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

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.

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

No matter which level of QuickBooks payroll you choose, you’ll have to do some groundwork before you start dispatching paychecks.  Intuit can manage everything up to and including, well, everything – payroll runs, filings, taxes and reports – but you’ll have to provide myriad details before you begin and during each payroll run.

QuickBooks’ tools must be followed to the letter to avoid penalties from federal and local agencies.  But before you even fire up QuickBooks, you’ll save a lot of scrambling later if you pull together the information you’ll need first.  Yes, this part will be tiresome, but you’ll have to do it eventually, anyway.  You may have all of this information in a neat file or an Excel spreadsheet, but it may also be scattered.  Wherever it exists, pull together:

• All employee W-4s
• All possible compensation levels (salary, hourly, bonuses, commissions and tips)
• Employee benefit information.  Do you offer 401Ks, health or dental insurance?  Can employees set up Flexible Spending Accounts?  How much PTO, vacation and sick time, etc., is offered?
• Additional withholding and payment options, like travel reimbursements and cash advances, wage garnishments, and union dues
• Hire and termination dates
• A voided check, if you offer direct deposit

You know from getting paychecks in the past that your total earnings are reduced by deductions like FICA, Medicare, and state income tax.  As an employer, you’re now responsible for calculating those withholdings and remitting them to the appropriate government entities.

Payroll taxes will be the bane of your existence unless you pick a payroll option that manages them (or let us help you with this arduous task).  You’ll need to know exactly what your liability is to both federal and local authorities.  If you don’t already, you can find contact information for state and local agencies here.

So another pre-payroll information-gathering task will involve learning what you’ll owe to whom and when.  Fortunately, QuickBooks will do all of the calculating for you, and it provides a thorough set-up wizard.

Paying employees is a challenging element of your role as an employer, and it must be done right.  We can help you build an accurate framework and keep up with your government payroll tax obligations.

Best wishes,

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

Intuit Payment Solutions provides tools – websites and hardware and software – that let you establish merchant relationships with banks so you can accept check and credit card payments and authorize them. The money moves into your account, usually within 2-3 business days, and your QuickBooks® files are always updated. The result: faster customer payments.

Intuit Merchant Services for QuickBooks® has helped businesses accept credit card payments for years. You simply enter the number in QuickBooks® (or swipe the card).

The Intuit® Payment Network offers another alternative: electronic invoicing. You include a link in outgoing invoices. Your customer clicks on it and enters bank account information, and the funds are transferred to your account.

Intuit Check Solution for QuickBooks® is a good option for business people who process a lot of paper checks. You can either scan checks directly into QuickBooks® or enter the routing and account numbers.

If you’re often on the road without QuickBooks® access, your PC can be an Intuit Online Terminal. The service’s secure website is available from any computer with an internet connection. The information from your customer’s paper check is converted into an electronic payment when you enter the numbers or swipe the card.

Intuit Check Solution for Terminals requires a special check reader. Once your customer’s check is approved, you’ll get a paper receipt that he or she will sign. You void the check and return it.

Intuit Merchant Service for Web Stores is your solution for online sales. You get a merchant account, set up your store through an approved company, and connect it to QuickBooks® for integrated bookkeeping.

If you have a physical retail location, you should consider QuickBooks® Point of Sale. This is sophisticated software that helps you manage actual sales and track customers and inventory.

Finally, mobile businesses can now process transactions on smartphones. Intuit GoPayment Mobile Credit Card Processing provides a special website where you log in, enter credit card information (or swipe the card using the free reader), and email or text a receipt.

For more information on these and other services and their pricing, contact us. We can help you find the best solution for your business and get you set up. You’ll soon be on the road to better cash flow and happier customers.

Best wishes,

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

Point of Sale systems have existed for years; they consist of hardware and software that work together to perform tasks like sales and returns, inventory management, and customer administration. Large retail stores live and die by them.

If you have a small retail operation and think POS is too cumbersome and expensive for you, you haven’t investigated QuickBooks Point of Sale. It’s affordable and, like other Intuit products, easy to use.

By using this software (with optional hardware), you will:

• Save time
• Improve inventory management
• Get reports assessing your operation’s performance
• Give customers a personalized buying experience

QuickBooks Point of Sale can be used alone or with QuickBooks. If you use both, POS will import customers and their account balances/limits, vendors and payment terms, and inventory. Data also moves back to QuickBooks, including sales receipts, deposits, sales tax, receipts of merchandise, inventory adjustments and cash drawer payouts.

