Deel offers clients plug-and-play accounting integrations with three of the most popular double-entry accounting softwares: Netsuite, Quickbooks & Xero. This article will go into detail about how they work with Deel to save your finance teams and accountants time and ensure you are getting the most out of Deel.
Functionality Overview
Deel's accounting integrations work by linking a vendor to an independent contractor or billing entity (like an EOR entity, or Deel Ltd. which invoices your company for management fees) managed in Deel, and syncing bills and bill payments that are generated and paid using the Deel platform. Our accounting integrations also sync invoice PDF documents and expense files.
Linking contractor & billing entities to vendors
Upon setup you MUST perform the linking process in order for invoices to sync.
Remember that when you use Deel, there can be 3 different types of entities invoicing your company: an independent contractor (which is, in effect, a small business), Deel Ltd. and Deel Employer Of Record (EOR) entities. After running through the setup steps of your integration you will need to ensure that each of these billing entities is linked up with a vendor (or supplier, or contact, depending on the accounting software you are using) in Deel.
Mass Linking
When you first set up your accounting integration you will be brought to the following screen. Below you can see an example of the 3 types of billing entities you have in Deel.
When you press the 'link' button, the following will happen:
- We search for matches between contractors and billing entities, and vendors in your system based on common email addresses.
- If we find a match we link the two records together, and all subsequent invoices, invoice payments and PDFs are synced to this vendor.
- If we do not find a match, which is usually the case, we will create a vendor for you to use to represent the invoicing entity in your accounting system.
Please keep the following in mind:
- If you are linking a large amount of billing entities, this might take some time.
- Some clients would like to link everything to a single vendor in their accounting system. While this is convenient to do and may save you some hassle, it comes with significant compliance risks pertaining to worker misclassification should a tax authority open up a misclassification case. We strongly advise clients to use separate vendors for each entity, whether that is a contractor or Deel itself. Independent contractors operate as small businesses and need to be treated as such in your accounting systems.
- If you do not enable 'contractor auto-link' you will need to link contractors on a periodic basis to ensure their bills are synced
Contractor Auto-Link
You may ask how you can automate the linking process so you do not need to periodically go into your Deel account whenever you bring on a new contractor, or start using EOR services in a new country. Fortunately, you can use the 'auto-link' feature that will perform the aforementioned process automatically upon contract counter-signing in Deel.
If you do not enable
Read about the different cases that apply to contractor auto-link:
For Freelance Contractors
If you have auto-link enabled for a given team, any freelance contract signed within that team by both your business and the freelance contractor will trigger the linking process. We'll look inside your accounting system, identify if a vendor exists based on email-matching, and then either link to an existing vendor or create a new one and link it to the contract record in Deel. This happens the moment both sides sign the contract.
For Employer Of Record Services
As you know, if you are hiring talent using our EOR service, you will be invoiced by the EOR entity in the country where the services are being rendered. In most cases nowadays this is a Deel-owned entity such as 'Deel NL' or 'Deel PH' (Philippines) though occasionally this could be a partner.
Given that your company and that EOR entity sign an agreement for a specific EOR employee for the first time, we will run the linking process for that EOR entity.
In the example below, you can see what Deel-NL looks like. If you hired an EOR employee under Deel-NL for the first time and didn't have that EOR entity represented as a vendor in your system (for Deel-owned entities, we use the email employ@deel.com), we would create that vendor for you and link it to this billing entity.
For Deel Ltd. (Deel billing entities)
Auto-link does not apply to Deel billing invoices because you should link this billing entity when you first set up your integration. 'Deel billing invoices' uses the email 'deel@letsdeel.com'. Please note you will need to perform linking for each team.
Deel Ltd. based in the USA, invoices clients for contractor management fees (SaaS, percent-based, DPA fee and Equipment fee, payment fees for ACH and BACS, as well as Deel COR services). Given that there almost always will be things that Deel directly invoices your firm for, we ask that you link up 'Deel billing invoices' when you first set up your accounting integration.
Unlinking
In order to unlink contractors and billing entities to vendors you should:
- Go into Settings Tab and scroll to the bottom of the page
- Click on 'Advanced Settings'
- Click the red 'Unlink Contractors' button which will unlink all contractors/billing entities under your organisation.
At the moment we do not support individual unlinking but we will in the future.
Bill (invoice) Syncing
The core feature of Deel's accounting integrations is the ability to sync bills to your system. Please keep in mind that in order for us to sync invoices, we need to have a linked vendor in the accounting system!
Overview
There are several very important points to keep in mind about how bill (invoice) syncing works. Please take careful note:
- Bills (invoices) are synced provided that:
- The billing entity - either Deel EOR entity, Contractor or Deel Ltd. (Deel Billing Invoices) are linked to a vendor in your system
- The invoice has been paid. Please note we DO NOT sync bills unless they have been marked as paid. Though this
When you initially set up an accounting integration, if you have gone through authentication step (for Xero and Quickbooks this is Oauth2.0, and for Netsuite it uses API keys) we will always enable automatic bill syncing.
You can disable automatic bill syncing with this setting in the settings section.
Permissions
In order to edit information, configure settings or setup/delete any accounting integration you need to be an admin or controller for a team. You will only be able to configure team-level settings if you have admin or controller level access.
Multi-Currency
Deel's accounting integrations support complex multi-currency scenarios to ensure that the most accurate data is going to your accounting systems. Though we support systems set up without multi-currency enabled, we strongly advise clients to activate multi-currency feature in their accounting system, which often comes at an added cost.