you can export products from ProductCart to QuickBooks as Inventory Parts, QuickBooks needs to know to which account those products should be allocated (inventory on hand represents an asset for your company). This account is typically called Inventory Asset.

Select Lists and then Chart of Accounts to see if you already have an Inventory Asset Account account in your QuickBooks company file. If not, you can add it as follows.
  • Select Lists and then Chart of Accounts.
  • Click on the New button and then select Other Account Types > Other Current Asset.
  • Under Account Name enter “Inventory Asset”.
  • Leave the rest of the fields “as is”.
  • Click Save & Close.
 

Adding Necessary Items to the QuickBooks Lists


The next step is to review your existing Item List to make sure that a number of required items are listed. It is important to set up the following items in QuickBooks prior to using the ProductCart Synchronizer. This is true regardless of whether you just created a brand-new company file or are using an existing company file.

Carefully review each of the following items. Your QuickBooks company file must contain a separate item for each of the following. All of these items must belong to income accounts in your Chart of Accounts.

If any of the items listed below do not currently exist in your QuickBooks company file, you must add them now. Your QuickBooks company file must be setup correctly for you to be able to successfully use the ProductCart Synchronizer.

The actual item names (Item Name/Number field) can be different from the ones listed below, but the Item Type must be the one specified, and the Account must always be an income account.
 
Shipping Charges
Does you company file already have an Item in the Item List that is used for shipping or delivery charges? If yes, make sure that it has the properties listed below, and then skip to the next item. If no, add it now by following these instructions:
  • ​Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Other Charge.
  • As the Item name/Number, enter “Shipping Charges”.
  • As the Description you may enter anything you wish.
  • Leave the Amount field set to 0.
  • Under Tax Code, specify whether this item is taxable or not. Shipping charges are often non-taxable.
  • As the Account, make sure to select an income account. For example, by default QuickBooks creates an account named Sales: Shipping and Handling. If this account doesn't exist, either use another income account or add it to your Chart of Accounts by selecting <Add New> from the Account drop-down on the New Item window.
 
Handling Fees
Does you company file already have an Item in the Item List that is used for handling fees? If yes, make sure that it has the properties listed below and then skip to the next item. If no, add it now by following these instructions. As you know, in ProductCart handling fees can be calculated separately from shipping charges, and therefore you need a separate account in your QuickBooks company file.
  • ​Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Other Charge.
  • As the Item name/Number, enter “Handling Fees”.
  • As the Description you may enter anything you wish.
  • Leave the Amount field set to 0.
  • Under Tax Code, specify whether this item is taxable or not. Handling fees are typically taxed.
  • As the Account, make sure to select an income account. For example, by default QuickBooks creates an account named Sales: Shipping and Handling. If this account doesn’t exist, either use another income account or add it to your Chart of Accounts by selecting <Add New> from the Account drop-down on the New Item window.
 
Reward Points
Are you using the Reward Points feature in your ProductCart-powered store? Note that it might be named differently in your store. Check under Marketing > Manage Reward Points in your ProductCart Control Panel. If you are using this feature, make sure that it has the properties listed below and then skip to the next item. If no, add it now by following these instructions:
  • ​Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Discount.
  • As the Item Name/Number, enter “Reward Points” or the name you use for Reward Points on your online store.
  • As the Description you may enter anything you wish.
  • Leave the Amount field set to 0.
  • As the Account, make sure to select an income account. For example, by default QuickBooks creates an account named Sales: Discounts Given (or Sales Discounts and Allowances). If this account doesn't exist, either use another income account or add it to your Chart of Accounts by selecting <Add New> from the Account drop-down on the New Item window.
  • At the bottom of the window, under Tax Code, enter Tax as the discount is applied before sales tax.
 
Discounts/Gift Certificates
Does your company file already have an Item in the Item List that is used for discounts and/or gift certificates? If yes, make sure that it has the properties listed below and then skip to the next item. If no, add it now by following these instructions:
  • ​Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Discount.
  • As the Item name/Number, enter “Discounts/Gift Certificates”.
  • As the Description you may enter anything you wish.
  • Leave the Amount field set to 0.
  • As the Account, make sure to select an income account. For example, by default QuickBooks creates an account named Sales: Discounts Given (or Sales Discounts and Allowances). If this account doesn’t exist, either use another income account or add it to your Chart of Accounts by selecting <Add New> from the Account drop-down on the New Item window.
  • At the bottom of the window, under Tax Code, enter Tax as the discount is applied before sales tax.
 
Payment/Processing Fees
Does your company file already have an Item in the Item List that is used for payment and/or processing fees? These are fees that you are charging your customers for use of a certain payment option (e.g. $5 if they want to pay by check), not the processing fees that you are paying. In other words, they are an income item on your invoices. This is different from the account that you may also have in your Chart of Accounts for payment processing expenses that your business incurs.

If you are charging your customers a payment/processing fee for use of a certain payment option, make sure that it has the properties listed below and then skip to the next item. If no, add it now by following these instructions:
  • Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Other Charge.
  • As the Item name/Number, enter “Payment/Processing Fees”.
  • As the Description you may enter anything you wish.
  • Leave the Amount field set to 0.
  • Under Tax Code, specify whether this item is taxable or not. Payment fees are typically taxed.
  • As the Account, make sure to select an income account. For example, by default QuickBooks creates an account named Other Income. Of course, you could separately create a new income account called “Payment and Processing Fees” or alike and reassign this item to it.
 

