Adding Apps to QuickBooks Online (QBO) to Build an Accounting Ecosystem

An "app" is simply short for an application. All apps run on an operating system such as Windows, Mac, IOS or Android. Each operating system has its own language and the app must be written using the specific language of the operating system. Apps that are built using the same operating system can interact with each other using "application programming interfaces" (or API's) These API's are sets of requirements that govern how one application can communicate and interact with another. The QuickBooks open API platform allows developers to connect their apps to QBO and seamlessly send data back and forth between them.

There are literally hundreds of different apps that will integrate with QuickBooks Online (QBO). But, how do you know when it's time to add an app and which apps do you need? Well, the simplest answer to that question is when I have a client who asks me about some particular data or management function they need to track that is not within the scope of their existing QBO, then it's time to investigate apps. Think of QBO as being your core foundational accounting platform upon which everything must filter in to. And so adding on additional apps is all about finding the right tool for the right job to automate a particular task.

Here's an example: Let's say your business is one that sells products online and uses Shopify as your ecommerce platform. Well, all the activity related to that online store must ultimately be integrated into your overall financial general ledger reporting system. Everything from purchasing your product, to inventory control, to customer order fulfillment and shipping ultimately generates financial transaction data that must be incorporated into you business' books. Suppose you also use Paypal in making purchases as well as in receiving customer payments. That is another level of activity that ultimately needs to get pushed through to your company's accounting books.

In the absence of any connectivity between Shopify, Paypal, and your company books, you would need to do a lot of manual data entry to bridge this gap in order to keep your company books up to date and accurate at all times. Trying to reconcile all this activity would be a monumental task. Thus, the purpose of using the QBO apps for Shopify and Paypal under this scenario is to be able to automatically synchronize transaction activity that affects both your ecommerce website as well as your company books.

Once you have identified a business need that goes outside the normal core accounting boundaries of QBO, it may be time to begin researching what apps are out there that already fulfill the function you need. But I cannot overemphasize the importance of looking at all the available apps thoroughly, including trying out a demo of the app. Remember, you don't want to connect an app with your QBO company file unless you fully understand the impact of the data flow sync between the app and QBO. In conjunction with this process it is essential that data fields are correctly mapped between the app and QBO during the onboarding integration process. Otherwise you could be posting entries erroneously to the wrong combinations of general ledger accounts, which of course means that your financial reports would all be wrong. Since the accuracy of your company's financial reports is the backbone of your business management and also required in your tax reporting compliance, accuracy here is clearly very important.

I am a CPA who works across the full spectrum of helping businesses optimize their accounting information workflow and procedures all the way through to the tax planning and preparation services, as well as special project consulting.

Lester R. Bahr, CPA
QuickBooks Advanced ProAdvisor for over 17 years.