Blog

5 Ways You Can Use QuickBooks’ Income Tracker

QuickBooks appeals to millions of small businesses because it offers multiple ways to complete the same tasks, which accommodates different work styles.  Say, for example, you wanted to look up a specific invoice. You could:

  • Go to the Customer Center and select the customer, and then scan through the list of transactions,
  • Use the Find feature (Edit | Find), or
  • Create a report.

Another way you can get there if you have a recent version of QuickBooks: the Income Tracker(Note: Only the Administrator or a staff member with the correct permissions can access this feature. Talk to us about whether to allow other employees to use it, and how to set that up.)

Figure 1: QuickBooks' Income Tracker provides a visual overview of your company's income.

Figure 1: QuickBooks’ Income Tracker provides a visual overview of your company’s income.

To get there, either click the link in the vertical navigation bar or go to Customers | Income Tracker.

One Screen View of Open Estimates and Open, Overdue & Paid Invoices

Four colored bars across the top of the screen represent open (unbilled) estimates, open invoices, overdue invoices, and invoices paid within the last 30 days. Each bar contains two numerical values: the number of transactions of that type and the dollar amount involved.

QuickBooks defaults to displaying all types of transactions, but when you click on a bar, the screen changes to show only that type of transaction.

You can also filter the table of transactions using the drop-down lists below the colored bars. Your choices here include Customer:JobTypeStatus (Open, Paid, etc.) and Date (range). Click the arrow to the right of each filter’s label to display your options.

The column labels below these lists will change depending on the transaction type that’s active.

Increased Functionality

The Income Tracker is great for simply viewing groups of transactions; double-clicking on one will open the original form. You can also open them by selecting an action to take. For example, open your estimates list and click on a transaction to highlight it. Then click the arrow next to Select in the Action column at the far right end of the row.

Figure 2: You can modify transactions like estimates from within the Income Tracker.

Figure 2: You can modify transactions like estimates from within the Income Tracker.

If you choose the first option here, QuickBooks opens a small window that asks you whether you’d like to create an invoice for 100 percent of the estimate, a percentage of it, specific items, or percentages of each item. When you make your selection and click OK, a completed invoice form opens, which you can then check over and save.

As you can see above, you can also mark the estimate as inactive, print it, or email it. A great time saver!

Each transaction type supports a different set of actions. In the open invoice action column, as you’d expect, you can click the option to Receive Payment, which opens the Customer Payment window with the customer and amount due already filled in. This can be edited to reflect a different amount, or you can just accept it as is, then save it.

Create New Transactions

You can even create a new transaction within the Income Tracker. Click on the arrow next to Manage Transactions in the lower left corner of the screen and select the form you want.

Figure 3: You can open new transaction screens from within QuickBooks' Income Tracker.

Figure 3: You can open new transaction screens from within QuickBooks’ Income Tracker.

Print Multiple Forms (Batch)

The Income Tracker also provides one of the fastest ways to print multiple forms. Just select the transactions you want to print by clicking in the box in front of them, and then click the arrow next to Batch Actions in the lower left corner.

Edit Transactions

Finally, you can edit transactions from here, too. Either double-click on one or select it and click Edit Highlighted Row in the Manage Transactions menu.

QuickBooks’ Income Tracker doesn’t do anything that can’t be done another way in the program. But it provides an excellent one-glance view of the current state of your receivables movement.

If you’re consistently seeing patterns that you don’t like, call us at 256-337-5200. We can evaluate your receivables process and suggest ways to accelerate it. Even if your sales aren’t increasing, getting that “PAID” stamp on invoices quickly will improve your cash flow and strengthen your confidence as a business manager.

The “QB Bob” Team @ www.qbbob.com

8 QuickBooks Reports That You Should Be Running Regularly

There are dozens of reports that you can run in QuickBooks. Do you know which ones are a “must” to run regularly?

Reports can tell you how many green sweatshirts you sold in March and how much you bought from your favorite vendor last month. They’re very good at drilling down to get the precise set of numbers you need.

But reports – carefully customized and properly analyzed – can do more than tell you how many golf clubs to order and when it’s time to switch phone services. They can help you make the business decisions that will help you take your growing company to the next level. There are several that you should be looking at regularly, some of which you can interpret easily and use in your daily workflow. We’ll help you with the interpretation of the more complex financial reports.

