The integration between Katana and QuickBooks Online simplifies the invoicing process by enabling the direct sync of sales orders (SOs) from Katana to QuickBooks as invoices. This functionality ensures accurate and efficient financial tracking, supporting both bulk and partial invoicing based on delivery status. It's designed to streamline accounting workflows, making it easier to manage finances across platforms.
Invoicing all
Once you've connected your QuickBooks account to Katana, you'll find a new Invoice column in the Sell screen and SO card.
In this column, if you select Invoice all for a SO it will create a matching invoice in QuickBooks and the Invoice status will change to Invoice created QuickBooks.
The value of the transaction will be recorded on the revenue account (the one selected during the initial connection to QuickBooks).
If your business operates in multiple currencies, Katana will include the currency of the order when creating invoices in QuickBooks.
Clicking the status will direct you to the invoice in QuickBooks.
Bulk invoicing
You can invoice several sales orders in one go through bulk invoicing.
On the Sell screen, select the orders you want to invoice.
Click Invoice selected to generate a matching invoice for each selected SO.
A box will pop up to display the progress.
Once complete, the Invoice status will update to Invoiced.
Note: This won't create a consolidated invoice for all selected sales orders, but rather a matching invoice in QuickBooks for each SO.
Partial invoicing for each delivery
Open up a SO card. If anything on the SO has been packed or delivered, an Invoice some... option becomes available.
Packed and Delivered sections of a SO can be separately invoiced. Each area has a Create invoice button. You can't partially invoice items that haven't been shipped - if items that haven't been shipped need to be on an invoice, you'll need to deliver the whole sales order.
Clicking Invoice some... opens a window with all the packed and delivered sections of the SO. You can select one or multiple sections to invoice.
The bottom of the window includes a checkbox that allows you to add all the selected sections into one invoice. If this checkbox (Create one invoice for all selected rows) is unchecked, separate invoices will be created for each selected section.
The data on an invoice created using partial invoicing is different from existing invoicing logic:
Invoice number (ref on memo field) - SO#/1, SO#/2, etc
Invoice date - Delivery date (picked date)
NOTE: Once an order is partially invoiced, you'll no longer be able to create a single invoice for the whole order.
If a partially invoiced SO includes a shipping charge, the fee will only be included on the first partial invoice (invoice number ending with " /1"). Once a shipping fee has been invoiced, the shipping fee line can no longer be edited and will remain this way even if the SO is reverted and a credit memo is created. If the same SO is invoiced again, the shipping fee won't automatically be included and you will need to do this manually in QuickBooks.
Reverting partial invoices and credit memos
In accounting, transactions aren't deleted, but rather reversed. If an invoice needs to be taken back, a "Credit memo” is created (essentially the opposite of an invoice). The Credit memo can be for the entire invoice or part of it.
Currently, the QuickBooks integration offers no option to reverse an invoice from Katana, leaving the only option to delete the invoice in QuickBooks. This results in the invoicing status changing in Katana as well.
With partial invoicing, it can be very easy to create a mess of sales orders being created and invoiced, etc. This is why we also introduced Credit memos to QuickBooks for any reverted deliveries.
Note: Invoicing status cannot be reverted back to Not invoiced in Katana. You need to delete the invoice in QuickBooks, which will also revert the status in Katana. Reflecting the status back to Katana might take a few minutes. This only applies to invoices created using Invoice all. Credit memos are not sent to QuickBooks when this option is used.
How reverting works
If you click Revert on a delivered section that has been invoiced, a popup will appear that explains what will happen.
About reverting
In accounting, transactions aren't deleted, but rather a reverse transaction is created. If an invoice has to be taken back, a Credit memo is created (for the whole invoice or only part of it).
Katana's integration with QuickBooks offers doesn't offer an option to reverse an invoice, so the only choice is to delete the invoice in QuickBooks, which results in the invoicing status changing in Katana.
With partial invoicing it becomes easy to accidentally create a mess of things being invoiced, reverted, and so on. To ensure clarity, partial invoices that are reverted will send a credit memo to QuickBooks for the reverted deliveries.
