Reconciling Shop Management Software and Card Payments to QuickBooks

What shop management software does

Shop management software is the system that runs your bays. It writes the repair order. It holds the parts used on the job. It tracks the labor hours your tech spent. It builds the invoice the customer sees. It may also take the card payment when the customer pays.

The shop system knows what each job earned on paper. It knows the parts cost. It knows the labor cost. It knows the total on the invoice. That is the side of the business that touches the car.

QuickBooks is the other side. It is where the bank, the bills and the payroll live. It is where your profit and loss report comes from. When the shop system and QuickBooks agree, the profit per job you see in one matches the profit per month you see in the other. You can read more about how we keep these two in line on our bookkeeping service page.

Why shop software and QuickBooks can disagree

The two systems do not talk to each other by magic. The shop system posts a sale when the invoice is written. QuickBooks records a sale when the deposit clears the bank. Those are often different days, and sometimes different amounts.

A customer picks up the car on Friday. The shop system posts the sale on Friday. The card payment clears the bank on Monday or Tuesday. The shop system shows the sale last week. QuickBooks shows the deposit this week. Neither one is wrong. They are just looking at the same job from two sides.

The gap gets bigger when fees come in. The shop system shows the full invoice amount. The card processor takes its fee and sends the net amount to the bank. If QuickBooks records only the net deposit, your sales look lower than the shop system says they were. The fee is hidden inside the sale.

Here is where the two systems drift apart.

• **The shop system posts on the invoice date: ** QuickBooks posts when the bank clears.
• - **The shop system shows the full invoice: ** the bank shows the net after card fees.
• - **The shop system tracks parts by job: ** QuickBooks tracks parts by supplier bill.
• - **The shop system tracks labor by tech: ** QuickBooks tracks labor by payroll run.

When you know where the gaps come from, you know where to look when the two do not agree.

How card payments show up in your books

Card payments move in two steps. The customer pays. Then the processor sends the money to your bank, minus its fee. Some processors deposit the net amount. Some deposit the full amount and bill the fee separate. Some send one deposit for the whole day and some send one per transaction.

The way the money lands in the bank shapes how it should land in the books. When the processor sends the net amount, you need to record the full sale and the fee as a cost. When the processor sends the full amount and bills the fee later, you record the full sale now and the fee when the fee bill clears.

Here is what each path looks like.

When you match the path to the books, the sale and the fee stay visible. When you skip the match, the fee hides inside the sale.

The net versus gross problem

The net versus gross problem is the most common mess in a shop that takes cards. The processor sends the net amount to the bank. The bookkeeper records that net amount as the sale. The fee never shows up as a cost. The shop system says the day earned one amount. QuickBooks says it earned less. The owner can not tell which one is right.

The right number is the full sale. The fee is a cost. When you record the full sale and the fee, two things happen. Your sales match the shop system. Your fees show up as a real cost, so you can see what the card actually cost you.

Here is the entry to make for each card deposit.

• **Record the full sale as income: ** the amount on the invoice, not the net deposit.
• - **Record the card fee as a cost: ** the slice the processor kept.
• - **Record the net deposit to cash: ** what actually cleared the bank.
• - **Match the deposit to the bank: ** the net amount should tie to the bank line.

When all three lines are there, the sale, the fee and the cash all tell the same story. When only the net is there, the fee is invisible and your sales look low.

How to match card deposits to the bank

The bank is the last word on what came in. Every card deposit that clears the bank should match a deposit in the books. When they do, the account is reconciled. When they do not, one side has a gap.

Start with the bank statement. Find each card deposit. Find the matching deposit in the books. When the amounts match, the deposit is tied. When the bank shows a deposit that is not in the books, it was missed. When the books show a deposit that is not in the bank, it was entered wrong or it has not cleared yet.

Here is what to check for each deposit.

• **Find the deposit on the bank statement: ** the date and the amount.
• - **Find the matching deposit in the books: ** same date, same amount.
• - **Check the amount matches: ** the net deposit, not the full sale.
• - **Check the fee is recorded: ** the gap between the sale and the deposit.
• - **Repeat for each day's batch: ** one by one until every deposit is tied.

When every deposit ties, the card side is clean. When one does not, you find the gap and fix it before the month closes.

