Wednesday, October 9, 2019

Who Owes You? 5 QuickBooks Online Reports That Can Tell You Fast

Keep a constant watch on your accounts receivable to improve cash flow.


Quick: How many of your invoices are unpaid? Have any of your customers gone over 30 days past due? Did you bill all of the time and expenses for that project you just completed for a customer? 


If you’re doing your accounting manually, there’s simply no way to get that information quickly. Depending on your bookkeeping system, you may not be able to get it at all.


QuickBooks Online has more than one solution for this problem. You see the first one every time you log in. The Dashboard contains a graphic in the upper left corner that tells you how many invoices are overdue and unpaid. Click on the colored bar labeled OVERDUE, and you’ll see a list of invoices with the unpaid ones right at the top.


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You can tell at a glance how much of your money is tied up in unpaid invoices.


While this is important information for you to have as you start your workday, it doesn’t tell the whole story. To get that, you’ll need to access some of QuickBooks Online’s reports – five of them in particular. Click Reports in the left vertical pane, and then scroll down to the heading labeled Who owes you


These reports are listed in two columns. Each has the outline of a star next to it. Click on the star, and the report will be added to the Favorites list at the top of the page. Click on the three vertical dots next to it, and you’ll be able to Customize the report. And as you hover over the title, you’ll see a small, circled question mark. Click on this to get a brief description of the report.


There are several reports in this list that can provide insight into where your outstanding revenue is. We recommend you run five of them at least once a week – more frequently if your business sells large quantities of products and/or services. The suggested are:


Accounts receivable aging detail


This report provides a list of invoices that are overdue, along with aging information. There are several columns in the report, but you’ll want to pay special attention to the last one: OPEN BALANCE.


Tip: If you have many customers or simply a high volume of unpaid invoices, you might consider running the Accounts receivable aging summary instead.


Changing the Content


Before you run the report, you should explore the customization tools provided for it. They won’t be the same for every report, but you can start to get an idea of what can be done. Hover over the report title and click Customize. A panel like the one pictured below will slide out of the right side of the screen.
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QuickBooks Online provides deep customization tools for reports.


You can see some of your customization options in the image above. Beyond these, you can also work with filters and headers/footers. When you’re satisfied with your changes, click Run report.


If you want to run a report with its default settings, just click on the report title in the list to display it.  You’ll have access to limited customization from there. 


Four other reports you should be generating regularly are:
  • Customer Balance Summary: Shows you how much each customer owes your business
  • Open Invoices: Lists invoices for which there has been no payment
  • Unbilled Charges: Just what it sounds like: tells you who hasn’t been invoiced yet for billable charges
  • Unbilled Time: Lists all billable time not yet invoiced


We don’t expect you’ll have any trouble understanding reports like these; they’re fairly self-explanatory. QuickBooks Online offers many other reports, the standard financial reports that need to be generated monthly or quarterly, like Balance Sheet, Profit and Loss, and Statement of Cash Flows. You’ll absolutely need these should you apply for a loan or need to supply in-depth financials for any other reason. We can help you analyze them to get a comprehensive, detailed picture of your company’s fiscal health.


SOCIAL MEDIA POSTS


Can you determine who owes you money—and how much—in just a few seconds? QuickBooks Online can. Find out how here.


QuickBooks Online’s Dashboard gives you an instant rundown on unpaid invoices. Do you know where to look? Find out how here.


One of the easiest ways to improve cash flow is by running a handful of accounts receivable reports in QuickBooks Online. We can show you how here.

Have you invoiced customers for all billable time and expenses? QuickBooks Online reports can tell you quickly in just a few easy steps. Find out how.

Wednesday, September 18, 2019

Creating Statement Charges in QuickBooks

There’s more than one way to bill customers for your products and services. A statement charge is one of them.


Depending on what kind of business you have, you probably have a preferred way of billing customers. If they walk into your shop and present a credit card or cash, you create sales receipts. If they order off your website, they might receive an electronic receipt. Or your arrangement may be such that you send invoices.


There’s another way that’s especially useful if your customers are responsible for paying recurring charges, like an ongoing service contract that’s billed monthly. You can enter those financial obligations directly as statement charges.