(1) Who Owes Money? A/R Aging Detail Report – That’s probably a question you ask yourself every day. You don’t necessarily have to run the A/R Aging Detail report every day, but you’ll want to run it frequently. It tells you who owes you money and whether they’ve missed the due date (and by how many days).

Figure 1: By running the A/R Aging Detail report, you can see whether you need to follow up with customers who have past due invoices.

Figure 1: By running the A/R Aging Detail report, you can see whether you need to follow up with customers who have past due invoice

As with any report, you can modify it to include the columns, data set and date range you want by clicking the Customize button. When you create a report in a format that you think you might want to run again, click the Memorize button.  Enter a name that you’ll remember, and assign it to a Memorized Report Group.

Getting There

There are two ways to find the reports you want to see. You can open the Reports menu and move your cursor down to the category you want, like Customers & Receivables, which will open a slide-out menu of options there.

Or you can open the Report Center, which lets you explore reports in more depth. Each is represented by a small graphic with four icons under it. You can:

      • Run the report with your own data in it
      • Open a small informational window
      • Designate it as a Favorite, and
      • View QuickBooks help.

Figure 2: If you access QuickBooks reports through the Report Center, you'll have several related options.

Figure 2: If you access QuickBooks reports through the Report Center, you’ll have several related options.

Other A/R that you should consult periodically include:  (2) Open Invoices and (3) Average Days to Pay.

(4) Tracking What You Owe – Unpaid Bills Detail.  Reports can also keep you up-to-date on money that you owe to other people and companies. An important one is Unpaid Bills Detail, accessible through the Vendors & Payables menu item. Though you can modify its columns, this report basically tells you who is expecting money from you, the date the bill was issued and its due date, any number assigned to it, the balance due, and relevant aging information.

(5) Vendor Balance Detail is critical, too. This report displays every transaction (invoices, payments, etc.) that contribute to the balance you have with each vendor.

Standard Financial Reports

Figure 3: We hope you'll let us help you by running and interpreting these standard financial reports.

Figure 3: We hope you’ll let us help you by running and interpreting these standard financial reports.

QuickBooks report categories include one labeled Company & Financial. These are reports that you can run yourself, but they’re critical for understanding your company’s financial status. We can customize and explain how to analyze these on a regular basis so you’ll know where you stand. They include:

(6) Balance Sheet. What is the value of your company? The balance sheet breaks out this information by account (under the umbrella of assets, liabilities and equity).

(7) Income Statement. Often referred to as Profit & Loss, this shows you how much money your business made or lost over a specific time period.

(8) Statement of Cash Flow. How much money came in and went out during a specified time range?

Reports can only generate information about what you’ve entered in QuickBooks and exactly where it’s been entered. So it’s crucial that you follow standard accounting practice as you proceed through your daily workflow. We’re always available to answer questions you have about QuickBooks’ structure and your activity there. Your reports – and your critical business decisions – depend on it.

If it’s been a while since you’ve had a QB file health check, please call us at 256-337-5200 to schedule an appointment today and let us show you how to start pulling these 8 “must” reports.

The “QB Bob” Team

The Basics About QuickBooks’ Fixed Asset Tools

Fixed assets are physical entities that you purchase to help your business generate revenue, like property, a vehicle or a commercial oven. By definition, they must be in use for over 12 months.

figure 1

Figure 1: You’ll need our help in depreciating the book value of your fixed assets, but careful recording of them will make your QuickBooks reports, your taxes and your company’s worth more accurate.

QuickBooks can help you track these, but both the value of your company and your tax obligations – and the sale price, should you eventually sell them — are affected by how the book value of your fixed assets is depreciated. It’s important that you work closely with us over the life of each one. What you can do on your own, though, is to maintain absolutely accurate records in this area.

Two Paths

The best time to start recording information about a fixed asset is while you’re creating a transaction related to its purchase. You can build an item record for it as you’re filling out the Item section of Enter Bills, Write Checks, Enter Credit Card Charges or Purchase Order.

