Quickbooks 2010 on demand 9780789743237, 078974323X, 1791801811, 9780768695373, 0768695376
QuickBooks Financial Software has become the preferred accounting software for the small business market. QuickBooks 201
382 105 32MB
English Pages 428 [451] Year 2009;2010
Polecaj historie
Table of contents :
Cover......Page 1
Dedication......Page 4
About The Authors......Page 5
Reader Services......Page 6
Contents......Page 8
Introduction......Page 16
1 Setting Up Your Company Accounts with the EasyStep Interview......Page 20
Installing QuickBooks......Page 21
Registering QuickBooks......Page 24
Setting Up QuickBooks in a Multiuser Office......Page 25
Transferring Data from Older Versions of QuickBooks......Page 26
Transferring Data from Quicken......Page 28
Practicing with the Sample Company Files......Page 30
Entering Data for a New Company......Page 32
Setting Up a Bank Account......Page 39
Setting Up Income and Expense Accounts......Page 40
Stopping, Restarting, and Completing the Interview......Page 41
2 Setting Up and Using Payroll Features......Page 44
Setting Payroll and Employee Preferences......Page 45
Setting Up Employees......Page 48
Setting Up Employee Payroll Information......Page 50
Setting Up Employee Payroll Taxes......Page 51
Setting Up Sick and Vacation Benefits......Page 53
Setting Up Payroll Deductions......Page 56
Paying Employees......Page 58
Printing Paychecks......Page 62
Using Direct Deposit......Page 63
Preparing and Paying Payroll Liabilities......Page 65
Creating Employer Payroll Reports......Page 68
Reporting Payroll Taxes with Form 941......Page 69
Paying Federal Unemployment Compensation Taxes with Form 940......Page 72
Preparing W-2 Forms......Page 74
Issuing W-3 Forms......Page 76
Setting Up Independent Contractors for 1099 Forms......Page 78
Setting 1099 Preferences......Page 80
Issuing 1099 Forms......Page 81
Outsourcing Payroll......Page 82
3 Adding or Changing Information After the EasyStep Interview is Completed......Page 84
Setting General Preferences......Page 85
Setting Desktop View Preferences......Page 88
Setting Accounting Preferences......Page 90
Adding Accounts......Page 92
Using Account Numbers......Page 94
Sorting Lists......Page 95
Displaying Lists on Forms......Page 96
Adding Customers......Page 98
Working with the Customer Center......Page 100
Adding Vendors......Page 102
Adding Items......Page 105
Adding Information “On-the-Fly”......Page 110
Moving Items on a List......Page 111
Creating Subitems......Page 112
Editing Information on a List......Page 113
Marking List Items Inactive......Page 114
Deleting Entries on a List......Page 116
Merging Entries on a List......Page 117
Printing Lists......Page 119
Searching for Transactions......Page 120
4 Invoicing and Collecting Income......Page 122
Setting Customers Preferences......Page 123
Creating an Invoice......Page 125
Previewing or Printing Invoices......Page 129
Emailing an Invoice......Page 131
Charging Expenses to a Customer......Page 135
Setting Finance Charge Preferences......Page 137
Creating a Monthly Statement......Page 138
Receiving Payments for Invoices......Page 140
Issuing a Credit or Refund......Page 141
Recording Cash Sales (COD)......Page 143
Making Bank Deposits......Page 144
Receiving Advances, Retainers, and Down Payments......Page 145
Issuing Discounts......Page 146
Tracking Accounts Receivable......Page 149
Viewing the Open Invoices Report......Page 150
Creating a Collection Letter......Page 151
Recording Bad Debts......Page 154
Working with Multiple Currencies......Page 156
5 Making Purchases and Recording Payments......Page 168
Setting Purchases and Vendors Preferences......Page 169
Working with the Vendor Center......Page 172
Using Purchase Documents......Page 173
Reporting on Open Purchase Orders......Page 178
Receiving Goods......Page 179
Receiving a Partial Order......Page 181
Viewing Aging and Unpaid Bills Reports......Page 182
Paying Bills......Page 183
Taking Discounts......Page 184
Using the Check Register......Page 185
Editing Bill Payments......Page 186
Deleting Bill Payments......Page 188
Setting Checking Preferences......Page 189
Writing Checks......Page 191
Printing Checks......Page 193
Voiding Checks......Page 194
6 Collecting and Paying Sales Tax......Page 198
Setting Sales Tax Preferences......Page 199
Creating a Sales Tax Item......Page 200
Creating a Sales Tax Group......Page 201
Charging Sales Tax to Customers......Page 202
Entering Tax Status of Inventory Items......Page 203
Selling Tax-Exempt Items......Page 204
Selling Items to Tax-Exempt Customers......Page 205
Producing Monthly Sales Tax Reports......Page 206
Paying Sales Tax......Page 207
Taking a Discount for Early Payment......Page 208
7 Using Time-Saving Features......Page 210
Memorizing Transactions......Page 211
Memorizing a Group of Transactions......Page 212
Using Memorized Transactions......Page 214
Scheduling Recurring Transactions......Page 215
Changing Memorized and Scheduled Transactions......Page 218
Removing Memorized Transactions......Page 220
Setting Reminders Preferences......Page 221
Using Reminders......Page 223
8 Job Cost Estimating and Tracking......Page 224
Setting Jobs and Estimate Preferences......Page 225
Setting Up a Job......Page 227
Tracking Job Status and Type......Page 230
Using the Job Type Feature......Page 231
Tracking Other Job Info......Page 232
Working With Estimates......Page 233
Invoicing Against an Estimate......Page 236
Reporting on Job Estimates vs. Actual......Page 239
9 Tracking Time......Page 240
Setting Time Tracking Preferences......Page 241
Installing the Timer......Page 242
Exporting Information to the Timer......Page 244
Creating a New Timer File......Page 245
Creating a Timer Activity......Page 247
Using the Timer......Page 248
Sending Timer Data to QuickBooks......Page 249
Importing Timer Data into QuickBooks......Page 250
Transactions......Page 251
Editing Timer Transactions......Page 252
Invoicing the Customer for Timer Activities......Page 253
10 QuickBooks Tips and Tricks......Page 254
Setting Spelling Preferences......Page 255
Creating a Budget......Page 256
Preparing Budget Reports......Page 260
Setting Up Classes......Page 262
Using Classes on Sales and Purchase Forms......Page 263
Reporting on Classes......Page 264
Creating Payment Terms......Page 265
Customizing Forms Design......Page 266
Customizing Forms Data......Page 269
Making Journal Entries......Page 273
Using the QuickBooks Remote Access Feature......Page 275
Creating Mailing Labels......Page 276
11 Using the QuickBooks Online Features......Page 278
Choosing Online Banking Mode......Page 279
Activating Online Services with Your Financial Institution......Page 281
Retrieving Online Transactions......Page 285
Adding Transactions to QuickBooks......Page 286
Renaming Rules—Automatically Assign List Name......Page 289
Setting Preference to Prefill Accounts......Page 290
Assigning Transactions to Open Vendor Bills......Page 291
Assigning Deposits to Open Customer Invoices......Page 292
Deleting Multiple Transactions......Page 293
Adding Multiple Transactions......Page 294
Making Online Payments......Page 295
Canceling Online Payments......Page 297
Sending Online Messages......Page 298
Transferring Money Between Accounts......Page 299
Getting Reports of Online Transactions......Page 300
Using the QuickBooks Website......Page 301
Using the QuickBooks Online Edition......Page 302
12 Preparing Income Tax Returns......Page 304
Choosing the Correct Income Tax Form......Page 305
Assigning Tax Lines to New or Existing Accounts......Page 307
Using the Income Tax Reporting......Page 308
Making Estimated Tax Payments......Page 312
Creating a Tax Return......Page 313
13 Data Backup and Security......Page 318
Backing Up Your QuickBooks Company File......Page 319
Restoring Backed-Up Information......Page 323
Using the QuickBooks Online Backup Service......Page 325
Adding or Editing the Administrator Password......Page 327
Adding New or Editing Existing Users......Page 328
Closing Financial Records at Year-End......Page 332
Creating a Closing Date Exception Report......Page 334
14 Using Inventory Features......Page 336
Activating Inventory......Page 337
Setting Up Inventory Items......Page 339
Adding to Your Inventory......Page 342
Editing Inventory Items......Page 343
Creating an Inventory Group......Page 345
Managing Sales Orders......Page 347
Setting Up Reminders to Replenish Your Inventory......Page 349
Preparing Inventory Reports......Page 350
Counting Your Inventory......Page 352
Adjusting Inventory Quantities......Page 353
Adjusting the Default Price of Inventory......Page 354
15 Recording Your Assets......Page 356
Reconciling Your Bank Statement......Page 357
Recording Bank Account Transfers......Page 360
Tracking Petty Cash......Page 361
Receiving Credit Card Payments......Page 362
Recording Deposits as Assets......Page 363
Purchasing Fixed Assets......Page 364
Entering Depreciation......Page 367
Selling Fixed Assets......Page 368
16 Recording Owners’ Equity......Page 370
Understanding the Opening Balance Equity Account......Page 371
Recording Owners’ Distributions......Page 374
Entering Prior Period Adjustments......Page 376
Viewing Transactions in Retained Earnings Account......Page 377
17 Recording Liabilities......Page 378
Managing Accounts Payable......Page 380
Recording Payroll Tax Accruals Without a QuickBooks Payroll Subscription......Page 381
Setting Up Credit Card Accounts......Page 382
Accounting for Deposits or Retainers......Page 387
Recording Loans......Page 388
Using the QuickBooks Loan Manager......Page 389
Recording Loan Payments......Page 392
18 Working with Reports in QuickBooks......Page 394
Company Snapshot......Page 395
Using the Improved Report Center......Page 397
Setting Report and Graph Preferences......Page 400
Modifying Reports......Page 403
Creating and Using Report Groups......Page 406
Memorizing Reports......Page 408
Importing and Exporting Report Templates......Page 409
Other Reporting Tips and Tricks......Page 411
Workshops......Page 414
What’s New and Improved......Page 426
A......Page 432
C......Page 433
D......Page 435
F......Page 436
G......Page 437
I......Page 438
L......Page 439
O......Page 440
P......Page 441
R......Page 443
S......Page 444
T......Page 445
U......Page 446
Z......Page 447
Citation preview
QuickBooks 2010 ®
Gail Perry, CPA Laura Madeira, Advanced Certified QuickBooks ProAdvisor
Que Publishing, 800 East 96th Street, Indianapolis, IN 46240 USA
QuickBooks® 2010 on Demand Copyright © 2010 by Pearson Education, Inc. All rights reserved. No part of this book shall be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the publisher. No patent liability is assumed with respect to the use of the information contained herein. Although every precaution has been taken in the preparation of this book, the publisher and author assume no responsibility for errors or omissions. Nor is any liability assumed for damages resulting from the use of the information contained herein. ISBN-13: 978-0-7897-4323-7 ISBN-10: 0-7897-4323-X Library of Congress Cataloging-in-Publication Data Perry, Gail. Quickbooks 2010 on demand / Gail Perry, Laura Madeira. p. cm. ISBN-13: 978-0-7897-4323-7 ISBN-10: 0-7897-4323-X 1. QuickBooks. 2. Small business—Accounting—Computer programs. 3. Small business—Finance—Computer programs. I. Madeira, Laura. II. Title. HF5679.P41652 2010 657’.9042028553—dc22 2009042235 Printed in the United States of America First Printing: December 2009
Trademarks All terms mentioned in this book that are known to be trademarks or service marks have been appropriately capitalized. Que Publishing cannot attest to the accuracy of this information. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark. QuickBooks is a registered trademark of Intuit, Inc.
Warning and Disclaimer Every effort has been made to make this book as complete and as accurate as possible, but no warranty or fitness is implied. The information provided is on an “as is” basis. The authors and the publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this book.
Bulk Sales Que Publishing offers excellent discounts on this book when ordered in quantity for bulk purchases or special sales. For more information, please contact U.S. Corporate and Government Sales 1-800-382-3419 [email protected] For sales outside of the U.S., please contact International Sales [email protected]
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Associate Publisher Greg Wiegand Acquisitions Editor Michelle Newcomb Development Editor The Wordsmithery, LLC Managing Editor Kristy Hart Project Editor Andy Beaster Copy Editor Water Crest Publishing, Inc. Indexer Lisa Stumpf Proofreader Jennifer Gallant Technical Editor Victor Madeira Publishing Coordinator Cindy Teeters Cover Designer Ann Jones Compositor Gloria Schurick
Acknowledgments A book such as QuickBooks 2010 On Demand couldn’t possibly be a one-person job. The group behind this project at Que Publishing forms a team in the very best meaning of the word. Everyone worked together to form a completed whole, and the result is the book you hold in your hands. We want to thank Michelle Newcomb, who organized the production of this book every step of the way, patiently working with us on important deadlines. Thank you also to Vic Madeira, who rode shotgun on the technical editing of this book to make sure everything you read is easy to understand and actually works the way it is supposed to. Thanks to Charlotte Kughen, who helped keep the editing a smooth process with frequent communication, Sarah Kearns, Andy Beaster, and the rest of the team at Que. Thanks also to the kind and patient technical support team at Intuit who kept us informed of changes all along the way.
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Dedication Gail and Laura dedicate this book to:
Georgia and Katherine, who make every day extraordinary; Rick, who puts up with way too many late nights at the keyboard; Vic, who is always ready to review content and then review it again; and Ron and Joycelyn Demaree, who taught Laura at an early age that anything is possible.
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About The Authors Gail Perry is a CPA and a financial journalist. She is the managing editor of AccountingWEB, the online daily news magazine for members of the accounting profession. She has worked in public accounting for more than 20 years and has spent that time helping her clients make the best use of the tax laws and accounting rules that benefit them and their businesses. Gail is a former senior tax accountant with the Big Four firm Deloitte, where she specialized in providing tax planning services and advice to small businesses. Gail has a degree in English and journalism from Indiana University and has written hundreds of newspaper and magazine articles about taxes, accounting, personal and business finances, and financial software. She is the author of more than 20 books, including The Complete Idiot’s Guide to Doing Your Income Taxes, Quicken All-In-One Desk Reference for Dummies, and Surviving Financial Downsizing: A Practical Guide to Living Well on Less Income.
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Laura Madeira is the owner of ACS, Inc., a software sales and consulting firm located in the greater Dallas, Texas area. Her affiliations with Intuit include being an Intuit Solution Provider, a select member of the Intuit Trainer/Writer Network, Advanced QuickBooks Certified, Enterprise and Point of Sale Certified, and member of the Intuit Solution Provider Advisory Council. Laura is also the author of the QuickBooks 2010 Solutions Guide and QuickBooks Essentials: For All QuickBooks Users, 9+ hours of self-paced video instruction, all offered by Que Publishing. For more than 22 years, Laura has worked with companies of all sizes and from many varied industries. Her focus has been to help the small to mid-sized growing businesses become more successful by automating their internal accounting processes and reporting functions. Additionally, Laura is a guest speaker for Intuit, providing training to thousands of consultants and accountants nationwide. She is also a respected author for Intuit who writes technical training materials presentations and documents her research and review of competing software solutions. Her QuickBooks at YearEnd document is one of the most sought-after publications that Intuit offers to its ProAdvisor consultants. Laura has served on two Intuit Customer Advisory Councils, and has been a consultant representing the accountant community during product development for QuickBooks 2010. She earned her accounting degree from Florida Atlantic University. Laura can be contacted through her website: www.quick-training.com.
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Visit our website and register this book at www.informit.com/title/9780789743237 for convenient access to any updates, downloads, or errata that might be available for this book.
As an associate publisher for Que Publishing, I welcome your comments. You can email or write me directly to let me know what you did or didn’t like about this book—as well as what we can do to make our books better.
Please note that I cannot help you with technical problems related to the topic of this book. We do have a User Services group, however, where I will forward specific technical questions related to the book. When you write, please be sure to include this book’s title and author as well as your name, email address, and phone number. I will carefully review your comments and share them with the author and editors who worked on the book. Email: [email protected] Mail:
Greg Wiegand Associate Publisher Que Publishing 800 East 96th Street Indianapolis, IN 46240 USA
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Reader Services
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Contents Introduction
1
Setting Up Your Company Accounts with the EasyStep Interview Installing QuickBooks Registering QuickBooks Setting Up QuickBooks in a Multiuser Office Transferring Data from Older Versions of QuickBooks Transferring Data from Quicken Practicing with the Sample Company Files Entering Data for a New Company Setting Up a Bank Account Setting Up Income and Expense Accounts Stopping, Restarting, and Completing the Interview
2
Setting Up and Using Payroll Features Setting Payroll and Employee Preferences Setting Up Employees Setting Up Employee Payroll Information Setting Up Employee Payroll Taxes Setting Up Sick and Vacation Benefits Setting Up Payroll Deductions Paying Employees Printing Paychecks Using Direct Deposit Preparing and Paying Payroll Liabilities Creating Employer Payroll Reports Reporting Payroll Taxes with Form 941 Paying Federal Unemployment Compensation Taxes with Form 940 Preparing W-2 Forms Issuing W-3 Forms
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c
1 2 5 6 7 9 11 13 20 21 22
25 26 29 31 32 34 37 39 43 44 46 49 50 53 55 57
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Setting Up Independent Contractors for 1099 Forms Setting 1099 Preferences Issuing 1099 Forms Outsourcing Payroll
3
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Adding or Changing Information After the EasyStep Interview is Completed Setting General Preferences Setting Desktop View Preferences Setting Accounting Preferences Adding Accounts Using Account Numbers Sorting Lists Displaying Lists on Forms Adding Customers Working with the Customer Center Adding Vendors Adding Items Adding Information “On-the-Fly” Moving Items on a List Creating Subitems Editing Information on a List Marking List Items Inactive Deleting Entries on a List Merging Entries on a List Printing Lists Searching for Transactions
4
Invoicing and Collecting Income Setting Customers Preferences Creating an Invoice Previewing or Printing Invoices Emailing an Invoice Charging Expenses to a Customer Setting Finance Charge Preferences Creating a Monthly Statement Receiving Payments for Invoices Issuing a Credit or Refund
59 61 62 63
65 66 69 71 73 75 76 77 79 81 83 86 91 92 93 94 95 97 98 100 101
103 104 106 110 112 116 118 119 121 122
Recording Cash Sales (COD) Making Bank Deposits Receiving Advances, Retainers, and Down Payments Issuing Discounts Tracking Accounts Receivable Viewing the Open Invoices Report Creating a Collection Letter Recording Bad Debts Working with Multiple Currencies
5
Making Purchases and Recording Payments Setting Purchases and Vendors Preferences Working with the Vendor Center Using Purchase Documents Reporting on Open Purchase Orders Receiving Goods Receiving a Partial Order Viewing Aging and Unpaid Bills Reports Paying Bills Taking Discounts Using the Check Register Editing Bill Payments Deleting Bill Payments Setting Checking Preferences Writing Checks Printing Checks Voiding Checks
6
Collecting and Paying Sales Tax Setting Sales Tax Preferences Creating a Sales Tax Item Creating a Sales Tax Group Charging Sales Tax to Customers Entering Tax Status of Inventory Items Selling Tax-Exempt Items Selling Items to Tax-Exempt Customers
124 125 126 127 130 131 132 135 137
149 150 153 154 159 160 162 163 164 165 166 167 169 170 172 174 175
179 180 181 182 183 184 185 186
c Contents
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Producing Monthly Sales Tax Reports Paying Sales Tax Taking a Discount for Early Payment
7
Using Time-Saving Features Memorizing Transactions Memorizing a Group of Transactions Using Memorized Transactions Scheduling Recurring Transactions Changing Memorized and Scheduled Transactions Removing Memorized Transactions Setting Reminders Preferences Using Reminders
8
Job Cost Estimating and Tracking Setting Jobs and Estimate Preferences Setting Up a Job Tracking Job Status and Type Using the Job Type Feature Tracking Other Job Info Working With Estimates Invoicing Against an Estimate Reporting on Job Estimates vs. Actual
9
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Tracking Time Setting Time Tracking Preferences Installing the Timer Exporting Information to the Timer Creating a New Timer File Creating a Timer Activity Using the Timer Sending Timer Data to QuickBooks Importing Timer Data into QuickBooks Transactions Editing Timer Transactions Invoicing the Customer for Timer Activities
187 188 189
191 192 193 195 196 199 201 202 204
205 206 208 211 212 213 214 217 220
221 222 223 225 226 228 229 230 231 232 233 234
10
QuickBooks Tips and Tricks Setting Spelling Preferences Creating a Budget Preparing Budget Reports Setting Up Classes Using Classes on Sales and Purchase Forms Reporting on Classes Creating Payment Terms Customizing Forms Design Customizing Forms Data Making Journal Entries Using the QuickBooks Remote Access Feature Creating Mailing Labels
11
Using the QuickBooks Online Features Choosing Online Banking Mode Activating Online Services with Your Financial Institution Retrieving Online Transactions Adding Transactions to QuickBooks Renaming Rules—Automatically Assign List Name Setting Preference to Prefill Accounts Assigning Transactions to Open Vendor Bills Assigning Deposits to Open Customer Invoices Deleting Multiple Transactions Adding Multiple Transactions Making Online Payments Canceling Online Payments Sending Online Messages Transferring Money Between Accounts Getting Reports of Online Transactions Using the QuickBooks Website Using the QuickBooks Online Edition
235 236 237 241 243 244 245 246 247 250 254 256 257
259 260 262 266 267 270 271 272 273 274 275 276 278 279 280 281 282 283
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12
Preparing Income Tax Returns Choosing the Correct Income Tax Form Assigning Tax Lines to New or Existing Accounts Using the Income Tax Reporting Making Estimated Tax Payments Creating a Tax Return
13
Data Backup and Security Backing Up Your QuickBooks Company File Restoring Backed-Up Information Using the QuickBooks Online Backup Service Adding or Editing the Administrator Password Adding New or Editing Existing Users Closing Financial Records at Year-End Creating a Closing Date Exception Report
14
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Using Inventory Features Activating Inventory Setting Up Inventory Items Adding to Your Inventory Editing Inventory Items Creating an Inventory Group Managing Sales Orders Setting Up Reminders to Replenish Your Inventory Preparing Inventory Reports Counting Your Inventory Adjusting Inventory Quantities Adjusting the Default Price of Inventory
15
Recording Your Assets Reconciling Your Bank Statement Recording Bank Account Transfers Tracking Petty Cash Receiving Credit Card Payments Recording Deposits as Assets
285 286 288 289 293 294
299 300 304 306 308 309 313 315
317 318 320 323 324 326 328 330 331 333 334 335
337 338 341 342 343 344
Purchasing Fixed Assets Entering Depreciation Selling Fixed Assets
16
Recording Owners’ Equity Understanding the Opening Balance Equity Account Recording Owners’ Distributions Entering Prior Period Adjustments Viewing Transactions in Retained Earnings Account
17
Recording Liabilities Managing Accounts Payable Recording Payroll Tax Accruals Without a QuickBooks Payroll Subscription Setting Up Credit Card Accounts Accounting for Deposits or Retainers Recording Loans Using the QuickBooks Loan Manager Recording Loan Payments
18
Working with Reports in QuickBooks Company Snapshot Using the Improved Report Center Setting Report and Graph Preferences Modifying Reports Creating and Using Report Groups Memorizing Reports Importing and Exporting Report Templates Other Reporting Tips and Tricks
345 348 349
351 352 355 357 358
359 361 362 363 368 369 370 373
375 376 378 381 384 387 389 390 392
Workshops
395
What’s New and Improved
407
Index
413
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Introduction What You’ll Learn Welcome to QuickBooks 2010 on Demand, a visual quick reference guide that shows you how you can take advantage of the nation’s best-selling small business accounting program. QuickBooks 2010 is filled with new features. If you’ve used QuickBooks in the past, you’ll welcome this guide that familiarizes you with the new QuickBooks so you won’t feel like an outsider.
How You’ll Learn The Best Place to Start How This Book Works Step-by-Step Instructions Organization of the Book
The Best Place to Start The best place to start is with a question. What do you want to know? What’s not working the way you expected it to work? What QuickBooks features do you think should provide you with more value? What kind of information are you trying to get from your QuickBooks program? Ask the question and then go to the table of contents or the index to find the area of the book that contains the answer. Chances are, you’ll begin by finding the answer to your question, and then you’ll start paging through the book, discovering new features and learning tips for making your QuickBooks experience more worthwhile and efficient.
How This Book Works Each task is presented on one page or two facing pages, with step-by-step instructions in the left column and screen illustrations on the right. This arrangement lets you focus on a single task without having to turn the page. Each time you see a numbered step, look at the corresponding figure to see where the number points. And because QuickBooks 2010 on Demand is a full-color book, this image should look just like the one you see on your own computer screen.
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Step-by-Step Instructions
Making Estimated Tax Payments 1
Click the Write Checks icon on the Home page to open a new check.
TIMESAVER Pressing Ctrl+W
Typically, each of your quarterly estimated payments is equal to at least 25% of the lesser of 100% of the estimated income tax for the current year or 100% of the tax shown on the corporation’s tax return for the preceding year. Use Form 8109 (call 1-800-TAX-FORM or contact your local IRS office) to accompany your tax deposits. Some corporations must use the Electronic Federal Tax Payment System to make tax deposits electronically. Contact the IRS or your accountant for more information on how to make deposits.
also takes you to the Write Checks window.
This book provides concise step-by-step instructions that show you how to accomplish a task. Each set of instructions includes illustrations that directly correspond to the easy-to-follow steps. Also included in the text are timesavers, checklists, and sidebars to help you work more efficiently or to provide you with more in-depth information. A “Did You Know?” feature provides tips and techniques to help you work smarter, and a “See Also” feature directs you to other parts of the book containing related information about the task. “Important” reminders call your attention to information you won’t want to ignore, and the “Timesaver” feature points out shortcuts for performing common tasks. In addition to the step-bystep instructions, you’ll find sidebars that describe how many standard QuickBooks features work, including the Starting Date, Items, and Classes. There are also sidebars that describe the behind-the-scenes accounting functions that QuickBooks performs on your behalf.
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2
Enter the date of the payment.
3
Enter the payee. This will probably be your bank. Ask your accountant for instructions on how to present your tax payments.
3
2
4
IMPORTANT Payroll taxes and income taxes are not the same! Make sure you have separate tax accounts for your income tax expenses and liabilities and that these accounts are not the same ones you use to record your payroll tax expenses and liabilities. Payroll taxes include the taxes withheld from employee paychecks and the employer’s share of taxes, such as FICA and Unemployment Compensation. 4
Enter the amount.
5
Enter the account name where the payment will be recorded (see the previous sidebar, “Accounting for Income Taxes”).
6
Enter an optional description.
7
Save the payment.
8
Print the check (see “Printing Checks” in Chapter 5, “Making Purchases and Recording Payments”).
See Also See “Scheduling Recurring Transactions” on page 196 to save time by scheduling and automating quarterly tax payments.
Easy-to-follow introductions focus on a single concept.
Illustrations match the numbered steps. 5
6
7
Did You Know? Choose either your income tax liability or your income tax expense account for recording the tax payment. If the tax liability has already been recorded, this payment should be assigned to the liability account. If you haven’t recorded the tax liability, record the payment to the income tax expense account.
Numbered steps guide you through each task.
Different estimated tax payment rules apply depending on the type of business. The information presented in this task describes estimated tax information for taxable corporations. Different rules apply for individuals and other types of organizations. Check with your tax professional to ensure that you are paying the correct amount of estimated tax.
Preparing Income Tax Returns
See Also points you to related information in the book.
293
Did You Know? alerts you to tips, techniques and related information.
Organization of the Book QuickBooks 2010 on Demand is arranged in chapters that correspond with various features of the program. Although every chapter might not apply to your business, there’s ample information about the QuickBooks program throughout the book, along with cross-references to other areas of the book, so after you find the answer to one question, you will likely be led to related information.
◆
Chapter 4, “Invoicing and Collecting Income”— Learn how to record your company’s revenue producing activities and keep track of customers. Use invoices, track accounts receivable, make deposits, give discounts, and communicate with your customers. For global companies, learn how to use Multiple Currencies in QuickBooks. Tips for all these tasks are provided here.
◆
Chapter 5, “Making Purchases and Recording Payments”—QuickBooks provides a place to record names and information about all your vendors and suppliers. Learn how to record purchase orders, enter bills, record receipts of items you’ve ordered, write checks, and use the check register.
◆
Chapter 6, “Collecting and Paying Sales Tax”—If your company sells items that are subject to sales tax, you need to keep track of the tax you collect and the taxable sales you make, and you need to pay that tax to the government. In addition, you need to know how to account for sales to taxexempt entities. Learn how to find the information you need to prepare your sales tax returns and pick up tips on recording sales tax discounts.
◆
Chapter 7, “Using Time-Saving Features”— QuickBooks has some great time-saving tools, such as reminders, memorized transactions, and a customizable favorites menu, new for QuickBooks 2010. Learn how to use these features and you’ll be ready to leave work early.
◆
Chapter 8, “Job Cost Estimating and Tracking”— QuickBooks provides you with the ability to create estimates, track jobs, and invoice based on the portion of the job that is completed.
◆
Chapter 9, “Tracking Time”—Use the QuickBooks Timer to turn your computer into a time clock and then export the time to QuickBooks, where it flows right into the payroll component of the program and can be billed directly to customers.
By chapter, these are the topics covered in this book: ◆
◆
◆
Chapter 1, “Setting Up Your Company Accounts with the EasyStep Interview”—Chapter 1 provides information about working your way through the EasyStep Interview, what information you need to have on hand before you begin the interview, what areas of the interview you can skip now and complete after starting the program, and how you can leave the interview and return later. Chapter 2, “Setting Up and Using Payroll Features”—Learn how to set up your employees, activate payroll deductions, record vacation and sick pay, prepare paychecks, and pay payroll taxes. Whether you use QuickBooks for your payroll or not, you’ll find useful information in this chapter about accounting for payroll taxes, distinguishing between employees and independent contractors, and issuing 1099 forms. Chapter 3, “Adding or Changing Information After the EasyStep Interview Is Completed”—Whether you used the EasyStep Interview from Chapter 1 or not, there’s bound to be more information you need to enter in your QuickBooks company file as time goes by. This chapter shows you how to set up new accounts, customers, vendors, and items and explains how to manage the lists that QuickBooks uses to organize all this information.
Introduction
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◆
◆
Chapter 15, “Recording Your Assets”—Every company has assets. From bank accounts, inventory, and receivables, to buildings, computers, and furniture, there’s plenty to keep track of. QuickBooks provides a complete asset record-keeping system that enables you to keep track of all the assets owned by your company.
◆
Chapter 16, “Recording Owners’ Equity”—Just how much is your company worth? Learn how QuickBooks tracks the value of your company and figure out what you need to know about that pesky Opening Balance Equity account that QuickBooks insists on using.
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Chapter 17, “Recording Liabilities”—Keep track of what you owe and to whom. Manage your payables, and learn how QuickBooks records loans and tracks the portion of your loan payments that represents interest.
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Chapter 13, “Data Backup and Security”—Let’s face it; everyone needs to be careful in this era of hacking, identity theft, and vengeful employees. Take advantage of the high level of security offered by QuickBooks to protect your precious company financial information.
Chapter 18, “Working with Reports in QuickBooks”—Everyone uses reports in QuickBooks. The reports summarize all the transactions you’ve entered in your QuickBooks company file and provide the information you need to judge your performance, attract investors, prepare for the future, pay your taxes, collect revenue, and pay your bills. Learn which reports are used frequently and how you can customize the QuickBooks reports so they provide you with just the information you want.
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Chapter 14, “Using Inventory Features”— QuickBooks offers many features to help you track your inventory and produce inventory reports. Learn how the inventory features work in QuickBooks and what features are going to help you keep track of inventory as it moves in and out of your company.
Workshops—This section contains a handful of interesting projects that go beyond the day-to-day experience. With these projects, you learn to create your own Favorites Menu, customize the Company Snapshot, use the new Document Management feature, color code your accounts, and even use To Do Notes.
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What’s New and Improved—This section explores the new features and tools of the 2010 release of QuickBooks.
Chapter 10, “QuickBooks Tips and Tricks”— Here’s a catch-all chapter that contains a little bit of everything. Look here for information on spellchecking, creating and using budgets, working with classes, setting payment terms, customizing forms (enhanced for QuickBooks 2010), making journal entries, and using QuickBooks to produce information that will make your accountant happy.
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Chapter 11, “Using the QuickBooks Online Features”—Take advantage of the online features in QuickBooks, including online banking, saving your company information online, and using QuickBooks from remote locations.
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Chapter 12, “Preparing Income Tax Returns”— You might not enjoy the drudgery of preparing income tax returns for your company, but QuickBooks makes the process a whole lot easier by providing reports that detail all the information you need for your quarterly and annual tax forms. Whether your company is a corporation, partnership, not-for-profit, or proprietorship, you’ll find the tax information you can produce will save you time when it comes to preparing information for the IRS.
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Setting Up Your Company Accounts with the EasyStep Interview For many, the most unpleasant part of owning a small business is the necessity of dealing with the accounting for money coming in and out of the business. When your skill is in providing services or producing inventory, finding the time or inclination to set up and maintain a bookkeeping system is difficult. But as we all know, it is only with a quality bookkeeping system that you will keep track of how much money your company is making and how successful you really are.
1 What You’ll Do Install QuickBooks Register QuickBooks
Years ago, Intuit came to the rescue of many small business owners with its QuickBooks software. QuickBooks is a bookkeeping program that is so sophisticated, it provides all the record keeping and reporting opportunities you need to keep on top of your company’s progress. At the same time, QuickBooks is so easy to use that someone with little or no accounting background can start using the program right out of the box.
Set Up QuickBooks in a Multiuser Office
You might already have started making excuses and finding other projects to do so you can avoid taking the time to set up your company’s bookkeeping records in QuickBooks. Let me tell you right now that you’re making a mistake if you don’t get this project under way. In the long run, you will save time and you will save money if your company’s financial records are easy to update and easy to access. QuickBooks installation and setup is a swift process. Although it varies by the size of the company, much of the setup work can be done after the initial process is complete, so you can allocate part of an afternoon to setup instead of several days. So let’s get started!
Enter Data for a New Company
Transfer Data from Older Versions of QuickBooks Transfer Data from Quicken Practice with the Sample Company Files
1
Set Up a Bank Account Set Up Income and Expense Accounts Stop, Restart, and Complete the Interview
1
Installing QuickBooks
If QuickBooks has not yet been installed on your computer, you’ll need to install the program before you can begin any of the setup procedures. Installation is easy—but beware! During installation, you are required to enter the license and product numbers. You’ll get these numbers from the back of the packaging or during the download process.
Install QuickBooks 1
Insert the QuickBooks CD in the CDROM drive of your computer or follow the instructions provided with the Intuit Download Manager to download the software from the Internet.
2
The Intuit QuickBooks Installer dialog displays.
3
Click Next. IMPORTANT Make appropriate installation choices. The installation choices presented to you can differ depending on the edition of QuickBooks that you purchased. Read the installation screens carefully, making the choices that correspond to the program you purchased. You might be presented with an opportunity to upgrade to a different edition of QuickBooks, such as the retail or contractors’ editions. Make sure you select the version you want to use.
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When you reach the screen that displays the QuickBooks License Agreement, make sure you read the agreement and understand its terms. Then click I Accept the Terms in the License Agreement when you are ready to proceed.
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Click Next.
6
Choose the installation type, Express (recommended) or Custom and Network options, which allows you to manually select the location and advanced server options.
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Click Next.
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5
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Enter your license number and product number. This information can be found on a yellow sticker on the back of the QuickBooks CD packaging or was included in your download instructions.
8
Click Next.
10 The Ready to Install dialog displays
9
with your unique License and Product numbers. Click the Print icon if you want to print the details. 11 If you want to have the service and
support icons on your desktop, put a check mark in the box to add them.
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12 Click Install. QuickBooks will install
the necessary files to your computer’s hard drive. When the installation is complete, a Congratulations dialog displays.
11
13 If not automatically selected, place
12
a check mark in the Open QuickBooks box. Place a check mark in the Help Me Get Started check box if you want QuickBooks to provide useful links to help with the startup process. 14 Click the Finish button. 13
Did You Know? Installation might not be automatic. If you insert your QuickBooks CD and the installation process does not begin automatically, click the Start button on your computer task bar; then select Run. For Vista users, click the Windows Orb icon and type run in the dialog. In the box that appears, type D:/setup.exe (where D is the drive letter for your CD drive) and then click OK.
14
Did You Know? The steps illustrated here are for an installation for only one user. If you choose multiple users, you also need to indicate if you are installing the full QuickBooks program or just the database server, and if you want to allow users on other computers to open company files stored on the computer where the QuickBooks program resides.
Setting Up Your Company Accounts with the EasyStep Interview
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Hardware/Software Requirements The system requirements for QuickBooks vary a bit, depending on the version of the program you use. Here are the minimum computer requirements for using QuickBooks 2010 on a standalone machine:
4
Just for fun, I dug back into my old manuals to compare programs. These were the system requirements back in 1992 when I started using QuickBooks: ◆
IBM XT, AT, PS/1, PS/2, or other IBMcompatible PC
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640K of RAM
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A hard disk with 2MB of free disk space
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A floppy disk drive (either 5.25" or 3.5")
A hard disk with 1GB of disk space (additional space required for data files).
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DOS operating system, version 2.1 or later
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4x CD-ROM drive required for CD installs.
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Monochrome or color monitor
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Display optimized for 1024 × 768 screen resolution or higher; supports 800 × 600 using the Small Fonts setting in Windows Control Panel, Display settings (in Vista, the Small Fonts setting is found in Control Panel, Personalization).
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Mouse (optional)
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Windows XP (SP2 or later strongly recommended) all editions, including 64bit if SP2 or later installed.
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Windows Vista with UAC, all editions including 64-bit.
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Windows Server 2003 or Windows Server 2008.
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2.0GHz Pentium 4 processor; 2.4GHz recommended.
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At least 256MB RAM for a single user; 512MB recommended (for Vista users, 1GB is recommended).
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Registering QuickBooks
QuickBooks gives you access to QuickBooks technical support, as well as online features of the program. In addition, when you register your program, you are signed up to receive information about product upgrades. As an added benefit, after you register your program, you no longer see the pop-up window reminding you to register. You are allowed to use QuickBooks for 30 days without registering; then you are required to register to continue using the program.
Register QuickBooks 1
Click the Begin Registration button in the registration reminder window, or select Help, Register QuickBooks from the program menu.
2
If online registration is available, enter the requested information about your company, and click Next. (Not shown).
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If no online registration is available, click Continue to register by phone.
4
Click the option to look up the existing registration or to call Intuit to register your software.
5
If you choose to look up your previous registration information, you will need to type your business telephone number and ZIP Code to locate your records. Click Continue. IMPORTANT Registration screen doesn’t appear, or Register QuickBooks doesn’t appear on the Help menu. Some registration is automatic. If you’ve registered a version of QuickBooks previously on your computer, you might not be asked to register your program. If an option to register QuickBooks does not appear on your Help menu, the program is already registered. With your QuickBooks program open, you can see your license number and product number by pressing Ctrl+1.
1
3
Did You Know? Telephone registration is also available. If you don’t have Internet access or you prefer to register by phone, you can use the telephone number that appears on the screen to complete the registration.
Setting Up Your Company Accounts with the EasyStep Interview
5
Setting Up QuickBooks in a Multiuser Office
You must have QuickBooks Pro or QuickBooks Premier if you plan to use QuickBooks in a multiuser environment where more than one person can access the company file at once. A maximum of five users can access the QuickBooks company file simultaneously; however, there is no limit to the number of users who can access the company file at different times. The multiuser license authorizes you to install the software on up to five different computers. Each workstation must have access to the company file. Another alternative for a multiuser office is QuickBooks Enterprise Solutions, which allows up to 30 simultaneous users.
Set Up QuickBooks in a Multiuser Office 1
Following the steps in the “Installing QuickBooks” task shown previously in this chapter, install QuickBooks on each computer that will access the company file. IMPORTANT The company file is stored on only one computer. All computers that are to have access to the company file need to be networked in such a way that they have read/write access to the computer or file server on which your QuickBooks company file resides.
2
When asked, enter the license number and product number for each computer.
3
Click Next.
Did You Know? The license number might not be unique. If you purchased a multiuser QuickBooks program, each of the users has the same license number. If you purchased separate QuickBooks programs for each user, the license number is unique for each user.
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Transferring Data from Older Versions of QuickBooks
If you’ve used an older version of QuickBooks and want to update your old QuickBooks company data to the latest version of QuickBooks, you’ll find that the process is quick and simple. But beware! After you transfer a company file forward to a newer version of QuickBooks, you can never reopen that company file in an older version of QuickBooks. So, in a multiuser environment, make sure all computers are upgraded to the new version of QuickBooks before you open your company file on one of the upgraded computers.
Update Data from an Older Version of QuickBooks 1
IMPORTANT Your older version of QuickBooks will no longer be functional. When you upgrade an older version of QuickBooks to a newer version, the older version is no longer available on your computer. All data files are updated to the new version as soon as you open them, and you can’t use those files in an older version of QuickBooks. If, instead of upgrading, you choose to install the new version of QuickBooks and leave the older version on your computer as well, a window appears asking you from which version to copy preferences. 1
The Open or Restore Company dialog displays. Select the appropriate choice for your needs (in this example, a company file).
2
Click Next.
3
QuickBooks locates the folder where your data is stored, or you can browse to the correct folder. Optionally, from the No Company Open dialog, select the data file and click Open or Restore an Existing Company. If your prior version data file required a username and password, you will be prompted to enter it here. Click OK to continue.
2
Continued, next page
Setting Up Your Company Accounts with the EasyStep Interview
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4
The Update Company File for New Version dialog displays. Place a check mark in the I Understand box and click Update Now. If you need to use the prior version at a later date, you will need to restore it from the backup.
5
QuickBooks prompts you to save a backup before updating. Click Next to browse to a folder where you want to save the backup file. Click OK to save it.
6
If prompted, click Change Location or Use This Location when prompted for the best location for a data backup. (This prompt displays if you are backing up to the same computer as your original data.)
7
Click OK to the message advising you how to use this backup file.
8
Click Yes to the warning that you are opening your data file with a new version of QuickBooks.
See Also See “Backing Up Your QuickBooks Company File” in Chapter 13, “Security,” for information on making backup copies of your data.
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4
Did You Know? Back Up Your Company File! Before transferring your company file to the newest version of QuickBooks, you are required to make a backup copy of it. Should there be a problem with the transfer or should there be any other reason why you would want to open the company file in the older version of QuickBooks, you will be able to do so. It’s wise to save your backup file to a CD or some other external media for extra protection in case there is ever a problem on your computer.
Transferring Data from Quicken
Quicken and QuickBooks are both products of Intuit Corporation, and the programs are compatible with one another. If you’ve been keeping track of your business accounting records in Quicken, you don’t have to start from scratch when you begin using QuickBooks. You can transfer your Quicken records right into your QuickBooks program.
Prepare Your Quicken Data for the Transfer IMPORTANT You cannot use your QuickBooks company file in Quicken. When you transfer files from Quicken to QuickBooks, the conversion copies your Quicken data to a new QuickBooks company file, leaving your original Quicken data file unchanged for continued use. After converting your Quicken file, you will have two sets of data: your original, unchanged Quicken file and your new QuickBooks company file. 2 1
Open the Account List in Quicken by pressing Ctrl+A.
2
Delete any accounts you don’t want to transfer to QuickBooks. To delete an account, right-click the account name and select Delete; then type the word Yes when asked to confirm the deletion.
3
Record any overdue scheduled transactions in Quicken. Press Ctrl+J in Quicken to open the Scheduled Transaction List. For any transaction you want to record, click the Enter button that appears to the right of the transactions.
4
Skip any overdue scheduled transactions that you don’t want to record by clicking the Skip button.
5
Close Quicken.
3
Setting Up Your Company Accounts with the EasyStep Interview
4
9
Perform the Conversion from Quicken to QuickBooks 1
In QuickBooks, select File, Utilities, Convert, From Quicken.
1
IMPORTANT If you are setting up your company in QuickBooks for the first time, you can convert data from
Quicken, Peachtree, Microsoft Small Business Accounting, or Microsoft Office Accounting as part of the EasyStep Interview process. On the introductory screen of the EasyStep Interview, click the Convert button, then choose the software you are converting from, and follow the onscreen instructions for converting your data. 2 2
Click Convert.
3
Click the name of the Quicken file to be converted. Unless you have changed the default filename in Quicken, this file is named Qdata.qdf. You might have to browse until you find the folder that contains your Quicken file.
4
Click Open.
3
Did You Know? Expect extra conversion steps if you have an accounts receivable account in Quicken. You might be asked if you have an accounts receivable account in Quicken that tracks customer invoices and customer payments. If you answer Yes, you are asked to identify the accounts used for accounts receivable. You might also receive a message after conversion telling you that a list of payee names needs to be identified as customers, vendors, and employees. You are shown a copy of this list to check which type applies to each name.
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Did You Know? These instructions apply only to certain versions of Quicken. The instructions for converting data from Quicken to QuickBooks apply to Quicken for Windows 98 through the most recent version of Quicken. For conversion from earlier versions of Quicken, refer to your QuickBooks manual.
Practicing with the Sample Company Files
At any time, either before or after you have set up your company in QuickBooks, you can open one of the sample company files that comes with your QuickBooks program and experiment with various features of QuickBooks without altering information in your own company file. Use the sample program to create sample invoices, design reports, try out the reminders, or use any of the features while your company data is safe.
Practice with the Sample Company Files 1
The first time you open QuickBooks, you see the Welcome to QuickBooks screen. Later you might see a different welcome screen with the same options. Click the option to Explore QuickBooks. If no welcome screen appears, skip to Step 7.
2
Select one of the files for a sample business.
3
If you are upgrading from an earlier version of QuickBooks, you might be asked to update your sample files to the new version. Click Yes to perform the update.
4
Click OK.
5
If you were required to upgrade your sample files from an earlier version, QuickBooks requires you to create a backup file before the upgrade can be completed. Click Yes to proceed with creating the backup. (If you are asked to accept the defaults, click OK.)
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1 2
4
Continue clicking Yes on the next screens to complete the backup process.
Continued, next page
Setting Up Your Company Accounts with the EasyStep Interview
11
7
If the introductory screen did not appear automatically, select File, Close Company from the QuickBooks menu.
8
From the No Company Open dialog, select Open a Sample File.
9
Click the name of the sample file you want to use.
8
10 You are reminded that this is a
sample file. Click OK to gain access to the sample file data.
Did You Know? Sample company files are provided with QuickBooks. Working with sample files allows you to familiarize yourself with the program without worrying about altering your company data. For example, the sample service-based business file contains examples of QuickBooks transactions in a business without an inventory. The sample product-based business file includes features from QuickBooks Pro and QuickBooks Premier, such as the job cost feature, estimates, and time tracking.
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9
Entering Data for a New Company
The process of entering company data has the effect of customizing QuickBooks so the program becomes a unique financial information resource for your company. Use the checklist that follows this section to help gather the information you need to make the setup process smooth and efficient. When you open QuickBooks for the first time, you are given several choices of actions to take. Select the option to Create a New Company File, and you’ll be ready to begin entering your company data. The company file is the term QuickBooks gives to the place on your computer where your company’s financial information is stored. When you select the option to open a new company file, the EasyStep Interview begins. Follow along, answering each question as well as you can. You can make corrections later if necessary.
Open a New Company File and Follow the Interview Questions 1
2
Select the Create a New Company File option from the No Company Open dialog. Selecting this option opens the EasyStep Interview. If the Welcome Screen doesn’t open automatically, choose File, New Company from the menu.
1
Click the Start Interview button to begin the EasyStep Interview.
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Continued, next page
Setting Up Your Company Accounts with the EasyStep Interview
13
3
Enter the name under which your company does business and the legal name of your company.
4
Enter the federal identification number for your company. This will be needed if you will be preparing payroll in your QuickBooks file.
5
Enter the address, phone number, and other requested information about your company; this information can then be added to your business forms, such as a customer invoice.
6
Click the Next button to proceed through the EasyStep Interview.
7
Choose an industry from the list provided if you would like QuickBooks to take care of the basic setup of accounts for your company. Any accounts created by QuickBooks can be changed, removed, or customized later.
8
Click Next.
9
You will be prompted to identify the type of legal organization that describes your company, such as sole proprietorship, LLC, and so on.
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10 Click Next.
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11 You will be prompted to enter the
first month in your business year (typically, January). Click Next. 12 The administrator password step is
optional. You can enter an administrator password or leave the field blank. If you enter a password, re-enter the password to make sure there is no error, and then click Next. (Not shown).
9
Did You Know? Password protection is important. Your QuickBooks program contains sensitive information about your company, and this information deserves protection. Although password protection is optional, this feature is recommended.
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13 Click Next (not shown) to create
the file. You are asked to give your company file a filename. All your company data is stored in this file.
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14 Click Save (not shown). From this
point forward, you can exit the interview at any time (see “Stopping, Restarting, and Completing the Interview,” later in this chapter) and your data is saved.
Did You Know? You can change the company data you entered during the interview. After you are running your QuickBooks program, select Company, Company Information from the QuickBooks menu and make any necessary changes.
See Also See “Entering Historical Data” in this chapter for information on entering previous transactions in QuickBooks.
Did You Know? You can start a new company file in QuickBooks without using the EasyStep Interview. On the first screen of the EasyStep Interview, you are given the option to Skip Interview. But unless you are a QuickBooks expert, don’t do it. Skipping the interview is not recommended for beginners and really leaves a lot of data entry to chance, even if you are an experienced QuickBooks user. If you insist on setting up a company on your own, you’ll find information throughout this book that can help you enter your company data without the EasyStep Interview.
Setting Up Your Company Accounts with the EasyStep Interview
15
Questions You May Have to Answer The EasyStep Interview is a quick process, but to get from screen to screen, you need to be able to answer some basic questions about your company. Most of these are yes-or-no questions, and they don’t ask for specific company amounts. Here are the questions you encounter on the early EasyStep Interview screens: ◆
Select your industry. Choose from a list of sample industry choices.
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What do you sell? Indicate if you sell services, products, or both.
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How will you enter your sales in QuickBooks? Indicate if you record your sales individually, as a daily or weekly summary, or if you use QuickBooks as a point-of-sale program.
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Do you sell products online? Yes, no, or maybe in the future.
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Do you charge sales tax? Yes or no.
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Do you want to create estimates in QuickBooks? Yes or no.
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Do you want to track sales orders before you invoice your customers? Yes or no.
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Do you want to use sales receipts in QuickBooks? Yes or no.
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Do you want to use billing statements in QuickBooks? Yes or no.
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Do you want to use invoices in QuickBooks? Yes or no.
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If yes to the preceding question, do you want to use progress invoicing? Yes or no.
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Do you want to keep track of bills you owe? Yes or no.
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Do you want the capability of printing checks? Yes or no.
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Do you want to track inventory in QuickBooks? Yes or no.
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Do you accept credit cards? Yes, no, or maybe someday.
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Do you want to track time in QuickBooks? Yes or no.
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Do you have employees? Yes (check boxes to indicate if you have W-2 employees and independent contractors) or no.
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Do you want to track multiple currencies in QuickBooks? Yes or no.
The Getting Started Checklist The EasyStep Interview establishes your company file in QuickBooks and sets up basic lists, which you can populate with your company information. Although you can start using QuickBooks as soon as you complete the brief interview, you will need to set aside time if you want to enter any historical information that needs to be included on your company financial statements. This historical information can include information from the first day of this year to the current date, as well as last year’s data for purposes of creating comparative reports.
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Start date—Determine the date on which you want your first company information to be tracked in QuickBooks. Complete company information, including all balance sheet amounts, should be entered as of the start date.
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Bank statements and cancelled checks from the start date to the present.
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Chart of accounts—If it’s available; otherwise, use a listing of the categories into which you group your company’s income and expense transactions.
You can save yourself a lot of time and frustration when setting up your company in QuickBooks by using this checklist to organize your data before you begin the setup process. Gather the company information that you want to enter in QuickBooks, and you’re ready to start the QuickBooks EasyStep Interview.
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Customer list—This includes all the people and companies with whom you regularly do business and whom you want to track in QuickBooks. Include as much of the following information as possible: name, address, telephone number, fax number, personal contact, ship-to address, sales tax status, payment terms you typically apply to each customer, and current jobs on which you are working for each customer.
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Inventory list—This includes all the items you sell, including a description of each inventory item, your cost of each item, the standard sales price of each item, the preferred supplier for each item, the quantity of each item currently on hand, and the number of each item at which a reorder request needs to be issued.
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Details of all amounts you owe as of the start date—This includes the name of the person or company to whom the money is owed and the amount owed.
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Details of all amounts owed to you as of the start date—This includes the name of the person or company who owes you money and the amount owed.
Keep in mind the fact that you don’t have to go back to the beginning of time to enter in QuickBooks every transaction since the day your company started business. See the information following this section, titled “Choosing/Changing Your Start Date,” for some pointers on how to decide how much information you’re going to put in your QuickBooks file. ◆
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Complete company name—Including d/b/a name, address, and type of business. Note also the type of tax return your company files (partnership, C corporation, S corporation, proprietorship, and so on). Federal Identification Number.
Setting Up Your Company Accounts with the EasyStep Interview
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The Getting Started Checklist continued ◆
18
Sales tax information—Include the rate at which you charge sales tax, the name and address of the taxing agency, and the amount of sales tax owed as of the start date.
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Vendor list—This includes all your regular suppliers and creditors, including the name, the address, the telephone and fax numbers, the personal contact, your account number with each vendor, and whether the vendors require a 1099 form. You will need the federal identification numbers of any vendors for whom you are required to file a 1099.
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Any existing budget information for your company.
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Employees list—You’ll need this if you plan to use QuickBooks for your payroll. Include names and addresses, Social Security numbers, rates of pay, withholding allowances and other deductions, and year-to-date information if your start date is later than January 1 or the first day on which your company does business.
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Payroll tax information—This includes your state unemployment compensation rate, local tax rates, and amounts of payroll taxes due as of the start date.
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Information about all assets owned by the company—This includes the original cost and date each item was purchased. If possible, you should also note the methods used for calculating depreciation on your assets and the accumulated depreciation to date.
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Credit card statements you have received since the start date.
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Details of all financial transactions since the start date—This includes checks written, amounts deposited, credit card transactions, and so on.
Choosing/Changing Your Start Date The start date you choose is not necessarily today’s date, but rather the date on which you want to begin tracking information in QuickBooks. When you set up a company in QuickBooks, you need to enter all transactions that have occurred in the company from the start date until today. The best start date is actually the day before the first day of a complete period; that period can be a year, a month, or a quarter. In other words, if you plan to start entering transactions for your company on January 1, you can set December 31 as your start date. That way, all the ending balances for the previous period (in this case, the previous year) will properly show as your beginning balances. Alternatively, if the business you are setting up in QuickBooks is a new business that didn’t get started until sometime after January 1, your start date will be the first day that you started doing business. If you start entering transactions on the first day of the year (or the first day that the company had any activity), the reports and financial statements you produce include information for the entire year. Having this information is particularly important when you’re gathering information at the end of the year for tax return preparation. If your business was in operation all year but you chose as a start date some date after the year has begun, the statements you produce will cover only part of this year. Next year and in future years, of course, your statements will cover the entire year. The advantage of choosing a start date that falls sometime during the year—rather than going back to the first day of the year—is that you won’t have as many transactions to enter at setup.
If it’s close to the end of the year (November or December, for example) and you don’t have a lot of spare time on your hands for tediously entering checks and deposits for the entire year, you might wait until the year ends and then enter your ending balances for the year and start entering your company transactions in QuickBooks as of January 1. If you entered a start date during setup and now want to change your start date to an earlier date, you need to go to the registers for each account where you have entered beginning balances, and change the start date and the beginning balance entry manually. To change the start date and the beginning balance entry manually, follow these steps: 1. Press Ctrl+A to open the Chart of Accounts. 2. Double-click any account name with an amount in the Balance Total column to open the register associated with that account. Only balance sheet accounts (assets, liabilities, and equity) have amounts in the Balance Total column. No registers are associated with income and expense accounts. 3. Enter the new start date as the beginning date. 4. Enter Opening Balance as the description. 5. Enter the amount of the account balance as of the start date. If you are changing your start date to a later date, you probably need to delete earlier transactions that affect income statement accounts. Transactions affecting only balance sheet accounts are probably fine as is.
