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How to Configure the QuickBooks® Integration - Part I


Introduction


The goal of this document is to guide you through the onboarding process for adding the QuickBooks Online integration to a Finale Inventory account. We will cover the basics of what the QuickBooks integration is capable of doing and if you want to configure Finale Inventory to sync sales revenue to your QuickBooks Online account. This may require some Q&A with your bookkeeper or CPA. It is important that you understand what Finale Inventory will and will not push to QuickBooks Online. There are some key decisions you need to make on how you want to handle your sales revenue information syncing to your QuickBooks online account. It is very important that you read over this entire document before you dive in and activate your QuickBooks Online integration. Be sure to take notes and formulate a plan for what information in Finale Inventory you want to sync to your QuickBooks online, after you have your game plan and you have read this entire guide you are ready to proceed with the prerequisites checklist and begin the onboarding process to configure the integration.

Please make sure you make a complete backup of your QuickBooks Online account prior to enabling the integration on your Finale Inventory account. Once Finale Inventory begins to sync/push transactions into your QuickBooks Online account there is no undo or bulk cancellation/reversal ability. The backup will provide you with recoverability if you make a mistake.


Overview of the Steps to Integrate with QuickBooks Online

  • Be aware of changes that may be required to your QuickBooks Online account in order to proceed

  • Ensure you have a properly configured Finale Inventory account

    • Accurate average cost

    • Accurate stock levels

    • Proper accounting practices

    • Correctly configured chart of accounts

  • Add the QuickBooks Online integration to your Finale Inventory

    • Connect to your QuickBooks Online account

    • Leave the integration disabled until go-live ready

  • Determine what features to enable/disable for syncing data with your QuickBooks Online

    • Enable/Disable Asset valuation/COGS Syncing

    • Enable/Disable PO/Bills/Payments

    • Enable/Disable Income/Invoices

    • Enable/Disable Additional fields to sync with QuickBooks Online For Invoices

    • Enbale/Disable Consolidations - Summarized journal entries

    • Configure account overrides for products/sale sources/reason codes/integrations

    • Enable/Configure Class mapping

  • Map your Finale Inventory general ledger accounts to your QuickBooks Online accounts

  • Choose your integration start date

  • Make manual journal entry for Inventory valuation in your QuickBooks

  • Enable the QuickBooks Online integration in Automatic mode

  • Watch for synchronization errors or warnings


Understand What Data Syncs to QuickBooks today

Financial data in Finale Inventory centers around the two sides of inventory flow, buying, and selling. Thus, purchase orders and sales orders are the primary transactions in Finale Inventory that contribute to the bulk of financial accounting entries to the general Ledger.

There are other transactions that mostly adjust stock levels like Stock Takes (Cycle counts), Stock changes, and builds that will also affect the general ledger. Transfers normally do not affect any financial data since they just move the inventory from one location to another.

If we split these activities into Purchasing, Selling, and adjustments, we can explain the data that will sync to QuickBooks as follows:

  • Bills - How much you owe a supplier/vendor for inventory you purchased(Accounts Payable)

  • Inventory value - The value of the inventory that you received(QoH)

  • Sales (Revenue) - How much you collected from your customers for inventory you sold

  • Cost of Goods Sold (COGS) - The cost of the inventory when you shipped what you sold

Currently, Finale Inventory only creates four types of transactions in QuickBooks: Purchase orders, Bills, Invoices, and Supplier Credit Memos.

We can push Purchase orders created in Finale into your QuickBooks Online account. Purchase orders in Finale Inventory are the central hub for inventory asset valuation and costing. They contain all financial costs for how the inventory you buy from your suppliers will be valued. If you allow Finale to push Purchase orders into your QuickBooks it allows you to use an alternate Bill workflow where you can create a Bill in your QuickBooks attached to the Purchase order that Finale pushed into your QuickBooks. We will import this QuickBooks-created Bill back into Finale and attach it to our Purchase order in Finale.

We sync Bills created in Finale into your QuickBooks Online account. Bills represent what you owe to your vendors for the inventory you acquire using Purchase orders.

We also support the creation of a Supplier credit memo in Finale Inventory or QuickBooks Online and it will sync. You will apply the Credit to a Bill in your QuickBooks online that we sync with, and it will be communicated to Finale Inventory. You may create the Credit Memo in either software, but you may only apply the credit in your QuickBooks Online.

We sync Invoices created in Finale into your QuickBooks Online account. Invoices represent sales revenue you are owed by your customers when using Sales orders.

We support the syncing or importing of bill payments made to Bills in QuickBooks Online back into Finale Inventory on a Bill by Bill basis, meaning a payment made in QuickBooks Online may be made against one single bill or many separate bills for the same vendor, all can be synced back to Finale from QuickBooks Online and mark the Finale Inventory Bill as paid.


Payments created in QuickBooks Online will only sync back into Finale if they were attached to a Bill that is associated with a Bill OR a PO created in Finale Inventory.


We create ledger entries for asset value and COGS adjustments directly to their corresponding chart of accounts in your QuickBooks Online chart of accounts.

We create ledger entries for all inventory variance transactions(Stock Take or Stock Change) are pushed as ledger entries as well, to the inventory variance expense account or the specific expense account configured for the reason code override.

We create ledger entries for all shipments in Finale on Purchase orders and Sales Orders. We use a clearing account for the purpose of understanding the difference in timing between the action of receiving inventory and paying for it(AP) and the action of shipping sales orders and getting paid(AR).

