If your business is approved for financing by Settle, you’ll be able to apply Extended Payment Terms (EPT) to use your working capital for qualifying invoices. When WC is used, Settle will pay your vendor upfront, and you will repay Settle the financed amount over a set period.

Since Settle pays the vendor on your behalf, your liability for this payment shifts from the vendor to Settle. To ensure your connected bookkeeping software stays up to date, we adjust your accounting ledger to reflect this shift in liability.

When you connect with QuickBooks Online (Settings > Accounting, connect QuickBooks Online), Settle will automatically add the following to your QuickBooks Online Chart of Accounts:

Once QuickBooks Online has been connected, map the following two accounts (Settings > Accounting):

This section shows how each step in the WC process will be synced to your QuickBooks Online account, using an example.

(For a high-level summary of events involved in WC, see this help doc.)

A Bill from The North Face due on 9/1/2022 is uploaded to Settle. The Bill is synced to QuickBooks.

You decide to finance this Bill on 9/15/2022. Since Settle paid the original bill on your behalf, you now owe Settle the principal amount plus financing fees. We mark the original bill as paid and create a new liability to Settle. This comprises two transactions:

1. A Journal Entry

We transfer the liability balance that you are financing from Accounts Payable to the Settle Loans Payable liability account (or whichever account you mapped for Settle loan principal).

2. A Bill Payment

We create a zero-dollar Bill Payment that links the Journal Entry described above with the original Bill, reducing the Bill’s balance by the amount being financed. The Bill Payment has a $0 impact to your books, and we sync it to the “Settle Clearing Out” account that we automatically create so that it does not clutter your bank registers.

Example:

Once you have made your first interest payment, we record the repayment made to Settle.

Settle does not create a liability for the owed interest. We only record it as an expense at the time the installment is paid.

Before repayment to Settle is due, you can repay a portion of your EPT loan early (more info here). For each repayment, we record a journal entry which reduces the amount in your Settle Loans Payable account accordingly.

Upon maturity of the WC loan, we record the repayment made to Settle, which nets out the impact of the original financing transaction on the Settle Loans Payable account.