Setting Up Your Company Accounts with the EasyStep Interview
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Setting Up a Bank Account
No matter what type of company yours is, you no doubt have a bank account where your receipts are deposited and from which your payments are made. Early in the EasyStep Interview, you are asked to set up your bank account.
Set Up a Bank Account 1
2
3
Enter the name of your bank account. You can use either the actual name of the bank or a descriptive name for the account (such as Checking Account or Savings Account).
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You can enter the bank account number and routing number. This information is required if you plan to activate the account for online banking. Indicate whether you opened this account before or after your start date.
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Click Next.
5
If you indicated that you opened this account before your start date, enter the date of the last bank statement you received prior to your start date. If you are setting up a new bank account where your first bank statement was issued after your start date, use your start date as the bank statement date.
6
Enter the ending balance amount from the last bank statement prior to your start date. If you are setting up a new bank account, enter 0 as the balance at the start date.
7
Click Next to proceed to the next part of the EasyStep Interview.
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7
Setting Up Income and Expense Accounts
As you progress through the EasyStep Interview, you reach the point where you are asked to review your company’s income and expense accounts. Income and expense accounts are used to categorize your company’s cash in and cash out. In addition to these types of accounts that QuickBooks provides with its standard chart of accounts, you will no doubt need to add accounts that are unique to your business. When the EasyStep Interview is completed, you can add your own income and expense accounts and remove any unwanted accounts from the standard list assigned by QuickBooks.
Setting Up Income and Expense Accounts 1
2
Scroll through the list of income and expense accounts provided by QuickBooks, comparing the accounts on that list to those you need for your business. Make a note of any income or expense accounts you need to add and those you want to remove.
2
Place a check mark next to any accounts you want to add to your own list of accounts. Uncheck those accounts you won’t need.
3
Click Restore Recommendations if you decide you want to remove the changes you added to the standard list of accounts chosen by QuickBooks.
4
Click Next to proceed through the EasyStep Interview.
3
4
Did You Know? See Also See “Adding Accounts” on page 73 for information on changing account information after you have completed the EasyStep Interview.
The QuickBooks recommended accounts are tailored to your business. Based on the type of business you indicated earlier in the interview, QuickBooks selects a list of income and expense accounts that should provide a good starting point for the accounts you need to use. You can add to the QuickBooks recommended list of accounts by checking off the additional accounts you want. And by keeping notes on the accounts you want to add in addition to those on the list, you can add extra accounts later.
Setting Up Your Company Accounts with the EasyStep Interview
21
Stopping, Restarting, and Completing the Interview
You don’t have to complete the EasyStep Interview in one session. If you need to take a break, you can exit from the EasyStep Interview without losing your place. When you return to QuickBooks, you’ll start right where you left off in the interview.
Stop and Restart the EasyStep Interview 1
Click the Leave button in the EasyStep Interview window.
2
Click OK (not shown). TIMESAVER Pressing Alt+L accomplishes the same thing. The Interview window closes, but the place where you left off is remembered.
3
Open QuickBooks, and you are automatically returned to the EasyStep Interview where you left off.
1
2
22
Entering Historical Data There is a proper order for entering your company information in QuickBooks. Follow this schedule, and you’ll find the entire setup process to be straightforward and efficient. This schedule applies to situations where you need to enter historical data—that is, previous transactions—in QuickBooks. Complete the setup process using the EasyStep Interview to open your new company file in QuickBooks, including deciding on a start date. Follow the instructions in Chapter 3, “Adding or Changing Information After the EasyStep Interview Is Completed,” to enter the company’s past transactions in the following order: 1. Enter all the bills your company has received since the start date, in the order received. These bills will be entered as payables.
3. Enter all the money your company has received since the start date. This includes cash, checks, credit card payments, and loans. Customer payments must be applied against open invoices to close out receivables. 4. Enter the actual deposits you have made since your start date. 5. Enter the payments for all the bills you have paid since your start date. Bill payments must be applied to open bills to cancel open payables. 6. Enter all the payroll transactions that have occurred since the start date. 7.
Enter all other checks you have written since the start date.
2. Enter all the invoices your company has issued since the start date. These invoices will be entered as receivables.
Setting Up Your Company Accounts with the EasyStep Interview
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2
Setting Up and Using Payroll Features As an employer, it is your job to keep track of and pay salaries and wages to your employees and contractor fees to your subcontractors. Although paying payroll and contractor fees can be time-consuming and tedious when done on paper and with a calculator, you’ll find that with QuickBooks, the process is quick and the record keeping is excellent. You’ll be able to produce all the federal payroll tax forms you need, right in QuickBooks, including the following:
What You’ll Do Set Payroll and Employee Preferences Set Up Employees Set Up Employee Payroll Information Set Up Employee Payroll Taxes
◆
Form 941—Employer’s Quarterly Federal Tax Return
Set Up Sick and Vacation Benefits
◆
Form 943—Employer’s Annual Federal Tax Return for Agricultural Employees
Set Up Payroll Deductions
◆
Form 944—Employer’s Annual Federal Tax Return
◆
Form 940—Employer’s Annual Federal Unemployment (FUTA) Tax Return
Print Paychecks
◆
Form W-2—Wage and Tax Statement
Prepare and Pay Payroll Liabilities
◆
Form W-3—Transmittal of Wage and Tax Statements
◆
Form 1099—Information Returns
◆
Form 1096—Annual Summary and Transmittal of U.S. Information Returns
Depending on the payroll option you choose, you can print any of the tax forms or have Intuit prepare them for you (see “Choosing from the Various QuickBooks Payroll Options” on page 27). In addition, QuickBooks provides the ability to set up payroll deductions for 401(k) plans, health insurance, health savings accounts, employee reimbursements, flexible spending plans, and dozens of other deductions. Finally, you can produce payroll reports that summarize all your employee payroll activity and company payroll expenses and liabilities.
Pay Employees
Use Direct Deposit
2
Create Employer Payroll Reports Report Payroll Taxes with Form 941 Pay Federal Unemployment Compensation Taxes with Form 940 Prepare W-2 Forms Issue W-3 Forms
Set Up Independent Contractors for 1099 Forms Set 1099 Preferences Issue 1099 Forms
Outsource Payroll
25
Setting Payroll and Employee Preferences
If you use QuickBooks to produce your payroll, there are settings you can configure, the most obvious of which is turning on your access to the payroll features. On the payroll preferences screen, you can also indicate printing options and reporting options, and you can create some default settings for your employees.
Set Up Payroll Preferences 1
Select Edit, Preferences.
2
Click the Payroll & Employees icon.
3
Click the Company Preferences tab.
4
Click the Full Payroll option if you use any of the QuickBooks payroll service options to calculate or issue paychecks.
5
Click No Payroll if you don’t have a payroll or you use an outside service.
6
Click Complete Payroll Customers to use the completely outsourced payroll option provided by QuickBooks.
7
Check the Copy Earnings Details From Previous Paycheck and Recall Quantity Field on Paychecks boxes and Recall Hour Field on Paychecks to have QuickBooks carry forward information from prior paychecks relating to amounts based on quantities.
8
Check the Job Costing and Item Tracking for Paycheck Expenses box to report payroll taxes by customer job, class, or type of service.
9
Choose a sort option for the Display Employee List By.
10 Check Mark New Employees as
Sales Reps to instruct QuickBooks to add all new employees to your sales rep list. 11 Check the Display Employee Social
Security Numbers in Headers on Reports box to have employee Social Security numbers appear in report headers.
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6 7
2 8
9
10 11
Choosing from the Various QuickBooks Payroll Options If you want your payroll calculations to be reliably accurate and automatic, you can subscribe to one of the QuickBooks payroll services. For more details and custom quotes for Assisted Payroll, call Intuit at 866-820-6379. You can also explore the various payroll options online at http://payroll.intuit.com. You can choose from several options to meet your payroll needs. Select the option that provides the type of service you need and that fits your budget: 1. Basic Payroll: $99/year for up to three employees; $199/year for four or more employees—Provides you with downloadable federal and state tax tables and provides you with the information you need to fill out federal quarterly and annual tax forms. You enter salary and wage information in your QuickBooks program, QuickBooks calculates the withholdings, and you print the checks. The direct deposit feature is included for an extra fee. Federal and state tax forms are not included. 2. Enhanced Payroll: $199.20 in the first year for up to three employees, $249/year thereafter; $299.20 in the first year for four or more employees, $349/year thereafter—Same features as Basic Payroll, plus federal and state payroll tax forms are included. Also included are worker’s compensation tracking, calculation, and reports, and net to gross for bonus calculations. You can file payroll tax forms electronically and make electronic payments as well.
3. Assisted Payroll: From $60/month— Same features as Enhanced Payroll, but with the added benefit of having Intuit prepare and mail state and federal payroll tax forms and make payroll deposits for you. You transmit payroll information, and all the processing is done by QuickBooks; then you download the results. Payroll records in QuickBooks are locked after being approved because Intuit takes responsibility for the tax filings. Also, you can add the QuickBooks Direct Deposit plan for an additional fee of $1.00 per paycheck to provide direct deposit services for your employees. W-2 forms can be printed and delivered to you, and you have access to HR specialists and other tools. 4. Intuit Online Payroll: $29.95/month (first six months waived for new subscribers)—You can use this option to access your payroll from any location, print paychecks and filled-in federal tax forms from any location, or give your accountant free access to your online payroll. Intuit Online Payroll does not require the use of QuickBooks financial software.
Setting Up and Using Payroll Features
27
10
Set Up Employee Preferences 1
With the Payroll & Employees preferences window still open, click the Employee Defaults button to set up employee default preferences.
2
Enter the name of the earnings item (such as Salary or Regular Pay) that normally should appear on each paycheck. Note that if you haven’t set up these payroll items in advance, you will be prompted to do so.
3
If every employee earns the same amount, enter an amount under Hourly/ Annual Rate. Otherwise, leave this field blank because later you will enter a unique amount for each employee.
4
If you want to use a Payroll Schedule, choose an option from the drop-down list or click Add New to create a new schedule.
5
If you do not use the Payroll Schedule feature, choose an option in the Pay Frequency field for your pay periods. (The Pay Frequency is filled in automatically if you use the Payroll Schedule.)
6
If you have previously selected the preference to track time, check Use Time Data to Create Paychecks and you will be enabled to use information from the QuickBooks Timer or time sheets to calculate paychecks.
7
Enter items that appear on all or most paychecks in the Item Name field, such as deductions for health insurance or retirement contributions.
8
Enter amounts only if the deduction amounts are the same for each employee or most employees. Otherwise, leave the Amount field blank because later you will enter unique amounts for employees.
9
Click OK.
10 Click OK on the main Preferences
window.
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9
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8
Did You Know? The Payroll Schedule feature enables you to set up a schedule for processing your payroll so that your employees are paid on a particular day. You’ll indicate the frequency with which you pay your employees and the days or dates on which you want them to receive their payments, and QuickBooks determines a processing schedule that incorporates weekends and federal holidays.
See Also See Chapter 9, “Tracking Time,” on page 221 for more information on the automatic time-tracking features that are available to QuickBooks Pro users.
Setting Up Employees
Enter Employee Personal Information 1
Click the Employee Center button on the QuickBooks toolbar or select Employees, Employee Center (not shown).
2
Click the Employees tab.
3
Press Ctrl+N to open the New Employee window.
4
Make sure the Personal tab is selected.
5
Enter the employee’s title and name.
6
Enter the way in which the employee’s name should appear on paychecks. (QuickBooks enters the same name you typed in Step 5, but you can change this if necessary.)
7
Enter the employee’s information in the SS No., Gender, and Date of Birth fields.
For each employee in your organization, certain pieces of information must be included in the payroll system. To process paychecks and prepare tax documents for your employees, you need to record the correct name, address, and Social Security number of each employee. In addition, QuickBooks gives you an opportunity to keep track of personal employee information, such as telephone and fax numbers, an email address, and the date of hire, all in one convenient location.
2
4
5 6
Did You Know?
7
You can enter additional information in the New Employee window, such as an employee number. On the next page, you’ll see that QuickBooks gives you the opportunity to compile many other pieces of information for your employees all in one place.
Setting Up and Using Payroll Features
29
2
1
Enter Employee Address Information 1
Click the Address and Contact tab in the New Employee window.
2
Enter the employee’s contact information, including address and telephone number, in the Home Address area.
3
Enter any other contact information you have for this employee, such as a cellular or pager number or email address.
4
Click the Additional Info tab.
5
Enter an employee ID number, if applicable, in the Account No. field.
6
Choose a Billing Rate Level for this employee, if applicable.
7
Enter other information for this employee in the Custom Fields area.
8
Click OK.
9
Click Leave As Is in the vacation/sick time dialog (not shown) if you are not yet ready to set up payroll information. Otherwise, click Set Up Now and continue to the next task.
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5
4
8
6 7
Did You Know? You can add custom fields for your employees. QuickBooks provides the opportunity to customize the setup screens for customers, vendors, and employees. Click the Define Fields button on the Additional Info tab and then add your own fields to the list and check whether you want these fields available for your customer, vendor, and employee setups.
30
Did You Know? You can use the QuickBooks Billing Rate Level feature to set billing rates for different types of jobs and employees. You can choose a fixed hourly rate for this employee or select a different rate for the different types of jobs offered by your company. Assign an employee to a billing rate level, and then his time will be billed at the appropriate rate for whatever job he is performing.
Setting Up Employee Payroll Information 1
If you clicked Set Up Now in the previous task, you can skip to Step 6. If you closed the New Employee window after the previous task, open the Employee Center and click the Employees tab to view the list of your employees.
2
Click the name of the employee for whom you want to set up payroll information.
3
Press Ctrl+E to edit the employee information.
4
Click the drop-down arrow next to the Change Tabs list.
5
Select the Payroll and Compensation Info tab.
6
Enter the annual salary or hourly rate this employee receives.
7
In the Payroll Schedule or Pay Frequency fields, indicate the schedule used by your company.
8
Enter any deductions that are regularly taken from this employee’s pay in the Additions, Deductions, and Company Contributions area. Deduction amounts are automatically entered as negative amounts.
9
Continue to the next task to enter payroll tax information for this employee.
After you’ve entered the specific personal information about an employee, it’s time to enter the payroll information for the employee. Here you’ll enter the amount of salary or hourly wage the employee earns, as well as any deductions, other than taxes, that you will withhold from the employee’s paycheck. 1
2
4 5
5 7 6
8
Setting Up and Using Payroll Features
31
Setting Up Employee Payroll Taxes
After you’ve set up the basic personal and payroll information for an employee, you need to enter information about payroll taxes. Your employees will each fill out a W-4 form (Employee’s Withholding Allowance Certificate) and a comparable state tax information form, providing information about marital status, dependents, and more.
Set Up Federal Payroll Tax Information 1
If the Edit Employee or New Employee window is still open on your screen, you can skip to Step 6. Otherwise, open the Employee Center to view the Employees list (not shown).
2
Click the name of the employee for whom you want to set up payroll tax information.
3
Press Ctrl+E to edit the employee information.
4
Click the drop-down arrow to display the Change Tabs list (see Steps 3–5 of the preceding task for visuals for these steps).
5
Select Payroll and Compensation Info tab.
6
Click the Taxes button.
7
Make sure the Federal tab is selected.
8
Make a selection from the Filing Status list for this employee, based on W-4 information.
9
In the Allowances field, enter the number of allowances the employee is claiming, based on W4 information.
7
10 In the Extra Withholding field,
indicate whether the employee has requested extra tax withholdings on the W-4 form. 11 Check all federal withholding
options that apply to this employee.
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5
11
9
10
8
1
Click the State tab.
2
Enter the state in which the employee works.
3
Enter the state for which you will withhold taxes. Typically, the employee fills out a form similar to the federal W-4 form for the state in which he works.
4
Enter the number of allowances the employee is claiming, based on information supplied by the employee.
5
Enter any additional required state information for this employee.
6
If the employee is subject to local taxes, click the Other tab and fill out any required information.
7
Click OK.
Did You Know? You can get a blank copy of the W-4 form on the Internet. The Internal Revenue Service makes the W-4 form available for printing. Go to http://www.irs.gov/pub/irs-pdf/fw4.pdf for a copy of the current year Form W-4, Employee’s Withholding Allowance Certificate. Note: The IRS doesn’t make forms for the next year available online until near the end of each calendar year.
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1
Set Up State and Local Payroll Tax Information
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6
7
3
Did You Know? Other tax information might be required. If QuickBooks is aware of any state or local tax issues pertaining to the state in which this employee works, you see a reminder window that tells you how to enter other required information. State tax information can be entered in Payroll Preferences. Choose Edit, Preferences, click the Payroll & Employees option, and then choose Company Preferences. Click Employee Defaults, then Taxes and State to set state tax preferences. NOTE: Even in states with no state income tax, the state portion must be completed or else the state unemployment tax will not calculate correctly.
Setting Up and Using Payroll Features
33
Setting Up Sick and Vacation Benefits
QuickBooks enables you to track allowable sick time and vacation time for your employees. You can keep track of the amount of time to which each employee is entitled, the amount of time each employee actually uses, and the expiration or carryover of that time.
Set Up Sick Benefits 1
Follow Steps 1–5 of the task “Set Up Federal Payroll Tax Information” on page 32.
2
Click the Sick/Vacation button.
3
Enter the number of hours of sick time available to this employee as of the beginning of the current year.
4
Enter the number of hours of sick time the employee has used so far this year.
5
Enter the method your company uses for accruing sick time—is it an annual accrual, a per-paycheck accrual, or a per-pay hour accrual?
6
Based on your choice in the previous step, enter the amount of sick time accrued for each accrual period.
7
Enter the maximum number of hours of sick time that can be made available to this employee.
8
34
Check Reset Hours Each New Year if the sick time accrual is to be reset to zero at the beginning of each year.
2
3
4
6 5 7 8
Set Up Vacation Benefits 1
Enter the number of vacation hours available to this employee at the beginning of the current year.
2
Enter the number of vacation hours this employee has used so far this year.
3
Enter the method your company uses for accruing vacation time.
4
Based on your choice in the previous step, enter the amount of vacation time accrued for each accrual period.
5
Enter the maximum number of vacation hours your company allows an employee to accrue.
6
Check Reset Hours Each New Year if the vacation time accrual is to be reset to 0 at the beginning of each year.
7
Click OK.
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4 6
5
Determining Year-to-Date Payroll Tax-Related Liabilities When it’s time to record your year-to-date payroll taxes, you might need to go back to the beginning of the year and summarize all your payroll transactions. If, for example, it is late June when you get ready to set up your payroll in QuickBooks, you’ll need to compile all your payroll tax expenses from January through June. These are the taxes you’ll compile: ◆
Federal income tax withheld
◆
FICA withheld (Social Security tax)
◆
Medicare tax withheld
◆
State income tax withheld
◆
Employer share of FICA (Social Security tax)
◆
Employer share of Medicare tax
◆
Federal unemployment tax
◆
State unemployment tax
In addition, you will need to enter year-to-date amounts you have withheld from employees for benefits such as health insurance, health savings account contributions, and retirement plans. You’ll also need to record year-to-date employer contributions to employee benefit plans.
Setting Up and Using Payroll Features
35
Entering Year-to-Date Payroll Amounts If you started using QuickBooks as of a date after the start of the calendar year, you need to enter year-to-date payroll amounts to ensure that your payroll records are complete. No matter what date you set as your start date, your payroll records must include all transactions for the entire calendar year.
◆
All federal taxes paid or withheld, including federal income tax, Social Security tax, and Medicare.
◆
All state and local taxes paid or withheld, including state income tax, local income tax, and any other state and local taxes incumbent upon the employee.
If you aren’t using one of the QuickBooks payroll services, you can enter your year-to-date information in the form of a journal entry. If you use a QuickBooks payroll service, you will be prompted to enter year-to-date information during the payroll setup.
◆
All other deductions withheld from employees and also those paid for by the employer, including such benefits as health insurance, retirement contributions, and any other benefit payments.
For each employee, be prepared to enter the following information relating to wages paid since the beginning of the year until the time at which you begin entering actual paychecks in QuickBooks: ◆
Total wages paid, including salaries, hourly wages, overtime payments, bonuses, and any other earnings from employment.
In addition to payments made to employees and deductions and payments made on behalf of employees, you will be prompted to enter payroll tax payments and benefit plan payments that have been paid by the company to date.
Did You Know? Want a quick and painless method to set up your payroll when starting to use QuickBooks payroll after the first of a year? From the Employees Menu, select Payroll Setup. Simply work through the steps one-byone, and in no time, you will have your payroll set up, easily entering your historical payroll totals.
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Setting Up Payroll Deductions
Employers deduct a variety of amounts from employee pay. In addition to payroll taxes, there can be deductions for contributions to a disability plan, health insurance plan, 401(k) plan, fundraising organization such as United Way, cafeteria benefit plan, and more. The process for setting up each of these items is similar. For this example, we’ll look at the procedure for setting up a payroll deduction for contributions to a 401(k) plan.
Set Up Payroll Deductions 1
Select Lists, Payroll Item List. TIMESAVER You could also click the payroll items icon in the payroll center.
2
Click the Payroll Item button and select New.
3
Choose your preferred method of setup. EZ Setup is recommended and has been chosen here.
4
Click Next.
5
Check the circle next to Retirement Benefits (401K, Simple IRA).
6
Click Next.
2
3
Continued, next page 4
5
6 Setting Up and Using Payroll Features
37
7 7
Check the box for 401(k) (most common).
8
Click Next.
9
Enter the name of the agency or company to whom you pay this liability in the Payee (vendor) field.
10 Enter the account number this
agency or company has assigned to you in the Account # field.
8
11 Enter the frequency and date on
which you expect to make payments to fund this 401(k) plan. 12 Click Next.
9
10
13 Click Finish to complete the setup
of your 401(k) plan.
Did You Know? QuickBooks allows you to designate employees, vendors, and others as sales reps. You can then associate sales with the reps responsible for those sales, for purposes of paying commissions or tracking their performances.
11
12
Add a new sales rep by opening the Sales Rep list. Choose Lists, Customer & Vendor Profile Lists, Sales Rep List. Press Ctrl+N to open the New Sales Rep window. Enter the name of the rep, the initials you will use to track this rep, and the type of rep (employee, vendor, or other). When you create an invoice, there is a Rep field where you can choose the sales rep responsible for the sale. Produce reports showing the performance of your sales reps by choosing Reports, Sales, Sales by Rep Summary (to see the total sales made by each sales rep), or Sales by Rep Detail (to see each sale made by each sales rep).
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13
Paying Employees
1
If you’ve worked through the tasks in this chapter so far, you’ve set up all the information necessary for producing paychecks. Now you’re ready to produce some actual paychecks! If you use the QuickBooks Scheduled Payroll feature, you can pay all your employees at once. If you prefer to handpick the employees that are to be paid, see “Selecting Employees for Special Payroll Preparation.” You can use the Scheduled Payroll for your normal payroll checks and use the Special Payroll for issuing bonus checks.
Select Employees, Pay Employees, Scheduled Payroll.
2
TIMESAVER Another way to initiate a payroll is to open the Employee Center and click the Payroll tab. 2
Click the Start Scheduled Payroll button.
3
Verify the date in the Pay Period Ends date.
4
Verify the date in the Check Date field.
5
Verify the cash account in the Bank Account field, on which the paychecks are to be drawn.
6
Enter or correct any gross amounts or times for employees.
7
Click an employee’s name to open the Preview Paycheck window where you can review and make changes to all income and deduction items for the selected employee.
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6
Continued, next page
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9
Setting Up and Using Payroll Features
39
8
Click Save & Close to close the Preview Paycheck window.
9
Click Continue when all employee information is correct (see previous page).
10 Click Create Paychecks when the
Review and Create Paychecks window appears.
See Also See “Printing Paychecks” later in this chapter to learn more about how to properly complete this task. 8
10
40
2
Selecting Employees for Special Payroll Preparation 1
Click the Employee Center button on the QuickBooks toolbar or select Employees, Employee Center.
2
Click the Payroll tab.
3
Click the Unscheduled Payroll if you want to edit paychecks for individual employees. Alternatively, you can choose Related Payroll Activities and Create Termination Check if you are issuing a final paycheck for an employee.
3
4
5
6
TIMESAVER You can also choose Employees, Pay Employees, Unscheduled Payroll, or Termination Check from the menu. 4
Enter the ending date for this pay period.
5
Enter the date on which the checks will be issued.
6
Verify the account from which funds should be drawn.
7
Click to check each employee who will be paid.
8
Click the Continue button. Each check appears for your approval.
9
Click Open Paycheck Detail to display detailed information about the selected paycheck.
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8 9
Continued, next page
Setting Up and Using Payroll Features
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10
10 On the individual check summary,
enter current period payroll information and make any necessary changes to deductions, withholdings, and employer contributions. 11 Click Save & Next if you checked
more than one employee. The payroll form for the next selected employee appears. 12 Click Save & Close when all payroll
information has been entered. 13 When the payroll record for the last
employee has been completed, you are returned to the Review and Create Paychecks window. Click Create Paychecks. 14 Click Print Paychecks if you plan to
print paychecks from your QuickBooks program. Click Print Pay Stubs if you write your checks by hand or if you use direct deposit. 15 Check all paychecks you want to
print, and then click OK, or select the pay stubs you want to print, and then click Print.
Did You Know? You can make entries or changes only in white areas of the Preview Paycheck window. The gray areas are computed by QuickBooks and reflect year-to-date totals. Payroll deductions must be brought upto-date. If you’re entering historical payroll information, don’t forget to include payroll deduction amounts in your historical entries.
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11
12
Printing Paychecks
1
When you’re ready to print checks, select File, Print Forms and then select Paychecks.
2
In the window that displays, verify the account from which the payroll is drawn.
3
Verify the starting check number for the paychecks.
4
Click Select All or place a check mark next to each paycheck you want to print.
5
Click OK to open the Print Checks dialog.
6
7
Usually the tasks of preparing and printing paychecks are done at different times, if for no other reason than the fact that you need to change the paper in your printer to payroll check forms. When you’re ready to print your payroll (and the proper forms are in your printer!), the following instructions will guide you.
In the Print Checks window, verify the printer and the check form (and make sure you have loaded the check forms into your printer!).
2
3
5
4
6
7
Click Print.
See Also You can save time by not printing your payroll checks by having your employees’ paychecks directly deposited into their bank accounts. See the next section in this book for more information.
Setting Up and Using Payroll Features
43
Using Direct Deposit
1
Activate direct deposit by choosing Employees, My Payroll Service, Activate Direct Deposit.
2
To assign direct deposit to an employee, open the Employee Center and click the Employees tab (not shown).
3
Double-click on the name of an employee who wants to receive direct deposit (not shown).
4
Click the drop-down arrow next to the Change Tabs field and select Payroll and Compensation Info.
5
Click the Direct Deposit button.
6
Click the Use Direct Deposit button (not shown).
7
Indicate if the money is to be deposited into one account or two (not shown).
8
Enter account number(s) and bank routing number (not shown).
9
If two accounts are chosen, enter the amount to be deposited in the first account. The remainder will be deposited in the second account (not shown).
10 Click OK to close the Direct Deposit
window (not shown). 11 Click OK to close the Edit Employee
window.
44
After your company is set up to use a direct deposit service for paychecks, executing the directly deposited paychecks is a simple process. You indicate on each employee’s payroll screen whether that employee uses direct deposit, and the rest is left to the electronic transfer genies. This task assumes that the employee’s bank information has already been set up as described in “How Does Direct Deposit Work?” on the next page.
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5
Did You Know? The choice for direct deposit is reversible. You can remove the direct deposit option by editing the employee information as described previously, clicking the Direct Deposit button, and removing the direct deposit information.
See Also See “How Does Direct Deposit Work?” in this chapter for detailed information about setting up a direct deposit service.
How Does Direct Deposit Work? If you use one of the payroll services provided by QuickBooks, for an additional fee you can sign up for direct deposit service. You are charged $.99 per paycheck to use the direct deposit service. You can get more information by calling Intuit at 866-820-6382. With direct deposit, your employees have the opportunity to have their paychecks deposited directly into their bank accounts. Alternatively, employees can request that the paycheck amount be divided between two accounts. Employees who want to use direct deposit need to sign a form providing you with the name, account number, and routing number of each bank or financial institution they want to use and a description of the type of account they have (checking or savings, for example). Employees can designate a specific amount or a percent of their paycheck that will be deposited in the first account. If less than
100% is to be deposited in the first account, the balance of the check is deposited in the second account specified. When you as an employer sign up for direct deposit with QuickBooks, you receive a packet in the mail that includes a PIN for use in setting up the service, as well as a sample employee form you can use to collect information from your employees. Set up direct deposit information for each employee by selecting Employee List from the Lists menu, double-clicking an employee, and clicking the Payroll and Compensation Info tab for that employee. Click the Direct Deposit button and enter the required information. Note that using Direct Deposit might require processing payroll two business days before it reaches the employees’ bank accounts.
Setting Up and Using Payroll Features
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Preparing and Paying Payroll Liabilities
The previous sections in this chapter have provided easy–to-follow instructions for setting up your employees so you can pay them in a timely manner. Indeed, a very important task. There is another task that is just as important—to remit to the state and federal agencies the payroll taxes withheld and those payroll tax costs that the company incurs with each payroll. Making these payroll payments accurately and timely can help your company avoid expensive late fees and penalties for errors or late filings. QuickBooks takes all the worry from you by providing an easy-to-use, accurate Pay Scheduled Liabilities workflow that is detailed in this section.
Edit Tax Payment Due Dates / Methods 1
Open the Employee Center by clicking on the icon with the same name or selecting it from the Employee menu.
2
Click on the Payroll tab.
3
In the Pay Scheduled Liabilities Pane, select Related Payment Activities from the drop-down menu.
4
Select the Edit Payment Due Dates / Methods.
5
From the QuickBooks Payroll Setup dialog that displays, select the scheduled payment and then click the Edit button.
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In the Edit Payment Schedule window, complete the Payee field by selecting from the drop-down list the vendor you remit the payment to, or type in the agency name if it is not already on your vendor list.
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From the Payment drop-down menu, select from one of the predefined time schedules, or click in the Let Me Use a Different Payment (Deposit) Frequency to see more options to meet your specific needs.
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Click Finish to be returned to the QuickBooks Payroll Setup dialog. Select another payroll tax item or click Finish Later to be returned to the Employee Center.
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Did You Know? Want to avoid worrying about your payroll? You should consider signing up for Intuit’s Assisted Payroll. With an Assisted Payroll subscription, you conveniently process your payroll in QuickBooks, but let Intuit handle the payments to the state and federal agencies, as well as all monthly, quarterly, or annual filings. Assisted Payroll is a worry-free solution for your payroll processing needs. For pricing information, see page 27.
Setting Up and Using Payroll Features
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Pay Payroll Liabilities 1
Open the Payroll Center from the Employees menu or from the Home page.
2
Select a payment in the Pay Scheduled Liabilities window. Click the View/Pay button.
3
When the Liability Payment form opens, it is already completed for you! Simply click Save and Close if you are printing the check.
4
If your business has signed up for e-Pay, click the e-Payment radio button and QuickBooks will process your payment to the IRS directly.
5
To print your payroll liability payment, click the Print icon on the top right of the liability check. To print the liability payment with other checks, save the form without printing, then go to File, Print Forms, Print Checks. Select your check(s) to print, and type in the first numbered check being placed in your printer.
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See Also See the “Printing Paychecks” section in this chapter for more information.
Did You Know? You can make paying your payroll liabilities even easier with e-Pay. With e-Pay, you prepare the payment in your QuickBooks data and then transmit your payment directly to the IRS (Internet connection required). To find out more about e-Pay, click the How Do I e-Pay link on the Liability Payment form created previously in Step 3.
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Creating Employer Payroll Reports
QuickBooks provides a variety of payroll reports to meet your needs. You can generate a payroll report on each employee, create a summary of your payroll deductions, summarize your entire payroll, show year-to-date tax liabilities, and more. Here we’ll create a payroll summary report and a year-to-date payroll tax report.
View a Payroll Summary Report 1
Click Reports, Employees & Payroll; then click Payroll Summary from the side menu.
2
Select the range of dates you want to cover in your report.
3
If necessary, click the Refresh button to update the report.
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Drag the bottom scrollbar to the right to view payroll information for all your employees.
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View Year-to-Date Payroll Liabilities 1
Select Reports, Employees and Payroll, Payroll Liability Balances.
2
Verify the dates for review. By default, it is the current calendar year through the end of the last month. Change the dates as needed. Tip: If you have older dated payroll liabilities not paid, you should leave the From date blank and select the proper To date. The report will then display all payroll liabilities due.
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Setting Up and Using Payroll Features
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Reporting Payroll Taxes with Form 941
Form 941 is a quarterly payroll tax form on which you report federal income tax withheld, as well as Social Security and Medicare tax. Because these taxes are based on the total wages you paid your employees, and because all this information is already available if you use QuickBooks for processing your payroll, preparing this form is easy.
Prepare Form 941 1
Select Payroll Tax Forms & W-2s, Process Payroll Forms from the Employees menu. 2
TIMESAVER You can also click the Process Payroll Forms icon on the Payroll tab in the Payroll Center. 2
Select the Federal Form option.
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Click OK.
4
Select Quarterly Form 941/Sch. B.
5
Verify that the filing quarter is correct.
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Verify that the Quarter Ending date is correct.
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Click OK.
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You might see a dialog box explaining why the form on your screen differs from the form that will print. Click OK to close this window.
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Check the appropriate box to indicate whether you are required to prepare Schedule B.
10 Enter a state code if the state in
which you paid taxes is different from the state of your company’s address. 11 Chances are good that these
options won’t apply to you, but check the box and enter the date of your last tax return if you no longer plan to pay payroll taxes. 10
12 Check the box if you are a seasonal
employer. 13 Click Next.
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14 Verify the number of employees
who were on your payroll on the 12th day of the current quarter for which you are preparing this form. 15 On the next screens, verify that the
numbers calculated by QuickBooks are correct. If the numbers are not correct, fix the problems in QuickBooks and then return to the 941 form to verify that it is correct. 16 If there is an overpayment, check
the appropriate box to indicate whether you want the overpayment credited to the next return or refunded. 17 Click Next. 18 Verify the amounts on Schedule B if
14
you are required to prepare this form (not shown). 19 Click Next if you want to view filing
and printing instructions. 20 Click the appropriate box to
perform one of these tasks: ◆ Save As PDF—Saves your form and protects it in a PDF format. The form can then be viewed in Adobe Reader. ◆ Print for Your Records—Sends your form(s) to the printer. ◆ Check for Errors—Verifies that all the necessary information is on the form. ◆ Submit Form—Reminds you to print a copy for your records and provides you with an opportunity to e-file your form, if you have signed up for this service. 21 Click Save and Close when you are
finished with the form.
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Paying Federal Unemployment Compensation Taxes with Form 940 Pay Federal Unemployment Compensation Taxes with Form 940 1
Select Payroll Tax Forms & W-2s, Process Payroll Forms from the Employees menu.
2
Select Federal Form.
3
Click OK.
4
Click Annual Form 940/Sch. A.
5
Verify the filing year.
6
Click OK.
Throughout the year, you might be required to make deposits of federal unemployment compensation tax. Once a year, you are required to file a federal Form 940 reporting your annual unemployment compensation tax liability, and at that time, you must arrange to pay any amount previously unpaid. QuickBooks can prepare this form for you to print, sign, and mail.
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7
You might see a dialog box explaining why the form on your screen differs from the form that will print. Click OK to close this window.
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On the 940 interview screen, check boxes to answer questions that apply to your company.
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Click Next.
10 Check the boxes to answer the
questions at the top of the Form 940. 11 Scroll through the Form 940 and
verify that the calculations are correct.
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12 If there is an overpayment, check
the appropriate box to indicate if you want the overpayment credited to your next return or refunded to you.
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13 Click Next to view the filing
instructions. 14 Click the appropriate box to
perform one of the tasks described next: ◆ Save As PDF—Saves your form and protects it in a PDF format. The form can then be viewed in Adobe Reader. ◆ Print for Your Records—Sends your form(s) to the printer. ◆ Check for Errors—Verifies that all the necessary information is on the form. ◆ Submit Form—Reminds you to print a copy for your records and provides you with an opportunity to e-file your form, if you have signed up for this service. 15 Click Save and Close when you are
finished with the form.
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Preparing W-2 Forms
1
Select Payroll Tax Forms & W-2s, Process Payroll Forms on the Employees menu.
2
Click Federal form.
3
Click OK.
4
Click Annual Form W-2/W-3.
5
Choose whether you are preparing W-2s for All Employees or a partial, alphabetical list.
6
Indicate the year for which you are preparing W-2 forms.
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Click OK.
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Click a check mark to the left of each employee who is to receive a W-2 form, or click the Mark All button to check everyone’s name.
9
Click the Review/Edit button.
Each January, all employers are required to provide employees with a Form W-2, Wage & Tax Report, summarizing the prior year’s wages and withholding. You can prepare the W-2 Form in QuickBooks and print from QuickBooks directly onto government-supplied W-2 forms, or you can choose to print on plain paper.
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9 Setting Up and Using Payroll Features
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10 Review each W-2 form. 11 If any errors appear, return to the
QuickBooks program and make corrections; then return to these forms and review. 12 Click Next to proceed to the next
W-2 form for review. 13 Click Save & Close when all forms
have been reviewed. 14 Click Print Forms when all W-2
forms have been reviewed. 15 Indicate if you want to print the
forms on blank pages or on preprinted forms. 16 Choose which copies of the forms
you intend to print at this time. 17 Click Print and Close Window
when completed.
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Issuing W-3 Forms
1
Select Payroll Tax Forms & W-2s, Process Payroll Forms on the Employees menu.
2
Click Federal Form.
3
Click OK.
4
Select Annual Form W-2/W-3.
5
Indicate the year for which you are preparing this form.
6
Click OK.
The W-3 form is a summary page that shows the totals of salaries and withholdings from all your W-2 forms. You can produce this form in QuickBooks only after you’ve completed your company’s W-2 forms. When you submit your W-2 forms to the federal government by mail, you need to include a W-3 form as a cover sheet.
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If you are returning to W-2/W-3 forms that were prepared previously, click Open Draft in the window that appears (not shown).
8
Click a checkbox to mark each employee who is to receive a W-2 form.
9
Click Review/Edit.
8
TIMESAVER Use the Mark All button to check everyone’s name at once. IMPORTANT Remember, you need to have already prepared your W-2 forms to prepare an accurate W-3 form.
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10 Click Print Forms (not shown). 11 Choose W-3, 1 per page. 12 Click Print and Close Window
when completed.
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Setting Up Independent Contractors for 1099 Forms 1
Do you hire vendors to perform services for your company and pay them without deducting payroll taxes? If so, QuickBooks can help you prepare and print 1099 forms for your vendors.
Click the Vendor Center icon on the toolbar; then click the Vendors tab to display the Vendor List.
2
Double-click a vendor to whom you think you need to issue a 1099 form (or press Ctrl+N to set up a new vendor).
3
Click the Additional Info tab.
4
Check this box to indicate that the vendor is eligible for a 1099 form.
5
Enter a tax ID number or Social Security number for the vendor.
6
Click OK.
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See Also See the sidebar, “Employees Versus Independent Contractors,” to determine if a service provider to your company should be an employee or paid as a vendor who is subject to receiving a 1099 MISC Income form at the end of the calendar year.
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Setting Up and Using Payroll Features
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Employees Versus Independent Contractors Part of the process of setting up your company in QuickBooks is choosing how to pay the people who work for you. Not everyone who works for you is an employee. QuickBooks defines employees as people who you pay for services and from whom you deduct taxes, sending that money on behalf of the employee to state and federal tax agencies. Independent contractors, on the other hand, are people you hire to do a particular job and are not your employees. You don’t withhold taxes from their paychecks. Sometimes determining whether someone who works for you is an employee or an independent contractor is difficult, so the IRS has attempted to simplify the process of distinguishing one from the other. The IRS has published a list of 20 questions to help determine whether a worker is an employee or a contractor. There’s no set number of right or wrong answers that determines how to classify the worker. Generally, the more positive answers you give to these questions, the more likely the person is an employee rather than an independent contactor: 1. Do you (as the person paying the worker) give the worker instructions that he is expected to obey? 2. Does your company provide the worker with training? 3. Are the worker’s services integrated into the regular business operation of your company? 4. Is it a requirement that the worker, personally, provide the services? 5. Is the worker prohibited from subcontracting the work? 6. Is the business relationship between your company and the worker an ongoing one?
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7.
Do you set the hours for the worker?
8. Is the worker expected to work full time for your organization? 9. Is the work performed on your company’s premises? 10. Do you instruct the worker regarding the order in which to perform his tasks? 11. Is the worker expected to submit reports (oral or written) that summarize his work progress? 12. Does the worker receive payments at regular intervals, such as weekly or monthly? 13. Does the worker get reimbursed for business and travel expenses? 14. Does your company supply the tools and supplies for this worker? 15. Does the worker have little or no significant investment in the tools used to perform the job? 16. Is the company responsible for absorbing any loss resulting from the work performed? 17. Is the worker prohibited from working for more than one company or person at a time? 18. Is the worker prohibited from making his services available to the general public? 19. Is it the company’s responsibility if the worker does not perform to the specifications of the project? 20. Is the company responsible if the worker causes any damage?
Setting 1099 Preferences 1
Select Preferences from the Edit menu.
2
Click the Tax: 1099 icon.
3
Click the Company Preferences tab.
4
Click the Yes radio button for Do You File 1099-MISC Forms?.
5
QuickBooks tracks several 1099 categories but only prints the information for Box 7: Nonemployee Compensation.
6
To assign the account or multiple accounts (usually expense account types) where you want to post these vendor expenses, select the drop down menu for Box 7 (or whichever 1099 category you will be tracking). Choose a specific account or, at the top of the list, select Multiple Accounts, and then choose several account.
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You are required to issue 1099 forms to certain contractors and vendors. To track 1099 information for the contractors you pay, and to have QuickBooks determine who qualifies for a 1099 form, you must turn on the preferences for 1099s.
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Click OK.
Setting Up and Using Payroll Features
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Issuing 1099 Forms
1
Select Print 1099s from the Vendors menu.
2
Click the Print 1099s button (click other buttons to review 1099 reports).
3
Enter the dates that cover the period for which you want to issue 1099 forms.
4
Click OK.
5
Verify which vendors should receive forms. Uncheck any vendors that don’t require 1099 forms.
6
Preview selected 1099 forms before printing. Click Close in the Preview window when you’re finished.
7
Click to print the selected 1099 forms. Click Print when the Print 1099s window appears.
8
Click to print the 1096 summary form that needs to accompany your 1099 forms when they are sent to the IRS.
You are required to supply certain independent contractors and businesses with 1099 forms. If your company plans to issue 1099 forms, the forms must be mailed to recipients by January 31 of the following year. For example, fees paid to an independent contractor in 2009 must be reported by January 31, 2010 (technically, February 1, 2010 because January 31 falls on a Sunday). QuickBooks prints the 1099 information on your government-supplied 1099 forms.
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Outsourcing Payroll
If you use QuickBooks to process your payroll, all the payroll expenses and payroll tax liabilities are already entered in your company’s financial records. If, instead, you hire an outside service to produce your payroll, the payroll expense must be entered in your QuickBooks file.
Record Payroll Expense and Payroll Liabilities 1
Select Make General Journal Entries from the Company menu.
2
Enter the date of the payroll.
3
Enter an optional journal entry number or accept the number QuickBooks has assigned to this entry.
4
Enter the name of the payroll expense account.
5
Enter as a debit the total amount of the gross payroll and related payroll expenses.
6
Enter a brief description of this transaction. The description you enter will automatically be copied to each line of the journal entry.
7
Enter the cash account that will be affected by this payroll.
8
QuickBooks automatically calculates the remainder of the journal entry and enters it as a credit for the net amount of the payroll. Verify that this amount agrees with your calculations.
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Click one of the save options.
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Adding or Changing Information After the EasyStep Interview Is Completed In the first chapter, you learned how to set up your company using the EasyStep Interview. Because the interview gathers the basic start-up information necessary to use your QuickBooks program, you can now use QuickBooks on a daily basis in a style that fits your business needs, without having to continually re-enter those pieces of information. That said, you might find that you need to enter more information into your QuickBooks company file after the interview is completed. Using the information presented in this chapter, you’ll be able to customize your QuickBooks experience so that the program produces exactly the results your company requires, as well as being able to add additional information that you might have skipped over or not thought of during the interview process. QuickBooks uses lists to keep track of everything, including your chart of accounts, your company’s vendors and customers, employees, jobs on which you’re working, different options for terms of payment, payroll items that are used for paychecks, and more. All the information that’s entered on QuickBooks forms is stored in a list. In this chapter, you’ll learn how to add to lists, change information already existing on lists, change the placement of list entries, sort lists, remove entries from lists, and combine list entries. When you change an item on a list, those changes carry through to the forms you use in QuickBooks and the reports you create.
What You’ll Do Set General Preferences Set Desktop View Preferences Set Accounting Preferences Add Accounts Use Account Numbers Sort Lists Display Lists on Forms Add Customers Work with the Customer Center
3 Add Vendors Add Items
Add Information “On-the-Fly” Move Items on a List Create Subitems
Edit Information on a List Mark List Items Inactive Delete Entries on a List Merge Entries on a List Print Lists
Search for Transactions
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Setting General Preferences
QuickBook’s general preferences affect the way the program works and provide you with an opportunity to set technical performance options, such as what happens when you press the Enter key, how information displays on your screen, and how the editing features work. After you’ve used QuickBooks for a while, you might want to revisit the general preferences and make changes to those preferences to make your time spent in QuickBooks easier or more efficient.
Set Personal General Preferences 1
Open the Preferences dialog box by selecting Edit, Preferences.
2
Click the General preference on the left side of the Preferences dialog box.
3
Click the My Preferences tab at the top of the dialog box if that tab is not already selected.
4
Check the Pressing Enter Moves Between Fields box if you want to use the Enter key to move between fields the way the Tab key works; otherwise, pressing Enter typically completes a transaction.
5
Check the Automatically Open Drop-Down Lists When Typing box if you want QuickBooks to always display a list of options for your data fields.
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If Beep When Recording a Transaction is checked, you’ll hear a “beep” sound every time you complete a transaction.
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If you want to type 1234 and have it appear as 12.34, check the Automatically Place Decimal Point box; otherwise, 1234 will appear as 1,234.00.
8
Checking the Warn When Editing a Transaction option results in a popup box appearing every time you make changes to a previously saved transaction.
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Check Bring Back All One Time Messages to restore the pop-up reminder messages that gave you an option to not see the messages again.
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10 Click here to Turn Off Pop-up
Messages for Products and Services (or uncheck if you want to start seeing them again). 11 When you check the ToolTips
option and then place your mouse over a field where the text is too long, QuickBooks displays the extended text. 14
12 The Warn When Deleting option
causes a pop-up warning to appear whenever you attempt to delete a transaction or an item that hasn’t been used.
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13 Check Automatically Remember
Account or Transaction Information if you want QuickBooks to read your mind. When using the recall options, as soon as you start typing, QuickBooks finds the customer or vendor that matches your entry and fills in the appropriate information. 14 Select Use Today’s Date as Default
for new transactions, or you can choose the Use the Last Entered Date as Default box instead. 15 Choose how you want QuickBooks
to treat customized descriptions that you enter on forms—keep the description you enter on a form even if you change the item selection (Always), remove the description when an item is changed (Never), or Ask with each circumstance.
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Did You Know? You can override customer or vendor information entered by QuickBooks. When you begin a transaction, such as writing a check, you can change the information that fills in automatically right on the form you are using. If you check Automatically Remember Account or Transaction Information, you can choose to either have QuickBooks automatically recall name and amount information from the last transaction you entered for this name, or you can choose to have QuickBooks pre-fill the account only and not the previous amount (recommended).
Adding or Changing Information After the EasyStep Interview Is Completed
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2
Set Company General Preferences 3 1
With General still selected on the left side of the Preferences dialog box, click the Company Preferences tab at the top of the box.
2
Choose whether you prefer to have time shown in Decimal or Minutes format. The Minutes choice is significant if you use QuickBooks for tracking time.
3
Check the Always Show Years as 4 Digits (1999) box, or uncheck the box if you want to display two-digit years.
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If you change the vendor or customer information on a form, QuickBooks prompts you to update the customer or vendor record. You may select the Never Update option to prevent changes to the customer or vendor information.
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Checking the box to Save Transactions Before Printing will automatically save your forms when you press the print button on the form. Click OK. TIMESAVER You can quickly update customer or vendor information while filling out a form. With your cursor in the customer or vendor field, press Ctrl+L to open the Customer or Vendor List. Double-click the name of the customer or vendor you want to edit, make your changes, click OK to save the changes, and then press Esc to close the list. IMPORTANT Save your changes. Any changes you make in the QuickBooks preferences dialog box are ignored by the program if you click the “X” or press Esc to close the preferences window. Be sure to click the OK button to save all your changes.
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For Your Information Easy Keyboard Shortcuts for Entering Dates in QuickBooks You don’t have to use any special keys such as Ctrl or Alt to take advantage of these shortcuts. Just place your cursor in a date field and type the letter or symbol listed here: Action
Shortcut
Today
t
Increase date by one day
+
Decrease date by one day
–
First day of week
w
Last day of week
k
First day of month
m
Last day of month
h
First day of year
y
Last day of year
r
Display date calendar
Alt+down arrow
Setting Desktop View Preferences
1
Select Edit, Preferences and then click the Desktop View option on the left side of the dialog box.
2
Click the My Preferences tab.
3
Choose whether you want to see one QuickBooks window at a time or multiple windows. Note that if you select One Window, you can still open multiple windows in QuickBooks; the windows just layer instead of appearing separately.
If you use QuickBooks on someone else’s computer, you might see a program that looks different from your own. The reason is that there is a variety of ways in which you can customize the appearance of your QuickBooks program. You might prefer to see a separate QuickBooks window on your screen for each transaction that is in progress, whereas other users might want to fill the screen with a single window or choose a different color scheme. If you use QuickBooks on a network, each user can have separate desktop settings. For that reason, you will see that there are only My Preferences available among the desktop view choices, and no Company Preferences from which to choose.
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Select an option for the display of your desktop. If you choose the Save When Closing Company option, every time you open QuickBooks, the program will reinstate the way your screen looked the last time you closed the program. Select Save Current Desktop to select items you want QuickBooks to restore when you open the program. A new selection, Keep Previously Saved Desktop, will be automatically added. Select Don’t Save the Desktop and your desktop will return to the QuickBooks start-up desktop each time you reopen the program. IMPORTANT Saving a desktop can slow your program’s performance. The more items you have open on your desktop, the more time it will take QuickBooks to open if you choose one of the options to save open items on your desktop.
5
Check the Show Home Page When Opening a Company File box if you want to display the new Home page each time you open QuickBooks. Selecting the box to Show Coach Window and Features will add these features to the Home page. Selecting the Show Live Community box will place the new help bar on the right of your screen. Optionally, select Detach the Help Window. This is useful if you work with dual monitors and want to move the help window to the other monitor.
6
Select from a variety of color schemes for your desktop display.
7
The two buttons in the Windows Settings area open Windows program dialog boxes that give you format options that affect Windows on your computer, not just in QuickBooks.
8
Click OK.
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Did You Know? You can change your screen resolution. If you can’t see all your QuickBooks windows in your screen, your screen resolution might need to be adjusted. Click the Display button in the Desktop View preferences, and then click the Settings tab. Experiment with changing the setting on the Screen Area until you find a resolution appropriate to your QuickBooks program. The higher the numbers you select, the smaller your screen items will appear, and more items will fit on your screen. You can get creative with your QuickBooks program. Use the Color Scheme option in the Desktop View preference to change your program to fit your mood. Choose from an array of 15 color choices. Experiment to see which ones you enjoy working with the most. Only the colors change when you choose a color scheme. The program works exactly the same with every color choice.
Setting Accounting Preferences
1
Open the Preferences window by selecting Edit, Preferences. Click the Accounting icon on the left side of the window.
2
Click the Company Preferences tab at the top of the window.
3
Check the Use Account Numbers box to turn on the account numbers feature.
4
Check the Show Lowest Subaccount Only box if you use account numbers and you want to shorten the account name that displays on a transaction.
5
Check the Require Accounts box to prevent a user from exiting a form without entering related account information. When this box is left unchecked, transaction information not assigned to accounts gets placed in the Uncategorized Income or Uncategorized Expense accounts.
See Also
Accounting preferences are rules for your QuickBooks program that relate to your company’s unique way of using this program. Included in this section are explanations of how to turn on or off the account numbering feature and how to use other important features such as class tracking and automatically assigning numbers to journal entries. The option to require users to enter account numbers on QuickBooks forms is also described here.
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Did You Know? Turning off account numbers does not remove the numbers. If you decide to turn off the account numbers option (for example, if you want to print a report that doesn’t display account numbers), the numbers you assigned to accounts remain in place. The next time you turn on account numbers, all the numbers return.
See “Setting Up Classes” on page 243 for information about creating and using the QuickBooks Class feature.
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Check the Use Class Tracking box to enable the Class feature in QuickBooks. If you check this feature, you have an option of requesting that the user be prompted to assign classes.
7
Check the Automatically Assign General Journal Entry Number box if you want QuickBooks to keep track of the last journal entry number you used and automatically increment the number for the next journal entry.
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Check the Warn When Posting a Transaction to Retained Earnings box if you want QuickBooks to provide a pop-up warning when changes are about to be made to Retained Earnings.
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Check the Date Warnings options and set a range of days in the past and the future if you want to receive a warning box alerting you to transactions that have dates outside the designated range. 11
10 Click Set Date/Password to set up a
closing date and password protection for entries that occurred before your closing date.
12
11 Indicate a date in the Closing Date
field after which no entries can be made to your company file unless a password is entered. 14 12 Enter a password to protect entries
that occurred before your closing date. 13 Re-enter the password. 14 Click OK. 15 Click OK to close the Preferences
window.
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Adding Accounts
1
There are many reasons to add accounts to your existing list of accounts. The standard account list provided by QuickBooks might not be sufficient or your company might have grown to add new types of income and you need accounts to reflect that change. You might have incurred a new expense that doesn’t fit into any of the existing account categories or you might simply want to change the names of the accounts. Whatever the reason, adding or changing account names is a simple process.
Open the Chart of Accounts window by selecting Chart of Accounts from the Lists menu or Company menu. TIMESAVER You can also open the Chart of Accounts window by clicking on the Chart of Accounts icon in the Company section of the Home page, or by pressing Ctrl+A.
2
Click the Account button at the bottom of the window and select New from the drop-down menu, or press Ctrl+N.
3
In the Add New Account: Choose Account Type window, select the type of account. Cost of Goods Sold has been selected in the figure. The information that displays in the next screen is determined by the type of account you choose.
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Click Continue.
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Enter a unique name for this account. The name you enter will appear on company financial statements, so be sure the spelling and capitalization is correct.
6
If this account is to appear on financial statements as a subaccount of another account, check the Subaccount Of check box and select the parent account from the drop-down list.
7
Enter an optional description for this account. The Description field, and, if visible, the Note or Bank account fields are optional fields.
8
Use the Tax-Line Mapping dropdown list to select a tax line for this account if you plan to use QuickBooks to prepare information for your company’s income tax return. Pick the line on which information from this account is to be summarized on your tax return.
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Your new account window might include an Opening Balance field. If there is a balance in the account when you begin using QuickBooks, enter that balance in this field. 8
10 Click a save option.
See Also See “Assigning Tax Lines” on page 288 for information on the tax lines feature. 10
See Also See “Understanding the Opening Balance Equity Account” on page 352 for information on what happens when you enter an opening balance.