Let’s say you’re writing a check for a new company truck. You’d go to Banking | Write Checks and fill in the blanks. Click the Items tab below the MEMO field, then click the down arrow in the ITEM field. Scroll up to the top of the list if necessary and select <Add New>. You’ll see this menu: 

figure 1

Figure 2: Keep track of your company’s fixed assets by creating item records for them. You can do this as you’re entering transactions for their purchase.

Click on Fixed Asset to open the New Item window.

Transactions Not Required

There may be times when you’ll want to create an item record for a fixed asset when you’re not processing a transaction. Such situations include:

  • Cash purchases
  • Transfer of a personal asset to your company
  • Purchase of a fixed asset with personal funds, or
  • A multi-item purchase.

To do this, click on the Lists menu and select Fixed Asset Item List. If you’re adding a new one, right-click anywhere in the list part of the screen and select New (or click the down arrow next to the Item button in the lower left of the screen and click New). The same New Item window that you opened from the check-writing screen appears.

You’ve already chosen Fixed Asset as the TYPE, so your cursor should be in the Asset Name/Number field. Enter an easy-to-recognize name so that you’ll be able to quickly identify it in reports. Select the correct Asset Account (ask us if you’re not sure) and type a description in the Purchase Description field, clicking the correct button for new or used.

Enter the Date purchased, the Cost and the Vendor/Payee. Don’t worry about the SALES INFORMATION fields until – and if – you eventually sell the asset.
figure 1

Figure 3: You should be able to complete the New Item window in QuickBooks for your fixed assets on your own, but consult with us on any questions.

Under ASSET INFORMATION, enter the Asset Description (you can write a lengthier description here), its Location, PO Number if applicable, Serial Number and warranty expiration date. Add Notes if you’d like, and you’re done – unless you want to incorporate Custom Fields. If so, click the Custom Fields button in the upper right, then Define Fields.

(We can provide the depreciation and book value numbers under FIXED ASSET MANAGER.)

Your fixed asset records are critical elements of QuickBooks. You may be storing similar information elsewhere in your office records, but QuickBooks needs it, too, so you’ll have a comprehensive accounting of your company’s value.

This can be a little tricky, contact QBBob at 256-337-5200 if you have any questions or to schedule an appointment.

Spring Cleaning of Your QuickBooks File

Ah spring!  The season of increased daylight, warming temperatures, and an overall feeling to  clean.  Most people are eager to throw open the doors and windows, and attack the dirt winter has left behind, both inside and outside of the house.

It’s not hard to see when your home is dirty; however, QuickBooks company file errors are harder to detect.  That is, unless you know the signs, including:

  • Inability to execute specific processes, like upgrading
  • Missing data (accounts, names, etc.)
  • Mistakes in reports
  • Occasional program crashes
  • Performance problems
  • Refusal to complete transactions (the dreaded looping)

 

figure 1

Figure 1: If some transactions won’t go through when you click one of the Save buttons – or worse, QuickBooks shuts down — you may have a corrupted company file.

Call for Help

The best thing you can do if you notice problems like this cropping up in QuickBooks – especially if you’re experiencing multiple ones – is to contact us. We understand the file structure of QuickBooks company data, and we have access to tools that you don’t. We can analyze your file and take steps to correct the problem(s).

One of the reasons QuickBooks files get corrupt is simply because they grow too big. That’s either a sign of your company’s success or of a lack of periodic maintenance that you can do yourself. QuickBooks contains some built-in tools that you can run occasionally to minimize your file size.

One thing you can do on your own is to rid QuickBooks of old, unneeded data. The software contains a Condense Data utility that can do this automatically. But just because QuickBooks offers a tool doesn’t mean that you should use it on your own.

figure 2

Figure 2: Yes, QuickBooks allows you to use this tool on your own. But if you really want to preserve the integrity of your data, let us help.

A Risky Utility

The program’s documentation for this utility contains a list of warnings and preparation steps a mile long.

We recommend that you don’t use this tool. Same goes for Verify Data and Rebuild Data in the Utilities menu. If you lose a significant amount of company data, you can also lose your company. It’s happened to numerous businesses.

Be Proactive

Instead, start practicing good preventive medicine to keep your QuickBooks company file healthy. Once a month or so, perhaps at the same time you reconcile your bank accounts, do a manual check of your major Lists.