We have a consolidated transaction feature for the Asset/COGS and Income/Clearing ledger entries. Consolidated transactions are a great way to reduce the number of ledger entries to your QuickBooks Online account. Current options support a daily summarized transaction per sales source(channel) that you must manually convert from a Draft stats to a Posted status in order for it to be synced to QuickBooks Online. We also support options for weekly and monthly consolidated time periods as well as auto-posting of the transactions 24 hours past transaction time.

IMPORTANT: At the present moment in time, payments created/made in Finale Inventory on Bills and Invoices are recorded in Finale Inventory’s general ledger, but they should NOT be synced into your QuickBooks. Make sure they do not add or record any payments against Bills or Invoices in Finale Inventory if they are syncing them into their QuickBooks. These payments created in Finale will cause a GL entry to possibly hit a ledger account in your QuickBooks but it will not be an official payment of the Bill or Invoice in your QuickBooks. All payments for Bills and Invoices should be made in your QuickBooks.

Suppliers, Customers, and Products are synced and pushed into QuickBooks when any Bill or Invoice has been posted that contains any of them. No Product, Customer, or Supplier is pushed from Finale Inventory to Quickbooks until they have been used on a PO, Bill, Suplier Credit memo, or Invoice. Supplier and customer data flows from Finale to QuickBooks. If the user updates data in their QuickBooks for a Customer or Supplier it will not be updated in Finale Inventory.

Duplicate Customer or Supplier names may get created in QuickBooks from Finale Inventory. The most common reason for duplicates is that the Supplier or Customer name in QuickBooks is not exactly the same name, spelling, or capitalization as it is in Finale Inventory. Therefore Finale creates a new entity in Quickbooks. When this happens you can use the Merge feature in Quickbooks to consolidate the two back into one.

You must merge the existing Customer or Supplier into the new entity that Finale Inventory created in your Quickbooks Online account. After it is merged you may edit the name of the entity Finale Inventory pushed into Quickbooks to match the old or preferred spelling.

Finale Inventory also supports syncing some order and invoice field data into custom fields on your QuickBooks Online Invoices. Helpful information like sales rep, fulfillment options, order source, or customer PO number.


Be Aware of Changes You May Need to Make to Your QuickBooks Online Account

  • You do not need any of the inventory management features of QuickBooks Online. All you need is QuickBooks Online Essentials at a minimum. You may use the Plus or Advanced versions as well, but you will not need the inventory features. They will essentially be turned off.

  • No Inventory items - When using Finale Inventory to sync information to your QuickBooks Online account we will sync the Product id to your QuickBooks as a Non-Inventory item. If it already exists as an Inventory item you must make it Inactive. Finale Inventory does NOT use the SKU field in your QuickBooks. We use the Name field. When we create items in your QuickBooks Online account we will use the Product ID from Finale Inventory to be the Name field and the SKU field value. We put the description field from Finale into the sales description field in QuickBooks. While we set the SKU field to the same value as the name field, we do not reference or use the SKU field in QuickBooks. If you currently have inventory items in your QuickBooks you will need to make them all Inactive. When you do your QuickBooks will write down the asset value to Cost of Goods Sold. Before you go live with the Finale Inventory QuickBooks integration you will need to make a manual journal entry to put the inventory asset value back.

  • No stock levels or quantity on hand - Since Finale Inventory is the master of your inventory stock levels and value we will not push or sync stock quantity to QuickBooks. We push the stock value of all of your quantity on hand to your inventory asset account in QuickBooks.

  • Manual entry must be made to sync up asset valuation - one of the last steps, before you go live with the Finale Inventory QuickBooks integration, will be to sync up your QuickBooks Online asset value with your Finale Inventory asset account valuation. Since Finale Inventory is the master of your inventory valuation you will need to make sure your QuickBooks asset valuation is exactly the same as the Finale Inventory asset valuation for the day before your desired start date. For example, if you were going to start syncing information from Finale Inventory to your QuickBooks on August 1st, 2023, this would be considered your Start date in Finale’s QuickBooks Integration settings. This also means that Finale would only send transactions with a date of 8/1/2023 and later to your QuickBooks. Finale does not push or sync an opening balance to your QuickBooks ledgers. We only sync transactions. Therefore you need to make sure your inventory asset account balance in your QuickBooks matches Finale Inventory’s inventory asset account balance for the day before we start pushing transactions into your QuickBooks account. To do this, you go to Finale Inventory’s inventory asset account in the general ledger and see what the ending balance was on 7/31/2023. You take that balance and compare it to your ending balance in QuickBooks for 7/31/2023. If there is a difference, you calculate what you need to do to make it match Finale Inventory’s balance and make a manual journal entry in your QuickBooks to make it match Finale for the end of the day on 7/31/2023.

  • Use of clearing accounts - Finale understands the difference in time between you ordering something and when you receive it and when you pay for it, and likewise when someone orders from you and you ship it and you get paid. Thus, Finale uses a purchase clearing account and a sales clearing account. These two accounts will be used for the two accounts on the non-inventory items we create and manage in your QuickBooks Online account.


  • Be careful of 3rd party tools that use Inventory items or non-inventory items. Finale must be the master. As seen above, if you have other software connected to your QuickBooks account they may interfere with our management of your inventory items. You need to make sure they do not change the Income/Expense accounts from what you have set the mapping to in Finale Inventory.

