QuickBooks Online

QuickBooks Online is powerful online accounting software that has localizations for many countries. MRPeasy focuses on manufacturing resource planning, reporting, inventory management, sales, and procurement. MRPeasy together with QuickBooks accounting creates a very powerful ERP system. We strongly recommend performing all business operations in MRPeasy, and in QBO the accounting only.

A quick summary of the integration:

  • The integration works fully automatically.
  • Sales, inventory transactions, manufacturing, and purchases must be managed in MRPeasy.
  • Financial values, such as changes in inventory accounts, WIP, COGS, etc. are posted to QBO daily.
  • Sales invoices and POs/bills are sent to QBO.
  • Purchase Orders can be posted to QBO as Bills or as Purchase Orders.
  • Payments for POs are synchronized two-ways with QBO if POs are posted as Bills to QBO. 
  • Payments of Invoices are synchronized two-ways.

Jump to:

  1. How to configure the integration with QuickBooks Online?
  2. How to import items, customers, and vendors from QuickBooks Online?
  3. How does the integration work between MRPeasy and QuickBooks Online?
  4. When are synchronizations performed?
  5. How are new items, customers, and vendors posted to QuickBooks Online?
  6. How are inventory tracking and financial transactions performed?
  7. How to work with Purchase Orders (POs) and Invoices?
  8. How to reconcile direct labor, overheads, and transfer expense liabilities?
  9. Troubleshooting, synchronization logs.

Setup of the integration between MRPeasy and QuickBooks Online

For setting up the MRPeasy and QuickBooks Online integration:

  1. Log in to MRPeasy.
  2. Navitage to Settings -> System settings -> Integrations.
  3. Click on Connect to QuickBooks.
  4. Choose the accounts for entries from MRPeasy (see below).
  5. Choose how to synchronize Purchase Orders (see below).
  6. Save

Chart of Accounts configuration in QuickBooks Online

The following accounts or similar should be configured in the QuickBooks Online chart of accounts before making the integration:

  1. Bank account (Current Asset).
    An account to where payments, if entered in MRPeasy for Invoices/Bills/POs, are posted to.

  2. Purchases (Current Asset).
    An account for holding costs of items or services not yet received, but invoice from the vendor has been received or paid.

  3. One Inventory (Current asset) account only;
    or two accounts, a Finished goods (Current asset) account and a Materials on hand (Current asset) account.
    Accounts for tracking the value of inventory. Purchased materials and manufactured items can be tracked on separate accounts.

  4. Work in progress (Current asset).
    An account for holding the value of currently unfinished goods, open manufacturing orders. A cost of a product = consumed materials + performed direct labor + allocated manufacturing overheads.

  5. Direct labor (Current liability).
    An account for posting direct labor costs, which are applied to product cost (to work in progress) according to time worked on a job. This should be a current liability, wages earned by employees, and should be reconciled with payroll regularly.
    (If the allocation of direct labor is not desired, then users’ hourly labor rates must be defined as 0 in MRPeasy)

  6. Manufacturing overheads (Current liability).
    An account for posting allocated manufacturing overhead costs, which are applied to product cost (to work in progress). This should be a current liability, overhead expenses pre-applied to product costs, and should be reconciled with actual expenses regularly.
    (If the allocation of manufacturing overhead is not desired, then workstations’ hourly rates and fixed and variable costs in Routings must be defined as 0 in MRPeasy.)

  7. Transfer orders liability (Current liability).
    If you have several sites between which you move items, then transfer fees, which are applied to inventory costs, are posted on this account. This should be a liability, transfer expenses pre-applied to inventory, and should be reconciled regularly with actual expenses.

  8. Sales (Revenue).
    An account where sales revenue is posted.

  9. Cost of goods sold (Expense).
    An account where the cost of goods sold is posted, once the items are shipped to the customer.

  10. Inventory Adjustments (Expense).
    An account for posting inventory balance changes from manual adjustments of inventory levels. Also, separate accounts can be configured for write-offs and write-ins.


Accounts need to be chosen for posting the following entries to QuickBooks:

Entry Description Accounting transaction
Invoices to customers Default revenue account that is used when posting invoices from MRPeasy to QuickBooks Online. D Accounts receivable (Current asset)
C Sales (Revenue)
(Made by Invoice in QBO.)
Purchase Orders / Bills Assets account which is used when posting Purchase Orders from MRPeasy to QuickBooks. D Purchases (Current asset)
C Accounts payable (Current liability)
(Made by Bill in QBO.)
Payments The default bank account where payment is posted, if payment for Invoice or Bill is entered in MRPeasy and synchronized to QuickBooks. A payment is received:
D Bank (Current asset)
C Accounts receivable (Current asset)
(Made by Invoice in QBO.)

