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Using QuickBooks' Reminders and Calendar

5/5/2020

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Now, more than ever, you need QuickBooks to track what needs to be done.

 
COVID-19 has transformed the entire U.S. small business landscape in just a few short months. Companies are struggling to stay afloat. We all just want to get back to “normal,” but it’s unclear when that will happen.
 
We’d like to help you as much as possible during these uncertain times. One of the ways we can do that is by supporting you as you keep a close watch on your income and expenses. QuickBooks is our go-to tool for that purpose, and we hope you’re making the best possible use of the software right now.
 
There are steps you can take to ensure that QuickBooks is working quickly and well for you, and that you’re attending to the work you must do every day. The software’s Reminders and Calendar can help you stay current with your accounting.
 

Setting Up Reminders

 
You don’t want to let anything slip through the cracks right now. It’s nearly impossible to keep up with your QuickBooks tasks without using the software’s Reminders feature. Before you start using this, you’ll have to set up its structure. Open the Edit menu and select Preferences | Reminders. This window will open:
 
You can tell QuickBooks which situations should trigger Reminders.
 
This window should open to the My Preferences screen. Click the box in front of Show Reminders List when opening a Company file to create a checkmark. Then click Company Preferences. You’ll see a list of QuickBooks “events,” like Checks to Print. You can tell QuickBooks how many days in advance you’d like to be warned about this pending activity by entering a number in the box in front of days before check date. You can also request that this appear in either Summary or List form. If you don’t want to be notified about any of them, click the button below Don’t Remind Me.  When you’re done here, click OK.
 
The next time you open QuickBooks, your reminders will appear in a window on top of your home page. When you double-click on one, the transaction or other item will open. Two icons in the upper right of the Reminders screen open your Preferences and a blank To Do form. Here, you can schedule a call, task, appointment, etc. and associate it with a customer, vendor, or employee if desired. This item will then appear in your Reminders list.
 
The Reminders window appears when you open the related Company file; you can add To Do’s manually.
 

A Graphical View

 
QuickBooks’ Reminders are not the only way you can ensure that you’re meeting your accounting obligations. You can use the Calendar to see what you’ve scheduled and accomplished every day.
 
As you did with Reminders, though, you should visit this tool’s Preferences page (Edit | Preferences | Calendar). Here, you’ll only need to work with the options under the My Preferences tab. You can choose from among a Daily, Weekly, or Monthly view, or just have QuickBooks Remember last view. Your calendar can display your choice of a Weekly view:a Fixed view of 5 or 7 days or a Variable view of 5/7 days. And, you can show All Transactions, To Do, Transactions Due, or choose one type of transaction (Invoice, Sales Receipt, Bill, etc.).
 
 
How would you like your Calendar displayed? QuickBooks lets you choose from among options.
 
You can also define Upcoming and Past Due Settings. You can Hide or Show these, Show only if data exists, or remember the last settings. QuickBooks allows you to choose the number of days’ worth of data that will be displayed for both Upcoming data and Past due data.
 
You can open the Calendar itself from the Company menu and by clicking a link in the Toolbar or on the Home Page. You’ll see a graphical calendar in the View you selected. Every day where there’s been-or is scheduled to be-activity will say either Due or Entered, with the corresponding number of transactions in parentheses. Below that is a list of Transactions Entered; you can double-click on any of them to see the actual transaction form.
A list of upcoming and past due transactions appears in the right vertical pane. Fields and buttons at the top of the screen allow you to change the View and limit the list to a specified type of transaction. You can also add To Do’s from this page.
 
We hope these tools are helpful for you as you navigate through today’s choppy financial waters. Please do let us know if we can assist you in managing your company’s critical accounting tasks. We want you to keep your business going as best you can until we get to the other side of the ongoing crisis.
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How to Back Up and Move a Company File in QuickBooks

4/7/2020

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Your QuickBooks company file is gold. Make sure you know how to back it up and restore it properly.

 
You may not think of your QuickBooks company file as being portable. It lives safely on the hard drive of your desktop and/or laptop computer. You wouldn’t want it to be anywhere else, right?
 
However, the most common reason businesses move these critical files is because they’ve purchased a new computer or they may also want to share their data. QuickBooks allows you to create a backup filethat you can save to a USB drive or CD, or to another folder on your company’s network. Once it’s available at its destination computer (where a copy of QuickBooks has already been installed), you (or another recipient) will be able to restore it.
 
