Computers are wonderful things especially when combined with a point of sale system. Gone are the days of counting back to make change, matching the drawer to your printer tape, and in some cases even 10-key. Instead, when you place an order, the cashier simply pushes the button that corresponds to the product or service and your order is processed. Some Point of Sale (POS) systems have even replaced pesky names of items (that require the ability to read) with pictures. Want fries with that? Easy, push the button that looks like french fries, and then the button that looks like a recycling bin. Simplicity of use at the tip of your finger, and the best part is that it all downloads simply and easily into your accounting software. However, are these systems truly as simple as advertised?
The way the POS integration works is typically that the POS will take all of the activity for the day, put it into a format that your accounting software can import, and then send that to information to your accounting software. In many cases this is in the form of a .CSV file that puts the information in a basic Excel-type format. This will normally require mapping the accounting categories in your POS to the chart of accounts in your Quickbooks or other accounting software. As long as your account mapping is done correctly you should be able to import you sales and inventory data seamlessly. However, if it is not set up properly on the front end it can be an accounting nightmare.
Here are a couple pitfalls to avoid when integrating your accounting file with your POS system.
– Avoid importing the same information twice. Now, typically a POS system will only export data if the data has changed. But, if you are downloading transactions from your bank and downloading them from your POS, there is a good chance that your income could be overstated. For example, if you import your POS sales for the day, make the deposit the following day, and then download that deposit from your bank the next day and classify it as sales, you have just effectively recorded that income twice. If the transactions are the same, you can match the bank download with what your POS has already downloaded. However, many variables could make those deposits different; anything ranging from credit card fees taken of the top to depositing checks only every other day.
– Quickbooks modules rarely handle foreign data well. Quickbooks is a great system for following specific reporting steps, such as tracking inventory through the purchase order/bill process, building assemblies, and invoicing the client with inventory items. However, when you journal entry figures into your inventory account, you will always have a difference between what your Ledger says and what your Quickbooks inventory count says. The same goes for Accounts Payable and Accounts Receivable. Undeposited Funds accounts in Quickbooks usually won’t even let you make a journal entry, but POS integrations can find their way around that. Think of POS imports in many cases as large journal entries. Unless you have a high end and expensive system, that is basically what the import is doing. So if you have it mapped to standard Quickbooks payable and receivable accounts, you will never again have a clean outstanding payable or receivable report to look at. In some cases, mapping to the Undeposited Funds account can corrupt the Quickbooks data file. As a solution, you may want to create accounts that perform the same function. For example, if you need your POS to record the sales into an undeposited funds account so that you aren’t double recording sales, you can create your own POS Undeposited Funds account as a current asset.
The good news is that POS systems create a very basic and user friendly interface that most IT techs can understand, and then store the information into formats that can go into accounting software or be pulled up for viewing later. In most cases, the clients POS systems is recommended by your franchiser or an industry expert. There are a lot of POS systems out there, and not all are created equal. Some have great customer service and great abilities, while others look great on the surface but may not be suitable for your accounting and/or reporting needs. We are constantly working with new POS systems in the field and helping clients discover how to best integrate their systems. If you have any questions, or there is any way we can help you with your POS system, please don’t hesitate to contact us.