Barn2Door Orders & Payment Settlement Timeframes
Farmers often ask questions pertaining to their Barn2Door order history and accounting best practices for payment reconciliation. While Barn2Door does not give accounting advice, we are fortunate to partner with the best-in-class small business accounting solution, Intuit Quickbooks Online.
Barn2Door is a line-of-business application designed to help Farmers grow and manage their operations. Barn2Door serves as a Farmer’s system of engagement (SOE) to manage revenue-generating activities (e.g., customers, inventory, schedules, orders). Quickbooks, on other hand, is a general ledger designed to aggregate all sources of income and manage your Farm expenses (e.g., payroll, vendors, and inputs).
Barn2Door Batch Processing of Orders
While your Farm may capture 100’s or 1000’s of orders every month in Barn2Door, only a batch summary of those transactions are posted into Quickbooks (to keep your general ledger clean). At the recommendation of Intuit, each individual Barn2Door transaction is NOT posted into Quickbooks Online, but rather a batch summary is posted on a daily or monthly calendar basis to streamline reconciliation.
Barn2Door Orders are tracked separately from Payments due to the unique variety of purchase options for Farm Products, including one-time-purchases, paid-upfront, pay-as-you-go, pre-order, deposits, and final charges. Farm Orders in Barn2Door are separate from actual receipt of Payment. This is different from prototypical eCommerce for consumer product goods (CPG).
For the sake of clarity, Barn2Door is tracking the actual orders of customers to be fulfilled during the calendar month (irrespective of purchase option). Deposits in Barn2Door reflect only the transfer of Payments that have actually settled in the calendar month. As a result, Farmers may find reconciling their Barn2Door purchases with Quickbooks Online to the penny a challenge.
Payment Settlements
Actual payments for your Barn2Door Orders will post directly to your bank account on file (and can simultaneously post to your Quickbooks Online account if you have “bank feeds” properly configured). Settlement timeframes, however, for bank payments can vary depending on the payment type and issuing bank for credit cards, debit cards, and ACH/electronic checks.
If a credit or debit card is from one of the Top 25 banks, then payments typically settle in 1-3 business days, not inclusive of non-business days (e.g., Sundays and bank holidays). However, if a credit or debit card is from a small community bank (e.g., local credit union), they often operate on a third-party banking platform, causing payment settlement time frames to be delayed 3-5 business days. The same is true for refunds (a reverse payment).
As a result, when a Farm receives an order via Barn2Door, the actual receipt of payment can take anywhere from 1-5 business days, depending on the payment type and issuing bank. Other third-party marketplaces (e.g., Amazon) withhold payment transfers for up to 30 days to account for fraud, disputes, and refunds. Barn2Door does not “withhold” any funds from Farmers; rather, Barn2Door transfers all monies to a Farmer immediately upon payment settlement.
Quickbooks Online Integration
Each month, Barn2Door data from the prior month is aggregated, categorized, and posted as a journal entry into a Farmer’s Quickbooks “clearing account.” Farmers can view their gross and net sales --- after taxes and fees are deducted (their ‘take home’ total). Farmers can reconcile their books monthly, choosing the appropriate accounting treatments (for their business) of Farm revenue and costs.
Payment settlement timeframes for your Barn2Door Orders will be subject to an inevitable delay to actual receipt in your Bank Account (and posted in your Farm QBO Account). For instance, if a Farmer had even sales over 30 days in a calendar month, but averaged 3-days for payments to settle, then up to 10% of a Farmer’s payments could “carry over” to the next month. This is well known and an inevitable outcome when trying to reconcile Line-of-Business (LOB) applications with Quickbooks Online.
Barn2Door provides an all-in-one solution to grow and manage your Farm business. If you’re curious to learn why successful Farms run on Barn2Door, watch this 5-minute video.