Customer Balances From Before You Started With FlexBooks

Read this with your bookkeeper, and if the amounts are large, with whoever prepares your taxes. This is a decision about your opening books rather than a FlexBooks setting, and there is no option here we can choose for you.

The situation

FlexBooks starts on a date you choose. From that date forward, every Mindbody sale and payment goes into QuickBooks.

What it does not do is bring across balances your members already owed on the day you started. If a member owed you $400 before your start date, Mindbody knows it and QuickBooks does not.

So your Accounts Receivable in QuickBooks will not agree with your member balances in Mindbody, and it will not agree until those old balances are paid off.

Why FlexBooks doesn’t simply bring them in

Because we cannot tell whether that income was already recorded in your old books.

If it was, bringing it across records it twice and inflates your income. If it was not, leaving it out understates what you are owed. Only you and your accountant know which is true, and it can differ member by member. Guessing on your behalf would be worse than leaving it alone.

Option 1. Deal with them as they arrive

Suitable for most studios.

Do nothing on your start date. When a member pays off an old balance, that payment syncs into QuickBooks with no invoice to attach to and shows up as an unapplied payment. You then create the missing invoice and link the payment to it.

The method is in Handling Unapplied Payments, under the initial sync section.

The work is spread out, and it only ever touches members who actually pay. The judgment call about whether that income was already in your old books gets made one member at a time, which is usually easier than making it for everyone at once.

Option 2. Bring the balances in on your start date

Best if you want the two systems to agree immediately.

Run Mindbody’s Account Balances report as at your start date, and have your bookkeeper enter those balances into QuickBooks per member, dated the day you started, offset to Opening Balance Equity rather than to an income account.

That is the part worth understanding: you are not recording new income. You are stating what was already owed to you on the day your books changed over, which is exactly what an opening balance is for.

Do it per member rather than as one total, or later payments will have nothing to attach to and you will end up back at option 1 anyway.

Option 3. Leave it, and accept the difference

You can decide the old balances are simply not going into QuickBooks, and track them in Mindbody until they clear.

Be aware of what this costs. Payments for those old balances will still sync, and each one will sit in QuickBooks as an unapplied payment, so the difference between the two systems does not quietly shrink to nothing. It gets replaced by a growing list of unapplied credits that somebody has to clear eventually. If you take this route, plan on clearing them at year end rather than never.

Where to get the numbers

Every option above starts from your member balances as at your start date. Mindbody produces that for you: run the Account Balances report and set it to your start date.

If you have trouble getting that report out, send us a message and we will help you find it. We cannot advise you on which option to take or make the entries for you, because the answer depends on how your previous books were kept.

How Does FlexBooks Handle Customer Account Balances?
Handling Unapplied Payments