  • Consider using A2X for eCommerce revenue - Finale Inventory can push revenue in the form of Invoices into your QuickBooks online. This means that in order to get eCommerce revenue from Shopify, Amazon, Etsy, eBay, etc. from Finale Inventory into your QuickBooks you must configure the integrations in Finale Inventory that pull the sales into Finale to automatically create Invoices in Finale Inventory when you ship the orders. This means that you will have a single invoice for each and every eCommerce order being pushed into your QuickBooks. This will work fine as long as you do not exceed about 3000 orders per month. It is a BEST PRACTICE to not do this. The best practice is to only put one transaction into your QuickBooks for each selling channel based on the payout statement from that channel. This is what A2X is designed to do.

  • Configure Finale Inventory to push/sync asset valuation, bills(accounts payable), COGS, and manual/B2B sales in the form of invoices to your QuickBooks Online. Enter your revenue from your eCommerce sites using products like A2X, Synder, or directly from the backend of the selling channel to your QuickBooks with a connector that consolidates the sales to summarized entries that relate to your payouts from those channels.

  • A2X is not required. Many companies do what A2X does themselves, manually. They simply go to the back end of the marketplace and get the details of the payout statements and enter them into their QuickBooks Online account. This takes care of the revenue/sales information from their eCommerce sites. Finale Inventory’s integration is configured to push asset valuation, bills/AP, and COGS into their QuickBooks.


How to Control What Syncs from Finale Inventory to Quickbooks

There are two basic ways to control what syncs to QuickBooks from Finale Inventory.

  1. The Chart of Accounts mapping

  2. Quickbooks Online Integration settings


By not mapping certain accounts on the Chart of Accounts page, you will prevent any data from syncing to QuickBooks related to those accounts/transactions, even if the integration is enabled and in Automatic mode.

There is a difference between not mapping the account and choosing Exclude transactions for the account. If you do not map an account at all to a QuickBooks account you will receive error messages and repeated attempts to sync the information that is using the unmapped account in Finale Inventory. If you have a reason to not send specific information to your QuickBooks account you can choose to “Exclude the transactions for the account.” This will prevent error messages and repeated attempts to sync information from Finale Inventory to your QuickBooks account that you fully intend to avoid.

Remember that journal entries to ledger accounts involve two sides, a debit, and a credit. If you fail to map one account or exclude a single account, you will be preventing any transactions from syncing that involve the two accounts together. For example, Sales shipments will make ledger entries in the asset account and COGS account. If you have not mapped one of those accounts but have mapped the other, you will not see any transactions sync to your QuickBooks for COGS, like sale shipments.

In the QuickBooks Online subsection on the Accounting tab in Application settings, you will see choices you can make for filtering which transactions are synced and how information is synced to Quickbooks. Most of the default will be used in most cases.



How to Control Which Chart of Account is Used When Syncing Information to QuickBooks Online

Finale Inventory has a set of default charts of accounts that all items and transactions are configured to use when you first create your Finale Inventory account. These accounts are located in the Application settings, Accounting tab.

The use of the desired account for transactions must be made prior to the transaction being recorded in Finale Inventory. If you have been using Finale Inventory and have any stock transactions already committed in your Finale Inventory account, they have already used the default settings and accounts. Adding and changing the default accounts will only affect new transactions committed after the change.


In order to configure account overrides you must first create the account in the Finale Inventory chart of accounts list using the Create new account button. Then will be able to choose this new account when making setting changes below.

For instance, if you wish to have Finale Inventory push Sales income into your QuickBooks Online using specific accounts per the selling channel, you would first create the new accounts, one for each sales channel, and then make the setting changes to use the new accounts you just created. Make sure the new accounts you create are using the appropriate type for the purpose of the account.


There are five main areas that have settings to control the accounts that Finale Inventory will use for transactions written to the general ledger in Finale Inventory and thus, transactions that get synced into your QuickBooks online.

  • Individual product id(SKU) overrides - Product tab in application settings

  • Receiving/Billing transactions - Purchasing section on the Accounting tab in application settings

  • Shipping/Invoice transactions - Selling section on the Accounting tab in application settings

  • Purchase/Sales order adjustment overrides - Purchasing/Selling tab in application settings

  • Inventory/Integration reason code overrides - Inventory tab in application settings


Following are details on the areas:


Individual Product ID (SKU) Overrides


Application settings, Products tab - each product id in Finale Inventory can be associated with only one chart of account for Inventory asset, Income, and COGS. By default, all product ids will use a standard set of default accounts already created in Finale Inventory. If you wish to have different accounts for different products like raw material type products be tracked in a Raw material asset account and finished goods inventory item be tracked in a Finished Goods asset account, you will need to enable the Use accounting fields default account overrides.




Once the Override feature is enabled you go to the product details page for each product id to set the accounts to use for Asset, Income, and COGS.



These override accounts may be imported in bulk through the product import screen.

Some of these accounts can also be overridden when syncing Income/Clearing/COGS entries to QuickBooks only in the Selling section defaults, sales source overrides. See below.


Receiving/Billing Transactions

Application settings, accounting tab, purchasing section - Purchase shipments and bills can be configured to use various default accounts.



Shipping/Invoice Transactions

Application settings, accounting tab, Selling section - Sales Order shipments and invoices can be configured to use various default accounts. There are also Sales Source overrides that can be configured to be used for grouping Income/Clearing/COGS entries to your QuickBooks Online.


Be sure to scroll down to see the Source account overrides for Sale Sources. You can use the Option name which will be the Sale Source like Shopify®, Amazon®, eBay®, etc., to configure the use of specific Income/Clearing/COGS accounts per selling channels.


If you do not see the Option name for your selling channel/marketplace or sales source, it is most likely due to the sales integration not being added to Finale Inventory. When you add selling or marketplace integration to Finale Inventory’s Integration page, the sales source will automatically be created. If you wish to create your own sales source fields, go to application settings, selling tab, and see the source section on the left.



