In 2004 I created a web site for my wife’s glove business called PalmFlex.com. Shortly after, I attended a QuickBooks Conference in Boca Raton, Florida.  At the conference I met Brad Waddell, the man who created the QODBC driver. The QODBC driver enables QuickBooks to communicate with other programs and is essential for most applications that integrate with QuickBooks. I asked Brad whether he could develop an application that would import orders from our web shopping cart into QuickBooks. He said he could, and introduced me to Chuck Vigeant, his partner at the time. Chuck supervised the production of the import utility and several months later it was up and running. I was thrilled to experience the efficiency and accuracy of downloading sales into QuickBooks, rather than dealing with the grinding burden of manual data entry.

At the end of our first month in business, I discovered a problem. The purchases in our shopping cart were paid by credit card and the batch deposits on our bank statement did not show the credit card detail, so I could not reconcile. When I tried to access the credit card payment information online, it was a nightmare to find the data. As a result, I could not determine which payments to select in our QuickBooks “Payments to Deposit” window to match batch deposit on the bank statement.  Therefore I had no way to know which online transactions were actually deposited. “I can’t run this business if I can’t reconcile my banks statements,” I exclaimed to my wife Barb in anguish.

After fretting over the issue for several days, the only solution I could come up with was to randomly select credit card payment in the “Payments to Deposit” window until the deposit totaled a dollar or so over the amount of the deposit on the bank statement, and then put in a line item negative adjusting entry in the “Make Deposit” window so that the total exactly matched the bank statement. This enabled me to reconcile my QuickBooks checking account accurately every month, even though there was no relationship between the transactions in our web store and the bank statement.

In the meantime I had signed up for QuickBooks Merchant Services so we could process orders that were taken over the phone by credit card in the “Receive Payments” window. This was a completely separate account to the online merchant account in PalmFlex.com, with a different account number. When I reviewed my bank statement I could see by the merchant account number whether deposits were from internet sales or phone sales. I noticed that the QuickBooks Merchant Services payments were always batched together in the “Payments to Deposit” window and the total of the batch was exactly the total of the deposit amount on the bank statement. This was a huge development!  Any business that accepts credit cards would be able to reconcile their bank statement faster, easier and more accurately if they used QuickBooks Merchant Services to process their credit card transactions.

 However, my web store was using a 3^rd party merchant processor and so those payments were only listed individually. I surmised that if I could use QuickBooks Merchant Services to process my web transactions as well, perhaps I could download those payments as batches, and then I would not be depositing random payments and making adjusting entries. It was no problem to sign up my web store with QuickBooks Merchant Services, as I already had an account with them, but how was I going to get that payment data into QuickBooks?

To find out, I contacted the senior product manager at QuickBooks Merchant Services. He told me that the batch information could be transferred to my shopping cart when transactions were processed online, but I would need to a software developer to customize the code in the utility that downloads the transactions into QuickBooks.  As Chuck Vigeant was no longer doing this type of integration, who could I turn to? I knew that this technology was now being used by a few web stores like GoDaddy.com and ProStores.com. However their shopping carts were limited in terms of functionality and customization. They were web hosts with a mass market appearance and basic utility. They were not appropriate for our specialized business where we were selling gloves with variations is material, style, size and color. I knew that Intuit had purchased Homestead, a web store provider, and they were developing its QuickBooks integration, but once again, it was not compatible with the personalized shopping experience we were trying to create. At least the technology is available.

I contacted Manish Jha owner of Atandra. He makes a very good product called T-Hub which downloads orders into QuickBooks from many web stores including Amazon, Yahoo Store, eBay and X-Cart. As I was migrating my web store to X-Cart, I asked Manish if he could customize T-Hub so it also downloads QuickBooks Merchant Services batch payment information. He agreed, and last week informed me the development was complete and ready to test.

This new is a significant and exciting breakthrough that will provide a solution to a significant ecommerce accounting problem: facilitating bank statement reconciliation with shopping cart transactions. This will elevate the ability of millions of small businesses doing ecommerce to manage their finances easier, faster and more accurately.

I will post information about my QuickBooks Merchant Services download tests on this blog when I have the results.

For information about QuickBooks Merchant Services, click here: http://quicklabs.com/quickbooks_merchantservices.html

For information about T-Hub, click here:
http://quicklabs.com/Integration/T-Hub.html

 

 

 

 

This entry was posted on Friday, October 31st, 2008 at 1:58 am and is filed under QuickLabs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.