QuickBooks 2009 on Demand

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on Demand Online Workshop Ready to start using the skills you just learned? The Online Workshop is a great place to get started. The Workshop is filled with projects that will help you use QuickBooks® 2009 on Demand in the real world.

Each project in the Workshop takes you step-by-step from beginning to end to make sure you get just i]ZgZhjaindj¼gZadd`^c\[dg#Cdidcanl^aandjeji ^cY^k^YjVahiZe"Wn"hiZeiVh`h^cidegd_ZXih!Wjindj¼aaVahdgZ^c[dgXZi]Zh`^aahndjaZVgcZY!hd ndj¼aa`cdl]dlVcYl]Zcid^cXdgedgViZi]ZiVh`h^cidndjgldg`# All Workshop files can be downloaded at queondemand.com.

HERE ARE SOME OF THE WORKSHOPS YOU’LL FIND: QuickBooks 2009 Projects The new Workbooks section of this book contains a handful of interesting projects that \dWZndcYi]ZYVn"id"YVnZmeZg^ZcXZ#L^i]i]ZhZegd_ZXih!ndj¼aaaZVgcid/  ™ 8jhidb^oZi]Z^XdcWVg  ™ JhZi]Z8dbeVcnHcVeh]di  ™ JhZId9dcdiZh  ™ 8dadgXdYZndjgVXXdjcih

Gail Perry, CPA With Laura Madeira

Que Publishing, 800 East 96th Street, Indianapolis, IN 46240 USA

QuickBooks® 2009 on Demand

Associate Publisher

Copyright © 2009 by Que Publishing

Greg Wiegand

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.

Acquisitions Editor

ISBN-13: 978-0-7897-3935-3 ISBN-10: 0-7897-3935-6

Project Editors

Library of Congress Cataloging-in-Publication Data Perry, Gail. QuickBooks 2009 on demand / Gail Perry. p. cm. ISBN 978-0-7897-3935-3 1. QuickBooks. 2. Small business--Accounting--Computer programs. 3. Small business--Finance--Computer programs. I. Title. HF5679.P4165 2009 657'.9042028553--dc22 2009007086 Printed in the United States of America

Jovana San NicolasShirley

First Printing: April 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 author 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 or from the use programs accompanying it.

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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Michelle Newcomb Development Editor Sherry Kinkoph Gunter Managing Editor Kristy Hart Andy Beaster

Copy Editor Language Logistics Senior Indexer Cheryl Lenser Proofreader Jennifer Gallant Technical Editor Victor Madeira Publishing Coordinator Cindy Teeters Book Designer Anne Jones Compositor Bronkella Publishing, LLC

Acknowledgements A book like QuickBooks 2009 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. I want to thank Michelle Newcomb, who organized the production of this book every step of the way. Thank you also to Vic Madeira, who rode shotgun on the technical editing end of this book to make sure everything you read is easy to understand and actually works the way it is supposed to, and thanks to David Ringstrom for help with the hundreds of illustrations that fill the pages of this book. Thanks to Sherry Kinkoph Gunter, Andy Beaster, and Jovana San Nicolas-Shirley, part of the team at Que. Thanks also to the kind and patient technical support team at Intuit. Finally, there aren’t enough words I can say to thank my devoted husband, Rick, who enthusiastically supports my endless string of freelance projects and who keeps my computers humming.

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Dedication This book is dedicated to Georgia and Katherine. You make every day extraordinary.

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Acknowledgements

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About The Authors Gail Perry is a CPA and a graduate of Indiana University. 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 most. Gail is a former senior tax consultant with the international CPA firm Deloitte, where she specialized in providing tax planning services and advice to small businesses. She has written hundreds of newspaper and magazine articles about taxes, personal and business finances, and financial software and is the managing editor of AccountingWEB, an online daily news magazine for members of the accounting profession. Gail 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 American Computer Staffing, Inc., a software sales and consulting firm located in the greater Dallas, Texas area. Her affiliations with Intuit include being a member of the Intuit Writer/Trainer Network, Advanced Certified ProAdvisor, Certified Point of Sale ProAdvisor, and Enterprise Solutions Provider. Laura is also the author of the QuickBooks 2009 Solutions Guide also published by Que Publishing. Laura has been teaching companies how to use Intuit's products since its first version. Laura has instructed more than 10,000 individuals. She presents QuickBooks training to audiences comprised of accountants, consultants, and end users. She represents Intuit as a select presenter for its yearly national multicity New Product Tour Launch seminars and QuickBooks Advanced Certification Training seminars. Laura continues to be a guest speaker for Intuit at national CPA trade shows. Laura is also a skilled technical writer and has provided Intuit with technical training and public presentation materials over the years. Her “QuickBooks at Year-End” document has been distributed by Intuit at several national events and is one of Intuit's most requested training and presentation documents. Laura can be contacted through her website www.quick-training.com.