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Using Account Numbers
1
Turn on account numbering by selecting Edit, Preferences, and selecting Accounting in the Preferences window.
2
Click the Company Preferences tab, and then check the Use Account Numbers option to make account numbering available for your company.
3
Click OK to save this change.
4
View account numbers by pressing Ctrl+A to open the Chart of Accounts window.
5
Add or change an account number by clicking once on the account name, and then pressing Ctrl+E to edit the account.
QuickBooks automatically assigns account numbers to your standard list of accounts. (These numbers aren’t displayed initially.) You can accept these numbers or change them. You can see a list of suggested account numbers by going to Help and typing in the search box “account numbering.” Follow the link to view an example of the standard account numbers. 1
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TIMESAVER You can also click the account name. Click the Account button at the bottom of the Chart of Accounts window, and select Edit Account from the menu. 6
Enter the account number for this account.
7
Click Save & Close to save the new account number.
7
Did You Know? Your financial statements are ordered first by type of account and then in account number order. When you assign account numbers, those numbers are treated as if they are a part of the account name, and any financial statements that appear in account name order are ordered by type, then chronologically by account number. Keep this in mind when selecting account numbers for your accounts, so the accounts on your financial statements will be ordered correctly. Adding or Changing Information After the EasyStep Interview Is Completed
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Sorting Lists
1
Select a list from the Lists menu to display that list on your screen.
2
Click the heading of one of the columns to sort the list by that column. Notice that an up arrow displays at the top of the column, indicating that the list is sorted by that column alphabetically or numerically (depending on the type of content) in ascending order.
3
Click the column arrow once to change the direction of the arrow and change to a descending sort order.
4
Click the heading of any other column to sort by that column.
5
Click the diamond that displays to the left of the first column to return the list to the default sort order.
Did You Know? However a list is sorted when you close the list, the same sort order remains in place the next time you view the list.
Did You Know? The default order depends on the list you are viewing. For example, the Chart of Accounts List is sorted first by Type, and then alphabetically by Name or Account Number (see “Using Account Numbers,” in this chapter).
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Sometimes the list you see isn’t the list you need. There are several ways that you can change how your list is sorted. If you’ve sorted a list and decide that the result isn’t what you need, you can easily return your list to the way it was originally sorted. If your list contains subaccounts, you can choose to retain the subaccount indentations when sorting.
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Displaying Lists on Forms
1
Open a form. For this example, an invoice has been opened.
2
Place your cursor in a field (for example, the vendor field, customer field, or item field) on your form.
3
Method #1: Click the drop-down arrow that displays in the field.
4
Click an item on the list. The list closes and the item displays in the appropriate field.
5
Method #2: With your cursor in the field you want to fill, press Alt+down arrow on your keyboard.
6
Arrow up or down on your keyboard to the item you want.
When you’re filling out a form, remember that all the information you enter on the form comes from your lists. Customers, vendors, product names, types of service, account names, shipping options, and payment terms all reside on lists. You don’t have to guess how a vendor’s name is spelled or the specific name of a product. You can display the appropriate list, select the item you need, and then close the list and complete your form.
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Method #3: Simply begin typing the list name, and QuickBooks will autofill the field with a name that begins with the matching letter.
8
Press Enter to select the item. The list closes and the item displays in the appropriate field.
9
Method #4: With your cursor in the field you want to fill, press Ctrl+L. A separate list window displays.
10 Arrow down to the item you want. 11 Press Ctrl+U. The item is selected
and placed in the appropriate field.
Did You Know? You can jump to a spot in a list. Instead of using the down arrow to move through a list, type the first letter of the item you want to choose and arrow down from that point on the list to the appropriate item.
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Adding Customers
Add Customers 1
By using QuickBooks to keep track of your customers, you can personalize their billings, send invoices and mailings effortlessly, and see at a glance the status of their accounts. QuickBooks provides you with built-in fields for entering detailed information about each of your customers.
2
Click the Customer Center icon on the toolbar. TIMESAVER Alternatively, you can click the Customers icon on the Home page or press Ctrl+J.
2
Click the New Customer & Job button at the top of the Customer Center window, and then click New Customer from the drop-down menu (or press Ctrl+N).
3
If the New Feature dialog opens, click Take Me There and continue with Step 4. If you do not want to use the new Add/Edit Multiple List Entries feature, click OK and continue to Step 6.
4
Select Customers, and begin typing in the spreadsheet, or you can copy and paste from an existing spreadsheet of data (Not shown; to see more information on this new feature, read the section “Adding Vendors” on page 83).
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To learn more about this new feature, for more detailed information click on the See How to Update Your Lists link . Click Save Changes when your spreadsheet entry is complete.
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6
Enter all the information you have about this customer, including name, address, billing and shipping addresses, phone and fax numbers, and email address. Note that you can add more than one Ship To address.
7
Clicking the Copy button enables you to quickly transfer address information from the Bill To address field to the Ship To field.
8
Click the Additional Info tab to progress to the next customer information screen.
9
If you plan to track customer type, choose from your drop-down type menu options or click Add New to create a new type.
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10 Enter the terms you’ve made avail-
able to this customer. You can select Add New to add your own options to this and the other drop-down lists.
See Also
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See “Creating Payment Terms” on page 246 for information on setting up payment terms for your customers.
11 If your company is required to
collect sales tax from this customer, you should identify the type of sales tax that applies to this customer and indicate that the customer is taxable in the Sales Tax Information section of the window. 12 You can use the Custom Fields area
to create useful fields of your own. Click the Define Fields button to add your own fields to this area. 13 Click the other tabs to enter informa-
tion such as credit limit, credit card number, status of job, and so on. 14 Click OK.
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Working with the Customer Center 1
From the icon bar, select Customer Center.
2
Arrow or scroll down to select the particular customer whose information you want to view.
3
View the job information, contact information, and transaction history for the customer or job selected.
4
Click the Edit Notes button to retrieve or enter informational notes about this customer or related jobs.
5
Click OK (or press Esc) to close the Notepad window.
When using the Customer Center, you can easily see detailed information about your customers, such as the amount the customer owes you, jobs in progress, informational notes, and pending estimates. This information is readily available by simply clicking on the Customer Center icon, even when you are working on a customer form. 2
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Did You Know? Create Reminders. Click the New To Do button in the Notepad window to make an entry in your Reminders List. More information about using the QuickBooks reminders feature can be found in Chapter 7, “Using Time-Saving Features.”
6
Click the customer name and then click the QuickReport button to view the details of transactions relating to this customer.
7
Press Esc to close the QuickReport.
8
Alternatively, click the Show dropdown list to select from a variety of transaction displays.
9
Depending on the option you choose in Step 8, there are filtering options available to you for customizing the data.
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10 Filter for a specific date range. 8
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11 Right-click one of the jobs for this
customer and select Show Estimates to see a report of the estimates for that particular job. 12 Double-click any estimate to open
the original estimate form. 11
13 Press Esc to close each of the
windows you displayed. 14 Click the Transactions tab in the
Customer Center to view a list of transactions for all customers. 15 Choose the type of transaction you
want to view. 12
16 Click the Filter By drop-down arrow
to choose whether you want to see all the transactions for the type you selected, or particular transactions. For example, you can choose to filter the list by All Estimates or Open Estimates. 17 Click the Date field to select a date
range for the transactions that appear on the list.
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Adding Vendors
Vendors are businesses and people who regularly sell you goods and services. When you enter vendor information in QuickBooks, you have all the details you need to contact your vendors, prepare purchase forms, process year-end 1099 forms, write checks, and create reports of your company’s spending.
Enter Vendor Address Information 1
Click the Vendor Center button on the toolbar. In the Vendor Center, select the Vendors tab. Click the New Vendor button at the top of the Vendor List.
2
If the New Feature dialog opens, click Take Me There and continue with Step 3. If you do not want to use the new Add/Edit Multiple List Entries feature, click OK and continue to Step 5.
3
Select Vendors, and begin typing in the spreadsheet or copy and paste from an existing spreadsheet of data. Quickly enter repeating data by selecting a row and right clicking with your mouse to duplicate information.
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Click Save Changes when completed. TIMESAVER You can also click the Vendors icon on the Home page to open the Vendor Center. To open the New Vendor window, press Ctrl+N from within the Vendor Center.
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6
Enter a name for the vendor. This is the name you will use to select the vendor from your Vendor List. It doesn’t have to be the name printed on vendor forms or checks. If a balance is due to this vendor at your company’s QuickBooks start date, enter the amount and the start date in the Opening Balance field. (I usually recommend that you enter these amounts on a vendor bill form).
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Enter the vendor’s legal name in the Company Name field. This is the name that displays on forms you prepare for this vendor.
8
Enter the name of a personal contact, if applicable, and the mailing address of the vendor.
9
Enter other pertinent information that you want to save.
10 If there is a name other than the
company name that needs to appear on checks to this vendor, enter that name in the space provided. 11 Click OK.
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Enter Additional Vendor Information 1
Click the Additional Info tab to access another page of information for the vendor.
2
Enter an account number. This is the number that this vendor has assigned to your company. If you print your checks from your QuickBooks program, the account number displays on the memo line of the checks.
3
For categorizing purposes, enter the type of goods or service you acquire from this vendor in the Type field.
4
In the Terms field, enter the terms your vendor has given you, if applicable. The payment terms you enter allow your QuickBooks program to calculate the due date of payments owed to this vendor.
5
If the vendor has assigned a credit limit to your account, enter that amount in the Credit Limit field.
6
If you are required to supply this vendor with a 1099 form, check the Vendor Eligible for 1099 box and enter the vendor’s tax identification number.
7
You can use the Define Fields button to create new fields that are customized to your business needs.
8
Click Account Prefill to assign default expense accounts (not shown).
9
Click OK to complete the entries for this vendor.
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See Also See “Understanding the Opening Balance Equity Account” on page 352 for information on what happens when you enter an opening balance.
Did You Know? You can make address changes right on the forms. When you use forms such as purchase orders, bills, and invoices, you can change the address of vendors and customers right on those forms. QuickBooks will prompt you, asking if you want the new address information to be available the next time. If you indicate “Yes,” the address information is changed for the appropriate vendor or customer.
See Also See “Issuing 1099 Forms” on page 62 for information on providing vendors with year-end 1099 forms.
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Adding Items
1
To create a new item, open the Item List by clicking Item List on the Lists menu or the Customers menu. Press Ctrl+N to open the New Item window.
2
If the New Feature dialog opens, click Take Me There and continue with Step 3. If you do not want to use the new Add/Edit Multiple List Entries feature, click OK and continue to Step 5.
3
Select from Service Items, Inventory Parts or Non-inventory Parts, and begin typing in the spreadsheet or copy and paste from an existing spreadsheet of data.
4
Click Save Changes when completed.
An item is a description that displays on your purchase and sales forms. Services and products that you buy and sell are items, as are the charges related to those services and products, including discounts, freight charges, late fees, and sales tax. At any time you can add to your item list, increasing the number of items that can be entered on your company’s forms.
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TIMESAVER You can also open the Item List from the Home page by clicking the Items & Services icon.
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5
Select the type of item from the Type drop-down list. Your item type must be selected from one of the ten categories offered in this list. Inventory Part has been selected in this example. Your screen might differ if you select a different item type.
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IMPORTANT Be careful when selecting an item type. Most item types are permanent choices and cannot be changed after they’ve been selected. 6
Enter a name by which you will identify this item when you enter the item on purchase and sales forms.
7
If the item is to be a subitem of another item, check the Subitem Of box and enter the parent item.
8
Enter the description you use for this item on purchase forms such as purchase orders and bills.
9
In the Cost field, enter the amount you pay when you purchase this item. If the cost varies with each purchase, leave the field blank and enter the cost on the bill when you enter the actual purchase in QuickBooks.
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10 Enter the account to which you will
charge the expense for this item in the COGS Account field. 11 If you purchase this item from the
same vendor time after time, enter the vendor name in the Preferred Vendor field. Otherwise, leave this field blank and enter the vendor name on the bill each time you purchase the item.
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12 If you are creating an inventory 18
item, in the Asset Account field, enter the account to which this item is added when purchases are made. This field might not appear, depending on the type of item you are creating. 13 If you are entering an inventory
14
item, enter the number of the items necessary to trigger a reorder in the Reorder Point field. Enter also the quantity of items currently on hand.
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14 Enter the description of the item as
it displays on an invoice. 15 In the Sales Price field, enter the
amount you normally charge for this item. If the sales price varies with each sale, leave the price blank and enter the price on the actual invoice when the item is sold. 16 Indicate whether the item is taxable
in the Tax Code field. 17 Enter the account to which income
from the item’s sale is credited in the Income Account field. 18 Click OK.
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Did You Know? You can type your choice or choose from the drop-down list. When you enter information in a field that contains a drop-down list, you have the choice of clicking on the arrow and choosing from the selections on the drop-down list, or you can type the entry in the field. If the entry you type does not appear on the drop-down list, QuickBooks gives you the opportunity to QuickAdd the new entry to your list. QuickBooks offers a Unit of Measure inventory option. Click the Enable button in the Unit of Measure area of New Item window to define the unit of measure for an item. If the button doesn’t appear, turn on the Unit of Measure feature by selecting Edit, Preferences, Items & Inventory, Company Preferences, and clicking Enable. Define measurement units such as foot, yard, pound, or whatever is appropriate for the inventory item. Multiple units of measure enable you to purchase, store, and sell in different units. For example, a fabric store might purchase fabric by the bolt, count it in inventory by the number of yards on the bolt, and sell it by the foot, thus using a set of three units of measure.
Types of Items QuickBooks gives you the option of creating ten types of items. Any items that you create must fit into one of these ten categories: ◆
Service—Labor charges and professional fees.
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Payment—Money received that reduces the amount owed on an invoice.
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Inventory Part—Merchandise your company purchases, keeps in stock, and resells.
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Noninventory Part—Products you sell but do not normally keep in stock or products that you have purchased and shipped directly to your customer. Group—A group of related items that are saved as one item. Typically you sell the entire group as a whole, but you can also reserve the option to sell pieces of the group individually. Discount—An amount of money subtracted from a total or subtotal cost of an item, such as a sale markdown or a reduction in the sales price of a specific item.
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Sales Tax—A sales tax item calculates a sales tax at a specified rate that represents the amount you pay to a sales tax agency.
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Sales Tax Group—You can combine related sales tax items, such as state, county, and city tax, as one group, and the group will appear as one item on an invoice.
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Subtotal—This item serves the purposes of providing a subtotal on an invoice; you can use this subtotal in calculations.
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Other Charge—Items that don’t fit in the other groups, such as freight, finance charges and late fees, special handling charges, and rush charges, are all considered to be Other Charge items.
QuickBooks Premier and Enterprise Solutions versions also provide an Inventory Assembly item for grouping parts into kits or pre-assembled parts.
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Using Items on Forms An item is a description that displays on your purchase and sales forms. An amount is associated with the item, and QuickBooks uses the amount to perform calculations on your forms and also records the accounting “behind the scenes.” When you create a list of items, you also instruct QuickBooks where to record the income and the expense for the item. Things you buy and sell are items. Discounts you apply and services you perform are also items, as are the sales tax you charge and the cost of freight. IMPORTANT Not all item windows will default to selecting both an income and an expense account. I recommend for all items that you select the box This Service Is Used… or This Item Is Used…. The resulting New Item or Edit Item dialog allows you to select both an income and expense account. For an example of working with items, look at an invoice form. If you plan to invoice a customer for some construction-related labor, such as installation and repair work, you must first enter descriptions of the labor as items in QuickBooks. These are service items. Each of these items represents a type of service you
provide and sell to customers. Other types of items are described in the “Types of Items” section that preceded this section. Click on the Invoice icon from the Home page and enter the customer information. Click in the Item column and then click the drop-down arrow that displays. Click an item from the list— in this case, Installation. If you entered a sales price when you created the item, the item description and rate per hour are filled in automatically. You can modify the descriptions on your invoice forms if necessary. For a service item, enter the number of hours charged to this job in the Amount column; the total amount for the invoice is calculated automatically. Next, click the line under Installation and click the drop-down arrow that displays. Select Repairs from the list and then enter the appropriate number of hours. If a specific rate does not appear, enter the hourly rate you want to charge for these repairs. Modify the description if necessary. Continue in this manner until all the items for this invoice have been entered.
The amount calculates automatically. Enter the type of service in this column. Enter the number of hours in this column.
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Adding Information “On-the-Fly” Did You Know? Invoice forms vary. The invoice form that displays on your screen might vary slightly from the one shown here, depending on the standard type of invoice you chose for your company in the EasyStep Interview.
1
Open an invoice by selecting Create Invoices from the Customers menu. TIMESAVER You can also open an invoice by clicking the Invoices icon on the Home page.
2
In the Customer:Job field, enter the name of a customer not already in your Customer:Job List.
3
Click in another field of the form, or press Tab to move to the next field. A Customer:Job Not Found window displays.
4
You have three choices relating to this customer. Clicking Quick Add adds only the customer name to your Customer:Job list, and you are ready to complete the form.
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When you need to add an item to your Items List, a customer to your Customer List, a vendor to your Vendor List, or any other piece of information to a list in QuickBooks, you can open the list and add the item, a process that has been described in this chapter. Alternatively, you can add the item “on-the-fly,” which is to say that you can open a form, such as an invoice or a bill, and simply enter the name of the piece of information you want to add to a list. When that name represents a new entry on the list, a window displays on your screen telling you this information is not found on your company lists and asking you whether you want to add the information now. Choosing to do so makes your job a bit more efficient. For purposes of this demonstration, the next example adds a customer “on-the-fly.” The technique shown here can be used on any QuickBooks form, for any QuickBooks List.
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Clicking Set Up opens the New Customer dialog box, where you can enter all the pertinent information about this customer. Clicking Cancel closes the Customer:Job window. You cannot complete the invoice form until you either add this customer to your Customer:Job list or enter a different customer name.
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Did You Know? Use Add New. Another way to initiate adding a piece of information onthe-fly is to click in a field of your form that has a drop-down list associated with it and then select Add New, which is always the first entry on the list. Clicking Add New immediately opens the dialog box you need to set up the new customer, vendor, item, or whatever you have chosen. Adding or Changing Information After the EasyStep Interview Is Completed
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Moving Items on a List
1
Open a list by selecting the list from the Lists menu. For purposes of this example, the Chart of Accounts List has been selected.
2
Scroll to the area of the list you want to reorder.
3
Place your mouse pointer on the small diamond to the left of the account you want to move. The mouse pointer becomes a foursided arrow.
4
Drag the account diamond to the new location on the list.
5
Release the mouse. The account has been moved. The next time you open the list, the account will still be in its new location.
By default, QuickBooks sorts lists in a particular order. The Customer and Vendor Lists are alphabetized; the Item List is sorted first by type of item and then alphabetized within each type. The list order is carried over to reports and statements. You can change the order of items on your lists. When you change the order on a list, the change remains permanent and carries through to your reports.
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You might have noticed that when you set up a new item, customer, vendor, or account, you can designate that the item is a subitem, a lower-level item under a parent, or leader item. If you didn’t designate the substatus when you first entered the information, you can do so at any time. Open the appropriate list and simply drag the item to its new parent, and then drag to indent.
Creating Subitems
1
Open a list. This example uses the Chart of Accounts List. You can open this list quickly by pressing Ctrl+A.
2
Place your mouse pointer over the diamond to the left of the item that is to become the subitem. The mouse pointer turns into a black four-sided arrow.
3
Drag the mouse pointer so that the item is located directly beneath the item that will be its parent. A dashed horizontal black line displays where the item is to move. In this example, subitems can only be placed with other accounts of the same type.
4
Release the mouse pointer.
5
Again, place your mouse pointer over the diamond to the left of the item that is to become the subitem.
6
Drag the mouse pointer slightly to the right. A dashed vertical black line displays where the item is to move.
7
Release the mouse pointer. The item is now indented beneath its parent.
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Editing Information on a List 1
Open a list. For this example, the Item List is used. You can open this list by selecting Item List from the Lists menu.
2
Scroll to the item you want to edit. Some of the item information is displayed to the right of the item name.
3
Double-click the name of the item. The Edit Item window displays.
4
Make your changes or enter new information about this item. In this example, the rate for repair work has been changed from $35.00 to $40.00.
5
From time to time, you will need to edit information on your lists. You might notice a spelling error, need to change an address, add notes, or add other information that you want to save.
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Click OK to save the information.
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Marking List Items Inactive
If you have a vendor who is no longer available as a current supplier, you can hide the vendor’s name so it no longer displays on the list. This way, you won’t run the risk of choosing that vendor by mistake. Also, the vendor you hide is no longer included in reports, although if you prepare a report that includes a time period where the vendor was still active, it will show up on the report.
Marking a List Item Inactive 1
Open a list. This example uses the Vendor List, found by opening the Vendor Center.
2
Click the name of a vendor you want to mark as inactive.
3
Right-click on the vendor name, and then select Make Vendor Inactive.
Did You Know? At the top of the Vendor List, change the view to All Vendors to see inactive members of the list. Inactive list members appear with an X to the left of the name.
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Did You Know? The Vendor List displayed in this task is one type of list. This list, like the Customer List and the Employee List, is displayed as part of the Center to which it relates. The other type of list is a standalone list like the Chart of Accounts and the Item List. For these lists, the process of making a list entry inactive is the same as described in this task. To view inactive entries in a standalone list, place a check in the Include Inactive checkbox that displays at the bottom of these lists.
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Change the Inactive Status of List Entries 1
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Hiding information on a list is not a permanent situation. Display hidden entries by checking the Include Inactive box that displays in some lists, or choose to display the entire list as I have done here by selecting All Vendors. TIMESAVER When you display inactive members of a list, those entries appear with an X to the left of the listing. Displaying the inactive members does not change their inactive status.
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Right-click an inactive list entry, and then select the Make Account Active choice to change the status back to Active.
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Using the Activities Menu on Your Lists Each list that stands alone in a separate window, such as the Chart of Accounts List and the Items List, has a drop-down activities menu. The menu contains shortcuts to chores relating to paying or receiving money. The Center Lists, such as those that appear in the Vendor Center and the Customer Center, feature a New Transactions button that provides a similar activities menu. You can conduct most of your company business from the list windows. Here are some examples of activities that appear as menu choices on the various lists: ◆
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Customer Center—Create invoices, create estimates, receive payments, make
deposits, create statements, and create credit memos/refunds. ◆
Vendor Center—Write checks, enter bills, and create purchase orders.
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Employee Center—Pay employees, pay liabilities/taxes, and process payroll forms.
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Chart of Accounts List—Write checks, make deposits, and transfer funds.
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Items List—Create invoices, enter sales receipts, change item prices, create purchase orders, receive items and enter bills, and adjust quantity/value on hand.
Deleting Entries on a List
You can remove list entries that have never been used. This option generally applies to account names that QuickBooks entered when you first set up your company and that you never intend to use, but this procedure can also be used for other information you don’t need. For example, if you open the Terms List and see several options for payment terms that your company doesn’t use, you can delete the unwanted choices.
Delete a List Entry 1
Open a list. This example uses the Chart of Accounts List.
2
Click the account you want to delete.
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Click the Account button at the bottom of the dialog box; then select Delete Account from the drop-down menu. On a list that displays in one of the Centers, right-click on the list entry you want to delete, and then choose Delete from the pop-up menu.
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Click OK when the Delete Account window displays.
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Click Cancel if you change your mind and want to keep the account.
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TIMESAVER There’s a shortcut fordeleting list entries. Select the entry you want to delete, and then press Ctrl+D.
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Merging Entries on a List
If you tried to delete an entry from one of your lists and were prevented from doing so, it is because the entry was used at some time in the past on at least one of your company’s forms. QuickBooks does not allow you to remove any member of a list that displays on a form. In lieu of deleting, you can make that list entry inactive by hiding it (see “Hiding Entries on Lists” previously in the chapter), or you can merge the entry into another entry on the same list. When you merge, you combine the unwanted entry into a different entry that you want to keep. For example, say you have a customer named Allard, Robert, but when you originally set up the customer, you entered the name as Robert Allard and used that name on an invoice form. Later you created a new customer named Robert Allard and assigned transactions to that name. These steps teach you how to merge two records for the same customer into one customer record. Be careful with this task. It is not reversible, so be sure you have made a backup of your data.
1
Open a list. This example uses the Customer List.
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Click the customer name you want to remove from the list but can’t because it has been used before.
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Right-click the customer name and then select Edit Customer:Job from the drop-down menu. TIMESAVER You can press Ctrl+E instead to get to the Edit Center window.
Did You Know? You can’t delete an entry from a list if it has been used previously. If you try to delete the entry by pressing Ctrl+D, you will receive an error message telling you the entry cannot be deleted.
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When the Edit Customer window displays, change the Customer Name at the top of the window to the name of the customer with whom you want to merge this customer information. In this example, the customer name is changed from James Rock to James A. Rock, Publishing.
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IMPORTANT Be sure to spell the name of the customer correctly. When merging one customer’s information into another’s, or when merging any two list entries, take extra care with the spelling and, if applicable, the punctuation of the name. QuickBooks recognizes a merge attempt only when the name matches exactly the name of the entry to which you are merging. 5
Click the OK button.
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Click Yes to execute the merge. The unwanted customer name is removed from the customer list and all transactions from that customer are transferred to the customer into which you merged.
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Click Yes if presented with an alert telling you that this change will affect closed periods and previous financial reports. 7
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Printing Lists
Printing a paper copy of your list provides you with a printed snapshot of the list as of today. You might want to print monthly copies of certain lists to save for comparison purposes. Or perhaps you need a printed copy of your customer list that includes telephone numbers. You can easily print your lists whenever you need them.
Print a List 1
Open the list you want to print, such as the Chart of Accounts, Item List, Vendors List in the Vendors Center, and so on.
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To print a simple copy of the list, without adding any formatting, press Ctrl+P.
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In the Print Lists window that displays, click the Print button to print the list.
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Alternatively, click the Reports button at the bottom of the list to see a selection of reports you can produce and print.
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Depending on the list you opened, the choices vary. Select the list you want to print.
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Click the Reports on All Accounts option at the bottom of the Reports menu to see other options. After selecting a report, click the Print button on the report.
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To print a list that opens in one of the centers, such as the Customer:Job List, open the Center and then click the Print button that displays at the top of the list. Choose from the menu options that appear.
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Searching for Transactions 1
Select Lists, Chart of Accounts to open the Chart of Accounts (or press Ctrl+A).
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Double-click the name of the cash account you use for your payments and deposits. The account register displays.
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Click the Go To button.
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Click the arrow next to Which Field to display a list of field choices.
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Click the field in which you want to conduct your search.
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In the Search For area, enter the payee name, account name, or amount for which you are searching.
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Click Back to search backward in the register, or click Next to search forward.
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Continue clicking Back or Next until you find the transaction you want.
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Click Cancel when you’re ready to close the Go To window.
If you are looking for a particular transaction, such as a payment you received or check you wrote, you can find the transaction by searching in your check register.
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transaction to display the original form that was used to create the transaction. IMPORTANT Be careful when editing transactions. If you edit a transaction that has already been recorded, you run the risk of changing information that has already been used on financial statements or in bank reconciliations. Proceed with caution whenever you change a QuickBooks transaction.
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Invoicing and Collecting Income Having a method for recording your income is likely one of the main reasons you purchased your QuickBooks program. Here are just some of the reasons why it’s important to have an accurate record of your income transactions. ◆
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You need to be able to track your company’s revenue and record income transactions so you know how well your company is performing.
Set Customers Preferences
You need a process to separate your income into appropriate accounts so that you can produce reliable financial statements that tell you where your company’s strengths and weaknesses are.
Preview or Print Invoices
You need the record-keeping ability necessary to provide your customers with an opportunity to make down payments and partial payments, as well as being able to give them the right to receive refunds and credits for returned merchandise or unfulfilled obligations. You need to properly track and record the dollar amount you deposit in your bank account.
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You need the convenience of sending an email invoice to your customers.
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If you incur expenses on behalf of a customer, you need to be able to charge those expenses to your customer.
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What You’ll Do
You need to be able to assess finance charges for late payments.
All of this and more can be accomplished through the invoicing and collection services available in your QuickBooks program. This chapter explains how you can meet all your revenue-collection obligations.
Create an Invoice
Email an Invoice Charge Expenses to a Customer Set Finance Charge Preferences Create a Monthly Statement Receive Payments for Invoices
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Issue a Credit or Refund Record Cash Sales (COD) Make Bank Deposits
Receive Advances, Retainers, and Down Payments Issue Discounts
Track Accounts Receivable View the Open Invoices Report Create a Collection Letter Record Bad Debts
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Setting Customers Preferences
You can customize some of the standard features that apply to invoices by making adjustments in the Sales & Customers preferences screen. The types of preferences that relate to your sales operations include setting a default shipping method, setting a standard markup percent for items you purchase and resell to customers, and indicating a standard FOB for your company. In addition, you indicate how you want reimbursements to be recorded in your financial records, in what order customer payments are to be applied to outstanding invoices, whether you want to be told you are about to issue a duplicate invoice number, and whether you want to use the QuickBooks Price Level feature. The QuickBooks Price Level feature enables you to easily apply discounts or price increases to items on your invoices. The settings you make here affect all your company’s invoices. Note that only a user with administrative rights can make changes to the company preferences for sales and customers.
Set Payments Preferences 1
Select Edit, Preferences.
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Click the Payments icon.
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Click the Company Preferences tab.
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Click on the Explain link to learn more about Integrated Payment Processing.
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Check Automatically Apply Payments if you want QuickBooks to apply customer payments to outstanding invoices.
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Check Automatically Calculate Payments if you want to automatically calculate the amount of payments you received based on the invoices you check off on the Receive Payments list.
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Check Use Undeposited Funds As a Default Deposit to Account to designate your undeposited funds account as the default account when recording payments that you receive.
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Click OK.
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Set Sales and Customers Preferences 1
Select Edit, Preferences.
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Click the Sales & Customers icon.
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Click the Company Preferences tab.
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In the Sales Forms pane, indicate the Usual Shipping Method and Usual FOB, and place a check mark to Warn About Duplicate Invoice Numbers.
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In the Miscellaneous pane, indicate a default packing slip template.
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Check Use Price Levels to use the QuickBooks Price Levels feature for quickly adjusting amounts on sales forms by a preset percentage.
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Check Enable Sales Orders if you want to use the sales orders feature in QuickBooks. If you check this box, you have the option of checking the box to warn about duplicate sales order numbers and to prevent the printing of zero amounts.
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If you have enabled sales orders, choose the templates you prefer to use for sales order packing slips and sales order pick lists.
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Click OK.
Did You Know? FOB stands for Free on Board. FOB refers to the physical place where the ownership of an item changes hands from the vendor to the purchaser. This designation is used when discussing shipping costs and is important for determining who has the responsibility of shipping and insurance costs. “FOB Our Warehouse,” for example, means the ownership of the item transfers to the purchaser when it leaves the seller’s warehouse. The purchaser is responsible for shipping charges and insurance on the item from the time it leaves the seller’s premises. Invoicing and Collecting Income
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Creating an Invoice
The invoice is the basic form you use to charge your customers for goods and services. Invoices include detailed lists of all items that you charge to a customer. There are several types of invoice forms available in QuickBooks. Choose the form that best suits the type of business you do. You can use the invoice form as a document that you give or send to your customers, or you can use the form purely for internal purposes, to record sales that occur in your company.
Select Customers, Create Invoices.
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TIMESAVER You can also click the Invoices icon on the Home page, or press Ctrl+I to start a new invoice. 2
Select a customer and, if applicable, a job from the Customer:Job drop-down list.
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Verify that the date is correct, making any necessary changes.
See Also Work more efficiently with the Attach Document feature, which is new in QuickBooks 2010. To learn more about this online subscription feature, see the section titled “Attaching Documents to Transactions” on page 157.
Did You Know? You can change preference settings on invoice forms. The settings you make in the Sales & Customers Preferences dialog box affect all of your company’s invoices. However, you can override these settings, if necessary, on the actual invoices.
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Click the Template drop-down menu if you want to choose a different style of invoice.
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Enter the terms that apply to this customer.
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Enter each of the items that this customer is purchasing, along with quantities and rates. (The rates might appear automatically, depending on how the items are entered in your records.) The Amount column is automatically calculated.
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Check To Be Printed or To Be Emailed.
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Select a save option.
Did You Know?
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A new feature in QuickBooks 2010 enables you to customize your forms to add a professional look to all of your QuickBooks forms, and it is FREE! Click the Customize icon on the Create Invoices dialog and choose Customize Design and Layout.
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Types of Invoices
Accounting for Sales
If you used the EasyStep Interview to set up your company, you were asked whether you wanted to use one of four types of invoice forms: professional, service, product, or custom. Choosing an invoice style in the interview doesn’t prevent you from using one of the other styles. The style you choose in the interview is the one that display by default when you begin creating an invoice. To use one of the other styles, open an invoice form, click the down arrow in the Form Template field at the top of the invoice form, and select another form.
The goods and services your company sells produce income that needs to be recorded in your company’s financial records. When you issue an invoice, QuickBooks increases your income by the amount on that invoice. If the sale is taxable, your sales tax liability account is increased by the amount of sales tax charged on the invoice. The following example illustrates the accounts that are affected in the background when you enter information on a QuickBooks invoice form:
The following four types of invoices are available in all versions of QuickBooks:
Sample invoice:
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Amount of sale
Professional invoice—Includes the following fields:* Terms, Item, Description, Quantity, Rate, and Amount.
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Service invoice—Includes the following fields:* P.O. Number, Terms, Item, Quantity, Description, Rate, and Amount.
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Product invoice—Includes the following fields:* Ship To, P.O. Number, Terms, Rep, Ship Date, Via, FOB, Quantity, Item Code, Description, Price Each, and Amount.
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Custom invoice—Can be customized to include any of the fields from other invoice styles and any other fields that are useful to you.
*Tax and Units of Measure fields also might appear, depending on the preferences you have selected.
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Sales tax Total amount due from customer
$100.00 $5.00 $105.00
Affected accounts: Debit Accounts receivable (or undeposited funds) Sales tax payable Sales revenue
Credit
105.00 5.00 100.00
Invoice Dates The date you enter on your invoice is significant because a variety of calculations result from that date: ◆
The invoice date is coordinated with the criteria you enter in the Terms field to help QuickBooks determine when the customer payment is due.
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The invoice due date is considered when QuickBooks produces Accounts Receivable Aging Reports, which show overdue customer payments in increments of 30 days, 60 days, 90 days, and so on.
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The invoice date is significant when you issue statements to customers and assess finance charges. When you set Finance Charge Preferences, you must indicate whether finance charges are to be assessed based on the date of the invoice or the due date based on the terms you indicated.
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The invoice date combined with the payment terms you set determine when the invoice display in your Reminders window as being overdue.
So, take extra care when you write invoices, knowing the date you put on an invoice has myriad implications throughout your QuickBooks program.
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Previewing or Printing Invoices
When it’s time to send your invoice to a customer, it pays to first take a look at the form and double-check to make sure everything is the way you want it. After previewing the invoice, you can choose to print the form right away or save it for printing later, perhaps with a batch of other invoices.
Preview or Print a Single Invoice 1
Prepare an invoice.
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If you want to print this invoice later with a batch of invoices, as described in the next task, check the To Be Printed box, save your invoice, and skip the rest of this task.
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To print this invoice now, click the drop-down arrow next to the Print button on the invoice form toolbar. Select Preview if you are not yet ready to print the invoice.
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TIMESAVER You can also press Ctrl+P to print the invoice. 4
Select Print to print the invoice.
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Click Print in the Print One Invoice dialog box that display.
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Save your invoice. 5
See Also See the following related topics for more information on coordinating the invoice date with various QuickBooks functions: ◆ “Setting Finance Charge Prefer-
ences,” page 118. ◆ “Creating Payment Terms,” page
246. ◆ “Creating a Monthly Statement,”
page 119.
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Printing a Batch of Invoices 1
Select File, Print Forms and then select Invoices.
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Check each invoice you want to print at this time.
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IMPORTANT You can save time by using the Select All and Select None buttons, and then checking or unchecking the invoices. IMPORTANT You cannot make changes in this window. If you discover that the amount on an invoice is incorrect, you cannot enter a change here. Close the Select Invoices to Print window and open the original invoice, make your changes, and return to this window for printing. 3
Click OK.
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Click the Print button in the Print Invoices dialog box.
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Did You Know? Memo information does not print on the invoice. You can enter comments for your own use in the Memo field of an invoice. Your customer won’t see this field on the printed invoice.
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Emailing an Invoice
The most popular form of communication these days seems to be email, so why not take advantage of this medium to dispatch your invoices? Email is easy, and you can get your invoice into the hands of your customer quickly. One word of warning: Make sure your customer expects the e-invoice so your message won’t get lost in the shuffle of junk that permeates email boxes. If your customer is keen on electronic communication, you might be able to encourage an electronic payment, which reduces the turnaround time on your invoice even more.
Setting Email Preferences 1
From the Edit menu, select Preferences.
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Select the Send Forms menu.
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3 On the My Preferences tab, place a
check mark to Auto-check the To Be Emailed box (optional). 4
Select the Company Preferences tab.
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Define your default salutation, subject, and generic content for your email communications.
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Click OK.
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Indicate Email Status on an Invoice 1
Create an invoice, or open an invoice form already created but not yet printed.
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Check the To Be E-mailed box to initiate email delivery.
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Click a Save option.
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If the customer’s email address was not entered previously, you are prompted to enter it now.
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Click OK.
Did You Know? Email addresses entered on-the-fly are saved for future use. If you are prompted to enter your customer’s email address, you only have to enter it once. Your entry is saved with this customer’s information for future use.
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Send One Invoice by Email 1
Open the invoice on which you indicated email delivery.
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Click the drop-down arrow next to the Send button.
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Select E-mail Invoice.
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Verify that the information in the cover letter is correct.
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Make changes or additions to the cover letter if necessary.
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Click the Send Now button.
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Send a Batch of Email Invoices 1
Select File, Send Forms.
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Click in the first column to check off each form you want to send. Check marks appear to the left of each selected form.
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Double-click any form to display a preview of the accompanying cover letter.
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Click Send Now.
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Did You Know? There's no need to save as you go. When creating default cover letters, you don't have to save your work as you switch from one letter to the next. All your letters are saved at once when you click the OK button.
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Charging Expenses to a Customer
When you make a purchase on behalf of a customer, you need to designate the customer on the bill. Then, when you create an invoice for the customer, you can request that expenses be charged, as well as any other items that go on the invoice. This is commonly referred to as time and materials billing or cost plus billing. You can also select a markup for the expense if you intend to sell this to your customer at a profit.
Designate the Customer When Making a Purchase 1
Prepare a new bill for a purchase, or open an existing bill.
2
Enter the customer’s name and, if applicable, a job.
3
Save the bill.
Did You Know? You can associate an expense with a customer without charging the customer for the expense. If you uncheck the box in the Billable field next to the customer’s name on a bill, the amount is not charged to the customer. You can remove the markup amount from the customer invoice. If you increase the expenses charged to your customer by a markup amount, this amount display on your customer invoice unless you check the Print Selected Time and Costs as One Invoice Item option. When you check this box, the markup still display on your screen version of the invoice, but the printed version combines the markup with the billed expense into one amount.
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Open an invoice form and enter the customer information.
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If this pop-up dialog box display, choose the option to Select the Outstanding Billable Time and Costs to Add to This Invoice, and then click OK. Note that you can check a box at the bottom of the dialog box if you want to make this your default choice for future invoices that have time or costs assigned to them.
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If the pop-up dialog box did not appear, click the Add Time/Costs button.
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Click the Expenses tab.
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Enter the markup amount or percentage, if applicable.
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Verify the account to which the markup should be recorded, if applicable.
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Check any item you want to include on this invoice.
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Indicate whether the expenses are taxable to the customer.
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If you are charging more than one item to the customer, and if you want all the items to appear as a single item on the customer invoice, check this box.
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Click OK to place the selected expenses on the customer’s invoice.
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Complete the invoice and save it.
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Place Expenses on a Customer Invoice
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Setting Finance Charge Preferences
1
Select Edit, Preferences.
2
Click the Finance Charge icon.
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Click the Company Preferences tab.
4
Indicate in the Annual Interest Rate field the amount of interest that your company charges for past-due customer payments.
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Indicate in the Minimum Finance Charge field the amount, if any, that your company assesses on late payments.
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Enter the number of days in the Grace Period (days) field allowed before finance charges are assessed.
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Choose from the Finance Charge Account drop-down list the account you use to track finance charges.
Do you charge your customers a fee for late payments? If so, you can create several settings to ensure that the process of assessing finance charges is consistent and automatic. Any settings you establish here can be revised later, but you’ll save yourself time by thinking through these options and configuring the settings before you start dealing with customers who made late payments.
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Check Assess Finance Charges on Overdue Finance Charges if you add previous finance charges to the balance when computing additional finance charges.
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Select an option in the Calculate Charges From section.
10 Check Mark Finance Charge Invoices
“To Be Printed” if you want to send an invoice to customers when finance charges are assessed. If you check this box, QuickBooks automatically places the finance charge invoices in your printer queue. 11
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Click OK.
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Creating a Monthly Statement 1
It’s not unusual to have some customers who don’t pay their invoices on time. If you have customers like this, you probably want to send them a reminder that they owe you money. The monthly statement lists outstanding invoices and also provides you with an opportunity to assess a finance charge.
Select Customers, Create Statements. TIMESAVER Clicking the Statements icon on the Home page also opens the Create Statements dialog.
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Indicate the date that will appear on the statement.
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Choose dates in the Statement Period From fields, or choose All Open Transactions as of Statement Date to create a statement for all outstanding invoices.
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If you choose to prepare statements for all outstanding invoices, check this box to limit the statements to invoices more than a designated number of days overdue.
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Select the customers who will receive statements. If you select any option other than All Customers, you can then select the specific customers who will receive statements.
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These options are only available to users of QuickBooks Pro, Premier, and Enterprise Solutions.
See Also See “Invoice Dates” on page 109 for more information on coordinating the invoice date and due date with monthly statements.
Did You Know? You can’t save statement options. If you make selections in the statement dialog box and then click Close rather than printing or emailing your statements, the choices you made are not saved. Invoicing and Collecting Income
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Select a template to use for the statements from the Template dropdown list.
7
Choose between creating one statement per customer or one statement per job.
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Check Show Invoice Item Details on Statements to provide detailed information from the invoice(s) on the statement.
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Choose to print statements by billing address ZIP Code.
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Check options under the Do Not Create Statements heading to customize the selection of which customers receive statements.
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Click Print or E-mail.
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Receiving Payments for Invoices
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You’ve received a check from a customer! Now you need to record the payment and indicate that the invoice has been paid. Doing so clears your accounts receivable account and places the funds in an undeposited funds holding area in your QuickBooks file until you deposit the funds. When you actually deposit the money, the undeposited funds account is cleared and cash is increased.
Select Customers, Receive Payments. TIMESAVER Click the Receive Payments icon on the Home page to go immediately to the Receive Payments dialog box.
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Enter the customer’s name in the Received From field.
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Enter the amount received.
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Confirm the date on which the payment was received.
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Enter the payment method.
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Enter the check number or other applicable reference number.
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Verify that the amounts are applied appropriately to the outstanding invoices by checking the invoices in order of how the payment will be applied.
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If the full amount owing has not been paid, indicate whether you want the remainder to be left as an underpayment or written off as either a discount or uncollectible.
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Click a save option.
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Did You Know? You can speed up the processing of your customer payments by one of several new payment options offered by Intuit Payment Solutions. To get more information about adding credit card processing, setting up recurring charges and adding eCheck processing, click the appropriate link on the left side of the Accept Payments dialog.
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Issuing a Credit or Refund 1
Select Customers, Create Credit Memos/Refunds, or click the Refunds & Credits icon on the Home page.
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Enter the customer’s name and, if applicable, the job to which this credit or refund relates in the Customer:Job field.
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Verify that the date is correct.
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Enter the item for which the credit or refund is being issued.
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Describe the reason for the credit or refund.
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Enter the quantity, and, if applicable, the rate.
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Enter an optional customer message. If you have not used this message before, you will be prompted to add the message to your message list. Click Quick Add to add the message.
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Indicate if you want to print the credit memo or send it by email. (These two options are not mutually exclusive— you can do both if you want.)
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Save the credit memo.
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If a customer returns an item or if for any other reason you need to issue a credit or a refund to a customer, you can do so easily. You are given room to fully describe the reason for the credit or refund, and you can indicate whether tax applies to the amount.
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If the Available Credit window display, select an option to indicate how you want the credit to be treated. If you choose to apply the credit to an invoice, you will see a list of open invoices for this customer, and you can select the invoice(s) on which the credit should be applied.
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Click OK.
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Did You Know? Customer messages are saved in QuickBooks. If you enter a message in the Customer Message area, and this is the first time you’ve used that message, you are prompted to add the message to your saved messages so that you can select the message again in the future, without having to retype it. Click the down arrow in the Customer Message area to view other messages that have been saved.
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Recording Cash Sales (COD)
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Select Customers, Enter Sales Receipts, or click the Create Sales Receipts icon on the Home page.
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Enter a generic name for the cash customer in the Customer:Job field.
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Select Quick Add to add this name to your customer list if the name has not been used previously.
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Verify the date of the sale.
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Enter the item(s) sold.
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Enter the quantity and rate.
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Indicate if you want the invoice to be printed or emailed, or you can choose to print the invoice now by clicking the Print button at the top of the form.
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Save the form.
Companies that make cash sales need to record these sales, just as companies that issue invoices record their sales. If yours is a cash business, such as a retail store, you might not keep a list of all of your customers. For sales to anonymous customers, you can create a customer and name it something such as Cash Customer or simply Customer and still record your sales properly in QuickBooks.
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Making Bank Deposits
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Select Banking, Make Deposits, or click the Record Deposits icon on the Home page.
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Change the payment type if you want to view a particular type of payment (such as only cash or only MasterCard and Visa).
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Check off each of the deposits you want to make at this time. You can use the Select All button to check off the entire list at once.
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Click OK.
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Verify the account to which the money will be deposited.
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Verify the date of the deposit.
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Verify all deposit information.
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If you intend to take cash back from the deposit, enter the account that the money should be assigned to.
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Enter an optional memo regarding the cash back.
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Enter the amount of the cash back.
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Click the Print button if you want to print a deposit slip or a summary of the deposit.
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Choose which documents you want to print.
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Click the OK button.
In the Sales & Customers preferences, you have the option of choosing whether you want payments to be routed to an undeposited funds account for future depositing instead of being recorded immediately as deposits. If you’ve chosen to deposit the funds later, you need to follow these steps to record the actual deposit.
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Receiving Advances, Retainers, and Down Payments
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Select Banking, Make Deposits. IMPORTANT If the Payments to Deposit window display, ignore that window at this time by clicking the X in the upper-right corner to close the window.
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Indicate the account into which this money will be deposited.
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Enter the date of the deposit.
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Enter the name of the customer and, if applicable, the job related to this deposit.
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Enter the account in which the deposit will be recorded. Typically this is a current liability account, not an income account.
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Enter an optional memo.
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Enter optional information about the method of payment.
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Enter the amount of the deposit.
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Click Print to print a deposit slip or deposit summary.
10 Save the deposit.
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You might require that your customers or clients give you advance payments, retainers, layaway payments, or down payments on purchases of goods or services. If the payment you receive is a down payment on the purchase of goods, you can create an invoice for the goods and then record the payment as a partial payment for that invoice (see “Receiving Payments for Invoices,” earlier in this chapter). If you are taking an advance payment or a retainer for goods or services that have not yet been invoiced, the procedure for recording the payment is somewhat different, as shown in this task.
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Issuing Discounts
If you offer discounts to your customers, you can record that information on a separate Discounts & Credits screen in QuickBooks. There are three types of discounts you can issue—sales discounts that you enter on a customer’s invoice, early payment discounts recorded automatically for customers who pay within a specified time period, and company-wide discounts such as when your company has a clearance sale on excess inventory items. The first two types of discounts are discussed here. Company-wide discounts are discussed in the “Adjusting the Price of Inventory” section of Chapter 14, “Using Inventory Features.”
Enter a Sales Discount on an Invoice 1
Press Ctrl+I to open an invoice.
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Enter the relevant customer information and a description of the items this customer is purchasing.
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Enter a Discount item in the Item section.
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Add a description of the discount, or revise the description that display.
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Enter the percent or exact amount of the discount. Enter the percent or amount as a positive number— QuickBooks automatically changes the discount to a negative for you. If you enter a percent, the discount is calculated based on the item on the line above.
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Save the invoice.
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Did You Know? A discount can be applied to more than one invoice item. Use Subtotal as an invoice item if you want to subtotal two or more items above the subtotal line, and then apply the discount to the subtotal line.
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Enter a Discount for Early Payment 1
Select Customers, Receive Payments. TIMESAVER Another way to get to the Receive Payments window is to click the Receive Payments icon in the Customers section of the Home page.
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Enter the customer’s name.
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Verify the date on which the payment is received.
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Enter the amount received.
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Click the invoice to which you want to apply a discount.
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Click Discount & Credits to open the Discount & Credits window.
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Did You Know? Date of receipt can differ from date of deposit. When issuing a discount for an early payment, the date on which the payment was received is of paramount importance. QuickBooks automatically enters today’s date when you open the Receive Payments form. Make sure the date on which the payment was actually received display on this form.
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Confirm the discount amount as computed by QuickBooks, and make any necessary changes.
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Verify the account to which the discount will be charged.
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Click Done.
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Check off the invoice(s) being paid.
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11 Note that the discount has been
applied. 12 Save the to customer payment
screen.
Did You Know? A discount date display next to invoices eligible for early payment discount. If the terms you assigned to an invoice make the invoice eligible for early payment discount, the date of eligibility display in the Disc. Date column in the Receive Payments window. 12
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Tracking Accounts Receivable
1
Select Reports, Customers & Receivables, or click the Customers & Receivables option in the Report Center.
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Select A/R Aging Summary to see a list of customers and the amounts owed by them.
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Select A/R Aging Detail to see every invoice that is overdue.
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Double-click any amount on the report to see the actual invoice form.
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Press Esc to close the reports.
Did You Know? You can change the interval for the number of days on your accounts receivable reports. The default interval when displaying the accounts receivable reports is from 30 days through 90 days overdue. You can change this by entering a different number of days (for example, 60, 90, 120, and so on) in the Interval fields at the top of the report.
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QuickBooks keeps track of all amounts owed to you by your customers. In addition, QuickBooks produces aging reports to show you how long overdue these outstanding amounts are. Examine these reports frequently so you can keep on top of your company’s collection effectiveness and so you’ll know which customers have trouble making timely payments.
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Viewing the Open Invoices Report 1
How much is owed to your company and who owes it? This information is readily available on the Open Invoices report. This report shows the detail of all amounts due from every customer and job. Information on this report is grouped by customer and job.
Select Reports, Customers & Receivables; then select Open Invoices from the side menu. TIMESAVER Another way to get to the Open Invoices report is to click the Customers & Receivables option on the Reports Center, and then select Open Invoices.
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Click the down arrow if you want to select a different method of sorting the report.
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Click Print to print a paper copy of the report.
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Double-click any amount to see the actual invoice.
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Press Esc to close the report.
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Did You Know? The open invoices report is also useful for finding unapplied payments or credits. Just click on each payment to edit which invoice it should be applied to.
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Creating a Collection Letter
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Select Company, Prepare Letters with Envelopes; then select the type of letter you want to create. For this example, a collection letter is selected.
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Select from the various options to determine who will receive this letter.
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Click Next.
Of course, you can open your word processing program and write an extemporaneous letter to the customer who owes you money. Or you can save time and use a standard form letter that is available to send to any customers who owe you money, anytime. Before printing the letters, you have the capability to customize the letters and add personal information if necessary.
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Choose to sort your list alphabetically by customer name or by amount, lowest to highest.
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The list that display here is the result of the selections you made in Step 2. Check off all members of the list who will receive the letter. Use the Mark All and Unmark All buttons to help with your selections.
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Click Next.
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Choose from a variety of available letters, or click the Create or Edit a Letter Template option to customize your mailing. If you choose to create a letter from scratch, a Microsoft Word document where you can customize your letter will appear. For this example, the Friendly Collection letter template has been chosen.
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Click Next.
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Enter the name and title of the person who will sign the letters.
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Click Next. A Microsoft Word document containing all the letters will open.
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Scroll through the letters to make sure they read the way you want them to. If necessary, you can add information to any letter.
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Select File, Print from the Word menu bar.
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In QuickBooks, click Next if you want to print envelopes. If you choose this option, you are asked to verify the size of the envelopes. In the Microsoft Word document that display, click OK to print the envelopes.
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If you don’t want to print envelopes, click Cancel.
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In QuickBooks, click Finish to close the Letters and Envelopes window.
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Recording Bad Debts
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Select Customers, Receive Payments, or click the Receive Payments icon on the QuickBooks Home page.
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Enter the name of the customer and job, if applicable, for whom you will record a bad debt.
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Click to place a check mark to the left of an uncollectible invoice.
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QuickBooks will pre-fill the Amount box with the remaining amount due for the selected invoice.
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Click the Discounts & Credits button.
Did You Know?
If your company keeps records on an accrual basis, you’ve already recorded income when a job is completed and invoiced, even though you haven’t yet received the payment from your customer. So when you discover that the customer isn’t going to pay, you need to offset the income you recorded with a bad debt expense. 3
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You might receive a warning about automatically calculating payments. Depending on the preferences you set for your company, you might receive a warning telling you that QuickBooks will automatically enter a payment in the amount of the invoice you checked. To override this calculation, click No when this warning display. Note that clicking No turns off the company preference for automatically applying payments. To reset this preference, select Edit, Preferences and click the Sales & Customers icon and the Company Preferences tab. Check the box to automatically apply payments.
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Enter as a discount the amount of the uncollectible debt.
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If necessary, change the discount account field to reflect the account where you record bad debt expenses.
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Click the Done button.
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Save the Receive Payments window.
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Did You Know? Bad debts get entered as positive numbers. Even though you are reducing the amount owed by the customer, enter the amount as a positive number. QuickBooks will reduce the amount due by the number you enter.
Did You Know? Program advertisements appear from time to time. When you make certain selections in QuickBooks, you might notice extra windows appearing, offering more information about special features, such as how to print labels or how to order preprinted supplies. When these windows appear, you can check a box in the window to keep the window from appearing again in the future, or you can simply click OK to close the window.
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Working with Multiple Currencies IMPORTANT Before you begin using Multiple Currency features in QuickBooks, review the information available in the Intuit Community. To access this information, select Manage Currency from the Company menu and then choose the Multicurrency Resource option on the right (Internet connection required).
Today, business economy is ever changing and for many businesses that means reaching into the global economy to conduct business. If your business buys or sells its products or services in a currency different from your home currency, then you will benefit from using the Multicurrency feature in QuickBooks. To begin using Multiple Currencies in QuickBooks you first enable the feature, a task that cannot be reversed. To keep your financial records current you use the exchange rate download and home currency adjustment tools. Your home currency is the currency of the country where your business is located. Using this feature, you can report your business financials in your home-based currency as well as foreign currencies.
Enable Multiple Currency in QuickBooks 1
From the Edit menu, select Preferences and choose the Multiple Currencies option.
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Select the Company Preferences tab.
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Click Yes, I use more than one currency.
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Click Yes to the warning that you are enabling multicurrency in your data file
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IMPORTANT The preference to enable Multiple Currency affects your financial reporting and cannot be disabled, so make sure you have made a backup of your data file prior to selecting this option. If you have an existing business, it is also advisable to discuss this change with your accounting professional. 5
Select your home currency from the drop-down menu options.
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Click OK to close the Preferences dialog.
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Click OK to the warning (not shown) that your company file will close and reopen with the changes made.
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Assign a Currency to Your Foreign Customer or Vendor 1
From the Icon bar select Customer Center (not shown).
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Click on New Customer (not shown).
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Type a Customer Name.
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From the Currency drop-down, select the default currency to use for this customer.
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Enter additional customer information as needed.
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Click OK.
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From the icon bar select Vendor Center (not shown).
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Click on New Vendor (not shown).
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Type a Vendor Name.