Note: These instructions were created using QuickBooks 2018. If you don’t see what’s being described here in your version, contact us.
 

Making a Backup

 
You shouldn’t wait until you have to move a QuickBooks company file before backing it up, though. This is something you should be doing regularly.
 
Before you start, make sure your copy of QuickBooks is updated, which shouldn’t be a problem if you’re set up with automatic updates. If you’re not, and you’ve ignored those messages about updates that appear when you open QuickBooks, we can help you launch a manual update and configure QuickBooks to automatically update.
 
With QuickBooks in Single-User Mode, open the File menu and hover over Back Up Company. Select Create Local Backup. You’ll see this window:
 
You can save your QuickBooks backup copy locally or online.
 
Intuit offers a service called Intuit Data Protect ($99.95 annually) that allows you to back up your company file online (we can help you explore this if you’re interested). Let’s assume here, though, that you have a USB drive plugged into your computer and are ready for your backup.
 
Click the button next to Local backup, then the Options button. In the window that opens, you’ll select your destination location and answer a few questions about your backup. One of these gives you the option to get a reminder to back up your file every x times you close QuickBooks, should you choose to do manual backups.
 
Click OK to return to the Create Backup window, then click Next. The following screen gives you the option to save your file and/or schedule future (automatic) backups. If you choose to simply save it now, check that button and click Next to verify the destination location and file name.
 
Note: Before you save your backup file, give it a name that is different from your regular company file. Write down the exact file name and its location.
 
Click Save. A small window will open displaying your progress, and you’ll get a confirmation message when the file has been saved with a .qbb extension. You can now take the removable storage device to the destination computer, where QuickBooks should already be installed.
 
Warning: If you want to schedule automatic backups by clicking on one of the two options in the Create Backup window, please consult with us first. Automated processes in QuickBooks can save time and effort, but when you’re dealing with your irreplaceable company file, you must get it right.
 

Restoring a Backup File

 
Once that’s done, open the File menu and select Open or Restore Company on the destination computer. This window will appear:
 
QuickBooks displays this window when you select File | Open or Restore Company.
 
Click the button in front of Restore a backup copy. Click Next and select Local backup. Then click Next again. Click the down arrow next to the Look in field and click on the location of your backup file to display its contents. Browse until you find the file (it should end in .qbb), then highlight it by clicking on it. Click Open.
 
QuickBooks displays a window that asks where you want to restore your file. You’ll click Next to find it in the Save Company File as window. The Save in field should point to your main QuickBooks directory (like QuickBooks 2018) and the File name field should show the correct file name.
 
When everything looks correct, click Save. QuickBooks will convert your .qbb file to the standard QuickBooks file type, .qbw, and open it.
 

Care Needed

 
Losing your QuickBooks data, as you know, would be absolutely disastrous. But there may be occasions when you’ll need to open a backup copy of your company file on a different computer. We would be happy to walk you through this the first time you do it; in fact, we highly recommend it. As always, we’re available to work with you on any QuickBooks issues you’re experiencing - or to get you up and running for the first time.
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Sales Receipts, Invoices, and Statements in QuickBooks

3/10/2020

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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

 
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

 
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

 
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.
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Dealing with Deposits in QuickBooks

2/11/2020

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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.
 
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.
 
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.
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Start 2020 Right: Get into the Report Habit

1/7/2020

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It’s a good time to start new habits - or refresh old ones. Running reports regularly will help you make better business decisions.

 
Whether or not you made New Year’s resolutions, you probably look at January as a fresh start in personal and professional matters. Unfortunately, we can’t help you join a gym or organize your closets or meet your monthly sales goals.
 
What we can do, though, is encourage you to start a new habit that may actually leave you more time for those activities and even improve your company’s financial bottom line. We’re talking about committing to using the reporting tools QuickBooks offers.
 
You can’t possibly know how your business is doing unless you take advantage of this critical feature. It’s the payoff for all the hard work you do keeping up with your daily accounting workflow. Here are five things you should try.
 

Visit QuickBooks’ Report Center:

As you know. QuickBooks devotes an entire menu to reports, dividing them into types (Sales, Purchases, Inventory, etc.). When you hover your mouse over one of these categories after opening the Reports menu, you’ll see a list of all related reports.
 
Click on Report Center, though, and you’ll see a kind of home page for reports. They’re categorized by type, just like in the main Reports menu, but there’s much more you can do here.
 
 
Click on a report name in the Report Center and you’ll have numerous options.
 