We Want To Hear From You! As the reader of this book, you are our most important critic and commentator. We value your opinion and want to know what we’re doing right, what we could do better, what areas you’d like to see us publish in, and any other words of wisdom you’re willing to pass our way. 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

Reader Services Visit our website and register this book at informit.com/register for convenient access to any updates, downloads, or errata that might be available for this book.

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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 Entering a Start Date 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 Using Timer Information with QuickBooks Payroll Printing Paychecks Using Direct Deposit Creating Employer Payroll Reports Reporting Payroll Taxes with Form 941

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1 2 6 7 8 9 11 13 19 21 22 23

27 28 31 33 34 36 39 42 47 48 49 51 53

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Paying Federal Unemployment Compensation Taxes with Form 940 Preparing W-2 Forms Issuing W-3 Forms Setting Up Independent Contractors for 1099 Forms Setting 1099 Preferences Issuing 1099 Forms Outsourcing Payroll

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Adding or Changing Information After the Interview Is Completed Setting General Preferences Setting Desktop View Preferences Sorting Lists Displaying Lists on Forms Adding Accounts Using Account Numbers Adding Customers Displaying Detailed Customer Information Adding Vendors Adding Items Adding Information “On-the-Fly” Moving Items on a List Creating Subitems Editing Information on a List Hiding Entries on Lists Deleting Entries on a List Merging Entries on a List Printing Lists Searching for Transactions Generating a QuickReport Setting Accounting Preferences

4

Invoicing and Collecting Income Setting Sales and Customers Preferences Creating an Invoice Previewing Invoices

57 59 61 63 65 66 67

69 70 73 75 76 78 80 81 83 86 88 92 93 94 95 97 99 100 102 103 104 105

107 108 111 113

Printing a Single Invoice Printing a Batch of Invoices Emailing an Invoice Charging Expenses to a Customer Setting Finance Charge Preferences Creating a Monthly Statement Setting Send Forms Preferences Tracking Accounts Receivable Receiving Payments for Invoices Issuing a Credit or Refund Receiving Cash Making Bank Deposits Receiving Advances, Retainers, and Down Payments Issuing Discounts Viewing the Open Invoices Report Creating a Collection Letter Recording Bad Debts

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Making Purchases and Recording Payments Setting Purchases and Vendors Preferences Using Purchase Orders Viewing Items on Purchase Orders Viewing Vendor Information Receiving Goods Receiving a Partial Order Viewing 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 Creating Purchase Reports

115 116 117 120 122 123 125 126 127 128 129 130 131 132 135 136 139

141 142 146 148 149 150 152 153 154 155 157 159 161 162 164 166 167 170

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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 Producing Monthly Sales Tax Reports Paying Sales Tax Taking a Discount for Early Payment

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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

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Job Cost Estimating and Tracking Setting Jobs and Estimate Preferences Setting Up a Job Using the Job Status Feature Using the Job Type Feature Using the Job Dates Feature Using the Job Description Feature Creating an Estimate Invoicing Against an Estimate Revising Estimates Creating a Work in Progress Report

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185 186 187 189 190 193 195 196 198

199 200 202 205 207 208 209 210 211 215 217

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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 Timed Activity Using the Timer Sending Timer Data to QuickBooks Opening Timer Data in QuickBooks Viewing Timer Transactions Editing Timer Transactions Billing Time from the Timer to the Customer Backing Up and Condensing Timer Data Restoring Backed-Up and Condensed Timer Data

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QuickBooks Tips and Tricks Setting Spelling Preferences Creating a Budget Producing Budget Reports Setting Up Classes Displaying a Class List Using Multiple Classes on One Form Reporting on Classes Creating Payment Terms Customizing Forms—Editing Existing Forms Customizing Forms—Creating a New Form Making Journal Entries Using the Audit Trail Using the QuickBooks Remote Access Feature Creating Mailing Labels

219 220 221 223 224 226 227 228 229 231 232 233 235 236

237 238 239 243 245 246 247 248 249 250 252 257 258 260 261

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Using the QuickBooks Online Features Setting Service Connection Preferences Setting Up Your QuickBooks Internet Connection Activating Online Services With Your Financial Institution Retrieving Online Transactions Adding Transactions to QuickBooks Renaming Rules—Automatically Assign List Name Preference to Prefill Account 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 QuickBooks Billing Solutions

