The Chart of Accounts and Double Entry Accounting

TABLE OF CONTENTS

• What Is the Chart of Accounts?
• Double-Entry Accounting And Payments Overview
• Example Transaction
• Key Points to Remember

What Is the Chart of Accounts?

The Chart of Accounts is the list of all accounts where QuickBooks records your financial transactions.  When the first synchronization process is initiated either by "Auto Sync" or "Sync Now", Pet Sitter Plus will create a number of specific additional accounts in QuickBooks and these are stored in the "Chart of Accounts." Pet Sitter Plus passes the financial transactions such as payments and invoices to the QuickBooks API, and the API determines which of the accounts to use in the Chart of Accounts. These rules cannot be overridden as they are pre-programmed within QuickBooks. 

The integration software relies on these accounts exclusively for the processing and synchronization of financial information.

The Accounts created are:

When an Invoice is created or a payment is processed by Pet Sitter Plus, there are two other accounts found in the Chart of Accounts that are used to document the transaction... these are used for Double-entry accounting purposes, they are:

Double-Entry Accounting And Payments Overview

Double-entry accounting is the principle that for every financial transaction, there are two sides recorded:

• An entry: A debit to one account.

• A contra-entry: A credit to another account.

The sum of all entries and contra-entries must balance to zero. If the trial balance does not balance, it indicates that something is missing or recorded incorrectly.

In the case of Pet Sitter Plus integration with QuickBooks, payments are presented to the QuickBooks API and the API does the adds the transaction to the following:

1. Undeposited Funds Account

   • One side of the double-entry is stored here.

   • This account records all payments received.

   • It should be reconciled to your actual bank account.

2. Debtors (Accounts Receivable / A/R)

   • The other side of the double-entry is stored here.

   • This account records invoices and payments received.

   • It provides a running total of what clients owe you (outstanding balances).

3. Client Account in Pet Sitter Plus

   • Independently of QuickBooks, the payment is also recorded in the client’s account within Pet Sitter Plus.

   • This allows you to track a running history of all transactions for each client.

Example Transaction

A client makes a payment of $100 for services and this is added to Pet Sitter Plus. The transaction is passed to the QuickBooks Integration either by auto-sync or sync now process:

• Pet Sitter Plus entries:

  • Client balance (+ $100)

  • Invoice created for services

  • Client balance (-$100)

• QuickBooks entries:

  • Debit → Undeposited Funds (+$100)

  • Credit → Debtors (A/R) (-$100)

Key Points to Remember

• The QuickBooks API decides how entries are posted into the Chart of Accounts.

• Undeposited Funds temporarily holds payments until they are banked.

• Debtors (A/R) tracks invoices and client balances.

• Pet Sitter Plus also tracks payments at the client level for operational visibility.