Charging for Time in QuickBooks Online Plus, Part 1

You could be losing revenue if you’re not tracking billable time carefully. QuickBooks Online Plus can help.

You can’t see time. Nor can you look at hours and minutes to see how many you have in inventory. But if you’re a service-based business, your income is derived from this invisible asset. Billable time needs to be entered and invoiced with absolute precision.

QuickBooks Online Plus has this covered. By using its time-tracking tools, you can:

• Create records for single activities or for entire timesheets.
• Give employees “Time-Tracking Only” access so they can complete their own timesheets.
• Set up contractors as vendors.
• Mark time as billable.
• Invoice customers for time spent on work for them.

Here’s how to get started.

The Time Tracking section under the Advanced tab in QuickBooks Online’s Accounting and Settings

Before you can start using QuickBooks Online’s time-tracking tools, you’ll need to make sure that this feature is turned on. Click on the gear icon in the upper right of the home page and select Account and Settings. Click on the Advanced tab. Both of the settings in the Time Tracking section should read On. If they don’t, click on the pencil icon to the right and click in the boxes to the left of both lines to make checkmarks.

You’ll have two additional options under Add Customer field to timesheets. You can choose whether employees will see the billing rate for their services. You can also change the first day of the work week by clicking on the up/down arrow.

Entering Time

By now, you should have created records for your employees and for your service items. If you haven’t, let’s get together and get you started on that. In order to start tracking time, you’ll need to have these thoroughly completed and ready to go.

You have two options here. One involves creating a record for just one work session. To do this, click on the plus sign (+) at the top of the home page. Under Employees, select Single Time Activity.

Tip: When you move the cursor over that line, you’ll see a small arrow in a box to the right. Click on the arrow instead of the phrase Single Time Activity, and the Time Activity window pops out separately. You can do this anywhere in QuickBooks Online where that same arrow appears.

You’ll see a blank version of this screen:

You’ll use this QuickBooks Online screen when you want to record a single activity.

Complete the fields here by clicking on the up/down arrows to open lists of options or by entering data when no list is available. You’ll enter the Name of the employee that provided the service and the Date when it was performed. If you have created Territory and Class lists, select the correct ones here. Choose the Customer who will be charged for your employee’s time and the Service received.

Be sure that there’s a checkmark in box in front of Bill at… line. The hourly rate should have filled in automatically when you selected the Service. If you put a checkmark in the box in front of Enter Start and End Times, you can do so in the boxes provided. Otherwise, you’ll just supply the number of hours and minutes. Finally, an expanded Description is optional but recommended. Save the screen when you’ve finished.

Limited Access

You may want to control the data entry for billable time that gets entered in QuickBooks Online. Perhaps you’re asking employees and contractors to submit paper timecards so that you can make sure that every billable increment of time gets billed back to the correct customer.

But you can also allow your staff members to enter their own timesheet data in QuickBooks Online. If that’s the case, you’ll need to set them up as Time Tracking only users. Click on the gear icon next to your company name in the upper right and select Manage Users under Your Company. Click New and follow the steps in the Mini Interview window that opens.

Note: If you haven’t gone through the process of assigning access rights to everyone who will be using QuickBooks Online, we can help you set this up so that individual staff members can work only in specific areas.

Using QuickBooks Online’s Mini Interview as you set up users’ access permissions, you can limit employees to Time Tracking Only so they can fill in their own timesheets.

Next month, we’ll talk about completing timesheets. We’ll also explain how billable time records make their way to customer invoices, and we’ll look at the time tracking reports available.

Simplify your tax life by organizing your chart of accounts

If you haven't revised your business's chart of accounts since you initially set it up, you may be missing out on an easy way to simplify your life at tax time. That's because your chart of accounts is more than a basic bookkeeping tool. Your chart can also help you keep track of items that affect your tax return.

For example, your business income may have multiple sources, including the sale of goods and services to customers, rents, royalties, interest, dividends, gains from the sale of business and investment assets, and "miscellaneous" receipts. These different types of income are treated differently under federal income tax rules and appear in different places on your return. Arranging your income accounts for tax-specific categories can streamline tax preparation time and reduce misstatements.

Expense accounts can benefit from organization too. For instance, you'll want to separate allowable deductions, such as ordinary and necessary business costs, from expenditures that produce benefits in future taxable years, such as equipment. That keeps your depreciation schedule current, highlights assets you've purchased and disposed of, and ensures proper reporting on federal, state, and local returns.

Organizing your chart of accounts to accurately track business events that affect your taxes can be cost-effective. Contact us for additional ways to get the most benefit from your chart of accounts.

Using Sales Receipts: When? How?

Some types of businesses always use sales receipts. Some use them occasionally. Here’s what you need to know about them.

How do you let your customers know how much they owe you, and for what products or services? In these days of ecommerce and merchant accounts, your customers may provide a credit card number over the phone or on a website. Or perhaps you send invoices after a sale and receive checks or account numbers in the mail. QuickBooks can help you both create the invoices and record the payments.