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From the Currency drop-down, select the default currency to use for this vendor.
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Enter additional vendor information as needed.
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Click OK. IMPORTANT You will assign the default currency to your customer and vendor records so that the correct currency will default on their respective transactions. If your
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customer or vendor has had transaction activity before using the multicurrency feature, you will have to create a new customer or vendor record for the foreign activity.
Did You Know? Review the “Adding Customers” and “Adding Vendors” sections in Chapter 3, “Adding or Changing Information After the Interview Is Completed,” for more information on completing the additional information.
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Select the Foreign Currencies You Will Be Using 1
From the Company menu, select Manage Currency.
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Select Currency List.
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If you are adding or removing a currency, click Include Inactive.
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Scroll through the list of exchange currencies.
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With your mouse click to remove the “x” in front of a currency to make it available for use or click to add the “x” to a list item to make it inactive.
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Did You Know? Inactive currencies will not display in drop-down lists when creating foreign transactions. However, inactive currencies, if used during a reporting period, will appear on reports. You can make an inactive currency active again at a later date.
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When you have finished selecting the currencies you want to work with, uncheck Include Inactive to shorten the list of currencies displayed in the list view.
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Click the red (x) on the top right of the Currency List to close.
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Add Foreign Chart of Accounts 1
From the List menu, select Chart of Accounts and choose New from the Account drop-down menu (not shown).
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Select Bank or Credit Card from the Add New Account: Choose Account Type dialog (not shown). QuickBooks automatically creates the necessary foreign Accounts Receivable and Accounts Payable accounts when the foreign currency is used on a transaction.
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Click Continue.
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Enter your new account Number, if the accounting numbering preference is enabled.
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Type an Account Name.
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Select the appropriate currency from the Currency drop-down list.
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Enter the optional information as needed.
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Click a Save option.
Did You Know? Currencies can be assigned to the following account types: bank, credit card, accounts receivable, and accounts payable. The currency of accounts receivable and accounts payable must match the currency of the customer/vendor used in the transaction. QuickBooks will default to or create the proper accounts receivable or payable account when you create your first sales or purchase transaction using that foreign currency. You must manually create any additional foreign bank or credit card accounts needed.
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Update the Foreign Exchange Rates 1
From the Company menu, select Manage Currency.
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Select Download Latest Exchange Rates. You can also access this functionality from the Currency List menu, Activities menu.
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Click OK to the message (not shown) that QuickBooks successfully updated the exchange rates
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Click OK to the message (not shown) that the rates downloaded successfully.
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You can edit the exchange rate by selecting a currency from the Currency drop-down menu and then choosing Edit Currency.
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Click the Change Format (not shown) to modify how the currency displays, click OK (not shown) to return to the Edit Currency dialog.
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Browse through the displayed calendar to select a date for the new exchange rate.
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In the Exchange Rate column enter the appropriate rate.
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Click OK.
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Record Foreign Sales Transactions To create a customer invoice, from the Home Page (not shown) click on Invoices.
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Select your foreign customer.
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The default currency Accounts Receivable account is selected.
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Did You Know? A unique Accounts Receivable account is automatically created when a foreign currency is used on sales transactions. The currency selected is defaulted from the New or Edit Customer dialog.
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Confirm the date and invoice number assigned by default are correct.
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Enter the item or items being sold to the customer.
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The Exchange Rate as of the date assigned to the customer invoice is displayed. Accept the default exchange rate (recommended) or modify as needed.
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The Balance Due is displayed in both the home currency and the foreign currency.
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Click a Save option.
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Click, Receive Payments on the Home Page (not shown) to receive payments from the foreign customer.
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Select the foreign Customer.
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QuickBooks will display the default A/R Account or you can select a different account.
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received or change if needed. 13
Select the Date the funds were received.
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for the selected date is correct, or edit if needed. 15
Complete the remaining information.
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Verify that the calculated Amount Received agrees with your banking records.
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Click a Save option.
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Record Foreign Purchase Transactions 1
To create a vendor bill, from the Home Page (not shown) click on Enter Bills.
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Select your vendor.
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Confirm the default currency Accounts Payable account assigned to your New or Edit vendor record.
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Enter the Date you want to record for the vendor bill.
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Enter the vendor’s bill number in the Ref. No. field.
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Enter the item or items being purchased from the vendor.
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The Amount Due displays both the foreign currency and home currency cost for the exchange rate as of the bill date.
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Accept the default exchange rate (recommended) or modify as needed.
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Click a Save option.
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10 Click Pay Bills on the Home Page 11
(not shown) to pay the vendor bill. 11
Select to Show All Bills, or only bills due on or before a specific date.
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Select the A/P Account for the foreign vendor.
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13 Filter or sort the Pay Bills listing as
desired. 14 Select the bills to be paid. 15 16
Complete the remaining information.
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Verify the correct Exchange Rate is listed for your bill payment date. Modify as needed.
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See Also For more detailed information about completing the Pay Bills process, read the “Paying Bills section in Chapter 5, “Making Purchases and Recording Payments.”
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Prepare Unrealized Gains and Losses Report 1
To prepare an Unrealized Gains & Losses report, select Reports, Company & Financial from the menu bar.
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Select Unrealized Gains & Losses report.
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In the Enter Exchange Rates dialog that displays, select the date you want to report the Unrealized Gains and Losses for.
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If the proper Exchange Rate does not default, enter the appropriate rate for the selected date.
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Click Continue. IMPORTANT You can assure that your financials are properly reported with the correct exchange rate if you make it a daily task to download or manually enter the updated exchange rates. See the previous section titled “Update the Foreign Exchange Rates.”
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The Unrealized Gains & Losses report is displayed and for each currency with unpaid transactions, the rate used for the report is displayed. 5
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Prepare Realized Gains and Losses Report 1
To prepare a Realized Gains & Losses report, select Reports, Company & Financial from the menu bar (not shown).
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Select Realized Gains & Losses to display the report showing transaction details of the recognized gain or loss on the reporting transactions.
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View your Profit & Loss, by selecting Reports, Company & Financial and selecting Profit & Loss Standard.
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Change the dates if needed.
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View the Exchange Gain or Loss amount reported on the Profit & Loss and compare to the Realized Gains & Losses report prepared above.
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Did You Know? When you invoice your client, or receive a bill from a vendor, the sales price or cost is reported in your financials at the “then current” exchange rate. However, because exchange rates fluctuate daily, your “realized” amount received or paid will probably differ from what was originally reported. This accounting is known as the “realized gain or loss” and is computed by taking the difference between the original document value and the new value at the current exchange rate. QuickBooks automatically creates this entry for you! Be sure to keep the exchange rates in your data file current by following the guidelines in section titled, “Updating the Foreign Exchange Rates.”
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Make a Home Currency Adjustment To restate your business financials in the home currency as of a specific date range, click Company, Manage Currency (not shown) and choose the Home Currency Adjustment.
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The Home Currency Adjustment dialog displays. Select the date for which you are restating your financial statements.
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Select Currency from the drop-down menu.
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The default Exchange Rate displays; if needed it can be modified here.
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Click Calculate Adjustment.
Did You Know? It is very important when you are presenting your business financials to a banking institution or others for review that you have prepared the Home Currency Adjustment prior to preparing the necessary reports. The Home Currency Adjustment will calculate any net gain or loss using the Home Currency Adjustment Exchange Rate, as if the transactions are completed and realized.
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Click Select All (recommended) or choose individual transactions to include in the Home Currency Adjustment.
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Click a Save option.
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QuickBooks restates your foreign Balance Sheet accounts in the value of the home currency and posts the offsetting entry to an Other Expense type account named “Exchange Gain or Loss.”
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Making Purchases and Recording Payments Nearly every business engages in spending of some sort. Businesses purchase inventory items, pay rent, buy supplies, clean their premises, pay employees, purchase equipment—the list goes on and on. The tasks described in this chapter will assist you in keeping track of your expenditures and knowing how much it costs to run your business. Besides knowing how much you spend, it’s important to know how much you owe and when your payments are due. You can have all this information at your fingertips when you track your expenses using QuickBooks. QuickBooks provides an option to use purchase order forms to record the items you have ordered so you can predict what bills you have yet to receive from the vendors. Using purchase orders also enables you to keep track of what is on order so you don’t reorder the same items. In QuickBooks, purchase order information flows directly to bills as soon as you receive the items you ordered. This way you don’t have to enter your purchase information twice. And if there are discounts available for early payment, QuickBooks calculates those for you. You can save time by using QuickBooks to print your checks, and you can produce a variety of reports that show you how much your company is spending and what you are purchasing.
What You’ll Do Set Purchases and Vendors Preferences Work with the Vendor Center Use Purchase Documents Report on Open Purchase Orders Receive Goods Receive a Partial Order View Aging and Unpaid Bills Reports
5 Pay Bills
Take Discounts
Use the Check Register Edit Bill Payments
Delete Bill Payments Set Checking Preferences Write Checks Print Checks Void Checks
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Setting Purchases and Vendors Preferences
Set Purchase Orders and Inventory Preferences 1
Select Edit, Preferences.
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Click the Items & Inventory icon.
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Click the Company Preferences tab.
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If you plan to use the inventory or purchase orders features in QuickBooks, check the Inventory and Purchase Orders Are Active box.
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Check Warn About Duplicate Purchase Order Numbers to be warned that you are about to use a duplicate purchase order number.
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Check the Quantity checkboxes if you want QuickBooks to reduce your available inventory totals by amounts on pending builds or sales orders.
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Check Warn If Not Enough Inventory To Sell and select one of the options to receive a warning message when you try to issue an invoice for items not in your inventory.
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Click Enable to enable the Units of Measure feature.
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In the Unit of Measure dialog box, choose between Single U/M Per Item and Multiple U/M Per Item.
Before you use the purchases and payments features of QuickBooks, you need to set some preferences to establish how the program will function. Some of these preferences might have been set when you used the EasyStep Interview, but it’s worthwhile to examine the preferences that are in place and make sure you are taking advantage of all QuickBooks has to offer in this area.
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10 For information about Units of
Measure, click Unit of Measure Overview. 11 Click Finish to return to the
Preferences window (or click Cancel if you decide not to use Units of Measure at this time).
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Accounting for Purchases When you purchase items, you record the payment for the items on bills. When you enter information on bills, QuickBooks performs various accounting procedures in the background. Fill out a bill recording your purchase of an item, and QuickBooks immediately debits (increases) the expense related to the item, or, if you track inventory in QuickBooks, the inventory account is debited (increased) and your liability account (Accounts Payable) is credited (increased). Later, when you pay the bill, QuickBooks debits (decreases) Accounts Payable, removing the amount of the purchase from that account, and credits (decreases) Cash (or Checking, or however you refer to your bank account), reducing the balance in your bank account by the amount of the purchase. So, in the following example, these are the accounts that are affected when you make a $500 purchase of items for inventory: Debit Inventory
Credit
$500.00
Accounts Payable
$500.00
When you pay the bill, these accounts are affected: Accounts Payable Cash
$500.00 $500.00
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Set Bills Preferences 1
With Preferences still open, click the Bills icon and click the Company Preferences tab. If you made changes on the previous Preferences screen, you will be prompted to save those changes before proceeding.
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Type a value in the Bills Are Due field to indicate how many days after receiving a bill the bill is due.
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Check Warn About Duplicate Bill Numbers from Same Vendor if you want to be told you have received a bill with a duplicate number from the same vendor.
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Check the Automatically Use Discounts and Credits box if you typically take advantage of discounts and credits.
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If you check the discounts and credits box, you must enter an account that will be credited with your discounts and credits. Click OK.
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Did You Know? QuickBooks assumes bills are due in 10 days. Because some vendors offer a discount for bills paid within 10 days, QuickBooks sets the bill due date at 10 days and adds the bill to your reminder list at that time. If you typically pay bills in 30 days, enter 30 in the Bills Are Due field, or use whatever timeframe is standard for your company.
Working with the Vendor Center
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Click the Vendor Center icon on the Navigation bar or Home page. The Vendor Center displays.
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Click the Vendors tab.
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Use the scroll bar to view the entire vendor list. Click on a vendor name.
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Select information you want to view from the Show drop-down list.
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View an original form by doubleclicking the form name.
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Press Esc to close the original form.
QuickBooks provides a one-stop window where you can view all the transactions currently active with a particular vendor. You can see outstanding bills, outstanding orders, payments issued, contact information, credit limit, and account number. You can manage vendor activities from this screen, such as recording the receipt of items and bills, payment of bills, and preparation of reports.
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Using Purchase Documents
The purchase order feature of QuickBooks is optional, but if you like to plan ahead, using purchase orders is a good idea. As soon as you enter a purchase order in QuickBooks, the process of tracking your company’s spending begins. You can see at a glance what is on order and how much money is committed. Purchase orders make bill paying easier because the information on the order flows right to the vendor bill.
Create Purchase Orders 1
Open a new purchase order by selecting Vendors, Create Purchase Orders. (Remember—you must have activated Purchase Orders in the Items & Inventory Preferences to have access to the Purchase Order form.)
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TIMESAVER Clicking the Purchase Orders icon on the Home page also opens the Create Purchase Orders window. 2
Click the Vendor field’s drop-down arrow to select a vendor from the existing vendor list. The vendor’s name and address appear in the Vendor area in the purchase order.
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If the goods are to be shipped to a location other than your company, enter the shipping location.
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If the address has changed for this vendor, enter the corrected information in the Vendor area of the form. When you close the purchase order, you are given an opportunity to make this change permanent. Verify the date and purchase order number; revise if necessary.
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Did You Know? You can enter a new vendor on-the-fly. If the vendor for this purchase order is not on the list, just enter the new vendor’s name in the Vendor field, and you can add the name to your Vendor list.
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Order Items on a Purchase Order
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Calculated automatically
Enter the name of the item you plan to order in the Item column. A description and price will fill in if this information has been saved previously.
See Also See “Adding Items” on page 86 for information on setting up inventory items.
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Enter the number of items you want to order in the Qty. column.
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Verify the per item price that displays in the Rate column, or enter a price if no price displays. Leave the Rate field blank if you are uncertain.
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If this order is for a specific customer, enter the name in the Customer column.
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Type an optional message that will appear on this purchase order in the Vendor Message field.
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Check To Be Printed to add this form to your print queue for printing later.
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Check To Be E-mailed to email this form to the vendor.
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Save the purchase order.
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Entering Vendor Bills 1
From the Home page, click on the Enter Bills icon.
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Select your vendor name from the drop-down list or click at the top of the list to create a new vendor listing.
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If you have an open purchase order for that vendor, click Yes to list the open purchase orders. (If not, click No and continue to Step 5).
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In the Open Purchase Orders dialog that displays, place a check mark next to the purchase order.
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Click OK. QuickBooks fills the items being purchased on the vendor bill from the open purchase order.
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Enter or adjust the Date, Ref. No., and Amount Due.
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The terms and discount will default from the original vendor settings, or you can override the terms when entering a new vendor bill.
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If you are assigning a purchase order to the bill, the items tab includes the details from your purchase order. Otherwise, click on the Expenses tab and enter the account you want to assign the expense to.
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Click one of the save options.
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Attaching Documents to Transactions 1
New for QuickBooks, 2010 you can attach documents to transactions.
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If this is your first time using this feature, click Company, Document Management and select Learn About Document Management. (If not, skip to step 6 or 7 after clicking the attach icon on a transaction.)
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Click Sign Me Up to enable the document attachment feature (Internet connection required).
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If you already have an Intuit Workspace Account, click Sign In.
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You are directed to the Intuit Workplace site. Click Create Account (not shown) and follow the screen prompts to enter your email address, create a password, and provide your name and a security question.
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Click that you agree with the terms and then click Create Account (not shown).
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The Document Management Signin dialog will display. Complete your User ID and Password to begin using Document Management.
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Open the transaction to which you want to attach documentation. Click the paperclip icon Attach.
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Click Local Files if you are attaching a document you have stored on your local computer.
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10 Click Online Document Inbox if you
recognize your installed scanner and process the request directly from within the program.
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are attaching a document that has previously been scanned and saved in Document Management but not yet attached. 11 Click Scanner and QuickBooks will
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12 Complete optional information for
Title, Description, and Keywords.
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13 Click View to view the attachment,
Delete to remove the document, or Save File As if you want to save a copy to your local hard drive. 14 Click OK to complete the process. 15 Easily identify transactions with an
attachment by the Green paperclip icon on the transaction or list item.
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Transactions with attachments will have a green colored paperclip icon.
Reporting on Open Purchase Orders
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Click the Vendor Center icon on the Icon bar or Home page.
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Click the Transactions tab.
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Click the Purchase Orders option.
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Choose from All Purchase Orders or Open Purchase Orders in the Date drop-down list to view all orders or all open orders.
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Double-click any order on the purchase orders list to view the actual order.
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Press Esc to close a purchase order you are viewing.
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Choose Reports, Purchases to view a menu of reports relating to your purchases.
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Select Open Purchase Orders or Open Purchase Orders by Job.
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Change the date at the top of the report to see items on order as of a specific date or for a particular time period.
You can prepare a report showing all outstanding purchase orders so you can easily see which items have been ordered and have yet to be received. Then it’s a simple matter to view an individual purchase order. You can change the order if necessary or indicate that all or some of the items have been received. After items are received, they are removed from the purchase order and added to your company’s accounts payable, ready for your payment.
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Receiving Goods
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When you receive items you ordered, those items need to be added to your inventory. Other goods you order, such as supplies, also need to be acknowledged in QuickBooks so that the outstanding purchase order can be closed and the payment process can begin. You can check the goods you ordered against the purchase order, or you can enter a bill directly into QuickBooks without first creating the purchase order.
Select Vendors, Receive Items.
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TIMESAVER Clicking the Receive Inventory icon on the Home page, and then choosing Receive Inventory Without Bill (opens the Create Items Receipts) or Receive Inventory With Bill (opens the Enter Bills form). 2
Click the down arrow or begin entering a vendor name in the Vendor area of the Create Item Receipts window to select a vendor.
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If an open purchase order exists for this vendor, you are prompted to receive items against a purchase order. Click Yes to see open orders.
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Check the order or orders that apply to the goods you received.
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Click OK. 3 4
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Check the Bill Received box if a bill was received with the shipment. The form name changes to an Enter Bills form.
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Verify the date on the bill.
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If you haven’t transferred information from a purchase order, enter information about items received and price.
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Verify the quantity of items received. 10
10 Verify the total amount due on the
bill. 11 Click Show PO if you need to view
the purchase order. 12 Select a save option.
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Did You Know? Purchases orders are automatically adjusted. If you receive items against a purchase order, the purchase order is adjusted to reflect items received. If the entire order is not received, the purchase order is adjusted to show the remaining items still on order.
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Receiving a Partial Order 1
Select Vendors, Receive Items.
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Enter the vendor name in the space provided.
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In the window that displays, click Yes to view open purchase orders.
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Check the purchase order that applies to the goods you received.
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Click OK.
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Check Bill Received if a bill for the partial order was received with the shipment.
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Verify the date on which the item was received.
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Make any necessary adjustments to the quantities to reflect the actual items received.
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Save the Create Items Receipts form.
Did You Know? Purchase orders are adjusted automatically. When you adjust the quantities of the items you have received, the original purchase order changes to reflect the remaining outstanding items.
If you created a purchase order for the goods you received, the purchase order list displays on a screen when you indicate you have received the goods. If you didn’t receive the complete order, you should note what was received and keep the purchase order active until you receive the rest of your order.
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Viewing Aging and Unpaid Bills Reports 1
Select Reports, Vendors & Payables, A/P Aging Detail.
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Scroll through the report to see which bills are due, when they are due, and how much you owe.
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Select Reports, Vendors & Payables, Unpaid Bills Detail.
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Scroll through the report to view amounts due to each vendor.
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Press Esc to close each of the report windows.
Want to know how much you owe and to whom you owe it? Produce the Unpaid Bills report, and you’ll have access to a complete list of all outstanding amounts.
Amount owing.
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Did You Know? You can view original documents that support entries on a report. Doubleclick any amount on these reports to view the actual bill.
Double-click on any amount to view the original bill.
See Also See Chapter 18, “Working With Reports in QuickBooks,” page 375, for detailed explanations about printing, customizing, and memorizing your QuickBooks reports.
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Paying Bills
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Select Vendors, Pay Bills, or click the Pay Bills icon on the Home page.
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Set the due date for bills you want to view, or click Show All Bills to show all outstanding bills.
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Check off all bills you intend to pay.
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Verify the payment amount for each bill and change the amount in the Amt. To Pay column if necessary.
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Indicate the date on which checks are written in the Date field
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Verify that the bank account shown in the Account field is the one upon which checks are drawn.
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Click Pay Selected Bills to complete the bill payment.
Did You Know? You don’t have to pay 100% of the bill amount. If you change the amount of payment on a bill to less than 100% of the amount due, the bill remains in your payables system with the remaining amount still due.
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Receiving merchandise and recording bills that are due solve the problem of getting the information about your purchases into QuickBooks. The next step is to pay for your company’s expenditures. You probably have a plan in place for paying bills. Maybe you write checks weekly or twice a month. Whenever you’re ready to make payments, you’ll find the bill-paying features of QuickBooks easy to master.
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Taking Discounts Did You Know? Bills in the discount period might not appear on the unpaid bills list. If a vendor offers a discount for early payment, and the bill is not due yet, it does not appear on the list. Clicking the Show All Bills option displays all bills currently outstanding, including those not yet due.
When you pay your bills early, you might be entitled to take a discount offered by your vendor. Check the terms of the bill you received to see whether there is an option for a discount. Terms such as “2% 10 Net 30” provide for a 2% discount if the bill is paid within ten days. Some companies also offer a discount if the entire balance is paid in full within 30 days as opposed to financing over a longer period of time. When you enter your bill in QuickBooks, you can define the discount terms, and then you can apply the discount right in QuickBooks. The discount is calculated automatically, but you can override the calculation if necessary.
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Choose Vendor, Pay Bills, or click the Pay Bills button on the Home page.
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Make sure the Show All Bills option is selected.
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Check off bills for payment.
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Click a bill with a discount date. (There will be a date in the Disc. Date column.)
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Notice that the potential discount displays in the Discount & Credit Information section of the window.
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Click the Set Discount button.
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The discount has been calculated. Verify that the amount is correct and make any necessary changes.
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Enter the account in which the discount will be recorded.
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Click Done to return to the Pay Bill window.
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10 Complete the bill payment process.
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Using the Check Register
The check register displays all the transactions that affect the cash account. There is a separate check register in QuickBooks for each cash account (and also all your other balance sheet accounts, except Retained Earnings). Every time you make a payment or record a deposit, the transaction is automatically recorded in your check register. You can view the transactions that have been recorded in the register, you can make entries directly into the register, and you can choose a transaction and go directly to the originating form.
Use the Check Register 1
Press Ctrl+A to open the Chart of Accounts.
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Double-click your checking account to open the register.
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Scroll to view existing transactions.
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Double-click any transaction (except in the Date or Number fields) to view the original form and make corrections if necessary.
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Click a transaction, and then click the QuickReport button to obtain a report showing all transactions for the selected payee.
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Click the Sort By drop-down arrow to select from a variety of sort options.
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Enter a transaction right in this register by filling in each appropriate field and then clicking the Record button.
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Click the Go To option to search for a transaction in this register (not shown).
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Right-click a transaction and then select Void to void the transaction (not shown).
10 Press Esc to close the window.
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Editing Bill Payments
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Press Ctrl+A to open the Chart of Accounts.
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Double-click the checking account you used to pay the bill. The account register displays.
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Find the check that was used to pay the bill.
QuickBooks is a flexible program. If you make a mistake, you can usually go back and correct the error. Say, for example, that you wrote a check by hand to a vendor for $500 to be applied to a bill for $2,000. However, you didn’t pay attention when you recorded the payment in QuickBooks, and you recorded the entire bill as being paid. You can correct the payment amount and the unpaid portion of the bill will be reinstated.
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See Also See “Searching for Transactions” on page 101 for information on finding transactions in the register.
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Double-click the check description to open the actual check.
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Change the amount paid to the correct amount.
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Click Recalculate to change the amount of the check.
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Save the transaction.
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You’ll see a warning that the change you’re making will affect the way your bill payments were previously recorded. Click Yes to accept the change.
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The QuickFill Feature As you’re entering information in QuickBooks, you might notice occasions when QuickBooks seems to know just what you’re thinking because it fills in the rest of the name or item. This feature is known as QuickFill. If you type a p in the Vendor area, for example, QuickBooks searches the vendor list for the first name beginning with a p and fills in the
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rest of the name, which might be Partington Supply. If the vendor you are really trying to type is Pranitis Heating and Cooling, continue typing. By the time you have typed Pr or Pra, QuickBooks has filled in the rest of the name; you don’t have to type anything more. Just click the next field or press Tab to proceed.
Deleting Bill Payments
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Press Ctrl+A to open the Chart of Accounts.
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Double-click the checking account you used to pay the bill. The account register displays.
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Find the check that was used to pay the bill.
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Double-click the check description to open the actual check.
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Change the amount paid to 0.
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Save the transaction.
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Click Yes when the Recording Transaction window displays.
Much like the process of editing incorrect bill payments, you can also delete a payment entered erroneously. If you entered a bill payment and then realized the payment was never made, you can delete the payment, thus reinstating the bill to its unpaid status.
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See Also See “Voiding Checks” on page 175 for information on voiding checks as an alternative to deleting payments.
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Setting Checking Preferences
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Select Edit, Preferences and click the Checking icon.
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Click the My Preferences tab.
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Indicate which bank account will be used for each type of form listed.
Did You Know? QuickBooks makes its own selection if you don’t specify a bank. If you leave the bank account options blank, QuickBooks chooses an account based on the account you used the last time you opened one of these forms. You can always override the bank account information on a form if necessary.
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If you write checks in QuickBooks, you can set certain preferences so that the checks are created to your specifications. For example, you can control which cash account is used for certain types of checks, and you can indicate whether you want your account information to appear on your check voucher. You can have QuickBooks change the date on your checks to match the date on which they are actually printed instead of the date on which they are created. You can also require QuickBooks to warn you if duplicate check numbers are about to be used, and you can request that certain payee information be included on the check.
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Click the Company Preferences tab to see the companywide options.
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Select Print Account Names on Voucher to display the name of your company account on check stubs.
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Leave the Change Check Date box unchecked to have QuickBooks print checks using the date on the check form. Check the box to have QuickBooks use the date on which the check is printed.
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Check the Start with Payee Field on Check to force QuickBooks to position your cursor in the payee field on checks.
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Checking the Warn about Duplicate Check Numbers box enables QuickBooks to provide you with a warning when you are about to issue a check with a duplicate number.
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When the Autofill feature is checked, QuickBooks will fill in the account number of any vendor or customer you enter on a form.
10 Indicate which account is to be
used for payroll and payroll tax liabilities. 11 If you download transactions from
your financial institution directly into QuickBooks, you now have the option of choosing between the new side-by-side view and the original register view when working with online banking. 12 Click OK.
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Writing Checks
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Select Banking, Write Checks. TIMESAVER Press Ctrl+W or click the Write Check icon on the Home page to open the Write Checks window.
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Verify the account on which this check will be written.
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Enter the payee’s name. IMPORTANT Respond to all warnings. A warning might appear when you enter a payee. The type of warning depends on the circumstances. For example, you might be told you have outstanding bills from this vendor. Read the warning, decide how you will respond, and then click OK to clear the warning from your screen.
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When you pay a bill in QuickBooks, the program issues a bill payment check. Whether you actually print checks using your QuickBooks program or simply enter payments you’ve made into the program, you need to familiarize yourself with the QuickBooks check-writing feature. You might write checks for obligations that don’t have accompanying bills, such as your rent. If you write handwritten checks, they need to be entered into QuickBooks. The best way to enter these payments into your QuickBooks program is through the Write Checks feature.
Enter the check amount.
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Verify the date and check number, if applicable.
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Enter the account to which this check should be charged, the amount, and an optional memo.
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If you are purchasing inventory, click the Items tab. Enter the items, the quantity, and the cost.
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Indicate whether this is to be an online payment.
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See Also See “Making Online Payments” on page 276 for information on making payments over the Internet. 10 6 9
Check the To Be Printed box if this check is to be placed in the print queue.
10 Record the check by selecting a
save option.
Did You Know? QuickBooks provides a link to the Pay Bills window. When writing a check, if you select a payee for whom there are outstanding bills, the Open Bills Exist window displays, listing the open bills and providing you with a direct link to the Pay Bills window. You can click the link to Pay Bills or you can click the option to Continue Writing Check.
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Printing Checks
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Select File, Print Forms, Checks.
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Verify the bank account.
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Verify the first check number for this batch of checks.
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Check off all checks that are to be printed.
When you write checks in QuickBooks, you indicate whether you want to print the check immediately (by selecting the Print option at the top of the window), print it at some future date (by checking the To Be Printed box), or not print it at all (by saving and closing). When you choose to print checks later, you can choose to print an entire batch of outstanding checks, or you can pick the ones you want to print and save the others until later.
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IMPORTANT Place the check forms in printer. Before continuing, be sure to place your actual check forms in the printer.
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Click OK.
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Verify the printer settings.
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Select the check style that matches your actual checks.
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Enter the number of copies that you want to print.
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Check the Collate box if you want your printed checks collated.
10 Indicate whether you want to have
QuickBooks print your company name, address logo, or signature image on the checks. If your checks are preprinted with this information, you should leave these boxes blank. 11 Click Print to send the checks to
the printer.
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Did You Know? It’s not too late to cancel your check printing order. When the print checks window is open, you can still change your mind. If you decide not to print the checks, click the Cancel button. The Print Checks window closes, and you are returned to the Select Checks to Print window, where you can change the selection of checks or click Cancel and print nothing.
Voiding Checks
You can void checks that have been recorded in your QuickBooks company file. There are two methods of voiding, depending on when the check was issued. If the check was issued in the current year, you can void the check in the check register. If the check was written in a prior year, you should be careful not to change amounts that appeared on your financial statements. The steps shown here will prevent that from happening.
Void a Check in the Current Year 1
Press Ctrl+A to open the Chart of Accounts.
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Double-click the name of your checking account to open the register.
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Click the Go To button.
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Select whether to search by payee, check number, or some other criteria.
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Enter the name (if you’re searching by payee), check number, or other information to help you find the check you want to void.
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Click Back or Next to search backward or forward in the register. Continue clicking Back or Next until you find the check you’re looking for.
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When the entry for the check displays in the register, press Esc to close the Go To window.
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Right-click the register entry.
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Click Void [check type] -Check on the pop-up menu (where [check type] represents the type of check you are deleting—in this example, it’s a bill payment). The check amount switches to 0 and VOID displays in the memo area.
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Void a Check from a Previous Year 1
Select Company, Make General Journal Entries.
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Enter today’s date (or the date on which the check became void).
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Enter the name of the cash account on which the check to be voided was drawn.
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Enter the amount of the check in the Debit column.
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Enter the phrase Void Check [check number] in the Memo column and enter the number of the check you are voiding.
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Enter the name of the account to which the check was originally charged.
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Verify the amount that displays in the Credit column.
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Click Save & Close to save the transaction and close the window.
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Follow Steps 1–7 from the previous task to open the register and find the check you want to void.
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10 Do not change the amount of the
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check! In the memo field, type Voided [on date] and enter the date on which you created the journal entry.
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11 Click the Record button. 12 Because this change affects a prior
year, you might be required to enter a password before the transaction can be recorded. 13 Click Yes to indicate that you
understand this change could affect previous financial statements.
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See Also See “Closing Financial Records at Year-End” on page 313 for information on setting a year-end close date and making changes after that date has passed. Making Purchases and Recording Payments
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Collecting and Paying Sales Tax If you sell items at retail and the items you sell qualify for sales tax, you are expected to collect sales tax from your customers at the time of the sale and remit that tax to the government on a timely basis. Because sales tax displays as a separate item on your invoice forms, you must set up a Sales Tax Item so that QuickBooks will accurately calculate the tax on sales forms. After you’ve set up a sales tax item, the tax calculates on your sales forms so you can charge your customers for the tax. In some states, various goods are exempt from sales tax. New Jersey, for example, doesn’t tax the sale of clothing. Illinois doesn’t tax the sale of newspapers and magazines. QuickBooks enables you to specify which of the items you sell are subject to the tax and which are not. Some customers are exempt from sales tax. For those customers, QuickBooks gives you an option of exempting the customers or particular sales from sales tax. After you’ve collected the tax, you are required to remit it to your state or local government. QuickBooks provides you with a form that summarizes your tax collections. You can use this form to calculate your sales tax, and then you can make your payment. You can also fill out your state sales tax form with the aid of a liability report and record an early payment discount in QuickBooks if your tax collection agency allows such a discount.
What You’ll Do Set Sales Tax Preferences Create a Sales Tax Item Create a Sales Tax Group Charge Sales Tax to Customers Enter Tax Status of Inventory Items Sell Tax-Exempt Items Sell Items to Tax-Exempt Customers
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Produce Monthly Sales Tax Reports Pay Sales Tax
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Setting Sales Tax Preferences
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Select Edit, Preferences to open the Preferences window.
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Click the Sales Tax icon.
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Click the Company Preferences tab.
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Select Yes to indicate that your company charges sales tax.
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Click Add Sales Tax Item to set up a new sales tax item (see the next task).
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Indicate the name of the sales tax item you most frequently charge to customers.
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Indicate the terms you want to use to see taxable and non-taxable sales.
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Check the Identify Taxable Amounts box if you want a T to appear on sales forms to identify taxable items.
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Indicate when you actually owe sales tax.
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tax remittances. 11 Click OK to save your changes.
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Before you can apply sales tax on your sales to customers, you need to set up preferences that indicate your sales tax requirements. In the Preferences window, you indicate when tax is charged to your customers, the frequency with which you pay sales tax to the government, and the name of the taxing jurisdiction(s) to whom you pay tax. You can also indicate whether you want taxable items to be tagged on invoices.
Did You Know? Tax can be owed at the time of sale or at the time of payment. If your company’s financial records are kept on the accrual basis, tax is owed to your government tax agency at the time of sale, and you remit the tax to the government when you file your sales tax return, whether or not the customer has paid the bill. If your records are kept on the cash basis, the sales tax is not owed by the customer, nor do you owe it to the government, until you collect the money from the customer.
Creating a Sales Tax Item
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Open the New Item window by selecting Lists, Item List, and then pressing Ctrl+N. If the New Feature dialog opens, click OK to close that dialog. The Add/Edit Multiple Items does not currently allow you to create a Sales Tax item type.
Remember, items are the pieces of information listed on sales and purchase forms, such as the goods you purchase. Sales tax is an item, too, because it occupies a line on your sales forms. Before you can charge a customer sales tax, you have to set up the Sales Tax Item, indicating the name of the tax, the taxing authority that ultimately receives the tax payment, and the rate at which tax is calculated. After all this is set up, charging sales tax becomes automatic.
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TIMESAVER Click the Items & Services icon on the Home page to open the Item List. 2
Select Sales Tax Item as the item type.
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Give your sales tax a name. “Sales Tax” is fine if there is only one tax and only one rate. If you pay tax at multiple rates or to different government offices, select a name that distinguishes this tax from the others.
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Enter a description of the tax and, if applicable, to what it applies.
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Enter the rate for this tax.
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Select the name of the agency to which you pay the tax from the drop-down list. This agency is added to your vendor list. If the tax agency does not appear on the list, select Add New at the top of the drop-down list to enter the agency name.
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Click OK to save your changes.
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Did You Know? You can Quick Add your sales tax agency to your vendor list. When you enter the name of your sales tax agency not previously entered, you are asked if you want to Quick Add this name to the Vendor List or set up the vendor. Selecting Quick Add puts just the agency name on your Vendor List. You can edit the vendor later to enter the address, phone number, and other pertinent information.
Did You Know? You can create a separate item for each sales tax you pay. If you pay tax to more than one taxing authority, or if you pay sales tax at more than one rate, create a separate item for each rate and each tax agency. When you charge a customer on an invoice, just select the proper tax item. QuickBooks will calculate the right amount and create a tax payable entry to the proper government authority.
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Creating a Sales Tax Group
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Select Lists, Item List from the menu.
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Press Ctrl+N to create a new item. If the New Feature dialog opens, you can optionally create multiple sales tax items in the Add/Edit Multiple List Entries feature. Click OK to close this dialog.
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Select Sales Tax Group as the item type.
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Enter a name for the sales tax group.
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Enter an optional description for the group.
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Enter each of the sales tax items you want to include in the group.
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Click OK.
Some companies have to remit sales tax to multiple sales tax authorities. If your company is required to charge and remit sales tax to more than one taxing authority, you can group the sales taxes together and apply them at once to the item being taxed. Each sales tax is set up as a separate sales tax item in QuickBooks, but on your invoices, the sales tax group displays as if it were one tax.
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For Your Information Sales Tax and Out-of-State Sales Businesses that sell items to out-of-state customers need to be aware of the sales tax rules both in their home state and in the state to which the sale is made. For years, most people took it for granted that if you made a sale to an out-of-state location, the seller is off the hook for collecting sales tax and the onus of paying use tax on the sale falls on the purchaser. One clear exception to this rule occurs when the goods being sold are located in the state where the purchaser resides, even if that is not the state where the seller resides. In this case, the seller retains the responsibility for collecting and paying sales tax. Due to the substantial shift to mail order and online selling, there is a nationwide effort underway to simplify and streamline the responsibility of sales tax collection. States are working together to institute a requirement that sellers collect and pay sales tax on all out-of-state sales that qualify for sales tax. So far, participation in this Streamlined Sales Tax Project has been instituted on a voluntary basis only, but stay tuned. If you’re in the business of selling to out-of-state purchasers, you might find yourself facing some new sales tax responsibilities in the near future.
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Charging Sales Tax to Customers
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Open an invoice (press Ctrl+I).
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Enter the customer name and the item(s) you plan to sell.
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Verify that the correct tax displays or select the correct tax. If you pay tax at only one rate and to only one government office, only one tax will be listed here.
QuickBooks calculates sales tax based on the rate you enter. All items on an invoice that are subject to tax are added together and the tax rate is applied. Items that have been designated as non-taxable are exempted from the tax calculation. Customers who are set up in your system should already have the appropriate sales tax rate assigned to them (see “Adding Customers” in Chapter 3, “Adding or Changing Information After the Interview Is Completed”). If the sales tax rate has not been assigned to your customer, you can indicate which tax rate to use right on the invoice. If you charge the same tax rate on everything you sell, the process of charging sales tax is easier still.
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Did You Know? You can create a new sales tax item on the fly. On an invoice form, click the down arrow in the Tax area and select Add New to enter a new sales tax item. 4
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Save the invoice.
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Did You Know? Sales tax rates should be assigned when a customer record is created. The sales tax rate assigned to a customer is not going to change, unless the customer moves to a new location where a different rate applies. Rather than running the risk of misapplying a sales tax rate directly on an invoice, you should assign the sales tax rate when you set up the customer.
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Entering Tax Status of Inventory Items
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Select Lists, Item List from the menu. If the New Feature dialog displays, click OK to close and resume with Step 2. Select Take Me There if you wish to do your editing in the new Add/Edit Multiple Items dialog (not shown).
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Click an item for which you want to identify the tax status.
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Press Ctrl+E to edit the item.
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Set the Tax Code to Tax or Non, depending on the tax status of the item.
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Click OK.
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Repeat this for all the items for which you want to assign tax status.
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Press Esc or click the Close button to close the Item List when you are finished.
It’s not unusual to prepare an invoice that includes both taxable and non-taxable items. For example, your invoice might be for services and inventory items. The inventory items might be taxable, but the services might not be subject to sales tax in your state. When you set up your items (see “Adding Items” in Chapter 3), you indicate whether each item is taxable. If the sales tax status of an item has changed, or if the tax status was not entered at the time you set up the item, you can edit the item to enter the correct sales tax status.
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Did You Know? The tax status of an item displays on an invoice. When you look at an invoice form, you’ll notice a tax column to the right of the items. Items marked with a “T” in this column are taxable. No “T”—no tax. If necessary, you can click in this column to change the tax status that already displays here, but the best method of correcting the tax status of an item is to follow the steps in this task and edit the item itself.
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Selling Tax-Exempt Items
1
Open the Item List by selecting Lists, Item List from the menu.
2
Double-click the item that you want to make tax-exempt. The Edit Item window displays.
3
Change the Tax Code to Non to indicate that this is a non-taxable item.
4
Click OK.
If your state’s tax law allows you to exempt certain items from the sales tax calculation, you can make this exemption automatic when you set up the non-taxable items. Each state has different rules about what is and isn’t taxable. For example, some states exempt sales of clothing from sales tax. Find out the rules for your state, and then set up your items accordingly.
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Collecting and Paying Sales Tax
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Selling Items to TaxExempt Customers 1
Click the Customer Center button on the Home page or icon bar.
2
Click the Customers & Jobs tab.
3
Double-click the name of the customer not subject to sales tax, or press Ctrl+E to open the Edit Customer window.
Some customers are exempt from paying sales tax. You need to acquire a tax-exempt number from the customers who are exempt. QuickBooks provides a place where you can enter this number. When you issue an invoice to that customer, tax is not charged.
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Did You Know? The tax status of a customer overrides the tax status of an item. When you set up items, you indicate whether those items are subject to sales tax. When selling a taxable item to a customer, the tax is only computed if the customer is subject to sales tax. Assigning a taxexempt status to customers ensures that QuickBooks does not compute sales tax on items sold to those customers.
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Click the Additional Info tab.
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Change the Tax Code to Non for non-taxable status.
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If applicable, enter the customer’s resale number.
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Click OK to save your changes. IMPORTANT Double-click on Customer, not Job. When making changes such as indicating a taxexempt customer, be sure you open the Customer’s edit window, not the edit window for a Job. There is no option for setting sales tax information in the Job windows.
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Producing Monthly Sales Tax Reports 1
Every state has a different form that accompanies sales tax payments. Although QuickBooks does not prepare the sales tax form for each state, the program does provide a sales tax report. This report helps you fill out the sales tax form for the state or states to which you must make payments.
From the Home page click the Manage Sales Tax icon.
2
Select the link for the Sales Tax Liability report in the Pay Sales Tax pane.
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Change the dates to reflect the time period that is covered by your current sales tax bill.
4
Click the Print button if you need to print the report.
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Close the report.
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Did You Know? Be sure you have set the correct preference information for sales tax. Setting the Preference for Sales Tax is important because it defines cash or accrual basis of paying the tax. After the correct preference is set, the Sales Tax Liability report should default to the correct period, based on the current system date and the preference setting of the basis and time of expected payment (such as monthly or quarterly). See “Setting Sales Tax Preferences” earlier in this chapter for more information.
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The sales tax report is comprehensive. The report contains the total sales for the time period, the amount of taxable sales, the amount of non-taxable sales, the tax rate for each type of sales tax you pay, and the amount of tax currently owed to each jurisdiction to which you pay tax. You can use this information to fill out the necessary tax form(s).
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Paying Sales Tax
1
From the Home page select Manage Sales Tax.
2
Click the Pay Sales Tax button.
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Verify that the bank account is correct.
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Verify the date that will appear on the check.
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Verify the date through which sales tax is due.
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Click to check each sales tax item you want to pay.
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Check the To Be Printed box if you plan to use QuickBooks to print this check.
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Click OK to execute the payment.
When it’s time for you to pay your sales tax, open the Pay Sales Tax window. From there, you can issue checks for sales tax payments and relieve your sales tax liability at the same time. By using the QuickBooks sales tax payment process, all accounts are charged properly. At any time, you can examine the information in this window if you want to know the status of your sales tax payable.
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Did You Know? Tax amounts are cleared from the Pay Sales Tax list. When you click OK to pay these amounts, the amounts are removed from the list. The next time you open this list, any amounts you paid no longer appear there.
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Taking a Discount for Early Payment
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If you pay your sales tax early or on time, you might have an opportunity to take a discount for the timely payment. If you simply reduce the amount you pay in QuickBooks, it will look like you didn’t pay the entire bill and you’ll still carry a liability on the books. Instead, you can record the amount of the discount first, offsetting the amount you owe; and then when you’re ready to pay the tax, the correct amount displays.
From the Home page, click Manage Sales Tax.
2
Select the Adjust Sales Tax Due link from the Manage Sales Tax window.
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Enter the date on which the discount is taken.
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Enter the name of the government agency to which you pay the sales tax.
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Enter the account in which you record discounts.
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Click the Reduce Sales Tax By option.
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Enter the amount of the discount.
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Click OK.
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Did You Know? You can record discounts in a separate account. Your company might have a specific account where discounts are recorded, or you might have to establish a new account that you can call Discounts Taken, or simply Other Income.
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Collecting and Paying Sales Tax
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Accounting for Sales Tax When you create an invoice for a taxable sale, several accounts are affected. Not only do you increase your sales revenue account and your accounts receivable account (or cash, if it is a cash sale), but your sales tax liability account is affected as well. Then, at the end of the month, when you pay your sales tax, the liability account is reduced. Here’s how a sample transaction is recorded in QuickBooks. An invoice is issued for the sale of $100 of taxable items and $5 sales tax, for a total of $105. Here are the accounts that are affected: Debit Accounts Receivable
Credit
105.00
Revenue
100.00
Sales Tax Payable
5.00
Note that if the item you sold is an inventory item that cost you $60, these accounts are affected as well: Debit Cost of Sales
Credit
60.00
Inventory
60.00
When you ultimately pay your sales tax, these accounts are affected for the total amount of your current liability: Debit Sales Tax Liability Cash
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Credit
xx.xx xx.xx
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Using Time-Saving Features A memorized transaction is a transaction, such as a check you have written or a form that you have filled in, to which you assign a name. After you name the transaction, you can recall and repeat the transaction without typing all the same information each time, and that makes your work more efficient. When you take the time to create a form that you plan to use again, remember to use the memorization feature to save it. A great side benefit of this feature is that the forms can then be made accessible to other QuickBooks users at your company to simplify their work as well. If several transactions go together and are used repeatedly, such as a group of bill payments that you make each month or a group of monthly invoices you send to rental tenants, you can memorize all the transactions as a group, and then execute them all together. Do you want to take this simplification technique one step further? Set up your memorized transactions as recurring transactions and QuickBooks will do the work for you. With recurring transactions, you can have a reminder sent to yourself, letting you know it’s time to execute a transaction, or you can have QuickBooks create the whole transaction set for you automatically. How easy is that? QuickBooks can create invoices, repetitive bills, and purchase orders, or it can enter journal entries for recurring expenses such as depreciation.
What You’ll Do Memorize Transactions Memorize a Group of Transactions Use Memorized Transactions Schedule Recurring Transactions Change Memorized and Scheduled Transactions Remove Memorized Transactions Set Reminders Preferences
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Memorizing Transactions
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In QuickBooks, you can memorize any transaction you want. You can memorize transactions that you re-use frequently or memorize a transaction that you might not use often but that is time-consuming or complicated to create. This task uses an example of a purchase order for several items you frequently order. Consider creating a purchase order for all the items you order from a single vendor. Then, when it’s time to place an order, you just open the memorized transaction and fill in the quantities.
Select Vendors, Create Purchase Orders. 2
TIMESAVER Click the Purchase Orders icon in the Vendors section of the Home page to open the Create Purchase Order window. 2
Choose or type a name in the Vendor field.
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Enter the items you normally purchase from this vendor, leaving the quantities blank.
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Press Ctrl+M to begin the memorization process, or you can choose Memorize from the Edit menu.
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Type a unique name for this transaction.
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Select Don’t Remind Me.
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Click OK to memorize the transaction.
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Continue using the Purchase Order form if you like. Or, press Esc and select No to close the form without creating an actual purchase order.
Leave quanitities blank.
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Did You Know? The Purchase Orders preference must be turned on. To have access to the purchase order features, you must turn on the preference for using purchase orders. See “Setting Purchases and Vendors Preferences” in Chapter 5, “Making Purchases and Recording Payments.”
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Memorizing a Group of Transactions
If you frequently perform the same transactions together, memorize them as a group and execute the whole group at once! For example, you might have several fixed monthly expenses that are due at the same time, such as rent, security service, insurance, loan payment, and so on. You can save all these expenses as a group called “Monthly Expenses,” and then with one easy click, all the transactions will be executed at once.
Memorize a Group 1
Create each of the memorized transactions that you plan to execute as a group, as shown in “Memorizing Transactions” previously in this chapter.
2
Press Ctrl+T to open the Memorized Transaction List, or choose Memorized Transaction List from the Lists menu.
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Click the Memorized Transaction button, and then select New Group.
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Enter a unique name for your memorized group.
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Select Remind Me if you want QuickBooks to issue a reminder when the group is due.
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If you ask for a reminder, choose a frequency in the How Often field.
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If you ask for a reminder, choose a date in the Next Date field for the next reminder to be issued.
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Click OK to establish your new group.
Did You Know? Memorized groups appear in bold. The memorized groups stand out on your Memorized Transaction List because they appear in bold. Also, the word Group appears in the Type column.
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Add a Transaction to the Group 1
With the Memorized Transaction List window still open, click once on the memorized transaction that you want to add to the group.
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Click the Memorized Transaction button at the bottom of the list and select Edit Memorized Transaction.
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TIMESAVER From the Memorized Transaction List, you can quickly open the selected transaction for editing by pressing Ctrl+E. 3
Click the With Transactions in Group option.
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In the Group Name field, select the name of the group to which this transaction is to be added.
5
Click OK to save the group assignment you have made for this transaction. You now have a group of recurring transactions.
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You now have a new Monthly Fixed Expenses Group. When it is time to enter these transactions, doubleclick on the bold group name (see next task).
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Repeat Steps 1–5 for each transaction you want to include in the group.
Did You Know? Memorized groups appear together in the Memorized Transaction List. QuickBooks displays all the members of a group listed beneath the group heading on your Memorized Transaction List.
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Using Memorized Transactions
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Press Ctrl+T to open the Memorized Transaction List window.
2
Double-click a memorized transaction that you want to use. The original form will appear.
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Now use the form as you use any QuickBooks form, making any necessary adjustments. In this example, I’ve entered the quantities of items I want to order.
4
Select a save option to finalize the transaction.
Okay, you’ve memorized some transactions—now what? You can take advantage of your memorized transactions by remembering to use them when you want to save time. Any time you want to use a memorized transaction, just open the list of memorized transactions, select the transaction, and use it as you do any other QuickBooks form.
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Did You Know? Memorized transactions aren’t permanent. You can open a memorized
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transaction and then make changes to the information that appears before you execute the transaction.
See Also See “Using Reminders” on page 204 for tips on having QuickBooks remind you that it’s time to use one of your memorized transactions.
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Did You Know? You can quickly execute the transactions for an entire memorized group. Double-click the name of the group in the Memorized Transaction List to access the Using Group window. Enter the date on which you want the transactions in the group to be executed, and then click OK. All the transactions in the group will be executed at once. Using Time-Saving Features
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Scheduling Recurring Transactions
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The next level of convenience after having QuickBooks memorize a transaction for you is to have QuickBooks take care of executing the transaction, too. After you get the hang of this procedure, you can let QuickBooks do all your work! Seriously, it’s nice not to have to worry about paying the rent on time—ask for a friendly reminder or just let your program do your chores automatically. This example sets up your monthly rent or mortgage payment as a recurring transaction.
Open the transaction window. For this example, press Ctrl+W to open the Write Checks window.
2
Enter the name of the vendor or payee—in this case, your landlord or mortgage company.
3
Enter the amount of the payment.
4
Enter the account to which the payment will be charged.
5
Indicate whether this check is to be printed or if the payment is to be made online.
6
Press Ctrl+M to memorize the transaction.
7
Select Automatically Enter to have QuickBooks create the transactions for you.
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See Also A monthly journal entry for depreciation expense lends itself well to the scheduled transaction feature. See “Entering Depreciation” on page 348 for information on setting up a transaction for entering depreciation.
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Did You Know? Recurring bills can be created also. Remember that the memorization feature applies to all forms, including bills. If you issue the same bills on a monthly basis, such as bills for rent or a flat fee for lawn care services, you can use the group and recurring transaction features to automate the repetitious creation of these bills each month.
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Choose a frequency in the How Often field to indicate how often you want this transaction to occur.
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Choose a date in the Next Date field for when this transaction will occur again.
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10 If there is a fixed number of
occurrences for this transaction— for example, 24 loan payments remaining—enter that in the Number Remaining field. Otherwise, leave this field blank. 11 In the Days in Advance To Enter,
choose when you want this transaction to be executed. 12 Click OK.
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Did You Know? You can turn an already-memorized transaction into a recurring transaction. Just open the Memorized Transaction List (Ctrl+T), click on the transaction, and press Ctrl+E to edit. Proceed with the next steps.
Uses for Scheduled Transactions When you think about it, there are really quite a few transactions that you repeat, month after month, quarter after quarter. There’s no reason not to automate these transactions by using the QuickBooks scheduled transaction feature. The more transactions you automate, the more time you will save by not having to create the same transaction over and over again, and the less likely it is that you will forget the transaction. Here are just some of the things you can do with scheduled transactions: ◆
◆
Create purchase orders for vendors with whom you place orders on a regular basis.
◆
Prepare journal entries for recurring transactions, such as depreciation and amortization expense.
◆
Create cash receipt forms for fees your company receives on a regular basis.
◆
Pay quarterly income taxes.
Pay monthly bills, including utilities, telephone, rent or mortgage, credit cards, loan payments, and contractor fees.
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Add a Memorized Transaction to Your Icon Bar If you use the QuickBooks Icon Bar (displayed by selecting Icon Bar from the View menu), you might want to take advantage of this shortcut. When you want to use one of your memorized transactions, you’ll save yourself the step of opening the Memorized Transaction List and searching for your transaction. Instead, all you have to do is click a button, and the memorized transaction appears. Any form or check can appear as a button on your Icon Bar when you follow these simple steps: 4. Enter a label for the transaction. This is 1. Open the form or check you want to the text that appears beneath the add to the Icon Bar. button on the Icon Bar. 2. Select Add [“active window”] to Icon 5. Enter a description for the transaction. Bar from the View menu. (Note: The This is the text that appears briefly Icon Bar must be displayed to execute when you pass your mouse over the this step. If the Icon Bar is not button on the Icon Bar. displayed, choose View, Icon Bar, and then you can complete this step.) 6. Click OK. The icon for your transaction 3. In the Add Window to Icon Bar dialog becomes a permanent part of your box that appears, scroll through the list Icon Bar. at the left to select an icon for this transaction. Click the icon you want to use. IMPORTANT This process can be used for saving frequently used reports, including memorized reports, on your Icon Bar as well. See Chapter 18, “Working with Reports in QuickBooks,” for more information about creating, customizing, and memorizing reports.
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Changing Memorized and Scheduled Transactions
Isn’t it funny how some things never seem to stay the same? Rents increase, payment due dates change, companies you did business with close or are bought by other companies, and customers move on. Your memorized and scheduled transactions don’t have to be trashed when the facts change. Just tweak the transaction to keep up with the times.
Change a Memorized Transaction 1
Press Ctrl+T to view the Memorized Transaction List.
2
Double-click a transaction to open the actual form.
3
Make any necessary changes to the form.
4
Press Ctrl+M to rememorize the revised form.
5
Click Replace.
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Using Time-Saving Features
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2
Change a Recurring Transaction 1
Press Ctrl+T to view the Memorized Transaction List. Remember, all your recurring transactions are also memorized transactions.
2
Click once to select the transaction you want to change.
3
Press Ctrl+E to edit the recurrence information for this transaction.
4
Select a different reminder option, if necessary.
5
Change the frequency of the recurrence, if necessary.
6
Change the next scheduled date for this transaction, if necessary.
7
Change the number of transactions remaining, if necessary.
8
Change the number of days in advance of the due date that this transaction should be entered.
9
Click OK.
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Removing Memorized Transactions
1
Press Ctrl+T to open the Memorized Transaction List window.
2
Click once on the transaction you want to remove.
3
Click the Memorized Transaction button at the bottom of the window, and then select Delete Memorized Transaction. TIMESAVER From the Memorized Transaction List, you can quickly open the selected transaction for editing by pressing Ctrl+E. To quickly delete a memorized transaction, select a transaction (see Step 2) and then press Ctrl+D.
