How to Categorize Expenses in QuickBooks Online Automatically with Synder Sync

How to Categorize Expenses in QuickBooks Online Automatically with Synder Sync

E-commerce platforms might have numerous types of fees and keeping track of how much money online businesses have to pay to payment platforms and sales channels in fees is hard, especially if you receive payments through multiple channels. Until you take a close look, the amount can seem minor, however, once you start to calculate, it can turn out to bring you more losses than profit. That’s why it’s essential to keep tabs on the fees to be sure that selling on these platforms is profitable and you don’t spend too much.

In this guide you’ll learn how to categorize such expenses in QuickBooks Online automatically with Synder software.

Contents:

1. Problem Introduction: Categorize Expenses in QuickBooks Properly

2. Recording each platform fees into a separate category in QuickBooks

3. Recording different types of fees in QuickBooks Online into separate categories

Problem Introduction: Categorize Expenses in QuickBooks Properly

Let’s say you sell on Shopify and Amazon and use Stripe and ShopPayments as payment methods. You need to track fees for each platform in QuickBooks separately to be sure you don’t lose too much money on fees as well as be aware of the sums you pay to each platform. What’s more, you need to track Amazon Advertising and FBA fees separately from all the other fees in QuickBooks Online, and know how much money you spend. So you’ve got to find a way to categorize the fees in  QuickBooks into five categories: Stripe fees, Shopify fees, Amazon FBA fees, Amazon Advertising fees, and Amazon other fees. Let’s see how this can be done with Synder software.

Recording each platform fees into a separate category in QuickBooks

First of all, we’re going to categorize fees by platforms in QuickBooks to get a clear understanding about how much money we spend on fees for each one of them. Good news is, the only tool you need to categorize fees by platforms into the correct expenses category in QuickBooks Online is Synder, and it does this automatically. Once you connect all payment platforms and sales channels along with QuickBooks to Synder, it creates a default fees account for each platform in your QuickBooks and sends all the fees there. 

You can check (and change if needed) the account by following the steps below:

1. Log into Synder → Select the organization needed in the top left corner.

2. Go to Settings on the left menu → Click “Sync Settings”.

3. Go to the Fees tab → “Category” is the setting you need.

By default, you’ll have “Stripe fees” for Stripe, “Amazon fees” for Amazon, and the “Shopify fees” account for Shopify. The category type will be stated as “Expenses” and the detailed type – “Commissions and fees”. That means all fees from the above mentioned platforms will be automatically synced into these default accounts in QuickBooks.

Note: If you have a specific account your fees should go to in QuickBooks Online and it’s not the one selected by default, you have to select the account you need in the Category setting, and hit the Update button to save the changes.

From now on, all fees for each payment platform and sales channel will go to the selected account in QuickBooks Online!

Recording different types of fees in QuickBooks Online into separate categories 

Now we need to categorize Amazon advertising fees and FBA fees not into the default “Amazon other fees” account but into 2 separate expenses categories in QuickBooks – “Amazon Advertising fees” and “Amazon FBA fees”. This way, you’ll track them separately and have a clear understanding of the amount paid for these types of fees.

Here are the steps we’ll need to take:

1. Create expenses categories for fees in QuickBooks;

2. Set up Synder categorization rules.

Creating expense categories for fees in QuickBooks

Note: If you already have the categories you want to send Amazon Advertising and FBA fees in your QuickBooks, you can skip this part and move on to the next point.

1. Go to the Chart of Accounts in QuickBooks Online → Click the “New” button in the top right corner;

2. Now fill out the details of the new account: Select Expenses as the Account Type and “Advertising/Promotional” as the Detail Type;

3. Give the account a name → Click  the “Save and Close” button.

Do the same to create “Expenses” Account Type for FBA fees. Select “Shipping, Freight and Delivery” as the Detail Type instead of “Advertising/Promotional”.

Setting up Synder categorization rules

Now we need to create a categorization rule that’s based on the “if-then” conditions to automatically send FBA and Advertising fees to the correct expenses categories and track them separately. 

1. Go to the Categorization Rules tab in Synder on the left menu → “Rules” → “Create Rule”;

2. Add the trigger that starts your rule: “Expense” → “Created”. It means that each time Synder creates an expense in your QuickBooks, this Rule will fire.

3. Add the condition to differentiate between the expenses: “If Line:Description” → Contains → Advertising”. That’s how you tell Synder to check if this condition is met and apply the rule according to it. 

4. Add the second condition “if No: If Line:Description → Contains → FBA

Note: In your case, you can use any other condition that makes sense for your business flow (amount, products, etc.).

5. Finally, choose the action for each of the conditions: “QuickBooks action → Expense → Update current”. This will tell Synder that it should update the exact expense which has triggered the rule.

6. You’ll be provided with an expense template where you’ll be able to select the category needed from QuickBooks for “Amazon Advertising fees” and “Amazon FBA fees”.

7. Save the rule.

Checking the results in QuickBooks

1. Go to the Synder’s Platform Transactions tab; 

2. Search for the Advertising fee and sale with FBA fee → Sync it;

3. Go to QuickBooks and find P&L to make sure everything is applied to the expected categories.

Synder records all the fees as expense transactions so you’ll have expenses created for each fee.

Here’s how your P&L report in QuickBooks Online will look like:

Now you’ve got your Profit & Loss in QuickBooks with Stripe fees, Shopify fees, Amazon other fees, Amazon Advertising fees, and Amazon FBA fees tracked separately. As simple as that!

Wrapping up 

Even though the sales channels and payment platforms fees categorization can seem unimportant at first sight, in reality it’s one of the top things to do for online businesses. Being aware of the amounts you pay to each sales channel and payment platform vs. your revenue for them helps your online business have better control over losses and spot the time when you need to react and change your strategy faster. That’s why it’s always good to automate the fees categorization and save time on repetitive day-to-day tasks to focus on results.

With Synder, you’ll not just get smart automatic categorization but also the data that matters. Check out Synder’s functionality – smooth synchronization, flawless reconciliation and accurate reporting by signing up for a free 7-day trial, or get a guided tour of the tool on a demo with our specialist. Make the most of automation!

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Ann Lamon

Ann Lamon

Ann has 3+ years of experience working in a fintech company helping Saas and e-commerce businesses and accountants automate their books. With a background in Customer Success and a keen interest in psychology, she belives that human approach is the main thing driving the success of any business.

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