There’s another type of sales document that you can use in certain situations: the sales receipt. You’d probably be most likely to use one of these when customers pay you in full for products or services at the same time they receive them.  

If you receive full payment for a product or service at the same time the customer receives it, you should use a sales receipt.

Completing a sales receipt is similar to filling out an invoice or purchase order. Click Create Sales Receipts on QuickBooks’ home page or open the Customers menu and select Enter Sales Receipts. A screen like the one above will open.

Choose a Customer from the drop-down list and a Class (if applicable). If you have created more than one Template (more on that later), make sure that the correct one appears in the field. Verify that the appropriate Date and Sale No. read as they should. Click on the type of payment you’re receiving, and enter the check or credit card number where necessary (a small window will open for the latter).

Note: If you are working with a type of payment that does not appear in the four icons, click on the arrow below More to add it.

Now you’re ready to select the products or services you sold by clicking on the arrow in the field under Item to open the available list (if you have not created a record for what you’re selling, select <Add New> and complete the fields in the New Item window that opens). Enter the quantity (Qty.). The Rate, Amount, and Tax fields should fill in automatically, based on the information you entered when you create the item’s record.

When you’ve entered all of the items that the customer is paying you for, you can choose which Customer Message will appear on the sales receipt (you can see your options in the drop-down list found in the lower left corner of the screen). Anything you enter in the Memo field will be for your internal use only; it will not appear on the printed or emailed sales receipt.

Click Save & Close or Save & New.

Customizing Sales Receipts

QuickBooks provides tools for customizing forms, including sales receipts.

QuickBooks’ forms contain the fields most often used by small businesses. But you can alter them in numerous ways to meet your company’s needs. To customize a sales receipt, open the Sales Receipt window and click on the Formatting menu. Select Manage Templates.

You’ll want to make a copy of the original sales receipt so that the original will always be available. Click the Copy button in the lower left. “Copy of Custom Sales Receipt” appears in the list of templates. In the Preview pane on the right, click in the field next to Template Name and replace the existing name with a new, more descriptive one if you’d like. Click OK.

The Basic Customization window opens. Click on Additional Customization at the bottom of the screen. You’ll see a window like the one in the image above. Click the Columns tab.  The list on the left displays all of the columns that can be included in the body of your sales receipt.

Click in the boxes below Screen and Print to indicate which columns should display on your QuickBooks screen and which should appear on the customer’s copy. The numbers in the Order column can be changed to reflect which column will come first, second, etc.

Numerous Options

There’s a lot more you can do to customize your QuickBooks forms. And there are other situations where you might want to issue a sales receipt. We’ve only been able to touch on both topics here, but would be happy to schedule time with you to explore these elements of QuickBooks.

BEWARE - Phone call Scam claiming you owe the IRS.

The real IRS will not:

Initiate contact with you by phone, email, text or social media to ask for your personal or financial information.

Call you and demand immediate payment. The IRS will not call about taxes you owe without first mailing you a bill.

Require that you pay your taxes a certain way. For example, telling you to pay with a prepaid debit card.

Read more about it here:

https://www.irs.gov/uac/Stay-Vigilant-Against-Bogus-IRS-Phone-Calls-and-Emails

Tracking Products and Services in QuickBooks Online, Part 2

Tracking Products and Services in QuickBooks Online, Part 2

Last month, we explored the process of creating a product record. Now we’ll look at where they’re used in QuickBooks Online.

Have you been able to create records for all of your products and services? If you have a large inventory, this can be quite a time-consuming process. But we highly recommend that you build complete records, even when you create them as you need them. This is critical if you plan to track inventory items.

You’ll use your product and service records in several areas of QuickBooks, including invoices and estimates, purchase orders, and sales receipts. There’s also an entire set of reports dedicated to products and inventory.

Important: If you’ve tried creating Inventory Items in QuickBooks Online but have only been allowed to set up Services or Non-Inventory Items, you missed a step when you were completing your Company Settings. Click on the small gear icon in the upper right (next to your company name), then on Settings | Company Settings. Click on Sales in the left vertical tab to see the Products and services section. If any of these three options is turned off, click in the box to turn it on.

Figure 1: These three options in Company Settings must be labeled On in order to make use of all of QuickBooks Online’s inventory-tracking features.

This is one of the reasons we recommend that you let us help you set up QuickBooks Online, even if you’re making a transition from the desktop version of QuickBooks. If you don’t visit every area of Company Settings and designate your preferences, you may get frustrated as you start working, thinking that the site isn’t capable of doing everything you need.

Using Your Records

You’ll see why it was so important to build a thorough set of product and service records when you start to enter data in transaction forms. Assuming that you’ve also created records for your customers and vendors, filling out an invoice, for example, is mostly just a matter of selecting the correct options from drop-down lists.