Payment is made:
D Accounts payable (Current liability)
C Bank (Current asset)
(Made by Bill in QBO.)
Purchase (materials) stock receipt journals For journal entry with the net sum of changes in purchases received from the last synchronization. D Materials on Hand (Current asset)
C Purchases
Work in progress journals For journal entry with the net sum of changes in work in progress from the last synchronization. D Work in progress (Current asset)
C Materials on hand (Current asset)
Manufacturing overhead journals For journal entry with the net sum of changes in applied manufacturing overhead costs from the last synchronization. D Work in progress (Current asset)
C Manufacturing Overheads (Current liability)
Labor journals For journal entry with the net sum of changes in performed direct labor costs from the last synchronization. D Work in progress (Current asset)
C Direct labor (Current liability)
Finished goods stock journals For journal entry with the net sum of changes in finished goods inventory from the last synchronization. D Finished goods (Current asset)
D Work in progress (Current asset)
Cost of goods sold journals For journal entry with the net sum of changes in the cost of goods shipped from the last synchronization. D Cost of Goods Sold (Expense)
C Finished goods (Current asset)
or Materials on hand (Current asset)
Manual stock adjustment journals For journal entry with the net sum of changes from manual stock adjustments from the last synchronization. D Inventory Shrinkage (Expense)
C Finished goods (Current asset) or Materials on hand (Current asset)
Additional costs due to transport between production sites For journal entry with the net sum of changes in the additional costs applied to transferred goods from the last synchronization. D Finished goods (Current asset) or Materials on hand (Current asset)
C Transfer orders liability (Current liability)

 

When setting up accounts, always consult your local accounting specialists, to make sure you follow local laws and regulations.

Configuring Purchase Orders synchronization

Purchase Orders from MRPeasy can be posted to QuickBooks as:

  1. Purchase Orders in QuickBooks, or
  2. Bills in QuickBooks. Payments for purchases are synchronized only if purchase orders are posted to QuickBooks as bills.

Important! If Several invoices per PO is enabled, then POs are not posted to QuickBooks. Purchase Invoices are posted as Bills.

Importing stock items, customers, and vendors from QuickBooks Online

It is possible to import stock items, customers, and vendors from QuickBooks to MRPeasy at MRPeasy -> Settings -> System settings -> Integrations -> QuickBooks. This will import new items. If some items were imported before, these will be skipped and not imported twice.

Stock items are matched by SKU in QuickBooks and Part Number in MRPeasy. The Name field in QuickBooks maps to the Part description field in MRPeasy.

Inventory tracking in QuickBooks Online

Inventory (stock) tracking should not be used in QuickBooks Online for items that are managed in MRPeasy. QuickBooks makes some automatic inventory transactions for these items, e.g. when they are bought or sold, which MRPeasy does not control.

MRPeasy itself posts changes in inventory balances to accounts during nightly synchronizations.

Coding items to different Inventory accounts

For inventory items, it’s possible to use a single Inventory account, or separately one Materials on hand account and one Finished goods account. Custom inventory accounts per item cannot be used.

After an MRPeasy Purchase Order is synchronized to QuickBooks Online, then in QuickBooks Online, the account, where these items are posted to, must not be changed. The integration default account must be used.

Otherwise, e.g., when materials are consumed in manufacturing, or items directly sold, MRPeasy will post a manual journal, which will credit the original asset account (Inventory/Raw materials/Finished goods), but not the new account.

Coding items to different Sales accounts

Different sales accounts for items can be assigned in QuickBooks Online, in the item's configuration page.

First synchronization

When making the connection between MRPeasy and QuickBooks Online:

  1. The changes in account balances from that day are posted to QuickBooks Online during the next nightly synchronization.
  2. The previous POs and Invoices are posted only after you open them and save. If you do not make changes to old documents, they are not posted to QuickBooks Online.

How the integration works between MRPeasy and QuickBooks Online

Below is a list of events or actions in MRPeasy, after which an entry will be made to QuickBooks. The example accounts correspond to the chart of accounts configuration explained above.