How to reconcile shop software totals to QuickBooks

The shop system has a sales total for the month. QuickBooks has a sales total for the month. When the two agree, the month is tied. When they do not, the gap is usually one of a few things.

A sale posted in the shop system but not in QuickBooks. A sale posted in QuickBooks but not in the shop system. A card fee booked as a sale reduction instead of a cost. A cash sale that cleared the drawer but never hit the bank. A sale posted in the wrong month because the deposit cleared late.

The clean way is to compare the two totals each month. Start with the shop system total. Pull the QuickBooks sales total for the same period. Find the gap. Trace it back to the sale that caused it. Fix it. Then check the two totals again until they agree.

Here is a simple month end check.

• **Pull the shop system sales total: ** the sum of every invoice for the month.
• - **Pull the QuickBooks sales total: ** the sum of every sale for the same month.
• - **Find the gap: ** the difference between the two totals.
• - **Trace the gap to a sale: ** the invoice or the deposit that is off.
• - **Fix the entry: ** move the sale to the right month or add the missing one.
• - **Check the totals again: ** they should now agree.

When the two totals agree, the shop system and QuickBooks tell the same story about the month. When they do not, the profit per job in the shop system will never match the profit per month in QuickBooks.

The monthly reconciliation routine

Reconciliation is not a one time project. It is a short routine that runs every month. The same steps in the same order keep the two systems in line and keep the gaps from piling up.

We start with the bank. We match every card deposit to the bank statement. We check the fee is recorded for each deposit. We pull the shop system sales total. We pull the QuickBooks sales total. We find the gap and trace it. We fix it. Then we close the month.

Here is the routine we run.

• **Match every card deposit to the bank: ** one by one until they all tie.
• - **Check each fee is recorded: ** the gap between the sale and the deposit.
• - **Pull the shop system sales total: ** the sum of the month's invoices.
• - **Pull the QuickBooks sales total: ** the sum of the month's sales.
• - **Trace any gap to a sale: ** the invoice or the deposit that is off.
• - **Fix the entry and close the month: ** the two totals agree and the month is locked.

When the routine runs every month, the two systems stay in line. When it skips a month, the gaps stack up and the next month is harder to close.

A situation we clean up

The sales that never matched

A busy auto repair shop runs its jobs through a shop management system. The card processor sends net deposits to the bank every day. The bookkeeper records each net deposit as the sale. The shop system says the month earned one amount. QuickBooks says it earned less. The card fees are nowhere in the books. At month end, the owner can not tell which number is right, what the card cost, or why the profit per job in the shop system never matches the profit per month in QuickBooks.

Here is how we handle it. We pull the bank statement and match every card deposit. We pull the processor statements and find the fee on each deposit. We rebook each sale at the full invoice amount. We record each fee as a cost. We pull the shop system sales total and the QuickBooks sales total and trace the gap back to the deposits that were booked at the net amount. We fix each one. When we are done, the two totals agree, the fees show up as a real cost, and the profit per job in the shop system matches the profit per month in QuickBooks. We set up a rule so the next month's deposits record the full sale from the start.

Mistakes we fix

• Net card deposits booked as sales, so the fee is hidden
• Card fees never recorded as a cost
• Shop system sales total that never matches the QuickBooks sales total
• A cash sale that cleared the drawer but never hit the bank
• A sale posted in the wrong month because the deposit cleared late
• A deposit entered twice, so sales are overstated
• No monthly match between the card deposits and the bank statement

Common questions

Why does my shop system sales total not match QuickBooks? The shop system posts on the invoice date and QuickBooks posts when the bank clears. The two look at the same job from two sides. When you reconcile the two totals each month, the gap shows up and you can fix it.

Should I record the full sale or the net deposit? Record the full sale as income and the card fee as a cost. The net deposit goes to cash. When you record only the net, the fee is invisible and your sales look low.

What if my processor sends one deposit for the whole day? Match that one deposit to the day's sales. Record the full sales for the day, record the total fee, and record the net deposit to cash. One deposit can tie to many sales.

Do I need to reconcile the card deposits every month? Yes. When you match the deposits to the bank every month, the gaps stay small and the close runs fast. When you skip a month, the gaps stack up and the next month is harder.