Quickbooks Tips For Square Users

Many small business owners love Square because it makes taking payments simple. But sometimes the Square and QuickBooks integration can be glitchy and create confusion when the numbers don’t match.

I worked with a client recently who was experiencing exactly this problem. Their QuickBooks income never seemed to match the Square reports, even though everything looked correct at first glance.

If you’re using Square and QuickBooks together, here are a couple of common reasons this happens.

1. Square Deposits Are Net of Fees

When Square deposits money into your bank account, the amount is not the total of what customers paid.

Square subtracts things like:

• Processing fees

• Refunds

• Discounts or comps

• Adjustments

So the deposit you see in your bank account is the net amount.

But your accounting system should record the whole sale first, then track the fees separately.

Additionally, when deposits are posted directly to income (which happens when you add them from your banking screen,) QuickBooks ends up recording net sales instead of gross sales, which makes your reports inaccurate.

2. There's usually a time difference between the sale and the deposit, which throws your numbers off.

Why These Cause Problems

When sales are recorded as net deposits, and when deposits are recorded days after the sale:

• Your income may appear higher or lower than it really is

• Processing fees may not be clearly tracked

• Reports may not match Square sales summaries

• Reconciling accounts becomes frustrating

Over time, these can make it difficult to trust your financial reports.

The Simple Workflow That Usually Fixes It

The most reliable solution is using a Square clearing account in QuickBooks. This account temporarily holds the sales before the actual deposit reaches the bank.

Here’s how that works in simple terms:

• Square sales are recorded to the clearing account

• Square fees are recorded separately as expenses

• The actual bank deposit clears the remaining balance

When set up properly, this allows:

• Square reports

• QuickBooks income

• Bank deposits

to all line up correctly.

A Quick Reminder

The Square integration can work well, but it often needs a little adjustment to the workflow to keep everything accurate.

If your QuickBooks income never seems to match your Square reports, you're definitely not alone. It’s one of the most common bookkeeping issues I see with small businesses.

Thankfully, it’s usually an easy fix once the system is set up correctly.

—JoAnne Lutat

BlancoDev Bookkeeping

Helping small businesses keep their numbers clear and reliable.