Bringing over an existing gift card liability when switching to QBO

Hi there, Cortese. 

I am delighted to explain to you the process of recording and keeping track of gift card liabilities in QuickBooks Online (QBO).

To properly manage gift card liabilities when transitioning to QuickBooks Online, you'll have to create a liability account and then name it "Gift cards". 

After that, you can create a service item and select the same account as the income account and call it a "Gift card". This will allow you to efficiently track the amount in that account.

After that, create a non-inventory type item called advertising expense and link it to the advertising expense account. 

To issue a gift card, create a sales receipt to record the sold gift card for the customer. Here's how:

Before you get started, make sure you add the gift certificate as a product.

1. Select + New.
2. Select Sales Receipt.
3. Fill out the sales receipt, then select the payment method and where the gift card amount will be deposited.
4. Enter a line under PRODUCT/SERVICES and choose the gift certificate you added.
5. Add the gift card amount and the sales tax rate.
6. When you’re done, select Save and Close.

Then, create an invoice for the redeemed Gift card. Here's how:

1. Select + New.
2. Select Invoice.
3. On the first line, select the Product/Service being bought and fill out the quantity and amount.
4. On the second line, select the Product/Service for Gift Certificates (the one linking to a liability account), and enter a negative number for the amount of the gift certificate.

Also, you can consult an accountant for some guidance on what account to use for the item.

I've also attached an article to help you with the steps on running and customizing the financial report for your future reference: Customize company and financial reports. 

I'm always around here if you need further help with recording transactions in QuickBooks. Take care!

@dcortese 

"Because sales revenue from that liability have already been collected and long spent, the account balance (if i'm thinking about this correctly), will always be off (thus my books always being off by the opening gift card balance). My best idea so far is to just create a "ghost" account (some sort of asset) to keep it balanced? Any and all ideas are helpful and thank you!"

There's no sales revenue when there's a gift card liability because both are credits from a double-entry accounting perspective.  The gift card liability becomes revenue when the gift cards are redeemed (debit gc liability, credit sales revenue).  The offsetting entry to the gift card liability was a bank deposit when the gift cards were sold.  The gift card liability balance is no different than a loan payable liability.  You don't want to create an offsetting asset account because the entirety of the client's balance sheet balances, even if the cash received from the sale of the gift cards has been spent long ago.