QuickBooks Online

QuickBooks Online is a 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:

  • It is possible to choose if only documents (Purchase Order/Invoice, Invoice, Credit-Invoice) are duplicated to QuickBooks, or also all inventory and manufacturing transactions are posted to QuickBooks with journal entries.
  • The integration can be configured to work fully automatically.
  • Sales, inventory transactions, manufacturing, and purchases should be managed in MRPeasy. Financial values, such as changes in inventory accounts, WIP, COGS, etc. are posted to QBO daily.

Jump to:

  1. How to connect with QuickBooks Online?
  2. How does the integration work between MRPeasy and QuickBooks Online?
  3. Selecting what to synchronize.
  4. Choosing how Purchase Orders/invoices are synchronized.
  5. Selecting accounts for the integration.
  6. How to import items, customers, and vendors from QuickBooks Online?
  7. How is the first synchronization performed?
  8. When are synchronizations performed?
  9. Can I use inventory tracking in QuickBooks Online?
  10. How does inventory tracking work in MRPeasy?
  11. Can I use several inventory accounts?
  12. Can I use several sales accounts?
  13. How are new items, customers, and vendors posted to QuickBooks Online?
  14. How to work with Purchase Orders (POs) and Invoices?
  15. How to reconcile direct labor, overheads, and transfer expense liabilities?
  16. Troubleshooting, synchronization logs.

Setup of the integration between MRPeasy and QuickBooks Online

Step 1. Connect MRPeasy and QuickBooks Online

  1. Log in to MRPeasy.
  2. Navigate to Settings -> System settings -> Integrations.
  3. Click on Connect to QuickBooks to connect MRPeasy and QuickBooks.

Step 2. Choose what to synchronize

It is possible to choose the synchronization of the following:

  1. Sales - If selected, Invoices and Credit-Invoices are sent to QuickBooks Online automatically, according to the synchronization schedule. If not selected, these can be sent manually only.
  2. Procurement - If selected, Purchase Orders / Purchase Invoices are sent to QuickBooks Online automatically, according to the synchronization schedule. If not selected, POs can be sent manually only.
  3. Balances - If selected, the financial transactions that are recorded in MRPeasy regarding inventory management, manufacturing, procurement, and sales, are posted to QuickBooks Online with journal entries, according to the synchronization schedule. If not selected, the posting of balances with journals is completely disabled.

Step 3. Choose how Purchase Orders are sent to QuickBooks Online

Purchase Orders from MRPeasy can be posted to QuickBooks as:

  1. Purchase Orders in QuickBooks, or
  2. Bills in QuickBooks.

Important! 

  • Payments for purchases are synchronized only if purchase orders are posted to QuickBooks as bills.
  • If Several invoices per PO is enabled, then POs are not posted to QuickBooks. Purchase Invoices are posted as Bills.

Step 4. Select accounts for the integration with QuickBooks Online

If synchronization of "Balances" is not selected in step 2, two accounts must be chosen:

  1. Purchases (Current Asset).
    - The default account used for items on Purchase Orders / Purchase Invoices that are duplicated to QuickBooks.
    - If "Balances" are not synchronized, this could be an inventory account, or expense account, etc.
    - If "Balances" are synchronized, this is an account for holding costs of items or services not yet received, but invoice from the vendor has been received or paid. It must not be manually changed in any documents in QuickBooks.
  2. Sales (Revenue).
    - The default sales account used for items on Invoices and Credit Invoices that are duplicated to QuickBooks.
    - An account where sales revenue is posted. It could be freely changed in documents in Xero.

If synchronization of "Balances" is chosen in step 2, the following accounts or similar must be chosen additionally:

  1. Bank account (Current Asset).
    - An account to where payments, if entered in MRPeasy, are posted to.
  2. One Inventory (Current asset) account only; or separate Finished goods (Current asset) and Materials on hand (Current asset) accounts.
    - Accounts for tracking the value of inventory.
    - All items with a BOM are considered finished goods; items without a BOM are considered materials.
    - Inventory/Stock tracking must not be used for items in QuickBooks Online.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. Cost of goods sold (Expense).
    - An account where the cost of goods sold is posted, once the items are shipped to the customer.
  8. A single Inventory Adjustments account; or separate Inventory gain (Revenue) and Inventory loss (Expense) accounts.
    - Accounts for posting inventory balance changes from manual adjustments of inventory levels.

Step 5. 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, by using the respective buttons.

This will import new objects only. If some objects 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.

Step 6. 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

Generally, it is possible to configure if only documents (Purchase Order/Invoice, Invoice, Credit-invoice) are duplicated to QuickBooks, or also all inventory and manufacturing transactions that are tracked in MRPeasy are posted to QuickBooks with journal entries.

  1. Events in direction MRPeasy -> QuickBooks.
  2. Events in direction QuickBooks -> MRPeasy.
  3. Synchronization schedule.

