7 Tips to Prevent Sync Issues in FreshBooks

The term synchronize seems too technical to inspire a lot of emotions. But tell someone that they just lost their data due to a "synchronization error" and all sorts of emotions begin to emerge.

Sync (or is it synch?) has been one of those features that you love and hate. Everyone wants their app to sync with something else. All the software developers make sure to highlight sync on their features page. Yet it's also the one feature that seems to be the most prone to catastrophic problems. Who reading this hasn't had a phone suddenly end up with 3 copies of everyone's contact because of a sync issue?

Yet despite all of the problems we have with sync, I have to rely on sync daily to keep something as important as my client's bookkeeping data up to date.

FreshBooks is a great app for time tracking and invoicing, but it doesn't handle all bookkeeping tasks. That means I need to get that data into another app. The way bookkeeping data is synched with FreshBooks is entirely one-time, one-way.

I create an invoice in FreshBooks. As soon as it is sent, it gets synced into the receiving app, like Xero or Kashoo. That's where the synching stops. If I make changes to that invoice in Xero, those changes don't go back to FreshBooks. Conversely, if I make changes to the invoice in FreshBooks the changes don't get sent to Xero. Payments will sync across later on, but that's it.

Why is this important?

There's usually a reason we're using 2 apps. In my case, it's usually a situation where the client is using FreshBooks day to day, and I'm using Xero or Kashoo. If either of us makes changes to an invoice, the other side doesn't see the updates in the reports. This means there will be discrepancies between both sets of books. If it was always the case that Xero was right and FreshBooks was wrong then I could just send the client some reports each month. But that's not the case. More often than not it's my data that's wrong.

So, bookkeepers, what are we to do? Here are 4 steps to make sure your data stays in sync.

  1. Be aware of the fact that this is an issue. Just being aware that this is an issue will help you prepare.
  2. Make sure your client is aware. Let them know that changes they make to FreshBooks invoices after they're sent don't update the data in Xero or Kashoo. This might make them less likely to make late changes, or at least let you know when they do.
  3. Make a checklist of areas you'll want to review each month before generating final reports.
  4. Create revenue and receivables reports in each app. Once the numbers in both apps match then you're good to go.

Just because 2 checklists are better than 1, let me run you through the 3 most common situations that would cause the data to get out of sync.

  1. Invoice totals are adjusted after they are sent. This usually happens on the client side. Maybe someone submits their time late and has to add it to the invoice later. Sometimes the customer pushes back about certain line items and adjustments need to be made.
  2. Invoices are written off or deleted. I don't mean bad debt writeoffs down the road. This just means that, after it was sent to the customer, the invoice was fully discounted or removed.
  3. Payments are changed or removed. All payments will sync across properly, but sometimes a payment is reversed, removed, or applied to a different invoice.

Until we get better sync this is just going to be something we have to deal with. If you put together a detailed plan, and follow it each month you should be fine.

Let me know if you've had this problem before: either in the comments or by replying to this email.

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One on One: Xero


*One on One is a series of reviews. Instead of a long-winded breakdown, I give you a quick summary along with one positive and one negative. *

So far my One on One reviews have covered 2 of the 5 main bookkeeping apps I use. Today we're going to do a quick review of Xero.

If you follow this industry at all you've heard about Xero. I don't think it's any secret Xero has their sights set on being the company who overtakes Intuit. I mentioned in a previous post that Intuit just announced that QuickBooks Online just surpassed 1,000,000 users. Xero has the silver medal with over 500,000 users. It's no surprise. They have created a very powerful service that offers a lot of power with a large directory of compatible 3rd party add-ons.

Name: Xero

Description: Xero is a full featured bookkeeping service based out of New Zealand. Founded in 2006, it has grown to become the second largest cloud-based accounting software. From the software I've used in my business it comes the closest to replicating the features and power that Intuit has in its offerings. Payroll is still quite basic and not available everywhere. It also doesn't do time tracking so I usually use it with FreshBooks. However, Xero does connect with a wide range of 3rd party offerings to fill in the gaps where it lacks features. You can connect your bank accounts, send out and receive payments on invoices, and track everything your accountant would need from you. The only major feature it's still lacking is inventory, so this is still not suited for any businesses that need inventory management.

Cost: There are 3 price tiers, from $20-40/month. The first tier is quite limited (send 5 invoices per month) and the top tier only adds multi-currency support. Most people will be using the $30/month plan.