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Preparing Income Tax Returns Choosing the Correct Income Tax Form Assigning Tax Lines Using the Income Tax Summary Report Using the Income Tax Detail Report Making Estimated Tax Payments Creating a Tax Return

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Security Backing Up Your QuickBooks Company File Restoring Backed-Up Information Using the QuickBooks Online Backup Service Setting Up the Administrator

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309 310 313 316 318

Adding Users Editing User Access Removing Users Closing Financial Records at Year-End Creating a Closing Date Exception Report

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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 Price of Inventory

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Recording Your Assets Reconciling Your Bank Statement Recording Automatic Teller Withdrawals Tracking Petty Cash Receiving Credit Card Payments Recording Deposits As Assets Purchasing Fixed Assets Entering Depreciation Selling Fixed Assets

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Recording Owners’ Equity Understanding the Opening Balance Equity Account Recording Owners’ Draws Entering Prior Period Adjustments Viewing Contents of Retained Earnings Account

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329 330 332 334 335 337 339 341 342 344 346 347

349 350 353 354 355 356 357 360 361

363 364 367 369 370

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Recording Liabilities Managing Accounts Payable Recording Payroll Tax Accruals Setting Up Credit Card Accounts Accounting for Deposits or Retainers Recording Loans Using the QuickBooks Loan Manager Recording Loan Payments

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Preparing the Top Ten QuickBooks Reports Setting Reports and Graphs Preferences Preparing an Income Statement Preparing a Balance Sheet Preparing a Trial Balance Preparing a General Ledger Report Preparing a Budget Report Preparing a Sales Tax Liability Report Preparing a Payroll Liability Report Preparing an Accounts Receivable Aging Summary Report Preparing a Job Progress Report Preparing an Accounts Payable Aging Detail Report Customizing Reports Memorizing a Customized Report

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Workshops Project 1: Customize the Icon Bar Project 2: Using the Company Snapshot Project 3: Using To Do Notes Project 4: Color Code Your Accounts

Index

371 373 375 376 381 382 383 386

387 388 392 393 395 396 397 400 401 403 404 405 406 409

411 412 414 417 420

423

Introduction What You’ll Learn Welcome to QuickBooks 2009 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 2009 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 2009 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 will also take 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.

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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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Illustrations match the numbered steps.

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”).

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Enter an optional description.

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Save the payment.

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Print the check (see “Printing Checks” in Chapter 5, “Making Purchases and Recording Payments.”)

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See Also See “Scheduling Recurring Transactions” on page 190 to save time by scheduling and automating quarterly tax payments.

Easy-to-follow introductions focus on a single concept.

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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 you are paying the correct amount of estimated tax.

See Also points you to related information in the book.

Numbered steps guide you through each task.

Did You Know? alerts you to tips, techniques, and related information.

Organization of the Book QuickBooks On Demand 2009 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 crossreferences to other areas of the book, so after you find the answer to one question, you will likely be led to related information.

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Chapter 4, “Invoicing and Collecting Income”— Learn how to record your company’s revenueproducing activities and keep track of customers. Use invoices, track accounts receivable, make deposits, give discounts, and communicate with your customers. Tips for all these tasks are provided here.

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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.

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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.

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Chapter 7, “Using Time-Saving Features”— QuickBooks has some great timesaving tools, such as reminders, memorized transactions, and scheduled transactions. Learn how to use these features and you’ll be ready to leave work early.

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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.

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Chapter 9, “Tracking Time”—Use the QuickBooks Time Tracker 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: ◆

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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 Interview Is Completed”—Whether you used the EasyStep Interview 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 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, making journal entries, and using QuickBooks to produce information that will make an auditor happy.

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 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.

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 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. ◆ Chapter 13, “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 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.

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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. ◆

Chapter 18, “Preparing the Top Ten QuickBooks Reports”—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. ◆

Workshops—This section contains a handful of interesting projects that go beyond the day-today experience. With these projects, you learn to customize the appearance of your program, stay on top of your To Do list, and manage all the activity in your QuickBooks file with the Company Snapshot.

Introduction

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Setting Up Your Company Accounts with the EasyStep Interview

1

For many, the most unpleasant part of owning a small business is the necessity of dealing with accounting issues. 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.

What You’ll Do

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.