As you know, QuickBooks can create statements, summaries of a customer’s activity. These are generated automatically from the invoices, receipts, payments, and other transactions you’ve recorded over a given period of time. But did you know you can manually add charges to statements? Here’s how it works.


Creating a Statement Charge


Click the Statement Charges icon on the home page or open the Customers menu and select Enter Statement Charges. Your Accounts Receivable register appears. Open the list in the field next to Customer:Job by clicking on the down arrow and select the correct Customer:Job. 


Warning: If the item will be attached to a specific job, not just a customer, be sure you choose the correct job. QuickBooks maintains a separate register for each.


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Consider creating a statement charge instead of an invoice for recurring transactions that will not be billed immediately.


Change the date if necessary and open the Item list (or click <Add New> if you haven’t created an item record yet). Select the one you want and enter a quantity (Qty). QuickBooks should fill in the rate and description. The TYPE column will automatically contain STMTCH (statement charge). Click Record when you’re done. The next time you create a statement for that Customer:Job, you’ll see the transaction you just entered.


Statement Charge Limitations


Before you decide to use statement charges, keep in mind that:
  • You can’t include some information that would appear on an invoice, like sales tax and discounts. 
  • Even if your charge relates to hours you worked for the customer, QuickBooks will not open a reminder window containing that information the next time you create an invoice for the customer. You’d have to Enter Time by creating a single activity or entering the hours on a timesheet. 
  • You still have to bill the customers. 


Billing the Customer


There are two ways to bill customers for statement charges. You can, of course, just generate statements that include the date(s) of the charge(s). The next time you create a statement for customers who have manually-entered statement charges, it will contain them, along with any other activity like invoices and payments. 
We’ve covered statements before, but we’d be happy to go over this QuickBooks feature with you. This means you’ll have to enter a statement charge every month if it’s to be a recurring one. Instead, you can treat them as memorized transactions, so they’re automatically entered in the register. If you’re billing multiple customers for the same service every month, for example, this would work well.


First, you’ll need to create a Group that contains all of those customers. Open the Lists menu and select Memorized Transaction List. Right-click anywhere on that screen and click on New Group. This box will open.


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If you regularly bill customers for the same service, like a monthly subscription, you can create a Group and memorize the transactions.


Give your Group a Name and click the button in front of Automate Transaction Entry. Open the list in the field next to How Often and select the billing interval. Choose the Next Date to indicate when this group billing should begin. If the charges should be entered on a limited basis, enter the Number Remaining. And be sure to fill in the Days In Advance To Enter if that’s applicable. Click OK.


Next, you’ll assign the customers who should be billed monthly to your Group. Click Statement Charges on the home page again to open your A/R register. Select each customer one at a time and right-click on the statement charge that you want to recur monthly, then select Memorize Stmt Charge. In the window that opens, give the transaction a new Name if you’d like (this will not affect the transaction, only how it’s listed). Click on the button in front of Add to Group and select the Group name from the drop-down list. Repeat for each customer you want to include.


Keeping Track


If periodic statements are your primary customer billing method, this system should work fine. But if you also send invoices and/or collect payment at the time of the sale, you’ll need to remember that your statement charges must be billed on a regular basis, too. We can go over your customer billing procedures with you to determine whether you’re using QuickBooks’ tools wisely – or whether some changes could improve your collection of payments.


SOCIAL MEDIA POSTS


Are you invoicing customers for recurring charges like subscriptions or service contracts? Consider using statement charges.


If you bill multiple customers for a recurring service, you could memorize those transactions as a group and automate statement charges. Find out how here.


Do you regularly send statements as customer bills? Ask us about how you could use statement charges.

Statement charges aren’t as detailed as invoices, but they may make sense for your business. We can help show you how.

Wednesday, September 4, 2019

5 Things You Should Know About the Chart of Accounts in QuickBooks Online

QuickBooks Online doesn’t require deep knowledge of accounting principles. Still, there are concepts you should understand.


You probably didn’t expect you’d have to become an accounting expert when you started your business. You knew you’d have to deal with recording income and expenses – maybe track your inventory and process a payroll. But you may not have understood just how complex financial bookkeeping could be.