When you click on the graphic representing a report, you’ll first be able to change the date range by clicking on the down arrow. Then you can Run the report, see a brief explanation by clicking Info, click on Fave to add it to your list of Favorites, or open Help. The tabs at the top of the screen allow you to toggle between these Standard views, reports you’ve Memorized, Favorites, Recent, and Contributed (report templates created by individuals outside of Intuit).
 
If you know exactly what reports you want to run it’s probably easier to just use the Reports menu, but the Report Center is a great place to learn about and organize your content.
 

Customize Your Reports:

You’re probably used to changing the date range on your reports, but have you ever explored any of QuickBooks’ other customization tools? You can use them on any report. Click the Customize Report button in the upper left. Click on the Display tab, and you can change the report’s columns by checking or unchecking entries in the list. Filters are more complex, and you may need our help setting up very specific, multi-filter reports. They offer a way to pare down your report to contain just the data you want. You could, for example, prepare a report that only includes one or more Transaction Types or customers who live in a specified state.
 

Memorize Your Reports:

Once you’ve changed columns and filters in a report you’ll run frequently, you can save those settings so you don’t have to go through all of that again. Open any report and click the Memorize button in the upper toolbar. The window that opens will ask if you want to save that customized report to a Memorized Report Group, which you can do by clicking the box and opening the list of groups. Either way, you can find your report by opening the Reports menu and selecting Memorized Reports.
 
If you want to create a new Memorized Report Group, open the Reports menu and click Memorized Reports | Memorized Report List. Open the Memorized Report drop-down menu and select New Group.
 

Schedule Your Reports:

The best way to get your report habit started is by creating a schedule of reports you need to see regularly. You can do this by setting up Reminders (Company | Reminders). Click the gear icon in the upper right corner to specify your Preferences and the + (plus) sign to add a reminder. QuickBooks 2017 and later versions offer a scheduling tool that allows you to share reports withothers, but please don’t try this on your own. It’s a complicated procedure with many rules.
 
You’ve probably noticed that there is a report category called Accountant & Taxes. Some of these should be created monthly or quarterly, but you’ll need our help analyzing them as well.
 
In the coming year, we strongly encourage you to expand your skills at generating reports. You can’t make realistic, effective plans for the future of your company without knowing its current financial state and its history. So start the year off right in 2020, and let us know how we can help.
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How to Clean Up QuickBooks for 2020

12/10/2019

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We know December is a busy month. However, take some time now to make sure QuickBooks is ready for 2020.

 
Yes, it’s here again: the end of the year. You probably have a lengthy to-do list full of tasks that must be done before December 31. There’s one task-or rather, a series of tasks-that you should definitely add to that list: year-end QuickBooks cleanup. Following the guidelines provided here will do three things. It will:
  • Ensure that you’ve processed every 2019 transaction (or that you know why you can’t).
  • Give you a sense of closure, knowing that you’ve dealt with all your 2019 financial data.
  • Allow you to start your 2020 QuickBooks activities with as clean of a slate as possible.

First Things First

 
Before you start looking at transactions and running reports, check to make sure that your fiscal year is recorded correctly in QuickBooks. Open the Company menu and select My Company. Click the pencil icon in the upper right to open the Company Information window, then click Report Information in the tabs to the left. This window opens:
 
Is your company’s fiscal year recorded correctly in QuickBooks? If not, please contact us. Don’t try to fix this on your own.
 

Account For All Of Your Income

 
You certainly want to have received all the money owed to you by December 31 if at all possible. So, run a report to see which customers have outstanding, overdue balances. Open the Reports menu and select Customers & Receivables | A/R Aging Summary.
 
The first column here will read Current. You don’t have to worry about these customers. It’s the next four columns that will require follow-up. If your default payment terms are 30 days, you’ll see columns for 1-30, 31-60, 61-90, and >90. Customers with dollar amounts in those columns have not met their obligations and are past due by those date ranges.
 
Note: If your default terms are different (like 15 days), you’ll need to customize the report. In the toolbar at the top, you’ll see a field labeled Interval (days). Change it to reflect your own default terms and click Refresh in the upper right corner.
 
If your report contains only a sea of zeroes in those four columns, everyone is paid up. If not, you can send statements to anyone who is at least one day past due to remind them of what they owe. Open the Customers menu and select Create Statements to see this window:
 
Partial view of the Create Statements window
 
Make sure the Statement Date is correct since QuickBooks will use this to calculate aging. Then you can either enter a specific Statement Period or request All open transactions as of Statement Date. If you choose the latter, you’ll most likely want to limit the statements to customers whose payments are overdue. So, you’d click in the box in front of Include only transactions over [your number here] days past due date.
 
