What does this article help you do

This article describes how to reconcile Authorize.Net payments in QuickBooks Online using PayTraQer.

Follow this guide to:

1. Connect Authorize.Net to QuickBooks Online using PayTraQer

2. Establish an Authorize.Net clearing account in QuickBooks

3. Sync Authorize.Net payments, refunds, fees, and settlements

4. Match Authorize.Net deposits in the QuickBooks bank feed

5. Reconcile the Authorize.Net clearing account at the month-end

6. Address common differences in deposits and clearing accounts

What Makes Authorize.Net Different?

Authorize.Net serves as a payment gateway, but it is not necessarily the platform where the initial sale occurs. 

It helps in authorizing and processing customer payments, but the actual sale might come from another system, like an e-commerce store, billing platform, invoice tool, or custom checkout.

This means that reconciliation differs from simply matching one bank deposit to one sale.

Authorize.Net activity is usually organized into settlement batches. A settlement can consist of approved card payments, refunds, eCheck transactions, returned eChecks, chargebacks, and other adjustments. Authorize.Net also generates reports for transaction details, settlement statistics, returns, chargebacks, eCheck.Net activity, and data for QuickBooks downloads.

When you enter that deposit as income, QuickBooks could miss refunds, fees, eCheck returns, or chargebacks. It may also create duplicate revenue if the original sale was already entered through another platform.

Before you sync, ensure that PayTraQer is set to create sales in QuickBooks or if it will just support payment, refund, fee, and settlement reconciliation.

Prerequisites

Before you sync Authorize.Net payments, make sure to finish these setup steps.

Create an Authorize.Net clearing account 

• In QuickBooks Online

1. Go to Accounting

2. Open Chart of Accounts

3. Click New

4. Choose Bank as the account type

5. Name the account Authorize.Net Bank Account

6. Save the account

• Use a Bank-type account since it can be reconciled in QuickBooks.

• Avoid sending Authorize.Net payments to your checking account directly during sync.

• For Authorize.Net reconciliation, it is advised to create a separate Authorize.Net bank account in QuickBooks instead of using your checking account for Authorize.Net transactions.

Create the required income and expense accounts

• Create or confirm the following accounts in QuickBooks Online:

• This configuration supports you in correctly matching Authorize.Net payouts and ensures that the final bank deposit is not recorded as direct income.

• When your Authorize.Net account deals with multiple currencies, set up a different clearing account for each currency.

For instance:

- Authorize.Net Bank Account USD

- Authorize.Net Bank Account GBP

• This keeps currency balances separate in individual clearing accounts.

How the Authorize.Net clearing account flow works

• The clearing account in QuickBooks is a temporary account that stores Authorize.Net transactions until the funds arrive in your actual bank account.

• Here’s how it works:

Step 1: Authorize.Net payments are integrated into QuickBooks.

Step 2: Payments are added to the Authorize.Net Bank Account.

Step 3: Fees are recorded as expenses when fee syncing is active.

Step 4: Refunds or returns lower the clearing account.

Step 5: PayTraQer makes a bank transfer from the clearing account to the checking account.

Step 6:The actual bank feed deposit is aligned with that transfer

• This separates gross sales, refunds, deductions, and deposits, making them easier to verify.

How to Reconcile Authorize.Net in QuickBooks Online Using PayTraQer

Step 1: Install and Connect PayTraQer

• Log in to QuickBooks Online and go to the Apps section.

• Search for PayTraQer, click on Get App Now, and authorize the link to your QuickBooks company.

• After you install PayTraQer, open it and select your preferred sync mode.

• Choose either Summary Sync or Itemized Sync depending on your accounting workflow.

• Go to the Connectors tab and pick Authorize.Net to start the connection.

• Make sure to use the correct Authorize.Net Merchant ID and account information. Do not link Authorize.Net as a standard PayPal account, as PayPal and Authorize.Net should be added as different connectors.

Step 2: Decide how Authorize.Net payments should be synced

• Check if Authorize.Net is your only sales source or just a payment gateway before syncing.

• This is significant since the sale could already be captured by another platform, such as BigCommerce, WooCommerce, Shopify, a billing tool, or a custom checkout.

Step 3: Configure Authorize.Net Sync Settings

• Check the Sales Settings and select Authorize.Net Bank Account as the clearing account.

• Set the Payment Method to Authorize.Net and pick the current or default customer.

• In Products and Services, link Authorize.Net Sales to the appropriate income account.

• In Tax Settings, prevent duplicate tax and apply the correct QuickBooks tax code.

• In Fees Settings, connect fees to Authorize.Net and Authorize.Net Processing Fees.

• Enable Payouts, transfer to checking, and consult How to Sync Authorize.Net with QuickBooks Online using PayTraQer.

• For complete setup instructions, check this article: How To Sync Authorize.Net with QuickBooks Online using PayTraqer

Step 4: Sync Transactions and Verify

• Start by syncing a short date range from Authorize. Net.

• In PayTraQer, choose the transactions and download the historical data.

• Examine the transactions closely before syncing them to QuickBooks Online.

• Check that sales, fees, refunds, and payouts are in the right accounts.