Purchase/Sales Order Adjustment Overrides

Application settings, Purchasing/Selling tabs, Adjustments sections. Purchase orders and Sales orders can be configured to have “below the line” adjustments that can be discounts, fees, or taxes. If these adjustments are not allocated they may be configured to override the default adjustment account from the Application settings, Accounting tab, Purchasing/Selling section defaults. Go to Application settings, Purchase/Selling tab adjustments section, and choose the appropriate credit/debit account override for the Adjustment name. Note, adjustments that are using an allocation method cannot be overridden and will be grey with no arrows for dropdown choices.


Inventory/Integration Reason Code Overrides

Application settings, Inventory tab, Variance reason accounts. Whenever a change to inventory stock levels is made outside of a Purchase order or Sales order the transaction is considered to be a variance. This variance to inventory stock level will have a positive or negative impact on the asset valuation. Finale Inventory allows you to establish reason codes for meaning changes to your inventory. Each reason code may be assigned to a specific chart of account for a purpose of tracking the adjustment to your inventory. The Account type for this account may be one of the following types: Other expense · Other current liability · Other current asset



Be Aware of the Financial Process Flow

Make sure that you and your financial people understand that Finale Inventory does not sync all actions in Finale Inventory to QuickBooks and that we use clearing accounts.

What is a clearing account? A clearing account is a temporary balance sheet account that is used to hold amounts or costs for items while other events or activities take place, at which point the funds are moved to their final and permanent account. Finale Inventory has a clearing account for Purchases and for Sales. Finale puts funds into the clearing account when the shipment occurs and waits till someone creates a Bill or Invoice for the shipment to move the funds to the final destination account, either Accounts payable or Accounts receivable.


Finale Inventory allows you to configure multiple Clearing, Income, and COGS accounts for use by each sales source or selling channel you have connected to Finale Inventory. This is not the default configuration. You must add the specific accounts for each sales source and update settings in Finale to use each account respectively and map them to your QuickBooks Online account.


See the pictures below that explain the key actions in Finale Inventory that lead to financial transactions in the ledger. Notice the Credit and Debit in the clearing accounts for the time between the shipment and the Bill or Invoice.


Purchase Order Workflow



Sales Order Workflow




Remember that Finale Inventory uses financial clearing accounts for both purchase orders and sales orders. This is different than Quickbooks’s normal chart of accounts configuration and process flow. QuickBooks Online does not use clearing accounts. It will recognize revenue immediately when the Invoice is created because they do not know when it was shipped. So, QuickBooks Online will hit the Asset account and Accounts receivable account immediately when the Invoice is posted, not using any clearing account. Because Finale Inventory knows when orders/items are shipped we recognize revenue when the items are shipped, thus we use a clearing account to hold the revenue between the time the order is shipped and the Invoice is created. This allows Finale Inventory to know what back-ordered sales or deferred revenue are. This is also true on the Purchase order side. Finale uses a separate Purchase Clearing account. This should normally be received very positively by your CPA/Bookkeeper.

To explain this flow more easily, when a sales order is created in Finale Inventory, regardless of whether it has been paid or not, there is no revenue reported to any chart of account. Finale Inventory waits until a shipment occurs to declare revenue(Sales Income), and then later that revenue is financially reconciled with an invoice. So, when the sales order is created and committed to in Finale Inventory, the sales revenue is not entered into Sales Income in the general ledger. When items are shipped we increase the Sales Clearing account with a DEBIT and CREDIT the Sales Income account for the product revenue(items on the order). Later, when an invoice is posted, the revenue is moved out of the sales clearing account with a CREDIT, and into the Accounts receivable account with a DEBIT. Finale sends the Invoice to QuickBooks Online. Later, when the bookkeeper posts a payment against the invoice in QuickBooks Online, the revenue clears the accounts payable and moves it to undeposited funds.

Contrast this with how QuickBooks Online operates without Finale Inventory. You do not have sales orders in QuickBooks Online. You only have an Invoice. When you create an invoice in QuickBooks, it recognizes income and goes straight to accounts payable in one step. No clearing account or clearing transactions are involved.

To show these financial steps to your bookkeeper/CPA or to see more information about general ledger transaction flows in Finale Inventory go here: Finale General Ledger transaction flow


What are Consolidated Transactions and How Are They Used in Finale Inventory?

Finale Inventory strongly recommends you use Consolidations if your company has eCommerce sales or has large sales orders with multiple products/SKU on them.


Consolidations are summarized journal entries created by an automated process in Finale Inventory that consolidates all the COGS and Income ledger entries made in one day, one week, or one month by selling channel. They are comprised of a summarized journal entry with a list of sales order shipments that made up the consolidation. These consolidations are not enabled by default and must be set up and configured in Application settings. If enabled, they will dramatically reduce the number of ledger entries made to the QuickBooks Online chart of accounts for COGS and Income.


Finale Inventory has a general ledger where we track all financial transactions that result from all stock transactions in Finale Inventory. The general ledger has a chart of accounts that is used for all stock transactions. Whenever a stock transaction is completed in Finale Inventory there will be ledger entries made into the appropriate accounts. Go here to see a list of journal entries for each of the corresponding stock transactions: Finale General Ledger transaction flow.