Below these options, you’ll be able to indicate which customers should receive statements. The most common choice is All Customers (who fall into the group you just defined), but you can also send to one or multiple customers, for example. QuickBooks will display a list if you select one of these. The right pane of this window contains several additional options that you can check or uncheck. When you’re satisfied, you can Preview, Print, or E-mail the statements.
 

Pay Outstanding Bills

 
You should also try to settle your Accounts Payable before the end of the year. Open the Reports menu and select Vendors & Payables | A/P Aging Summary. Look for dollar amounts in the columns that show aging beyond the first column. You can also run the Unpaid Bills Detail report and look at the Aging column, as pictured here:
 
Look in the aging column of this report to see which bills are past due and by how many days.
 
Note: QuickBooks has multiple Preferences that relate to reports and aging. We can go over these with you if you haven’t explored them.
 
There are other tasks you should complete before December 31, some of which may require our assistance. These include reconciling all accounts, running year-end reports, and clearing any deposits that remain in the Undeposited Funds account. We’re here if you need us now, otherwise we can connect in the New Year.
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Setting Up Sales Tax in QuickBooks, Part 2

11/1/2019

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Now that you have your sales taxes set up, you’ll be able to use them in transactions and reports.

 
Last month, we talked about the process of setting up sales taxes in QuickBooks. To recap a bit, you first have to go to Edit | Preferences | Sales Tax to make sure the software is set up correctly for this use. This means you’ll need to understand exactly what your state and local sales tax rules are. You can learn this by going to your state’s Department of Revenue or Department of Taxation website.
 
State sales taxes are considered Items in QuickBooks; you create them like you would create product records. When local sales taxes are also required, you can set up Sales Tax Groups. You’ll be assigning these Items as well as Tax Codes to customers.
 

Using Sales Taxes

 
Once you have sales taxes set up, you can start using them in transactions. You can create them on the fly from within transactions, but we recommend taking care of this important housekeeping task before you start.
 
QuickBooks applies the Sales Tax Item or Sales Tax Group that you assigned to the customer on your invoices. You can see the others that are available.
 
Start by creating an invoice. When you reach the Tax column for your first line item, you’ll see that QuickBooks has already assigned Tax or Non to it based on the information in the item’s record. You can mix taxable and non-taxable items on the same invoice. You can also add a new sales tax on the fly from the invoice itself. Click the down arrow in the Tax column and select <Add New>.
 
Be sure you’re not required to pay sales tax on an item when Non is selected. You may not have to charge sales tax on, for example:
  • Nonprofit organizations
  • Out-of state sales
  • Items that your customers will resell
Tip: If you’d like, you can create more specific sales tax codes for these situations. You could use OOS for out-of-state sales, for example, LBR for labor, and NPO for nonprofit organization.
 
 
QuickBooks already includes Sales Tax Codes Tax and Non, but you can add additional ones that are more descriptive.
 
Be very careful with your sales tax classifications in QuickBooks. As we said last month, such errors will be discovered in a sales tax audit, should you ever be subject to one.
 
Once you’ve entered all the line items in the invoice, look down toward the bottom of the screen, directly beneath the table containing invoiced items and above the Total. QuickBooks will have calculated the sales tax due using the Sales Tax Item or Group you assigned to that customer during setup, placing it in the Tax field.
 
Look to the left of those numbers, and you’ll see the actual rate that was applied. To the left of that is a drop-down list containing the correct Sales Tax Item or Sales Tax Group. Click the down arrow if you want to see the list of other options. And in the lower left of the screen, you’ll see the Customer Tax Code.
 

The Sales Tax Center

 
The Manage Sales Tax window
 
When it’s time to pay sales taxes, you’ll open the Vendors menu and select Sales Tax | Manage Sales Tax. From the screen that opens, you’ll be able to:
  • Access Sales Tax Preferences.
  • Generate sales tax reports that will help you fill out required forms.
  • Visit related screens.
There are two reports you’ll need to run: Sales Tax Liability (displays total sales, amounts that are taxable and at what rates, taxes collected, and how much sales tax is due to each taxing agency) and the Sales Tax Revenue Summary (breaks down total sales into taxable and non-taxable). These reports are, of course, customizable, so you can filter them, for example, by Sales Tax Code.
 

