When you create a sales transaction in QuickBooks, you are required to map each line of the transaction to a QuickBooks item.
Also called "Products and Services," these items allow for greater transparency and precision than mapping directly to general ledger accounts.
They also better reflect reality since the sale of multiple products or services could all flow into a single account in the GL.
Novi AMS Maps to Items
One of the benefits of using Novi AMS is the way that we match our business rules to the rules already in force within QuickBooks. Just like QuickBooks requires you to use items when creating invoices or sales receipts, Novi does the same.
This symbiosis is one ingredient to the special sauce that allows Novi and QuickBooks to integrate so seamlessly.
A question we often get is when someone is trying to map to an Account in the Chart of Accounts. This is incorrect. Items are IN accounts, but an actual item needs to be created within an account before it can be mapped in Novi.
Mapping to Items in Novi
Both event tickets and dues rules must be mapped to an existing item in QuickBooks Online. To update this mapping in Novi, click within the Item dropdown of the section and select the appropriate item.
Each event ticket must be mapped to an item. Feel free to map multiple tickets to the same item or create a unique item for each ticket. It's up to you and your accountant as to how much detail you'd like to track.
Perhaps you want to track sponsor tickets to a different item than regular member tickets? Or perhaps you want to track this year's annual meeting to a different item (and therefore a different GL code) than last year's meeting.
The good news is that once you decide what business rules you'd like the event and corresponding tickets to follow and map the tickets to their appropriate items, Novi will take care of the rest. All of your event registrations will be mapped correctly.
Each dues rule is also mapped to an item. This allows your association to track things like new vs renewing members differently in your accounting system or have different items for each member type.
You can also get solid reporting on items like reinstatement fees or application fees. Dues rules accounting can be as simple or detailed as you'd like.
Ecommerce Products = Items
Products are the one circumstance where Novi maps to an account from the chart of accounts. This is because a Novi product is an item (Product or Service) in QuickBooks and if you remember from earlier in the article, items are in accounts.
We have created what software engineers call a 1:1 or a one-to-one relationship between Novi products and QuickBooks items. We do this to ensure that your sales reports like the "Sales by Product" report inside of QuickBooks are powerful and accurate.
The Bookkeeper / Accountant's Role
For better controls, most associations will generally limit access to their QuickBooks account to a small subset of their staff. Novi AMS enforces this business practice by requiring certain tasks to be done in QuickBooks by an authorized staff member or outside advisor.
Prior to an event ticket or dues rule being created inside of Novi, the bookkeeper or accountant should create the appropriate item inside of QuickBooks. When doing this, the item can be mapped to the proper GL account. Once this is complete, any staff member with admin access to Novi should be able to map the dues rule or event ticket to that item. We have found that this separation of concerns allows the accounting team to keep pristine books without impeding the rest of the staff from their jobs.
Changing the Account Mapped to an Item in QuickBooks
Any change of the GL account to which an item is mapped must be done in QuickBooks.
How to change the income account for a Product/Service item within QuickBooks
In QuickBooks, select the Gear icon on the Toolbar.
Under Lists, select Products and Services.
On the Action column of the Product/Service you want to edit, select Edit.
From the Income Account drop-down, select the new account.
If you want all previous use of the item to be changed, mark the box "Also update this account in historical transactions." Note: This box only becomes available after the account is changed. Make sure to go slowly. You can easily miss it. If you do miss it, see this workflow from QuickBooks.
Click Save and close.