# Event Reaction QuickBooks  document QuickBooks Debit account QuickBooks Credit account
Purchasing
1 A purchase order is created in MRPeasy and confirmed (an 'Invoice ID' is saved). PO is sent from MRPeasy to QuickBooks* PO or Bill 'Purchases' QuickBooks controlled (eg, Accounts Payable)
2 PO is paid. Payments are synced between MRPeasy and QuickBooks two-ways** PO or Bill QuickBooks controlled (eg, Accounts Payable) 'Bank'
3 PO is received in MRPeasy. Accounts are updated in QuickBooks once per day*** Journal 'Materials on Hand' 'Purchases'
Manufacturing
4.1 Parts are consumed in MRPeasy. Material costs are posted.
Accounts are updated in QuickBooks once per day***
Journal 'Work in Progress' 'Materials on Hand'
4.2 Manufacturing order is started in MRPeasy. Planned manufacturing overheads and labor costs are posted.
Accounts are updated in QuickBooks once per day***
Journal 'Work in Progress' 'Manufacturing Overheads'
Journal 'Work in Progress' 'Payroll/Direct labour'
5 Manufacturing is finished in MRPeasy. The differences between real costs and planned costs are posted. Products move from WIP to finished goods inventory account.
Accounts are updated in QuickBooks once per day***
Journal 'Finished Goods' 'Work in Progress'
Sales
6 An invoice is created in MRPeasy and confirmed (invoice is changed from 'Dummy' to 'Unpaid'). Invoice is sent from MRPeasy to QuickBooks* Invoice QuickBooks controlled (eg, Accounts Receivable) 'Sales'
7 Invoice is paid. Payments are synced between MRPeasy and QuickBooks two-ways** Invoice 'Bank' QuickBooks controlled (eg, Accounts Receivable)
8 Goods are shipped in MRPeasy. Accounts are updated in QuickBooks once per day*** Journal 'Cost of Goods Sold' 'Finished Goods'
Other inventory transactions
9 A manual stock lot is created in MRPeasy during the stock-taking. Accounts are updated in QuickBooks once per day*** Journal 'Materials on Hand' / 'Finished Goods' 'Inventory Shrinkage'
10 A manual write-off is created in MRPeasy during the stock-taking. Accounts are updated in QuickBooks once per day*** Journal 'Inventory Shrinkage' 'Materials on Hand' / 'Finished Goods'
11 A transfer order is made to move items between production sites, transport fee applied. Accounts are updated in QuickBooks once per day*** Journal 'Materials on Hand' / 'Finished Goods' 'Transfer orders liability'

Synchronization schedule:

  • (*) Invoices and purchase orders are sent to QuickBooks once per 5 minutes. Alternatively, it is possible to send a particular document to QuickBooks immediately by clicking the button Add to QuickBooks at the document's details page.
  • (**) Payments are synchronized along with invoices and purchase orders and during nightly synchronizations.
    NB! Payments for purchases are synchronized only if purchase orders are posted to QuickBooks as bills.
  • (***) Actions, that are made once per day, are performed during the night (usually between 1 A.M. and 3 A.M.). These can be run manually by clicking button Synchronize at Settings -> System settings -> Integration -> QuickBooks. Manual synchronization cannot be performed more often than once per 5 minutes.

Inventory tracking and financial transactions step-by-step

In MRPeasy, together with all automatic accounting transactions, the inventory tracking and financial transactions work as follows:

  1. All items in inventory are tracked using stock lot tracking within MRPeasy. I.e. each batch of physical items is accounted for separately.

    A stock lot is an internal business object in the MRPeasy software, used for providing the FIFO method of using goods, and also for specific functionality, like expiry date, or batch traceability. Without such specifics, you do not need to operate with stock lots in your daily business (MRPeasy does it in the background).

  2. When a purchase order is sent to QuickBooks and a Bill is made in QuickBooks, then the cost of items is posted on a purchases account:
    D Purchases (Current assets)
    C Accounts payable (Liabilities)
    (This transaction is made by QuickBooks according to the Bill in QuickBooks.)
    (The Purchases account must not be manually changed for inventory items in the Bill!)


  3. When purchased items are received, then items are transferred from purchases to materials on hand:
    D Materials on hand (Current assets)
    C Purchases (Current assets)

  4. Additional expenses incurred with purchases (e.g. transport, customs) can be accounted into the cost of the procured items, by entering them as “Additional fees” on the Purchase Order in MRPeasy.
    D Purchases (Current assets)
    C Accounts payable (Liabilities)
    (This transaction is made by QuickBooks according to the Bill in QuickBooks.)