Transfer Data from Older Versions of QuickBooks

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. Unlike in the old days, QuickBooks installation and set-up is a swift process. While 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!

Install QuickBooks Register QuickBooks Set Up QuickBooks in a Multiuser Office

Transfer Data from Quicken Practice with the Sample Company Files Enter Data for a New Company

1 Enter a Start Date

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! You must have the packaging that comes with your QuickBooks CD-ROM. During installation you are required to enter the license and product numbers found on the back of this packaging.

Install QuickBooks 1

Insert the QuickBooks CD in the CD-ROM drive of your computer.

2

Click Install. The Installation wizard appears.

3

Click Next to proceed with the installation. 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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2

5

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.

5

Click Next to continue the installation.

6

Enter your license number and product number. This information can be found on a yellow sticker on the back of the QuickBooks CD packaging.

7

4

Click Next.

6

7

8

If you do not already have an earlier version of QuickBooks on your computer, or if you don’t want to overwrite an earlier version, choose the first installation option.

9

Click the Change button if you want to choose a location other than the folder indicated for storing your QuickBooks program.

8

9

10 10 If you are upgrading from a

previous version of QuickBooks, select the second installation option and indicate the version of QuickBooks already in place on your computer. 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, instazead 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.

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12

11 Uncheck the Add Other Service

and Support Shortcuts to Your Desktop checkbox if you don’t want icons on your desktop that enable you to access technical support. 12 Click Next.

Continued, next page

Setting Up Your Company Accounts with the EasyStep Interview

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13 Choose Yes or No in response to

the question about adding Google Desktop to QuickBooks. 14 Click Next. 15 When the installation process is

finished, click Finish. Your computer may be rebooted at this time.

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. In the box that appears, type D:/setup.exe (where D is the drive letter for your CD drive) and then click OK.

Did You Know? The steps illustrated here are for an installation for only one user. If you choose multiple users, you will 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 computer to open company files stored on the computer where the QuickBooks program resides.

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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 2009 on a standalone machine: ◆

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IBM-compatible 500MHz Pentium II or equivalent computer (1GHz Pentium III is recommended) 128MB of RAM (256MB is recommended) for a single user; 256MB of RAM (512MB is recommended) for multiple concurrent users A hard disk with 850MB of free disk space for the installation and additional space as needed for your company data

◆

2x CD-ROM

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256-color SVGA monitor

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An Internet connection with at least a 56Kbps modem is required if online features, including automatic updates, will be used

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Windows 2000/XP and Internet Explorer 6.0

Just for fun I dug back in 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’’)

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DOS operating system, version 2.1 or later

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Monochrome or color monitor

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Mouse (optional)

Setting Up Your Company Accounts with the EasyStep Interview

5

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 annoying 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

Enter the requested information about your company.

3

Click Next or Continue (depending on the registration screen you see).

4

Click Finish Registration when you have entered all the requested information. 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

2

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.

6

3

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.

2

3

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.

Setting Up Your Company Accounts with the EasyStep Interview

7

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 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.

Transfer Data from an Older Version of QuickBooks 1

From the opening screen in the new version of QuickBooks, click the name of your company file.

2

Click Open.

3

Check the box to confirm that you want to open this file in the new version of QuickBooks.

4

Click Update Now. You will be required to follow additional onscreen instructions to complete the update. In particular, you are required to complete a backup of your company file.

See Also See “Backing Up Your QuickBooks Company File” in Chapter 13, “Security,” for information on making backup copies of your data.

8

3

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 the file. 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. If you think you’ll want to reopen your company data in Quicken, make a copy of your Quicken file to use in the transfer to QuickBooks and leave your original Quicken file intact. 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 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.

2

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 from the menu.

1

IMPORTANT If you are setting up your company in QuickBooks for the first time, you can convert data from Quicken or Peachtree as part of the EasyStep Interview process. On the introductory screen of the EasyStep Interview, click the Convert button, then choose Quicken or Peachtree, and follow the onscreen instructions for converting your data. 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 may have to browse until you find the folder that contains your Quicken file.

4

Click Open.

2

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.

10

4

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 latest version of Quicken. For conversion from previous 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 accompany 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. Type the word 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.)

6

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, Open or Restore Company from the QuickBooks menu.

8

Choose Open a company file.

9

Click Next.

10 Click the name of the sample file

you want to use. 11 Click Open. 12 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.

12

8

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 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 Welcome screen. 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.

2

Continued, next page

Setting Up Your Company Accounts with the EasyStep Interview

13

3 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.

