Wednesday, March 18, 2020

Sales Receipts, Invoices, and Statements in QuickBooks

QuickBooks allows you to create multiple types of sales forms for different situations. Here’s a look at what they are and when to use them.


When you buy something at a store, you want a piece of paper that shows what you purchased and what you paid. If you receive products or services before you pay for them, you certainly expect to receive a bill. And if you have several transactions with the same company and want clarification on what you’ve paid, and what you owe for a specific time period, the company can usually send you a summary.


Your customers want the same things. That financial documentation might be difficult for you to provide if you’re still doing your accounting manually on paper.


Fortunately, QuickBooks has a solution. Or, rather, several solutions. The software includes templates for all of the sales forms that you’ll probably ever need: invoices, sales receipts, and statements. Here’s an introduction to when and how to use them.


Sales Receipts


A screenshot of a cell phone

Description automatically generated
When a customer pays you on the spot, you can create a sales receipt.


When you receive full payment for a product or service at the time of the sale, the correct form to use in QuickBooks is the Sales Receipt. Click the Create Sales Receipts icon on the home page or open the Customers menu and select Enter Sales Receipts. You’ll see a form like the partial one pictured above.


Click the down arrow in the Customer:Job field and select the correct one or <Add New>. If you assign transactions to Classes, pick the right one in that list. The Template field should default to the appropriate form. If you’ve created more than one sales receipt template, select the one that you want. Click the icon above the correct payment type.


Tip: Want to be able to accept credit cards and eChecks? You’re likely to get paid faster by some customers. You’ll also be able to accept payments on your smartphone or tablet and create receipts. Talk to us about adding this capability.


Select the appropriate Item(s) from that drop-down list and enter a Qty (Quantity). Be sure to apply the sale’s Tax status by opening that list. (If you know that you’re responsible for paying sales tax on at least some of your sales but you haven’t set this tracking up in QuickBooks yet, we can work with you on that. It’s important.) When you’ve finished filling in the table with all the goods or services you sold, you can save the transaction and either print it or email it to your customer.


Invoices


A screenshot of a cell phone

Description automatically generated
After you’ve completed the top half of an invoice, you’ll see something like this at the bottom.


You’ll create and send Invoices to customers when you’ve received either a partial payment or no payment at the time of the sale. Those completed transactions become a part of your total Accounts Receivable (money owed to you). Click Create Invoices on the home page or go to Customers | Create Invoices. Fill out the fields at the top of the screen like you did with your sales receipt; the forms are almost the same. Invoices, though, have Bill To and Ship To addresses, as well as fields for the sale’s Terms and Due Date.


You shouldn’t have to do anything with the bottom half of the screen (pictured above) unless you want to include a Customer Message, since the information here is carried over from the top of the screen. Check to make sure the Tax Code is correct, though.


It’s important to note, it's an either/or situation when it comes to creating an invoice and a sales receipt for the same transaction. It’s best to not use sales receipts for invoice payments, as it can cause issues.


Statements


A screenshot of a cell phone

Description automatically generated
When you create statements, you’ll first choose the customers who should receive them.


Statements are very useful when you have multiple customers who are past due on their payments (you can find this out by running the A/R Aging Summary report, which you’ll find under Reports | Customers & Receivables). Click the Statements link on the home page or go to Customers | Create Statements.  You’ll first have to select the customer(s) who should be on your list, as pictured above. There are several other options on this page that will help you refine this group. When you’re done, QuickBooks will automatically generate them, and you can print or email them.


You’ll save a lot of time when you use QuickBooks’ sales forms. Your bookkeeping will also be more accurate, and it will be easier to track down specific transactions. If you use them conscientiously, you’ll be able to run reports that provide comprehensive overviews of various elements of your finances.


Do you have questions about any of this, or are you just getting started with QuickBooks? We’re happy to schedule a consultation to determine what your needs are and how we can assist. Contact us, and we’ll set something up.


SOCIAL MEDIA POSTS


Still creating sales forms manually? QuickBooks makes this task much simpler and faster. They’ll be easy to find, too. Find out how here.


Do you sometimes receive payment for products or services at the same time you provide them? QuickBooks can create sales receipts. Here’s how.


