This article describes how to reconcile Braintree transactions in QuickBooks Online with PayTraQer.

Follow this guide to:

1. Connect Braintree to QuickBooks Online through PayTraQer

2. Create a Braintree clearing account in QuickBooks

3. Align Braintree payments, fees, refunds, and payouts

4. Accurately match Braintree bank deposits in QuickBooks

5. Reconcile the Braintree clearing account at the month's end

6. Address common discrepancies in payouts and clearing accounts

What Makes Braintree Different?

Braintree stands out as it manages more than just a basic card transaction. It is capable of processing card payments, PayPal transactions, digital wallets, refunds, fees, and chargebacks prior to the final payout being deposited into your bank.

In QuickBooks Online, the bank feed generally displays only the deposit from the payout. It does not effectively illustrate the entire payment activity related to that figure. This can create challenges in reconciliation when sales, fees, refunds, and payouts are recorded together.

For effective Braintree reconciliation, it is essential to monitor each segment of the payment process individually. PayTraQer streamlines this workflow by syncing Braintree transactions into QuickBooks Online in a well-structured format. It helps separate sales, fees, refunds, and payouts, which allows bookkeepers to review the records clearly and match the final bank deposit with assurance.

Prerequisites

Before syncing Braintree transactions, make sure to finish these setup steps in QuickBooks Online.

Create a Braintree clearing account

• In QuickBooks Online:

1. Go to the Accounting section

2. Open the Chart of Accounts

3. Click on New

4. Choose Bank as the type of account

5. Name it Braintree Bank Account

6. Save the account

• Select a Bank-type account as it can be reconciled in QuickBooks.

• Avoid using an income account, expense account, or any other current asset account for the Braintree holding account. 

• A Bank-type clearing account makes it easier to match payouts and reconcile at the end of the month.

Create the required income and expense accounts

• Create or confirm the following accounts in QuickBooks Online:

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

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

For instance:

- Braintree Bank Account USD

- Braintree Bank Account GBP

- Braintree Bank Account CAD

• This keeps currency balances separate in individual clearing accounts.

How the Braintree clearing account flow works

• The Braintree clearing account serves as a temporary holding account in QuickBooks Online.

• Here’s how it works:

Step 1: Braintree payments are entered into QuickBooks.

Step 2: Payments are recorded in the Braintree clearing account.

Step 3: Braintree fees are classified as expenses from the same clearing account.

Step 4: Refunds and chargebacks decrease the clearing account.

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

Step 6: The bank feed deposit in QuickBooks corresponds to the payout transfer.

• This separates gross sales, processing fees, refunds, and net payouts, making them easier to verify.

How to Reconcile Braintree 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 Braintree to start the connection.

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

Step 2: Decide how Braintree sales should be synced

• Before syncing, check if Braintree is your only sales source or just your payment source.

• This is significant as many businesses operate Braintree alongside an ecommerce platform.

• Look at the table below to choose the right setup.
  

• Do not allow two systems to record the same sale in QuickBooks.

• If another connector is already sending sales to QuickBooks, set up Braintree in PayTraQer primarily for handling payments, fees, refunds, and payout reconciliations.

Step 3: Configure Braintree Sync Settings

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

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

• In Products and Services, link Braintree 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 Braintree and Braintree Processing Fees.

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

• For complete setup instructions, check this article: How to Sync Braintree with QuickBooks Online using PayTraQer.

Step 4: Sync Transactions and Verify

• Start by syncing a short date range from Braintree.

• 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 Braintree transactions distinct.

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

• For complete sync instructions, check this article: How to Sync Braintree with QuickBooks Online using PayTraQer.

Step 5: Match Bank Deposits in QuickBooks Online Banking Feed

• Once PayTraQer logs the Braintree 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 Braintree 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 Braintree clearing account

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

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

• During reconciliation, mark the transactions that correspond with your Braintree 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 Braintree settlement report.

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

Step 7: Reconcile the checking account in QuickBooks Online

• Before you reconcile, review your Braintree reports and the history of PayTraQer syncs.

• Check:

• Total payments

• Total refunds

• Total fees

• Total chargebacks

• Total payouts

• Transactions still in transit

• Failed or skipped syncs

• After you reconcile the Braintree 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 Braintree sales directly into the checking account, as this account should only receive payout transfers from the clearing account.

• The difference has to be $0.00. If the difference is not zero, check the Braintree report with the PayTraQer sync history and the QuickBooks clearing account register.

Common Scenarios and How to Fix Them

Month-end checklist

Before closing the month, confirm the following:

PayTraQer vs Other Tools for Braintree

FAQ

1) Why should Braintree have a separate clearing account in QuickBooks Online?

Braintree needs its own clearing account since it operates as a distinct merchant account separate from PayPal. Use a dedicated account like the Braintree Bank Account to monitor Braintree sales, refunds, fees, chargebacks, and payouts prior to the funds being deposited into your checking account.

2) Can I use my PayPal Bank Account for Braintree transactions?

No. Although Braintree is a PayPal company, Braintree and PayPal should not share the same QuickBooks Online account. Combining both processors in a single clearing account can lead to payout discrepancies, duplicate deposits, and problems with reconciliation.

3)  What Braintree reports should I use for reconciliation?

Make use of the Braintree transaction report, settlement report, payout report, fee report, refund report, and chargeback report when relevant. These reports aid in ensuring that QuickBooks Online corresponds with Braintree activity.

4)  How do I verify that Braintree transactions synced correctly? 

Verify one sale, one fee, one refund if needed, and one payout transfer in QuickBooks Online.

Ensure that sales are recorded in the Braintree Bank Account, fees are recorded in Braintree Processing Fees, and payouts are moved to checking.

5)  Should I use Summary Sync or Itemized Sync for Braintree?

Choose Summary Sync if you want organized books and smoother payout reconciliation. Select Itemized Sync when you need detailed transaction information, customer-level insights, or thorough audit tracking in QuickBooks Online.

6) Why does my Braintree clearing account not return to zero?

The clearing account might not reach zero if there are unsettled transactions, a payout is still pending, or if fees, refunds, or chargebacks haven't been synced. Before making any manual adjustments, review the Braintree ending balance and the pending payout report.

7) Why is my Braintree deposit not matching in the QuickBooks bank feed?

A Braintree deposit might not match if the payout amount, payout date, fees, refunds, chargebacks, or transfer account are not consistent. Check the payout in PayTraQer against the Braintree settlement report before reconciling it in QuickBooks Online.

8) How should Braintree fees be recorded in QuickBooks Online?

Braintree fees must be linked to a different expense account, such as Braintree Processing Fees. In the Fees Settings of PayTraQer, set the Vendor to Braintree and the Expense Account to Braintree Processing Fees.