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Options for setting up QuickBooks Online integration
Options for setting up QuickBooks Online integration

When connecting your Katana account to QuickBooks Online, you have two main choices for how the setup is done depending on your needs.

Anneli Tuisk avatar
Written by Anneli Tuisk
Updated over a week ago

When establishing the connection between Katana and QuickBooks Online, you'll be given two main choices for how you want the connection to be established. The option you choose depends on what works best for your accounting principles and how you use Katana with QuickBooks Online.

Simple accounting vs. Accounting with COGS

Simple accounting

This option uses a revenue account for invoices created from Sales orders (SO) and an expense account for bills created from Purchase orders. With Simple accounting, you can choose to use both invoicing and billing or only one of them. This setup won't update the inventory balance in QuickBooks Online. All purchases sent from Katana to QuickBooks will be put into the chosen expense account in the income statement.

Accounting with Cost of Goods Sold (COGS)

With this option, you can choose an inventory account for purchases, a revenue account for invoices, and an expense account for delivered goods. Bills created from Purchase orders in Katana use the chosen inventory account, which means purchases will increase the balance of the inventory account. When an invoice is created for a delivered SO, a journal entry for the cost of this sale is also sent from Katana to QuickBooks. This journal entry credits the inventory account and debits the expense account. If the invoice is created for a SO that isn't fully delivered, the journal entry is pushed to accounting when the SO status is marked Delivered in Katana.

Who should decide which option?

There are both positives and negatives for either option depending on your workflows and accounting principles. When making the choice we recommend discussing it with your business' accountant.

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