Finale Inventory makes very detailed ledger entries. This means that there are multiple entries per order line item made to the corresponding ledgers. So one order shipment in Finale Inventory is not one ledger entry but four ledger entries per every order line item in the shipment. If you have hundreds or thousands of sales orders shipping out each day, this will lead to thousands of ledger entries made to Finale ledgers for Assets, Sales Clearing, Income, COGS, etc. This is perfectly normal for Finale Inventory and our ledgers can handle this type of volume very easily. Where this becomes an issue is with synchronizing our financial information with outside accounting software like QuickBooks Online. We strongly recommend that if you are going to use Finale Inventory to push Asset, COGS, or revenue entries into your QuickBooks Online that you turn on and use Consolidated transactions in Finale Inventory.

Consolidated transactions in Finale Inventory are a great way to simplify ledgers. Once it is enabled and configured, Finale Inventory will automatically summarize all transactions for each sales source configured in Finale into two journal entries per day, week, or month. One for COGS and one for Income.

These consolidated transactions will have a detailed list of all the transactions that comprised the summarization for the day, week, or month for the selling channel.

Even if you have configured the QuickBooks Online integration settings to not sync income into your QuickBooks Online from Finale Inventory, the Consolidations for income will still be created for all enabled sales sources and they should be posted to Finale Inventory’s general ledger. We will not push them to QuickBooks Online if you have configured to not sync that sales source or ledger account.


Failing to POST any consolidation transactions left in a DRAFT status will prevent you from reporting on the Income or COGS from the sales transactions in that consolidation for general ledger reports in Finale Inventory.


Consolidations are for a specific frequency: Daily, Weekly, or Monthly. If you post a draft consolidation before its frequency is complete, Finale Inventory will automatically create additional draft consolidations to consolidate the remainder of the frequency.


CRITICAL: Do not enable consolidation for sales sources that you will need invoices to sync from Finale to QuickBooks online. If you consolidate a sales source that has invoices in Finale Inventory, those invoices will not be synced as invoices into your QuickBooks. If you enabled consolidation for a source you need Invoices synced to QuickBooks Online, you must turn off the consolidation for that source and go and cancel any consolidations for that source so that the invoices will be synced.

How to Enable and Configure Consolidations


To enable the Consolidation feature go to Application settings, Accounting tab, to the Consolidations section.



Notice that all existing sales sources for your Finale Inventory account will be listed with a default setting of “Do not consolidate sales.” These sales sources come from default sources created for all Finale Inventory accounts and any Sales/Marketplace integrations you have added to your Integrations page.

Online, Phone, Email, Retailer, Other, and No sales source are default sales sources created for all Finale Inventory accounts. If you do not see the sales source for your selling channel/marketplace it is most likely due to the sales integration not being added to Finale Inventory. When you add selling or marketplace integration to Finale Inventory’s Integration page, the sales source will automatically be created. If you wish to create your own sales source fields, go to application settings, selling tab, and see the source section on the left. Do not add sales sources manually for any integration-based sales sources like Shopify, Amazon, Etsy, eBay, Shipstation, etc. These will be automatically added to the list when you have the integration added and connected on the Integration page.

Choose the Sales source you want to enable consolidations for and change the setting from “Do not consolidate sales” to one of the other two options:

  • Consolidate sales

  • Consolidate and post sales

  • Do not consolidate sales


Choosing Consolidate sales or Consolidate and post sales will enable the feature for all sales for the given sales source you selected. You will then see two more options be enabled for the frequency of the consolidations and the date on which they will begin.


The difference between Consolidate sales and Consolidate and post sales is how and when the consolidated transactions will be posted to Finale Inventory’s general ledger and thus when they will show up in your QuickBooks Online account. Choose Consolidate sales if you want to control when the consolidation transaction is POSTED. Finale will create the consolidation transaction in DRAFT status. It will stay in DRAFT status until you change it to POSTED. If you do not change it to posted it will never be recorded in the general ledger and it will never be synced to QuickBooks Online.

Choose Consolidate and post sales if you want Finale Inventory to automatically update the consolidation transactions from DRAFT to POSTED for you. It will do so 24 hours after the selected frequency. This option gives you 24 hours after the previous day’s sales to review the DRAFT consolidation if you have chosen Daily for the frequency. If you have chosen Weekly(Monday to Sunday) or Monthly as your frequency, it will automatically post the consolidations 1 day after the consolidation period.

Once you have made all three selections, it will take 5 to 10 minutes before you will see the first Consolidation transactions show up on the Consolidation list screen.



Notice that this view can be searched, Filtered by status, Date, sales source, and other information. There will be two transactions per frequency per sales source. One for COGS and one for Income. If you click on the Consolidation ID it will take you to the journal entry details.


From this detail page, click on the Transaction list tab to see all the sales transactions make up this consolidation.


Click on the sale link and you will be taken to the shipment details page.


Note that you can see that the sale shipment has been added to a consolidation transaction. You can click the link to go back to the consolidated transaction details. The first one is the COGS entry and the second one is the Income entry.


How Does the Status of a Consolidation Impact When and How Data is Synced with QuickBooks Online?


Consolidations must be POSTED to be entered into the general ledger in Finale Inventory and thus to be synced into your QuickBooks account. Finale Inventory integrations run on an automated 60-minute cycle.

So, if you just POSTED a Consolidation, you would see it show up in your QuickBooks account the next time the integration syncs. You can always go to the Integrations page and use the run task now feature on the QuickBooks Online integration



Remember if you chose the Consolidate sales feature when you enabled consolidation you will need to remember to go to the Consolidation list screen yourself and select the Consolidation transactions you wish to move from a DRAFT status to a POSTED status. They will not post on their own or automatically.