• Make sure to keep PayPal and Authorize.Net transactions distinct.

• If everything seems accurate, sync a larger date range and switch on Auto Sync for future Authorize.Net transactions.

• For complete sync instructions, check this article: How To Sync Authorize.Net with QuickBooks Online using PayTraqer

Step 5: Match Bank Deposits in QuickBooks Online Banking Feed

• Once PayTraQer logs the Authorize.Net payout transfer, access QuickBooks Online and navigate to Transactions or Banking.

• Go to the Checking account feed and remain in the For Review tab to find the Authorize.Net deposit.

• Locate the corresponding deposit and select Match, not Add, so QuickBooks connects it to the transfer already recorded by PayTraQer.

• This step is crucial because clicking Add may result in a duplicate deposit and inflate your income in QuickBooks Online.

• If the deposit does not match automatically, check the payout amount, payout date, transfer account used in PayTraQer, and if the payout has already been synced.

• Also, verify if refunds, fees, or chargebacks have altered the final net payout amount that was deposited into your bank account.

Step 6: Review the Authorize.Net clearing account

• The Authorize.Net Bank Account in QuickBooks Online should show the money that is still in Authorize.Net before it gets transferred to your actual bank account.

• To reconcile it, go to Accounting, select Reconcile, pick Authorize.Net Bank Account, input the statement ending date and ending balance from your Authorize.Net settlement report, and then begin the reconciliation process.

• During reconciliation, mark the transactions that correspond with your Authorize.Net report, such as sales, refunds, fees, chargebacks, and payout transfers.

• If all funds for the period have been paid out, the clearing account might be nearly zero, although some balance could remain for pending items.

• If the difference does not resolve, carefully compare QuickBooks with the Authorize.Net settlement report.

• Check if a payout was overlooked, a refund was synced twice, a fee was charged to the wrong account, PayPal and Authorize.Net were confused, or if the wrong ending balance was entered.

Step 7: Reconcile the checking account in QuickBooks Online

• After you reconcile the Authorize.Net clearing account, go to your main checking account and complete the regular bank reconciliation in QuickBooks Online.

• Select the Gear icon, click on Reconcile, choose the checking account, verify the starting balance, enter the ending balance and date from your bank statement, and then click Start reconciling.

• Compare the transactions in QuickBooks with those on your bank statement, and only mark the matching transactions as cleared during the reconciliation.

• Each payout should ideally correspond directly to the bank deposit and the transfer noted in QuickBooks Online.

• If a payout does not align, check the related transfer and ensure that the amount in QuickBooks matches the actual bank deposit.

• Avoid recording Authorize.Net sales directly into the checking account, as this account should only receive payout transfers from the clearing account.

Common Scenarios and How to Fix Them

PayTraQer vs Other Tools for Authorize.Net

FAQ

1) Why should Authorize.Net have a separate clearing account in QuickBooks Online?

A separate clearing account is necessary for Authorize.Net because the bank deposit could differ from the gross payment amount. The clearing account is useful for keeping track of payments, refunds, fees, returns, chargebacks, and settlement transfers until the final deposit is made into your actual bank account.

2) Should I use Summary Sync or Itemized Sync for Authorize.Net?

Choose Summary Sync for fewer QuickBooks entries and simpler reconciliation. Use Itemized Sync for detailed transaction information at the customer or item level.

3)  Why is my Authorize.Net clearing account not zero?

A clearing account can be non-zero if a settlement is still in transit, a fee is not accounted for, a refund wasn't synced, a return or chargeback is absent, or the payout transfer hasn't been initiated.

4)  How should chargebacks be recorded?

Chargebacks need to be tracked separately from regular refunds. Utilize accounts like Authorize.Net Chargebacks and Authorize.Net Chargeback Fees to monitor disputed payments and related charges.

5)  Can I use one Authorize.Net clearing account for multiple stores?

You are allowed to do this, but it may complicate reconciliation. If various stores are using the same Authorize.Net account, consider using separate clearing accounts, classes, or locations to ensure each store is tracked clearly.

6) What account type should I select for the Authorize.Net clearing account?

Select Bank for the account type. A Bank account can be reconciled in QuickBooks Online and is more effective for matching payouts.

7) What Authorize.Net activities can be synced into QuickBooks using PayTraQer?

With PayTraQer, you can sync Authorize.Net payments, refunds, fees, and payout or settlement transfers into QuickBooks Online based on your configurations.

8) Should Authorize.Net payments be synced as sales receipts or invoice payments?

Your QuickBooks workflow determines this. If invoices are already in QuickBooks, match the payment to the invoice. If there are no invoices, you can sync the payment as a sales receipt or a payment entry, depending on how you have it set up.

9) What if another e-commerce app already creates sales in QuickBooks?

Avoid syncing the same Authorize.Net payments as new sales. This could lead to income duplication. Instead, use Authorize.Net primarily for tracking payments, handling refunds, managing fees, and reconciling settlements.

10) What happens if I accidentally add an Authorize.Net deposit as income?

QuickBooks can indicate duplicate income. Delete the added bank feed transaction, then match the deposit to the appropriate payout transfer produced by PayTraQer.