If you bill customers after you’ve provided a product or service, you can use QuickBooks’ invoice forms to collect your payments. Find out more here.

Did you know QuickBooks can help you create statements to send to customers who are past due on their payments? Find out how here.

Wednesday, March 4, 2020

Are You Following Best Practices in QuickBooks Online?

“Best practices” are recommendations for the most effective way to get things done. Are you following standard procedures in QuickBooks Online?


Habits can be good things when you’re talking about getting through the workday successfully. You might have developed a habit of responding to emails quickly and preparing checklists before you go into meetings. Maybe you schedule your most challenging work for high-energy times of the day and leave less-demanding tasks for those times when you’re not as chipper.


It’s easy to fall into habits with QuickBooks Online, too. You might follow the same workflow pattern every day simply because that’s the way you’ve always done things. There’s nothing wrong with that – as long as you’re incorporating as many of the site’s best practices as you can. That is, you’ve made a habit of taking actions that will lead to the most effective use of QuickBooks Online.


Here are four habits we think you should consider developing if you haven’t already.


Go through your new transactions every day:


One of the five best things about QuickBooks Online is its ability to connect to your financial accounts and import transactions regularly. But this feature is only useful if you review your recently-downloaded transactions every day. Wait too much longer than that, and it will become too overwhelming.


A screenshot of a cell phone

Description automatically generated
We recommend you review your account transactions every day and complete any of the fields necessary.


To view an account register, you’d click Banking in the left vertical pane, and then click on the desired account at the top of the screen. When you select a transaction, a small window like the (partial) one pictured above drops down and displays your options. If you have not worked with defining and clearing downloaded transactions before, we can provide guidance here. It’s complicated.


Always assign categories to expenses:


You’ll get out of QuickBooks Online what you put into it. That is, the more conscientious you are about completing records and transactions thoroughly, the more helpful your reports will be. It’s especially important that you assign categories to expenses and mark them as billable or not. Those categorized expenses will be very important as you’re preparing your company’s income taxes. And you want to be sure that customers are billed for expenses you incur on their behalf.


Run aging reports once or twice a week:


QuickBooks Online can help you keep up with money owed to you and money you owe, but you have to take the time to stay current with that information. The site’s Dashboard provides the dollar total for unpaid invoices and links to a list, but it doesn’t tell you what bills of your own may be coming due – or are late.


We recommend you run at least two reports at the beginning and end of the week: Accounts Receivable Aging Summary and Accounts Payable Aging Summary. You can modify these reports by clicking the Customize button, but they should be good as is. You don’t want to see any numbers in any columns except the first one (Current). If you see any beyond that, it means that either incoming or outgoing payments are overdue.  Click on any number to see the transactions behind it.


Set reorder points on inventory items.


A close up of a map

Description automatically generated
Inventory-tracking in QuickBooks Online is complicated. We can help you understand it.


Keep an eagle eye on your product inventory levels. When you create an item record (Sales | Products and Services | New), be sure to enter a Reorder point. The Products and Services page tells you how many items have Low Stock or are Out of Stock. You can also see the Qty on Hand and Reorder Point in the table below those numbers.


Warning: Inventory-tracking is an advanced feature of QuickBooks Online. If you need these tools, contact us about scheduling some time to go over them thoroughly.


More to Implement


There are many other best practices that we’d recommend for your use of QuickBooks Online. Several of them have to do with reports, one of the site’s capabilities that is particularly robust but which many businesses don’t fully engage in because some of them are difficult to analyze. These include standard financial reports like Balance Sheet and Statement of Cash Flows


You’ll need these reports if you apply for financing or want to share information about your company’s financial health with a third party. The insight they provide can also be useful to you in making business decisions.  We’d be happy to create and analyze these for you on a regular basis, or to consult with you on any other aspect of QuickBooks Online that is perplexing.


SOCIAL MEDIA POSTS


QuickBooks Online has its own set of best practices that will make your accounting more effective. We share these with you here.


QuickBooks Online allows you to download transactions from financial institutions. It’s important that you view and approve these every day. Here is how.


Do you always assign categories to expenses and mark billable ones as such? It’s important for many reasons. We list them here.

QuickBooks Online can track inventory quite capably, but it’s a complex process. Let us help you if you’re planning to take this on. Find out more here.