Invoicing status
SOs have three invoicing statuses — Not invoiced (grey), Invoiced (green), or Partially invoiced (yellow). Once all SO rows are invoiced, the status will change to Invoiced.
If you choose to sync invoice payment statuses during the integration setup, the statuses [Paid, Partially Paid, or Unpaid] will also be displayed. Invoice payment statuses are only displayed when a SO has been invoiced.
Journal entry for inventory
There are two ways to set up a QuickBooks integration.
If the Accounting with inventory setup is chosen, a journal entry to decrease the inventory balance and increase the COGS expense account is sent to QuickBooks when an invoiced SO is delivered. If a delivered SO is invoiced, the journal entry is sent to QuickBooks with the invoice.
When invoicing the whole SO, a journal entry for inventory is sent to QuickBooks when the SO is fully delivered. With partial invoicing, the journal entry works in line with invoicing - the journal entry is sent for the invoiced delivery, not for the whole SO.
Note: There can be a small (10min) delay sending entries
Data between QuickBooks Online and Katana are matched as follows:
Katana | QuickBooks | Comments |
Sales order # | Memo (Invoice number - if enabled from QuickBooks) | Katana sends the SO number to the Memo (Message on statement) field on the invoice in QuickBooks.
If Custom transaction numbers are enabled in QuickBooks, Katana will also send the SO number to the QuickBooks invoice as an Invoice number.
If Custom transaction numbers are disabled in QuickBooks, then the Invoice number is generated automatically on the QuickBooks side. |
Customer | Customer | Customers are matched based on email. |
Bill to | Billing address | All address details are matched on invoice. QuickBooks customer address is not updated. |
Ship to | Shipping to | All address details are matched on invoice. QuickBooks customer address is not updated. |
Created date | Invoice date | SO created date in Katana is used as the Invoice date in QuickBooks (not the date when the invoice is created). |
Delivery deadline | - | - |
- | Payment term | Payment term data does not exist in Katana. Customer's payment terms are added to the invoice in QuickBooks automatically. If a new customer is created in QuickBooks, then your default QuickBooks payment terms are applied. |
Line item | Line item | SO line items in Katana will be added as invoice line items in QuickBooks. Products are matched based on SKU. Products that do not exist in QuickBooks are created automatically. Any values of existing products are not overwritten in QuickBooks when products are matched. |
Quantity | Quantity | - |
Price per unit | Rate | - |
Tax % | Tax rate | Assigned to the line item in QuickBooks based on the tax rate mapping defined during the initial connection of QuickBooks to Katana. |
- | Payment status | Payment status does not exist in Katana, this is not synced. |
Currency | Currency | Advanced or higher plans only |
Discount: | Discount | If discounts are enabled in QuickBooks Online, the total discount applied to a SO is sent to QuickBooks.
|
All invoices in QuickBooks are created as "Tax exclusive".
Integration setup with inventory accounting
If the Quickbooks Online integration with Katana is done using the Accounting with Inventory option then a journal entry for the Cost of Good Sold is sent to Quickbooks from Katana when the sales order is fully delivered.
This means that if an invoice is created for a sales order that is in a Delivered status, a journal entry that credits the inventory account and debits the Cost of Goods Sold account is sent to QuickBooks immediately after the invoice.
If an invoice is created for a sales order that is not Delivered in full, this transaction is pushed to QuickBooks only when the sales order’s status is delivered. Read more.
Deleting invoices
You can only delete invoices in QuickBooks Online.
Either navigate to the "Sales" section in QuickBooks and find the relevant invoice on the list or click on the "Invoice created QuickBooks" status if a SO in Katana to open the invoice in QuickBooks.
If you delete an invoice in QuickBooks that was created via the Katana integration, the Invoice status for the related SO is reverted to Not invoiced.
Note: It might take up to 15 minutes for the Invoice status to update in Katana after deleting the invoice in QuickBooks.
Your feedback is invaluable. Let us know your thoughts on this article or anything in Katana you'd like to see improved: [email protected]