    Once the PO is received:
    D Materials on hand (Current assets)
    C Purchases (Current assets)

  5. When a manufacturing order is planned, then according to the bill of materials, the materials are reserved for this job.

  6. When a manufacturing order is started, the estimated labor and manufacturing overhead costs are posted to work in progress (WIP):
    D Work in progress (Current assets)
    C Direct labor (Liabilities)
    D Work in progress (Current assets)
    C Applied manufacturing overhead (Liabilities)

  7. When materials are reported consumed in production, they are moved to WIP:
    D Work in progress (Current assets)
    C Materials on hand (Current assets)

  8. Once a manufacturing order is finished
    first, WIP is adjusted for the difference between estimated and actual labor and overhead costs:
    D Work in progress (Current assets)
    C Direct labor (Liabilities)
    D Work in progress (Current assets)
    C Applied manufacturing overhead
    (Liabilities)

    And second, WIP is cleared and posted to finished goods:
    D Finished Goods (Current assets)
    C WIP (Current assets)

  9. When the customer is invoiced and the invoice is sent to QuickBooks, the sales transaction is made:
    D Accounts receivable (Current assets)
    C Sales (Revenue)
    (This transaction is made by QuickBooks according to the invoice in QuickBooks.)

  10. When products are shipped to the customer, then the cost of the products is posted to cost of goods sold account:
    D Cost of goods sold (Expenses)
    Finished Goods (Current assets)

  11. When a payment has been…
    …made:
    C Bank (Current assets)
    D Accounts payable (Liabilities)

    …received:
    D Bank (Current assets)
    C Accounts receivable (Current assets)

    Payments are synchronized in two ways, can be entered into Invoices and Bills either in MRPeasy or QuickBooks Online.
    Payments for POs are synced only if POs are posted as Bills to QuickBooks Online.

  12. When additional fees are posted to transfer orders, these increase the cost of the transferred items:
    D Materials on hand / Finished goods (Current assets)
    C Transfer Orders liability (Liabilities)

Synchronization of changes on the accounts is posted once per day as a manual journal to QuickBooks Online, which posts total changes. As an exception to this, Invoices and Purchase Orders are synchronized within 5 minutes.

Working with Purchase Orders and Invoices

Posting new items, customers, and vendors to QuickBooks

  • When posting invoices and purchase orders to QuickBooks, MRPeasy will create stock items, customers, and vendors in QuickBooks, if they do not exist.
  • Stock items are matched by SKU in QuickBooks and Part Number in MRPeasy. The Name field in QuickBooks maps to the Part description field in MRPeasy.

Synchronizing Purchase Orders or Bills with QuickBooks Online

During integration setup, you must choose if Purchase Orders in MRPeasy are posted to QuickBooks Online as Bills or Purchase orders.

Once the Invoice ID has been entered on Purchase Orders or Purchase Invoices in MRPeasy, then it will be synchronized to QuickBooks Online.

Posting additional fees on an MRPeasy Purchase Order to QuickBooks Online

If the Additional fees field is used on a Purchase Order in MRPeasy, then this is posted as a line item to QuickBooks Online.

This must be posted to the integration default account (Purchases or Inventory). The additional fees are expenses which are added to inventory valuation. This will be expensed when finished goods are sold and included in COGS.

If additional fees are expensed immediately, and not part of inventory valuation, then for these, non-inventory items in MRPeasy can be used. In the QuickBooks Online Bill, if necessary, the desired expense account can be selected for the item.

Synchronizing Invoices to QuickBooks Online

Once invoice type is marked Invoice or Credit invoice, and status is not Dummy, they are synced to QuickBooks Online.

Reconciling accounts

How to reconcile a Direct labor account?

Direct labor cost is part of the cost of goods sold (Expense), and it is pre-applied to products before a pay run is made. This allows to estimate the real cost of products, but this also means that the pre-applied portion of labor costs must be reconciled with actual labor costs.

Generic example, periodic reconciliation of posted direct labor:

  1. A pay run is made.
    For example, resulting account transactions might be the following:
    D Wages and Salaries (Expense)
    C Payroll (Current liability)
    D Payroll (Current liability)
    C Bank (Current assets)

  2. A manual journal entry is made to zero out direct labor liability for that period:
    D Direct labor account (Current liability)
    C Wages expense (Expense) / or COGS / or similar

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

How to reconcile the Applied Manufacturing Overheads account?