5

Enter the address, phone number, and other requested information about your company.

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.

4

5

6

8 Click the Next button to proceed.

You will be asked to identify the type of organization that describes your company, and the month in which your business year begins (typically, January).

7

8

14

9

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, then click Next.

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.

10 You are asked to give your

company a filename. All your company data is stored in this file. 11 Click Save. 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.

10 11

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.

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 outside the EasyStep Interview.

Setting Up Your Company Accounts with the EasyStep Interview

15

Questions You’ll 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:

Do you want to use sales receipts in QuickBooks? Yes or no.

◆

Do you want to use billing statements in QuickBooks? Yes or no.

◆

Do you want to use invoices in QuickBooks? Yes or no.

◆

If yes to the above question, do you want to use progress invoicing? Yes or no.

◆

Select your industry: Choose from a list of sample industry choices.

◆

What do you sell? Indicate if you sell services, products, or both.

◆

Do you want to keep track of bills you owe? Yes or no.

◆

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.

◆

Do you want the capability of printing checks? Yes or no.

◆

Do you want to track inventory in QuickBooks? Yes or no.

◆

Do you accept credit cards? Yes, no, or maybe someday.

◆

Do you want to track time in QuickBooks? Yes or no.

◆

Do you have employees? Yes (check boxes to indicate if you have W-2 employees and independent contractors) or no.

◆

Do you want to track multiple currencies in QuickBooks? Yes or no.

◆

16

◆

Do you sell products online? Yes, no, or maybe in the future.

◆

Do you charge sales tax? Yes or no.

◆

Do you want to create estimates in QuickBooks? Yes or no.

◆

Do you want to track sales orders before you invoice your customers? 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. 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. 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. ◆

◆

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.

◆

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.

◆

Bank statements and cancelled checks from the start date to the present.

◆

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.

◆

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.

◆

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.

◆

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.

continues

Setting Up Your Company Accounts with the EasyStep Interview

17

The Getting Started Checklist continued

18

◆

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.

◆

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.

◆

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.

◆

Any existing budget information for your company.

◆

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.

◆

Payroll tax information—This includes your state unemployment compensation rate, local tax rates, and amounts of payroll taxes due as of the start date.

◆

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.

◆

Credit card statements you have received since the start date.

◆

Details of all financial transactions since the start date—This includes checks written, amounts deposited, credit card transactions, and so on.

Entering a Start Date

After you answer the introductory questions in the EasyStep Interview (see “Questions You’ll Have to Answer” earlier in this chapter), the interview asks you for your Start Date. The Start Date is the date on which you will first start entering your company information in QuickBooks. This is not necessarily today’s date, nor is it necessarily the first day on which your company started doing business. Many people go back to January 1 to start entering their information. If your company is relatively new, you might want to go back to the first day you started doing business. If you select a date in the past for your start date, you need to go back to that date and enter all the transactions that have occurred since then.

Enter a Start Date 1

2

3

In the EasyStep Interview, choose the first option if you want to use January 1 of the current year as your start date.

1

Click the second option and enter your start date if the above date is not the correct start date.

2

Click Next to proceed with the interview.

See Also See “Entering Historical Data” in this chapter for information on entering previous transactions in QuickBooks. 3

Setting Up Your Company Accounts with the EasyStep Interview

19

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) are in place 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.

20

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 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

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).

2

You can enter the bank account number and routing number. This information is required if you plan to activate the account for online banking.

3

Indicate whether you opened this account before or after your start date.

4

Click Next.

5

If you indicated 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

1

3

4

5 6

Click Next to proceed to the next part of the EasyStep Interview. 7

Did You Know? The name you assign to your bank account appears on financial statements. Consider using a generic name like Cash or Bank Accounts. Then you can set up your individual bank accounts as subaccounts of the main account.

Setting Up Your Company Accounts with the EasyStep Interview

21

Setting Up Income and Expense Accounts

As you progress through the EasyStep Interview, you reach the point where you are asked to set up your company’s income and expense accounts. Expense accounts are used to categorize your company’s cash outlays. In addition to the expense accounts 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

3

4

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. Check 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.

See Also See “Adding Accounts” on page 78 for information on changing account information after you have completed the EasyStep Interview.

22

2

Did You Know? 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.

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 the EasyStep Interview 1

Click the Leave button in the EasyStep Interview window.

2

Click OK. TIMESAVER Pressing Alt+L accomplishes the same thing. The Interview window closes, but the place where you left off is remembered.

