Using QuickBooks Online Simple Start with Square Inventory
A bookkeeper's question about pairing QBO Simple Start with Square highlights how to handle sales data when inventory stays in Square and isn't tracked in QuickBooks.
When a small business processes payments through Square, a common bookkeeping setup is to leave inventory management entirely in Square while using QuickBooks Online (QBO) strictly for financial tracking. This approach often leads to a practical question: do you need to pay for a higher-tier QBO subscription, or is the most basic plan enough?
The Simple Start Approach
QuickBooks Online Simple Start is the entry-level subscription. It tracks income and expenses, captures receipts, and handles basic sales tax, but it does not include the built-in inventory tracking tools found in higher tiers like Essentials or Plus.
However, if you are only recording daily or monthly sales summaries from Square, you do not necessarily need QBO’s native inventory features. You can use a standard service or non-inventory item on your sales receipts to represent your Square deposits. Because you are not adjusting stock quantities inside QuickBooks, Simple Start is often perfectly capable of handling this workflow.
Handling Square Sales in Simple Start
To make this setup work, you typically record sales in QuickBooks using a Sales Receipt. You can create a generic product or service item mapped to your preferred income account. When you enter the total sales from Square, you can use that generic item for the revenue line.
To keep the books accurate, you also need to account for the processing fees Square deducts before depositing the money into your bank account. You can add the fee as a negative line item on the same Sales Receipt, or record it as a separate expense transaction when the bank deposit clears.
Connecting the Accounts
Intuit offers a direct Square integration for QuickBooks Online. Depending on how the sync is configured, the app can automatically import your daily Square sales summaries, taxes, and processing fees directly into QBO.
If you choose to use the direct integration, it will map your Square sales to a basic sales receipt in QuickBooks without requiring you to activate advanced inventory modules. This allows you to maintain your stock levels in Square while keeping your accounting clean and straightforward in Simple Start.