That’s why you decided to use QuickBooks Online, or are at least considering it. The service is an expert on accounting, and it simplifies the process. It knows exactly how you have to document transactions to stay compliant with the rules that accountants and other businesses follow. This is good practice, and it’s absolutely necessary if, for example, you ever have to apply for financing.


One of the features of accounting systems you should understand is the Chart of Accounts. You won’t have to alter it in any way—in fact, we strongly advise against it—but you’ll encounter it when you work with transactions. Here are five things you should know about it.


What is it?


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These three columns from QuickBooks Online’s Chart of Accounts display account Names, Types, and Detail Types.


QuickBooks Online’s Chart of Accounts is a list of financial categories that are used to classify your company’s transactions when you record them. If you were doing your accounting manually, you would have to create your own Chart of Accounts. But QuickBooks Online builds one for you based on the company type and industry you choose when you’re setting up the site.


Why is the Chart of Accounts important?


Some people refer to the Chart of Accounts as the “backbone” of your company file. All transactions flow to it. Its primary importance can be summed up in one word: reports. Your reports will not be accurate if your Chart of Accounts is poorly constructed or if you categorize transactions incorrectly. This becomes as issue when you want to:
  • Prepare taxes. Your income tax return will not reflect your reportable income and deductible expenses if transactions are not assigned to the right classifications.
  • Apply for financing, take on an investor, sell your company, etc.
  • Monitor your finances. You won’t get a true picture of your income and expenses, which makes it difficult to analyze your company’s fiscal health and plan for the future.


What’s in the Chart of Accounts?


There are two types of accounts. One contains information that’s used in the Balance Sheet report. These accounts will have a number in the QuickBooks Balance column that’s based on all transactions up to the current date. They include Assets (bank accounts, accounts receivable, inventory, etc.), Liabilities (unpaid bills, credit cards, payroll and sales taxes, loans, etc.), and Equity


The remainder of the accounts are used in the Profit and Loss report, otherwise known as the Income Statement. They’re divided into Income (sales, discounts given, etc.), Cost of Goods Sold (labor, shipping, materials and supplies, etc.), Expenses (advertising, insurance, payroll, etc.), Other Income, and Other Expense. You won’t see a number in the QuickBooks Balance column for these accounts because the Profit and Loss report changes based on the date range selected.


Should I ever make any modifications to my Chart of Accounts?


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You can set up bank and credit card accounts in QuickBooks Online’s Chart of Accounts.


As we stated earlier, we strongly recommend that you never modify your Chart of Accounts without consulting us. However, there are two exceptions to this. You’ll want to create entries for your bank and credit card accounts. To do this, first open the Chart of Accounts by clicking the gear icon in the upper right and selecting Chart of Accounts under Your Company. When it opens, click New in the upper right corner. Choose Bank or Credit Card and fill in the blanks.


Do I need to use account numbers in the Chart of Accounts?


Generally, the smaller the business, the less need there is for this. If your business is big enough that you have dedicated A/P and A/R individuals, you may want to post transactions to account numbers.


Understanding Reports


QuickBooks Online makes it possible for you to view the Chart of Accounts and those two critical reports, Balance Sheet and Profit & Loss. Customizing and analyzing them, though, is something you should do under professional supervision. We’re happy to help here and in other advanced areas of the site. Contact us for a consultation.


SOCIAL MEDIA POSTS


QuickBooks Online’s Chart of Accounts is the “backbone” of your accounting. If you don’t understand what its purpose is, we can show you.


Do you know how QuickBooks Online’s Chart of Accounts is used in transactions? Find out how here. We can help you understand this.


You can create bank and credit card accounts from QuickBooks Online’s Chart of Accounts, but you shouldn’t change anything else there. Find out why here.

Did you know QuickBooks Online creates a Chart of Accounts for you when you set up your company file?  Find out more here and let us know if we can help you make any necessary changes.

Wednesday, August 21, 2019

Using QuickBooks' Bill Tracker

If your business pays a lot of bills, you need an efficient system for staying current with them. QuickBooks’ Bill Tracker provides that.