1

2

Setting Up Your Company Accounts with the EasyStep Interview

23

Restart the EasyStep Interview 1

When you return to your company after leaving the Interview, click OK to continue the Interview. The interview window displays the screen where you left off.

1

Complete the EasyStep Interview 1

When you reach the last screen of the EasyStep Interview, click Finish to complete the interview and close the interview screens.

1

24

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 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. 2.

Enter all the invoices your company has issued since the start date. These invoices will be entered as receivables.

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.

Setting Up Your Company Accounts with the EasyStep Interview

25

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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:

What You’ll Do Set Payroll and Employee Preferences Set Up Employees

■

Form 941—Employer’s Quarterly Federal Tax Return

Set Up Employee Payroll Information

■

Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees

Set Up Employee Payroll Taxes

■

Form 944—Employer’s Annual Federal Tax Return

■

Form 940—Employer’s Annual Federal Unemployment (FUTA) Tax Return

Pay Employees

■

Form W-2—Wage and Tax Statement

■

Use Timer Information with QuickBooks Payroll

Form W-3—Transmittal of Wage and Tax Statements

Print Paychecks

■

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”). 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.

Set Up Sick and Vacation Benefits Set Up Payroll Deductions

2 Use Direct Deposit

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

27

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.

28

5

4

3

6 7

2 8

9

10 11

Did You Know? You can carry forward employee quantity information (see Step 7 in this task). The quantity carry forward feature is useful for situations in which an employee’s pay is based on the number of hours worked in each pay period and an employee typically works the same number of hours in each pay period.

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 800-316-1365. For more information about the Complete Payroll feature, call 800-365-9621. You can also explore the various payroll options online at http://payroll.intuit.com.

3.

Assisted Payroll: from $59/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 $.99 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 starting in the fourth month (requires QuickBooks Online version)—If you use the QuickBooks Online Edition, 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.

You can choose from six options to meet your payroll needs. Select the option that provides the type of service you need and that fits your budget. 1.

2.

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. Enhanced Payroll: $199 in the first year for up to three employees, $249/year thereafter, $299 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.

Setting Up and Using Payroll Features

29

Set Up Employee Preferences 1

With the Payroll & Employees preferences window still open, click the Employee Defaults button to set up employee 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 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. 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.

30

1

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

7

10

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6

3

7

4

5

9

10

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 219 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.

2

Click the Employees tab.

3

Press Ctrl+N to open the New Employee window.

4

Make sure the Personal Info 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

1

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

31

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 if you are not yet ready to set up payroll information. Otherwise, click Set Up Now and continue to the next task.

3

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.

32

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 Payroll and Compensation Info.

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

7 6 8

Setting Up and Using Payroll Features

33

Setting Up Employee Payroll Taxes 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.

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.

6

Click the Taxes button.

7

Make sure the Federal tab is selected.

8

Make a selection 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 W-4 information.

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.

1

7

indicate whether the employee has requested extra tax withholdings on the W-4 form. options that apply to this employee.

34

4

2

10 In the Extra Withholding field,

11 Check all federal withholding

5

11

9

10

8

6

Set Up State and Local Payroll Tax Information 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.

2

1

4

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

35

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 34.

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

36

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.

7

1 2

3

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

37

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. 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. 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: ◆

38

Total wages paid, including salaries, hourly wages, overtime payments, bonuses, and any other earnings from employment.

◆

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.

◆

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.

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.

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

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.

3

Continued, next page 4

5

6 Setting Up and Using Payroll Features

39

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.

12 11

13

40

Using the QuickBooks Sales Rep Feature 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. 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).

Setting Up and Using Payroll Features

41

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 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

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 printing paychecks. 8

10

Setting Up and Using Payroll Features

43

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.

2

3

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.

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5

6

8

9

Click Open Paycheck Detail to display detailed information about the selected paycheck.

9

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.

Continued, next page 10

11

12

Setting Up and Using Payroll Features

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13

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.

14

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.

15

46

Using Timer Information with QuickBooks Payroll

1

To see how the Timer information appears in QuickBooks, examine an employee’s payroll record by first opening the Employee Center.

2

Click the Employees tab.

3

Click on the name of an employee who has used the Timer during any pay period.

4

Double-click one of the paychecks that appears in the transaction list to view the actual check.

5

Click the Paycheck Detail button.

6

Note that the hours from the Timer have been transferred to this employee’s payroll record.

7

Click the Close button (X) to close this and the Paycheck window.