Adding Necessary Sales Tax Items

 
Bypassing QuickBooks Tax Calculation
Depending on which tax settings you use in ProductCart, tax calculation in QuickBooks may need to be bypassed and taxes may need to be added to an Invoice or Sales Receipt as a “line item”. That is: there are cases in which ProductCart must calculate and display taxes in a certain way, and QuickBooks should not be allowed to automatically calculate taxes on the order as it is transferred from ProductCart.
 
An Example: Store Using a Tax Data File
An example will help you understand this issue: if you use a tax data file in your ProductCart-powered store, sales taxes will be calculated differently depending on the customer's shipping address. A different tax rate picked from a list of possibly dozens of tax rates will be used depending on the customer's “ship to” address. These different tax rates typically do not exist in QuickBooks, where a Sales Tax Account item is associated with just one tax rate (e.g. 8.25%).
 
Required Sales Tax Items
In this and other scenarios, ProductCart Synchronizer will export tax information for the Web order as an item listed on the Invoice or Sales Receipt, below other items (e.g. below products purchased, shipping charges, etc.), instead of letting QuickBooks automatically calculate sales taxes.

To properly handle these scenarios, you will need to create two different Sales Tax Items in your QuickBooks company file. Note that the names of the Sales Tax Items are used by ProductCart Synchronizer and therefore must be exactly the ones mentioned below. Both Sales Tax Items must have a 0.00 rate.
 
  1. ​Line Item Tax: The first Sales Tax Item must be called “Line Item Tax”
    • Select Item from the Icon Bar or Item List from the Lists menu.
    • Click on the Item button at the bottom of the page and select New.
    • As the Item Type, select: Sales Tax Item.
    • As the Sales Tax Name, enter “Line Item Tax”.
    • As the Description you may enter anything you wish.
    • As the Tax Rate enter 0.00
    • Under Tax Agency, specify the vendor (tax agency) associated with this tax item.​
  2. Order Level Tax: The second Sales Tax Item must be called “Order Level Tax”
    • Select Item from the Icon Bar or Item List from the Lists menu.
    • Click on the Item button at the bottom of the page and select New.
    • As the Item Type, select: Sales Tax Item.
    • As the Sales Tax Name, enter “Order Level Tax”.
    • As the Description you may enter anything you wish.
    • As the Tax Rate enter 0.00
    • Under Tax Agency, specify the vendor (tax agency) associated with this tax item.
 

Adding Necessary Generic Customer Account


​At least one generic customer account is required for orders to be exported. Does your company file already have a Customer in the Customer Center? If yes, skip to the next item. If no, add it now by following these instructions:
  • ​Select Customer Center from the Icon Bar.
  • Click on the New Customer & Job button and select Customer.
  • Fill in all required fields.
  • Note: This is a generic customer account. You may name the customer Generic Customer Account or Web sales, etc.
  • Click OK.
 

Adding Necessary Generic Item or Service


At least one generic item is required for orders to be exported. Does your company file already have an item (e.g. Service, Inventory Part, Inventory Assembly, or Non-Inventory Part)? If yes, skip to the next item. If no, add it now by following these instructions:
  • ​Select Item from the Icon Bar or Item List from the Lists menu.
  • Click on the Item button at the bottom of the page and select New.
  • As the Item Type, select: Service, Inventory Part, Inventory Assembly, or Non-Inventory Part.
  • As the Item name/Number, enter the item's SKU (part number) as it appears in your ProductCart-powered store.
  • As the Description you may enter anything you wish. This is the name of the product or service.
  • Fill in all remaining fields.
  • Under Tax Code, specify whether this item is taxable or not. Shipping charges are often non-taxable.
  • Make sure to select all the required accounts. For example, all Inventory Parts require an income account. By default QuickBooks creates an income account named Merchandise Sales. If this account doesn't exist, either use another income account or add it to your Chart of Accounts by selecting <Add New> from the Account drop-down on the New Item window. You may want to create a new income account for Online Sales.
 

Back-Up Company File


We strongly recommend that you backup your QuickBooks company file before using the ProductCart Synchronizer for the first time.

To protect your data, regular backups should not be stored on your local computer, but rather on a separate, back-up storage unit (e.g. a different computer, a portable hard drive, a flash card, etc.).


To perform this task
  1. Open the company file you want to back up.​
  2. Go to the File menu and click Save Copy or Backup to open the backup wizard.
  3. Click Backup copy, click Next, and then click Local backup.
  4. If you haven't already done so, click Options to set your backup defaults and choose a location on your hard drive to store the temporary backup. Click OK.
  5. Click Next.
  6. Click Save and then click Next.
  7. (Optional) If you want to change the name or location that QuickBooks suggests for the backup file, type your changes in the File name field and click the Save In drop-down arrow to select another location. Do not change the .qbb filename extension.
  8. Click Save to start the backup.
  9. QuickBooks verifies the integrity of your company file based on the backup defaults you set, temporarily closes your company file, and then creates the backup.
  10. When the backup is complete, QuickBooks displays a message showing the location of the backup file. Click OK.
 

Next Step


Installing the ProductCart Synchronizer on your web store.
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