Run the Account Listing report (Lists | Chart of Accounts | Reports | Account Listing). Are all of your bank accounts still active? Do you see accounts that you no longer used or which duplicate each other? Don’t try to “fix” the Chart of Accounts on your own. Let us help.
figure 3

Figure 3: You might run this report periodically to see if it can be abbreviated.

Be very careful here, but if there are Customers and Vendors that have been off your radar for a long time, consider removing them – once you’re sure your interaction with them is history. Same goes for Items and Jobs. Go through the other lists in this menu with a critical but conservative eye. If there’s any doubt, leave them there.

A Few Alternatives

There are other options. Your copy of QuickBooks may be misbehaving because it’s unable to handle the depth and complexity of your company. It may be time to upgrade. If you’re using QuickBooks Pro, move up to Premier. And if Premier isn’t cutting it anymore, consider QuickBooks Enterprise Solutions.

There’s cost involved, of course, but you may already be losing money by losing time because of your version’s limitations. All editions of QuickBooks look and work similarly, so your learning curve will be minimal.

Also, try to minimize the number of open windows that are active in QuickBooks. That will improve your performance. And what about your hardware? Is it getting a little long in the tooth? At least consider adding memory, but PCs are cheap these days. If you’re having problems with many of your applications, it may be time for an upgrade.

A Stitch in Time…

We’ve suggested many times here that you contact us for help with your spring cleanup. While that may seem self-serving, remember that it takes a lot less time and money to take preventive steps with your QuickBooks company file than to troubleshoot a broken one.

NEW–Intuit Checks: Invest in Fraud Protection…

Did you know that check FRAUD is more common than credit card fraud?  Check fraud costs businesses a median of $150,000 and causes 30% of small businesses to fail each year.

figure 1

Why should I buy Intuit checks from Small Business Solutions? 
  • Intuit checks are designed exclusively for QuickBooks to print perfectly every time.
  • Intuit checks were designed by an FBI fraud trainer and have 27 overt and covert features designed to keep your business safe.
  • Intuit checks protect you with state-of-the-art security from manufacturing to your door and provide features not found in other checks.  All for only cents more per check.
  • Intuit Premier checks have a security hologram on the front of the check that makes scanning or copying nearly impossible.
Cost and Type.  There are four types of Intuit checks: 
  • Basic Voucher:  From $.16 to $.43/check
  • Secure Plus Standard: From $.18 to $.57/check
  • Secure Plus Voucher:  From $.24 to $.65/check
  • Secure Premier Voucher: From $.27 to $.73/check
Basic Voucher checks offer minimal protection against fraud. Use these to track payroll deductions and invoice payment details with convenient check stubs.  Designed with the (1) printable check at the top and a stub area below.
Secure Plus Standard checks have 10 security features which help prevent fraud, from chemically reactive paper to tamper-resistant toner. They’re also great for paying employees and suppliers. Designed with the (3) printable checks per page.
Secure Plus Voucher checks have 10 security features which help prevent fraud, from chemically reactive paper to tamper-resistant toner. They’re also great for paying employees and suppliers. Designed with the (1) printable check at the top and a stub area below.
Secure Premier Voucher checks offer our most powerful prevention against fraud. The new security hologram makes it virtually impossible to counterfeit!  Designed with the (1) printable check at the top and a stub area below.
Other check supplies:
  • Deposit Slips:  From $.07 to $.26/ea.
  • Security Pens:  Pack of 5 = $10.98 (~$2.19 each)
  • Self-Seal Standard Check Envelopes: From $.12 to $.28/ea.
  • Endorsement Stamps:  $35.98 each
Make life simple.  Purchase all of your QuickBooks products and check supplies from one vendor.  
 
Call us today at 256-337-5200 to order your Intuit Checks & Supplies
Invest in Fraud Protection…….don’t rely on damage control
 

5 Ways to Accelerate Your Receivables in QuickBooks

If you asked five small business owners to name the top roadblocks they face in their quest for ongoing profitability, it’s likely that all five would point to slow payments.  It’s everyone’s problem. Accounts receivable requires constant monitoring.  As satisfying as it can be to dispatch a group of invoices, you know that it’s going to take some work to bring in payment for at least some of them.  You can take steps to collect the money you’re owed faster. Here are five things that we suggest to accelerate your accounts receivable in QuickBooks

1.  Let customers pay invoices electronically.

figure 1

Figure 1: You’re likely to get paid faster if you let customers pay electronically when they receive an invoice. Go to Edit | Preferences | Payments | Company Preferences.

