Integrating Katana with QuickBooks Online allows you to manage your inventory and financial data efficiently. Depending on your accounting practices and requirements, you can choose between two primary methods for handling stock synchronization.
Integration setup options
Option 1: Track stock in QuickBooks Online (bills as inventory asset)
For businesses that need to reflect inventory changes in QuickBooks, you can periodically create manual journal entries based on data from Katana. This approach ensures that your financial statements accurately represent your inventory status.
Advantages:
Ensured data accuracy between Katana and QuickBooks
Track additional costs, stock adjustments, and manufacturing operation costs in both Katana and QuickBooks
Track the cost of goods sold (COGS) between Katana and QuickBooks
Option 2: Manage stock exclusively in Katana (bills as expense)
If your local accounting standards do not mandate tracking inventory in QuickBooks, you can opt to manage all stock-related activities solely within Katana.
Advantages:
Simplified accounting processes, as there's no need to record stock entries in QuickBooks.
Potential cost savings by using a QuickBooks plan without inventory tracking features.
Considerations:
Not suitable if your accounting regulations require inventory tracking in QuickBooks.
Steps for enabling stock 'push' sync
Follow these steps in the configuration section to align your inventory data between Katana and QuickBooks:
1. Send POs as an inventory asset
In Katana, navigate to the Integrations Marketplace and click Open configuration under the QuickBooks integration.
Enable Send Katana purchase orders as bill to QuickBooks.
Select Bills as an inventory asset (rather than Bill as an expense)
Select a QuickBooks asset account
2. Adjust for stock changes
Enabling this option allows you to push the stock adjustment value to QuickBooks, which will adjust the selected expense account and inventory asset account.
Checkmark Include purchase order additional costs in the QuickBooks bill.
Select an expense account.
3. Send manufacturing operations costs
If you track your manufacturing operations cost in Katana, like labor and overhead, we recommend sending these costs to QuickBooks to increase the selected liability account and inventory asset account:
Checkmark Send manufacturing operations cost to QuickBooks.
Select a QuickBooks liability account
4. Record cost of goods sold (COGS)
Have COGS automatically sent to QuickBooks when SOs are delivered in Katana. The selected expense account will increase, and the inventory asset account will decrease.
Note: The Cost of services is not included in the COGS value.
Enable Automatically send Katana Cost of goods sold to QuickBooks.
Choose a QuickBooks expense account
Further define the expense account by category via the Accounts by category tab and selecting different accounts for categories.
Handling subassemblies
If your production process includes subassemblies and you track them separately in QuickBooks:
Transfer materials to subassemblies
In Katana, filter MOs for subassemblies completed during the period.
Note the materials cost for these orders.
In QuickBooks, create a journal entry to:
Debit the subassemblies inventory account.
Credit the materials inventory account.
Add operations costs to subassemblies
In Katana, identify the operations cost for the subassembly orders.
In QuickBooks, create a journal entry to:
Debit the subassemblies inventory account.
Credit the appropriate liability account.
Transfer subassemblies to finished goods
Determine the total cost of subassemblies used in finished goods production.
In QuickBooks, create a journal entry to:
Debit the finished goods inventory account.
Credit the subassemblies inventory account.
Your feedback is invaluable. Let us know your thoughts on this article or anything in Katana you'd like to see improved: [email protected]