Bill-paying may be your least favorite accounting activity. You definitely know how those checks and online payments affect your account balances, but it’s more than that. Staying up to date with your bills and paying them on time (but not too early) takes a supreme organizational effort.


If you’re using a manual bookkeeping system, you know how difficult it is to keep up. QuickBooks offers several options for helping you with this. You can set reminders and/or put the due dates on your calendar. If you’re using QuickBooks 2016 or later, you have access to another tool: Bill Tracker


A Comprehensive Overview


QuickBooks Bill Tracker is similar to the software’s Income Tracker. If you’ve used that, you know that it provides a way to get a birds-eye view of your accounts receivable. You can see where every transaction falls in your income “pipeline” (estimates, open invoices, etc.). 


Bill Tracker works similarly, but for accounts payable. It has two advantages over just opening your Vendor Center and clicking the Transactions tab. First, it displays the Status of each transaction. Second, it contains Action links, so you can do more than simply open each entry.


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Bill Tracker lets you switch between lists of different types of accounts payable transactions.


To open this tool, click Bill Tracker in your navigation pane. The screen that appears consists of two parts. Color-coded bars across the top represent different transaction types, Purchase Orders and Bills. The latter is further divided into Open Bills, Overdue, and Paid In The Last 30 Days. Each bar contains both the number of transactions that fall in that category and their total dollar amount.  Click on one, and the list below changes to include only that type of entry.


Note: You can see in the image above that the Open Bills list has three alternate views that you can open by clicking on them in the drop-down list: Item Receipt, Credit, and Unapplied Payments. If you have questions on any of these, we can explain them to you, since you should know when to consult these lists. 


Changing the View


Bill Tracker defaults to the broadest view possible. That is, when you select a category of transactions, it shows all of the active ones. But a series of drop-down lists below the main toolbar gives you control over what subset of information is displayed there. You can narrow your list down to one vendor, for example, and choose a date range.


Data columns are different for each list. When you’re displaying Overdue transactions, the labels read Vendor, Type, Number, Date, Due Date, Aging, Status, Amount, Open Balance, and Action. You get a thorough description of each entry at a glance.


Taking Action


As we said earlier, Bill Tracker lets you work with transactions as well as just view them. Click on Purchase Orders and open the drop-down list at the end of one of the rows in the Action column. You can see in the image below what your options are there, including Convert to Bill. When the Open Bills list is active, you’ll be able to click on Pay Bill.


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Open the drop-down list in the Action column to see what you can do with the selected transaction.


To see what else you can do with individual transactions or groups of them, look in the lower left corner of the screen and locate the Batch Actions and Manage Transactions buttons. With the Purchase Orders list open, click in the box in front of one or more to create a checkmark. Open the Batch Actions menu. You’ll see that only two options are available to you here; the others are grayed out. You can Print Selected Purchase Orders or Close Purchase Orders. Pay Bills is only active when you’re in a list that allows that.


Now, open the Manage Transactions list. You can create transactions from this menu by clicking on Purchase Order, Bill, CC Charge, or Check. If you select Edit Highlighted Row, the original transaction will open.


Warning: Remember that you should never write a check to pay a bill if you’re using QuickBooks’ bill-payment tools. If you’ve already entered the bill, click Pay Bills on the home page or open the Vendors menu and select Pay Bills. Talk to us if you have questions about this process.


QuickBooks offers multiple ways to take the same actions in accounts payable; Bill Tracker is just one. But this instant overview can tell you quickly where you stand with your vendors -- and help you avoid late payments.  


Social media posts


Did you know QuickBooks provides many ways to help you pay bills on time? Bill Tracker is one of them. Here is an overview on this useful feature.


QuickBooks’ Bill Tracker gives you an instant overview of your active accounts payable transactions. Are you using this useful feature? We can show you how.


If you’re using QuickBooks’ bill-paying tools, never write a check to pay a bill. You must use the Enter Bills and Pay Bills links. Find out how here.

QuickBooks’ Bill Tracker lets you work with accounts receivable transactions as well as view them. Find out more here and ask us about how this useful feature can help you.