Wednesday, February 19, 2020

Dealing with Deposits in QuickBooks

Where do the payments you receive in QuickBooks go? The software provides tools for managing deposits.


Recording payments, whether they come in to comply with an invoice you sent or are issued as sales receipts, is one of the more satisfying tasks you do in QuickBooks. The sales cycle is almost complete, and you’re about to have more money in the bank – once you document the payments as bank deposits.


Unless you use QuickBooks Payments, which moves your company’s remittances into an account automatically, you’ll have to deal with your deposits twice. First, you’ll have to make out a deposit slip for the bank. You’ll also need to record the deposit in QuickBooks itself.


Fortunately, the software makes this easy for you. Here’s how it works.


A Special Account


By default, QuickBooks transfers payments received into an account called Undeposited Funds. You can see it in your Chart of Accounts by clicking the Chart of Accounts icon on QuickBooks’ home page and scrolling down a bit. Look over to the end of the line and you’ll see its current balance. This account is an Other current asset. It holds your payments until you record them as deposits and take your money to the bank. 


When you’re getting ready to take cash and checks to the bank, click the Record Deposits icon on the home page. The Payments to Deposit window will open.


A screenshot of a cell phone

Description automatically generated
When money moves into Undeposited Funds from invoice payments or sales receipts, it’s displayed in the Payments to Deposit window.


We recommend completing your physical deposit slip first, based on the checks and cash you have in hand. Then, match them to payments in the window pictured above. You can click in front of each one you’ve matched to create a checkmark. When you’ve finished, click OK. The Make Deposits window will open. Make sure that the account you want to Deposit to is showing in the upper left corner. You can add a Memo and change the Date if needed.


Do you want cash back from your deposit? You may want to move this to Petty Cash, for example. Click the down arrow in the Cash goes back to field and select the correct account. Add a memo if necessary and enter the Cash back amount. When you’re done, save the transaction. QuickBooks now knows that you’re taking a deposit slip to the bank.


The total for your handwritten deposit slip and the final tally in the Make Deposits window should be the same. This will ensure that the amount deposited in your bank account will match the bank deposit amount in QuickBooks when reconciling. If you have leftover cash or checks, you’ll need to track down their origins and create new transactions. 


Checking Your Work


It’s a good idea to check your Undeposited Funds account occasionally to make sure that you haven’t left money undeposited. To do this, open your Chart of Accounts again. Right-click Undeposited Funds and click on QuickReport: [number] Undeposited Funds. All should be selected in the Date field in the upper left. Click on Customize Report and select the Filters tab. Scroll down in the Filters list and click on Cleared. Select No and click OK to display your report.


A screenshot of a cell phone

Description automatically generated
You can customize your QuickReport to see if you’ve neglected to deposit any payments. If this list contains any, open the Banking menu and select Make Deposits to follow the steps above again.


Changing Your Destination Account


As we’ve already mentioned, QuickBooks is set up to automatically move payments into Undeposited Funds. We recommend leaving it this way so you can easily check for money that hasn’t been deposited. You can change this, though. If you feel it’s necessary, let us know, and we’ll help you modify your destination account.


Working with Payment Methods


QuickBooks comes with a default set of payment methods. You can add to these and/or make existing ones inactive, so they don’t clutter up the drop-down list. Open the Lists menu and select Customer & Vendor Profile Lists | Payment Method List. If you don’t accept Discover cards, for example, right-click on that entry and select Make Payment Method Inactive. To add one, click the down arrow next to Payment Method and then New. The Payment Method should always match the Payment Type.


Precision Critical


Account reconciliation is difficult enough without having to deal with deposit discrepancies. Treat this element of your accounting with great care and let us know how we can help with account management, financial reporting or any other QuickBooks-related issues. We can troubleshoot – or even take over bookkeeping tasks that are vexing you.


SOCIAL MEDIA POSTS


Did you know that QuickBooks comes with an Undeposited Funds account? This is where the money from your invoice payments and sales receipts is recorded. Find out more here.


When you fill out a written bank deposit slip, you’ll need to match its content to transactions in QuickBooks. The software helps you do this. Here is how.


Did you know you can add Payment Methods in QuickBooks or make existing ones inactive to reduce clutter? We can show you how.