Point of Sale looks and works like other Windows software. To process a sale or return, you simply click tabs, select from lists, and enter data. While you’re entering a transaction, the software is updating inventory and customer information. You can accept six different types of payments — including credit and gift cards — and print receipts.

Detailed customer and inventory records – which can be added and accessed during a transaction — help you know your buyers and your stock status. Add a bar code scanner to your hardware configuration, and your interactions with customers will be accelerated. POS automatically generates purchase orders when inventory drops.

Your careful tracking of customers, sales, and inventory culminate in comprehensive views of your operation’s activities. Customizable built-in reports provide insight into everything the software tracks, including:

• Customers – Sales volume by customer, sales by promotional code
• Inventory – Inventory value, summary with activity
• Sales – Best and worst sellers, most common returns, discount summary
• Orders – Layaway detail, backorders

Additional reports cover adjustments, taxes, employees, and shipping. At day’s end, you can run comprehensive activity summaries.

QuickBooks Point of Sale is easy to use, but retail management is complex. We can help you set up and maintain the software to best accommodate your hectic workflow and plan for your store’s future by intelligently interpreting the past.

Best wishes,

“QB Bob” Crook
Owner, Small Business Solutions, LLC
QuickBooks ProAdvisor Intuit Solutions Provider (ISP)
Certified – Advanced, Enterprise, & Point of Sale

QuickBooks’ standard reports are critical to understanding your company’s past, present, and future. But the program also offers innovative tools that can make them significantly more insightful and comprehensive.

QuickBooks offers two simple conventions that let you identify related data: classes and types. Classes are used in transactions. Types are assigned to individual customers, vendors, and jobs. You might use classes to, for example, separate transactions that relate to different departments or locations or types of business. A construction company might want to track classes using New Construction, Remodel, and Overhead. Your customer types might help you isolate groups by characteristics like Industry or Geographical Location.

First, make sure that QuickBooks is set up to use classes. Go to Edit | Preferences | Accounting | Company Preferences. Make sure that Use class tracking is checked. If you want to be prompted for a class designation in transactions, check that box, too. QuickBooks already contains a Type field in customer, vendor, and job records.

It’s easy to build lists of options for both. To define classes, go to Lists | Class List. In the bottom left corner of the screen, click on Class, then select New from the menu.

Let’s say that you’re a contractor and you want to separate remodeling jobs into room types, like Bathroom or Kitchen. Go through the above steps again. Enter “Bathroom” in the Class Name field and click the box next to Subclass of. Open the list and choose “Remodel”. Click OK.

Now you can use classes in transactions. Open a blank invoice and select a customer. The Class field will be next to the customer name. If the entire invoice will be assigned to the same class, click the drop-down list and select it. You can also assign separate classes to individual line items.

Not all invoice templates include a column for classes. You can add this by selecting the invoice form you want to modify and clicking Customize in the toolbar.

QuickBooks comes with two reports specially designed for tracking class-based transactions: Profit & Loss by Class and Balance Sheet by Class (both can be found in the Reports menu, under Company & Financial). Of course, you can filter other reports to include a class column. You can also create a QuickReport for individual classes. Go to Lists | Class List and select a report or graph.

Warning! The Balance Sheet by Class report is complicated and may produce unexpected results. It’s strongly advised to let a certified ProAdvisor (such as those at Small Business Solutions!) help you work with this one and set up a solid class structure.

Customer, vendor, and job types are a bit less complicated. Job types are especially useful; you can track, for example, profitability and time spent on individual projects. Customer and vendor types can produce output for things like targeted mailings and reports.

Creating types is very similar to creating classes. Go to Lists | Customer & Vendor Profile Lists, and select the type you want to work with. You’ll follow the same instructions here as you did for classes. Types do not appear on transactions; they’re designed for your own internal use, and they’re stored in records.

Classes and types can be used very effectively in your bookkeeping, but they require a good deal of thought and planning upfront to get accurate, meaningful reports. Let us know if we can assist as you attempt to use these powerful forms of classification.

Best wishes,

“QB Bob” Crook
Owner, Small Business Solutions, LLC
QuickBooks ProAdvisor Intuit Solutions Provider (ISP)
Certified – Advanced, Enterprise, & Point of Sale