If you use QuickBooks Pro or QuickBooks Premier, you have the option of using the QuickBooks Timer, a time-tracking program that comes bundled with the QuickBooks program. This program enables a business to allow employees and contractors to record time on their own computers and feed that time into the QuickBooks program where it is processed along with the payroll or contract payments. You’ll be happy to discover that employee time recorded with the Timer is easily transferred into the QuickBooks payroll system. 2

3

4

See Also See Chapter 9 for more information on using the QuickBooks Timer program. 5

Did You Know? QuickBooks has an online time tracker! QuickBooks has a web-based time tracking program. Employees and vendors enter time on the Web and the time is downloaded to time sheets in QuickBooks.

6

Setting Up and Using Payroll Features

7

47

Printing Paychecks

1

Usually the jobs 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!), these instructions will guide you.

When you’re ready to print checks, select File, Print Forms and then select Paychecks.

2

In the window that appears, verify the account from which the payroll is drawn.

3

Verify the starting check number for the paychecks.

4

Click Select All or check off each paycheck you want to print.

5

Click OK.

6

In the Print Checks window, verify the printer and the check form (and make sure you have loaded the check forms into your printer!).

7

Click Print.

2

3

5

48

4

6

7

Using Direct Deposit

1

After your company is set up to use a direct deposit service for paychecks, executing the directly deposited paychecks is a simple matter. 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 the employee’s bank information has already been set up as described in “How Does Direct Deposit Work?” on the next page.

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.

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.

8

Enter account number(s) and bank routing number(s).

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.

4

11

5

Did You Know? The choice for direct deposit is reverable. You can remove the direct deposit option by editing the employee information as described above, clicking the Direct Deposit button, and remove the direct deposit information.

10 Click OK to close the Direct Deposit

window. 11 Click OK to close the Edit Employee

window.

See Also See “How Does Direct Deposit Work?” on the next page for detailed information about setting up a direct deposit service.

Setting Up and Using Payroll Features

49

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 800-750-0477. 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

50

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.

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.

4

Drag the bottom scrollbar to the right to view payroll information for all your employees.

2

3

4

Setting Up and Using Payroll Features

51

View Year-to-Date Payroll Liabilities 1

Select Lists Payroll Item List.

2

Click the Reports button; then select Reports on All Payroll Items, Payroll Liability Balances.

3

Verify the dates you want the report to cover.

4

Double-click any amount to display another report showing the detail that makes up that amount.

2

3

See Also See the Basic Report Rules task in Chapter 18, “Preparing the Top Ten QuickBooks Reports,” for more information on printing paper copies of reports. 4

52

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, the creation of this form is easy.

Select Employees, Payroll Tax Forms & W-2s, Process Payroll Forms. 1

Select Payroll Tax Forms & W-2s, Process Payroll Forms from the Employees menu.

2 3

TIMESAVER You could also click the Process Payroll Forms icon on the Payroll tab in the Payroll Center. 2

Select the Federal Form option.

3

Click OK.

4

Select Quarterly Form 941/Schedule B.

5

Verify that the filing quarter is correct.

6

Verify that the date of the payroll quarter is correct.

7

Click OK.

8

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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6

Continued, next page

Setting Up and Using Payroll Features

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9 9

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. 12 Check the box if you are a seasonal

employer. 13 Click Next. 10

12

11

13

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14 Verify the number of employees on

your payroll 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 number are not correct, fix the problems in QuickBooks and then return to the 941 form to verify 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.

Continued, next page

16

17

Setting Up and Using Payroll Features

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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.

56

21

20

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.

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.

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.

2

3

4

Continued, next page

5

6

Setting Up and Using Payroll Features

57

8

On the 940 interview screen, check boxes to answer questions that apply to your company.

9

Click Next.

10 Check the boxes to answer the

questions at the top of the Form 940.

8

11 Scroll through the Form 940 and

verify that the calculations are correct.

9

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. 13 Click Next to view the filing

instructions.

10

14 Click the appropriate box to

perform one of the tasks described below. ◆

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.

58

13

15

14

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

Indicate the year for which you are preparing W-2 forms.

6

Choose whether you are preparing W-2s for All Employees or a partial, alphabetical list.

7

Click OK.

8

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. 12

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17 Click Print.

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Issuing W-3 Forms

1

Select Employees, Payroll Forms.

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.

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Click a checkbox to mark each employee who is to receive a W-2 form.

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Click Review/Edit. TIMESAVER Use the Mark All button to check everyone’s name at once.