If you choose the Consolidate and post sales feature when you enable consolidations Finale will automatically update the DRAFT status transactions to POSTED status for you, 1 day after the frequency period selected for the consolidations.

You may also POST the consolidation from the detail screen of the transaction.


If you change the status of a consolidation from DRAFT to POSTED and you change your mind, you may Cancel the POSTED consolidation. If Finale Inventory has already synced it with your QuickBooks Online account, Canceling it in Finale Inventory will reverse it out of your QuickBooks Online account.

If you change the status of a consolidation from DRAFT to POSTED prior to the end of the consolidation frequency, Finale Inventory will automatically create a new secondary consolidation transaction in DRAFT status, and continue to add new transactions to it.


If you consolidate a sales source that has invoices in Finale Inventory, those invoices will not be synced as invoices into your QuickBooks. If you enabled consolidation for a source you need Invoices synced to QuickBooks Online, you must turn off the consolidation for that source and go and cancel any consolidations for that source so that the invoices will be synced.

Does Finale Inventory Support Classes and How Do We Map Transactions to QuickBooks Online Classes?


Finale Inventory will be supporting the use of various order and product fields and attributes for mapping sales transaction information into QuickBooks Online Classes. We will be adding a Classes configuration section on the Accounting tab in Application settings. From there you will be able to choose what method and field you want to use in Finale Inventory to map to specific Classes in your QuickBooks Online Account. More information will be coming in the next few months.

Make sure you have enabled Classes in your QuickBooks Online settings.


You will choose between using one Class for one entire transaction or using many different classes per transaction where you may assign a different class to each row in a transaction. For example, if you were going to have a Class in your QuickBooks for Amazon, Shopify, and eBay, then this would most likely be one class for the entire transaction. You would not for example have two different classes for the order that came from Amazon. Another example would be that you want to have a different class used for each product on an order, regardless of where the items were sold. Then you would select One for each row in the transaction so you would be able to map the sales/COGS for each product to a different class in your QuickBooks.

Once you have your Classes established in your QuickBooks Online, Finale Inventory will be able to read them after you have connected your Finale Inventory account to your QuickBooks account.

To configure Classes in Finale inventory, go to Application settings, Accounting tab, Classes section on the lower left.



Here you will choose how you will assign Classes for your sales in Finale Inventory. Chose from one of the four options: Sales source, Product category, or from one of your custom order or product fields you have configured on your Finale Inventory account. Below you will see an example of two order-level custom fields, Sales Person and “Your Custom Field”.



Choose a Sales source if you want to assign a Class for each selling channel or source in Finale Inventory. This would be one class per transaction.


Notice how Finale will pull the classes from your QuickBooks into the selection list. Map your Finale Inventory Class option to QuickBooks Class value.

What are Inventory Variances and Where Do They Show up in My QuickBooks Online Account?

When you make a change to your inventory stock level in Finale Inventory using a Stock Change transaction or a Stock Take transaction it will cause the asset valuation to either go up or down. This is called a variance to your inventory stock level and valuation. These additions or subtractions from inventory should have a reason code that tags the variance with a reason or purpose for making the adjustment to your inventory. The reason codes are stored in the Application Settings, Inventory tab.


Notice that you may add your own reason codes or edit the existing ones. You can enable them for Stock changes or Stock takes or both.


By default, these inventory variances will be all reported to the inventory variance account in Finale Inventory. They will not be transmitted into your QuickBooks online into different expense accounts. They will only go into one expense account that you map Finale Inventory’s inventory variance account to on the chart of accounts page in Application settings, Accounting, Chart of accounts section.

To understand what the breakdown of the variances are for a given time period, you will need to run a custom report that shows the variances for a given time period summarized by the reason codes.



Finale Inventory also allows you to configure reason code overrides for the purpose of tracking variances into specific accounts per each reason code or type.


Go to Application settings, Inventory tab, Variance reason accounts. Whenever a change to inventory stock levels is made outside of a Purchase order or Sales order the transaction is considered to be a variance. This variance in inventory stock level will have a positive or negative impact on the asset valuation. Finale Inventory allows you to establish reason codes for meaningful changes to your inventory. Each reason code may be assigned to a specific chart of account for the purpose of tracking the adjustment to your inventory. The Account type for this account may be one of the following types: Other expense · Other current liability · Other current asset


If you are an FBA(Fulfillment by Amazon) seller/user and you have connected Finale Inventory to your Amazon FBA account and have virtualized your FBA stock level in your Finale Inventory account using a Finale Location/Sublocation for viewing the stock level at FBA, and you have turned on the automatic, nightly feature that imports your stock levels from Amazon FBA and overwrites them in Finale Inventory, each and every day there will be variances created from this process. This will end up sending an inventory variance into your QuickBooks chart of account. If you leave the default settings in Finale Inventory which will send it all to the Inventory variance account, it will have the appearance of you finding and losing a lot of inventory. This is not recommended. Make sure you create a specific FBA Inventory variance account and map the Integration stock change reason to use this account.


FBA Alterative implementation choice: If you would still like to connect Finale Inventory to your QuickBooks and keep the virtualization of FBA inventory, we could also turn off the nightly stock import feature on the Amazon FBA. You would only run it ONCE per month, manually, on the last or first day of the month. That way you only get one variance for the entire month. In the near future, Finale Inventory will be improving the FBA stock level visibility in Finale Inventory and will have a better solution for handling the FBA stock valuation.


Know How you Want to Handle your Sales Information Syncing to QuickBooks Online


When it comes to syncing information from Finale Inventory to QuickBooks, the most important choice to make revolves around how to hand their Sales information.