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The time might come when you no longer need a transaction you memorized. Maybe you’ve finished paying the monthly car payments, or maybe you’ve purchased a building or moved out and are through paying rent. When that time comes, remove the transactions you no longer need from your Memorized Transaction List and also remove the reminders for those transactions so that you no longer see the transactions on your reminders list.
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Click OK when asked if you are sure you want to delete the memorized transaction.
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Setting Reminders Preferences
QuickBooks has a feature called Reminders that helps you keep track of everything that needs to be done. You can be reminded of bills to pay, checks and other forms to print, customers who are late with their payments, money waiting to be deposited, and even your brother’s birthday. Use the Reminders to help organize your tasks. By setting certain preferences, the Reminders feature will behave just the way you want it to.
Set Personal Reminders Preferences 1
Select Preferences from the Edit menu.
2
Click the Reminders icon at the left side of the window.
3
Click the My Preferences tab.
4
Check the Show Reminders List When Opening a Company File box to have reminders displayed when you open your company file in QuickBooks.
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Set Company Reminders Preferences 1
Click the Company Preferences tab.
2
Click in the Show Summary column for each type of information you want to display in your Reminders list. These items will display on a single line with a total amount.
3
Click in the Show List column for each type of information for which you want the details to display in your Reminders list. These items will display with a summary and a detail of every individual item that makes up the summary.
4
Click in the Don’t Remind Me column for each type of information that will be excluded from your Reminders list.
5
Indicate how many days in advance of the due date these items will appear in your Reminders list.
6
Click OK.
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Using Reminders
1
If the Reminders list is not visible on your screen, select Company, Reminders.
2
Double-click any summary entry (shown in bold) to see the detail that makes up that total.
3
Click Collapse All to show only the summary information for each type of entry.
4
Click Expand All to see details of all summary entries.
5
Double-click a detail entry to go to the original form for that entry or to execute a command associated with that entry.
6
Click Custom View to return to the display you chose in Reminders Preferences.
7
Press Esc or click the X to close the window.
Paper to-do lists are so passé! Use the QuickBooks Reminders list to keep your desk space clean and your tasks organized. QuickBooks will remind you to notify your customers when their invoice payments are overdue, pay your bills, print your checks and other forms, follow up on unfilled purchase orders, deposit the money you’ve collected, execute memorized transactions, and more.
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Job Cost Estimating and Tracking If you use one of the QuickBooks versions that contain the job cost estimating feature, you can create estimates for your work and track income and expenses on a job-by-job basis. In fact, this is often the one feature that causes people to bypass the Simple Start version of QuickBooks as compared with the other versions on the market. An estimate is a bid or quote for a job. You create an estimate and then invoice the customer either at the completion of the job or as the job progresses. Estimates can be revised as work on the job advances, and QuickBooks enables you to create more than one estimate for the same job. Keep in mind that an estimate is not the final word on what a job will cost. Consider placing a disclaimer in the message area of the estimate form indicating that the numbers presented in the estimate are based on reasonable assumptions but that you reserve the right to change the estimate prior to the completion of the job and with the approval of the customer.
What You’ll Do Set Jobs and Estimate Preferences Set Up a Job Track Job Status and Type Use the Job Type Feature Track Other Job Info Work with Estimates Invoice Against an Estimate
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Report on Job Estimates vs. Actual
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Setting Jobs and Estimate Preferences
1
Select Edit, Preferences.
2
Click the Jobs & Estimates icon on the left side of the Preferences window.
3
Click the Company Preferences tab. (The My Preferences tab has no options for Jobs & Estimates.)
4
If you plan to track jobs by status, check to see whether these status descriptions are appropriate to your work and make any necessary changes.
5
Click Yes to turn on the estimates feature.
6
Click Yes to turn on the progress invoicing feature.
7
Check Warn About Duplicate Estimate Numbers to have QuickBooks give you a warning if you attempt to issue a duplicate. This option is not available if you do not choose to use estimates.
8
Check Don’t Print Items That Have Zero Amount to remove zerobalance items from printed invoices. (The zero balance items will still appear on the screen version of the invoice.) This option is not available if you do not choose to use progress invoicing.
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Click OK to save your settings.
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To take full advantage of the Estimates feature in QuickBooks Pro or Premier, you need to set the preferences for jobs and estimates. Here you can turn on the access to estimates and progress billing and protect yourself against accidentally issuing two estimates with the same number. If you use progress billing, you might appreciate a feature that enables you to leave zero-balance amounts from partially billed estimates off your invoices.
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Accounting for Jobs
Job Cost Estimating
When you use the QuickBooks estimates feature, no transactions are recorded on your company income statement or balance sheet. The estimate is not treated as a sale, so the form is for your information only. You can create reports that display pending estimates, but your company’s financial statements contain only completed transactions.
The purpose for estimating is to determine the cost of a job in advance. By estimating the actual cost as accurately as possible, you can make an intelligent bid on a job and set parameters for factors such as the following: ◆
The profit you expect to earn on the job
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How long the job will take to complete
When jobs are invoiced to customers, even if the job is still in progress, the amount that has been invoiced increases both your income and your Accounts Receivable accounts. Any unbilled portion of the estimate continues to remain off your books.
◆
The quantity and types of employees and subcontractors necessary to complete the work
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What parts and supplies you are required to have on hand before the work begins
Partial completion of a job, invoiced to a customer for $500, is recorded like this when you issue the invoice:
By preparing a detailed estimate, you can judge your company’s capability to complete the job on schedule. You can use the Item Estimates vs. Actuals report (go to Reports, Jobs, Time & Mileage, Item Estimates vs. Actuals) to see if a job is profitable and then address problem areas.
Debit Accounts Receivable Revenue
Credit
$500.00 $500.00
Included in your estimate should be the following types of expenses: ◆
Employee labor—The number of employees, types of skills needed, cost of labor, and amount of time required to complete the job.
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Subcontracted labor—The same information as with employee labor.
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Materials—The types of materials and quantity of each, length of time required to obtain or produce materials, and cost of materials.
◆
Tools—The types of tools and equipment required to perform the job and the cost of any tools or equipment not already owned by the company or subcontractors.
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Overhead—The cost of indirect expenses such as administrative costs, facility expense, employee benefits, and wear and tear on equipment and tools.
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Setting Up a Job
Depending on the type of business you have, you might need to track revenues and expenses on a job-by-job basis. You can track multiple jobs for the same customer and then create invoices and record your expenses as they relate to the individual jobs. Before allocating revenue and expenses to a particular job, you must set up the job and identify with which customer the job is associated.
Enter New Job Information 1
Display the Customers & Jobs list by clicking the Customer Center icon (or choose Customers, Customer Center) and then clicking the Customers & Jobs tab.
2
Click the name of the customer to whom this job relates.
3
Right-click on the customer name; then choose Add Job from the popup menu.
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TIMESAVER You can also open the New Job window by clicking the New Customer & Job option at the top of the list and then clicking Add Job. 4
Enter a name in the Job Name field.
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Verify the contact name and address for this customer and make any necessary changes. IMPORTANT Be sure to click the customer name before selecting Add Job. Although you can change the customer name in the Add Job window, the related customer information, such as address and contact information, is not automatically updated. Rather than trying to change all this information each time you add a new job, select the customer name first and then open the Add Job window.
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If this is all the information you plan to add at this time, click OK to save your entries.
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Enter Additional Information for a New Job 1
If the New Job window is still open, click the Additional Info tab to enter other information relating to the job. If you need to re-open the New Job window, right-click on the job and then choose Edit Customer:Job.
2
Select the customer type. If the type you want to use does not appear, select Add New from the drop-down menu to add a new type to the available options.
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If applicable, select from the Preferred Send Method list for sending invoices and other forms to this customer.
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If applicable, make a choice in the Price Level field for this customer. 2
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Enter Payment Information for a New Job 1
Click the Payment Info tab to enter more information relating to the job.
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If you use account numbers for your jobs, enter the number in the Account No. field.
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If applicable, enter a number in the Credit Limit field if your company has assigned a limit to this customer. You will be warned if you attempt to issue an invoice for more than the customer’s credit limit.
4
Indicate the payment method typically used by this customer in the Preferred Payment Method field. If a credit card is chosen, you can enter the customer’s credit card information.
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Did You Know? Credit limits generate warnings when you issue an estimate or invoice. If you attempt to create an estimate or invoice for more than the customer’s credit limit, QuickBooks provides you with a warning. Job Cost Estimating and Tracking
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Enter Specific Job Information 1
Click the Job Info tab to enter more information relating to the job.
2
Choose an option from Job Status if you track this information.
3
Type or select a date in the Start Date field.
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Type or select a date in the Projected End field.
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Type or select the actual end date in the End Date field.
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Enter a description for the job in the Job Description field.
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Select a job type for this job. If the applicable job type does not appear in the Job Type list, select the Add New option in the list to enter a new type of job.
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Click OK to save your entries.
Did You Know? Some of this information might already appear. Much of the information relating to individual jobs, such as price levels and credit limits, was already entered when you set up the customer. Unless a change relating to the specific job occurs, you can accept the information that carries over from the customer.
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Tracking Job Status and Type
If your company works on only a handful of jobs at a time, you can probably keep track of the status of those jobs in your head. But for those companies with many balls in the air, QuickBooks provides a job status feature to keep track of how close to completion each job is. You might also want to filter reports for type of job. For example, a construction company might perform commercial, residential, or government work. This is an excellent use for job types.
Set Job Status Preference 1
Select Edit, Preferences.
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Click the Jobs & Estimates icon.
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Click the Company Preferences tab.
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If you want, change the name of any job status by deleting the name you see and entering your own choice for a job status.
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Click OK.
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Display the Customers & Jobs list by clicking on the Customer Center icon, and then clicking the Customers & Jobs tab.
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Double-click a job name if you want to change its status.
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Click the Job Info tab.
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Select the appropriate job status from the Job Status drop-down list.
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10 Click OK.
Did You Know? Updating the job status is a manual process. You need to remind yourself to regularly update the statuses of all your jobs. QuickBooks does not do this for you.
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Using the Job Type Feature
1
Display the Customers & Jobs list by clicking on the Customer Center icon, and then clicking the Customers & Jobs tab.
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Double-click a job name.
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Click the Job Info tab.
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Click the down arrow in the Job Type field.
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Select an existing job type, or click Add New to enter a type that is not listed.
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Click OK.
Did You Know? An advantage of using job types is that QuickBooks allows you to search and report on them. A drop-down list in the Job Type field provides an easy way to choose from existing job types. Also, if you open the Lists menu, select Customer & Vendor Profile Lists, and then select Job Type List from the side menu, you can create quick reports, easily edit job types, and search for job types in your transactions.
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You have the option to define the Job Type field for each job. Unlike the Job Status field, no standard entries are available in the Job Type field; therefore, you can customize job types to go with your business. For example, a construction company’s job types might include New Construction, Repairs, and Renovation. Job types can also be subtypes of other job types; for example, the New Construction job type might include the subtypes Commercial and Residential. After you enter a job type, that type stays in your company file and becomes available as a selection on other jobs.
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Tracking Other Job Info
You can use the Job Dates feature in QuickBooks to keep track of the dates on which you start jobs, the projected end date of each job, and the actual end date of each job. QuickBooks gives you the option of entering a narrative description for each job. This is an optional feature. There is no menu of standard descriptions from which you can choose, so you can create your own description for each job.
Job Dates and Description 1
Display the Customers & Jobs list by clicking on the Customer Center icon, then clicking the Customers & Jobs tab.
2
Double-click a job name.
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Click the Job Info tab.
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Enter or update the dates for this job.
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Click OK.
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Enter a brief description in the Job Description field or update an existing description. You are limited to 99 characters, including spaces.
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Click OK.
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Did You Know? You can make a standard list of descriptions for use in your company. Although QuickBooks doesn’t include a provision for storing job descriptions and making them accessible to other jobs, your company can set up a standard job description list of its own, print it, and circulate it to anyone entering job information in QuickBooks. For example, if you are a tax practitioner, some standard descriptions for the type of tax work you perform might include the following: ◆ Quarterly Estimates ◆ Annual Tax Planning ◆ Estate Planning ◆ Individual Income Tax Returns ◆ Business Income Tax Returns ◆ Payroll Tax Forms
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Working With Estimates
You can use the Estimates form to create estimates that provide preliminary planning information for each of your jobs. The forms QuickBooks provides for your estimates look very similar to invoice forms. Fill out an estimate showing the anticipated time, items, and expenses you plan to allocate to this job. Estimates are saved, referred to, revised, and (ultimately) used to create invoices as the job is completed. Be sure you have enabled the Estimates feature before starting this task (see “Setting Jobs and Estimate Preferences” earlier in this chapter).
Create an Estimate 1
Select Customers, Create Estimates.
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Indicate the customer and, if applicable, the job for which you are preparing an estimate in the Customer:Job field.
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Verify that the correct date appears on the form.
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Enter all the items and expenses that relate to this estimate.
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Select a save option to complete the estimate.
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Revise Estimates 1
Select Reports, Jobs, Time & Mileage, Estimates by Job.
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Double-click the estimate you need to change. 2
TIMESAVER Alternatively, you can click the Customer Center icon to open the Customer Center, click the Transactions tab, and then click Estimates. Double-click on the estimate you want to revise. 3
Make changes on the estimate form.
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Click a save option to save your changes.
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Confirm that you want to make the changes to the estimate by clicking Yes.
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If the Add Change Order window appears (not available in all QuickBooks versions), click Add to add text to the bottom of your estimate describing the exact change(s) and the date of the change. Click Do Not Add if you want to change the estimate without calling attention to the change. With this choice, no descriptive text will appear on the revised estimate.
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If Add was selected, the Estimate now includes the change order text.
Did You Know? Changes made on progress billed invoices don’t flow back to estimates. Although QuickBooks keeps track of payments received from customers and any edits you might make to invoices, the original estimate remains unaltered by these events. Only changes you make on the original estimate form itself alter that form.
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Invoicing Against an Estimate
After you have an estimate in your QuickBooks file, you can refer to that estimate when you’re ready to prepare an invoice. When you prepare an invoice for a job that has been estimated, you have the option of invoicing for the complete estimate, a percentage of the estimate, or specific items on the estimate. The concept of invoicing a portion of the estimate is called progress invoicing.
Invoice for Percentage of Estimate 1
Press Ctrl+I to open an invoice form.
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Enter the name of the customer and, if applicable, the job. If an estimate exists, the Available Estimates window displays.
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Click to select the estimate against which you want to invoice.
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Click OK.
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Select the option to Create Invoice for the Entire Estimate (100%) or Create Invoice for a Percentage.
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Click OK; the amounts from the estimate are entered on the invoice.
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Verify that all amounts on the invoice are correct. Make any necessary changes to the amounts on the invoice.
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Select a save option to complete the invoice.
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Prepare an Invoice for Selected Items 1
Follow Steps 1–4 from the previous example.
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Select Create Invoice for Selected Items or for Different Percentages of Each Item.
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Click OK.
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Click Show Quantity and Rate to show the quantities and prices (rates) of the estimated items.
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Click Show Percentage to show the percentages of the estimated items.
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In the appropriate column, indicate the percent, quantities, or prices of each item you want to include on the invoice.
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Click OK.
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Depending on the choices you made in Step 6, you might see a warning indicating that some invoice items display a zero amount and suggesting that you not delete these items. After you read the warning, click OK to close the warning window.
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Save your invoice (not shown).
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Did You Know? Zero-balance items don’t show on the printed invoice. Assuming you set the jobs and estimates preferences to hide zero-balance items from your invoice, you won’t see those items on your printed invoice. They do, however, appear on the invoice you see onscreen. Click the Print button at the top of the invoice and then select Preview to view the actual invoice before it prints. You’ll see that the zero items do not appear.
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Reporting on Job Estimates vs. Actual 1
Select Reports, Jobs, Time & Mileage, Job Estimates vs. Actual Summary.
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Click OK to display the report.
See Also For more details on working with reports in QuickBooks, see Chapter 18, “Working with the Report Center.”
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After you’ve entered estimates into your QuickBooks file, you can produce a report that displays all outstanding jobs, the amount of estimates on these jobs, and a comparison of the budgeted costs to the invoiced amounts. Use this report to ensure your job’s profitability.
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Tracking Time All the QuickBooks editions except the Simple Start version provide access to the QuickBooks Timer. The timer gives QuickBooks users the ability to use the computer like a time clock, tracking time spent and assigning that time to customers and jobs. In addition to using the time clock features, you can use the timer to record a description of the work you performed and the amount of time you spent.
What You’ll Do Set Time Tracking Preferences
Information recorded in the timer can be transferred directly to your company payroll if you use QuickBooks for preparing your payroll. You can also transfer time charged to a job directly to a customer invoice to expedite invoicing and avoid errors.
Install the Timer
The timer works on any computer. The owner of the QuickBooks program can provide employees and contractors with a copy of the timer program, loaded with company customer and job names as well as designated tasks, and the worker can record time spent and then export the information back to the company file, saving time and paperwork.
Create a Timed Activity
Export Information to the Timer Create a New Timer File
Use the Timer Send Timer Data to QuickBooks
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Import Timer Data to QuickBooks Transactions
Did You Know? QuickBooks has a Web-based Timer program. The QuickBooks Time Tracker program enables your employees or contractors to enter their time over the Internet and then you securely download the data directly into your QuickBooks data file. Your employees or contractors do not have to have access to your QuickBooks data file to enter their time. To learn more about this, from your QuickBooks Home page, select the drop-down menu Enter Time and choose the Let Your Employees Enter Time menu (an Internet connection is required).
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Setting Time Tracking Preferences 1
Select Edit, Preferences.
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Click the Time and Expenses icon.
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Click the Company Preferences tab.
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Click Yes to turn on time tracking.
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Select the first day of your work week from the drop-down list.
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Place a check mark next to Create Invoices from a List of Time and Expenses.
Setting time tracking preferences is as simple as turning on the feature. That, along with designating the first day of your work week, is all you need to do to activate this feature.
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Select Track Reimbursed Expenses as Income (if this isn’t selected, reimbursed expenses will be a negative cost in your expense account).
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Optionally set a Default Markup Percentage.
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From the drop-down menu, select the Default Markup Account.
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10 Click OK.
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You will see a list of all customers’ time and expenses to be invoiced after you click Create Invoices from a List of Time and Expenses.
Installing the Timer
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Right click on Start or Windows Orb (Vista) and then select Explore.
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Using Windows Explorer find your CD-ROM drive or the folder on your computer where the QuickBooks Timer folder resides.
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Double-click the QBTimer folder.
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Double-click Setup.exe.
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Click Next on the QuickBooks Pro Timer Installation Wizard (not shown).
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Follow the onscreen installation instructions, accepting the default choices for file locations and options and clicking Next and Install to continue through the installation process (not shown).
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For future reference, make a note of the name of the folder into which the timer is installed.
Did You Know?
Install the timer so you can begin using the time tracking features of QuickBooks. When you install the timer, you can track time on your computer and use the timer to bill time to clients and record time for payroll purposes. You can also install the timer on computers that aren’t running QuickBooks. The timer program is found on the QuickBooks program disk, or you can copy the timer program files from one computer to another. You won’t need any password or registration number to install the timer program on any computer.
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You can install the timer repeatedly. There is no limit to the number of computers on which you can install the QuickBooks Timer.
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Getting Your Employees Up to Speed with the Timer After your employees install the timer on their computers, you can help them get started by explaining how the timer works and how you expect them to use this program. Specifically, these points should be discussed: ◆
Remember that you are providing your employees with data from the QuickBooks Customer & Jobs list that they need to import onto their computers before they can start time tracking. Point out that this data is in the form of an .iif file, and direct them to install it in the same directory (or folder) as the QuickBooks Timer. The default timer folder is
Keeping Track of Time There are several reasons for time tracking. This list explains some of the reasons we need to keep track of the amount of time spent at work and what is done with that time: ◆
When companies know how long it takes to do a particular job, they can determine when a job will be completed.
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Companies compare the length of time different workers take to complete the same work to determine how to place workers in positions where they will be most useful and efficient.
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If a company pays or charges by the hour for services, the company needs to know how much time is spent on a job to assess the cost of the job.
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Nonsalaried workers who are paid by the hour must keep track of time so that they can be paid.
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Knowing the amount of time a job has taken in the past helps a company estimate the amount of time a similar job will take in the future.
C:\Program Files\Intuit\QuickBooks\ QuickBooks Pro Timer.
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Discuss any sensitive issues about security and the privacy of the information in the Customer & Jobs list. Tell employees that they have to name and create a QuickBooks Timer file.
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After the timer file is created, employees must import the .iif file. Then they can begin recording timed activities.
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Acquaint employees with the drop-down menu system of selecting their own name, customer, job, and services before actually clicking the Start button to begin time tracking.
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Provide your employees with a brief training session on recording time and transferring that time back to the QuickBooks program.
Exporting Information to the Timer
1
Open QuickBooks and select File, Utilities, Export, Timer Lists.
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You see a graphic illustration of how the timer works. Click OK.
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Enter a filename for the timer file, preserving the .IIF file extension QuickBooks supplies. IMPORTANT You need to provide this file to others. Remember the folder where this file is saved because you will need to copy this file for any employees or contractors who are using the timer on another computer. Keep in mind that, in addition to those who use desktop models, employees and contractors using laptop computers can also take advantage of the timer feature.
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Click Save.
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Click OK.
The timer uses information from your QuickBooks file to enable your employees and contractors to charge time to customers and jobs. Employee names; descriptions of payroll items such as salary, hourly, overtime, and so on (not amounts, just the names of these items); names of customers and related jobs; and classes (if applicable) all are fed into the timer. Then an employee or a contractor simply uses the timer like a stop watch to record time spent on a project. The total time for the project can also be entered directly into the timer. This information must be exported to the timer before your employees or contractors can start using the timer.
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Creating a New Timer File
1
Click the Start button; then select All Programs, QuickBooks Timer, QuickBooks Pro Timer.
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For this example, we will assume you haven’t used the timer before. Click Create New Timer File.
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Click OK.
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Give your timer file a name.
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Click Save.
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You are reminded that you need to import the timer information. Click No to continue to the import session.
When using the timer—whether it is on your computer, as illustrated here, or on someone else’s computer where you have installed the program—you don’t need to have your QuickBooks program open. The timer works independently of QuickBooks, which is why you can provide the timer to others who aren’t using your computer. You record time and activities in the timer and use the memo area to describe the work you do.
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In the Timer program, select File, Import QuickBooks Lists from the menu.
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Click Continue on the Import QuickBooks Lists window.
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Click on the filename where your timer data was exported from QuickBooks.
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10 Click Open. 11 Click OK.
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Creating a Timer Activity
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With the timer open, click the New Activity button in the timer window.
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Enter the date. The timer defaults to today’s date; you might need to enter a different date, particularly if you are entering time for work that was performed at an earlier date.
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Select your name (or the name of the person who is using the timer) from the drop-down menu.
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Select a customer and job from the Customer:Job drop-down menu.
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Make a selection in the Service Item drop-down menu.
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If your company uses classes, make a selection in the Class dropdown menu.
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Enter optional memorandum information that describes the work in the Notes field.
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Indicate whether this time is to be billed to the customer by checking or unchecking the Billable box.
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Click OK.
10 Repeat these steps to create more
timed activities.
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Before you can begin clocking your time, you must indicate the type of activity you are performing, the name of the customer or job to which this activity applies, and the class (if applicable). You might want to include a brief description of the exact work you are performing and indicate whether this time is directly billable to the customer. You don’t have to enter this information each time you use the timer for the same job. Once entered, the job information will be accessible in the future.
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Did You Know? The name you enter must be on the list that was imported from QuickBooks. If the name you want to use doesn’t appear on the list, you need to first enter the name as an employee or a vendor in QuickBooks and then re-export the files from QuickBooks to the timer. The same goes for the other timer information that needs to be entered from drop-down lists.
Using the Timer
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Click the Start button on your taskbar. Then select Programs, QuickBooks Timer, QuickBooks Pro Timer.
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Select an activity from the Current Activity drop-down list.
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Click Start and begin working.
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When you have finished working and are ready to stop the clock, click Stop.
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The Stop button changes to Resume, and you can click Resume to continue running the timer.
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To enter your time directly into the timer instead of running the stop watch, click Edit Activity.
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Enter the correct time in the Duration field.
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Click OK.
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When you are finished recording your time, select File, Exit from the menu in the Timer program.
After you’ve set up at least one timed activity in your timer, you can use the timer to record your time on the activity. You have the choice of actually using the timer as a stop watch or entering your total time for a project.
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Sending Timer Data to QuickBooks
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In the Timer program, select File, Export Time Activities from the menu.
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Click Continue.
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Enter the date through which timer activities should be exported to QuickBooks.
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Click OK.
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Enter a filename for your export file. The user’s initials and date of the export have been used as the filename in this example.
After recording information in the timer, you need to send the data back to be incorporated into your company’s QuickBooks file. This is a reverse of the export/import process you used when you sent employee and job data to the timer from QuickBooks. When timer data has been returned to QuickBooks, you can bill the time to clients and link it to the payroll program.
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Click Save.
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Click OK.
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You can now close the timer program.
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Did You Know? Exported time stays in the timer. When you export time data to QuickBooks, the data is not removed from the timer. At some future date, if you need to refer to the time you entered in the timer, you can do so. 5 6
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Importing Timer Data into QuickBooks 1
In your QuickBooks program, select File, Utilities, Import, Timer Activities.
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Click OK.
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In the Import window that displays, locate and click the file.
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Click Open.
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Click the name of the report you want to view.
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Click View Report to see the details of the imported activities.
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When the report displays, doubleclick any activity to see that the activity has been entered in the Time/Enter Single Activity window of your company’s payroll system.
QuickBooks imports data from the timer directly into the employee or subcontractor time sheets. After the data is imported, you can pay employees with the data from the timer and bill time to your customers.
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Click the Timesheet button to view the complete time record for this employee.
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Transactions 1
With the timer open, select View, Time Activity Log from the menu.
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Enter the date or date range for which you want to view timer activity.
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Note whether activities have been exported.
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Double-click any activity to open the activity and edit it (see the next task for an example of editing a timed activity).
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Click any activity once; then click the Contact Info button to view detailed contact information about the customer or client.
In your timer program, you can view all the timer activities, even the ones that have been exported. This task shows you how to view timer transactions.
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Did You Know? Customer contact information might not be available. Only the contact information that was exported from QuickBooks to the timer displays here. If the contact information was never entered in QuickBooks, it doesn’t appear in the timer.
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Limit the number of timed activities that are exported to QuickBooks by holding down the Ctrl key while clicking to select certain activities in the log.
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Click Export to export all selected activities.
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Editing Timer Transactions 1
You can change information that has been recorded in the timer by editing transactions. If the information has already been exported to QuickBooks, make sure you inform the QuickBooks administrator of the changes that need to be made so the exported information can be corrected.
With the timer activity log open (see the previous task), doubleclick any timer activity to edit it.
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IMPORTANT If you attempt to edit a timer transaction that has previously been exported, you will receive an alert message advising you that the activity has already been exported. Click Yes to change the transaction’s status to Unexported, or click No to leave the status as Exported. Click Cancel if you have decided not to edit this transaction after all. 2
Change the Customer:Job information if necessary.
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Adjust the amount of time if necessary.
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Correct the detailed text description if necessary.
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Click OK when you’ve finished making changes.
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Did You Know? Editing is handy when you make a mistake. Maybe you entered the wrong job name, maybe you left the clock running while you took your lunch break, or perhaps you forgot to enter a detailed description of the work you performed. The edit feature lets you correct your entries.
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Invoicing the Customer for Timer Activities 1
Import time from the timer, as shown in the task “Importing Timer Data to QuickBooks.”
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Select Invoice for Time and Expenses from the Customers menu. (If you do not have this menu, skip to the next step.) Select a date range for costs you want to include on the invoice.
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Select the customer you want to bill and click Create Invoice.
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Optionally select Let Me Select Specific Billables for This Client.
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Click the Add Time/Costs tab.
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Click to check each item you want to include on this invoice, or click Select All to choose all items.
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Check the Print Selected Time and Costs as One Invoice Item box if you want all time to be displayed as one item on the invoice.
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Click OK.
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Click one of the save buttons to save the invoice.
When you enter time that is allocated to a customer or job in the timer, the information carries over directly to that customer when the time is imported into QuickBooks. See how to apply that time to a customer invoice.
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QuickBooks Tips and Tricks This collection of miscellaneous tips and techniques contains something for every QuickBooks user. Here you’ll find tips for correcting errors, and you’ll learn how to customize a form. You’ll also learn how to check your spelling, and you’ll find out how to create mailing labels.
What You’ll Do
This chapter contains information about working with an outside accountant who can access your company information and help you make year-end journal entries to produce accurate financial statements. You’ll learn how to void checks without affecting a prior period balance.
Set Spelling Preferences
In addition, you’ll explore budgets and how to produce budget reports. You’ll also learn some tips for using a budget effectively. The QuickBooks Class feature, a method of grouping transactions, is also covered in this chapter, with information on how to incorporate classes into your forms and reports.
Set Up Classes
Create a Budget Prepare Budget Reports
Use Classes on Sales and Purchase Forms Report on Classes Create Payment Terms
10 Customize Forms Design Customize Forms Data Make Journal Entries
Use the QuickBooks Remote Access Feature Create Mailing Labels
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Setting Spelling Preferences
1
Select Edit, Preferences.
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Click the Spelling icon.
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Click the My Preferences tab.
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Check the Always Check Spelling box to require that QuickBooks spellcheck each of your forms before printing, saving, or sending them.
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Check Internet Addresses to eliminate URLs from spellcheck.
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Check Numbers to eliminate spellchecker alerts on words containing numerals.
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Check Capitalized First Letter to eliminate proper nouns from spellcheck.
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Check All UPPERCASE to eliminate from spellcheck words that contain all capital letters.
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Check Mixed Case to eliminate from spellcheck words that contain capital letters after the first letter.
Did You Know? Spellchecking is not available on all forms. The QuickBooks spellchecking feature is available only on forms you send to customers and vendors. This includes invoices, purchase orders, estimates, sales receipts, and credit memos. You can enforce automatic spellchecking or you can spellcheck on an individual basis by clicking the Spelling button at the top of the form.
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To spell correctly, or not to spel corectley—fortunately, there’s a bit more to setting your spelling preferences than that! Do you want QuickBooks to check your spelling on your forms? Are there certain types of words you want the spellchecker to ignore? The spelling preferences are personal settings, as opposed to companywide settings, so each QuickBooks user at your company can choose personalized spelling features.
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Click here to check spelling on the current form.
Creating a Budget
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You can set up a budget in QuickBooks that can be used to track your company’s financial progress throughout the year and to draw comparisons between actual and budgeted performances. The easiest way to begin budget creation is to use a year-end income statement from your company’s previous year. You can use the numbers on the financial statement to get started with your budget and then fine-tune the budget after all the prior year’s numbers have been entered. QuickBooks has created a wizard to walk you through the process of setting up your budget.
Select Company, Planning & Budgeting; then select Set Up Budgets from the side menu that displays. IMPORTANT If the Set Up Budgets window displays, click Create New Budget to open the window shown here. If this is the first time you have created a budget, the Create New Budget window opens automatically.
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Enter the year (calendar year or fiscal year, depending on your company’s year-end) for which this budget will apply.
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Indicate whether this budget is to be based on profit and loss or balance sheet (for this example, we will use profit and loss).
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Click Next.
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If you want your budget to be organized by customer and job or by class, indicate that here. For this example, we will not organize the budget by these criteria. (Note: Class is not an option on this screen if your company does not use class tracking.)
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Click Next.
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Select whether you want to create your budget from scratch or from prior year financial statement numbers. For this example, we will create the budget from prior year numbers.
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Click Finish.
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Did You Know? Budget setup is easy after the first year. If you’ve used QuickBooks in the past, your prior year’s financial information is already saved in your file. Instead of creating your budget from scratch, you can use the prior year’s financial statement numbers as your starting point and save yourself the time of looking up and entering this information.
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In the white areas, fill in the monthly amounts for your budget. QuickBooks automatically summarizes your monthly amounts in the Annual Total column (the first column).
10 Save time by entering an amount in
the first month; then click the Copy Across button to insert that amount in every other month for the year. 11 Automatically increment budgeted
amounts by clicking the Adjust Row Amounts button. All amounts in the selected row will be increased or decreased by the amount or percentage that you indicate.
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12 In the window that displays after
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you click Adjust Row Amounts, choose whether you want to begin the increase or decrease with the first month or with the currently selected month. 13 Indicate if you want the budgeted
amount to increase or decrease by the amount you enter. 14 If you chose Currently Selected
Month in Step 12, you have the option of checking the Enable Compounding box (not shown). This feature produces amounts that are incremented each month by the amount you enter in the next step. 15 Enter the amount or percent as a
positive number in the field provided. 13
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16 Click OK. All amounts that appeared 17
on the budget line are increased or decreased based on your entries. 17 When you have finished entering all
the budgeted information, click Save to save your budget. 18 Click OK to close the budget
window. 19 To make changes to an existing
budget, click the drop-down arrow and choose the budget you want to edit.
Did You Know? You can save your budget as you go. You can click the Save button while you’re working on your budget to make sure your budgeted information is saved. Clicking Save authorizes QuickBooks to save the information you have entered but doesn’t close the budget setup window. Clicking OK saves and closes the window.
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Creating a Budget
Budgeting in the First Year of Business
Often, people use the income and expense numbers of the prior year as the starting point for creating a budget. Then they consider their knowledge of the future expectations and anticipated trends of the industry and adjust the budget numbers to embrace those trends. In addition, a good budget maker throws in a dose of personal experience with the way the business operates and the way the business is expected to operate so the budget can accurately reflect the goals and reasonable expectations for the year(s) ahead.
Sometimes it’s difficult to know where to begin in creating a budget when you have no prior experience from which to draw. That shouldn’t prevent you from creating a budget, however. Some suggestions for resources when trying to project your first year of business follow:
For example, if you are in the new home construction industry and know that the new factory in town will bring in hundreds of new employees, you can reasonably expect your business to increase next year. Or, if your landlord has been raising the rent on other buildings he owns and your lease is due for renewal, you can safely expect your rent expense to increase in the near future. Traditionally, a budget is created for an entire year at a time, with amounts shown for each month of the year. The monthly amounts are often the same, using an average of annual amounts from the prior year as a starting point. You enter the monthly amount you expect to earn or spend in the next year, and QuickBooks automatically extends that amount to each month of the coming year. You can then revise and tweak individual monthly budgeted amounts. Alternatively, you can enter different amounts for each month of the budgeted year, or you can enter an initial monthly amount and have QuickBooks increase or decrease that amount by a particular percentage each month. Before you begin the budget process in QuickBooks, print a copy of your prior year’s (or several prior years’) Profit and Loss statement. This statement can be a guide for you as you create the budget. You might also want to schedule a session with other members of your company to discuss plans and expectations for the future and to rough out a budget on paper before committing it to QuickBooks.
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Contact financial advisors in the community who work with businesses of your type—accountants and bankers, for example—who might have some insight into what you can expect in your first year.
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Try to meet with other members of your profession, through professional societies, local business clubs, or direct contact with owners of similar companies, and explain that you are looking for guidance and helpful hints about determining the financial expectations of a company such as yours.
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Use the library and the Internet to research your field. You can probably locate an Internet group of people who are in the same field as you, and who can lend advice and insight.
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Draw on your own understanding of the industry or profession and that of the people who work with you. Your company might be new, but you have knowledge of the business. Sometimes a gut feeling based on experience and wisdom provides the best guidance.
Preparing Budget Reports 1
Select Reports, Budgets & Forecasts, and then select Budget Overview from the side menu that displays.
2
Select the budget you want to view in your report.
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Click Next.
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Choose how you want the budget to be laid out on your screen.
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Click Next.
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Click Finish to produce the report.
You can produce several budget reports in QuickBooks, comparing your actual performance to your budgeted performance. Income statements and balance sheets both utilize budgeted numbers. Use these reports to see how your company’s performance compares to your expectations.
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What’s a Class?
Using Classes with Payroll
A class is an optional tool you can use to identify income, expense, and payroll transactions that belong to a particular group.
There are two ways in which you can use classes while reporting payroll in QuickBooks. You can choose to assign entire paychecks to a particular class, or you can choose to assign individual payroll items to classes.
Does your company have locations, divisions, departments, funds, or other areas that it needs to track separately? Perhaps you want to track income by the person who does the work (typical among lawyers, accountants, salespeople, and other professionals) for purposes of paying commissions and bonuses or judging performance. Or your company might engage in several distinct types of business—for example, a construction company that performs both residential and commercial construction—so it is beneficial to track the performance of each type of work. If these or other scenarios apply to your company, you can use the QuickBooks class feature and report on each area of your business separately. You have the option of setting up subclasses of classes to further classify and separate income and expenses. For example, a law firm that practices in the areas of criminal law, family law, and personal injury might want to have a class for each of these types of law and then a subclass for each attorney. That way, the firm can create reports that show how the family law practice as a whole is doing, another report showing how each lawyer within the family law practice is performing, and so on for each area of law and each attorney.
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If the classes you set up for your company relate to different offices, divisions, or locations, it probably makes sense to assign entire paychecks to a class. Employees generally work in one location, and their payroll is associated with that location. Alternatively, if your employees work on a variety of different assignments and your classes reflect the various types of work your employees perform, you might find that assigning particular payroll amounts to different classes is a more effective means of reporting. Choose the method you want to use for assigning classes to payroll by setting a preference. The method you choose applies to all employees. Set the payroll class preference by selecting Preferences from the Edit menu. Click the Payroll & Employees icon and click the Company Preferences tab. Indicate whether you want to assign one class to each entire paycheck or to the earnings items on paychecks. Note that this option displays only if you have turned on class tracking.
Setting Up Classes
1
Select Edit, Preferences.
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Click the Accounting icon.
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Click the Company Preferences tab.
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Check Use Class Tracking to turn on the class feature.
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Click OK.
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Select Lists, Class List. If this is the first time you’ve used classes, the list will be empty.
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Click the Class button and select New from the drop-down menu to set up a new class.
QuickBooks provides an additional level of organization called classes. Classes enable you to group transactions in ways that can help you better analyze your company’s performance. For example, you can use classes to track transactions by region, salesperson, or type of job. 2
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TIMESAVER You can also press Ctrl+N to open the New Class window. 8
Enter a name for this class.
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If the class is a subclass of another class, indicate that by checking the Subclass Of box and selecting a class from the drop-down list.
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10 Click OK to save the class.
Did You Know? The Class option displays on forms. After you’ve turned on the class tracking feature in the Preferences window, you’ll notice a Class option on your various forms. The option is not present when class tracking is turned off.
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Using Classes on Sales and Purchase Forms
You might think that you can enter only one class per form. But what if the information on your form relates to more than one class? For example, you might need to order items from one vendor that relate to different classes. You can solve this problem by putting a separate class column on the form instead of using the Class box at the top of the form. Then you can designate a separate class next to each item you order.
IMPORTANT Turn on Classes! You must have the Class feature turned on before performing this task. 1
Select Lists, Templates.
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Double-click the form to which you want to add a class column.
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Click the Additional Customization button in the Basic Customization window that displays (not shown).
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Click the Columns tab in the Additional Customization window.
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Check the box next to Class in the Screen column and optionally the Print column.
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Click OK in the Additional Customization window.
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Click OK in the Basic Customization window (not shown).
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Reporting on Classes
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Select Lists, Class List.
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Click the Reports button.
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Choose from these reports: ◆
QuickReport (Ctrl+Q)— Displays a report of all the transactions that refer to the selected class.
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Profit and Loss by Class— Select Reports on All Classes, Profit and Loss by Class. This report shows you all income and expenses for the year to date, with a separate column for each class.
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Profit and Loss Unclassified— Select Reports on All Classes, Profit and Loss Unclassified to display the Profit and Loss without breaking out amounts by class.
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Graphs—Select Reports on All Classes, Graphs to select either graphs depicting Income and Expense Items by Class or Budget vs. Actual by Class.
You can display several class-related reports right from the class list window. And don’t forget that you can customize many of the QuickBooks standard reports to include a column for your classes. See Chapter 18, “Working with Reports in QuickBooks,” for more information.
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Creating Payment Terms
1
Select Lists, Customer & Vendor Profile List; then select Terms List from the side menu that displays.
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Click the Terms button and select New from the drop-down menu to create a new term.
When you send an invoice to a customer, it is common practice to indicate when you expect to receive payment. You might want to be paid the full amount in 30 days (net 30) or in 15 days (net 15). You might offer a small discount for early payment (2% 10 net 30 = 2% discount if the balance is paid in 10 days, but the full balance is due in any case in 30 days), or you might expect to be paid immediately (due on receipt). All these options are called terms, and QuickBooks starts you out with a sample list of frequently used payment terms. You can add your own favorite terms to this list.
TIMESAVER You can also press Ctrl+N to open the New Terms window. 3
Enter a name for this term.
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Select Standard to base the term on the date an invoice is issued. Alternatively, select Date Driven if you want the term to be based on a particular day of the month.
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Enter the number of days until the full amount of the invoice is due.
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Enter the discount percentage, if any, for early payment.
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Enter the number of days during which the customer is eligible to claim the discount.
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Click OK.
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Did You Know? Using payment terms results in better record keeping. When you enter payment terms, QuickBooks uses this information to determine due dates of bills and invoices and posts related notices in the Reminders window.
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Customizing Forms Design 1
You no longer need to be a designer to create forms that will wow your customers or that will look more professional when communicating with your vendors. New for QuickBooks 2010 is a free form design service. Customize all your forms at once, add industry-specific designs, modify text font, and pick from several layout options.
If you are new to QuickBooks 2010, click the Invoice icon from the Home page to open Customize Your QuickBooks Forms. Click Get Started.
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Optionally, access the same feature from Lists, Templates. Choose Create Form Design from the Templates menu lower left.
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The QuickBooks Forms Customize dialog displays.
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To add your company logo, click Add and you will be able to browse to the location where you have stored your logo. Or select the “Need a logo? Get started” for information on having a logo designed for your business (fees apply).
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From the Industry drop-down menu, select your industry or show all industries. Click on a design to select a specific industry design.
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Click Next to advance to the Colors and Fonts options in the wizard.
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From the Font and Grid Colors options that are displayed, choose an overall font for the entire form, or customize with specific fonts for selected data. Also select the colors for your form’s grid.
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Place a check mark next to the fields you want to include in your form. Grayed-out fields indicate missing information in your QuickBooks data file. (To update this information from the Company menu, select Company Information and enter the missing data).
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Optionally, select the I Use Window Envelopes option to help guide the placement of the data on the form.
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10 Click Next to display the Grid Style
options.
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11 Select your preferred shading
options for the grid. Note that the form previews are for selecting shading options and do not necessarily match your own form data layout. 12 Click Next to review your design. 13 Click Back to return to previous
choices and make changes (not shown). 14 Click Next on the Review Design
dialog (not shown).
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11
13
12
15 Place a check mark next to each
form to which you want to apply the newly created design. What a timesaver! QuickBooks makes a copy of the original template, so you do not need to worry about overriding your previous design.
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16 Click Apply. 17 Read the information on the Design
Applied dialog (not shown). Click OK to close. 18 Optionally, save your design online
by providing a name for the design and clicking Save. If you choose the option to Save, follow the instructions to create an Intuit online account (not shown).
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Did You Know? Does your company need to have a logo designed? Click the Need a Logo? link on the QuickBooks Forms Customization screen, and several designers will provide samples that you can purchase. Web design, brochure design, graphic design, and merchandise logo design are also offered.
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Customizing Forms Data
1
Select Lists, Templates.
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Click a form you want to revise. For this example, the MyDesign Rock Castle Invoice has been selected.
3
Choose Templates, Edit Template from the button at the bottom of the window, or double-click on the template name.
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In the Basic Customization window that displays, click the Manage Templates button.
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The previous section provided steps to use the new QuickBooks 2010 forms designer to customize the professional look of your forms. The following steps will help you change the layout of the data on your forms. QuickBooks comes with a collection of standard forms that are ready for your use. You are welcome to use these forms as is, or you can determine what data is displayed or printed on the form.
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If you did not previously add a logo to your documents, place your logo image file in the images folder of your QuickBooks directory. Check the Use Logo box and navigate to the location of your logo image file. Your logo must be a JPG, GIF, or BMP file.
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Modify the selected detail as needed; most of this should already be selected from your work in customizing the form (see previous task).
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Click the Additional Customization button.
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8 Click the Header tab to customize
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the details that print at the top of the invoice form. Check boxes to choose or uncheck boxes to deselect the elements you want to include. 9
Click the Columns tab to choose which columns should appear in the print and screen versions of the item description area of your form, and indicate the order in which they should appear.
Did You Know? There are screen elements, and there are print elements. For each form, some elements are displayed only on your screen and not on the printed form, other elements are displayed on both the screen and the printed form, and some elements are displayed only on the printed form. Check boxes in either the Screen or the Print column, or both, to determine where the elements appear.
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Did You Know? Certain form elements can’t be changed. You might see a message indicating that some of the design options are unavailable to you. If you chose to edit a standard Intuit form, there are certain areas you are not permitted to change. You can overcome this obstacle by choosing to create a new form from the existing template, as we have done in this example.
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10 Click the Prog Cols tab. (This tab
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displays only if you have chosen Invoice as your form type.) Choose which columns should appear on the print and screen versions of your progress invoice form, and indicate the order in which they should appear. Note: The Estimate Columns portion of this screen only displays if you have turned on the preference for progressive billing.
See Also More information about estimates and progressive billing can be found in Chapter 8, “Job Cost Estimating and Tracking.”
11 Click the Footer tab. Check boxes to
add features to the bottom of the print and screen versions of your form; uncheck boxes to remove features.
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12 Click the Print tab. Choose whether
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you want to use the default printer settings from your QuickBooks Printer Setup, or you can choose to set specific printer settings for this form. 13 Check the box Print Page Numbers
if you want page numbers to appear on multipage forms. 14 Check the Print Trailing Zeros box
if you want QuickBooks to display insignificant, or trailing, zeros so that numbers will be aligned on the form. If you choose to display the zeros, you can indicate how many decimal places you want to display. 15 Click the Layout Designer button to
view your masterpiece. 16 In the Layout Designer, click the
Margins button to designate the size of your form.
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17 Click the Grid button to display a
nonprinting grid that can help you line up various elements on your form. 18 Click specific elements and drag to
move them to new locations (not shown). 19 Click the handles on the corners of
form elements to resize them (not shown). 20 Click OK when you have completed
working with the Layout Designer. 21 Click OK to close the Additional
Customization window. 22 Click OK to close the Basic
Customization window (not shown).
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Did You Know? You can preview your new form. In the actual form window, click the arrow next to the Print button and then select Preview. QuickBooks Tips and Tricks
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Making Journal Entries
1
Select Company, Make General Journal Entries.
2
Verify the date and entry number for this journal entry.
3
Enter the first account name.
4
Enter the amount in the Debit or Credit field.
5
Enter a description in the Memo field (optional, but recommended).
6
Enter a customer name in the Name field if this amount is to be associated with a specific customer. QuickBooks adds a check mark in the Billable field, indicating that the amount is to be transferred to a customer’s invoice.
7
Click the Billable field if you want to uncheck the box and not have this amount transferred to a customer’s invoice.
8
Enter a class if you are using the Classes feature.
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Enter the next account name.
10 Verify the amount. 11 Repeat these steps until you have
entered all the accounts required of this journal entry. 12 Click a save option.
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For some transactions, no QuickBooks standard form is available. For these transactions, you use the General Journal. The General Journal is the place where you adjust the balances in your accounts without the use of forms such as invoices, bills, and checks. In this journal, you can reclassify balance sheet information, void a prior period check (as in Chapter 5, “Making Purchases and Recording Payments”), record depreciation and amortization expenses, and reclassify amounts charged to the wrong account. General Journal entries are made to accommodate these changes. For this example, we create a General Journal entry to record depreciation expenses.
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Did You Know? It’s easy to reverse a journal entry. Some journal entries get reversed at the end of each month, quarter, or year. Open an existing journal entry and click the Reverse button located at the top of the General Journal Entry window. A new entry displays, dated for the first day of the following month, with the prior entry’s amounts reversed. Journal entries aren’t just for depreciation. Use a journal entry whenever you need to enter or change information in your accounting records and no obvious form is available for the job.
Using the Accountant Edition of QuickBooks The Premier Accountant Edition of QuickBooks offers features for accountants who work with their QuickBooks-using clients. By using the Accountant Edition of the program, third-party accountants can manage financial activities for the QuickBooks clients. The QuickBooks Premier Accountant Edition includes features designed specifically for accountants, such as the following: ◆
Client Data Review, a tool to help accountants troubleshoot and review a client’s data file.
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Intuit Statement Writer so that you can prepare customized financials using QuickBooks data integrated with Microsoft Excel (sold separately).
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Fixed Asset Manager, which tracks all assets and calculates depreciation.
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Loan Manager for tracking and managing loans and loan amortization schedules.
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Free Remote Access, which enables accountants to work on client files from any location (free for 12 months—after 12 months, this service requires a subscription).
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The ability to save reports and forms as PDFs and email them directly from QuickBooks.
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After the Fact Payroll, a spreadsheet-like tool for entering payroll after the fact easily and quickly, with the option to have corrections made to client errors.
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Client Ready Payroll Reports for professional-looking payroll reports to give the client.
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Working Trial Balance window—one place to perform all your period-end tasks.
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Adjusting Entry and Adjusted Trial Balance report for tracking adjustments.
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Reconcile Discrepancy report, which displays deleted and changed transactions for easy reconciliation.
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Integration with Lacerte and ProSeries professional tax software.
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Password-protected close date and access to Closing Date Exception Report to prevent unauthorized changes after the close date and to help locate authorized changes after the close date.
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Accountant’s Copy, which enables the customer to continue working while the accountant modifies forms directly with journal entries. Also, a Dividing Date is set to prevent the client from making any changes to the date prior to the working date of the Accountant’s Copy. A report is created for the client to see before importing the accountant changes.
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Using the QuickBooks Remote Access Feature 1
Go to http://quickbooks.intuit.com/ product/add_ons/remote_access.jsp to read about the remote access feature.
2
After the remote access feature is activated, you are given a Web address, login name, and password. Depending on the level of service you purchase, you can perform the following tasks from any location 24 hours a day with remote access:
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Log in and open your company file.
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Enter transactions in your company file.
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Transfer files from one computer to another (depending on the level of service purchased).
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Meet clients in an online remote location, with video, record, and playback capabilities.
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Access files and applications on other remote computers. (Depending on the level of service purchased).
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Print information from your company file. (Depending on the level of service purchased).
If you travel or work out of the office and want to access your QuickBooks file from a remote location, the Intuit Remote Access feature is the tool you need. If you own the QuickBooks Premier Edition, this service is free for a year. Otherwise, depending on the level of service you choose, there is a $3.95 to $29.95 monthly fee to use the remote service.
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Did You Know? Fees are subject to change. Any fees for services that are quoted in this book are the fees that were in place when the book went to press. The fees might have changed by the time you decide to purchase these services. Be sure to check online at the Web address given to find out the latest information about the exact fees for a service before you agree to purchase the service.
Creating Mailing Labels 1
Select File, Print Forms; then select Labels from the side menu that displays.
2
Select which group of labels you want to print. For this example, the customer list has been selected.
3
Indicate whether you want to narrow the mailing list to particular types.
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Indicate whether you want to specify ZIP codes that begin with a particular number.
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In the Sort Labels By drop-down list, indicate how you want the list to be sorted.
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Check Print Ship To Addresses Where Available to use ship to addresses instead of mailing addresses.
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Check Print Labels for Inactive Names if you want to print labels for names that are inactive.
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Check whether you want to print labels for individual jobs (only applicable if you are printing labels for customers).
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Click OK.
Sending an announcement to all your customers, vendors, or employees is easy when you use the address information already stored in your QuickBooks file to create mailing labels. QuickBooks lets you select the group and then produce labels based on your specifications.
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10 Select from the Label Format list to
choose the style of label to print.
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11 Click Preview to see whether the
labels you are about to print are what you expect.
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12 Click Align if you need to adjust the
alignment of the text that will appear on your labels. 13 Enter any horizontal or vertical
adjustments that you need to make to align your printed material with your labels. 10
14 Click Print Sample and print a test
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version on plain paper to see how the labels will look without wasting label paper. 15 Click OK to close the Fine
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Alignment window after making any necessary adjustments.
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16 Click Print.
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Using the QuickBooks Online Features Statistics show that more individuals are now participating in online banking activities. Banks and credit card institutions are making their online services easier to access and more cost-effective, and the confidence in the security of online financial transactions is increasing. QuickBooks provides a user-friendly interface with your bank or credit card, enabling you to download your transactions for easy matching and reconciliation, examine recent bank transactions, transfer money between two online accounts, and pay bills online. You don’t have to use all the online services offered by your financial institution. Checking balances and transferring funds are typically free services, but many banks charge a monthly fee or per-transaction fee for bill payment services. You should weigh this fee against the cost of postage and paper supplies and the time you save to determine whether the service is worthwhile to you. If your bank or credit card institution does not provide online services and you want to use these features, you can open a new account with a bank or credit card institution that does provide these services. Opening an account for the purpose of using online services doesn’t necessarily mean you have to sever ties with your original financial institution, however. For banking, you can use one bank for online services and keep another for savings and loan services.
What You’ll Do Choose Online Banking Mode Activate Online Services with Your Financial Institution Retrieve Online Transactions Add Transactions to QuickBooks Rename Rules—Automatically Assign List Name Set Preference to Prefill Accounts Assign Transactions to Open Vendor Bills
11 Assign Deposits to Open Customer Invoices Delete Multiple Transactions Add Multiple Transactions Make Online Payments
Cancel Online Payments Send Online Messages
Transfer Money Between Accounts Get Reports of Online Transactions Use QuickBooks Website
Use QuickBooks Online Edition
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Choosing Online Banking Mode
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If you are new to using QuickBooks 2010 or if you are just beginning to use the online banking feature, you will see displayed the Choose Your Online Banking Mode dialog. You can choose to work with the new Side-by-Side Mode or the previous Register Mode. Choose the mode you prefer by clicking Continue to keep your current mode or Change Mode to make a switch.
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In addition, you can choose and later change your Online Banking Mode from the Banking menu. Select Online Banking and choose Change Online Banking Mode (not shown).
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Click the radio button for the Online Banking mode you prefer (you can later return to this menu to change to the other mode).
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Click on the What’s the Difference link to learn more about the differences.
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Click OK
Over the years, QuickBooks has added functionality to the process of downloading financial institution transactions directly into your QuickBooks data. QuickBooks 2010 has even more flexibility in online banking. QuickBooks users have the option to choose between two different methods of viewing the information that is to be downloaded. Try both methods; see which one works best for you.
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Did You Know? The remaining sections on the QuickBooks Online Banking feature will be shown using the Side-by-Side mode.
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Signing Up with Your Bank for Online Services You’ll find that the nuts and bolts of carrying out online banking procedures are pretty easy and straightforward. Here are some preliminary and precautionary steps to keep in mind if online banking is new to you. These are the types of start-up procedures you should anticipate: 1. First, determine whether your existing bank provides online services. You can do this by calling the bank or by viewing the QuickBooks list of QuickBooks-friendly online institutions. The Financial Institutions Directory can be viewed by selecting the Banking menu and then selecting Online Banking, Participating Financial Institutions. If your bank or credit card is on the list, click the link to your financial institution to find out more about which options are available to you. 2. To see what your options are, begin using the QuickBooks Online Banking setup (select the Banking menu and then select Online Banking, Set Up Account for Online Services). You will encounter the following choices: ◆
If your bank provides online services directly through QuickBooks, you can simply continue the setup steps to make your bank aware that you are now taking advantage of its online service and begin banking and optional bill-paying through QuickBooks.
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If your bank provides online services but is not working directly with QuickBooks, you can still use the software your bank provides for an online connection to pay bills through QuickBooks, but you cannot do full online banking through QuickBooks. Stop the setup, consult your bank, and ask it to send you its information for going online.