A few years ago, this was a good idea. In 2014, when people have stopped carrying checkbooks and are accustomed to using their mobile devices to pay for merchandise, it’s become almost required. Whether or not you know it, you’re probably losing some business if you don’t have a merchant account that supports credit and debit card payments, and possibly e-checks.
If you have an online storefront, you’ve undoubtedly been accepting plastic for a long time now. Not many shoppers want to place an order on a website and hunt for envelopes and stamps and blank checks to complete it. If you invoice customers, it’s just as critical that you allow them to remit payment ASAP.   Not set up with a merchant account yet? We can help you get started with the Intuit Payment Network.

2.  Keep a close watch on your A/R reports.

Part of being proactive with your accounts receivable is being vigilant and informed. Create and customize A/R reports regularly. When you customize your A/R Aging Detail report, for example, in addition to the other columns that you include, be sure that Terms, Due Date, Bill Date, Aging and Open Balance are turned on (click Customize Report | Display and click in front of each column label).
You should also be looking at Open Invoices and Collections Report frequently, or assigning someone else to monitor them closely. We can help here by creating more complex financial reports periodically, like Statement of Cash Flows.

3.  Send statements.

figure 2

Figure 2: In this window, QuickBooks wants you to create filters to identify customers who should receive statements. Here, everyone with transactions that are more than 30 days old will be included.

Invoices are generally the preferred way to bill your customers, but you should consider sending statements in addition when customers have outstanding balances past a certain date. QuickBooks sometimes calls these reminder statements. You’re not providing the recipients with any new information; you’re simply sending a kind of report that lists all invoices sent, credit memos and payment received.
To generate statements, click Customers | Create Statements. You’ll see the window pictured above. You can send statements to everyone, a defined group or one customer, and you can define the past-due status that you want to target in addition to other options.

4.  Send accurate invoices the first time.

Few things will slow down your accounts receivable more than incorrect invoices. The customer can wait until payment is almost due to dispute the charges, which means that they’ll probably get another 15 or 30 days (or whatever their terms are) to pay the amended bill.  So whoever is responsible for creating invoices needs to be checking and re-checking them. If it’s logistically possible depending on your workflow, have them verified by a second employee.

5.  Offer discounts for early payment and assess finance charges.

Offering discounts is a balancing act. You’ll be getting less money for your sale – even 5 percent multiplied by many customers can add up – but it may make sense financially for you to take a small hit in return for being able to deposit the payment sooner. We can help you do the math here.

To offer this, you’ll have to set up your discount scenario as a Term option (Lists | Customer & Vendor Profile Lists | Terms List), as seen here:

figure 3

Figure 3: This Standard discount term gives customers a 5 percent discount if their invoice is paid within 10 days.

To make a customer eligible for the discount, open the Customer Center and double-click on a customer, then on Payment Settings | Payment Terms.

You might also want to be assessing finance charges. The revenue you bring in from finance charges will probably be negligible. But sometimes, just knowing that a late payment will be more costly may prompt your customers to settle up in a timely fashion.

Whatever approaches you choose to accelerate your receivables, be consistent. If any of your customers should compare notes, you want to be regarded as being firm but fair.

2 Ways to Receive Customer Payments

Receiving Payments from Customers in QuickBooks

Depending on the situation, there’s more than one way to record a payment in QuickBooks. Here are your options.

There are undoubtedly some QuickBooks tasks that are more enjoyable than others. It’s no fun paying bills, for example, and making collection calls on unpaid invoices can be downright unpleasant.

But you probably don’t mind recording payments after all of your hard work creating products or providing services, sending invoices or statements, and generating reports to make sure you’re on top of it all.

QuickBooks offers more than one way to document customer remittances, and it’s important that you use the right one for the right situation.

Defining the destinationfigure 1

Figure 1: Uncheck the box on the farthest right if you think you may want to direct payments to other accounts sometimes.