Scenario

Description

Scenario 1

You are a business that has eCommerce sales only.

Scenario 2

You are a business that has eCommerce sales and manually created B2C/B2B type sales.

Scenario 3

You are a business that does not have any eCommerce sales and only has direct B2C/B2B sales which that manually create in Finale Inventory.

Scenario 4

You are a business that wants no syncing of Sales Revenue from Finale Inventory. You only want manual summarized journal entries made to their QuickBooks from analyzing reports in Finale Inventory(Only want Bills, Assets, and COGS).

Scenario 5

You are a business that does not use Finale Inventory to track any sales(simple accounts for In/Out inventory/stock management)

Scenario 6

You want some other hybrid combination of the above situations or you want to customize what information you want to sync to your QuickBooks Online.


Scenario 1: eCommerce Only setting choices


Example A - Sync Bills, Assets, COGS, and No Revenue Data from Finale Inventory to QuickBooks

  • Determine and set integration filter start date

  • Use defaults for Accounts payable section

  • Use defaults for Import customers and suppliers

  • Leave Sale source filter empty



  • When mapping chart of accounts, do not map any Sales revenue related accounts:

Example B - Sync Bills, Assets, COGS, and Revenue Data Sent from Finale Inventory as invoices

  • Determine and set integration filter start date.

  • Use defaults for Accounts payable section.

  • Use defaults for Import customers and suppliers.

  • Set a sales source filter for any source or sources they do want to see invoices pushed for. Leave blank if they want invoices for all orders from all sources.



  • Make sure when mapping their accounts you do map all the sales revenue fields.


  • Make sure all sources of sales revenue that they want to sync to QuickBooks have Create invoice turned on in the integration and a Default Customer name for the Source is assigned


Scenario 2: Finale Account Has eCommerce Sales and Manually Created B2C/B2B Type Sales


Example A: Sync Bills, Assets, COGS, and Only Manual Orders Sales Revenue Synced to QuickBooks

  • Determine and set integration filter start date

  • Use defaults for Accounts payable section

  • Use defaults for Import customers and suppliers

  • Set a sales source filter to the Manual order sale source values. If you do not have a sales source called Manual order, you may add one to the list in Application settings, Selling tab, Source section.



  • Make sure when mapping their accounts you do map all the sales revenue fields


  • Make sure all manual order sources of sales revenue that they want to sync to QuickBooks have a posted invoice


Scenario 3: Finale Account Does Not Have any eCommerce Sales and Only Have Direct B2C/B2B Sales Which They Will Manually Create in Finale Inventory

Example A - Sync Bills, Assets, COGS, and All Invoices to Their QuickBooks

  • Determine and set integration filter start date

  • Use defaults for Accounts payable section

  • Use defaults for Import customers and suppliers

  • Leave Sales source filer empty/blank



If you use custom fields on your QuickBooks Online Invoices you may use the section below to choose what information in Finale Inventory syncs to the custom fields on your QuickBooks Online Invoice:

You may choose to not update any fields, or choose from any Finale invoice and sales order custom fields, or any of the following Finale Invoice/Order fields:

  • Sales source

  • Origin

  • Order date

  • Fulfillment

  • Requested shipping

  • Customer PO


Screenshot_022224_035559_PM.jpg

  • Make sure when mapping their accounts you do map all the sales revenue fields


  • Make sure all sources of sales revenue that they want to sync to QuickBooks they Create and post an invoice for them


Scenario 4: Finale Account Wants no Syncing of Sales Revenue from Finale Inventory.

They only want manual summarized journal entries made to their QuickBooks from analyzing reports in Finale Inventory.

Example A - Sync Bills, Assets, COGS, no Sales Data at All to Their QuickBooks

  • Determine and set integration filter start date

  • Use defaults for Accounts payable section

  • Use defaults for Import customers and suppliers

  • Leave Sale source filter empty



  • When mapping chart of accounts, do not map any Sales revenue related accounts:


Scenario 5: Finale Account Does Not Use Finale Inventory to Track any Sales

Example A - Sync Bills, Assets, COGS Only

  • Determine and set integration filter start date

  • Use defaults for Accounts payable section

  • Use defaults for Import customers and suppliers

  • Leave Sale source filter empty



  • When mapping chart of accounts, do not map any Sales revenue related accounts:


Scenario 6: You Want Some Other Hybrid Combination of the Above Situations or You Want to Customize What Information You Want to Sync to Your QuickBooks Online.

  • If the previous scenarios did not fit your needs, you may need to seek professional help from Finale Inventory or one of our Accounting service provider partners.

  • Another approach would be for you to create a new, free, trial account of QuickBooks Online that is not your real account or set of books. Then connect Finale Inventory to this trial account and test all the different options and features so you can see how they operate and how they will impact your QuickBooks account. After you have figured out the way you would like your integration to work, simply add another new QuickBooks Online integration to your Finale Inventory account and configure it to connect to your real QuickBooks Online account. Be sure to deactivate the previous QuickBooks Online integration on Finale’s Integration page that was connected to your trial/test account.


Figure Out Your Sales/Revenue Sync Requirements


Each of the above scenarios has multiple options to consider and support when it comes to configuring Finale Inventory to sync sales information into QuickBooks.

Finale currently only supports syncing detailed, non-summarized invoices to QuickBooks for sales. There are many ways to configure Finale Inventory to communicate financial data to QuickBooks. Some include sales information, and some do not. The following are four basic approaches:

  • Sales Approach 1: You want to sync sales information from Finale Inventory - This will likely be the most common method at this time. Currently, Finale only supports syncing sales information to QuickBooks in the form of open invoices for each and every sales order or for only a subset of sales orders using the Source filter.