One Positive: Bank rules, hands down. Some software will do a fairly good job of learning how to categorize your downloaded bank transactions. This lets you get through bank reconciliations a bit quicker than a fully manual process. Xero takes this 3 steps further with bank rules. You can create simple or complex rules to automatically handle the transactions as they come into Xero. For example:

If the vendor = Staples, then mark this as Office Supplies. That's a really simple example. Take a look at the screenshot below to give you an idea of what you can do. Combine this with Cash Coding, which lets you accept multiple transactions at once, and you can really fly through those bank recs each month.

Xero Bank Rules

One Negative: Reporting. I just can't find a lot of good to say about most of these bookkeeping services when it comes to reporting. Why is this so tricky? The list of reports is a bit bigger than others, but you can't do much in the way of customizing them. I don't have a problem spending the time to create a custom report of my own, but I'm not given the tools I need to make this happen. Xero is tracking the data, so there's a database that contains all the data points I need. Why not give us the ability to dig into our data and report it the way we want?

Final Thoughts: Xero is pretty darn good as an all-around bookkeeping solution. Other services do certain things better. FreshBooks does invoicing better. ADP is much better for payroll. But if you need something to handle your entire business and your business is a bit more complex than what Wave can handle, Xero is a great solution.

Let Xero Supercharge your bank reconciliation

The trouble with trying to pick a "favourite" cloud-based bookkeeping service is that they all have unique things that make them stand out.

In Xero, at least for me, their standout feature is bank rules. Most services will automatically pull down bank transactions. Some of them will even "learn" how to categorize some of your transactions over time. Xero's implementation is my favourite.

Xero lets you create rules. These rules let you auto-categorize transactions as they come in based on several criteria. Instead of trying to explain it all by text, let me show you.

Here's a transaction that was downloaded from my PayPal account.

xero bank reconciliation

As you can see, Xero pulled down the date, the payee (PayPal), the description (Fee), and the amount ($9.22). PayPal fees are a common transaction in this account. Instead of having to manually categorize these each time, let's create a rule.

Click on the "Create rule" button at the top right of the transaction details. That will bring you to the Bank Rules screen. It's so powerful, I can't get you a screenshot that covers the full set of options. There are 7 different sections to each rule. Here are the first 4.

xero bank rules

xero bank rules 2

1.. The first part is the "IF" in a typical IF/THEN statement. This covers all the criteria your bank will provide that Xero can use to categorize the transaction. Some of these are going to be the same each time...others are specific to the individual transaction. I can't tell you how to handle each of yours, but I'll use this PayPal transaction as an example.

What you see above is what Xero filled in. We're going to change this a bit.

  • Let's keep the Payee equals PayPal.
  • We'll remove the Reference equals. That will be different each time.
  • We can also keep the Description equals Fee.

What this means is that anytime a transaction from "PayPal" shows up with "Fee" in the description it will trigger the next parts of the rule.

2.. You've got 3 choices on how to set the payee.
* The payee from #1 will be used.
* You can select a payee or create a new one.
* You can opt to wait and fill it in during reconciliation.

3.. You can skip this step unless the transaction is for an asset purchase.

4.. This is where you set the category. In this example we're just going to put "Merchant Fees" in the Account field, and leave the rest as is.

5.. You can leave this setting as is, unless you want to fill in the reference during reconciliation.

6.. In this example we're going to keep this as PayPal. However, if you're setting up a rule for a transaction that happens across multiple accounts, you can change this to "all bank accounts".

7.. Finally, we need to give the rule a name. PayPal is fine, but since there might be more than 1 rule associated with PayPal, something like PayPal Fees might be more appropriate. Click Save.

And that's it. Here's what you'll see once you've saved it.

xero bank rules 3

Now let's go back to the bank rec screen and see what it looks like.

xero bank reconciliation 2

See the difference? Now, instead of having to fill in each value, Xero just asks you if you want to apply the PayPal Fees rule. All you have to do for any future PayPal fee is click OK and it gets properly categorized.

Final tip:

The way Xero categorizes the info from the bank accounts can vary. For example, sometimes the "description" from a bank transaction gets placed in the "Description" field; other times it gets placed in "Reference". You can edit this in the bank import settings (maybe I'll cover this in another post), but there's a way to cover your bases here.

In #1, click on the dropdown menu that shows "Description". Instead, select "Any text field". Now the rule will still run even if the description was saved to the "Reference" field instead.

Happy reconciling!