A Delicate Balance

 
Collecting the correct amount of sales tax on taxable items and submitting the right tax totals to the right agencies takes vigilance. You don’t want to charge customers for unnecessary taxes, but you also don’t want to end up paying taxes you should have invoiced out of your own pocket.
 
We can help you get this straight from the start. It’s much easier to spend some time setting up sales tax accurately in QuickBooks than it is to go back and untangle inaccurate records. Give us a call and we’ll set up a consultation.
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Setting Up Sales Taxes in QuickBooks, Part 1

10/1/2019

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If your business is required to collect and pay sales taxes, you can use QuickBooks' tools to help you meet those obligations.
 
Next to payroll, state sales taxes represent probably the most complex element of your accounting tasks. QuickBooks can help with the mechanics, but there's a lot you need to learn before you can start charging and paying them. For example:
  • Is your company located in a destination-based or origin-based state where taxes are concerned (do you charge sales tax based on where your customers are or where you are)?
  • Certain types of items and services are exempt from sales tax. Are yours?
  • What local taxes (city, county, etc.) must you collect, if any?
  • How often must you submit what you owe, and to what agency?
If you don't know your state's rules, search for your Department of Revenue (sometimes called the Department of Taxation) on Google. Or talk to us about this whole complicated process. You can't begin to work with sales taxes in QuickBooks until you know the answers to many questions.
 

First Steps

Once you know what your state's rules are, you can start setting up the sales taxes you're required to collect and pay. Open the Edit menu and select Preferences. Click on Sales Tax, then Company Preferences. Make sure the Yes button is highlighted next to Do you charge sales tax?, then click on Add sales tax item. You'll see this window:
 
In states where it's required, you may have to at least set up a state sales tax item in QuickBooks. You may also be responsible for local (city, county, etc.) taxes.
 
TYPE should already be set to Sales Tax Item. Enter a name for your tax in the Sales Tax Name field; the Description should automatically appear as Sales Tax. Type in the Tax Rate (%) and the name of the Tax Agency that will collect it (select <Add New> if it's not there already). Click OK to return to Company Preferences and continue to define additional tax rates. If there is a sales tax item you use frequently, you can select it from the Your most common sales tax item field.
 
Tip: Each sales tax rate is considered an Item in QuickBooks. When you have to edit or delete one, open the Lists menu and select Item List. Type sales tax in the Look for box, then Search. Right-click on your target and select your desired action from the local menu that appears.
 

Sales Tax Groups

When you want to combine multiple sales taxes as one item (state, county, etc.), click Add sales tax item again in Company Preferences and choose Sales Tax Group. Enter a Group Name/Number and Description. In the table below, click the down arrow in the field in the TAX ITEM column. Keep selecting individual tax rates until you're finished, then click OK. When you use one of these groups in a transaction, the customer will only see the total tax, but reports will break them down into their individual parts.
 

Completing Your Preferences

The bottom half of the Company Preferences screen needs more information.
 
It's important that all the entries at the bottom of the Company Preferences screen are correct before you start working with sales taxes in QuickBooks.
 
The first two items here are simply field labels that will appear in transactions to indicate whether or not a line item should be taxed. You should leave them as is; they're automatically created by QuickBooks. If you want to Identify taxable amounts as "T" for Taxable when printing, click in that box to make a checkmark.
 
Is your QuickBooks company file set up on a cash or accrual basis? Click on the button in front of the correct choice. WHEN DO YOU PAY SALES TAX is a question that will be answered as you're learning about your state's sales tax requirements. When you've completed this section, click OK.
 

Assigning Tax Codes

As you create item and service records in QuickBooks, you'll be asked to indicate whether or not they're taxable. The Tax Code field appears at the bottom of the window, like in the image below.
 
You'll need to designate every item or service you sell as taxable or non-taxable.
 
There's much more you need to know about collecting and submitting sales taxes, like how to work with transactions and reports. We'll cover those topics next month. In the meantime, let us know if we can help you set up your QuickBooks company file for this complex task.
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Creating Statement Charges in QuickBooks

9/1/2019

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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.
 
 
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.
 
 
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.
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Using QuickBooks' Bill Tracker

8/1/2019

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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.
 
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.
 
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.
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    Author

    Julie L. Davis, CPA is the founder and owner of JD and Company in Yorba Linda, CA.  The company specializes in both for-profit and non-profit organizations, providing accounting, bookkeeping services, and tax preparation for small businesses. 

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