@VG26 ; Welcome to the Square community forum. I am going to step in for HC_Charlie till he sees this. If you want someone to see a Post here use the "@" symbol when you do that a drop box will show up with people in this thread or you can start typing someone's id here like I did with yours to find them quicker. Now on to you Question.
I used a video that was on you tube from an accountant out of Florida named Hector Garcia. https://youtu.be/xxksQLwBhEc?si=jTz4BVZI22W4YaV7 Watch the 1st 8 min the rest is too confusing lol. He does a lot of accounting videos but the one he did of a sales Receipt in QB Desktop is no longer visible or he removed it. The reason why could be that he was explaining also about a program that no longer exists or is owned by the same company. The thing is he explained having Credit Card sales from any processor very well. What he did was, use Sales Receipts for Cash sales and also one for Credit card sales. The ones with Cash Sales went to Record Deposits for when you made the actual Deposit. The Credit Card Sales were setup to go into a "holding" account. Basically think of Square as the Holding company. Payment came in, but Square is Holding it till it is deposited to your account. When he did the video in QuickBooks desktop you could actually look for a Bank called Square 1. This is what I use, then when I get the deposit from Square to my bank the $ is transferred out of the Bank called Square 1 to my bank account. By setting things up this way you have a Check and Balance for what you expect from Square and What was transferred to your bank. Example:
CC Sales = $500.00
Square Merchant Fees = $25.00
Amount transferred to Square 1 Bank is $475.00
On your Bank statement there better be a deposit for $475.00 also and when this transfers from Square 1 to your bank Square 1 will be at either $0.00 or the amount of todays sales that you entered.
If you combine the sales of cash and credit card to 1 Sales Receipt then you will not have this same check and balance.
Now I will enclose some screen shots of my QuickBooks Desktop of both a Cash and a Credit card Transaction the way I have it, and also two from my Test QuickBooks file.
To get the sales Receipt to Show Square Sales Receipt, go to the formatting Tab in the Sales Receipt Popup window in QBD and then Choose Custom Design.
This picture shows entering data from the Daily Sales Summary. The Cash and Credit Card amounts are Positive and Income accounts. The Merchant Account Fees, Discount Fees, and Sales Tax will be Negative numbers. The Merchant Account Fee is an Expense, The Discount is a reduction in what you actually would earn from the Gross amount, and the Sales Tax is moved to a Liability account that you will owe to the state for sales tax. The Tax here is Negative since Square includes it with their amounts in the Sales Summary for BOTH cash and Credit Card Sales.
The Next two images are how I import each sale, not at the end of the day. This first one is a Credit Card sales example, the customer used a Discover card, Bought 4 items, Square had their Fee and The state wants their Sales Tax. In this since the Items show their sale price without sales Tax, we add sales tax here. But still subtract Squares Fee. The $47.46 is what I actually will have deposited from this transaction plus the other sales from that date. Which will all be put in as a Deposit to the Holding Square 1 bank till my bank shows the deposit from Square.
The below is how you could enter Cash sales, the Ebo42sil and Oils would be reduced to your one line of Cash sales. No merchant fees needed since Square does not charge on Cash sales. The Government still wants their sales tax and that is what gets transferred to Undeposited Funds. The problem is Square does not tell you on on report unless you filter it for Cash only sales and the Credit Card Sales. Which I can not find. The other is to manually subtract your Summary Reports Sales Tax from your Balance Transfer Sales tax for that day to get your Cash Sales tax. My Summary report for 8-30-2020 showed $39.88 for Sales tax but my Balance Transfer showed $36.58 or a difference of $3.30. Now my Cash sales may have included non Taxable items T-shirts or Fudge for example in the total sales, and using the full $58.26 times my sales tax rate would give me $3.4956 for the sales tax on cash sales at my 6%. That would have been a 20 cent difference in this example.
So after all of this splitting the cash and Credit Card sales gives better book keeping abilities but for simplicity the combined method will work just fine. But just know that the books between Square and QuickBooks may not match completely for deposit records.