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If your bank does not provide online banking, you can change your bank to a QuickBooks-friendly bank or simply sign up for Intuit’s online bill-paying service. Select the Banking, Online Banking, Learn About Online Bill Payment menu for more information (an Internet connection is required).
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If you decide to switch banks to one that works online with QuickBooks, submit your online application and wait for account information to be sent to you. IMPORTANT If you are considering changing banks simply for online access, think twice. Even in the electronic age, some important banking and lending decisions are still based on rapport. If you’ve taken the time to get to know your banking officer, loan managers, and so on, don’t cavalierly sever those relationships. Check with your home bank first and find out whether it has plans to offer online services in the near future. Mention that you use QuickBooks and want to tie in your QuickBooks accounts with your bank. You might find out that your bank is about to start offering the very services you need.
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Activating Online Services with Your Financial Institution
1
Select Banking, Online Banking, Set Up Account for Online Services.
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From the Select Your QuickBooks Account drop-down menu, select the QuickBooks bank account (or credit card) for which you want to set up online services or select Add New if you are creating a new bank or credit card type account. (Remember, you must have online services enabled with your financial institution before you can set up the services within QuickBooks.)
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Click Next.
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From the Enter the name of your Financial Institution drop-down menu, select your banking or credit card institution. Hint: You can also begin typing the name, and QuickBooks will prefill the list with possible matches.
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Click Next.
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You might be prompted with a Select Option dialog box if your financial institution has multiple related financial entities. Choose where the account is held if applicable, and click OK.
The first step in using online banking services is getting access to a bank that provides the services you need. After you’ve opened a bank account and established online privileges, you’re ready to put QuickBooks to work. With an Internet connection, you’ll be able to access your bank account directly from your QuickBooks program. These steps show you how to initiate the QuickBooks online banking feature.
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If your financial institution provides more than one method for connecting, you will be given the option to choose which connection to use. Select Direct Connect if you want to connect to your bank or credit card directly from within QuickBooks. (This is the most efficient method.) Select Web Connect if you want to first sign into your financial institution’s website before downloading transactions (this method is more manual and time consuming).
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Click Compare These Options if you are unsure which to choose from.
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Click Next.
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Select Yes if you have already activated your online access with your financial institution.
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Select No if you need the contact information for your financial institution.
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If you selected No, a dialog will open in which you can view your bank’s contact information.
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Click Next to complete the signup process.
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Click Back to return to the previous menu to continue with the setup steps.
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At any time, click Set Up Later to close the Set Up Account for Online Services dialog.
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Enter the Customer ID that your financial institution recognizes for online access.
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Enter the Password that your financial institution recognizes for online access.
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Confirm your Password by re-entering it.
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Click Sign In.
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Click to select the account you want to log onto from the list if more than one account is displayed.
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Click Next, and QuickBooks will now process the request for your online financial services connection to QuickBooks.
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Click Activate Online Bill Payments to set up the ability to pay your bills directly from QuickBooks (fees may apply).
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Click Finish, and QuickBooks opens the Online Banking Center shown in the following section titled “Retrieving Online Transactions.” 22
Did You Know? You can also download your credit card transactions directly into your QuickBooks data file. If you have a business credit card, you can also choose to download these transactions as well as banking transactions.
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Why Bank Online? Many people are reluctant to conduct financial transactions online. Their concerns can relate to security issues, a loss of personalized service, or the simple desire for a paper document summarizing the transaction. If you are trying to decide whether to bank online, perhaps this list of advantages to online banking will help sway you:
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See the whole picture—When you conduct a transaction at the teller window of your bank, you get a receipt for that transaction. That’s all. When you bank online, you see every transaction that has passed through your account in the current banking cycle, and you see the balances in all your accounts.
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Bank 24/7—You no longer have to worry about when the bank is open. You can bank any time of the day or night when you bank online. Stay warm, dry, and comfortable by banking from your desktop at a time that fits your schedule instead of working around the bank’s schedule.
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No waiting in line—How often do you go to the bank and feel like you could read the entire newspaper while you wait in line? Forget about lines. You can conduct your banking transactions immediately when you bank online. It’s as if you had your own private teller, waiting patiently to process your transactions.
Comparison shop for a bank—With the advent of online banking, many banks have begun offering accounts online. You don’t even have to live in the same town as these banks to have an account there. Although examining bank balances and transferring funds are usually free services, there are other online services you can explore—bill paying, for example—for which some banks charge a fee. Shop around for a bank that provides the services you want at the price you want to pay.
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Maintain accurate records—Take advantage of the fact that you can check your bank balance anytime, day or night, to ensure that your own records in QuickBooks are accurate and up-to-date.
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Retrieving Online Transactions 1
Select Banking, Online Banking, and choose Online Banking Center (not shown).
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If the Choose Your Online Banking Mode dialog displays select Continue to use your existing mode or switch the mode by choosing Change. The selection is not permanent, so you can test each method and pick what works best for you. (Not shown).
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If you have more than one online account, verify that the correct account name displays in the Financial Institution pane. If you have multiple online services, use the Select drop-down menu to select the proper online service you want to work with in the current online banking session.
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Click the Receive Transactions button to automatically connect through the Internet with your selected financial institution.
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Enter your PIN into the access dialog that displays.
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Click OK.
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QuickBooks will provide a status message as it downloads current transactions into the QuickBooks Online Banking Center. In the Online Banking Center you can control which transactions you download into your QuickBooks financial institution register.
After you’ve activated online services with your bank, you can request to review and download your bank or credit card transactions that have recently cleared your financial institution. New flexibility is built into the QuickBooks 2010 Online Banking feature that lets you choose between two methods of managing your downloads. 3
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See Also Now that you have successfully retrieved your financial institution’s transactions, follow the steps in the next few sections to properly download the transactions into your QuickBooks file.
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Adding Transactions to QuickBooks 1
Open the Online Banking Center by selecting Banking, Online Banking, and choosing Online Banking Center (not shown).
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In the Item column click an item to review downloaded transactions received into the Online Banking Center.
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Click Add Transactions to QuickBooks.
You can conveniently add transactions one at a time to your QuickBooks data file. (If you’d like to learn to add multiple transactions, read the “Adding Multiple Transactions” section later in this chapter.) Activating Online Banking Services can save you time and improve your data entry accuracy.
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Click a single transaction on the left (or see the section on “Adding Multiple Transactions” later in this chapter).
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The Payee field will automatically populate if the QuickBooks online banking services recognizes the payee. If it doesn’t populate, simply click the drop-down menu to select from your QuickBooks lists (vendors, employees, customers, other names) or begin typing the name and have QuickBooks add it to your lists.
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The Account field will automatically populate if the QuickBooks online banking services recognizes the payee from a previous downloaded transaction. If it doesn’t populate, simply begin typing the account name or click the drop-down menu to select from a list of your accounts.
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When you click the More Matching Options link you can select a radio button to record the expense, assign the payment to an open vendor bill, or match to an existing QuickBooks transaction.
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Click Show Splits, Memo, Date, Number to show detailed information about the transaction.
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You can accept the default Date or modify as needed.
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If no number downloaded, enter an optional Number with which to identify the transaction.
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Enter an optional Memo for the transaction in the Memo field.
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In the Account field, type the account name or select one from the drop-down menu that displays when the field is selected.
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Accept the default amount that displays or modify if needed in the Amount field.
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You can assign the expense to a customer using the Customer:Job field.
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Place a check mark in the Billable box if you will be using the QuickBooks Add Time and Costs feature to invoice the customer for the expense.
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Assign a class with the Class field if you departmentalize your company’s Income Statement (and use Classes for other reporting).
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Click Remove Selected to clear the line detail above.
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Click Hide Splits, Memo, Date, Number to return to the lessdetailed entry dialog.
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Click Add to QuickBooks, and the transaction will now be included in the QuickBooks register for that financial institution.
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Click Finish Later to return to QuickBooks and exit the Online Banking Center.
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Did You Know? To help QuickBooks online services automatically select the payee name, a Renaming Rule is created automatically by the QuickBooks online services. These rules can be modified (see the “Renaming Rules—Automatically Assign List Name” section). To help QuickBooks online services automatically select the account to assign to your payee, complete the Account Prefill tab in the Add New or Edit Vendor dialog box. For these features to work properly, you will need to set the following preference: Select Edit, Preferences, General, My Preferences tab and select the Automatically Recall Information, Prefill Accounts for Vendor Based on Past Entries radio button.
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Renaming Rules— Automatically Assign List Name 1
Click Renaming Rules from the topright corner of the Online Banking Center (not shown).
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Click the name for which you are modifying the renaming rule from the list on the left.
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Select the If a Downloaded Name drop-down menu and choose from the Begins with, Ends with, Contains, or Exactly Matches options.
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Type the criteria to be used. In this example, Verizon has been entered for the Contains option. QuickBooks Online Banking would ignore the changing transaction number in future transactions and look for a match that contains the information you identified.
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Click Remove if you want to clear your selection.
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Click Save to assign the renaming rule.
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Click Cancel to not assign the renaming rule.
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Click Close to close the Edit Renaming Rules dialog box.
Did You Know? The QuickBooks Online Banking feature creates a renaming rule automatically when you assign the transaction to an existing QuickBooks name for the first time. You can then modify the renaming rule.
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Renaming rules automate and standardize the names of downloaded banking transactions into QuickBooks. Your financial institution may assign a transaction number to the downloaded payee name. QuickBooks previously expected you to create a new vendor for each transaction with the name change and used Aliasing to avoid multiple vendors. For example, you purchase mobile phone services from Verizon Wireless. When the transaction is downloaded, the vendor name is “Verizon wireless - .” So that QuickBooks will ignore the transaction code and assign it to the proper vendor, a renaming rule is created that begins with, ends with, contains, or exactly matches the downloaded transaction. Follow these steps to modify the renaming rules created automatically by QuickBooks Online Banking.
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Setting Preference to Prefill Accounts
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From the Home page, click the Vendor Center button (not shown).
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Double-click Vendor Name to open the Edit Vendor dialog box (not shown).
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Click the Account Prefill tab.
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Using the drop-down menus for Select accounts to pre-fill transactions, choose up to three account names you want to assign as default accounts for this vendor.
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Click OK.
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Select Edit, Preferences, General, and click the My Preferences tab. Click Pre-fill Accounts for Vendor Based on Past Entries. IMPORTANT The preferences selection in Step 6 must be made for the Prefill option to work properly.
Each banking transaction downloaded into your QuickBooks file must be connected to an account. You can have QuickBooks help automate this process by assigning up to three accounts to each vendor record. When QuickBooks Online Banking downloads a transaction, it will look to see if you have defined a preferred account for that vendor in the vendor setup.
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Assigning Transactions to Open Vendor Bills 1
Select the More Matching Options link at the top right of the Add Transactions window (not shown, but see “Adding Transactions to QuickBooks” earlier in this chapter).
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Click Select open bills to pay in QuickBooks.
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Select the Vendor from the drop-down list, or begin typing the vendor name, and QuickBooks will find vendor list names that match.
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Accept the default date or change as needed.
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Enter an optional memo in the Memo field.
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Enter an optional transaction number or name in the Number field if no number displays.
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Place a check mark next to the open bill or bills that are being paid by this downloaded transaction.
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Click the Add to QuickBooks button to record this transaction to your financial institution register in QuickBooks.
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Click Finish Later to leave the Record a Bill Payment window.
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Click Yes if you do not want to save the changes made in the Record a Bill Payment window.
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Click No if you want to save the changes made in the Record a Bill Payment window.
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To associate a downloaded banking transaction to an open vendor bill in QuickBooks, effectively paying the open vendor bill with the downloaded transaction, activate the Add Transactions to QuickBooks button in the Online Banking Center and follow these steps.
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Assigning Deposits to Open Customer Invoices 1
With the Add Transactions window open, click a deposit transaction item from the list on the left.
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Accept the default Date or modify as needed.
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Enter an optional Memo.
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Click to place a check mark next to each invoice that was included in the downloaded deposit. Modify the amount in the Deposit List pane if you are not receiving full payment.
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Click Remove Selected to clear the contents of the Deposit List pane.
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Click Add to QuickBooks, and your transaction will be included in your financial institutions register in QuickBooks.
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Click Finish Later to exit and return later to finish recording.
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If you opt to finish recording information later, QuickBooks presents a prompt box. Click Yes to discard your changes.
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Click No to save your changes and be returned to the Record a QuickBooks Deposit window.
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When you finish assigning deposits, close the Online Banking Center window to exit.
QuickBooks Online enables you to match your downloaded banking deposits to open customer invoices or previously recorded deposits in your bank account using the Make Deposit forms. Open the Online Banking Center and click the Add Transactions to QuickBooks button to begin the task.
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Deleting Multiple Transactions
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From the Add Transactions to QuickBooks online banking window, choose the Select Items to Delete button.
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To select specific items to remove, choose Select Individual Transactions and click to place a check mark next to each transaction you want to delete.
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To select all the transactions, choose Select All Transactions and you will be prompted to enter Date. All checked transactions dated prior to this date will be deleted.
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Click to add or remove the checkmarks in the far-left column for the transactions you want to delete.
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Click Delete Selected to remove the transactions from this and future downloads.
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A confirmation prompt displays. Click Yes to permanently delete the transactions from the download.
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Click No to be returned to the Select Items to Delete dialog box.
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Click Cancel to not delete the items selected and be returned to the Add Transactions to QuickBooks dialog box.
There might be occasions when you want to delete all or some of the downloaded transactions before they are entered into your financial institution register in QuickBooks. This is especially true if this is the first time you have downloaded transactions and you want to begin recording transactions from a specific date. You will use the Select Items to Delete feature to remove multiple transactions with one click of the mouse. Open the Online Banking Center and click the Add Transactions to QuickBooks button to begin this task.
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Adding Multiple Transactions 1
QuickBooks Online Banking Services can save data entry time by enabling you to add multiple transactions at one time with the Add Transactions to Quickbooks window. Open the Online Banking Center and click the Add Transactions to QuickBooks button to begin this task.
From the Add Transactions to QuickBooks window, click the Add Multiple button.
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In the No. field, you can add a transaction number (optional).
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Click the Payee field to select the payee from your QuickBooks lists.
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Click the Account field to select the account from your QuickBooks chart of accounts.
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If you use classes, enter a class in the Class field.
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To select all the transactions, place a check mark in the Renamed or Unmatched boxes. If not selected, you can manually add or remove individual check marks for individual items you want to add to your financial institution register.
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Leave the default check mark in Select All Matched, and QuickBooks Online Banking will remove these “matched” transactions from future downloads.
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You can click the check boxes to add or remove individual check marks.
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Click Add Selected to add the selected transactions to your QuickBooks register for this financial institution.
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If you click Cancel, you will be given the choice to keep or discard your changes to the transactions.
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Making Online Payments
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If you have activated your online bill payment service, as discussed in the “Activating Your QuickBooks Online Services” section earlier in this chapter, you will have links to Write Online Checks and Pay Bills in the Online Banking Center.
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Click Write Online Checks to create a check that will be sent to your financial institution for payment directly to the vendor. Select the Pay Bills to write a bill payment check in QuickBooks.
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In this example, a check has been prepared. Select Online Payment. QuickBooks will now include this in your Online Banking Center as a transaction ready to send.
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Click Save and Close.
Online Bill Payment from the QuickBooks Online Services lets you pay your vendors electronically though QuickBooks. After the service is enabled (your bank may charge a fee for this), you use QuickBooks to record the bills being paid and send instructions to your financial institution. It is your financial institution’s payment processor that will make the payments electronically or print and mail the check for you. 2
Did You Know? Your financial institution doesn’t offer bill pay service? Consider signing up for the Intuit QuickBooks Bill Pay Service. Select the Banking, Online Banking, Learn About Bill Payment. You can read more details and sign up for the service. It is currently offered free for 30 days (or up to 20 payments). After the trial period, it is currently priced at $15.95 a month for up to 20 payments. Then, an additional charge of $6.95 is assessed for each group of 10 bill payments.
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The Online Payment dialog instructs you to click Send/Receive Transactions to complete the process.
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Click OK.
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Click Send/Receive Transactions in the Online Banking Center window.
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Enter your PIN if requested. (Not shown).
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The Online Transmission Summary dialog box displays. Click Print if you want to print the summary.
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Transmission Summary details and return to the Online Banking Center.
Did You Know? The address, telephone number, and account number are required for online vendors.
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Using the QuickBooks Online Features
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Canceling Online Payments
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From the Online Banking Center, select Cancel Payments from the Items Ready to Send pane (not shown).
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On the displayed Payments You Can Cancel dialog select the payment you wish to cancel. Click View Payment if you want to make changes to the payment details.
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Click Cancel Payment. The Cancel Payment prompt box displays.
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Click Yes to cancel the payment.
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Click No to not cancel the payment.
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Click Help for more instructions.
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Click Close to close the Payments You Can Cancel dialog box.
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Click OK to the QuickBooks message that displays.
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Click Receive/Send Transactions from the Online Banking Center (not shown).
If you requested an online payment that your bank has not yet sent, you might still have time to change your mind. Whether you want to change the amount of the payment or cancel it entirely, you can request that the bank cancel the original payment. Note that your bank might not be able to cancel the requested payment if there is not enough time for the bank to process the request.
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Sending Online Messages 1
From the Online Banking Center, click the Create Messages link in the Items Ready to Send pane (not shown).
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Select the appropriate account from the Message To drop-down menu.
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Enter a Subject Line for your message.
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Select the appropriate account in the Regarding Account drop-down menu.
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Type your message.
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To retain a record of your message, click Print (optional).
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Click OK to record the message to be sent.
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Click Cancel to exit without saving.
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Click Send/Receive Transactions to send your message to your financial institution (not shown).
It’s not exactly a message in a bottle, but you can send a message electronically through space, as it were, and communicate with your financial institution using your QuickBooks program. You can also make email requests for information or services.
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Did You Know? If you have something important to say, call, don’t write. If you need to discuss an issue now, call, don’t write, your bank. Banks might take 24 hours or longer to respond to email messages.
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Transferring Money Between Accounts
You can use the QuickBooks online banking feature to transfer funds between accounts, move excess funds from non-interest-bearing accounts into interest-bearing accounts, or transfer money from your main checking account into your payroll account without ever leaving your desk.
Request the Funds Transfer 1
Select Transfer Funds from the Banking menu.
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Ignore the date—QuickBooks forces this date to read Next Business Day when you indicate you are making an online transfer of funds.
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Enter or select the account from which you are transferring funds.
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Enter or select the account to which you are transferring funds.
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Enter the amount of the transfer.
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Check the Online Funds Transfer box.
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Click Save & Close to close the Transfer Funds Between Accounts dialog box. Alternatively, click Save & New to record another transfer, or click Clear to remove your entries in the data fields.
Dispatch the Funds Transfer 1
Select Banking, Online Banking, Online Banking Center.
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Select the appropriate Financial Institution if you have more than one enabled (not shown).
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Click Send/Receive Transactions (not shown).
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Did You Know? Your Online Banking Center will not show the transfer funds link if you currently do not have two accounts enabled for online access at the same financial institution. You cannot transfer funds between different banks from your QuickBooks Online Banking Center.
Getting Reports of Online Transactions 1
Select Reports, Custom Transaction Detail Report. The Modify Report window automatically displays.
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Click the Filters tab.
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Click Online Status in the Choose Filter list.
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Select the type of online transactions you want to see. For example, pick from transactions to send, transactions that have been sent, and so on.
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Click OK.
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The Custom Transaction Detail report displays with your Online Banking transactions listed.
You can request a report that shows all your online transactions and use this report as a confirmation of transactions that have occurred. You can also customize the report to show only items you’ve sent or items waiting to be sent.
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Using the QuickBooks Website
QuickBooks offers a wealth of business resources on its website, from technical support and backup services, to a credit card merchant account program, and links to sources for business loans, credit reports, insurance, and more. You can also take advantage of the option to order Intuit paper products, such as invoices and checks. Go to the following URL address: http://www.quickbooks.intuit.com. Click links to access a variety of tools and resources.
Create a website
Credit card, Payroll eCheck services processing
Try QuickBooks Online free
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Supplies
Tech support
Using the QuickBooks Online Edition
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Using your Web browser, go to the QuickBooks website at www.quickbooks.intuit.com.
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Click Products and Services at the top left of the page and choose QuickBooks Online.
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Review the information about the different versions of QuickBooks Online.
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Click Start Now or Try It Free for the version that best meets your needs:
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QuickBooks Online Free—Enables you to create invoices and track money for up to 20 customers under a single user license.
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QuickBooks Online Basic— Includes all the features of Online Free, plus login access for yourself and for your accountant and 40 standard reports. Free for 30 days; then $9.95/month.
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QuickBooks Online Plus—Includes all the features of Online Free and Basic, plus login access for three employees and your accountant, more than 65 standard reports, and budgeting, time tracking, and automated bill pay features. Free for 30 days; then $34.95/month.
Consider using the web-based edition of QuickBooks if you spend time away from the company and need remote access to your company files. You can access your company QuickBooks information 24 hours a day and can create forms and run reports, and the online service comes with free technical support from Intuit. You can try the online service for 30 days at no cost.
Choose which product best meets your needs
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Preparing Income Tax Returns Whether your company is a corporation, partnership, proprietorship, or not-for-profit, you need to prepare income tax returns at the end of each year. The government requires that you report a summary of your income and expenses for the year, and—although it doesn’t produce income tax returns—QuickBooks does provide all the information you need to prepare the forms yourself or have someone else prepare your tax returns using your QuickBooks data.
What You’ll Do
In this chapter, you learn how to set up your accounts so the numbers feed into the proper places on the tax reports. You see the tax reports that you can produce in QuickBooks, and you also learn how to record estimated tax payments and learn about the tax programs with which QuickBooks integrates.
Make Estimated Tax Payments
Choose the Correct Income Tax Form Assign Tax Lines to New or Existing Accounts Use the Income Tax Reporting
Create a Tax Return
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Choosing the Correct Income Tax Form
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Select Company, Company Information.
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Click the drop-down arrow to select a tax form for this entity.
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Click OK.
Each type of business entity is required to file a different income tax form. If you used the EasyStep Interview to set up your company in QuickBooks, you were asked to indicate which type of tax form your business files. QuickBooks uses this information to determine which type of business entity your company is. Before you can use the QuickBooks features that help you prepare your income tax return, you must have the correct business entity selected. To verify, enter, or change your company’s entity information, follow these steps.
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Did You Know? You will get a warning before you make the change. If you chose a tax form that differs from the form previously selected during the EasyStep Interview, you see a message that reads: “Income tax settings now invalid and will be deleted in all accounts. Continue?” Click Yes to proceed with the change in tax form.
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Which Income Tax Form Should You Use? Each type of business entity commands its own federal income tax return. You should consult with a tax professional to find out which type of tax return you need to file and, for that matter, which type of business entity is best for your company. Here are the various federal business income tax forms at a glance: ◆
Form 990—Use this form if you are a taxexempt organization. Tax-exempt organizations are usually those in the business of helping others. The IRS must give approval to your exempt status. Organizations that qualify for exempt status typically include organizations that are charitable, educational, scientific, religious, or literary. The only income on which this type of organization pays income tax is income not related to the reason for the exempt status.
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Form 990-PF—Private foundations use this form. A private foundation is typically a tax-exempt entity that is controlled by an individual or a family. Strict rules apply to this type of tax-exempt organization.
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Form 990-T—Tax-exempt organizations that have a profitable business not related to the exempt purpose of the organization are required to report the tax information from their profitable business on this form.
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Form 1040—This is the tax form used by individuals. If your business is a sole proprietorship or another type of business that is not required to file a separate business tax return, such as some limited liability corporations, your business income and expenses are reported on your 1040. Most commonly, people who report business activity on their 1040s use an accompanying Schedule C to summarize their business transactions.
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Form 1065—Use this form if you are a partnership. Partnerships are similar to S corporations in that your share of the company’s net income or loss is passed on to you and taxed on your individual tax return (1040). Limited liability corporations with more than one member also use a Form 1065.
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Form 1120—Taxable corporations use this form to report their business activity. Corporations are taxed at their own rates and are liable for their own debts.
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Form 1120S—Some corporations are classified as Subchapter S corporations. Instead of being taxed at corporate income tax rates, the income or loss of an S corporation is passed on to its owners, much like a partnership, and taxed on the individual tax returns.
Preparing Income Tax Returns
287
Assigning Tax Lines to New or Existing Accounts 1
If you plan to use QuickBooks to help prepare your company’s income tax forms, you must assign a tax line to each of your company’s accounts. You can assign tax lines as you set up your accounts, or you can open a Chart of Accounts report that lets you see the tax line assignment status of all of your accounts at a glance and then assign tax lines directly from the report.
Click the Chart of Accounts icon on the QuickBooks Home page.
TIMESAVER Press Ctrl+A to quickly open the Chart of Accounts. 2
Select New from the Account menu (or press Ctrl+N). Or if you’re editing an existing account, skip to Step 6.
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Choose the type of account in the Add New Account: Choose Account Type window (not shown).
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Click Continue (not shown).
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Enter appropriate information such as Name and Description to set up your account (skip to Step 7).
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If editing an existing account, follow Step 1, and then with the account selected, click Ctrl+E to edit the account.
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Click the drop-down list in the Tax Line Mapping field to view the list.
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Click the tax line that is appropriate for this account.
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Click OK.
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Did You Know? Tax lines vary depending on the tax return you file. When you selected your company’s tax form, QuickBooks loaded the tax lines that apply to that particular form. Different companies see different tax lines on the Tax Line Mapping dropdown list.
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Using the Income Tax Reporting
The QuickBooks tax reports are designed to help you or your accountant prepare your income tax return. Review the Account Listing Report to verify the tax lines assigned to your accounts. The Income Tax Summary report displays a summary of your company’s income and expenses with one line on the report corresponding to each line of your income tax return. The Income Tax Detail report shows the complete detail of every transaction that feeds into the individual lines on your company tax return.
Create Accounting Listing Report 1
Select Reports, Accountant & Taxes; then select Account Listing.
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Double-click any account showing in the Tax Line column.
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Click the Tax Line Mapping dropdown list to display the available tax lines. Select the proper tax line item. (Refer to the earlier section, “Assigning Tax Lines to New or Existing Accounts.”)
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Click OK. Repeat the steps for any other accounts that need to have a tax line assigned.
Preparing Income Tax Returns
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Creat Income Tax Summary Report 1
Select Reports, Accountant & Taxes; then select Income Tax Summary.
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The Income Tax Summary report is automatically compiled based on the previous calendar year. Click in the From and To fields to change the range of dates, if necessary.
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Double-click any amount to see the detail of all the transactions that make up that amount.
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Double-click the Tax Line Unassigned items at the bottom of the Income Tax Summary report to display the detail of items that have not yet been assigned to tax lines. If you need to assign tax lines to these items, go back to the previous task and follow the steps to assign tax lines.
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Press Esc to close the report.
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Creat Income Tax Detail Report 1
Select Reports, Accountant & Taxes; then select Income Tax Detail.
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Change the dates in the From and To fields, if necessary.
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IMPORTANT Your company date information might have been entered incorrectly. The dates that appear on the tax reports are a function of the fiscal year information you entered when you set up your company. If you find you must consistently change the dates on your tax reports, open the Company Information dialog box (choose Company Information from the Company menu) and verify that the months in the lower-left corner of this box are correct. 3
Double-click any item to see the original document.
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Press Esc to close the report and any original document windows you opened.
Did You Know? The Income Tax Detail report should be examined before you rely on the numbers in the Income Tax Summary report. Take the time to closely examine the Income Tax Detail report, studying the way in which your transactions have been classified. You are responsible for being able to explain the tax treatment of all these amounts to the IRS.
Preparing Income Tax Returns
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Paying Estimated Taxes
Accounting for Income Taxes
If your business is a taxable corporation or you are the owner of the business and the business income is reported on your personal income tax return, you have a responsibility to estimate and pay quarterly income taxes. The IRS requires quarterly estimated payments of income taxes, and your state might require payments as well. Use the tax reports discussed in this chapter to help calculate your quarterly income tax.
The account you use to record your income taxes when owed and when paid depends on your tax filing status. For example, if your business is an S Corporation, a partnership, or an LLC, taxes are reported on your individual tax return. If the company pays this amount for you, generally you record the amount in Owner’s Draw equity account.
Corporate estimated tax payments are due as follows: ◆
First quarter—The 15th day of the 4th month of the fiscal year.
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Second quarter—The 15th day of the 6th month of the fiscal year.
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Third quarter—The 15th day of the 9th month of the fiscal year.
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Fourth quarter—The 15th day of the 12th month of the fiscal year.
Individual estimated tax payments are due as follows: ◆
First quarter—April 15th
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Second quarter—June 15th
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Third quarter—September 15th
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Fourth quarter—January 15th
If the 15th of the month in which a tax payment is due falls on a Saturday, Sunday, or federal holiday, the tax payment is due on the next business day.
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If you are other than an S Corporation, your tax expense is owed and paid by the corporation. When you created your Chart of Accounts, you might have included accounts for income taxes. If you don’t have the accounts yet, you’ll need to set them up when you get ready to record the amount of tax you owe and the payments you make for that tax. If you (or your accountant) determine that your company owes $10,000 in income tax, these are the accounts you’ll use to record the liability: Debit Income Tax Expense
Credit
$10,000.00
Income Tax Payable
$10,000.00
When you pay the income tax, these accounts are affected: Debit Income Tax Payable Cash
Credit
$10,000.00 $10,000.00
When computing your income tax liability, don’t forget to calculate and pay any applicable state income tax.
Making Estimated Tax Payments 1
Click the Write Checks icon on the Home page to open a new check.
TIMESAVER Pressing Ctrl+W also takes you to the Write Checks window. 2
Enter the date of the payment.
3
Enter the payee. This will probably be your bank. Ask your accountant for instructions on how to present your tax payments.
Typically, each of your quarterly estimated payments is equal to at least 25% of the lesser of 100% of the estimated income tax for the current year or 100% of the tax shown on the corporation’s tax return for the preceding year. Use Form 8109 (call 1-800-TAX-FORM or contact your local IRS office) to accompany your tax deposits. Some corporations must use the Electronic Federal Tax Payment System to make tax deposits electronically. Contact the IRS or your accountant for more information on how to make deposits.
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IMPORTANT Payroll taxes and income taxes are not the same! Make sure you have separate tax accounts for your income tax expenses and liabilities and that these accounts are not the same ones you use to record your payroll tax expenses and liabilities. Payroll taxes include the taxes withheld from employee paychecks and the employer’s share of taxes, such as FICA and Unemployment Compensation. 4
Enter the amount.
5
Enter the account name where the payment will be recorded (see the previous sidebar, “Accounting for Income Taxes”).
6
Enter an optional description.
7
Save the payment.
8
Print the check (see “Printing Checks” in Chapter 5, “Making Purchases and Recording Payments”).
See Also See “Scheduling Recurring Transactions” on page 196 to save time by scheduling and automating quarterly tax payments.
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Did You Know? Choose either your income tax liability or your income tax expense account for recording the tax payment. If the tax liability has already been recorded, this payment should be assigned to the liability account. If you haven’t recorded the tax liability, record the payment to the income tax expense account. Different estimated tax payment rules apply depending on the type of business. The information presented in this task describes estimated tax information for taxable corporations. Different rules apply for individuals and other types of organizations. Check with your tax professional to ensure that you are paying the correct amount of estimated tax.
Preparing Income Tax Returns
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Creating a Tax Return
When you have all the information necessary for the preparation of your income tax return, you can find all the tax forms you need on the Internet. The IRS provides access to printable tax forms and accompanying instructions on its website, available for downloading; all the state revenue agencies provide their tax forms online as well. Determine which tax forms you need. The easiest way to do this is to look at last year’s tax return. If this is the first year for your company’s tax return, start with the main tax form for your company, as described earlier in this chapter. As you follow along and read the instructions, you will find out which other tax forms and schedules you need.
Download Federal Tax Forms 1
Open your web browser and go to the IRS website at http://www.irs.gov.
2
Click the Business tab.
3
Click Forms and Publications in the lower left.
4
Click Forms and instruction number (PDF) link.
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5
In the Find box, type your form number or scroll through the list to find your form.
6
Select Product Number in the dropdown next to Find.
7
Click the name (in the Product Number column) of a form you want to view. The form you selected displays.
8
You can view the form onscreen, enter information on the form, print it, and save it.
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1
Download State Tax Forms 1
Go to the Fun with Taxes website at http://www.funwithtaxes.com.
2
Click the Tax Website Links on the left.
3
Click the Tax Forms link on the right under State.
4
Click the state for which you need tax forms. The website for that state’s revenue agency will appear in a separate window. 2
3
Did You Know? Each state has its own website. You can use an Internet search engine to find the revenue agency for your state. Or you can go to a website that provides links to all state revenue agencies. A site like this is especially handy if you need to file tax returns in more than one state.
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Non-Tax-Related Transactions
Using QuickBooks with TurboTax
From time to time, transactions occur in your business that has no business on your tax return. Following is a checklist of typical business transactions that you do not include as income or deductions on your tax return:
You already know you can print tax reports in QuickBooks and fill out tax forms either by hand or in a tax preparation program. You also can use QuickBooks to communicate with tax preparation software such as TurboTax and prepare your tax return by transferring information from QuickBooks to the tax program.
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Penalties you pay the IRS and state revenue agencies—If you make a late tax payment, the interest portion is a taxdeductible expense but the penalty is not.
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Costs of tickets for traffic violations—The cost of breaking the law is not deductible.
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Start-up costs of beginning a new business—The legal fees, corporate filing fees, research costs, market surveys, and other expenses you incur to help get your business rolling can be amortized over a period of five years, or you might qualify for a deduction of up to $5,000 of these costs in the year in which they were incurred. Special rules apply when startup costs exceed $50,000.
◆
Charitable contributions—Unless your business is incorporated, charitable contributions belong on a business owner’s Schedule A with other itemized deductions, even if the business paid the contribution.
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Lobbying costs—Even if lobbying results in a direct benefit to your business, the costs are not tax deductible.
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Dues to entertainment facilities—The cost of specific entertainment events can qualify as a business deduction, but the country club dues are not deductible.
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Appreciation in property—Assets owned by your company might increase in value over the years, but you are not taxed on that increase (at least not until you sell the assets for a profit).
Before you can use TurboTax or any other tax software program in conjunction with your QuickBooks program, you must ensure that all accounts have been properly assigned to tax lines. When you’re certain that your QuickBooks information is ready to be transferred to a tax preparation program, start the tax program (TurboTax, for example) and follow the prompts when asked whether you want to import information from QuickBooks. QuickBooks can be imported into TurboTax, TurboTax for Business, TurboTax Pro Series, and H&R Block’s TaxCut program, plus other tax programs used by accounting professionals.
Did You Know? There is an election available for companies to take a first-year deduction for up to $5,000 of start up costs (this amount is reduced if the total start-up costs exceed 50,000). If you take the election, then any costs exceeding $5,000 are to be amortized over 15 years.
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Data Backup and Security There are few things more precious than your company’s financial data. Don’t rely on good luck to protect your QuickBooks information. Take advantage of the various levels of security protection that QuickBooks offers, from password protection of sensitive areas of your data to offsite backup protection and everything in between. There are plenty of tools you can use to make sure your data is safe. In addition to the availability of good storage and backup procedures, QuickBooks users have access to a multilevel security system within the program. The QuickBooks security system enables you to protect sensitive data from the eyes of unauthorized personnel. In addition, you can protect your data from being changed by unauthorized users. You can also set a password-protected closing date so that no company transactions from before the closing date can be changed without the permission of someone with access to the password.
What You’ll Do Back Up Your QuickBooks Company File Restore Backed-Up Information Use the QuickBooks Online Backup Service Add or Edit the Administrator Password Add New or Edit Existing Users Close Financial Records at Year-End Create a Closing Date Exception Report
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Backing Up Your QuickBooks Company File
1
Select File, Save Copy or Backup.
2
Click the Backup copy option.
3
Click Next.
4
Choose Local backup. (For information about online backups, see “Using the QuickBooks Online Backup Service,” later in this chapter.)
5
Click Options.
Did You Know? There are multiple options for saving your QuickBooks file. Pick the right one for your needs. The Backup Copy option is best for safe storage of your data. Use the Portable Company File option only if you need to email your data or move it from one computer to another. The Accountant’s Copy is a specific file backup format that enables your accountant to make changes to your data while you continue your dayto-day transaction entry.
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A backup is an exact copy of your company data file. Every prudent businessperson should ensure that a functioning backup system is in place. However, if you are using an automated backup system, you should still run a test of your backup process to confirm that the QuickBooks backup is functioning properly. If you instead back up specific files individually, these steps will demonstrate how to back up just your company’s QuickBooks information. Consider backing up frequently and keeping a copy of your backed-up data somewhere off of your company premises. For this example, you’ll save your backup file to a USB thumb drive (portable storage device). An online backup procedure is presented later in this chapter.
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Browse to the file location where you want your backup to be stored.
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Check here if you want QuickBooks to include the backup date and time in the backup file name (recommended).
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Check here to limit how many backup copies are allowed in one folder.
9
If you want to receive backup reminders, check the box and enter the frequency with which you want to be reminded.
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10 Choose a verification option.
QuickBooks recommends that you let the program completely verify the integrity of your data when you back up.
11
11 Click OK. 12 If you are backing up your data to
the same computer drive as your original data you might receive a warning recommending that you select another computer location. Click Change Location or Use this Location (not shown). Click OK (not shown)
13 14 15
13 Click Save It Now to save your file
now. 14 Click here if you want to set up a
backup schedule in addition to saving your file now.
16
15 Click here to set up a backup
schedule for future use only. 16 Click Next.
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17 Verify the location where this file
17
will be saved. 18 Verify that the filename that
displays is the name you want to use for this backup. Make changes if necessary. 19 Click Save to perform the backup
procedure. 20 Click OK when the process is
completed. 19
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20
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What Type of Backup Should I Create? You don’t want to be “wishing” that you had a backup in case of a computer malfunction. So be prepared with a backup of your data on a removable storage device or to another computer. There are other uses for backing up your data: the Portable Company file and the Accountant’s Copy file. Details of each of the file types are discussed next. QBB: QuickBooks Backup File This file type remains the best choice for securing a data backup of your work. If needed, this file can be restored to a .QBW file. Here is a list of some of the advantages and limitations of sharing this type of data file: ◆
The file cannot be opened first without being restored. To restore a backup file, click File, Open or Restore Company and select the Restore a Backup Copy option.
◆
Once restored, the file extension becomes .QBW.
◆
Changes made to a restored version of this file type cannot be merged later into the original data file.
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The file type does not replace a .QBB backup because it lacks some of the needed transaction logs.
◆
The file cannot be opened until it is restored. To restore a portable company file, click File, Open or Restore Company and select Restore a Portable File.
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Once restored, the file extension becomes .QBW.
◆
Changes made to a restored version of this file type cannot be merged later into the original data file.
QBX: Accountant’s Copy (Export File) As a business owner, if you choose to share your data with your accountant using the Accountant’s Copy functionality, this is the file type that is used. Here are of some of the advantages and limitations of sharing this type of data file: ◆
This file type is created by the business owner and enables your accountant to review and make needed changes to your data while you continue recording your day-to-day transactions in the file at your office.
◆
Any changes or additions your accountant makes can be imported (merged) into your company’s data file.
QBM: QuickBooks Portable Company File This file type does not replace the usefulness of the QuickBooks .QBB file type. Here is a list of some of the advantages and limitations of sharing this type of data file: ◆
The compressed file size makes a .QBM a perfect choice for attaching to an email or when moving from one computer location to another.
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Restoring Backed-Up Information 1
Select File, Open or Restore Company.
2
Choose Restore a Backup Copy.
3
Click Next.
4
Choose Local Backup.
5
Click Next.
6
Browse to the folder where you want to store your data backup.
7
Accept the default file name or edit.
8
Click Open.
If your company’s QuickBooks file has been damaged or you’ve replaced your computer, you need to restore your company’s QuickBooks file from the most recent backup. Note that all transactions you’ve entered in QuickBooks since the last time you backed up your file will need to be reentered.
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8
9
Click Next.
10 Verify the name of the company file
you want to restore. 11 Click Save to begin the restoration
process. 12 Click Yes to accept the overwrite of
any data currently stored on your computer. (Be sure this is what you want to do—it is irreversible.)
9
13 Type the word YES to verify that
you want to continue with the restoration process. (Again, be sure this is what you want to do—it is irreversible.) 14 Click OK. 15 Click OK again.
Did You Know? Consider enforcing a procedure whereby QuickBooks users at your company use checklists to show which transactions they enter and when the entries are made. With this type of system in place, you’ll easily be able to see which entries need to be reentered in the event of a system crash and subsequent restoration of backup. This checklist method is particularly useful for smaller companies that don’t have a lot of transactions to track. Larger companies, particularly companies using QuickBooks on a multiuser system with several users, should perform a nightly backup.
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305
Using the QuickBooks Online Backup Service
1
Select File, Save Copy or Backup.
2
Click the Backup Copy option.
3
Click Next.
4
Choose Online Backup.
5
Click Next to be taken directly to the QuickBooks Online Backup utility.
For an added measure of security, you can take advantage of Intuit’s online data backup service. This fee-based service provides an offsite location for your backup. The online backup basic service starts at $4.95 per month, and there are several levels of backup service available. The Intuit backup service includes a triple DES-128-bit encryption, which is the same encryption standard used by the United States government. Files that have been backed up online can be downloaded at any time and onto the same or a different computer from which they were backed up. Intuit offers a free 30day trial of this service.
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Did You Know? Intuit’s service isn’t the only online backup service available. Many companies offer online backup services. Your company might already have such a service in place for files other than QuickBooks. Explore the Internet, ask for referrals from computer users you trust, and find out what other services are available.
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You might see a message telling you that QuickBooks is going to launch your Web browser. Click OK if this message displays.
7
Click the Start Backup button.
8
If you are new to the backup service, read about the backup services and pricing options that are displayed. Then click Try Now for the option you want to use. The file you select downloads to your computer. Just follow the onscreen instructions for installation of this feature.
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307
Adding or Editing the Administrator Password
1
QuickBooks provides a login and password system that enables you to restrict which users can view and change your company’s financial information. To take advantage of this security system, you must first designate someone as the administrator. The person with administrative rights has the right to view all company records, make changes to any existing transactions, and create a closing date password. You can indicate the number of users for your company during the EasyStep Interview. When you first go to the Set Up Users screen, you are asked to establish the administrator password.
Select Company, Set Up Users and Passwords; then choose Set Up Users. Note that this task is for first-time setup of the administrator password.
2
Note the name for the administrator. Admin has already been entered. Although it is possible to change the name of the administrator, this isn’t recommended (not shown).
3
Select the Admin user list item and choose Edit User on the right (not shown).
4
Enter a password for the administrator. It can be no more than 16 characters and can include spaces. Note that the password is case sensitivex.
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5
Enter the password again.
6
Select a Challenge Question from the drop-down menu.
7
Type the Challenge Answer.
8
Click Next.
9
Click Finish (not shown).
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8
7
Did You Know? Each user, including the administrator, should have a separate username. For the best security, the Admin username should only be used for Admin tasks. By assigning a separate username to each user, including the administrator, and requiring users to sign in with their own usernames, it becomes easy to trace who performed which tasks.
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Adding New or Editing Existing Users
After you’ve set up the administrator’s password access for your QuickBooks company file, you’re ready to set up (or edit) the individual users and assign their rights for accessing and changing information. You can set a separate password for each user; you can assign separate rights to each user as well. Each user can create a password, or you can have the administrator assign passwords to each user. In any case, only a person logged in as the administrator has the right to initiate the setup of users.
Add a New User or Edit an Existing User 1
Select Company, Set Up Users. (Note: The User List will already be open if you just finished setting up an administrator password in the previous task. In that case, you can skip this step.)
2
Click Add User or Edit User.
2
Did You Know? Only the administrator can set up new users. You must be logged in as Admin to enter new users in your QuickBooks file.
3
Enter a name for this user.
4
Enter a password (or have the user enter a password).
5
Reenter the password.
6
Click Next.
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IMPORTANT You can also choose to delete a user. Rest assured that even though you have deleted the user, the Audit Trail will continue to reflect the removed user on the transactions that were created or modified by that user.
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Assign All Rights 1
Click All Areas of QuickBooks if this user is to have the ability to access and make changes in all areas of the program.
2
Click Next.
3
Click Yes.
4
Click Finish. IMPORTANT Verify that the correct rights have been assigned. After assigning user rights, the person setting up the users should log in as the new user and verify that the correct privileges and rights have been assigned.
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Did You Know? Adding features might require adjustments to user rights. If you turn on certain features in QuickBooks after you’ve set up users, you might need to revise the users’ rights. For example, if you turn on Inventory after you’ve assigned user rights, your users won’t automatically have access to inventory features, even if you gave a user access to all rights. Use the same procedure to edit existing users and add permissions as needed.
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Did You Know? Many preferences are user-specific. After new users have been set up, the administrator might want to log in as each user and go to the Preferences window (Edit, Preferences) to adjust settings in the My Preferences areas.
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Assign Selected Rights 1
As an alternative to assigning all rights, as described in the previous task, you can identify which areas of the program the user can access. After assigning a username and password, choose Selected Areas of QuickBooks to designate specific areas of the program to which this user will have rights.
2
Click Next.
3
For each area of the program, indicate the level of access the user has by choosing No Access, Full Access, or Selective Access.
4
If you chose Selective Access, click an option to indicate whether the user has the right to create transactions, create and print transactions, or create transactions and reports.
5
Click Next and work through the eight sections to assign the appropriate access. If you are not sure what access to assign to a user, set the access level and then log in as that user and attempt to modify an area you want to deny access to.
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Did You Know? Do you want to control your file so that your accountant cannot view customer credit card numbers, or add or modify user settings? Create a user name for your accountant and assign the External Accountant user type. All other privileges are afforded the External Accountant user.
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On Page 9 of 10, indicate whether the user has the right to change and delete transactions in the areas to which access has been assigned.
7
Indicate whether the user has the right to change and delete transactions that occurred prior to the company’s closing date (addressed later in this chapter).
8
Click Next.
9
Verify all the access rights that have been assigned to this user.
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10 Click Back to return to a previous
page and make changes. 11 Click Finish to complete the setup
of this user’s rights. 9
Did You Know? Additional security controls exist in the QuickBooks Enterprise Solutions. If you are using the Enterprise Solutions software, you’ll find that there are additional options for setting security access. The access levels for each user can be set on individual reports and accounts to allow or disallow these options in any combination: View, Create, Modify, Delete, or Print.
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Closing Financial Records at Year-End
“Closing the books” is an option in QuickBooks, not a requirement. If you want to continue to permit changes to transactions from previous accounting cycles, such as the year just ended or an earlier year, you can ignore the option for setting a closing date. If you want to ensure that your year-end final numbers on your reports remain final, follow the steps in this example to set and protect your company’s closing date.
Set the Closing Date 1
Select Edit, Preferences.
2
Select the Accounting preference.
3
Click the Company Preferences tab.
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3
9
TIMESAVER If your User List window is already open, just click the Closing Date button and the Preferences window opens to the Accounting Company Preferences screen. 4
Click the Set Date/Password button.
5
Enter a closing date.
6
Enter a password. You are limited to 16 characters, including spaces. Note that the password is case sensitive.
7
Reenter the password.
8
Click OK.
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9
Click OK to close the Preferences window.
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Did You Know? Closing dates make your outside accountant happy. By setting a closing date and assigning a password, your accountant can be assured that the numbers he or she is reviewing at the end of the year will not change.
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Restrict User Access to PreClosing Date Transactions 1
2
Select Set Up Users and Passwords, Set Up Users from the Company menu.
2
Click a user’s name.
3
Click the Edit User button.
4
Click Next until you get to the Changing or Deleting Transactions screen.
5
Indicate whether this user will have the right to change or delete transactions before the closing date.
6
Click Finish.
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See Also See the next task, “Creating a Closing Date Exception Report,” for information on viewing a report that displays all the changes made to company records after the closing date.
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Creating a Closing Date Exception Report
1
If you use the closing date feature in QuickBooks, you’ll want to take advantage of the opportunity to produce a report that shows changes to the closed accounts. The Closing Date Exception report shows changes to the closed periods. This report displays all transactions dated on or before the closing date that were modified or entered after the closing date was established. This report is only available in QuickBooks Premier and higher editions of QuickBooks.
From the Reports menu, select Accountant and Taxes, Closing Date Exception Report. TIMESAVER Alternatively, choose Report Center from the Reports menu.
2
Scroll through the report to see all the transactions.
3
Double-click any amount to see the actual transaction. IMPORTANT You must first set a closing date in your QuickBooks data file before changes to transactions dated on or before the closing date will be tracked.
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Did You Know? You can find out who made the postclosing date transaction. Note that the Last Modified By column shows which user entered the transaction during the closed period.
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Using Inventory Features Merchandise that you own and expect to sell to others is called inventory. QuickBooks provides a full, interactive inventory feature that constantly tracks and updates your company’s inventory totals. Each time you receive new items in stock, your inventory quantity increases and your inventory cost is recalculated to reflect the average cost of all items in stock. Each time you sell an item, your inventory decreases. The cost of an inventory item you sell is recorded in your QuickBooks records at the current average cost of the item. A reorder feature reminds you when supplies are getting low and tells you when you need to order more. QuickBooks also provides a warning message if you try to sell more inventory items than you have in stock.
What You’ll Do Activate Inventory Set Up Inventory Items Add to Your Inventory Edit Inventory Items Create an Inventory Group Manage Sales Orders Set Up Reminders to Replenish Your Inventory
14 Prepare Inventory Reports Count Your Inventory
Adjust Inventory Quantities
Adjust the Default Price of Inventory
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Activating Inventory
1
Select Edit, Preferences.
2
Click the Items & Inventory icon.
3
Click the Company Preferences tab.
4
Check Inventory and Purchase Orders Are Active.
5
While you’re here, you can check the box to have QuickBooks warn you if you are about to issue a purchase order with a number that duplicates another order.
6
Also, you can check the box to have QuickBooks warn you if you try to issue an invoice for inventory items you do not have in stock.
7
Click OK.
Before you can use the QuickBooks inventory features, you must turn them on. You might have already encountered questions about inventory when you used the EasyStep Interview, and as a result, your inventory might already be activated. If you still need to activate your access to the program’s inventory features, this task leads you through the necessary steps.
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Recording Manufacturing Inventory in QuickBooks
Accounting for Inventory When you record the order of inventory items with a purchase order, no change is made to your company’s accounts. Until the receipt of the order is recorded, the inventory items are not accounted for on your company financial statements. When you receive inventory items, you record the event and enter a bill for the items on an Enter Bills form. Here is an example of the accounts that are affected when you purchase and receive inventory items valued at $500: Debit Inventory
Credit
$500.00
Accounts Payable
$500.00
When you pay the bill, these accounts are affected: Debit Accounts Payable Cash
Credit
$500.00 $500.00
If your company is a manufacturing company making products from raw materials or parts and supplies, you might want to upgrade your version of QuickBooks to QuickBooks Premier or QuickBooks Enterprise Solutions. These programs enable you to account for the process of creating and building items from component items in your inventory. When the assembly items are completed, the component items are removed from inventory, and the completed assembly items are added to your inventory. If your company manufactures only a small quantity of items, you can apply a little creative manipulation of the Pro version of QuickBooks to record your inventory. Although you can keep track of individual raw material items with the QuickBooks Pro inventory feature, there is no provision for transferring these items to work-in-progress or finished goods. One method that works for recording manufactured inventory in QuickBooks Pro is to record raw materials as inventory items at the time they are purchased. Then, when the end product has been manufactured, record sales of your end product by using the inventory group feature discussed later in this chapter.
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Setting Up Inventory Items 1
Select Item List from either the Lists or the Customers menu. TIMESAVER You can also click the Items & Services icon found in the Company area of the home page.
2
If the New Feature dialog displays (not shown), click Take Me There if you want to enter your new inventory items in a table format, or click OK and continue with Step 9.
3
If you are continuing from Step 2, the Add/Edit Multiple List Entries dialog displays. (You can also access this feature from Lists, Items List, selecting the Item drop-down menu and choosing the Add/Edit Multiple Items.)
4
From the Add/Edit Multiple List Entries dialog, select Inventory Parts from the drop-down list.
5
Click Customize Columns if you want to change the order of the information to be entered or the selection of information displayed on this dialog.
6
Enter an Item Name, choose from the list of subitems, enter an optional default cost and sales price, and select the proper COGS (Cost of Goods Sold) account from the drop-down menu. Right-click to duplicate rows, copy down, or even clear a column of data. IMPORTANT You can use the handy Copy and Paste features of Microsoft programs to enter data into this Add/Edit Multiple List Entries tool that’s new in QuickBooks 2010.
7
Click Save Changes to save your work.
8
Click Close.
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When you set up an inventory item in QuickBooks, you provide descriptive information about the item, as well as basic facts such as cost, sales price, sales tax treatment, and preferred vendor. In addition, you have the option of indicating how many of these items you prefer to keep in stock so QuickBooks can warn you when stock is running low. All inventory items must be set up in this manner before you can refer to the items on forms such as purchase orders, invoices, and bills. For an existing business with inventory already in place, this method of setting up inventory items is the most expedient. After you’ve set up your entire existing inventory using the features on the Item List as described in this task, you can enter new inventory items directly from your bills or purchase orders, as described in Chapter 5, “Making Purchases and Recording Payments,” or by using the Receive Items form, as described in the task that follows this one.
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Press Ctrl+N. If the New Feature menu displays, click OK. The New Item dialog displays.
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10 Select Inventory Part from the Type
drop-down list. 11 Enter the name of the item as it will
appear on your inventory list. Choose to associate with another item by selecting Subitem of, and enter an optional manufacturer’s part number. 12 Choose an optional unit of measure
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for this item. Click Edit to define a unit of measure (only available with QuickBooks Premier or Enterprise). 13 Enter the description of the item as
you want it to appear on purchase orders and bills when you purchase this item.
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14 Enter the cost you pay when you
purchase this item, indicate the Cost of Goods Sold account, and enter your preferred vendor if you have one. 15 Enter the description of the item that
Did You Know? Entering the cost is optional. If the amount you pay for this item varies, you can leave the cost field blank and enter the cost when you enter a bill from your supplier.
should appear on invoices when you sell this item to your customers, or accept the default description from the purchase information entered in Step 14. 16 Enter the sales price you charge for
this item. If the price varies, you should leave this field blank. 17 Change the Tax Code option if
necessary to indicate whether the sale of this item is subject to sales tax.
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18 Enter the income account that is
credited when a customer purchases this item. 19 Enter the asset account that is
increased when you add this item to your inventory, or accept the default. 20 If you want to be reminded to
reorder this item, enter the quantity of items that represents the cutoff for reordering. Although you can enter the On Hand quantity here, it is recommended that you use an Inventory Adjustment to do this. See the section titled “Adjusting Inventory Quantities” (later in this chapter). 21 Click OK.
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Did You Know? You can indicate the quantity of inventory items on hand. When you set up a new inventory item, you have the option of entering the number of items on hand. Based on the purchase price you entered, QuickBooks calculates the value of the items on hand. This feature is available only when setting up a new item. To change the quantity on hand after the item has already been set up, see “Adjusting Inventory Quantities” later in this chapter. Bills and purchase orders should be used for entering the quantity and value of inventory items. By using the proper purchase forms to add to your inventory, you enable QuickBooks to calculate the correct average cost for your inventory items. The Unit of Measurement feature is available only in Premier and higher versions of QuickBooks. If you use the Unit of Measurement feature in a QuickBooks Premier data file and then open the file in the QuickBooks Pro version, you will be able to see the Unit of Measurement field, however, you will not have the ability to edit or create new units of measurement.
Adding to Your Inventory
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When you record the receipt of inventory items from your vendors, those items are added to your QuickBooks inventory. You can record the receipt of items from a vendor’s bill, or if you haven’t yet received a bill, the items can be entered from a packing slip. As soon as the bill arrives, one check mark turns the QuickBooks record of received items into a bill that needs to be paid.
