Why Every Shop Should Turn On Touchless Accounting | Podcast Ep. 58 | Mastering ServiceTitan

A lot of times people don't care. As long as the place they want to be right is right. They don't care if the other one is. So if you're doing all your collections through Servicetitan, and you know what your AR is in ServiceTitan, should it be right on your balance sheet? Sure. Do you know how to fix it? Probably not.

Welcome to Mastering Service Titan, where you get expert advice from power users. I'm your host, Josh Liu, and today I'm here with Jessica Woodruff Smith, the co owner at Box of the Trades, a service titan certified. And we are talking about a really exciting topic which I know nothing about. We're talking about touchless accounting, which was announced last year at Pantheon, I believe. And so, Jessica, thank you so much for joining us.

Thank you for having me.

So you were telling me before we started recording, last year at Pantheon, they announced touchless accounting. You were on an early access or a beta program at the time. It's been a year since. For the audience who doesn't know what this is, can you share what is touchless accounting?

Okay. Touchless accounting replaces the batch post export process. When you batch post export, once it's in QuickBooks, it's in QuickBooks. And sometimes it can take days to get there, it can take weeks to get there, sometimes it can take longer than that to get there. And Your data in QuickBooks is only as accurate as what's made it over there from Servicetitan. And once you've hit export, there's no more changing it. You gotta do an adjustment invoice. It's. It's a really big headache with Touchless. It's syncing journal entries for all your financial transactions every two minutes. So almost real time with the data as accurate as it, as it is today. And then if you have to change something, say your technician forgot to bill for something, or you need to update an invoice summary, which you wouldn't be able to do after it was exported with the old system. You can just make that change and any financial changes will, will update that journal entry and resync so your QuickBooks will get more accurate. It will be as accurate as possible every two minutes. So you can run your P and L and know where you are right now and not where you were two days ago when you exported everything. Wow.

And, oh, also, can you talk about, I know we don't have your lanyard here, but you had this $100 bill on your lanyard. Can you talk a little bit about what that was?

So I have a hundred dollar bill on my lanyard because I'm challenging people to show me that their QuickBooks accounts receivable matches their Service Titan AR reconciliation report to the penny. Most of the people I've talked to have said no, I know it doesn't, or it absolutely doesn't, or we're not even going to do that. I had one person tell me that it definitely did and then open up their laptop and show me, and it did not. So the reason I bring this up, and the reason that's my challenge is that I know it doesn't. Maybe there was an issue way back at your Service Titan import. Maybe somebody has posted and bypassed a batch that should have been exported and now it exists in Service titan, but not QuickBooks. Maybe somebody's deleted something sometime along the way in QuickBooks that should be there. The touchless integration. The first thing you do is you make sure your numbers match your ar. And then when you turn it on, it just stays matched because there's no more accidental bypassing. There's no. It just works. Wow.

Okay. I'm really excited to dive into details, but one thing is really interesting that you said most people, their answer was, oh, I know it doesn't match.

Right.

And so I would imagine most people listening, that's probably what they're thinking, like, oh, I know it doesn't match.

Yeah.

How come there's such a mismatch?

A lot of times people don't care as long as the place they want to be right is right. They don't care if the other one is right. So if you're doing all your collections through Service Titan and you know what your AR is in Service Titan. Yes. Should it be right on your balance sheet? Sure. Do you know how to fix it? Probably not. Sometimes it's just too hard to fix. So we let it go. Right.

Does that problem end up on the accountants?

It sure does.

Yeah.

Right. And then they have to figure out how to where do I move this money? Since it's not accounts receivable, it's a very big headache. So the first step is we fix it. And I can help with that. And the second step is get the touchless turned on so it stays right.

Okay. What does the process of fixing it look like?

So I can't know what people really owe you. Right. But I can guide you through. Okay, so this one's five years old. Do they owe this money? It exists in QuickBooks, but not service Titan. Did you maybe record a payment in Service Titan that didn't make it to QuickBooks, I kind of guide you through what doesn't match. Let's figure out why, and then we figure out how to clean it up.

And it sounds like, wow, even like something can happen five years ago and they might still owe you. And it's. It seems like these are like, Is it just a pile of like, stuff that's falling through the cracks that just keeps adding up?

It absolutely can be. Oh my gosh.

Okay. I can imagine people listening and being like, I'm just gonna pretend that doesn't exist. I don't want to deal with it.

People don't like accounting.

Yeah. So, okay, self admittedly, I was telling you before we started recording, I suck at accounting and spreadsheets. I'm not like a numbers person. How do you help people like me who just. This isn't their language.