Okay @VG26 here's my procedure for recording daily sales from Square into my Quickbooks Desktop. Note, I use a Mac so the screenshots may look different. I hope I don't miss any steps; it's kinda automatic for me know so I'll try to remember each step along the way.
First thing, check out the attached .pdf file. It's a paper I print out on my b&w printer at the start of each month. Then I manually write down the sales for each day. i use REPORTS in the Square Dashboard. I'll reference the Square report and record CC (credit card) sales, Cash sales, any misc amount like Checks, as well as the CC merchant fee that Square charges and takes out of the final bank deposit.
I also use the TAX tab in the report area, and record Non-tax sales, taxable sales, and total sales tax collected. I fill in all of these amount on my paper form. See the screen shots below. I know it looks confusing, but keep checking it out and see where the numbers match and it may start to make sense where the report numbers go on the paper form. I do the paper form so i can manually input the figures in Quickbooks.
OKAY, now going to Quickbooks. When I first setup my accounts, I had to create ITEMS to use to make a daily sales receipt entry. You'll see those below. For some reason, I had to make those items NON-INVENTORY PARTS; Quickbooks didn't like it when I used "Payment" even though the cash, credit, etc are payment methods. Somehow it still works setting them up as non-inventory parts. I put the *asterick beside the names so I could easily identify which items I wanted to use for the receipt. You only need to set these up once.
Then for each daily sale, go to the Create Sales Receipt on the home screen of Quickbooks. (You can also create a memorized transaction that will auto populate these fields)
You'll notice the Total equals ZERO. That's how you know it's correct. The SALES are entered as positive figures, and the PAYMENTS are all entered as negative numbers. The negative numbers will hit your corresponding ACCOUNTS in Quickbooks, so when you do a deposit entry it will correctly hit those accounts in the ledger. (I'm sorry I don't remember how I set up my initial accounts, if you need to know that, I'll try to go backwards and figure it out.)
So you'll see the amounts from the Square reports, that I write on my paper form, match what I enter in Quickbooks. There is also a column on my paper form for Square Deposit$ /Date. Here I record the deposit amount (which should be the Credit Card sales MINUS credit processing fee, and if you use Square Loans and/or Square Savings, those are taken out. I use the Check Box to keep track when I record the deposit in Quickbooks. That is shown below.
I deposit my CASH sales at the end of each month because I don't have many cash sales, but you could do it more often. You'd do a separate Deposit in Quickbooks...and I use a "Cash Sales to be Deposited" account that I use in Account section. Then this entry will zero out the "Other Current Asset" account in my general ledger, which shows how much cash I've collected but have yet to deposit.
I hope all of this wasn't too confusing. I know it's a LOT. I spend several days with an accounting professional going over how to set up my accounts for my particular retail business. So as I said, I don't remember exactly how those may have been setup in Quickbooks. But this procedure for recording my daily sales correctly hits all of the accounts I have setup to keep track of Cash, Credit card sales, Merchant account fees, Square Savings and Square Loan accounts.
Please let me know if you want more clarification on anything here. It may even be possible to zoom or something and I could show you exactly where I find/click things in Square or Quickbooks.
@Candlestore Hi Keith, no problem. This is the journal entry we decided on. It will be a one-step journal entry that will cover everything. On the Credit side are two sales categories that I need, shipping to customers, and sales tax collected. Then, on the Debit side are Returns, Refunds, Discounts, and Cash payments, Credit Card payments. One moving item that could be debit or credit is gift cards. If a customer purchased a gift card then it's on the Credit side. If they redeemed (paid for a purchase using a gift card they already have then) it's a Debit instead. The Debits total should equal the Credit total. The total number at the very bottom does not actually agree with any total on the Squares Sales Report. It won't because the numbers are being collected from different parts of the Square report. Hope this helps! I was super relieved to have a plan finally. Now to go back over a few months and fix things 🙂 In addition to this daily summary entry, I will have to do a COGS entry monthly to bring over that info into QuickBooks desktop, etc.
