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QuickBooks Online: syncing Settle Working Capital - Bullet Loans 🔄

Becca Campbell avatar
Written by Becca Campbell
Updated over 3 weeks ago

Overview

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.


The WC sync process

Configuration

New Accounts:

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

  • "Settle Clearing Out" - a "cash" account, used to mark the synced Bill as paid

  • "Settle Loans Payable" - a Liability account, used to represent your balance owed to Settle due to financing and subsequent principal repayments

Settings:

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

  • Settle finance fees - We sync all financing-related fees paid to Settle to this account. You should map to an account like Interest Expense.

  • Settle loan principal - We sync all transactions that increase or decrease your financing-related liability to Settle (minus fees) to this account. We automatically map it to the Settle Loans Payable account that we create, but you can modify if needed.


How it Works:

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.)


Step 1:

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

Date

Account

Vendor

Amount

Object Synced to QBO

9/1/2022

Debit (Dr.) Office Supplies Expense

The North Face

$1,000

Bill

Credit (Cr.) Accounts Payable

The North Face

($1,000)

Bill

Step 2:

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).

Date

Account

Vendor

Amount

Object Synced to QBO

9/15/2022

Debit (Dr.) Accounts Payable

The North Face

$1000

Journal Entry

Credit (Cr.) Settle Loans Payable

Settle

($1000)

Journal Entry

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.

Date

Account

Vendor

Amount

Object Synced to QBO

9/15/2022

Debit (Dr.) Accounts Payable

The North Face

$0

Bill Payment

Credit (Cr.) Settle Clearing Out

The North Face

($0)

Bill Payment

Step 3:

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.

Date

Account

Vendor

Amount

Object Synced to QBO

10/15/2022

Debit (Dr.) Interest Expense

Settle

$15

Journal Entry

Credit (Cr.) Cash

Settle

($15)

Journal Entry

Step 4:

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.

Date

Account

Vendor

Amount

Object Synced to QBO

11/15/2022

Debit (Dr.) Settle Loans Payable

Settle

$1,000

Journal Entry

Debit (Dr.) Interest Expense

Settle

$15

Journal Entry

Credit (Cr.) Cash

Settle

($1,000)

Journal Entry

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