Before you begin receiving payments, you need to make sure they’ll end up in the correct account. The default is an account called Undeposited Funds. To make sure that this setting is correct, open the Edit menu and select Preferences, and click the Company Preferences tab. Use Undeposited Funds as a default deposit to account should have a check mark in the box next to it.

If you think you’ll sometimes want to deposit to a different account, leave the box unchecked. Then every time you record a payment, there’ll be a Deposit to field on the form. Talk to us if you’re planning to use any account other than Undeposited Funds, as you can run into serious problems down the road if payments are earmarked for the wrong account.

The right tool for the job

Probably the most common type of payment that you’ll process will come in to pay all or part of an invoice or statement that you sent previously.

figure 2

Figure 2: You’ll record payments on invoices you’ve sent in this window.

To do this, open the Customers menu and select Receive Payments. In the window that opens, click on the arrow in the field next to RECEIVED FROM to display the drop-down list, and choose the correct customer. You’ll see the outstanding balance. Enter the amount of the payment you received in the AMOUNT field and change the date if necessary. Click the arrow in the field next to PMT. METHOD, and then select the type of payment.

If you established a credit card as the default payment method in the customer record, the card number and expiration date will be filled in. If not, or if a check was submitted, enter the information requested.

Any outstanding invoices will appear in a table. Make sure that there’s a check mark in front of the correct one(s). If the customer only made a partial payment, you’ll have to indicate how you want to handle the underpayment. Here are your options:
figure 3

Figure 3: You can select how to handle partially-paid invoices here.

When you’re done, save the payment.

Instant income

There may be times when you receive payment immediately, at the time your products or services change hands. In these cases, you’ll want to use a sales receipt. Open the Customers menu again and click Enter Sales Receipts.

Select a customer from the drop-down list or add a new one, then fill out the rest of the form like you would an invoice, selecting the items and quantities sold, and indicating the type of payment made (cash, check, credit).figure 4

 Figure 4: Fill out a sales receipt when payment is received simultaneously with the sale.

Other scenarios

These are the most common methods of receiving payments from customers, and you may never have to do anything other than simple payment-recording and sales receipts.

But unusual situations may arise that leave you stumped. For example, a customer may want to make a partial, advance payment before you’ve created an invoice or at the same time you’re entering it. In a case like this, you’ll have to create a payment item so that the money you’ve just received is reflected on the invoice. Or you may get a down payment on a product or service, or even an overpayment.

Let us help you when such situations occur. It’s much easier –and more economical for you – to spend some time with us before you record a puzzling payment than to have us track it down later on. We’ll help ensure that your money makes it to the right destination. Call us today at 256-337-5200.

The “QB Bob” Team
Certified QuickBooks® ProAdvisors
Advanced, Enterprise, Online & Point of Sale
Intuit Premier Reseller

9 QuickBooks Best Practices for Payments

They’re not carved in stone, but accounting professionals tend to agree that these guidelines can improve the speed and accuracy of your payments – both incoming and outgoing — through QuickBooks.

Old habits are hard to break. Once you start doing something one way, it can be hard to change course. There has to be a reward, a reason for altering an existing approach to a task.

In the case of QuickBooks best practices for payments, the rewards are clear.

  • Your cash flow will improve.
  • You’ll save time, which saves money.
  • You’ll minimize late fees and poor credit.

figure 1 extra

Figure 1: Best practices benefit your business in many ways, but they can also offer your customers convenience, like the option to pay invoices online.

Suggested approaches

You’ve probably incorporated some best practices into your business already – especially if you’ve had any QuickBooks training. They aren’t hard-and-fast rules: Many are just common sense.

Here are some of the best practices that we recommend you incorporate into your workflow.

Annotate everything you can. Whether or not the IRS ever audits you, you should be including descriptive details wherever you can, unless there’s no reason that you’d ever need a reminder of why you made a specific deposit or created a sales receipt or wrote off an outstanding balance.

Use subaccounts whenever possible. It will make reports more precise.

Take advantage of the tools available for electronic financial processing. Get a merchant account so you can accept credit cards and eChecks. Scan checks for immediate deposit. Let customers pay online by including a link in invoices. Get set up for accepting payments when you’re out of the office. We can help you set up the solutions that make sense for your business.

