What are Consolidated transactions and how are they used in Finale Inventory?

This article originates from the following larger help article: How to configure the QuickBooks Online integration  Please visit this link if you have other QuickBooks Online integration questions.

Finale Inventory strongly recommends you use Consolidations if your company has eCommerce sales or has large sales orders with multiple products/SKU on them. 

Consolidations are summarized journal entries created by an automated process in Finale Inventory that consolidates all the COGS and Income ledger entries made in one day, one week, or one month by selling channel. They are comprised of a summarized journal entry with a list of sales order shipments that made up the consolidation.  These consolidations are not enabled by default and must be set up and configured in Application settings.  If enabled they will dramatically reduce the number of ledger entries made to the QuickBooks Online chart of accounts for COGS and Income.

Finale Inventory has a General ledger where we track all financial transactions that result from all stock transactions in Finale Inventory. The General Ledger has a chart of accounts that is used for all stock transactions.  Whenever a stock transaction is completed in Finale Inventory there will be ledger entries made into the appropriate accounts. Go here to see a list of journal entries for each of the corresponding stock transactions: Finale General Ledger transaction flow

Finale Inventory makes very detailed ledger entries. This means that there are multiple entries per order line item made to the corresponding ledgers. So one order shipment in Finale Inventory is not one ledger entry but four ledger entries per every order line item in the shipment. If you have hundreds or thousands of sales orders shipping out each day, this will lead to thousands of ledger entries made to Finale ledgers for Assets, Sales Clearing, Income, COGS, etc.   This is perfectly normal for Finale Inventory and our ledgers can handle this type of volume very easily.   Where this becomes an issue is with synchronizing our financial information with outside accounting software like QuickBooks Online.   We strongly recommend that if you are going to use Finale Inventory to push Asset, COGS, or revenue entries into your QuickBooks Online that you turn on and use Consolidated transactions in Finale Inventory.

Consolidated transactions in Finale Inventory are a great way to simplify ledgers. Once it is enabled and configured, Finale Inventory will automatically summarize all transactions for each sales source configured in Finale into two journal entries per day, week, or month. One for COGS and one for Income.

These consolidated transactions will have a detailed list of all the transactions that comprised the summarization for the day, week, or month for the selling channel.

NOTE: Even if you have configured the QuickBooks Online integration settings to not sync income into your QuickBooks Online from Finale Inventory, the Consolidations for income will still be created for all enabled sales sources and they should be posted to Finale Inventory’s general ledger. We will not push them to QuickBooks Online if you have configured to not sync that sales source or ledger account.

IMPORTANT: Failing to POST any consolidation transactions left in a DRAFT status will prevent you from reporting on the Income or COGS from the sales transactions in that consolidation for general ledger reports in Finale Inventory. 

UNDERSTAND: Consolidations are for a specific frequency: Daily, Weekly, or Monthly. If you post a draft consolidation before its frequency is complete, Finale Inventory will automatically create additional draft consolidations to consolidate the remainder of the frequency.

CRITICAL: Do not enable consolidation for sales sources that you will need invoices to sync from Finale to QuickBooks online.  If you consolidate a sales source that has invoices in Finale Inventory, those invoices will not be synced as invoices into your QuickBooks.  If you enabled consolidation for a source you need Invoices synced to QuickBooks Online, you must turn off the consolidation for that source and go and cancel any consolidations for that source so that the invoices will be synced.