Of course, even if you have a comprehensive set of records, you’ll certainly take on new customers and vendors, and start offering additional products and services down the road. When this occurs, or if you didn’t complete your setup work because you absolutely had to start entering transactions, you can add items as you need them.

Figure 2: When you create transactions, you can choose products or services from a list of existing records or add new ones “on the fly.”

Once you’ve selected a customer and either accepted the default terms and dates or edited them to reflect your needs, you’ll click on the arrow to the right of the first field in the body of the invoice, as pictured in the example above. You can scroll down and find the item that the customer wants to purchase in the list that drops down or click on +Add New.

If you do the latter, the Product/Service information panel will slide out from the right. You can then create a record for the product or service, like we wrote about last month.

A Running Tally

Here is another reason why it’s so important to be conscientious about completing product records. When you enter that number in the Initial quantity on hand field, QuickBooks Online uses that as a starting point for tracking your inventory levels. Every time you process a form indicating that you’re selling x number of widgets, the site subtracts that from the most recent total.

Figure 3: QuickBooks Online helps you keep a close eye on your stock levels in real time.

When you click in the Quantity field, a small cartoon bubble opens above it, telling you how many units are currently available. This keeps you from selling items that you don’t have. It also indicates when you may have too much of a product, and it’s not selling quickly.

Unless you have a very small product list, you may not recognize overstocks. So QuickBooks Online offers several reports that can help you track your inventory. Click on Reports in the left vertical tab, then All Reports, then Manage Products and Inventory to see what’s available.

Figure 4: The Inventory Valuation Detail report

Setting up QuickBooks Online for a successful launch can be challenging. So can the concepts involved in tracking your inventory of products. We’re always happy to help with either process – or both.

Tracking Products and Services in QuickBooks Online, Part 1

Inventory management requires precision, constant attention, and smart decisions. QuickBooks Online can help.

If you started small with your business, keeping track of your product inventory was probably pretty easy. Maybe you kept your stock in a few boxes or a closet, and it was easy to tell at a glance what needed replenishing.

As you grew, the process of inventory-tracking started to get unwieldy. You were selling too many products in too large a volume; a casual look at your inventory no longer sufficed. And  physical inventory counts took a lot of time. So you found yourself with too many of some items and not enough of others.

Keeping inventory items at financially-responsible levels is a delicate balance. If you have too much on hand, you tie up money. Too little in stock, and, well, you know what happens: you wind up with unfulfilled orders and unhappy customers. QuickBooks Online can help.

Building Inventory Records

QuickBooks Online’s inventory-management tools help you:

• Create thorough records for each product and service that you sell.
• Fill out sales and purchase forms -- like invoices and purchase orders -- quickly and accurately using these item records, and,
• Generate reports that provide the real-time status of your inventory.

Figure 1: You can build a database of product and service records using QuickBooks Online’s inventory management tools.

Here’s how to get started. Click on the gear icon in the upper right, next to your company name, and select Products and Services. Once you start adding records, this screen will display a table containing critical details about your inventory and non-inventory items as well as the services you sell.

Click New in the upper right corner. A vertical pane will slide out of the right side of the screen, asking you what type of item you want to describe. Select Inventory item, and the Product/Service information window opens. Enter the name of your item in the first field and its SKU (optional) in the next. You can upload an image if you’d like, too.

The line below this information reads Is sub-product or service. You should only click in the box in front of it if you have already created a parent product or service and want to put this item in a sub-category of it. In the example above, Writing tools is the parent category and 3 4x6 journals, multi-color is one member of that product category. (Questions? Ask us.)

As you can see, you can modify some options here without completely starting over. If this item should have been classified as a Non-inventory item, click Change type and select the correct one. You can also delete your image or replace it with another.

Figure 2: You need to be absolutely sure that your Initial quantity on hand figure is correct in this window, since it will affect transactions and reports.

How many units of this item do you have right now? Enter that number in the field and then choose today’s date from the calendar that’s available in the As of date field. Your Inventory asset account should be pre-selected to Inventory Asset. Account designations must always be correct in QuickBooks Online.

Warning: If you are unfamiliar with assigning items to accounts, let us walk you through the early stages of setting up your inventory records. We can help you understand the Chart of Accounts and how it relates to various tasks you’ll be doing.

Enter the description you would like to appear on sales forms in the Sales information field. Then complete the Sales price/rate box. This is the price that you will charge customers for the item. If sales tax will be applied, click in the box in front of Is taxable to create a check mark. Sales of Product Income will probably already appear in the Income account field.

Go through similar steps in the Purchasing information fields, keeping in mind that the Cost field should reflect your cost to buy the items you sell, if indeed you do purchase and resell inventory. When you’re done, click Save and close or Save and new.

This is a lot of work, but it’s important work. You’re building the foundation for your inventory management system.

Next month, we’ll look at how you will be using your item information in transactions and reports.