HouseCall Pro Refunds and the QBO Integration
When integrated into QuickBooks Online, HouseCall Pro can encounter issues when processing refunds because the two software programs handle refunds differently. Our experience in software integration and management is vast, meaning we work with many companies such as Jobber, Buildertrend, Knowify, ServiceMate, and some smaller companies like BuilderPrime. One of our most popular invoicing software for current clients is HouseCall Pro. While the integration between QuickBooks and HCP is quite successful, some parts of the accounting do not translate smoothly.
HCP vs. Quickbooks Processing
HCP and Quickbooks have one issue that causes the difference in how refunds are processed: what happens to the invoice after the refund is issued? In QuickBooks online, the software assumes that the invoice is closed. The customer will not be repaying this invoice for the refunded amount.
With Housecall Pro refunds, the opposite occurs. The invoice is re-opened for the refund amount, meaning the customer now owes payment on this invoice again.
The two software’s opposite reactions lead to two sub-problems. What happens when the customer does not repay? What happens when the customer pays? We have to look at the effect of each software on these two scenarios.
What Happens When the Customer Does Not Repay?
Let’s start with Housecall Pro. If the customer does not repay, what happens to the invoice? Unfortunately, there is now an outstanding invoice for the portion refunded to the customer. There are a multitude of ways to correct an open invoice in HCP.
The options are discounting, creating a negative line item for the refund, or creating a local payment. Discounting and creating a negative line item will negate your sales reports in HCP correctly.
However, it will cause negative numbers across your QBO accounts receivables report. The local payment will increase your sales report in HCP, but the purpose of the local payment is to be able to make a payment that does not integrate.
We recommend the last option because HCP is an invoicing and dispatching software. Your sales and income will be more accurate with your accounting software, so we favor the fix that does not affect your accounts receivable.
In Quickbooks, if a customer does not repay the invoice, the invoice is already correct. However, the listed adjustments above will affect the accounts receivable. Using the discount line or a negative line item is because it eases the clean-up process in QuickBooks online.
Accounts receivable management removes the discount or negative line item in QBO and saves. If you push the invoice again into QBO for any reason, you must make this correction again.
The local payment will leave the accounts receivable report in the correct shape on the QBO side, which is best since your financial information and standing should be reflected in QBO over HCP.
What Happens if the Customer Does Repay?
In HCP, if the customer repays the outstanding invoice, for example, changing the payment method from credit card to check, all that needs to be done is mark the invoice as paid again. Easy.
Again, the problem appears on the accounts receivable report for QuickBooks online. The second payment will come through the integration and have no invoice to be received. The invoice did not re-open, so now you are dealing with a negative for the entire repayment.
The simplest way to correct this without disrupting your income breakdown would be to double the invoice. The second payment then has an invoice to receive against, creating an accurate picture of what occurred financially. You will have these following transactions occur: the first payment will go against the original invoice, and you then subtract the refund, putting this customer interaction at zero.
Doubling the invoice ensures you are accounting for that second payment, so the customer interaction equals the original balance. It does not double your income because a refund can be accounted for in QBO.
Conclusion
The integration between HCP and QBO is far from perfect, but at least multiple workaround options exist to solve its problems. HCP refunds are one of the top issues, but this blog has various ways of handling them based on how your business reviews its information. The most critical part of these integrations is ensuring that someone watches for errors and known issues that could cause a mess in your books.
If you are more of a visual learner and need to watch someone walk you through these scenarios instead of reading about them, please check out our youtube video How to Properly Handle Refunds between HCP and QuickBooks with James to give you a first hand recap.If you are still determining which plan works best for you or need additional help or have any questions, Waterford Business Solutions is happy to help. Feel free to call us at 864-351-0852 or email us at Info@WaterfordBusiness.com.