I try to speak their language. And I am not an accountant to begin with. I joined the trades by working for my dad. I started as a csr. I did a little bit of everything. Finally decided to go back to school and get a business degree. But when I started digging into the accounting, I wasn't an accountant. I'm still not an accountant. I just have a business degree. Right. I know how to talk to people and explain debits and credits and the things that didn't make sense to me when I was the CSR turned accountant at the company. Right.

Yeah. Actually, maybe if we could take a step back just for me personally, because I know nothing about this. Can we go through some of those basics of account accounting? What is a debit? A credit? What's that batching and posting? And what's the process look like overall?

So debits and credits exist in your accounting world to increase or decrease the balances in account. So when an invoice posts, it credits your accounts receivable and debits your revenue. And then when a payment posts, it debits your accounts receivable and credits your bank account because there's a payment. Right. There's a solid chance I have debits and credits backwards. I have to Google it because like I said, I'm not an accountant by trade. I know CPAs that have to stop and think about which one debits and which one credits. But they are the words that mean money moves from one account to another. And there's always a debit for every credit. Batching, posting, exporting, and servicetitan, which most of your listeners will know about, means you have reviewed the invoice. You know, it's right. You've put it in a batch in Servicetitan, that batch gets posted and then that posted batch gets exported and all that data gets pushed to QuickBooks or Intact or whatever software you're using.

Gotcha. And can those invoices be pushed over even if they, if you haven't received a payment yet?

They can. Oh.

And that's where the credit and the debit comes in and making sure it's all the same.

So an invoice gets posted with a balance. That's where we come into accounts receivable. Right. Because you still are owed that money. If an invoice pushes to the balance, that balance should exist in both QuickBooks and Service Titan. Then when you collect the payment, the payment gets applied in Service Titan, the payment gets pushed to QuickBooks, your accounts receivable balance goes down. So that's how they should stay matching. Right? Right. The same thing's happening in both places.

Okay. And it's so common that they're not matching because a lot is it because of the delay of.

So some of it is there's a function in Service Titan where you can, instead of exporting a batch, you can bypass a batch. Meaning I don't want this to hit QuickBooks. For whatever reason I was cleaning something up that's not real and I don't need it in QuickBooks or I accidentally clicked bypass because it's right next to the export button and I didn't notice because I was moving fast or whatever. Right. So that's a thing that happens and causes things to go wrong.

Okay, I see. When these little things go wrong or big things go wrong and it starts to pile up, what's the cost to the business? Like why should they care about this?

Well, if your account's receivable balance is wrong, it can affect your, affect your taxes because you're paying more taxes or less tax. I'm not an accountant, I'm not a tax accountant, but numbers being wrong in QuickBooks on your P and L or on your balance sheet directly affects how much you pay in taxes. And if you're not paying enough now because it's affecting it in that way, you're going to pay more later. And if you are, if you're paying too much now, maybe you're never going to fix it and you're never going to get it back. Right?

Yeah. So, okay. People should definitely be caring about this. It is your hard earned money at the end of the day, the bottom line. So let's go back to touchless Accounting. You mentioned how every two minutes it syncs and if you get it right the first time, you can keep it right in an ongoing way. How exactly do people get this set up and do you have any tips for implementation?

So in order to set it up, they have to ask their CSM to turn it on, but turning it on doesn't make it happen right away. So then you have to make sure you've checked all your boxes, your AR balance is correct and everything's set up right to your GL accounts match between QuickBooks and Service Titan and your business units are mapped to classes if you want to track to that level in QuickBooks. And then you can go to your journal entry settings that your CSM has turned on for you and you can switch from the document export method to the journal entry export or sync method. It's not exporting anymore, it's syncing. And then you can tell it, I want these to sync real time, so every two minutes or I want these to sync manually and I will click a button to to make it happen. I don't recommend that because why wouldn't you want it there as soon as you could, even if it's not quite right yet? Because the changes will push later.

Gotcha. And then, so let's say I'm listening, I talk to my csm, we turn it on, we set up that sync. What can I expect from there? Does it just.

It just runs? I have not. So let's back up just a second.

Yeah.

Because with batch post export, there are a bunch of fields that have to match in QuickBooks from ServiceTitan, so you could end up with a number of export errors that stack up because you have to fix them and then you have to re export and you have to make it work. And lots of people let those export errors stack up till the end of the month. So none of that Data is in QuickBooks. With Touchless you can have errors, but it's pretty much limited to general ledger account name doesn't match or your business unit got disconnected from Quick QuickBooks. I have not seen a sync error at any of the companies I've helped with this beyond those two errors since I started helping companies get set up after we get them running and it's all set up right. I have not seen any errors and their stuff is just sinking. It's almost set it and forget it.

