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Deep Dive: Expensify Card and QuickBooks Online Auto-Reconciliation: How it works!

Nicole Trepanier
Nicole Trepanier Expensify Team Posts: 498 Expensify Team
edited May 27 in Deep Dive Docs

If you are using both QuickBooks Online and the Expensify Card, we will automatically reconcile your expenses daily in QBO.

Initial setup:

  1. First, go to your group policy that is connected to QBO. On the Export tab, ensure that the user selected as the Preferred Exporter is a policy admin with an email address that belongs to the domain that you will be using for the Expensify Cards, e.g., if your domain is company.com, your Preferred Exporter's email address would need to be email@company.com.
  2. Next, head to the Advanced tab and ensure that Auto-Sync is enabled.
  3. Now, head to Settings > Domains > Company Cards > Settings. Use the dropdown menu next to "Preferred policy" to select your group policy that is connected to QBO and has Scheduled Submit enabled.
  4. In the dropdown menu next to "Expensify Card reconciliation account", select your existing QBO bank account for reconciliation. This account will need to be the same bank account that you use for Expensify Card settlements.
  5. In the dropdown menu next to "Expensify Card settlement account", select your settlement business bank account (shown in Expensify under Settings > Account > Payments).

How this works:

  1. On the day of your first card settlement after the card is set up, we will create the Expensify Card Liability account in your QBO general ledger, and if you've chosen Daily Settlement, then we will create an Expensify Clearing Account there as well.
  2. During your QBO auto-sync on that same day, if there are unsettled transactions, we will create a journal entry with the total of all posted transactions since the last settlement. This will credit the bank account selected, and either debit the new Expensify Clearing Account (for Daily Settlement) or the Expensify Liability Account (for Monthly Settlement).
  3. Once the transactions post and the expense report is approved in Expensify, the report will be exported to QBO with each line as individual credit card expenses. For Daily Settlement, an additional journal entry will credit the Expensify Clearing Account and Debit the Expensify Card Liability Account. For Monthly Settlement, the journal entry will credit the Liability account directly and debit the correct expense categories.

* Note: If you want to select the Expensify Card Liability Account as the export account for non-reimbursable expenses when exporting as credit card to QBO, you will need to wait until the account is created during the first Auto-Sync as described in step 1 of "how this works". Please also note that it is not necessary to select the Expensify Liability Account there for reconciliation to work as long as you have selected it under Domain > Company Card > Settings as described in "Initial setup". For more information on QBO export settings take a look at this page.

Example:

We have card transactions for the day totaling $100, so we create the following journal entry upon sync:

The current balance of the Expensify Clearing Account is now $100

The transactions posts in Expensify and the report is approved and exported, so we create the second Journal Entry:

We then reconcile the matching amounts automatically which clears the balance of the Expensify Clearing Account.

You will now have a debit on your credit card account (increases the total spent) and a credit on the bank account (reduces the amount available). The Clearing Account has a $0 balance. 

Each expense will also create a credit card expense exactly as we do today, exported upon final approval. This will debit the expense account (category) and contain any other line item data.

This process will occur daily during the QBO Auto-Sync to always keep your card reconciled.

Note: If Auto-Reconciliation is disabled for your company's set of Expensify Cards, a Domain Admin can set an export account for individual Expensify Cards via Settings > Domains > Company Cards > Edit Exports. The Expensify Card transactions will then export into the selected account. These will always export as a Credit Card charge (in your accounting software), even if the non-reimbursable setting in their accounting configuration is set to another type such as a Vendor Bill.

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