Single Order Entries versus Summary Entries
Streamlining Accounting: The Case for Summary Entries
When recording data into your accounting system, prioritizing both accuracy and usability is essential for effective financial reporting and decision-making.
The Problem with Single Order Entries
Some existing integrations allow you to import/record sales at the order level, by creating an invoice/sales receipt for each individual sale. Recording each individual transaction separately can clutter your financial records and make troubleshooting errors nearly impossible, especially for high-volume businesses. For instance, consider a coffee shop selling 500 coffees daily, translating to 15,000 transactions monthly. If recorded individually, each sale would generate its own invoice, flooding your accounting system and complicating error resolution.
This level of detail isn't necessary for financial reporting purposes and can always be retrieved from the source system (e.g., Square, Shopify, etc.). Our approach is different, and we believe it's more appropriate for ensuring clean and accurate data is recorded in your accounting platform.
The Advantage of Summary Entries
Instead of detailed transaction logs, we use summary entries to consolidate an entire day's activities into a single record. This method captures all sales summaries, payouts, and fees within a 24-hour period, simplifying account review and reconciliation. It aligns with the usual receipt of batched daily payouts rather than individual transaction transfers, just as you receive deposits from the source system rather than individual transfers for each coffee you sell.
Practical Example
As seen above, 150 individual transactions during the day which would have translated into 150 invoices cluttering your accounting platform. By using our approach, a single entry would capture the total sales for the same day with all relevant data being posted to the correct accounts (sales tax, discounts, tender types, etc.).
Daily report from source (Square)
Summarized Journal Entry (Square Sales)
We do allow mapping to subcategories for certain fields based on how the data is set up in your source system. For example, Square Sales can be broken down into categories like Food, Beverages, and Coffee sales, and then mapped/posted to the appropriate sub-accounts, provided that the items are correctly set up in the Square app.
Contact [email protected] if you are interested in learning more. We are here to help.