Password-protect your QuickBooks file, even if you’re a sole proprietor. You’re out of the office or occupied with something else sometimes, aren’t you? Unless no one else ever comes in and you lock your door every time you leave, secure your data. Those easily-accessible processes you’ve set up to pay and be paid can be used by an unauthorized individual.

 figure 2 extraFigure 2: Yes, you must. And set up a reminder to change it every 90 days.

Be smart – and frugal – when it comes to expenses. Make sure that any employee who has the ability to write checks, approve expenses or make any kind of payment through QuickBooks has the same mindset. You might want to consult us when you’d like to spend more than, say, $2,500 on something that’s not a regular, recurring expense. We can help you consider the tax implications, the potential ROI and, in some cases, depreciate the item(s).

Cross-train your accounting staff. This both ensures that critical work always gets done and can expose unauthorized payments.

Be diligent about billing and collections. When you have established good relationships with customers, it’s tempting to want to help them out by extending credit or delaying due dates sometimes. Save this generosity for extreme cases.

Set up a report schedule. You probably run some reports as needed, but it’s critical that you customize, create and analyze basic financial reports on a regular basis. Many reports in QuickBooks are self-explanatory, but it takes a trained eye to spot trouble brewing in, for example, Profit & Loss, Balance Sheet and Statement of Cash Flows. We can help you determine which reports you should be looking at yourself and which you should have us assemble periodically.

Flag potential IRS Form 1099 contractors when you create their records. It’s so important that you create and dispatch 1099s to everyone who is eligible that QuickBooks has a built-in tool for doing this.

figure 3 extraFigure 3: If there’s any possibility that a vendor may require an IRS Form 1099 at the end of the year, be sure to check this box.

If you want to have a more comprehensive understanding of payment best practices, talk to us. We can do some one-on-one training and/or help you find resources. QuickBooks is easy to use, but its advanced features may require explanations and practice. And you’ll find it even easier to use if you learn the theory and concepts behind the step-by-step procedures.Call us today at 256-337-5200.

The “QB Bob” Team
Certified QuickBooks® ProAdvisors
Advanced, Enterprise, Online & Point of Sale
Intuit Premier Reseller

 

7 Tips for Managing Payroll

It’s one of the most challenging elements of accounting — and one that must be absolutely accurate and timely.

image 1

 

 

 

That sigh of relief you breathed when you finished your initial payroll setup could probably be heard in the next office building. This is a daunting task, and you should be proud of yourself for getting through it.

But you know that payroll data isn’t carved in stone. Payroll taxes change regularly on the federal, state and local levels. And as your employees’ lives change, so, too, do their payroll requirements.

You’ve heard about the penalties and fines that the IRS can levy if your payroll taxes aren’t correct, and your employees won’t be happy if you don’t make needed changes. So stay compliant. Here are some ways to do that:

  1. Update payroll tax tables frequently. QuickBooks recommends that you do this every time you pay your employees (or at least every 45 days). Go to Employees | Get Payroll Updates. It’s not just data that changes: Taxing agencies sometimes change the forms themselves. So this is critical.
  2. Stay on top of changes in staff tax status. When you set up your payroll system in QuickBooks, you entered default tax-related values for all employees that were automatically applied to everyone. Your payroll updates will handle these global changes. But if you need to change data for an individual employee, go to the Employee Center and click on the Employees tab. Double-click on the correct name and select Payroll Info and then the Taxes button.
  3. Don’t use Write Checks when you’re prepaying payments for your payroll tax liabilities. QuickBooks needs to know when you’ve fulfilled an obligation, and your reports will not be accurate if you simply dispatch a check. Go to the Pay Scheduled Liabilities box in the Payroll Center.
  4. Set up in payroll user permissions carefully. Only you or a very trusted employee should be able to create, print, e-pay and e-file transactions and forms. Full Access should be restricted to you and your accountant. Go to Company | Set Up Users and Passwords | Set Up Users.
  5. Know when to start over. If you’ve made some changes to an employee’s paycheck but got interrupted and forgot what you did, right-click on his or her name in the employee list and select Revert Paycheck. Begin again rather than guessing.
  6. Use the Payroll Item List. You’ll need to open the Employee Center and Payroll Center for many procedures, but you can also accomplish a great deal from the Payroll Item List window. Seeing this screen regularly also helps you get more familiar with your Chart of Accounts. Open the Lists menu and select Payroll Item List. You can access numerous tasks — like setting up payroll, paying employees and payroll taxes, processing forms and running reports — by highlighting a payroll account and right-clicking or by opening the menus in the lower left corner of the screen.
  7. Don’t edit payroll tax amounts on your own. Some payroll tax rates aren’t updated in your payroll tax tables, and QuickBooks lets you edit them manually. Let us help you with this, at least the first time you do it. Incorrect rates can cost you money and time.