Select Vendors, Receive Items. 3
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TIMESAVER Click the Receive Inventory icon in the Vendor section of the home page and then choose Receive Inventory without Bill from the pop-up menu that displays. 2
Enter the name of the vendor.
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Enter the date the items were received.
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Enter the name of the item(s) received.
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Enter the quantity of items received.
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You can enter the cost of the items if you have this information, or you can leave this area blank.
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Click one of the save options; the items are immediately added to your inventory.
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Did You Know? Received items affect your accounts payable, even though you have yet to receive a bill from the vendor. When you record the receipt of items, QuickBooks adds the anticipated amount to your accounts payables as unpaid bills. The bills, however, do not appear in the Pay Bills window until the actual bill is received and recorded in QuickBooks (see the task “Paying Bills” on page 164 in Chapter 5 for more on this topic).
Did You Know? Entering items changes the average cost. When you add items to your company’s inventory, the average cost of that item is updated to incorporate the new items you’ve added and the cost you’ve entered. Although you can record the receipt of items without entering a cost, be aware that they will be averaged in with your other receipts at zero cost, thus reducing the average cost of all the pieces of that item you have in inventory. Using Inventory Features
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Editing Inventory Items
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Select Lists, Item List. If the Add/Edit Multiple List Entries dialog displays, click OK.
2
Click the name of the item you want to change.
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Press Ctrl+E.
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Change any of the information in the white areas of the Edit Item window, except the Type, which cannot be changed (see the following “Did You Know?”). Note that the information that displays in the edit window varies, depending on the type of item you choose. The window shown here is for an inventory part item.
If the information you recorded about your inventory items changes, you can easily edit the information in your QuickBooks records. You can change information about the item, including item description, the cost, the sales price, a preferred vendor, and the sales tax status. You cannot change the item’s on-hand quantity or the average cost. You also can’t change the item’s type. After an item is designated as an inventory part item, it must keep that designation.
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Click OK.
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Did You Know? Inventory part items can be reclassified as inventory assembly items. QuickBooks offers a feature called inventory assembly items. Inventory assembly items are items built from inventory parts or other inventory assemblies and then sold as one item. Only users of QuickBooks Premier and Enterprise Solutions can create and build assembly items, but all QuickBooks users can edit, purchase, and sell them.
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Did You Know? You can change a non-inventory part item to an inventory item. Although you can’t change the item type of an inventory item, you can make a one-time, nonreversible change to alter the type of a noninventory item to an inventory item.
Methods of Valuing Inventory You can use several methods to value inventory. QuickBooks uses the average cost method, in which the cost of all pieces of a single inventory item is totaled and then the total is divided by the number of items in stock, providing an average cost for each item. Although this method is effective and easy to maintain, it is not the most popular method of valuing inventory.
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Last in, first out (LIFO)—Users of this method of inventory valuation make the assumption that the last items (the most recent items) you purchase are the first items you sell. Imagine a clothing store, where the latest fashions are the ones that sell, whereas the older articles of clothing stay on the racks. Items remaining in your inventory are assumed to be the oldest items and are therefore valued at the cost of the oldest items purchased.
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Specific identification method—Users of this method of inventory valuation have an inventory that lends itself to the tracking of individual items. As each item is sold, the value of the inventory on hand is reduced by the actual cost of the specific item. For example, all automobiles have a vehicle identification number (VIN), so tracking specific automobiles that go in and out of inventory is commonplace.
The three most popular methods of inventory valuation are not supported by QuickBooks. They are as follows: ◆
First in, first out (FIFO)—Users of this method of inventory valuation make the assumption that the first items you purchase are the first items you sell. You’ll notice that a grocery store prefers to sell items on this basis, always moving the items with the earliest date to the front of the shelf so they never have any old stock on hand. The value of inventory at the end of the year (or reporting period) is determined by taking a physical inventory count and then matching the costs of the most recently purchased items to the quantity of items on hand. The cost of the earliest items purchased is then added to the cost of sales. By using this method, your inventory is always valued at its most current cost.
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Creating an Inventory Group
Sometimes you might want to group several inventory items into one mega-item, so you can refer to the group as a whole. For example, suppose you are a retailer who sells dishware. Your inventory might include plates, cups, saucers, and bowls, all of which could be sold individually. Alternatively, you could group together one place setting of a plate, cup, saucer, and bowl and sell the group as a single item. Construction and manufacturing companies can use this feature, too. In this example, a construction company creates a group of items that together make up the supplies and labor required to build a wooden deck.
Set Up the Inventory Group 1
Select Lists, Item List. If the Add/Edit Multiple List Entries dialog displays, click OK.
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Press Ctrl+N.
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Select Group as the Type.
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Enter a name for the group.
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Enter a description for the group.
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Check the Print Items in Group box if you want all the details of the group to appear on customer invoices. If you leave this unchecked, only the name of the group prints.
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Enter the individual items that form the group.
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Click OK.
Did You Know? A variety of item types can be included in an inventory group. You are not limited to inventory part items in your inventory group. You can include other items such as non-inventory parts and service items in a single inventory group.
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Use the Inventory Group 1
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Open a new invoice by pressing Ctrl+I. TIMESAVER You can also get to a new invoice by clicking the Invoices icon on the home page.
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Enter the customer name.
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Enter the name of the group.
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Verify that all other information is correct.
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Click one of the Save buttons.
The detailed group information displays on your screen, but only displays on the printed invoice if you requested details by checking the box in the group setup screen.
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Managing Sales Orders
QuickBooks Premier and Enterprise versions offer a feature called Sales Orders whereby you can track all the inventory sales orders that have yet to be filled or invoiced. This feature is advantageous for companies that make repeat sales to customers and don’t want to invoice the customers separately for each sale, and for companies that need to create worksheets for organizing order fulfillment from a warehouse or other inventory storage facility. Fill out a sales order much like you would fill out a purchase order, and then track the progress of your sales orders through the Sales Order Fulfillment Worksheet.
Manage Sales Orders 1
Choose Customers, Create Sales Orders from the menu.
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Enter customer name, date, and order information, just as you would if you were entering information directly on the customer’s invoice.
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Click Save & Close to save the sales order.
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Choose Customers, Sales Order Fulfillment Worksheet.
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Note the fulfillment status codes in the Sales Orders portion of the worksheet.
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Click on an item to see the detail of the sales order.
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Select from several options for sorting the report.
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Check off orders you want to fulfill.
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Check the boxes for any forms you want to print.
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These orders can be filled at this time.
This order can be partially filled at this time.
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10 Click Print to print the selected
forms. 11 Click Close to close the report.
Note that nothing you enter on this report is saved.
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12 Press Ctrl+I to open an invoice
form. 13 Enter the customer name.
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14 Open sales orders for this customer
appear in the Available Sales Orders dialog box that displays.
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15 Check off any sales orders that you
want to invoice at this time. 16 Click OK to close the Available
Sales Orders dialog and return to the invoice. 17 You will be asked to indicate if you
want to invoice for all items or only selected items on the sales order (not shown). If you choose Selected Items, you can enter the quantity of items that you will invoice at this time.
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18 Information from the sales order
displays on your invoice. Complete the invoice and choose a save option.
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Setting Up Reminders to Replenish Your Inventory
If you didn’t designate a reorder point when you set up your inventory items, now’s the time to do so. Edit your inventory items and enter how many of each item you want to keep in stock. Then use the reminders list to send yourself messages to reorder. Every time the level of an inventory item in stock drops below the reorder point, a reminder to reorder is added to your reminders list.
Create a Reminder to Replenish Inventory 1
Select Lists, Item List. If the Add/Edit Multiple List Entries dialog displays, click OK.
2
Click the item for which you want to establish a reorder point.
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Press Ctrl+E.
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Enter the reorder point.
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Click OK.
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View Reminders 1
Select Company, Reminders.
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Scroll down if necessary until you find the Inventory To Reorder reminder.
3
Double-click Inventory to Reorder. All items that have passed their reorder point now appear. 3
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Preparing Inventory Reports
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You can produce several standard inventory reports in QuickBooks. You can then use these reports to keep track of how many items are on hand, the value of your inventory, and pricing information. A detailed description of each type of inventory report is included. Remember that you can customize these reports to fit your needs, and you can export reports to Microsoft Excel if you need to present reports in a format not supported by QuickBooks.
Select Reports, Inventory, or view the inventory report selections in the Report Center; then open one of the following inventory reports: ◆
Inventory Valuation Summary
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Inventory Valuation Detail
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Inventory Stock Status by Item
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Inventory Stock Status by Vendor
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Physical Inventory Worksheet
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Pending Builds
See the next page for a description of each of these reports.
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A Variety of Inventory Reports You’ve already been introduced to the Sales Order Fulfillment Worksheet earlier in this chapter. This report, available on the Customers menu when you use the QuickBooks sales order feature, displays all the orders currently in progress, providing detailed information about the quantities of items ordered, amount of inventory available to fulfill those orders, and anticipated ship dates. This worksheet gives you the opportunity to select orders to be filled and to print documentation to accompany those orders. The Inventory Valuation Summary report shows the worth of each item in your inventory based on the average cost method. The report also shows what percentage of the total inventory each item accounts for, what the items retail for, and what percentage of the total retail value each item accounts for. The Inventory Valuation Detail report takes the Inventory Valuation Summary one step further and shows you the complete details of every inventory transaction (each purchase and sale) for the requested period of time. The Inventory Stock Status by Item report lists each item in inventory and tells you how many are currently in stock, how many are on order, and when you can expect to receive the orders. The report also calculates the average sales of each item on a per-week basis. The Inventory Stock Status by Vendor report displays the same information as the Stock Status byItem report, but the items are grouped by vendor so you can quickly find out how many items are on order from a particular vendor and which inventory items are ordered from each vendor.
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The Physical Inventory Worksheet report lists all the inventory items you have set up for your company, along with the preferred vendor for each item, the quantity of each item that QuickBooks shows you have on hand, and a place where you can enter the quantity you actually have in stock. The Pending Builds report, ideal for manufacturing companies, shows all transactions recorded as pending builds of assembly items. To take advantage of the pending builds feature, you must have QuickBooks Premier or QuickBooks Enterprise Solutions. On any invoice form, there is a mini-report available in the Item Quantity area. Enter an item on the invoice, and an icon displays in the Quantity column. Click the icon, and a little report displays, showing how many of the item you have in stock and how many are on order. This mini-report is also available in the Item List window. Click an item in the Item List, click the Activities button, and choose Current Availability.
See Also See Chapter 18, “Working with Reports in QuickBooks,” for information on manipulating QuickBooks reports so that they display the information you want to see in the manner in which you want to see it.
Counting Your Inventory
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Although QuickBooks keeps meticulous records of the inventory you purchase and the sales you enter, differences will occur between the amounts entered during the year and the actual quantity of items on your shelves. The more frequently you count inventory, the more likely you are to be aware of any loss or damage to your inventory. You should try to account for material discrepancies between your books versus your actual inventory records. To assist you in taking a physical inventory count, QuickBooks provides a Physical Inventory Worksheet that you can print out and use while you count your inventory. In this example, the column that displays the QuickBooks count of inventory items is removed so the person making the physical count will be less inclined to rely on the computer-supplied numbers when counting inventory.
Select Reports, Inventory; then select Physical Inventory Worksheet.
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To remove the On Hand column, place the mouse pointer over the small diamond to the right of the On Hand column heading.
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Drag the diamond over the words On Hand, to the diamond on the left of the column heading.
4
Release the mouse; the On Hand column disappears.
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Slide the diamonds as necessary so that the full text of each column is visible.
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Click the Print button.
7
Click Print in the Print Reports window.
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Did You Know? Many reports contain an export to MS Excel feature so that you can manipulate the data in Excel. Although some reports can be imported back to QuickBooks, we recommend that only advanced QuickBooks users attempt this, or unwanted changes can occur to your QuickBooks data.
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Adjusting Inventory Quantities
1
Select Lists, Item List.
2
Click the Activities button.
3
Select Adjust Quantity/Value On Hand.
4
Enter the date on which you want the adjustment to affect your financial records. Often, this type of adjustment is recorded as a yearend adjustment.
5
Choose an account in the Adjustment Account list.
6
For each inventory item that needs to be changed, enter the actual quantity on hand.
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QuickBooks calculates the change in quantity.
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Check Value Adjustment if you want to display a new column that shows the dollar amount of the change by individual item. You can also enter a specific value of an item in the New Value column that displays.
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Enter an optional memo describing the reason for the adjustment.
After you take a physical count of your inventory, you might find that some of your QuickBooks inventory records don’t agree with the actual count at your business premises. You might need to make adjustments in the count recorded in QuickBooks. Check with your company’s accountant before making any adjustment in inventory quantities to ensure that such an adjustment is accounted for properly. Some financial and tax considerations must be addressed when making such an adjustment.
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Adjusting the Default Price of Inventory
1
Select Lists, Item List. If the Add/Edit Multiple List Entries dialog displays, click OK.
2
Click the Activities button.
3
Select Change Item Prices.
4
Choose from the Item Type list what you want to display on this report.
5
Click to place a check mark in the column to the left of any individual item you want to change.
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When you enter inventory items in QuickBooks, you have the option of entering the sales price for each item. When the price for an item has already been entered, you don’t have to remember prices when you create invoices for customers because QuickBooks automatically enters the price information for you. And here’s an even greater timesaver: If you need to change the sales prices on any or all of your inventory items, you don’t have to edit the items individually. Instead, you can bring up a window that shows all your inventory items and their prices and then go down the list, making changes to any of the items. Or you can select the items to change and order QuickBooks to change everything at once by a certain markup or markdown percentage or amount. 2
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Make the price change in the New Price column.
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Did You Know? You can use the Select All feature, selectively. Save time by clicking Select All to select every item on the list. Then deselect certain items by clicking in the check mark column to remove the check mark on items you don’t want to change.
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Alternatively, click Mark All to change all the inventory items at once.
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Change the price of all marked items at once by entering a percent or dollar amount by which you want to change the price of the selected items. Use a minus sign if the change is to be a markdown instead of a markup.
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Select whether the price change is to be based on sales price (Current Price) or cost (Unit Cost).
10 Click the Adjust button (even if the
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change is to be a markdown). 11 The new marked-up (or marked-
down) prices are assigned to all checked items. 12 Click OK.
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Recording Your Assets Anything your company owns that has value is considered to be an asset. Assets can be used in the production of income, and they are available to pay your company’s debts. They include cash, investments, receivables, inventory, prepaid amounts, and fixed assets.
Fixed assets are belongings of yours that are expected to last for more than a year and that are used for the production of goods and services, including such items as buildings, furniture, farm animals, vehicles, machinery, land, and mineral resources. The management of fixed assets in your QuickBooks company file includes recording the cost of the assets and monitoring their use and deterioration through regular deductions of depreciation. Rather than taking an expense deduction for the entire cost of the asset in the year in which it is acquired, accounting and tax rules require us to spread the cost of the asset over the asset’s useful life, associating the cost of the asset with the income it produces over a period of years. Use a depreciation expense account to record the current year’s expense associated with the use of your fixed assets.
What You’ll Do Reconcile Your Bank Statement Record Bank Account Transfers Track Petty Cash Receive Credit Card Payments Record Deposits As Assets Purchase Fixed Assets Enter Depreciation
15 Sell Fixed Assets
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Reconciling Your Bank Statement
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QuickBooks provides a reconciliation screen that enables you to quickly match your cash transactions with those that appear on your monthly bank account statement. You sort your transactions in the same order in which they appear on the bank statement, going down the list, checking off each transaction that agrees with the bank statement, and correcting errors if necessary:
Select Banking, Reconcile.
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TIMESAVER You can also click the Reconcile button in the Banking area of the home page to begin the reconciliation process. 2
Select the account for which you received a bank statement.
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Verify the statement date and change if necessary.
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Verify that the beginning balance matches the beginning balance on your bank statement.
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Enter the ending balance from your bank statement.
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Enter the date, amount, account, and class (if you’re tracking by class) for the service charge.
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Enter the date, amount, account, and class (if you’re tracking by class) for the interest earned.
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Click Continue.
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Click to check off all the items that appear on your bank statement.
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If the difference is not 0.00 and you select Reconcile Now, an adjustment for the difference will be recorded to a Reconciliation Discrepancies expense account.
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10 Click the column header title to sort
transactions in that column. 11 Click to select Highlight Marked,
and all transactions marked in the Reconcile - dialog will be highlighted 12 Click Reconcile Now.
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Did You Know? The reconciliation beginning balance should match the bank statement beginning balance. If a difference exists, you can ignore the difference (if it is minimal) or find the discrepancy. Click Locate Discrepancies to view the previous reconciliation report and determine why your balance was not reconciled the previous month. Use this report to view previously reconciled transactions that have been changed since the last reconciliation. It is best to clear up beginning balance errors before proceeding.
13 If you did not reconcile to the
penny, the Reconcile Adjustment window displays. Click Enter Adjustment to have QuickBooks enter a reconciling adjustment in your register. The amount of the reconcile adjustment will be sent to an expense account on the general ledger named Reconciliation Discrepancies. 14 Choose Summary, Detail, or Both to
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choose the type of reconciliation report. 15 Click Display to view the report
onscreen. 16 Click Print if you want to print a
copy of this report (recommended).
Did You Know? You can see reconciliation reports from previous periods. QuickBooks Premier and higher enable you to look at your reconciliation report from the previous month in case you need to resolve a discrepancy. Choose Banking and then Previous Reconciliation from the Reports menu. Choose whether you want to display the detailed report or a summary, and then click Display.
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Accounting for Assets When you acquire an asset, the cost of the asset is recorded on your company balance sheet. If you spent cash to acquire the asset, your cash account is reduced. If you borrowed money, your liabilities are increased. Here are some examples of how asset acquisitions are recorded in QuickBooks. Fortunately, QuickBooks does all this accounting for you when you use the proper Purchase and Sales forms. You write a check to place a $400 deposit with your utility company: Debit Other Assets: Deposits
Credit
$400.00
Debit
Mortgage Payable
Depreciation Expense
Credit
Credit
$250.00
Accumulated Depreciation
$250.00
If you sell a fixed asset that cost $1,000 for $800 and you had previously recorded a depreciation expense of $520, here are the accounts that are affected: Debit
You take out a $100,000 mortgage on a building and also make a $10,000 cash down payment:
Cash
Debit
$400.00
Cash
Fixed Assets: Building
When you create a journal entry to record depreciation expense, these accounts are affected:
Cash
$800.00
Accumulated Depreciation
$520.00
Fixed Asset Gain/Loss on Sale of Asset
Credit
$1,000.00 $320.00
$110,000 $10,000 $100,000
Tax Consequences of Sales of Business Assets When you dispose of a business asset, you have to report your gain or loss on your income tax return. The tax treatment of the transaction is determined by the type of the asset. If the asset is a depreciable asset, the IRS explains that you might have to recognize all or part of the gain as ordinary income. If you have a gain on the sale of the asset, the gain can be treated as ordinary or capital. You might be entitled to favorable tax rates on the capital gain.
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Because the tax treatment of asset sales is complicated, it is recommended that you seek the help of an accountant or a tax professional to assist in calculating the tax on the sale. Sales of business assets are reported on IRS form 4797, “Sales of Business Property.” You can obtain a copy of this form and the instructions that accompany it from the IRS at 1-800TAX-FORM or from the IRS website at www.irs.gov.
Recording Bank Account Transfers 1
Select Banking, Transfer Funds.
2
Enter the date of the transfer.
3
Click the drop-down list to select the account to Transfer Funds From.
4
Click the drop-down list to select the account to Transfer Funds To.
5
Enter the Transfer Amount.
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Enter an optional memo.
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Click a save option.
Many businesses have more than one bank account at the same financial institution. If your bank allows you to transfer money online or over the phone, you will need to record this information in QuickBooks.
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Tracking Petty Cash
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If your company keeps cash on the premises, be it a petty cash fund for incidental expenses or money for the cash register, you need to account for that money and for the way in which it is spent. By keeping track of the way in which this money is spent, you gain tighter control on how your company uses all its resources. One way to track petty cash is to keep a notebook or notepad with your petty cash fund and record all your expenditures. As the fund is depleted, reimburse it with cash transfers from an existing bank account, as described in the previous example.
Press Ctrl+A to open the Chart of Accounts. TIMESAVER Clicking the Chart of Accounts icon on the home page will also take you directly to the Chart of Accounts window.
2
Double-click the Petty Cash account (or whatever the account name is that you use) to open the account register.
3
Enter the date of a transaction.
4
Enter the name of the person or company who was paid in the Payee column.
5
Enter the amount of the expense in the Payment column.
6
Enter the account that should be charged.
7
Enter optional descriptive information.
8
Click Record.
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Repeat Steps 3–8 for each transaction you need to record.
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IMPORTANT Be sure to have a procedure for authorizing petty cash expenditures. Cash is the easiest thing to lose track of in a business. You need to have controls in place to protect your cash. Don’t allow employees to access cash without authorization.
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Did You Know? It’s easy to reconcile your petty cash account. When you use a petty cash account in QuickBooks, you can reconcile the account at any time by counting the cash and comparing it to the running balance in your QuickBooks register. Set up a reminder (see Chapter 7, “Using Time-Saving Features”) to reconcile on a regular basis.
Receiving Credit Card Payments
1
If your customers pay you with credit cards, the credit card amount is deposited directly into your bank, much like a check. Later, you might have to reconcile to record fees deducted by the credit card company. At the time you receive the credit card payment, you need to open the Receive Payments window and record the payment, using the credit card information supplied by your customer.
Select Customers, Receive Payments. If presented with the Get More From QuickBooks Payment Interview, complete the survey or click the red X in the top right to close the box.
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TIMESAVER Click the Receive Payments icon on the home page to quickly jump to the Receive Payments window. 2
Enter the customer name in the Received From field.
3
Enter the amount of the payment.
4
Verify the date of the transaction.
5
Select the type of credit card used from the Pmt. Method drop-down list.
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Enter the credit card number.
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Enter the expiration date.
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Click to check the invoices to which this payment applies, adjusting the amounts if necessary. (Note: QuickBooks assumes that the oldest invoice is paid first. You can override the checkmarks that are inserted by QuickBooks.)
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Click a save option. IMPORTANT Get paid more quickly by processing your customer payments by credit card directly in QuickBooks. For more information, click the Edit payment preferences to enable Credit Card Processing (separate fees apply).
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Did You Know? You can set a default account for recording credit card payments. Select Preferences from the Edit menu, and then choose Sales & Customers and Company Preferences. Check the box to Use Undeposited Funds as a Default Deposit to Account if this is the account you prefer to use for the initial recording of your deposits. Leave the box unchecked if you prefer to have your credit card payments recorded directly in your bank account. Using the Undeposited Funds account enables you to record the related credit card fee when entering the actual deposit. When you place the credit card amount on your deposit form, you can add another line, select the Credit Card Expense account, and enter a negative amount representing the amount the credit card vendor takes out for its fee. This way, the deposit you record in QuickBooks will match your actual bank deposit. Recording Your Assets
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Recording Deposits as Assets
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You might need to pay a deposit or retainer to establish credit or as an advance or a reserve against future services you will receive. This type of payment held by the vendor is considered to be an asset of yours and should be recorded as such. Deposits of this nature technically belong to you and increase the value of the company. The first time you write a check to pay for a deposit, you might need to set up a new account to track your company’s deposits.
Press Ctrl+W to open the Write Checks window.
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TIMESAVER You can click the Write Checks icon on the home page to open the Write Checks window. 2
Verify the bank account from which the money will be drawn.
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Enter the Payee information.
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Verify the date.
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Enter the amount of the deposit.
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Type Deposits as the account name (or whatever name you choose for this asset).
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If this is a new account, an Account Not Found window displays. Click Set Up.
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Select Other Asset as the account type.
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Click Continue.
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that displays, enter the name of the new account, subaccount information (if applicable), an optional account description, the account number (optional), and a tax line reference if required; then click Save & Close (not shown). 11 Complete the check by clicking a
save option.
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Purchasing Fixed Assets
When you purchase a fixed asset, you need to set up an account to keep track of the asset. You can create this fixed asset account by entering a new account in the Chart of Accounts or by adding to the Fixed Asset Item List.
Enter a Fixed Asset in the Chart of Accounts 1
Press Ctrl+A to open the Chart of Accounts; then press Ctrl+N to open the Add New Account: Select Account Type window.
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Select Fixed Asset for the account type.
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Click Continue.
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Enter a name for this asset.
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If you have enabled Accounting Numbering in your preferences, type an account number.
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Check the Subaccount Of box and enter a subaccount name if this asset is to be categorized as a subaccount of another account.
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Enter optional information in the Description and Note fields to provide additional information about the asset.
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If you plan to use QuickBooks to assist in your tax preparation, you might want to assign a tax line to this asset at this time. Depending on your type of business, the tax line might not be necessary for a fixed asset.
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If you’re entering an asset you owned prior to creating your QuickBooks file, you can click the Enter Opening Balance button and enter the beginning balance and date acquired. If you plan to enter the purchase of this asset separately, skip this step.
10 Click Save & Close.
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Did You Know? You’ll be happy that you used the Fixed Asset Item List at tax time. When you purchase a fixed asset and record the asset as a Fixed Asset Item, QuickBooks tracks the necessary information for your tax preparation, in addition to tracking useful warranty information. Recording Your Assets
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Enter a Fixed Asset in the Fixed Asset Item List 1
Select Lists, Fixed Asset Item List; and then press Ctrl+N to open the New Item window.
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Enter a name for this asset.
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Indicate whether the asset was new or used when you acquired it.
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Enter the asset description that displays on the bill you received from your vendor.
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Enter the date you acquired this asset.
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Enter the cost of the asset.
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Enter the vendor from whom you purchased the asset.
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Enter the account where you will record the cost of the asset.
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Enter an optional description for the asset.
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asset, including location, numbers, and warranty expiration date, as well as optional notes. 11 Click OK.
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Did You Know? It’s wise to give fixed assets unique names. Although it’s not a requirement that you assign unique names to your assets, you can more easily distinguish one from another when you give each asset a different name. Even if the names are simple—such as Desk 1, Desk 2, and Desk 3—when you look at a report of your assets, you know at a glance that you are looking at different assets and not a duplicate entry of the same asset.
Did You Know? The Fixed Asset Item List is not accessible from the Chart of Accounts. If you prefer to enter your fixed assets in the Fixed Asset Item List, you need to open the Item List and choose New instead of entering the asset from the Chart of Accounts list.
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Calculating Depreciation The rules for computing depreciation are complicated. Therefore, this section is designed to provide an overview of the depreciation process, but should not take the place of more thorough reading or the advice of an accounting professional. If you want to read more about depreciation, take a look at the Internal Revenue Service Publication 946, “How to Depreciate Property,” which is available online at www.irs.gov or by calling the IRS at 1-800TAX-FORM.
MACRS Depreciation Expense for Five-Year Property:
Most assets are expensed for tax purposes using the Modified Accelerated Cost Recovery System (MACRS) method of calculating depreciation. Under MACRS, the cost of an asset is expensed over a period of years based on percentage tables provided by the IRS. The accelerated method of depreciation produces a greater expense in the earlier years of asset use. A different depreciation method, such as a straight-line method, can be used for financial statement presentation. Here are sample MACRS percentage tables for five-year and seven-year assets. Five-year assets include automobiles and trucks, computers, and other office equipment. Sevenyear property includes office furniture and fixtures.
Year
Percentage
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20%
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32%
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19.2%
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11.52%
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11.52%
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5.76%
MACRS Depreciation Expense for Seven-Year Property: Year
Percentage
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14.29%
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24.49%
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17.49%
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12.49%
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8.93%
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8.92%
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8.93%
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4.46%
Note: The previous tables employ the half-year convention. Under this convention, all property is treated as if it is acquired and disposed of at the midpoint of the year.
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Entering Depreciation
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Select Company, Make General Journal Entries.
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Verify that the date and journal entry number are correct, and make any necessary changes.
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Check the Adjusting Entry checkbox if it is not already checked.
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Enter the account you use for recording depreciation expense.
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Enter the amount of the depreciation expense in the Debit column.
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Enter a brief, descriptive memo.
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Enter the asset account you use to record accumulated depreciation.
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Verify the accuracy of the credit amount that automatically displays, or enter the correct amount.
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Click a save option.
Depreciation expense is the current deduction for the allocation of the cost of a fixed asset, spread over the useful life of the asset. Use the general journal entry feature to enter depreciation in your accounting records. You might want to confer with your accountant before making this entry because accountants often provide their clients with the entries needed for recording depreciation. You can enter depreciation monthly, quarterly, or annually; typically, the frequency of the depreciation entry coincides with the frequency with which you issue financial statements for your company.
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See Also See “Making Journal Entries” on page 254 for information on using the general journal entry feature.
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Did You Know? You probably won’t use the Name column. The Name column is used for assigning journal entry amounts to specific customers. Unless you are charging this depreciation to a customer, you can leave the Name column of the journal entry blank.
Selling Fixed Assets
When you sell a fixed asset, you need to record the income from the sale and remove the asset and associated with accumulated depreciation from your company’s financial records. You can use an invoice form to record the sale of a fixed asset, or you can enter the entire sales event in a general journal entry. If you use the Fixed Asset Manager, you should enter the asset sale in an invoice because that process ensures that the specific asset is removed from your accounting records.
Enter a Fixed Asset Sale on an Invoice 1
QuickBooks enters this amount automatically.
Press Ctrl+I to open an invoice form. TIMESAVER Clicking the Invoices icon on the home page also opens an invoice form.
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Verify the date and invoice number, and make any necessary changes.
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Enter the name of the customer who is purchasing the asset.
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Click in the Item column; then scroll down the Item list and click the asset you want to sell.
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Enter the sales price of the asset in the Amount column. Note: You might see a window informing you that the sales price in the fixed asset item differs from the sale price you entered here. Click Yes to close that window and continue with your transaction.
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Verify the tax status of this customer, and make any necessary changes to the name of the sales tax authority that displays.
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Click a save option. You might see a window informing you that the fixed asset item has not been updated to reflect the sale. Click Yes to update the item in your records.
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Enter a Fixed Asset Sale in a Journal Entry 1
Select Company, Make General Journal Entries.
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Verify that the date and journal entry number are correct, and make any necessary changes.
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Enter the account you use for recording the deposit of cash, or enter your undeposited funds account.
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Enter the amount of money you received in the Debit column.
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Enter a brief, descriptive memo.
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Enter the asset account you used to record the cost of this asset.
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Enter the original cost of the asset in the Credit column.
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Enter the asset account you used to record the accumulated depreciation for this asset.
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Enter the amount of depreciation you previously recorded for this asset as a debit. This might or might not be as much as the cost you entered in Step 7.
10 Enter the account you use to record
the income or loss from the sale of fixed assets. If you have not yet created such an account, click the Add New option at the top of the account list and set up a new account. 11 QuickBooks automatically
computes the income or loss from the sale of this asset. Verify that this amount is correct. 12 Click a save option.
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See Also See “Setting Up Income and Expense Accounts” on page 21 for information on creating a new account.
Did You Know? When you save a journal entry recording depreciation expense, you might see a message from QuickBooks with information about the Fixed Asset Item List. Click OK to close the message.
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Recording Owners’ Equity When describing different types of accounts, the phrase net worth is often applied to the sum of a company’s equity accounts. If you add up all the value of the company’s assets (items the company owns) and then subtract the company’s liabilities (amounts owed to others), you are left with the net worth of the company, or its equity.
What You’ll Do
Although you can take a shortcut to determine net worth by subtracting liabilities from assets, for a true understanding of net worth, you need to examine the actual accounts that make up the equity section of your company’s balance sheet.
Record Owners’ Distributions
If your company is a corporation, you have a capital stock account that shows the face value, or par value, of stock shares the company has issued. In addition, you have a paid-in capital account, which is calculated by taking the difference between the amount actually paid for your company’s stock and the par value. Capital accounts—including retained earnings, owner’s capital, and draw accounts—represent the cumulative net earnings of the company, less any sharing of earnings that has already been paid to owners. Each year the company’s capital account is increased by the company’s net income and decreased by a variety of items, including the company’s net loss for the year, dividends, or other withdrawals paid to shareholders or owners. There is an equity account that is unique to QuickBooks, called the opening balance equity account. Because QuickBooks is a double-entry bookkeeping program—meaning that for every number you enter, there is an offsetting number of the same amount in another account—and because QuickBooks enables you to enter numbers without identifying where the offsetting number is to be entered, the opening balance equity account exists. This account provides a temporary resting place for entries you make that have only one side. The existence of this account enables QuickBooks users who are not accountants to enter beginning balances in accounts without having to know the offsetting entry. In this chapter, you learn how to understand the numbers in the opening balance equity account and how these amounts should be handled when you prepare your financial statements.
Understand the Opening Balance Equity Account
Enter Prior Period Adjustments View Transactions in Retained Earnings Account
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Understanding the Opening Balance Equity Account
Say, for example, that you enter an opening balance of $5,000 when you set up your cash account. QuickBooks puts $5,000 into your cash account, but it doesn’t know where the offset of that $5,000 should go, so off it goes to the opening balance equity account.
Examine the Opening Balance Equity Account 1
View the contents of your opening balance equity account by pressing Ctrl+A to open your Chart of Accounts.
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Scroll down until you see the opening balance equity account.
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Click to select the account name.
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Click the Reports button.
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Select QuickReport: Opening Bal Equity.
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TIMESAVER You can quickly access the opening balance equity account from the Chart of Accounts screen by clicking on the Opening Bal Equity account description, and then pressing Ctrl+Q. Ctrl+Q opens a QuickReport for whatever account is highlighted on the Chart of Accounts. 6
Examine the report to determine in which accounts these amounts really belong. Typically, the amounts in the opening balance equity account belong in your company’s retained earnings or other ownership equity account.
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Double-click any entry on the report to see the source of the entry.
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Zero-Out the Opening Balance Equity Account 1
Select Company, Make General Journal Entries.
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Enter the date for this journal entry. The opening balance equity account should generally have a zero balance. If it doesn’t, be sure to create a transaction to clear any balance in this account before preparing financials.
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Type Opening Bal Equity as the first account name.
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Enter as either a debit or credit, depending on your own account balance, the amount necessary to clear the opening balance equity account.
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Enter a brief memo description.
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Enter the account(s) to which you will transfer the amounts in the Opening Balance Equity account.
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Click one of the save options.
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Your opening balance equity account now has a zero balance and will not appear on financial statements.
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Did You Know? There’s a shortcut for clearing the balance in the Opening Balance Equity account. Instead of creating a general journal entry, double-click the Opening Balance Equity account name in the Chart of Accounts list. The register for the account displays. Make a new entry in the register by entering an amount to increase or decrease the account balance. You just select an offsetting account for this entry. Most likely, the offsetting account will be your company’s Retained Earnings account.
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Accounting for Equity Most of the changes to your equity accounts happen in the background—automatically and without intervention from you. The Opening Balance Equity Account (OBEA), for example, is adjusted when you make entries that affect the opening balances of other accounts. For example, if you set up a new account to reflect your company’s ownership of a $2,000 computer, the transaction is recorded like this:
When recording the opening balance for fixed asset:
The amount in the OBEA actually should be categorized with the company’s net worth, so you might have to make a journal entry to reclassify this amount to Retained Earnings. (Alternatively, you might use an equity holding account during the year, such as an Owner’s Equity account, where you record equity transactions; then at the end of the year, you transfer appropriate transactions to Retained Earnings.)
Clearing the opening balance account to retained earnings:
Debit Fixed Asset/Computer
Credit
$2,000.00
Opening Balance Equity
$2,000.00
Debit
Credit
Opening Balance Equity $2,000.00 Retained Earnings
$2,000.00
At year-end, QuickBooks automatically resets your income and expense accounts to zero balances for the new year. The net effect of this transaction is offset in the company’s Retained Earnings account: If an investor or owner puts money in the company—not as a loan but as a capital investment—a transaction like this might be recorded:
When an investor puts money into the company: Debit Cash Owner’s Equity: Investments
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Credit
$10,000.00 $10,000.00
Recording Owners’ Distributions
When owners take money out of a company that is not a corporation, the money is classified as a loan, distribution, or draw. A distribution account is an owner account that is increased by the earnings of the company and decreased by the amount of money the owner takes out of the company. Noncorporations need to set up a distribution account for each owner. You might want to create a master equity account for all owners and then a subaccount under the master account for each individual owner’s distribution.
Set Up a Distribution Account 1
Press Ctrl+A to open the Chart of Accounts.
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Press Ctrl+N to open the Add New Account window.
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Select Equity from the Account Type options.
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Click Continue.
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Enter a name for the account.
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Indicate whether this is to be a subaccount of another account.
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Enter an optional description.
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Click one of the save buttons to save the account.
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Record an Owner’s Withdrawal 1
Press Ctrl+W to open the check window.
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Verify that the correct cash account displays.
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Enter the name of the owner who is withdrawing money from the company.
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Enter the date.
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Enter the amount.
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Enter the owner’s distribution account.
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Click a save option.
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Entering Prior Period Adjustments
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Select Company, Make General Journal Entries.
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Enter the date when this adjustment occurred. The date will be a current year date, not a prior year date.
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Enter the accounts affected by the adjustment. (A capital account such as Retained Earnings will be one of the affected accounts.)
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Enter the amount of the adjustment, offsetting the adjustment in the capital account.
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Enter a memo that describes the fact that this is a prior period adjustment.
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After you’ve issued your company’s financial statements for the year, you’re not supposed to go back and change the numbers. Shareholders and investors have the right to assume that your financial statements provide final numbers for the year and that those numbers won’t change at some point in the future. But what if the numbers really do change? What if some unforeseen information that invalidates some of the information on the financial statements comes in after the financial statements have been issued? Or what if you simply made a material mistake on last year’s financials? Accounting rules permit a company to enter the change on the current year’s financial statement by describing a prior period adjustment in the equity section of the balance sheet. Your balance sheet will show the balance in retained earnings at the beginning of the year, followed by the prior period adjustment to that balance. As for recording the adjustment in your QuickBooks file, you need to make a journal entry to correct the accounts. In this example, a change in the value of the ending inventory from the previous year has been discovered.
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Click a save option.
Did You Know? Only one line of description is necessary. When entering general journal entries, the top line of the description automatically should carry through to all the lines of the journal entry. To activate (or deactivate) this feature, choose Edit, Preferences, Accounting, My Preferences, and check or uncheck the box for Autofill Memo in General Journal Entry. Recording Owners’ Equity
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Viewing Transactions in Retained Earnings Account 1
Press Ctrl+A to open your Chart of Accounts.
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Click Retained Earnings to select the account.
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Click the Reports button in the Chart of Accounts window.
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Select QuickReport: Retained Earnings. TIMESAVER You can quickly access the Retained Earnings QuickReport by double-clicking Retained Earnings in the Chart of Accounts.
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Retained Earnings is the account that represents the accumulated net earnings of your company. The amount in this account changes automatically as of the first day of each fiscal year. The total income less the total expenses for the prior year (net income) flows into this account. QuickBooks automatically closes all income and expense accounts on the last day of your fiscal year and places the company’s net income (or loss) in the Retained Earnings account. QuickBooks enables you or your accountant to view the information in your Retained Earnings account by producing a QuickReport. The automatic closing entry displays on the report with the description Closing Entry.
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Double-click any entry on the report (other than a closing entry) to see the detail of that transaction.
Did You Know? QuickBooks automatically prepares a year-end closing entry. At the end of each fiscal year, a closing entry is automatically made to your QuickBooks accounts, zeroing out all your income and expense accounts and offsetting the net income or loss to your Retained Earnings account. QuickBooks calculates this entry based on the amounts in your income and expense accounts. Double-clicking a closing entry in your Retained Earnings QuickReport does not produce a detailed report—you cannot view the detail of this closing entry. However, you can bring up the information by viewing a Profit + Loss statement from the year of the closing.
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Recording Liabilities The term liabilities refers to your company’s debts. QuickBooks groups liabilities into four types of accounts:
What You’ll Do
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Accounts payable—These are the bills you owe currently.
Manage Accounts Payable
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Credit card—This is the balance due on company credit cards.
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Other current liabilities—This represents payroll owed to employees, taxes payable, advances, deposits, subscriptions your customers have paid, loans from shareholders, and other debt you expect to pay back within one year.
Set Up Credit Card Accounts
Long-term liabilities—These are debts that won’t be paid back within the year.
Use the QuickBooks Loan Manager
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Record Payroll Tax Accruals Without a QuickBooks Payroll Subscription
Account for Deposits or Retainers Record Loans
Record Loan Payments
Some liabilities are paid quickly. Utilities, for example, are paid each month, and new bills come in to take their place. Other liabilities linger; mortgages stretch out over decades. Credit card balances, although constantly refreshed, might never seem to go away. Companies are required to report their liabilities on financial statements so investors and lenders have a clearer picture of the value of the company.
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Accounting for Liabilities When you incur a debt, the debt amount is recorded as a liability and appears as such on your company financial statements. The value you receive in exchange for the liability can increase your assets or your expenses.
If you make a $265 purchase of office supplies from your local supply store and you receive a bill for the supplies, these accounts are affected when you record the receipt of goods and the bill:
For example, if you borrow $10,000 and receive cash, the following accounts could be affected:
Debit
Debit Cash
Cash Vehicle Loan Payable
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$265
When you issue a check to the office supply store to pay the bill, here’s what happens:
If you purchase an asset such as a vehicle, with a cash down payment, and you take out a loan to finance the balance of the purchase, the transaction might affect your accounts in this way: Fixed Assets/Vehicle
Accounts Payable
$10,000
Debit
$265
Credit
$10,000
Note Payable
Office Expenses
Credit
Credit
$22,000 $5,000 $17,000
Debit Accounts Payable Cash
Credit
$265 $265
Managing Accounts Payable
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Select Reports, Vendors & Payables; then select A/P Aging Summary.
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Examine the report to see how much your company owes each vendor and how long overdue the payments are. Note that amounts you owe for inventory items are included in this report if you enabled the QuickBooks inventory feature.
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Change the interval for each column of the report if the default 30-day interval is not the information you want to see.
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Change the limit of 90 days if you need to see the specific intervals for payables older than 90 days.
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Double-click any amount to view a Quick-Zoom report showing all the bills that make up that amount.
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Double-click any bill amount on the Quick-Zoom report to see the actual bill.
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Press Esc to close each window, or click the X in the upper-right corner of each window.
Amounts you owe your vendors, including subcontractors, are grouped under the heading of accounts payable. Most companies pay off their accounts payables in 30–60 days. Amazingly, new payables are always ready to take the place of the ones you pay! When entering a payable in QuickBooks, you are required to enter at least the name of the vendor, the amount of the debt, and the account to which the payable is expensed. If you take the time to enter payment terms, QuickBooks provides you with a reminder of when the debt is due.
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Recording Payroll Tax Accruals Without a QuickBooks Payroll Subscription
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Select Company, Make General Journal Entries. You might see an information window telling you about the automatic journal entry number-ing feature. Click OK to close this window.
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Enter the date of the payroll, which might be different from the date that automatically displays.
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Enter the payroll expense account.
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Enter the gross payroll expense (total salaries and wages before withholdings) as a debit.
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Enter a brief memo.
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Enter the first tax liability account—for example, enter Payroll Withholding:Federal.
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Enter the amount of tax liability as a credit.
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Repeat Steps 6 and 7 until all your tax liabilities have been entered.
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Enter the cash account from which the payroll is paid.
10 Verify the net payroll expense (the
amount of payroll actually paid out to employees after withholdings) as a credit. This amount is automatically calculated by QuickBooks and should agree with your records. 11 Save the journal entry.
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The taxes you withhold from your employees must be turned over to the government, and, as an employer, you must pay additional payroll taxes such as the employer’s share of Social Security, Medicare, and unemployment taxes. Although these amounts are owed to the government when you issue paychecks, the amounts might not be due immediately. When your company owes payroll taxes, you have to create liability payroll items and accounts (such as State Unemployment) to record the taxes that are due. If you use QuickBooks to calculate your payroll, the liabilities are recorded automatically during the payroll setup. If you use an outside payroll service that debits your cash account for the payroll, you need to record your payroll and payroll tax accruals yourself, as shown here.
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Did You Know? QuickBooks can enter payroll automatically. Although a journal entry like the one shown in this task or a check to your payroll provider is necessary if you outsource your payroll services, all these entries are made automatically if you use one of the QuickBooks payroll subscription offerings. The payroll tax works similarly if you write a check for payroll services. If you write a check to your payroll service provider instead of having the net payroll amount withdrawn from your cash account, you record the same expenses and liabilities as in the previous task’s journal entry, without the entry for your bank account—that amount is recorded in the amount of the check.
Setting Up Credit Card Accounts
You can set up a credit card as a separate liability account in QuickBooks. The account can be a subaccount of another liability account, or it can stand alone as a separate item on your balance sheet. Each month, as you make credit card charges, you increase the balance of your credit card liability. When you make payments on the account, you decrease the liability balance. QuickBooks provides the opportunity to reconcile your credit card account every month, just as you do your bank account.
Set Up a Credit Card Account 1
Press Ctrl+A to open the Chart of Accounts list.
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Press Ctrl+N to open the Add New Account window.
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Select Credit Card for the Type.
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Click Continue.
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Enter the name for this credit card account.
6
Indicate whether you want this account to be a subaccount of another liability account.
7
Enter optional description, credit card number, tax line, and opening balance information.
8
Save the new account.
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Did You Know? It’s your choice when you enter credit card charges. You can record charges as they are incurred or record them all at once when the monthly statement arrives. The best accounting practice, however, is to enter charges as they are incurred. You might be able to download your credit card charges. Some credit card vendors allow their users to automatically download transactions directly into QuickBooks. After setting up your credit card in QuickBooks, contact the credit card company to see if they have a cooperative online arrangement with QuickBooks. If they do, ask them to send the information you need to sign up for this service. Then set up the online credit card account just as you would an online bank account (see “Activating Your Online Bank Account” in Chapter 11, “Using the QuickBooks Online Features”).
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Record Credit Card Charges 1
Select Banking, Enter Credit Card Charges.
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Indicate which credit card you used for this charge.
3
Enter the name of the vendor from whom you made the purchase.
4
Enter the date of the purchase.
5
Leave the Amount field set to zero. (Don’t make any changes in this field.)
6
Enter the account in which the purchase should be recorded.
7
Enter the amount of the purchase. The amount you enter in the expense area of the form is automatically filled in above, in the Amount section of the form.
8
Enter an optional description of the expense.
9
Repeat Steps 6 and 7 to enter any additional purchases made in this transaction.
10
Save the form.
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Pay/Reconcile a Credit Card Account 1
Select Banking, Reconcile. TIMESAVER You can also click the Reconcile button in the Banking area on the Home page.
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Enter the credit card for which you have received a statement.
3
Enter the date of the statement.
4
Verify the Beginning Balance.
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Enter the ending balance that displays on your statement.
6
Enter any finance charge that displays on the statement.
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Enter the date on which the finance charge was assessed.
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Verify the account to which the finance charge should be recorded and class if using class tracking.
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Click Continue.
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Did You Know? You can enter missing charges without closing the reconciliation window. If you forgot to enter some charges and want to do so before finishing your reconciliation, open the Enter Credit Card Charges window and enter your charges. They will appear in your reconciliation window as soon as you enter them.
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10 Check off all the entries that appear
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on your credit card statement. These entries are drawn from transactions you have entered into your QuickBooks file as payments or using the Enter Credit Card Charges form. 11 Optionally, click Highlight Marked to
make it easier to see those transactions that are not marked as cleared. Click Reconcile Now to complete the reconciliation.
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Did You Know?
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You can leave the reconciliation and finish later. If you begin your reconciliation and then realize you don’t have time to finish the job, click the Leave button. Your work will be saved, and you can begin again right where you left off.
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13 The Reconcile Adjustment window 15
displays if a difference exists between the statement balance and the sum of the items you checked off in Step 9. Click Return to Reconcile to return to the reconciliation if you want to identify the difference. 14 Click Leave Reconcile if you want to
leave the reconciliation for now and come back later. 15 Click Enter Adjustment to enter an
adjustment for the unreconciled amount. Note: The adjustment is recorded as an expense in the Reconciliation Discrepancies account. 16 Select whether you want to issue a
check or record the credit card bill as a payable. 17 Click OK.
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Select the type(s) of reconciliation report you want to produce.
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Click Display to display the report(s) onscreen.
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Click Print to print a paper copy of the report(s).
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requested payment by check. Verify the information on the check, and indicate whether it is to be printed or paid online. (Your bank might charge a fee for online payment service.) 22
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Save the check.
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Accounting for Deposits or Retainers
1
Select Company, Make General Journal Entries.
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Verify that the correct date displays.
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Enter the liability account where you record your deposits.
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Enter the amount you are ready to transfer to income. This entry should be a debit.
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Enter an optional memo.
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Enter the customer or client who made the deposit.
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Enter the income account where you record the money you earned for this job.
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Enter the amount of the deposit or retainer in the credit column.
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Save the entry.
See Also See “Receiving Advances, Retainers, and Down Payments” on page 126 for information on the proper method for recording the receipt of a deposit or retainer.
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Depending on the type of business your company engages in, you might receive advances, deposits, or retainers from your customers or clients. Although this money has been paid to you, it is for future services and has not yet been earned. Therefore, instead of recording the money as income, the payments should be recorded as liabilities. After you perform the services and earn the money, you transfer the liability to an income account, shown here.
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Did You Know? You can refer to customers and jobs in journal entries without having the amount flow through to a customer invoice. The only time a journal entry amount flows through to a customer invoice is if the entry is made to an expense account. Customer and job references on non-expense account lines are information-only entries. You can record down payments on customer invoices. An alternative to recording down payments with journal entries that go straight to the liability account is to set up down payments as Other Charge items, with the related account being a liability account. You can record down payments on an invoice form, using the Other Charge item on the invoice. Because the Other Charge item is not related to an income account, your income records are not affected, but by recording the down payment as an Other Charge item, you can spot the amount on a Sales by Item report.
Recording Loans
1
Press Ctrl+A to open the Chart of Accounts list.
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Press Ctrl+N to open the Add New Account window.
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Select Long Term Liability as the account type.
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Click Continue.
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Enter a name for the loan. This will appear on your balance sheet, so choose the name carefully.
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Indicate whether this is to be classified as a subaccount.
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Enter an optional description for the loan.
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Enter an optional account number and tax line for the loan.
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Click the Enter Opening Balance button if the loan was already in place at your company’s start date; enter the loan amount and starting date in the fields provided. For new loans, you enter the balance when you receive the loan, so you can skip this step.
When you borrow money, you must record as an asset the receipt of cash or the item purchased on credit, and you must record the liability that offsets that asset. If the loan will be paid in full within a year, it is a current liability. If the payback period is longer than a year, it’s a long-term liability. (Some companies record the entire loan in the long-term part of the balance sheet. Others record the loan in two parts, reflecting both liability portions.) This example shows how to set up a long-term loan.
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10 Click one of the save options.
See Also See “Making Bank Deposits” in Chapter 4, “Invoicing and Collecting Income,” for more information about depositing money that your company receives.
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Using the QuickBooks Loan Manager
1
Select Banking, Loan Manager.
2
Click the Add a Loan button.
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Enter the liability account where the loan balance is recorded.
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Enter the name of the lender.
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Enter the date on which the loan was initiated.
6
Enter the principal balance.
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Enter the number of payments you will make.
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Enter the frequency with which you will make payments.
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Click Next.
The QuickBooks Loan Manager makes entering loan payments a simple process. Enter basic information about your loan, including the starting date, interest rate, number of payments you will make, and amount you will pay; QuickBooks takes care of calculating how much of each payment is principal and interest. When it’s time to make a payment, open the Loan Manager and click the Set Up Payment button to initiate a payment with the interest and principal recorded correctly.
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Did You Know? Escrow payments increase the amount of the loan payments. Mortgages are the most common type of loan that includes escrow payments. Escrow payments are payments made to a separate fund that is held by the lending institution and used to pay such items as property taxes and insurance.
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Calculating Interest Interest is calculated based on an annual interest rate and is calculated either as simple interest or compound interest. For simple interest, you multiply the loan amount by the annual interest rate and then divide the interest by 12 to arrive at a monthly interest rate. For compound interest, the principal balance on which the interest is calculated is reduced each time a payment is made. The amount of interest changes with each payment because the interest is recalculated on a constantly changing loan balance.
Fortunately, loan calculators are available on the Internet that enable you to experiment with borrowing scenarios, and these calculators compute the interest for you. Even better, you can use the QuickBooks Loan Manager to calculate compound interest and show you how much of each payment represents principal and interest. A number of calculators are available on the Intuit website, as follows: http://accountant.intuit.com/practice_resources /calculators/index.html.
Did You Know? QuickBooks offers only two compounding options. When entering the compounding period, your only choices are Monthly and Exact Days. Monthly interest is calculated and compounded once each month. A lender that uses the Exact Days method compounds interest daily, based on either 360 or 365 days in an annual cycle.
Did You Know? Use the Loan Manager when making payments. Return to the Loan Manager and click Set Up Payment each time you are required to make a payment on the loan. This way, interest is calculated correctly and your loan balance is reduced according to your repayment schedule.
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Enter the due date of the next payment.
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Enter the payment amount.
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Enter the number of the next payment.
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Enter the payment frequency.
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Enter escrow payment information if applicable.
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Check this box if you want a 10-day advance warning of the payment due date.
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Click Next.
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Enter the interest rate.
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Enter the frequency with which interest is compounded.
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Enter the account from which payments will be drawn.
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Enter the account in which interest expense should be recorded.
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Enter the account in which any bank fees or service charges should be recorded.
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Click Finish.
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Click the Payment Schedule tab to see a detailed list of how your payments will be recorded.
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Click Set Up Payment to open the check window and issue a payment for this loan. QuickBooks fills out the check with the proper interest and principal disbursement.
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Recording Loan Payments
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If you receive a monthly statement from your lender that breaks down interest and principal payments, you can skip using the Loan Manager and just enter the principal and interest information when you write your check. When you make payments on your loan, write a check to the lender, noting both parts of the payment. See the accompanying text for information on calculating interest.
Click the Write Checks icon in the Banking section on the Home page. 2
TIMESAVER You can quickly open the Write Checks window by pressing Ctrl+W.
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Verify the account from which the payment will be drawn.
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Enter the payee.
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Enter the date of the payment.
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Enter the amount of the payment.
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Enter the loan liability account.
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Enter the amount of the payment that will reduce the loan balance.
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Enter the expense account where you record interest paid by your company.
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Verify the amount that QuickBooks calculated for interest (the difference between the check total and the amount in Step 7).
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10 Select whether this is to be an
online payment or a check is to be printed. 11 Save the check.
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Working with Reports in QuickBooks QuickBooks is all about reports. All the information you enter on forms, registers, and journal entries is stored in QuickBooks, waiting for you to pull it out in reports. Reports show you the results of all your company’s financial transactions. You can display reports, print them, save them, email them, and rely on the information they provide to show you how well your company is meeting your expectations. QuickBooks comes with a large collection of reports to help you understand your business. You can customize all the QuickBooks reports so they display exactly the information you need. You can access all the QuickBooks reports from the Reports menu and also by clicking the Report Center button on your Icon bar. The Report Center provides you with a sample view of what each report displays, so if you’re not certain which reports you want to work with, the Report Center is probably going to be more helpful to you than just picking a title from the Reports menu. Use reports to show potential lenders and investors why they should commit funds to your company. Use reports to supply your accountant with information necessary to prepare tax forms, and use reports to compare your company’s actual performance with the budget. Use reports to keep track of who owes you money and to whom you owe money.
What You’ll Do Company Snapshot Use the Improved Report Center Set Report and Graph Preferences Modify Reports Create and Use Report Groups Memorize Reports Import and Export Report Templates
18 Other Report Tips and Tricks
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Company Snapshot
Get instant views into the bottom line with at-a-glance reports that feature easy-to-read graphics. See data from multiple years side-byside for a quick comparison. These reporting tools are commonly referred to as digital dashboards and provide real-time visual views of a company’s critical information. The improved QuickBooks offers the ability to customize the information shown and is now user- and company file-specific when you work in a multi-user environment.
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From the Icon bar, select Company Snapshot to view the default graphs and reports.