If you’re not using QuickBooks Payments, you’ll need to use the software’s deposit tools to make sure your accounts are accurate. Here is how to get started.

Wednesday, February 5, 2020

5 Things You Need to Know About Sales Taxes in QuickBooks Online

The most important thing you need to know about sales tax is that administering it correctly can be challenging. 


If you sold only one type of product to customers in one city, collecting and paying sales tax would be easy. But most businesses have a wider reach than that.


QuickBooks Online offers tools that allow you to set up sales tax rates and include sales tax on sales forms. Further, it calculates how much you must pay to state and local taxing agencies.


This is one of the most complicated areas in QuickBooks Online because you may have to deal with numerous taxing agencies. If you’re not already working with sales taxes, we strongly recommend you let us help you get everything set up correctly from the start. Taxing agencies can audit your recordkeeping and you want to make sure it is set up correctly. 


That said, here are five things we think you should know.


QuickBooks Online calculates sales tax rates based on:


  • Where you sell. Every state is different. If your business is located in Florida and you sell to a customer in Minnesota, you’ll be charging any sales tax levied by the state of Minnesota and possibly the city and county and other taxing authorities – if you have a connection, a “nexus” in that state (a physical location, active salesperson, etc.). 
  • What you sell
  • To whom you sell. Some customers (like nonprofit organizations) do not have to pay sales tax. You’ll need to edit their customer records to reflect this in QBO. Open a customer record and click the Edit link in the upper right. Click the Tax info tab and make sure there’s no checkmark in the box that says This customer is taxable. The Default tax code will be grayed out, and you can enter Exemption details in that field. 


A picture containing screenshot

Description automatically generated
Customer records for exempt organizations should contain details for that exemption. You’ll need to see their exemption certificate or at least know its official number.


Intuit now offers a revamped version of QuickBooks Online’s sales tax features.


At some point, you’ll be asked if you want to switch to the new, more automated system.  The actual mechanics of the process are simple, but you’ll be moving historical and in-process data to a new structure. If you have sales tax set up right now and your situation is at all complicated, you’re going to want our help with the transition.


This enhanced feature only supports accrual accounting.


You can combine individual tax rates.


If you are required to pay city, county, and state sales tax rates for a particular customer, for example, you can create a Combined tax rate that contains all of the individual components. The customer will only see the total on an invoice or sales receipt, but QuickBooks Online will track each one accordingly for payment and reporting purposes


A screenshot of a cell phone

Description automatically generated 
You can combine sales tax rates in QuickBooks Online (image above from current Sales Tax Center in QuickBooks Online, not the enhanced one).


Product and service records should contain sales tax information.


This is another area that will require some research. Just as some services are subject to tax, some products are not (like groceries in Arizona). So, you’ll need to find out what the rules are for what you sell. You can find this information on the website of the state’s Department of Revenue (sometimes called the Department of Taxation).


Once you know, you can record that status in QuickBooks Online. Open a product record by going to Sales | Products and Services and clicking Edit in the Action column or create a new one by clicking New in the upper right. Scroll down to Sales tax category in the record. You can choose between Taxable – standard rate and Nontaxable


There’s a third option here: special category. This gets complicated. We can help you determine whether it applies to you.


QuickBooks Online tracks the sales tax you owe.


You can see what you owe to each agency by running the Sales Tax Liability Report, and record payments when you’ve made them. Summary and detail versions of the Taxable Sales report are also available.


Once you get sales taxes set up in QuickBooks Online, it’s easy to add them to the relevant sales forms. Getting to that point, though, takes time, study, and careful attention to detail. If you’re getting ready to sell, or you’re already selling and struggling with sales taxes, let us know. We can schedule an initial consultation to see how we can be of assistance.


SOCIAL MEDIA POSTS


Did you know that QuickBooks Online can calculate and apply sales taxes to transactions? However, setup requires some upfront research. Here are a few things to get started.


Does your business have to charge multiple levels of sales taxes? QuickBooks Online allows you to combine them. Here’s how.


QuickBooks Online calculates sales taxes based on where and what you sell, and to whom. It’s a bit complicated and here is why. We can help you get through setup.


Did you know that Intuit has released an enhanced version of QuickBooks Online’s Sales Tax Center? Here are the details and we can help you make the transition.