The symbiotic relationship between 17hats invoicing and bookkeeping makes reporting revenue and sales tax an automatic process. There is no need to decipher the amount of sales tax to pull out from an invoice, or how to break down deposits from PayPal to put towards each invoice.
There are a few things you need to be aware of so that you understand the flow of bookkeeping.
- Bookkeeping is on Cash Basis. That means the date of the payment is also the date of the bookkeeping record. 17hats uses this to generate your P&L and Sales Tax reports.
- When a partial or full payment is made, not only will the invoice reflect the new balance, the bookkeeping module will create a transaction for the sale (based off the revenue category assigned to the invoice item), and a transaction for sales tax when applicable (based off of the sales tax category assigned)
- So what do you do with the deposit transactions from your bank feed? You should categorize them as "Transfer from accounts". Categorizing "Transfer from accounts" eliminates the "double post" effect of counting the revenue twice.
- PayPal and Stripe do not report the merchant fee to your bank. Meaning what you receive in your account is less than what the client paid for so you have to manually expense the merchant fees to account for the difference.
Here is another article which details what to do about bank deposits.
The first step to using 17hats Bookkeeping & Reporting is to connect your bank account. You can do this by clicking on the "connect account" within your Account Settings > Bookkeeping Options.
Here you can connect your account with over 20,000 financial institutions which will import transactions from the past 90 days.
If you don't see your bank on the front page, you can also search for your bank within the search bar.
After that, you can set up your transaction categories on the main bookkeeping options page
Here you'll see a lot of basic categories which you can edit or if you have any specific categories, you can add that using the "Add Category" button.
Once selected, you'll see a pop-up to enter the category information.
Next let's look at the main Bookkeeping tab where you can find all your transaction history .
The search filters will allow you to view transactions from each bank account, a specific category, type of transaction, or by the date range, amount or keyword.
You can also edit your transactions as needed from this page and generate reports.
Feel free to reach out via Live Chat if you still have any remaining questions and we'll be happy to help out!
Keywords: Bookkeeping, Invoices, Sales Tax, Reporting, Cash Basis, Accrual Basis