I am developing an enterprise data integration platform that handles various financial transactions including invoices, payments, and refunds, with a specific focus on reconciling Shopify refunds in QuickBooks Online. My current challenge involves determining the best workflow and entities for tracking these refunds in QuickBooks, especially when these transactions are sanitized for privacy and assigned to a single 'generic' customer in our system.
Handling Refunds: Using the quickbooks/v3-php-sdk, what is the best practice for managing Shopify refunds in QuickBooks Online? How can I track these refunds accurately, considering they are processed as generic transactions for a single customer?
Linking Refunds to Payments: For refunds processed in Shopify, which entities or methods should I use to create corresponding transactions in QuickBooks Online? Particularly, I need a way to link these refunds to payments or bank transactions within QuickBooks.
From my research and exploration of QuickBooks Online's API, I've come across entities and types that might be relevant, but I'm unsure about their exact application in my specific scenario:
In QuickBooksOnline\API\Data, entities such as IPPCheckPayment and IPPCheckPurchase seem related, but it's unclear if they fit the refund scenario.
In QuickBooksOnline\API\Facades, I found QuickBooksOnline\API\Facades\Payment, but I'm uncertain about how this integrates with the refund tracking process.
Upon further investigation, including exploring the Payment Entity Page in QBO's API Explorer, I noticed references to checks in the context of payments. However, I'm still unclear about how this fits into the process of creating and managing refunds from Shopify. Specifically, I'm curious if setting Line.LinkedTxn.TxnType to "Check" is a step in the right direction, and how this integrates with my objective of reconciling Shopify refunds in a sanitized, privacy-conscious manner.
Any insights or guidance on the best entities and workflows to use for this unique integration challenge would be greatly appreciated.
In this solution, I address the challenge of reconciling Shopify refunds in QuickBooks Online using the PHP SDK. The process involves creating a credit memo, a purchase entry, and a zero-amount payment to link these transactions. This approach ensures accurate financial records in scenarios where standard methods may not be directly applicable.
Just perform this step as you normally would using the CreditMemo entity. You'll need to note the TxnId, CustomerRef and TotalAmt of the returned transaction and the total amount.
There's a lot of ways / use cases to create a creditmemo, but for this example, we'll assume
CustomerRef is 123 this is the RefId for the customer you are issuing the Credit Memo forTotalAmt is 137.22 it's important to get the amount including tax so it can be matched correctlyTxnId of the created credit memo is 51153 (this will be needed to match to the $0.00 payment later)In the QBO application, this would be creating an expense. A couple of important things to note about this step, is that this is primarily for noting the routing of funds from the asset account back into your receivables.
In Step 2, it's crucial to exclude taxes from the Purchase entry to ensure that it matches the CreditMemo. This is because the CreditMemo already accounts for tax implications, and including taxes in the Purchase entry will only offset and complicate the transaction amount available for matching.
See the link to the Purchase entity documentation above, but for this illustration, I successfully used a version of the following values to create a purchase.
{
"AccountRef": "101", // Asset Account
"PaymentType": "Cash",
"EntityRef": "123", // Customer reference ID of Credit Memo
"TotalAmt": "137.22",
"GlobalTaxCalculation": "TaxInclusive",
"TxnDate": "2010-01-01",
"Line": {
"Description": "refund to xxx credit memo",
"Amount": "137.22",
"DetailType": "AccountBasedExpenseLineDetail",
"AccountBasedExpenseLineDetail": {
"CustomerRef": "123",
"AccountRef": "201", // Accounts Receivable
"TaxCodeRef": "4", // Out Of Scope
"TaxInclusiveAmt": "137.22"
}
}
}
AccountRef @101 in this case this is the ref Id of the asset or holding account you want to pull the funds fromTxnDate should match the payment date in the next stepLine[].AccountBasedExpenseLineDetailAccountRef is the RefId for Accounts ReceiveableTaxCodeRef Important: the RefId for the TaxCode "Out of Scope"I'm going to assume the TxnId of the Purchase transaction is returned as 51154 for this example.
The job of the payment is to link the Purchase and the CreditMemo entities. It has a TotalAmt of 0.00.
The amount is set to $0.00 because the CreditMemo amount and PurchaseAmount are self cancelling, resulting in a net amount of $0.00
Using the same values as before for CustomerRef and TxnDate, you will add two line items to the payment. One with a LinkedTx.TxnType of Expense and one of CreditMemo, with matching amounts. Please be sure to include their respective LinkedTxn.TxnId numbers as well.
{
"CustomerRef": "123",
"TotalAmt": "0",
"ProcessPayment": "false",
"TxnDate": "2010-01-01",
"Line": [
{
"Amount": "137.22",
"LinkedTxn": {
"TxnId": "51154",
"TxnType": "Expense"
}
},
{
"Amount": "137.22",
"LinkedTxn": {
"TxnId": "51153",
"TxnType": "CreditMemo"
}
}
]
}
When you look at the response, you can check for the LinkedTxn values to ensure they matched.
This method is particularly useful in scenarios where standard reconciliation processes do not suffice, especially when dealing with complex integrations involving customer privacy or unique accounting requirements. While this solution worked well in my specific case, it will likely need tweaking for each specific case.