Katana's QuickBooks Online (QBO) integration allows you to create invoices in QBO based on Katana's Sales orders (SO).
When you've connected your QBO account to Katana, you can find a new Invoice column in the Sell screen and SO card.
Selecting Invoice all for a SO will create a matching invoice in QBO. The Invoice status will change to Invoice created QBO.
The value of the transaction will then be recorded on the revenue account initially selected during the initial connection to QBO.
If you do business in multiple currencies, Katana will also include the currency of the order when creating invoices in QBO. Read more about QBO and multicurrency here.
Clicking on the status will direct you to the relevant invoice in QBO.
Invoicing in bulk
You can also invoice several Sales orders in one go.
On the Sell screen, select the Sales orders you want to invoice.
Click on Invoice selected to generate a matching invoice for each selected Sales order.
A box will popup indicating the process.
Once complete, the Invoice status will change to Invoiced.
Note: This won't create a consolidated invoice for selected Sales orders, but only a matching invoice in QBO for each Sales order.
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 the invoicing button — Create invoice. You can't partially invoice any items that haven't been shipped - if items that haven't been shipped need to be on the invoice, you'll need to deliver the whole SO.
Clicking Invoice some... will open 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 not checked, separate invoices will be created for each selected section.
The data on an invoice created using partial invoicing is different from the existing invoicing logic:
Invoice number (ref on memo field) - SO#/1, SO#/2, etc
Invoice date - Delivery date (picked date)
NOTE: Once you've partially invoiced an order, 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 uneditable even if an 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 once created. If an invoice needs to be taken back, then a "Credit memo” is created (basically the opposite of an invoice). The Credit memo can be for the entire invoice or just parts of it.
Currently, the QBO integration offers no option to reverse an invoice from Katana, leaving the only option to delete the invoice in QBO. This results in the invoicing status changing in Katana as well.
With partial invoicing, it can be very easy to create a mess of combinations sales orders being created and invoiced, etc. This is why we're also introducing Credit memos to QBO for any reverted deliveries.
Note: Invoicing status cannot be reverted back to Not invoiced in Katana. You need to delete the invoice in QBO, 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 QBO 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 and whether or not you'd like to go through with the revert.
In accounting, transactions aren't deleted. Instead, a reverse transaction is created. If an invoice has to be taken back, a Credit memo is created (it can be for the whole invoice or only parts).
Katana's integration with QBO offers no option to reverse an invoice, so the only option is to delete the invoice in QBO, which results in the invoicing status changing in Katana.
With partial invoicing it becomes quite easy to create an accidental mess of things being invoiced, then reverted, and so on. To ensure clarity, partial invoices that are reverted will send a credit memo to QBO for the reverted deliveries.
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 the QBO 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 QBO when an invoiced SO is delivered. If a delivered SO is invoiced, the journal entry is sent to QBO with the invoice.
When invoicing the whole SO, a journal entry for inventory is sent to QBO 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.
Data between QuickBooks Online and Katana are matched as follows:
Sales order #
(Invoice number - if enabled from QBO)
Katana sends the SO number to the Memo (Message on statement) field on the invoice in QBO.
If Custom transaction numbers are enabled in QBO, Katana will also send the SO number to the QBO invoice as an Invoice number.
If Custom transaction numbers are disabled in QBO, then the Invoice number is generated automatically on the QuickBooks side.
Customers are matched based on email.
All address details are matched on invoice. QBO customer address is not updated.
All address details are matched on invoice. QBO customer address is not updated.
SO created date in Katana is used as the Invoice date in QuickBooks (not the date when the invoice is created).
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.
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.
Price per unit
Assigned to the line item in QuickBooks based on the tax rate mapping defined during the initial connection of QuickBooks to Katana.
Payment status does not exist in Katana, this is not synced.
Advanced or higher plans only
All invoices in QuickBooks are created as "Tax exclusive".
Integration setup with inventory accounting
When the Quickbooks Online integration to 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 Delivered status then a journal entry that credits the inventory account and debit the Cost of Goods Sold account is sent to QBO immediately after the invoice.
But if an invoice is created for a sales order that is not Delivered in full then this transaction is pushed to QBO only when the sales order’s status gets delivered. Read more.
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 for a specific SO in Katana to open the respective invoice in QuickBooks.
When you delete an invoice in QuickBooks that is created via 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.