--- title: "Recording Square Sales in QuickBooks Online | MCC Solutions" description: "Get Square sales, fees, tips and sales tax into QuickBooks Online correctly and reconcile each deposit to the bank." url: "https://mcc-solutionsnj.com/bookkeeping/guides/square-sales-in-quickbooks-online" --- Bookkeeping guide · Updated October 12, 2026 # Recording Square Sales in QuickBooks Online Square deposits are net amounts. To keep your books accurate, you need the gross sales, fees, tax and tips behind each deposit, and a clear method of matching them to the bank. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** Square deposits are net amounts, so work from Square's sales summary and transfer reports to get the gross sales, fees, tax and tips behind each deposit. Avoid recording only the bank deposits, because they hide fees, refunds and tax. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [NJ 1099 contractor rule (ABC test)](/bookkeeping/guides/nj-independent-contractor-rule-abc-test-2026) · [Trial balance explained](/bookkeeping/guides/trial-balance-explained) · [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) **Free tools:** [Credit card fee calculator](/bookkeeping/credit-card-fee-calculator) · [How many sales do I need to break even?](/bookkeeping/break-even-calculator) Sell in more than one place? The [Sales-Channel Profit Tracker](/toolkits/sales-channel-profit-tracker) shows which channel makes money after fees, costs and booth fees. [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Choose how to bring the data in You can use a connection app that creates summary entries, export reports from Square and enter them yourself, or import a spreadsheet. Whichever you pick, work from Square's sales summary and transfer reports. Avoid recording only the bank deposits, because they hide fees, refunds and tax. ## Map sales categories Map Square items or categories to your income accounts. Gift cards, tips and sales tax are not sales, so give them their own destinations. Discounts and refunds should reduce income. Services and goods may need different accounts if margins differ or if sales tax treatment differs. ## Fees and the bank deposit Square deducts processing fees before the transfer. Record the fees as an expense. The deposit in the bank should equal gross card sales, minus fees and refunds, plus tips collected that are to be paid to employees if they are included in the transfer. Build the entry so the net amount equals the bank deposit line, and the feed can then match it. ## Tips, tax and cash Tips are a liability until paid out to staff, normally through payroll. Sales tax collected is a liability until remitted. Cash sales never pass through Square deposits, so make sure your daily entry includes them and the cash deposits you make at the bank. Keep a separate account for over and short. ## Monthly checks Reconcile Square's total transfers for the month to bank deposits. Compare sales tax collected to the amount reported on your sales tax return. Investigate payouts that are held, disputed or delayed. Square-issued loans or financing, if you use them, are liabilities and not income, with repayments taken from sales, so check how those are recorded. If your files get complicated, keep a one-page procedure with the report names and steps for each month. That makes the process repeatable by you or a bookkeeper. Review it each year as Square changes its reports. ## Example of a daily entry A day with 1,000 dollars in card sales, 60 in sales tax, 100 in tips and 35 in fees would show income of 1,000, tax payable of 60, tips payable of 100 and fees expense of 35. The deposit would be 1,125 if the tips are included in the transfer. Writing the entry that way lets you match the bank amount exactly, and every piece stays visible for later review. A refund appears as a negative sale and returns money from your Square balance. A gift card sold is a liability, and its redemption later becomes income. A dispute may withdraw funds and add a fee until it is resolved. Record each of these separately in your summary so they do not hide inside sales totals, and review them with your monthly reports from Square. ## Common questions **Why does my Square deposit not equal my sales?** Because of fees, refunds, tips, timing and any held funds. The transfer report lists each piece. **Can I automate the whole process?** Often partly. Check the summaries regularly even when a connection app does the posting. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### Square, Stripe and payment processors How sales from Square, Stripe, PayPal and other processors should flow into your accounting software, and why deposits never match sales. Square & Stripe →](/bookkeeping/software/square-and-stripe)[### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online) More guides - [Bookkeeping for Stripe Payouts, Fees and Disputes](/bookkeeping/guides/stripe-payouts-and-bookkeeping) - [How to Import Bank Transactions From a CSV File](/bookkeeping/guides/how-to-import-bank-transactions-from-csv) - [Importing Customers and Vendors Into QuickBooks](/bookkeeping/guides/import-customers-and-vendors-into-quickbooks) - [Moving From QuickBooks Desktop to QuickBooks Online](/bookkeeping/guides/migrate-quickbooks-desktop-to-online) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Do it yourself ### Chart of Accounts and QuickBooks Import Pack Start your books with an account list built for your type of business, instead of the generic default, and compare it with the accounts you already have. [See what's inside ($24)](/toolkits/chart-of-accounts-quickbooks-import-pack)14-day full refund Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)