5 Things You Give Up When You Move Your Bookkeeping Online

I made a big jump back in 2010. I decided to try out a few online bookkeeping services...just for fun. I had never considered them a viable alternative to my QuickBooks, but thought it would be an interesting experiment.

Fast forward almost 4 years and I'm using Xero, Freshbooks, Kashoo, and Wave every day. I still use QuickBooks, but it doesn't represent the majority of my time anymore.

That's not to say this change didn't come with some trade offs. Working almost entirely online is very useful, but there are going to be some features and conveniences you will give up when making the switch.

Before you make the jump, here are a few things you'll need to be prepared to give up or change.

  1. Data entry speed
    This one isn't maybe. If you do a lot of data entry in a desktop app like QuickBooks, you are going to find it slower working online. The app you have installed on your computer doesn't care if your internet is slow. You can work at home or at a campground and you'll get the same performance. Unless you're running a seriously old computer, you are going to find working online slower than what you're used to. This is especially true for bookkeepers and accountants. If you're used to ripping through a stack of receipts like it was nothing, you are going to feel the difference. I've tried a ton of bookkeeping services, and no matter how good their interface is, they just can't replicate the speed of a local application. Some of the reasons are found in my second point.

  2. Keyboard shortcuts
    This will be more for the power users out there. QuickBooks has a few really useful keyboard shortcuts to help you speed through large stacks of paperwork. Once you learn them, you will really miss them when you move online. Some online services incorporate them. So far, Kashoo is the only one to incorporate my favourite...Ctrl+Enter. In QuickBooks, when you're ready to save a bill or invoice, you press Ctrl+Enter and it saves the invoices and starts a new one. I hate having to take my hands off the keyboard to click the Save and New button. If you enter one or two bills into your software every day, it's not a huge deal. If you have to get through hundreds of bills each day, it quickly takes a toll on your productivity...not to mention the RSI issues. So, if you're used to hitting Ctrl+W to write a cheque, or Ctrl+Del to delete a line...I'm sorry to say those days are now behind you.

  3. Powerful, customizable reports
    QuickBooks, at least the version I use, has spoiled me on reports. If you really fill in all the details into every bill or invoice, you can pull out some really great information for yourself or your clients. And, what you can't do directly from a one-click report can be achieved by combining the results of a couple in Excel and working some magic. The point is, QuickBooks lets you track a lot of details. One big example is Class Tracking. If you want to split up your company into departments, and track each one's profitability, you won't find that in many of the online options. Xero has a version of it, which is nice, and Netsuite (more suited to bigger businesses) also has the feature. It's out there, but just don't expect that it will be the norm. Most online options will give you a list of reports you can pull...some better than others. The big problem you'll come across is that most of them aren't as customizable as the one's you'd find in QuickBooks.

  4. Backup I've got all of my client's QuickBooks files set to backup automatically whenever I close the app. It keeps the last 10 (date stamped) versions of the backup somewhere safe, and that folder gets backed up automatically each day. Of course, the reason for that is that QuickBooks used to have a problem with data corruption...especially on large client files. I haven't had a big problem in years, but it's nice to have those backups just in case. Online, your backups are handled by the company hosting the service. I don't get a backup file saved locally from FreshBooks or Xero. And, to be honest, I've only had to deal with an issue once where I needed something restored. I do wish I could have those local backups though. If there was ever a problem, or if the service shut down, I would prefer having a file on my computer that I could restore from. Maybe there are some out there that provide that option...I just haven't come across it yet.

  5. Accountant workflow
    This isn't a loss, but more of a change. If you (and your accountant) are used to sending them a copy of your QuickBooks file at year end, this new system will be different. There's no "file" to send. In this case you can either download reports or give them access to your account. More modern accountants won't have a problem here. Some accountants are fine with this change...others aren't. Make sure to speak to them before making the change so you know how to handle year end.

"There's no free lunch"

Gaining the ability to collaborate in real time with your clients and their data is incredible for both sides. Bookkeepers don't get a frantic call on the weekend demanding that reports get sent over from the local QuickBooks file. Owners don't have to remain in the dark until the next meeting with their bookkeeper. And, with the ability of many services to download your bank transactions automatically, you gain a lot by going online.

I just want to make sure you're aware of the cost you pay for this convenience.

If you know of any other points that you found when making the change, let me know in the comments. I'd also love to hear from companies offering these services if you have been able to address all (or some) of these issues.