Events in MRPeasy and the resulting events in QuickBooks Online:

# MRPeasy document MRPeasy event QuickBooks event QuickBooks Debit account QuickBooks Credit account
Purchasing
1 Purchase Order Purchase Order is created. No event.    
1.1 Purchase Order / Purchase Invoice The 'Invoice ID' is saved. PO or Bill is created*. 'Purchases' QuickBooks controlled (eg, Accounts Payable)
1.2 Purchase Order / Purchase Invoice PO is updated. PO or Bill is updated*, if QuickBooks accepts the update. According to 1.1
1.3 Purchase Order / Purchase Invoice PO is received. Journal is made***.
(Exceptions: 2.2, 3.1)
'Materials on Hand' 'Purchases'
1.4 Purchase Order / Purchase Invoice  Payment is saved. Payment is saved for Bill**. (Payment is created according to the difference in the sum of saved payments in MRPeasy and QuickBooks.) QuickBooks controlled (eg, Accounts Payable) 'Bank'
1.5 Purchase Order / Purchase Invoice  Payment is deleted. No event, payment must be deleted manually.    
1.6 Purchase Order / Purchase Invoice PO is deleted. 1. If PO had additional transactions associated, a new journal is made with net adjustments***. According to 1.3, 2.2, 3.1
      2. PO/Bill is not deleted, it must be deleted manually.    
Purchasing - additional transactions of Subcontracting Purchase Orders
2 Shipment (for a Purchase Order.) Shipment is created for shipping parts to vendor No event.    
2.1 Shipment  Goods are picked from stock. Journal is made***. 'Work in Progress' 'Materials on Hand'
2.2 Purchase Order PO is received. Journal is made***. (This is an exception to 1.3) 'Finished Goods' 'Work in Progress'
'Purchases'
3 Purchase Order (for an operation in a MO.) "Shipment date" is saved. Journal is made***. 'Work in Progress' 'Purchases'
3.1 Purchase Order PO is received. No event. (This is an exception to 1.3)    
Manufacturing
4 Manufacturing Order Manufacturing Order is created No event.    
4.1 Manufacturing Order Parts are consumed. Journal is made***. 'Work in Progress' 'Materials on Hand'
 
4.2 Manufacturing Order Operations are started. 1. Journal is made with full planned overhead cost***. 'Work in Progress' 'Manufacturing Overheads'
  2. Journal is made with full planned labour cost***. 'Work in Progress' 'Payroll/Direct labour'
4.3 Manufacturing Order Manufacturing Order is finished. 1. Journal is made***. 'Finished Goods' 'Work in Progress'
      2. Journal is made to adjust overhead and labour cost***. According to 4.1, 4.2.
Sales
5 Customer Order Customer Order is created No event.    
6.1 Invoice Invoice status is changed from 'Dummy' to 'Unpaid'. Invoice is created*. QuickBooks controlled (eg, Accounts Receivable) 'Sales'
6.2 Invoice Invoice is updated. Invoice is updated*, if QuickBooks accepts the update. According to 6.1
6.3 Invoice Payment is saved. Payment is saved for Invoice**. (Payment is created according to the difference in the sum of saved payments in MRPeasy and QuickBooks.) 'Bank' QuickBooks controlled (eg, Accounts Receivable)
6.4 Invoice Payment is deleted. No event, payment must be deleted manually.    
6.5 Invoice Invoice is deleted. No event, invoice must be deleted manually.    
7.1 Credit-invoice Credit-invoice status is changed from 'Dummy' to 'Unpaid'. Credit-invoice is created*. QuickBooks controlled (eg, Accounts Payable) 'Sales'
7.2 Credit-invoice Credit-invoice is updated. Credit-invoice is updated*, if QuickBooks accepts the update. According to 7.1
7.3 Credit-invoice Payment is saved. Payment is saved for Credit-invoice** (Payment is created according to the difference in the sum of saved payments in MRPeasy and QuickBooks.) 'Bank' QuickBooks controlled (eg, Accounts Receivable)
7.4 Credit-invoice Payment is deleted. No event, payment must be deleted manually.    
7.5 Credit-invoice Credit-invoice is deleted. No event, credit-invoice must be deleted manually.    
8 Shipment (for a Customer Order.) Shipment is created No event.    
8.1 Shipment Goods are picked from stock. Journal is made***. 'Cost of Goods Sold' 'Finished Goods'
Other inventory transactions
9 Manual stock lot A manual stock lot is created in MRPeasy during the stock-taking. Journal is made***. 'Materials on Hand' / 'Finished Goods' 'Inventory gain'
10 Write-off A manual write-off is created in MRPeasy during the stock-taking. Journal is made***. 'Inventory loss' 'Materials on Hand' / 'Finished Goods'
11 Transfer Order Transport fees are applied to a Transfer Order, and Transfer Order is received. Journal is made***. 'Materials on Hand' / 'Finished Goods' 'Transfer orders liability'
Other transactions
12 Purchase Order, Purchase Invoice, Manufacturing Order, Manual stock lot, Write-off, Transfer Order, Shipment Document is changed and inventory cost or balances change. Journal is made with net adjustment***. According to the transactions, which are updated.

 

Events in QuickBooks Online and the resulting events in MRPeasy:

# QuickBooks document QuickBooks event MRPeasy event
Payments
1 Bill, Invoice, Credit-Invoice Payment is saved. Payment is saved for Purchase Order / Purchase Invoice.**
(Payment is created according to the difference in the sum of saved payments in MRPeasy and QuickBooks.)
2 Bill, Invoice, Credit-Invoice Payment is deleted. No event, payment must be deleted manually.

 

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 evening (usually between 9 p.m. and 11 p.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 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.

Inventory tracking in MRPeasy

In MRPeasy, the principles of inventory tracking are the following:

  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. By default, MRPeasy uses FIFO (FEFO, when Expiry dates are used) principle when booking goods for consuming or shipping goods from inventory.

    It is possible to manually manage and override the bookings and consumption of inventory, e.g. for actual costing and/or for very detailed tracking and traceability.

  3. Financial transactions are automatically made when specific events happen with the inventory.

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

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). 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, or product configuration page, 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.

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