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Click Add Content to view and select from additional graphs and reports.
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Click Print to print or preview the Company Snapshot.
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Click a + Add button to add that graph or report to your Company Snapshot.
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Click Restore Defaults to remove any graphs or reports you added.
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Click Done to view your modified Company Snapshot.
See Also See project 2 in the Workshops section for examples of how to customize your company snapshot.
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To rearrange the order or placement of a graph and report, click and hold your left mouse button (a move Icon displays), drag the item to a new location, and release the button.
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Did You Know? You can set the Company Snapshot as the default view when you open your QuickBooks data file. With the Company Snapshot displayed, click Edit, select Preferences, and choose Desktop from the left bar. In the Desktop pane, choose the option to Save current desktop. Each time you open your QuickBooks file, your Company Snapshot will display with current data.
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Using the Improved Report Center
If you are new to QuickBooks or if you have never reviewed the QuickBooks Report Center, in this section you can find out about the many features available for simplifying your reporting needs in QuickBooks. Use the Report Center to find standard, memorized, favorite, or recently run reports. You can browse through sample report images, report descriptions, or both.
Carousel View 1
To open the Report Center, select Report Center from the Icon bar or from the Reports menu (not shown).
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Click to view the reports or graphs in Carousel View.
3
Click to select a Report Center tab.
4
Click to select a report group within the selected tab. The report groups available will differ depending on your version of QuickBooks.
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Use the scroll bar to move the carousel view through samples of the reports available in the selected report group. Data displayed is sample data.
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Click the Dates drop-down menu to select a specific date, or accept the default date. (You can also modify the date on the displayed report.)
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Click to display the report details with your company data.
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Click to Mark or Unmark as favorite. Marking a report as a favorite places it on the Favorites Report Center tab.
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Click to open Help information about the specific report.
10 Optionally, click to close the menu
report group listing on the selected tab.
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List View 1
To open the Report Center, select Report Center from the Icon bar or, optionally, open from the Reports menu (not shown).
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Click to view the reports or graphs in List View.
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Click to select the desired Report Center tab.
4
Click to select a report group within the selected tab. The report groups available will differ depending on your version of QuickBooks.
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Click once to select a report or graph.
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With a report selected in list view, the Dates drop-down displays; select your preferred date range.
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Click to display the report with your company data.
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Grid View 1
To open the Report Center, select Report Center from the Icon bar or, optionally, open the Reports menu (not shown).
2
Click to view the reports or graphs in Grid View.
3
Click the desired tab in the Report Center.
4
Click the desired report grouping. A grid view of available reports is displayed with sample data.
5
Use the scroll bar to view the available reports and graphs.
6
With a report selected, click to change the report dates.
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Click to view a thumbnail of the report with sample data.
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Click to display the report with your company data.
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Click to add to the Favorites tab of the Report Center.
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Setting Report and Graph Preferences
Make some basic decisions up front about how your reports and graphs should appear, and you won’t have to think about these choices every time you open a report. Each QuickBooks user at your company can set personal report preferences. Company-wide preferences, such as text formatting and the way numbers appear, affect reports that are accessible by all users.
Set Personal Reports and Graphs Preferences 1
Select Edit, Preferences to open the Preferences window.
2
Click the Reports & Graphs link.
3
Click the My Preferences tab.
4
Check the Prompt Me to Modify Report checkbox if you always want the customizing options to appear when you view reports.
5
Select a refresh option to indicate whether you want a report to update automatically when you make a change.
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Check Draw Graphs in 2D (faster) if you like your graphs in twodimensional style instead of the default three-dimensional.
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Check Use Patterns to produce graphs in shades of black, gray, and white instead of full color. This is the best choice if you plan to print graphs on a black-and-white printer.
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Click OK, or see the next task to set additional preferences.
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Set Company-Wide Reports and Graphs Preferences 1
Select Edit, Preferences.
2
Click the Reports & Graphs link.
3
Click the Company Preferences tab.
4
Select whether to present reports on a cash basis or an accrual basis.
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Select whether you prefer aging reports such as the Accounts Receivable Aging Report aged from the invoice due date or the transaction date.
6
Indicate how you want account names and descriptions displayed on reports.
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Click Classify Cash to select which accounts you want to include in your Statement of Cash Flows.
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Click Format to make format choices for your report.
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Check off each item that should normally appear on your reports.
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10 Enter your company name the way
you want it to appear on reports. 11 Click the arrow to select from
several date styles. 12 Click the arrow to select from
several page styles. 13 Click the Fonts & Numbers tab to
set preferences for font style and number presentation on your reports. 9
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14 Click a report element from the
Change Font For list.
A sample of the currently selected font is displayed.
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15 Click Change Font to change the
font selection for the selected title. 16 Select a preference for displaying
negative numbers. 17 Check Divided by 1000 to show
report amounts divided by 1,000. 18 Check Except Zero Amounts to omit
zero amounts from reports. 19 Check Without Cents to display
amounts without cents.
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20 Click OK to close each of the
preference windows. 14
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Working with Reports in QuickBooks
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Modifying Reports
QuickBooks makes gathering information from your data quick and easy. Though many reports are already created and organized for your use, you might want to modify an existing report.
Display Options 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section earlier in this chapter.
2
Click Modify Report. The Display tab is shown by default. The type of information that can be modified will vary depending on the report that is currently open.
3
Click to change the selected report dates.
4
Click to toggle between Accrual and Cash Basis reporting. The default is set in reporting preferences.
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Select what data you want to display in the report. This information will vary greatly depending on the report that is displayed.
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Click the Advanced button to choose which rows and columns you wish to display on the report. Click OK to close the Advanced Options.
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Click OK to return to the report, or click one of the other tabs to continue modifying the report. 8
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Filters Options 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section.
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Click Modify Report. The Display tab is shown by default.
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Click the Filters tab.
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In the Choose Filter pane, select the specific item you want to include in the filters. The example shown is filtering for Account.
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With the item type selected to the left, click the drop-down menu or other options offered. If offered a drop-down, scroll up and down through the options available.
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Review your filter choices.
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To remove a filter, click the filter item and then click Remove Selected Filter.
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When you have finished setting all of your filters, click OK to return to the report, or click one of the other tabs to continue modifying the report.
Header/Footer Options 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section.
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Click Modify Report. The Display tab is shown by default.
3
Click the Header/Footer tab.
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Modify the Show Header Information; it is recommend that you keep these defaults.
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Modify the Show Footer Information.
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Modify the alignment of the report.
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Click OK to return to the report, or click one of the other tabs to continue modifying the report.
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Fonts & Number Options 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section.
2
Click Modify Report. The Display tab is shown by default.
3
Click the Fonts & Numbers tab.
4
From the Change Fonts For list, select the data for which you want to change the font.
5
Click the Change Font button to display the Column Labels dialog (not shown). Click OK to return to the Modify Report dialog.
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Choose how you want to display negative numbers and other display options.
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Click OK to return to the report, or click one of the other tabs to continue modifying the report.
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Creating and Using Report Groups
If you have not set up your own customized report groups, you might not know how easy they are to work with and how efficient they can make reporting on your QuickBooks data. This section highlights how to create and use report groups. One purpose of using report groups is the convenience of printing or displaying a batch of related reports at one time. For example, your accountant has requested that you review certain reports prior to his visit. When the requested reports are memorized and placed in a report group, you save time and are better prepared for your accountant’s review of your data because you can prepare them all at one time.
Creating a Report Group 1
Click Reports from the menu bar.
2
Select Memorized Reports, Memorized Report List.
3
The Memorized Report List dialog displays. Click Memorized Report, New Group.
4
Type a Name to identify the group (not shown).
5
Click OK (not shown).
6
The memorized report list displays with your newly created report group in bold type.
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To exit, click the red X in the topright corner.
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Did You Know?
3
If you want to store your reports to a report group, you need to first create the report group and then, when memorizing your reports (see the “Memorizing Reports” section later in this chapter), you can assign the report to a specific report group.
Click the red x to close.
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Using Report Groups 1
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From the Process Multiple Reports dialog, click to select the group of reports you want to display or print.
3
Place a check mark to include the report or remove the check mark for those reports you do not want to run (not shown).
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Modify the From and To dates if needed. IMPORTANT Changing the From and To dates in the Process Multiple Reports dialog is only temporary. If you want the date change to be permanent, you need to re-create the report and memorize it again.
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To process a batch of related reports, click Reports and choose Process Multiple Reports.
Click an option to Display or Print.
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Memorizing Reports
1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section earlier in this chapter.
2
Click the Memorize button on the active report dialog.
3
Type a Name for the report or accept the default name.
4
To save your report in a group, click Save in Memorized Report Group and choose the appropriate group from the drop-down menu.
5
Click OK to memorize your report and return to the displayed report.
After you have created a report group, you will want to use the memorize feature to place reports in that group. Placing your memorized reports in a group is optional, but using groups will help keep your memorized reports organized.
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Importing and Exporting Report Templates
QuickBooks offers the option to import and export report templates. This feature is useful for accountants who want to save time by having several clients use the same report template. You can export and import a single report or a group of reports only from the memorized report list. So before you attempt to export a report, be sure QuickBooks memorizes it first.
Importing Report Templates 1
Click Reports, Memorized Reports. The Memorized Report List dialog appears.
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On the Memorized Report List dialog, select Import Template from the Memorized Report drop-down menu.
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The Select File to Import dialog appears in Windows Explorer, enabling you to browse to the stored location of the .QBR template.
4
Select the appropriate .QBR report or report group template.
5
Click Open. The Memorize Report dialog displays.
6
Type a name for the report or accept the default report name.
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If you want to assign the report to a group, check the box and indicate the name of the Memorized Report Group.
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Click OK to add the report to your memorized report list.
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Did You Know? Did you know that an abundance of reports are already created for you to import into your data file? Both business owners and accountants will find these reports to be useful and unique to what you already have in QuickBooks. Go to www.quickbooksgroup.com. In the More Resources section (on the right side of the screen), select Library. In the Reports pane, select to download and import Customers, Payroll, Troubleshooting, or All reports into your QuickBooks data file.
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Exporting Report Templates 1
Click Reports, Memorized Reports. The Memorized Reports List dialog displays.
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Click once to select the report on the list that you want to export (not shown).
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On the Memorized Reports List dialog, select Export Template from the Memorized Report drop-down menu (not shown).
4
The Specify Filename for Export dialog displays in Windows Explorer; type a file name (or accept the default name assigned).
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Click Save to store the file with an extension of .QBR.
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To share this report with others, copy the .QBR file to a USB removable device or attach it to an email.
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IMPORTANT Not all reports can be exported. If the report has been customized with filters for unique list items that another data file might not have, such as a unique chart of accounts, a warning will display that the report cannot be exported.
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Other Reporting Tips and Tricks
You have learned some of the most useful tools for working with reports in QuickBooks. You might want to email your financials to your banking institution if you are applying for a loan. Or perhaps your accountant needs to do some tax planning and requests that certain reports to be forwarded to him via Microsoft Excel. Or perhaps you just want to collapse the information in summary form, making it easier to analyze. Here are some useful tips and tricks for making QuickBooks even easier to use for reporting.
Emailing Reports 1
To set your default preferences and text for emailing forms, select Edit, Preferences, and choose the Send Forms preference.
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Click the My Preferences tab to select to send your email via Outlook or QuickBooks E-mail.
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IMPORTANT The option to select Outlook will only display if you have Microsoft Outlook installed on the same computer as the QuickBooks data file. 3
Click OK.
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Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section.
5
Click the Email drop-down menu. Select your preference to attach the report as an Excel or PDF file attachment.
6
If you are sending the report via Outlook (not shown), an Outlook new mail will open with the attachment. You can then use Outlook editing features before sending.
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If you are sending the report via QuickBooks E-Mail (not shown), you can modify the default text that was assigned to the email, as defined in step 1.
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Exporting Reports to Excel or .csv File Format 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section earlier in this chapter.
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Click Export. The Export Report dialog displays with the Basic tab selected.
3
Choose an export option that meets your needs.
4
Click the Advanced tab for more export options (not shown).
5
Click Export to create an Excel workbook or .csv file.
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Before clicking Collapse.
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Hiding Header and Collapsing Details 1
Display a report in your QuickBooks data using any of the instructions in the “Using the Improved Report Center” section earlier in this chapter.
2
Click Hide Header. The report dialog displays without the report header (not shown).
3
Click Collapse. The report displayed rolls up subaccounts into the assigned primary account.
Subaccounts roll up into totals for primary accounts.
Did You Know? If you are using QuickBooks Premier or QuickBooks Enterprise, you can purchase the Intuit Statement Writer 2010 (ISW). ISW combines the flexibility and ease of Microsoft Excel with real-time links to your QuickBooks accounting data so you can save time when creating customized financial statements. To find out more, click Reports, Intuit Statement Writer. You can also learn more about using this tool in QuickBooks 2010 Solutions Guide, also published by QUE Publishing (www.informit.com/que). Working with Reports in QuickBooks
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Workshops You’ve learned the steps for performing everyday tasks in QuickBooks. Now it’s time to stretch your QuickBooks legs a bit and pick up some new pointers for making your QuickBooks experience more robust. This section of the book contains a handful of interesting projects that go beyond the day-to-day experience. Included in these projects are workshops to help you learn to create your own Favorites menu, use the new Document Manager, and see critical information about your business by viewing the Company Snapshot.
What You’ll Do Create Your Own Favorites Menu Customize the Company Snapshot Use Document Management Color Code Your Accounts Use To Do Notes
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Project 1: Creating Your Own Favorites Menu The Project With the steps shown in this project, you can add or remove the Favorites menu, and customize and organize your very own Favorites menu.
At various points in this book, we’ve discussed memorizing commonly used reports. We have also provided instructions for adding commonly used reports and forms to the icon bar. New for QuickBooks 2010 is your very own Favorites menu. You can add both reports and forms directly to the Favorites menu. If your QuickBooks file is used by multiple users, trust that your Favorites menu is only seen by you when you log into the QuickBooks file with a user name unique to you. The Favorites menu is also company file specific, meaning if you have multiple company files, the Favorites menu you create in one file will not be available in the other company file. Begin using QuickBooks more efficiently by creating your own user- and file-specific Favorites menu.
The Process 1
Click View, and select Favorites Menu to show or to hide the Favorites menu.
2
From the menu bar, click Favorites, Customize Favorites (not shown).
3
On the Customize Your Menus dialog, click on a form or report in the Available Menu Items list on the left side of the dialog.
4
Click Add to include the selected item on your Chosen Menu Items list.
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Click an item in the right pane.
6
Click Remove to take a selected item off of your Chosen Menu Items list.
7
Select one of the Chosen Menu Items and click Move Up or Move Down to arrange the items on the list.
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Click OK.
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See Also For more customizing tips, see “Add a Memorized Transaction to Your Icon Bar” in Chapter 7, “Using Time-Saving Features.”
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Project 2: Customizing the Company Snapshot The Project Display the Company Snapshot, add new content, rearrange the content, and examine details of the data. You can set the snapshot as your QuickBooks home page.
The Process 1
Click the Company Snapshot button on the QuickBooks Icon Bar or choose Company Snapshot from the Company menu (not shown).
2
Click Add Content to view and select additional reports for viewing on your personalized Company Snapshot.
3
Click the (+) sign to select a new report or graph for display on your Company Snapshot.
4
Click Restore Defaults to remove additional content that was added.
5
Click Done.
The QuickBooks Company Snapshot feature is available in the 2010 versions of QuickBooks Pro, QuickBooks Premier, and QuickBooks Enterprise Solutions. When you display the Company Snapshot, you see all of the vital information about your company on one screen without losing the ability to drill down to the original documents supporting any of the items or amounts displayed on the snapshot screen. You can customize the selection of information that appears on the snapshot, and if you really like this feature, you can even turn it into your QuickBooks home page. If you work with multiple users in the same QuickBooks data file, your Company Snapshot is only seen by you when you log into the data file with your own username.
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Click Print to print a hard copy of your company snapshot.
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Click the header of any graph or report displayed on the Company Snapshot. A move icon displays.
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With the move icon mouse cursor displayed, drag and drop the content to any other location on the Company Snapshot.
9
Change the information displayed on any graph or report by choosing a different date range in the drop-down menu.
6
10 Hover over any bar on the graph to
see the actual amount represented by the bar (not shown).
9
11
11 Double-click on any information
displayed on a report or graph to get more detailed information. 12 Click additional links to useful related
tasks. Shown here is the Receive Payments link; click it to record money received from your customers. 12
13 To set the Company Snapshot as your
home page, first make sure the Company Snapshot screen is open on your computer screen. 14 Choose Edit, Preferences, and click
Desktop View on the left side of the Preferences window. 15 Choose Save Current Desktop. 16 Uncheck Show Home Page When
Opening A Company File. 17 Click OK.
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Project 3: Using Document Management
Beginning with QuickBooks 2010, electronically “paperclip” your documents to QuickBooks transactions to stay organized and save time with QuickBooks Document Management. Organize receipts, contracts, statements, and more by attaching electronic or scanned files to any customer, vendor, employee, account, or transaction. Store documents online so that they are easy to find and share.
The Project Attach a vendor’s original copy of the bill to the recorded QuickBooks transaction and view the source document at a later date. Set up multiple users, including your accountant, and assign privileges for adding, removing, or viewing stored documents. You need a scanner and an Internet connection to use this service. To learn more about QuickBooks Document Management, select Company, Document Management and choose Learn About Document Management. You will prompted to sign up for an Intuit Workplace Account, which is free. An Internet connection is required.
The Process 1
After signing up for an Intuit Workspace Account (not shown), create a transaction in QuickBooks (this example is a vendor bill).
2
Click Attach on the transaction; you might be prompted to save your transaction first (not shown).
3
On the Attachments dialog, click Local Files if you are attaching a previously scanned document.
4
Click Online Document Inbox if you are attaching a scanned document that was previously stored online.
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Click Scanner to scan your source document directly from within QuickBooks (the scanner must be accessible by the computer running QuickBooks).
6
Click OK.
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The transaction with the attachment displays with a green paperclip icon.
8
To manage your documents online, click Company, Document Management, Document Management Center (not shown). Sign in with your Intuit Workspace Account ID (an email might be sent to you initially with steps to verify your email address).
9
From the QuickBooks Document Management Center, you can choose how many documents to display in your inbox or shared folder. You can also filter the documents listed by transaction type, company, customer, or vendor.
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10
9
Click Add Document to Inbox. The Document Record dialog displays. Browse to the folder on your computer where you previously scanned and stored the document.
11 Click OK to close. 12 Click Company, Document
Management, Set Up and Manage Users (not shown). You will be prompted to sign into your Intuit Workplace Account. You can assign full, view only, or custom access to up to 30 individuals. 13 Click Sign Out when completed (not
shown).
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Project 4: Color Coding Your Accounts
If you have multiple bank accounts in QuickBooks, you might find that it’s easy to make an entry in the wrong account. By colorcoding your accounts, you can have a visual reminder of which account you’re working with, thus making it less likely you’ll make an error by using the wrong account. When you change the color of a cash account, for example, not only does the account register change, but so do the forms associated with that account. When you prepare to write a check, the check color will match the account color.
The Project Assign a new background color to an account from within the account register. For this example, we are using a cash account; however, this procedure works for any balance sheet account. 2
The Process 1
Press Ctrl+A to open the Chart of Accounts window.
2
Double-click the account for which you want to change the color.
3
With the account register open, choose Edit, Change Account Color from the main menu.
4
Click a Basic Color or click the Define Custom Colors button to choose from the complete array of colors.
5
4
Click OK.
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401
6 6
Your color is now applied to the account register.
7
Press Ctrl+W to open a check form.
8
Change the bank account to the account whose color you just changed. The new color appears on the check form.
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402
Project 5: Using To Do Notes The Project Create a To Do Note, establish when you want to be reminded of this task, edit the task, and remove the note once the task is executed.
As part of the QuickBooks Reminders feature, you can create To Do Notes to remind yourself of, well, actually anything. Just like you might keep a list on your desk to remind you of calls to make, errands to run, gifts to purchase, and so on, you can use the To Do Notes in the QuickBooks Reminders and record all of your To Do items in your QuickBooks program. Not only does this save paper, but it also organizes your personal and business To Do lists in one convenient spot and adds the To Do items to your daily tasks. As described in the previous project, your Reminders list is part of the Company Snapshot dashboard that you can choose to have displayed on your QuickBooks desktop at all times. Use the To Do Notes feature to make QuickBooks your one-stop place for all of your tasks, not just your QuickBooks tasks.
The Process 1
Choose Company, To Do List to display your To Do List.
2
Choose To Do, New, or press Ctrl+N to open the New To Do window.
3
Enter your task in the Note area.
4
Enter the date on which you want to be reminded.
5
Click OK.
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6
Open your To Do Note for editing by clicking the note in the To Do List and then choosing To Do, Edit To Do Note from the drop-down menu. You can also press Ctrl+E or double-click the note to open it.
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Make your changes to your To Do Note.
8
If the task has been completed and you want to continue to keep the task visible on your To Do List, check the Done checkbox.
9
To keep your To Do Note in your QuickBooks file but make it invisible on your To Do List, check the To Do Note Is Inactive checkbox.
10
6 7
Click OK.
10
Did You Know? To Do Notes are not limited to QuickBooks tasks. Do you want to remember your best friend’s birthday? Do you want a reminder to pick up some steaks on the way home from work? Have you got a meeting at school this week? You can enter personal reminders as well as QuickBooks reminders in the To Do Notes.
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11
To remove a To Do Note permanently, click the note and then choose To Do, Delete To Do Note from the drop-down menu.
12
Click OK when asked to confirm the deletion.
13
View your To Do Notes on the Company Snapshot.
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What’s New and Improved
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It is exciting to explore new features and tools each year with the release of QuickBooks. This year is no different. Many of these new features are discussed in this edition of QuickBooks 2010 on Demand. For those features that are not covered in this content, you can learn more about them through the following sources:
QuickBooks 2010 Solutions Guide, author Laura Madeira, also published by Que Publishing. Visit http://www.informit.com/store/product.aspx?isbn=0789738341 to learn more about the book or visit the author’s website at www.quick-training.com. Visit the Intuit website for a list of all the new features: http://quickbooks.intuit.com/product/accounting-software/latest-business-accounting.jsp
Document Management (p. 399) Electronically “paperclip” your documents to QuickBooks transactions to stay organized and save time with QuickBooks Document Management. Organize receipts, contracts, statements, and more by attaching electronic or scanned files to any customer, vendor, employee, account, or transaction. Scanner and Internet connection required. For more information see the workshop, “Using Document Management,” on page 399 or the section titled “Attaching Documents to Transactions” in Chapter 5 on page 157.
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Add/Edit Multiple List Entries (p. 79) Quickly enter or edit multiple Items, Customers, and Vendors using spreadsheet-like functionality. Use familiar “cut and paste” commands. Add list data from your Microsoft Excel spreadsheets. Add or edit your lists making changes faster and more efficient.
Favorites Menu (p. 396) Get one-click access to your everyday tasks using the Favorites Menu. Add shortcuts directly to specific functions. Personalize favorites for each user. Pay Bills Filtering (p. 164) Need to pay only a specific vendor? Conveniently filter the Pay Bills dialog for a specific vendor. See at a glance the amount you’re paying that specific vendor. Custom Fields (QuickBooks Enterprise Solutions only) Get more fields…more flexibility…more control. Manage more information with more custom fields in QuickBooks Enterprise Solutions 10.0. Track more information with two to three times more custom fields for customers, vendors, employees, and items. Define custom fields to accept certain formats (such as date, phone number, select from list, numeric) to improve the accuracy of data. Use advanced filtering and sorting to run reports on the custom field information. For more information visit http://enterprisesuite.intuit.com/. Card Scan For QuickBooks users that also have a Card Scan scanner and software installed, you can save time by choosing to have the Card Scan data automatically populate the data when creating a new customer or vendor. If you begin using QuickBooks and you have already installed the Card Scan software, you will be able to use this new feature with vendor and customer lists.
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Electronically Print Check Signatures If you prepare large volumes of checks from your QuickBooks data file, with QuickBooks 2010 you can now electronically attach a signature to print on the check automatically. No special printer, no special ink, just another way to save time! To use this feature you will need to create a signature file, usually a scanned signature stored as an image file, such as .jpg. To add this signature file to your checks, click File, Print Forms, Print Checks. In the Print Checks dialog you can select the Print Signature Image and browse to where you have stored the signature image.
eCheck Payment Processing Intuit Check Solution for QuickBooks includes the option to accept check payments by telephone. Get your money faster by avoiding the time it takes for customers to mail their check payments to you. Accept checks over the phone and manually enter check information (no scanner required). The next time you need to process a payment from the same customer, QuickBooks can recall the check information that you stored. eCheck Payment Processing includes a check verification service that reduces the risk of bad checks. For more information, visit http://payments.intuit.com/.
Paper Check Processing Intuit Check Solution for QuickBooks offers a new check acceptance solution that helps businesses reduce paperwork and get paid quickly. Skip the bank lines and start processing checks electronically. It’s as easy as scan, deposit, and done! For more information, visit http://payments.intuit.com/. GoPayment Mobile Payment Processing Conveniently get paid on the spot. There are two options for processing your payments. The first is GoPayment via Web Browser. You can access GoPayment on any mobile web browser by going to www.GoPayment.com. You can use any carrier and any mobile phone with Internet access. The second is GoPayment via Downloadable Application. You can download the GoPayment application onto your mobile phone for easier access, an enhanced user experience, and compatibility with the optional hardware. For pricing and detailed information, visit http://payments.intuit.com/.
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What’s Improved for QuickBooks 2010 Report Center (p. 378) Spend less time hunting for the right report by previewing a full-size sample report before running it. No more looking at tiny thumbnails as we have in the past. Includes convenient report groupings for your Standard, Memorized, Favorite, and Recent reports.
Customizable Company Snapshot (p. 397) QuickBooks Pro, Premier 2010 (all editions) and QuickBooks Enterprise Solutions 10.0 (all editions) offer an improved Company Snapshot for reporting critical company information and accessing useful QuickBooks tasks in a single window. Get instant views into the bottom line with more at-a-glance reports featuring easy-to-read graphs and reports. See data from multiple years side-by-side for a quick comparison. Bank Reconciliation (p. 338) Reconciling your accounts in QuickBooks just got a whole lot easier! When you mark a transaction as cleared in the Reconcile dialog, QuickBooks highlights the transaction, setting it apart from other non-cleared transactions. This makes it easier to work through the reconciliation process because you can see which transactions are not highlighted and have not yet cleared. Online Banking Download Interface (p. 260) Use the online banking feature in QuickBooks to save time and improve accuracy with data entry. QuickBooks 2010 makes data entry easier than ever by letting you choose your method of viewing and downloading transactions.
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Forms Customization Promote your business by presenting a consistent, professional look across all your QuickBooks invoices and forms. Select from new, free professional designs to make your invoices and other forms stand out from the competition. It’s easier and faster to add your logo, select fonts and colors, and customize the shading and borders of data grids. Apply the new form design globally to all templates in QuickBooks with one click! Visit, http://quickbooks.intuit.com/product/accounting-software/latest-business-accounting.jsp. Clean Up Company Data The Clean Up Company Data utility is a tool that creates an archive of your company file for your records and removes old, dated transactions. Improved for QuickBooks 2010; this tool will help to reduce overall file size as part of the condensing process. To access this tool select File, Utilities, Clean Up Company Data. However, while this is an improved feature, it might not offer enough of a file reduction to make it beneficial for very large data files. Make sure you have made a backup of your data prior to attempting to use this tool. Client Data Review This feature is available in Premier Accountant 2010 and Enterprise Accountant 10.0. It is a set of tools used primarily by accounting professionals to streamline their clean-up work with a client’s file and improve profitability while helping the client. Using Client Data Review makes tasks such as troubleshooting beginning balance differences, reclassifying transactions, identifying negative inventory items, and fixing incorrectly paid sales tax forms much easier. For more information, visit http://www.informit.com/store/product.aspx?isbn=0789743221 to read the online chapter “Detecting and Correcting with the Client Data Review Feature” or visit the author’s website at www.quick-training.com.
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Intuit Statement Writer For use with QuickBooks Premier (sold separately) and QuickBooks Enterprise (no additional fee) Intuit Statement Writer 2010 is used by accounting professionals to create customized financial statements. The Intuit Statement Writer uses Microsoft Excel as the platform for creating and customizing financials for clients. More information is available about this useful reporting tool in the QuickBooks 2010 Solutions Guide. Visit http://www.informit.com/store/product.aspx?isbn=0789738341 to learn more about the book or visit the author’s website at www.quick-training.com.
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Index A Account Listings, reporting income taxes, 289 account numbers, 75 turning off, 71 Accountant Edition of QuickBooks, 255 Accountant’s Copy, 300, 303 accounting for assets, 340 for deposits or retainers, 368 for equity, 354 for income taxes, 292 for inventory, 319 for jobs, 207 for liabilities, 360 for purchases, 151 for sales, 108 for sales tax, 190 accounting preferences, 71-72 accounts adding, 73-74 assigning tax lines to, 288 color coding, 401-402 credit cards, setting up, 363 accounts payable, 359 managing, 361 accounts receivable, tracking, 130 accounts, chart of, EasyStep Interview process, 16
activating inventory, 318 online services with your financial institution, 262-264 activities menu, lists, 96 adding accounts, 73-74 administrator passwords, 308 customers, 79-80 information on-the-fly, 91 items, 86-88 to inventory, 323 list entries, multiple, 408 memorized transactions to Icon Bar, 198 transactions to groups, 194 multiple, 275 to QuickBooks, 267-269 users, 309 additional information, vendors, 85 addresses entering employee address information, 30 vendors, 83-84 adjusting default price of inventory, 335-336 inventory quantities, 334 adjustments, prior period adjustments, 357
413
advances, 126 assets accounting for, 340 fixed assets, 337 naming, 346 purchasing, 345 selling, 349 fixed assets. See fixed assets recording deposits as, 344 tax consequences of sales of business assets, 340 assigning currency to foreign customers or vendors, 138 rights to users, 310-312 tax lines to accounts, 288 Assisted Payroll, 27, 47 attaching documents to transactions, 157-158
B backing up company files, 300-302 files, 8 Backup Copy option, 300 Backup File option, 303 backups, 300 online backup service, 306-307 restoring, 304-305 types of, 303 bad debts, recording, 135-136 bank account transfers, recording, 341 bank accounts, setting up, 20 bank deposits, 125 bank reconciliation, 410 bank statements EasyStep Interview process, 18 reconciling, 338-339
414
banking, online banking, 259 activating with your financial institution, 262-264 advantages of, 265 bill payment, canceling payments, 278 deposits, assigning to open customer invoices, 273 making payments, 276-277 messages, sending, 279 preferences, prefilling accounts, 271 QuickBooks Online, 283 reports of online transactions, 281 transactions adding multiple, 275 assigning to open vendor bills, 272 deleting multiple, 274 retrieving, 266 transferring money between accounts, 280 Basic Payroll, 27 bill payments canceling, 278 editing, 167-168 bills paying, 164 discounts, 165, 189 paying online, 276-277 payments, deleting 169 preferences, 152 viewing aging and unpaid, 163 budgets creating, 237-240 first year of business, 240 reports, 241
C calculating depreciation, 347 interest, 371 net worth, 351
canceling online payments, 278 cancelled checks, EasyStep Interview process, 18 capital accounts, 351 capital stock account, 351 Card Scan, 408 Carousel View, Report Center, 378 cash, tracking petty cash, 342 cash sales, recording, 124 changing memorized transactions, 199 recurring transactions, 200 start dates, 19-21 charging sales tax to customers, 183 charging expenses to customers, 116 designating customers when making purchases, 116 placing expenses on customer invoices, 117 Chart of Accounts, 140 chart of accounts, EasyStep Interview process, 18 check register, 166 checking preferences, 170-171 checks eCheck Payment Processing, 409 electronically printing check signatures, 408 paper check processing, 409 printing, 174 voiding, 175 in the current year, 175-176 in the previous year, 177 writing, 172-173 checks (cancelled), EasyStep Interview process, 18 choosing income tax forms, 286-287 online banking mode, 260 start dates, 19-21
classes, 242 payroll, 242 reports, 245 sales and purchase forms, 244 setting up, 243 Clean Up Company Data utility, 411 Client Data Review, 411 closing financial records at year-end, 313 closing date, setting, 313 restricting user access to pre-closing date transactions, 314 Closing Date Exception report, creating, 315 COD (cash sales), recording, 124 collapsing details in reports, 393 collecting income, 103 collection letters, creating, 132-134 color coding accounts, 401-402 company files, 13 backing up, 300-302 company general preferences, 68 company reminders, preferences, 203 Company Snapshot, 376-377 customizing, 397-398, 410 company-wide reports, preferences, 382-383 compound interest, 371 converting Quicken to QuickBooks, 10-11 cost of online backup service, 306-307 Remote Access feature, 256 cost plus billing, 116 counting inventory, 333 credit, issuing, 122-123 credit card payments, receiving, 343 credit cards, 359 accounts paying/reconciling, 365-367 setting up, 363 recording charges, 364 credit limits, 209
Index
415
.csv file format, 393 currencies, Multiple Currencies, 137 adding foreign Chart of Accounts, 140 assigning currency to foreign customers or vendors, 138 Home Currency Adjustment, 148 Realized Gains & Losses, 147 recording foreign purchase transactions, 144-145 recording foreign sales transactions, 142-143 selecting currencies you will be using, 139 Unrealized Gains & Losses, 146 updating foreign exchange rates, 141 current liabilities, 359 custom fields, 408 custom invoices, 108 Customer Center, 81-82 customer invoices, assigning deposits to, 273 customer messages, 123 customer preferences, 104 customers adding, 79-80 designating when making purchases, 116 placing expenses on invoices, 117 sales tax, charging, 183 selling tax-exempt items to, 186 customizing Company Snapshot, 397-398, 410 Favorites menu, 396 forms, 107, 411 data, 250-253 forms design, 247-249
D data entering for new companies, 13-19 forms, customizing, 250-253
416
transferring from Quicken, 9-11 transferring from older versions of QuickBooks, 7-8 updating from older versions, 8-9 dates, invoices, 109 deductions, payroll, 37-38 deleting bill payments, 169 list entries, 97 transactions, multiple, 274 deposits accounting for, 368 assigning to open customer invoices, 273 bank deposits, 125 recording as assets, 344 depreciation calculating, 347 entering, 348 design of forms, customizing, 247-249 designating customers when making purchases, 116 desktop view preferences, 69-70 details, collapsing in reports, 393 direct deposit, 43-45 Discount, 89 discounts for early payment, 189 issuing, 127 entering discounts for early payment, 128-129 entering sales discounts on invoices, 127 paying bills, 165 Discounts & Credits screen, 127 display options, modifying reports, 384 displaying lists on forms, 77-78 distribution accounts, 355 owner’s withdrawal, 356 Document Management, 399-400, 407 down payments, 126
downloading federal tax forms, 294-295 state tax forms, 296
E EasyStep Interview opening new company files, 13-19 required information, 17-18 stopping and restarting, 22 eCheck Payment processing, 409 editing administrator passwords, 308 bill payments, 167-168 information on lists, 94 inventory items, 324 list entries, multiple, 408 timer transactions, 233 users, 309 email, reports, 392 emailing invoices, 112-114 batches of, 115 indicating email status on invoices, 113 setting preferences, 112 employee address information, entering for payroll, 30 employee labor, 207 employee payroll information, setting up, 31 employee personal information, entering for payroll, 29 employee preferences, payroll, setting up, 28 employees versus independent contractors, 60 paying, 39-40 special payroll preparation, 41-42 Enhanced Payroll, 27 entering data for new companies, 14-19 depreciation, 348 historical data, 23
entries on lists, deleting, 97 merging on lists, 98-99 equity, accounting for, 354 estimated taxes, paying, 292-293 estimates, 205, 214 versus actual cost, reports, 220 creating, 214 invoicing for selected items, 219 invoicing for percentage of, 217-218 revising, 215-216 Estimates feature, preferences, 206 estimating job cost, 207 Excel, exporting reports to, 393 expense accounts, setting up, 21-23 expenses, placing on customer invoices, 117 exported time, 230 exporting information to timer, 225 report templates, 391 timer data to QuickBooks, 230
F Favorites Menu, 408 creating, 396 federal identification numbers, EasyStep Interview process, 18 federal payroll tax information, setting up, 32 federal tax forms, downloading, 294-295 federal unemployment compensation taxes, paying with Form 940, 53-54 fields, custom fields, 408 FIFO (first in, first out), 325 files backing up, 8 company files, backing up, 300-302 filters options, modifying reports, 385 Finance Charge, preferences, 118 financial institutions, activating online banking, 262-264
Index
417
financial records, closing at year-end, 313 closing date, setting, 313 restricting user access to pre-closing date transactions, 314 financial statements, prior period adjustments, 357 first in, first out (FIFO), 325 first year of business, budgets, 240 Fixed Asset Item List, 345-346 fixed assets, 337 naming, 346 purchasing, 345 entering in chart of accounts, 345 entering in Fixed Asset Item List, 346 selling, 349 invoices, 349 journal entries, 350 FOB (Free on Board), 105 font and number options, modifying reports, 386 foreign exchange rates, updating, 141 foreign purchase transactions, recording, 144-145 foreign sales transactions, recording, 142-143 Form 1040, 287 Form 1065, 287 Form 1099, 59-62 Form 1120, 287 Form 1120S, 287 Form 8109, 293 Form 940, paying federal unemployment compensation taxes, 53-54 Form 941, reporting payroll taxes, 50-52 Form 990, 287 Form 990-PF, 287 Form 990-T, 287 forms 1040, 287 1065, 287
418
1099, 59-60 issuing, 62 preferences, 61 1120, 287 1120S, 287 8109, 293 990, 287 990-PF, 287 990-T, 287 customizing, 107, 411 data, 250-53 customizing design, 247-249 displaying lists on, 77-78 federal tax forms, downloading, 294-295 income tax forms, 286-287 items on, 90 purchase order forms, 149 classes, 244 sales forms, classes, 244 state tax forms, downloading, 296 W-2, preparing, 55-56 W-3, issuing, 57-58 Free on Board (FOB), 105
G General Journal, 254 general preferences, 66 company general preferences, 68 personal general preferences, 66-67 goods, receiving, 160-161 GoPayment mobile payment processing, 409 graphs, preferences, 381-383 Grid View, Report Center, 380 Group, 89 groups inventory groups, 326-327 memorizing transactions, 193 report groups, 387-388 creating, 387
sales tax, creating, 182 transactions, adding to, 194
H hardware requirements, 4-5 header/footer options, modifying reports, 385 headers, hiding in reports, 393 historical data, entering, 23 Home Currency Adjustment, 148
I Icon Bar, adding memorized transactions to, 198 importing report templates, 390 timer data into QuickBooks, 231 inactive status of list entries, changing, 96 income accounting for sales, 108 collecting, 103 invoicing, 103 income and expense accounts, setting up, 21 Income Tax Detail, 291 Income Tax Summary, 290 income taxes accounting for, 292 estimated tax payments, 292-293 reporting, 289 Account Listings, 289 Income Tax Detail, 291 Income Tax Summary, 290 independent contractors 1099 forms, 59-60 versus employees, 60 information, editing lists, 94 installing QuickBooks, 2-3 timers, 223
interest, 371 interview questions, opening new company files, 13-19 Intuit Online Payroll, 27 Intuit QuickBooks Bill Pay Service, 276 Intuit Remote Access feature, 256 Intuit Statement Writer, 412 Intuit Statement Writer 2010 (ISW), 393 inventory, 317 accounting for, 319 activating, 318 adding to, 323 adjusting default price, 335-336 counting, 333 preferences, 150 quantities, 322 adjusting, 334 receiving goods, 160-161 recording, 319 reminders to replenish, 330 reports, 331-332 tax status of items, 184 valuing, 325 inventory assembly items, 324 inventory groups, 326-327 inventory items editing, 324 setting up, 320-322 Inventory Part, 89 Inventory Stock Status by Item, 332 Inventory Stock Status by Vendor, 332 Inventory Valuation Detail report, 332 Inventory Valuation Summary report, 332 invoice forms, 91 invoices creating, 106-107 dates, 109 emailing, 112-114 batches, 115 indicating email status, 113 preferences, 112
Index
419
entering discounts for early payments, 128-129 entering sales discounts, 127 fixed asset sales, 349 indicating email status on, 113 monthly statements, creating, 119-120 placing customer expenses on, 117 previewing, 110 printing, 110 batches, 111 receiving payments for, 121 types of, 108 invoicing estimates for selected items, 219 income, 103 payment terms, creating, 246 for percentage of estimates, 217-218 progress invoicing, 217 for timer activities, 234 issuing 1099 forms, 62 credit or refunds, 122-123 discounts, 127 entering discounts for early payment, 128-129 entering sales discounts on invoices, 127 W-3 forms, 57-58 ISW (Intuit Statement Writer 2010), 393 Item Quantity, 332 items adding, 86-88 inventory, editing, 324 moving on lists, 92 on forms, 90 order on purchase orders, 155 tax-exempt items, selling, 185 types of, 89
420
J job costs, estimating, 207 job status, preferences, 211 job type feature, 212 jobs accounting for, 207 entering new job information, 208-209 entering payment information, 209 entering specific job information, 210 estimates versus actual cost, reporting, 220 tracking, dates and descriptions, 213 journal entries, 254 fixed asset sales, 350 reversing, 254
K keyboard shortcuts, entering dates, 68
L last in, first out (LIFO), 325 liabilities, 359 accounting for, 360 current, 359 long-term liabilities, 359 paying payroll liabilities, 48 payroll liabilities, 63 year-to-date payroll liabilities, viewing, 49 license numbers, 6 LIFO (last in, first out), 325 list entries, changing inactive status of, 96 list items, marking inactive, 95 List View, Report Center, 379 lists activities menu, 96 displaying on forms, 77-78 editing information on, 94
entries, deleting, 97 merging on lists, 98-99 moving items on, 92 printing, 100 sorting, 76 loans, 369 payments, 372 recording, 369 recording payments, 373 local payroll tax information, setting up, 33 logos, 249 long-term liabilities, 359 loans, 369
M MACRS (Modified Accelerated Cost Recovery System), 347 mailing labels, creating, 257-258 managing accounts payable, 361 Sales Orders, 328-329 manufacturing inventory, recording, 319 marking list items, inactive, 95 materials, 207 Memo field, 111 memorized transactions, 195 adding to Icon Bar, 198 changing, 199 removing, 201 memorizing reports, 389 transactions, 192 adding to groups, 194 groups, 193 merging entries on lists, 98-99 messages customer messages, 123 sending, 279 Modified Accelerated Cost Recovery System (MACRS), 347
modifying reports display options, 384 filters options, 385 font and number options, 386 header/footer options, 385 money, transferring between accounts, 280 monthly sales tax reports, 187 monthly statements, creating, 119-120 moving items on lists, 92 Multiple Currencies, 137 adding foreign Chart of Accounts, 140 assigning currency to foreign customers or vendors, 138 Home Currency Adjustment, 148 Realized Gaines and Losses, 147 recording foreign purchase transactions, 144-145 recording foreign sales transactions, 142-143 selecting currencies you will be using, 139 Unrealized Gaines and Losses, 146 updating foreign exchange rates, 141 multiuser offices, setting up QuickBooks in, 6-7
N naming fixed assets, 346 net worth, calculating, 351 New Employee window, 29 new features, Document Management, 407 non-tax-related transactions, 297 Noninventory Part, 89
O on-the-fly, adding information, 91 online backup service, 306-307 online banking, 259 activating with your financial institution, 262-264 advantages of, 265
Index
421
bill payment, canceling payments, 278 deposits, assigning to open customer invoices, 273 making payments, 276-277 messages, sending, 279 preferences, prefilling accounts, 271 QuickBooks Online, 283 reports of online transactions, 281 transactions adding multiple, 275 assigning to open vendor bills, 272 deleting multiple, 274 retrieving, 266 transferring money between accounts, 280 Online Banking Center. See online banking online banking download interface, 410 online banking mode, choosing, 260 online messages, sending, 279 online transactions, adding to QuickBooks, 267-269 Open Invoices report, viewing, 131 open purchase orders, 159 opening new company files, 13-19 opening balance equity account, 352-354 zeroing-out, 353 opening balance equity accounts, 351 ordering items on purchase orders, 155 orders, receiving partial orders, 162 Other Charge, 89 out-of-state sales tax, 182 outsourcing payroll, 63 overhead, 207 owner’s withdrawal, distribution accounts, 356
P paper check processing, 409 par value, 351
422
partial orders, receiving, 162 password protection, 15 passwords administrator passwords, 308 for users, 309 Pay Bills filtering, 408 Pay Bills window, 173 paychecks, printing, 43 paying bills, 164 discounts, 165 credit card accounts, 365-367 employees, 39-40 special payroll preparation, 41-42 estimated taxes, 292 federal unemployment compensation taxes, Form 940, 53-54 sales tax, 188 paying bills online, 276-277 Payment, 89 payment information for new jobs, entering, 209 payment preferences, customer preferences, 104 payment terms, creating, 246 payments GoPayment mobile payment processing, 409 loans, 372 recording, 373 receiving for invoices, 121 payroll Assisted Payroll, 27 Basic Payroll, 27 classes, 242 deductions, 37-38 direct deposit, 43-45 employee address information, entering, 30 employee payroll information, setting up, 31
employee personal information, entering, 29 employee preferences, setting up, 28 Enhanced Payroll, 27 federal payroll tax information, setting up, 32 Intuit Online Payroll, 27 outsourcing, 63 preferences, setting up, 26 sick benefits 34 state and local payroll tax information, setting up, 33 summary reports, viewing, 49 tax payments, editing due dates/ methods, 46-47 vacation benefits 35-36 payroll liabilities, 63 paying, 48 Payroll Schedule feature, 28 Payroll Setup, 36 payroll tax accruals, recording, 362 payroll taxes, reporting with Form 941, 50-52 Pending Builds report, 332 personal general preferences, 66-67 personal reports, preferences, 381 petty cash, tracking, 342 Physical Inventory Worksheet report, 332 Portable Company File option, 300, 303 practicing sample company files, 12-13 preferences accounting preferences, 71-72 bills, 152 checking preferences, 170-171 company-wide reports, 382-383 desktop view preferences, 69-70 email preferences, 112 Estimates, 206 Finance Charge, 118
general preferences company general preferences, 68 personal general preferences, 66-67 graphs, 381-383 inventory, 150 job status, 211 online banking, prefilling accounts, 271 payment preferences, 104 payroll preferences, setting up, 26 personal reports, 381 purchase orders, 150 Reminders, 202 company reminders, 203 Sales & Customers, 105 sales tax, 180 spelling, 236 time tracking, 222 prefilling accounts, setting preferences for online banking, 271 preparing budget reports, 241 inventory reports, 331-332 W-2 forms, 55-56 previewing invoices, 110 price, adjusting default price of inventory, 335-336 print elements, 251 printing checks, 174 invoices, 110 batches, 111 lists, 100 paychecks, 43 prior period adjustments, entering, 357 product invoices, 108 professional invoices, 108 progress invoicing, 217 purchase order forms, 149 classes, 244
Index
423
purchase orders attaching documents to transactions, 157-158 creating, 154 open purchase orders, 159 ordering items, 155 preferences, 150 vendor bills, entering, 156 purchases, accounting for, 151 purchasing fixed assets, 345 entering in chart of accounts, 345 entering in Fixed Asset Item List, 346
Q .QBB file type, 303 .QBW, 303 quantities, adjusting inventory, 334 quantity, inventory, 322 QuickBooks, 1 converting from Quicken, 10-11 data, transferring from earlier versions, 8 installing, 2-3 multiuser offices, setting up, 6-7 registering, 5 TurboTax, 297 QuickBooks Billing Rate Level feature, 30 QuickBooks Loan Manager, 370-372 QuickBooks Online, 283 QuickBooks payroll services, 27 QuickBooks Premier Accountant Edition, 255 QuickBooks website, 282 Quicken converting to QuickBooks, 10-11 transferring data from, 9-11 QuickFill feature, 168
424
R Realized Gains and Losses, 147 receiving advances, retainers, and down payments, 126 credit card payments, 343 goods, 160-161 partial orders, 162 payments for invoices, 121 reconciling bank accounts, 410 bank statements, 338-339 credit card accounts, 365-367 petty cash, 342 recording bad debts, 135-136 bank account transfers, 341 cash sales (COD), 124 credit card charges, 364 deposits as assets, 344 foreign purchase transactions, 144-145 foreign sales transactions, 142-143 loan payments, 373 loans, 369 manufacturing inventory, 319 payroll tax accruals without QuickBooks payroll subscriptions, 362 recurring transactions changing, 200 scheduling, 196-197 refunds, issuing, 122-123 registering QuickBooks, 5 Reminders company reminders preferences, 203 preferences, 202 reminders, 81, 202-204 replenishing inventory, 330 viewing, 330
Remote Access feature, 256 removing memorized transactions, 201 Renaming Rule, 269 replenishing inventory reminders, 330 Report Center, 378, 410 Carousel View, 378 Grid View, 380 List View, 379 report groups, 387-388 creating, 387 reporting income tax, 289 Account Listings, 289 Income Tax Detail, 291 Income Tax Summary, 290 payroll taxes with Form 941, 50-52 reports, 375 budgets, 241 classes, 245 Closing Date Exception, creating, 315 collapsing details, 393 Company Snapshot, 376-377 .csv file format 393 emailing, 392 estimates versus actual, 220 exporting to Excel, 393 headers, hiding, 393 inventory, 331-332 Inventory Stock Status by Item, 332 Inventory Stock Status by Vendor, 332 Inventory Valuation Detail, 332 Inventory Valuation Summary, 332 memorizing, 389 modifying display options, 384 filters options, 385 font and number options, 386 header/footer options, 385 monthly sales tax reports, 187 of online transactions, 281
Open Invoices, 131 open purchase orders, 159 Pending Builds, 332 Physical Inventory Worksheet, 332 preferences company-wide reports, 382-383 graphs, 381-383 personal reports, 381 Realized Gains and Losses, 147 Report Center, 378 Carousel View, 378 Grid View, 380 List View, 379 Sales Order Fulfillment, 332 storing, to report groups, 387 templates exporting, 391 importing, 390 Unpaid Bills, 163 Unrealized Gains and Losses, 146 restarting EasyStep Interview, 23 restoring backed-up information, 304-305 restricting user access to pre-closing date transactions, 314 retained earnings accounts, viewing transactions, 358 retainers, 126 accounting for, 368 retrieving online transactions, 266 reversing journal entries, 254 revising estimates, 215-216
S sales, accounting for, 108 Sales & Customers, preferences, 105 sales forms, classes, 244 Sales Order Fulfillment, 332 Sales Orders, managing, 328-329 Sales Tax, 89, 179
Index
425
sales tax accounting for, 190 charging to customers, 183 groups, creating, 182 items, creating, 181 out-of-state sales tax, 182 paying, 188 preferences, 180 Sales Tax Group, 89 Sales Tax Item, creating, 181 sales tax reports, monthly, 187 sample company files, practicing, 12-13 scheduled transactions, 197 scheduling recurring transactions, 196-197 screen elements, 251 screen resolution, changing, 70 searching for transactions, 101 security backups. See backups passwords, administrator passwords, 308 rights, assigning to users, 310-312 selling fixed assets, 349 invoices, 349 journal entries, 350 tax-exempt items, 185 to customers, 186 sending online messages, 279 Service, 89 service invoices, 108 shortcuts for entering dates, 68 sick benefits, 34 signatures, electronically print check signatures, 408 simple interest, 371 software requirements, 4-5 sorting lists, 76 specific identification method, 325 spellchecking, 236
426
spelling preferences, 236 start dates choosing/changing, 19-21 EasyStep Interview process, 18 state payroll tax information, setting up, 33 state tax forms, downloading, 296 stopping EasyStep Interview, 22 storing reports to report groups, 387 subcontracted labor, 207 subitems, creating, 93 Subtotal, 89 system requirements for QuickBooks, 4-5
T tax lines, assigning to accounts, 288 tax payments, editing due date/methods, 46-47 tax returns 294 downloading federal tax forms, 294-295 downloading state tax forms, 296 tax status of inventory items, entering, 184 tax-exempt items, selling, 185-186 taxes consequences of selling business assets, 340 federal payroll tax information, setting up, 32 federal unemployment compensation taxes with Form 940, 53-54 income taxes. See income taxes payroll tax accruals, recording, 362 sales tax. See sales tax state and local payroll tax information, setting up, 33 tax status of inventory items, 184 year-to-date payroll taxes, 35 telephone registration, 5 templates, reports exporting, 391 importing, 390
time, tracking, 224 time and materials billing, 116 Time Tracker program, 221 time tracking, preferences, 222 timer activities creating, 228 invoicing for, 234 timers, 221, 229 creating new timer files, 226-227 explaining to employees, 224 exporting data to QuickBooks, 230 exporting information to, 225 importing data into QuickBooks, 231 installing, 223 transactions editing, 233 viewing, 232 To Do Notes, 403-405 Tools, 207 tracking accounts receivable, 130 jobs, dates and descriptions, 213 petty cash, 342 time, 224 transactions adding to groups, 194 attaching documents to, 157-158 memorized transactions, 195 adding to Icon Bar, 198 changing, 199 removing, 201 memorizing, 192 groups, 193 non-tax-related, 297 online banking adding multiple, 275 assigning to open vendor bills, 272 deleting multiple, 274 reports of transactions, 281
online transactions adding to QuickBooks, 267-269 retrieving, 266 recurring transactions, changing, 200 scheduled, 197 scheduling recurring, 196-197 searching for, 101 timers editing, 233 viewing, 232 viewing in retrained earnings accounts, 358 transferring data from earlier QuickBooks versions, 7-8 from Quicken, 9-11 transferring money between accounts, online banking, 280 TurboTax, QuickBooks and, 297 types of items, 89
U Unpaid Bills report, 163 Unrealized Gains and Losses, 146 Update Company File for New Version dialog, 9 updating data from older versions of QuickBooks, 8-9 foreign exchange rates, 141 job status, 211 users adding, 309 assigning all rights, 310 assigning selected rights, 311-312 editing, 309 passwords, 309 restricting access to pre-closing date transactions, 314
Index
427
V
Z
vacation benefits, 35-36 valuing inventory, 325 vendor bills assigning transactions to, 272 entering on purchase orders, 156 Vendor Center, 153 vendors, 83 additional information, entering, 85 addresses, entering, 83-84 viewing aging and unpaid bills, 163 Open Invoices report, 131 payroll summary reports, 49 reminders, 330 timer transactions, 232 transactions in retained earnings accounts, 358 year-to-date payroll liabilities, 49 voiding checks, 175 in the current year, 175-176 in the previous year, 177
zero-balance items, 219 zeroing-out, opening balance equity accounts, 353
W-X W-2 forms, preparing, 55-56 W-3 forms, issuing, 57-58 W-4 forms, 32-33 websites, QuickBooks, 282 writing checks, 172-173
Y year-end, closing financial records, 313 restricting user access to pre-closing date transactions, 314 setting closing date, 313 year-end closing entries, 358 year-to-date payroll amounts, 36 year-to-date payroll liabilities, viewing, 49 year-to-date payroll taxes, 35
428
QUICKBOOKS 2010 SOLUTIONS GUIDE for Business Owners and Accountants By Laura Madeira ISBN-13: 9780789743220 This is a must-have reference for QuickBooks users and accounting professionals that will help you identify common errors and easily fix them— saving time and money. After you have read QuickBooks 2010 on Demand, you will benefit from having a reference that will help you find, fix, and avoid QuickBooks errors. The QuickBooks 2010 Solutions Guide for Business Owners and Accountants will be the perfect resource for you. This advanced reference book provides additional tips and tricks to make accounting for business finances easier and more accurate. It’s an excellent resource for the person who is new to using QuickBooks or the person who has used QuickBooks for years but is not familiar with how to locate and correct data entry or setup errors. Accountants will value the information and how it can assist them to be more accurate and efficient with the review of their client’s data file monthly, quarterly, or annually at tax time.
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