How does 17hats invoicing and bookkeeping work?

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.

1. 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.

2. 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)

3. 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. 

4. 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. 

KeywordSearch:  Bookkeeping, Invoicing


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