Accurate financial reconciliation with third-party (3P) platforms requires precise mapping of various transaction types to your Chart of Accounts (COA). This guide provides an overview of key transaction types and offers recommendations for their mapping to ensure clarity and consistency in your financial records.
To complete the mapping, navigate to Balance --> Journal Entry Automation --> Journal Settings and Select “Map Chart of Accounts”
Handling 3P Adjustments and Fees
1. Loop Over/Short Entry
Purpose: Balances journal entries to ensure that debits and credits align. Typically used when sales and/or payouts are not posted. Not necessary if every Loop category is mapped into the chart of accounts. Learn more!
Mapping Recommendations:
Option 1: Map to an Accounts Receivable (A/R) Adjustment account.
Option 2: Create a separate Loop Over/Short account.
2. Customer Refunds and Won Disputes
Customer Refunds
Description: Chargebacks and customer-initiated refunds debited from sales (order issues, cancellations). Learn more!
Mapping Recommendations:
Option 1: Assign to a Sales Adjustment account.
Option 2: Assign to a Customer Refunds account.
Won Disputes
Description: Refunds initially disputed and later recovered.
Mapping Recommendations:
Option 1: Assign to a Sales Adjustment account.
Option 2: Assign to a Customer Refunds/Won Dispute account.
3. Miscellaneous Fees
Description: Fees labelled as "miscellaneous" by Delivery Service Providers (DSPs). Learn more!
Mapping Recommendations:
Option 1: Assigh to the same fee account as Delivery Fees.
Option 2: Create a separate Miscellaneous Fees account.
4. Unaccounted Transactions
Description: Transactions that are not identifiable and not attributed to any specific sales breakdown (e.g., rounding errors). Learn more!
Mapping Recommendations:
Option 1: Assign to the same fee account as Delivery Fees.
Option 2: Create a separate Unaccounted Expense or Assign to Over and Short account.
5. Commissions
Description: Fixed fees charged by delivery providers for order facilitation and delivery services.
Mapping: Assign to a dedicated Delivery Fee account.
6. Marketing Spend
Description: Variable expenses from campaigns, promotions, and advertisements and should be used when you don't want to post detailed breakdowns across ad and promos
Sub-Categories:
Marketing Ad Spend: Expenses for online ads, banners, etc.
Marketing Promo Spend: Costs associated with promotional discounts, such as "buy one, get one free" offers.
Mapping Options:
Use the Super category and assign it to the Marketing Spend GL account.
Create separate GL codes for Ad Spend and Promo Spend.
Map Ad Spend and Promo Spend to the same GL account with separate line items.
Recommendation: Separate Marketing Spend and Commissions into distinct GL accounts for clearer tracking.
7. Net Payout
Description: Net amounts received from 3P platforms after all deductions.
Mapping: Assign to a Bank Deposits or Undeposited Funds account.
Tip: Use location-level GL accounts via Manage Customisations in the Chart of Accounts if each location has a separate deposit account
Handling 3P Sales and Taxes
1. Customer Tips
Description: Tips collected by marketplaces meant to be passed on to store team members. This amount is credited to the payout.
Mapping: Assign to a Tips Payable account, accounting for them separately from regular sales.
Note: Leave unmapped if your POS already posts this information in your ERP. If tips are disabled on 3P delivery sites, review the Income Statement on Loop for fee breakdowns. Contact your DSP point of contact if tips appear unexpectedly.
2. Sales (Excluding Tax)
Description: Total sales amount before taxes.
Mapping: Assign to a Sales Revenue account for each delivery partner for detailed tracking.
Note: Leave unmapped if your POS already posts this information in your ERP.
3. Taxes
Description: Sales taxes collected on behalf of tax authorities.
Mapping: Assign to a Sales Tax Payable account.
Note: Leave unmapped if your POS already posts this information in your ERP.
Taxes Withheld (Credit)
Description: Taxes NOT owed by the restaurant, collected and remitted by the marketplace on your behalf to comply with marketplace facilitator taxes (MFT).
Mapping: Assign to a Sales Tax Non-Payable/MFT account if you intend to track this.
Note: Leave unmapped if your POS already posts this information in your ERP or is set up to exclude MFT.
4. Taxes Withheld (Debit)
Description: Offsets the tax withheld (credit) to adjust tax liabilities based on your POS settings.
Mapping Recommendation:
Option 1: Assign to a Tax Liability account if your POS posts MFT as a liability without distinguishing different tax types.
Consult your Loop Balance point of contact (POC) or reach out to support@tryloop.ai for the optimal setup.
Note: Leave unmapped if your POS is configured to exclude MFT and does not post them as tax liabilities.
Handling POS Specific Adjustment:
1. POS Subtotal Variance
Description: Used when POS is posting sales and to identify any variance between sales as reported by the POS versus sales reported by the marketplaces for the given period.
Mapping: Assign to a Sales Revenue account for each delivery partner
2. POS Tax
Description: Used when POS is posting tax and to identify any variance between tax as reported by the POS versus tax reported by the marketplaces for the given period.
Mapping: Assign to a Sales Tax account.
3. POS Commission
Description: Used when POS is posting commission to identify any variance between commission as reported by the POS versus commission reported by the marketplaces for the given period.
Mapping: Assign to a dedicated Delivery Fee account.
Need Assistance?
If you have any questions or require further assistance during the integration process, please reach out to us at support@tryloop.ai.