  • Sales Approach 2: You do not want to sync any sales information from Finale Inventory because you do not want invoices for each and every eCommerce sale. In this configuration, Finale Inventory will be configured not to push any sales information into QuickBooks. You will then use QuickBooks built-in connectors to import sales directly from your marketplaces.

  • Sales Approach 3: You want to sync a limited or filtered set of sales information from Finale Inventory via invoice using the Source filter on Finale sales orders/invoices and use some other third-party service or QuickBooks built-in connector to import the rest of your sales information into your QuickBooks.

  • Sales Approach 4: You currently use or will use a third-party software tool to retrieve sales information directly from their sales platforms, for example, services like A2X or Webgility.


How Do you Know Your Finale Inventory Account is Ready to Sync with QuickBooks Online?


Before you enable the QuickBooks Online integration you must make sure your Finale Inventory account is configured correctly and you have ensured that you do not have any stock valuation issues that have not been resolved for the start date filter you have chosen. Below is a list of items to check in your Finale Inventory account to make sure you are ready:

  1. Each and every product id must have a value configured/computed for Average cost. A blank average cost is not zero and is only acceptable if you have never had any inventory on hand of that product. If any product id has quantity on hand it must have an average cost of 0.00 or higher. Use the Average cost change transaction to establish an average cost with a record date prior to any stock level being established in your inventory for that product. To do this, look at the stock history for the product id. Find the first record date where the stock level was added. Make sure there is an average cost established before that date. Use the Effective date on the Average cost change transaction to establish a cost before the first record date.

  2. Make sure there are no inactive product ids with quantity on hand. Deactivated product ids carry stock quantity and thus can carry value. If you have deactivated any product ids without removing any stock quantity on hand you will have orphaned stock value. Your stock reports will not provide you with accurate information since you have deactivated products that will be excluded from the reports. The general ledger will still hold the value and also send this value into your QuickBooks. Run a report or use the product view to verify that all inactive product ids have no quantity on hand. If they do, you must reactivate them, then remove the stock, then deactivate them again. Remember, you must do this in time correctly. If you do it for today, but you are syncing your records with QuickBooks with a start date filter from last month, you have not corrected the problem in time correctly. Make sure when you are correcting stock issues the record date(effective date) of the change must be before your sync start date filter. You cannot use a backdated stocktake. You must use a back-dated stock change.

  3. Make sure you do not have any packed sale shipments on any sales orders in a completed state. Any packed sales shipment should be current and still in your warehouse. If you have any completed sales orders with packed shipments they are still on your books/ledger. They must be shipped so that the value can be removed from assets and reported to COGS. Run a report to find any packed sale shipments where the sales order has a completed status. To correct them you must revert the sales order to the draft state, go to the shipments tab, find the shipment in a packed state, ship the shipment with a correctly backdated ship date, then put the sales order back into the Completed state. There is no bulk solution for this, you must manually fix each one that you may have.

  4. Make sure you do not have any transfers erroneously left in an In Transit state.

  5. Make sure you do not have any stock item in stock with a negative quantity on hand.

  6. Make sure all your average costs for each product are positive and are the value you expected. If you have any product ids with a negative average cost or have an average cost that is grossly overstated, you most likely have major stock management issues. Things that contribute to this situation are: Shipping items out of inventory when you do not have the quantity on hand, receiving inventory on purchase orders after you have shipped the items out of inventory, using purchase orders and not providing a price, never establishing a proper average cost for your items and running the inventory system with a negative quantity on hand, or using product ids for non-inventory items and shipping them on sales orders without configuring them properly.

  7. Any location/warehouse in Finale Inventory that has quantity on hand will be pushing stock valuation into your QuickBooks inventory asset accounts if configured to do so, make sure you understand there is no filter or setting to not sync one warehouse vs another. If you configure Finale Inventory to sync asset valuation to your QuickBooks, all asset valuation is synced regardless of what location/warehouse it is sitting in. Asset accounts are associated with products, not warehouses.

  8. If you have turned on Consolidations, make sure you have posted previous period draft consolidations. Draft Consolidations do now show up in the general ledger but their content/transactions do show up in inventory valuation reports.

Use the reports in Finale Inventory to verify your stock valuation is correct. Run the Inventory valuation audit by location, in units report from the Accounting, Audit reports section.



This report will help highlight common issues and mistakes with your stock valuation.



In the report example above you can see that products are missing average cost which will impact your stock valuation. Also, you can see that there are packed inventory items that are impacting valuation. It is normal to have packed inventory for the current day or the most recent few days, it is not normal to have packed shipments forever. Note this report gives you a total valuation. Use this total valuation and evaluate it against the Stock valuation on the Stock view screen and the general ledger inventory account balance.


See that the total valuation on the audit report matches the valuation at the top of the stock view. If they do not match, you could have an issue you need to resolve. Make sure you are using the correct filters for the view when evaluating the value.


See the general ledger, Inventory balance for the time period of the audit report. The balance in the general ledger inventory account is what will be pushed into your QuickBooks. If this balance does not match the Stock view screen valuation and the Inventory valuation audit report, investigate the difference.

Notice in the example above, the general ledger shows a $16,171.16 balance. This is $5.84 lower than the audit and stock view screen. There could be a logical explanation for this, or it could be evidence that you have other problems.

Check to make sure that you do not have Draft Consolidation transactions that need to be posted so that your general ledger balance will align with the stock view/reports.



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