From what i have seen, i believe we need to track inventory in square. This inventory should update the inventory in quick books online. That is the intent of the connection, to sync sales and inventory to QB.

In my situation i also have an online store, so what i do on my online store is track inventory in QB and sync that to my online store via a third party software(which i need later anyways to add additional stores i.e. amazon).

I believe this is the solution to online, POS, and QB. I dont have this all set up and tested yet.

QB, please let me know if this seems like it will work on your end.