QuickBooks lets you create some sophisticated payroll reports in Excel, but here, too, let us walk you through this since the process involves macros, which can be tricky. We hope you’ll contact us at 256-337-5200 with any questions you have about payroll so that your relationships with taxing agencies — including the IRS — remain in good standing.

Customer Refunds: Are You Doing Them Right?

Customer Refunds: Are You Doing Them Right?

Refunds. You probably wince at the word. Some – like customer refunds for returns – are fairly uncomplicated, thanks to QuickBooks’ tools. Others, not so much. You may find yourself unable to balance your accounts receivable.

There are numerous scenarios that necessitate the use of credit memos, including overpayment, order cancellations, and bad debt write-off. It’s critical that these are entered correctly. If they aren’t, you may lose a lot of the time that QuickBooks helped you save as you try to chase down a few dollars.

Let’s say a customer pays for an order but cancels before it ships. You could:

• Apply the balance to an existing invoice
• Keep it as an available credit
• Issue a refund

Click Customers | Create Credit Memos/Refunds. Select the correct customer and job (and A/R account, if you have more than one). Enter the items just as they appear on the invoice. When you’re finished, click Save & New. The Available Credit window opens, displaying your options:

You would select Give a refund and click OK. The Issue a Refund window opens and should already be filled in. If everything is correct, click OK. The refund check has now been entered in the checking register, ready to be processed.

WARNING: If the invoice was paid with a credit card, it gets complicated. Your instructions will depend on whether you are using Intuit Merchant Service for QuickBooks or another merchant account service. You’ll also have to deal with transaction fees. We can help you deal with this.

If the customer has open invoices, you may want to choose Apply to an invoice in the Available Credit window. A list opens; just select the correct invoice. Or if you want to have those extra funds available for other invoices but don’t want to apply them immediately, click Retain as an available credit. When you want to use them, click the Apply Credits button in the lower right corner of the invoice.

Sometimes, customers overpay an invoice or statement charge, or make a down payment for which there is no invoice. This is easy to fix. Open the Customer Payment screen (Customer Center | Transactions | Received Payments) and double-click the related payment. In the screen’s lower left corner, you’ll see this:

Click the correct button, then Save & Close. The Issue a Refund window opens; you’d treat it the same way you did when you dispatched a return refund.

You can also use credit memos to write off bad debt if you are using the accrual method of accounting. If you don’t already have a Bad Debt item in your item list, set up a new item as an Other Charge. Name it “Bad Debt” and match it to the correct account.

Open the Credit Memo window and select the customer, then select Bad Debt as the item. You’ll get a message saying that the item is associated with an expense account; click OK. Enter the write-off amount minus sales tax if taxable (be sure the Tax column is correct) and click Save & Close.

WARNING: Enter two lines on the credit memo if it combines both taxable and non-taxable items (both charged to the Bad Debt account), one for each type. Be sure that the Tax Columns are correct.

The Available Credit window opens. Select Apply to an invoice. Put a check mark next to the correct one and click Done.

It seemed easier in the days when you just wrote a check for a refund or made an entry in a paper ledger, didn’t it? Using QuickBooks credit memos, though, helps you maintain records that follow standard accounting procedures and simplifies our understanding of your files. We’ll be glad to help you make sure that this sometimes-complex task is done right from the start.

Best wishes,

“QB Bob” Crook
Certified QuickBooks® ProAdvisor
Advanced, Enterprise, & Point of Sale
Intuit Premier Reseller

Latest Posts

Contact Us

PO Box 10053
Huntsville, AL 35801
(256) 337-5200
info@qbbob.com