Whoa. How is it doing that so well and getting rid of all the errors?

It's because it only has to match that GL account and have the business unit connected. When you're exporting, the customer names have to match the price book items have to be set up correctly to go over and it's just, it runs so much more smoothly when there are less data points that have to match.

Interesting. And does it need less data points because it's doing its own matching or.

So what it is is it's putting, if you choose summary, it's only pushing that GL data. It's not pushing anything else. If you choose detail, it's going to push over customers and whatnot. But you don't need that in QuickBooks. It exists in Service Titan. Service Titan can be your accounting sub ledger. You can go see your total balance in QuickBooks and if you say I need to see the transactions that make this up, you can go back to the journal entries, see what transactions they are and see it in Service Titan. And you don't need to have it in QuickBooks. Which means you don't need, you don't hit customer limits in QuickBooks. You don't size out of QuickBooks the way some companies do when they have too many customers and then they have to go to intact. So you can use QuickBooks to an unlimited revenue number if you're using this. Whereas if you're just batch post exporting you can size out. Wow.

And is touchless accounting available in core? Is it. Do you have to pay extra for.

It's absolutely not something you pay extra for. It's a core product, not a pro production. There are no pro products associated with it. So there's no pro add ons as far as I know at this moment in time.

Wow. Okay, so please send this episode to your accountant, anyone that does anything to do with accounting at your shop. This sounds like a no brainer. Is there, I mean is there anyone who shouldn't be using this? Like maybe their accounting workflows are so messed up that they're not ready.

I would say you absolutely need to make sure you're set up for success. So make sure that your price book is set up so when you sell sell your items they're hitting the GL accounts you want them to hit. Which really needs to be done for batch post export also. But it's easier to catch on that. So once they're set up right, you can set up your journal entry integration. You can make it happen. And I personally believe there is no one that shouldn't be on it.

Wow.

Okay.

Such a powerful feat. I'm so glad like that was the first thing you mentioned in terms of what you wanted to talk about? Because it sounds like everyone should be on it. Are there any lessons from being on the beta in the early days? Things to watch out for for people who are jumping into touchless accounting?

Right after you get it turned on and you're set up, make sure you're checking every day that there are no sync errors because that's where you're going to find that the price book item you never used that finally got used has the wrong GL account or that some payment type is mapped to the wrong gl or it's just a case of watching for those sync errors and after the first month you'll probably never see any more.

Okay, cool.

Yeah.

So just making sure those edge cases are all taken care of.

Exactly.

Such a good example about that price book item that like just doesn't get used very often and it's a good time to catch it. Yeah, yeah. Can you talk a little bit about Box for the trades and some of the ways you work with with customers?

So box for the trades. We're a full service service titan coaching company. We're a Service Titan certified provider. We're brand new, we've hit the market in July, but we have some serious experience behind us. I've been in the trade since 2006, been on Service Titan since 2018. I have experience with private equity. I have experience in a small family owned business, multiple small family owned businesses. My partners are Megan Likes, who owns Likes accounting, she's a QuickBooks Certified Expert. And Gary Woodruff who happens to be my brother, has equal amount of service titan and trades experience experience but has also been a consultant at another company. So he has that consulting background. And we also have a partner, Stephanie Allen, who owns Airworks Solutions and she has been in the trade since 2010 and brings that owner perspective to our group.

Gotcha. Are there any particular problems that you like to help people solve?

My favorite one to solve is getting touchless set up. But my brother has a really great price book product he's doing right now. We offer some ongoing coaching packages and we're happy to have discovery calls with anybody who'd like to talk about what we can do to help them.

Awesome. I feel like this episode, especially touchless accounting, oh my gosh. It's something you have to do.

I'm so passionate about it and I want to help everyone because I think everybody should be on it.

That's amazing. And what are your thoughts on Pantheon so far this year?

I have had such a good time. I have learned a lot. It's now Friday, almost afternoon, and I feel a little bit dead. But it's been so good. I've made a lot of connections, I've seen a lot of my friends, and I just, I love Pantheon. I would never miss Pantheon.

And it's so cool. Full circle. To be hearing that touchless accounting came out last year. You got on super early, and it seems like you've gotten able to master it and now getting to help people set it up for their own businesses. So thank you so much for joining us today. Do you have any parting thoughts or parting words to share?

All I have to say is if you've never been to Pantheon, you should go to Pantheon. Pantheon. Because you'll learn about so much that you maybe never would hear about and you'll connect with people in a way that you can't do over the Internet.

Totally awesome. Thank you so much for joining us today and sharing a lesser known product that everyone should use that's included in Core. It's like a no brainer. So thank you so much for coming on.

Thanks, Josh.