Applied manufacturing overhead cost is part of the cost of goods sold (Expense), and it is pre-applied to products before bills have actually been received. This allows to estimate the real cost of products, but this also means that the pre-applied portion of overheads must be reconciled with actual expenses.

Generic example, periodic reconciliation of posted applied manufacturing overhead:

  1. Bills are entered on expense accounts as normal.
    For example, resulting account transactions might be the following:
    D Expense account(s), e.g. COGS
    C Accounts payable (Current liability)
    D Accounts payable (Current liability)
    C Bank (Current assets)

  2. At the end of the accounting period, a manual journal entry is made to zero the applied manufacturing overhead account for that period:
    D Applied manufacturing overhead account (Current liability)
    C Expenses account(s) / or COGS / or similar.

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

How to reconcile the Transfer Orders Liability account?

Transfer orders cost is part of the cost of goods sold (Expense), and it is pre-applied to products, before bills have actually been received. This allows to estimate the real cost of products, but this also means that the pre-applied portion of overheads must be reconciled with actual expenses.

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

Generic example, periodic reconciliation of posted transfer orders liability:

  1. Transportation expenses are entered as normal.
    For example, resulting account transactions might be the following:
    D Transportation (Expenses)
    C Accounts payable (Current liability)
    D Accounts payable (Current liability)
    C Bank (Current assets)

  2. At the end of the accounting period, a manual journal entry is made to zero the Transfer Orders Liability account for that period:
    D Transfer Orders Liability (Current liability)
    C Expenses account(s) / or COGS / or similar.

Always consult your local accounting specialists, to make sure you follow local laws and regulations.

Troubleshooting

Synchronization logs

To see what manual journal entries have been posted to QuickBooks Online, please go to Settings -> System settings -> Integrations -> Synchronization logs.

Issues:

  • Invoice is not posted to QBO.
    - MRPeasy only posts invoices in statuses 'Unpaid', 'Paid partially' or 'Paid'; and types 'Invoice' or 'Credit invoice'. Invoices in other statuses or types are not posted. Please check the status and type of the invoice.
    - Invoices are posted once per 5 minutes. To synchronize immediately, click Add to QuickBooks in the Invoice details page.
  • Purchase Order is not posted to QBO.
    - The "Invoice ID" must be saved in the Purchase Order details in MRPeasy, before it will be posted. Please check that this is done and the PO is saved. 
    - Purchase Orders are posted once per 5 minutes. To synchronize immediately, click Add to QuickBooks in the Purchase Order details page.
  • Error messages when sending an invoice to QuickBooks Online after applying a tax.
    - When posting invoices to QBO, the applied tax rates must exist in QBO beforehand.
    - Please pre-configure these tax rates in QBO, or update these invoices and then try to post them again.
  • Error message "Business Validation Error: You must select an account for this transaction." when trying to post Invoice or PO to QBO.
    - Please go to QuickBooks -> Products, and check that every product in the document has both income and expense accounts set.
  • Error message "Invalid Reference Id : Accounts element id *** not found" when trying to synchronize balances.
    - Please go to MRPeasy -> Settings -> System settings -> Integrations > -> QuickBooks -> Change accounts, and check that all accounts are selected.
  • Error message "Duplicate Document Number Error."
    - This means that there is already a document in QBO with this number.
    - This may happen when you delete a document in MRPeasy, do not delete it in QBO, and re-create the document in MRPeasy. MRPeasy does not delete documents in QBO automatically. If a document has been posted to QBO, and it is needed to delete it, please delete it manually in both systems. The software works like that to avoid a conflict when a document is posted to QBO, and your accountant starts to process it, and at the same time, somebody deletes this document in MRPeasy.

Old version

Above mentioned functionality is available in the new version of the integration, from October 2-nd, 2017. If you have used the integration before that day, this functionality is not available. To enable it, go to MRPeasy -> Settings -> System settings -> Integration -> QuickBooks, disconnect from QuickBooks, and connect again.

Support

The integration between QBO and MRPeasy is maintained by MRPeasy. If you have technical questions about the integration, please turn to MRPeasy support. However, our Support team is unable to consult you regarding the setup of your accounting in QBO.


  1. Transfer orders liability (Current liability), or similar.
    If you have several sites between which you move items, then transfer fees, which are applied to inventory costs, are posted on this account. This should be a liability, transfer expenses pre-applied to inventory, and should be reconciled regularly with actual expenses.
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