8

IMPORTANT Remember, you need to have already prepared your W-2 forms to prepare an accurate W-3 form. 10 Click Print Forms (not shown). 11 Choose W-3, 1 per page. 12 Click Print.

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Setting Up Independent Contractors for 1099 Forms 1

QuickBooks gives you the mechanism for tracking amounts paid to independent contractors so you can produce the necessary 1099MISC form.

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 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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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 Yes to turn on your access to the QuickBooks 1099 features.

5

QuickBooks has listed 1099 payment thresholds based on federal regulations. If you want to change any of these amounts, do so in the white columns.

6

Click OK.

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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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 here to print the selected 1099 forms. Click Print when the Print 1099s window appears.

8

Click here 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 2008 must be reported by January 31, 2009 (Technically, February 2, 2009 since January 31 falls on a Saturday). 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 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.

What You’ll Do

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.

Display Lists on Forms

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.

Add Items

Set General Preferences Set Desktop View Preferences Sort Lists Add Accounts Use Account Numbers Add Customers Display Detailed Customer Information Add Vendors

3

Add Information “On-the-Fly” Move Items on a List Create Subitems

Edit Information on a List Hide Entries on Lists

Delete Entries on a List Merge Entries on a List Print Lists

Search for Transactions Generate a QuickReport Set Accounting Preferences

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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 appears 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 option 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.

6

If Beep When Recording a Transaction is checked, you’ll hear a “beep” sound every time you complete a transaction.

7

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 pop-up 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 if you didn’t want to see the messages again.

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10 If the pop-up sales pitch messages

are sounding a bit too familiar, turn them off completely by checking Turn Off Pop-Up Messages for Products and Services (or uncheck if you want to start seeing them again).

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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.

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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. 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

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 in the name of a particular vendor based on your collective previous entries.

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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Set Company General Preferences 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.

4

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 like 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 appear 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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4

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.

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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. The Home page has replaced the old QuickBooks Navigators. Selecting the box to Show coach window and features, will add these features to the Home page. Selecting the box, Show live community, will place the new help bar on the right of your screen.

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 most enjoy working with. When you choose a color scheme, only the colors change. The program works exactly the same with every color choice.

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 appears 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 appears to the left of the first column to return the list to the default sort order.

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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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,” later in this chapter).

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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 appears in the field.

4

Click an item on the list. The list closes and the item appears 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.

7

Press Enter to select the item. The list closes and the item appears in the appropriate field.

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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: With your cursor in the field you want to fill, press Ctrl+L. A separate list window appears.

9

Arrow down to the item you want.

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10 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 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 appears in the next screen is determined by the type of account you choose.

4

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 are 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 298 for information on the tax lines feature.

10

See Also See “Understanding the Opening Balance Equity Account” on page 364 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. When you add accounts, you can assign any number you want. Your account numbers can be up to seven characters long and can contain a combination of letters and numbers. 1

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TIMESAVER Or you can 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 7

Enter the account number for this account.

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Click Save & Close to save the new account number.

Did You Know? See Also See “Preparing a Trial Balance” on page 395 for information on displaying account numbers on reports.

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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 Customers

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.

Add Customers 1

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 dropdown menu (or press Ctrl+N).

3

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.

4

Clicking the Copy button enables you to quickly transfer address information from the Bill To address field to the Ship To field.

5

Click the Additional Info tab to progress to the next customer information screen.

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If you plan to track this information, enter the type of referral that led this customer to you.

7

Enter the terms you’ve made available to this customer. You can select Add New to add your own options to this and the other dropdown lists.

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See Also See “Creating Payment Terms” on page 249 for information on setting up payment terms for your customers. 8 8

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.

9

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.

10 Click the other tabs to enter

information such as credit limit, credit card number, status of job, and so on. 11 Click OK.

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Displaying Detailed Customer Information 1

Open a customer form, such as an invoice (press Ctrl+I).

2

Click in the Customer:Job field.

3

With your cursor in the Customer:Job field, press Ctrl+L to display your complete Customer:Job list.

4

Arrow or scroll down to select the particular customer whose information you want to view.

5

View the job information, contact information, and transaction history for the customer or job selected.

6

Click the Edit Notes button icon to retrieve or enter informational notes about this customer or related jobs.

When entering into a transaction with a customer, you might want to see detailed information about that customer, such as the amount the customer owes you, jobs in progress, informational notes, and pending estimates. This information is readily available and can be accessed while you fill out a customer’s form.

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7

Click OK (or press Esc) to close the Notepad window.

7

Did You Know? Create Reminders. Click the New To Do button in the Notepad window to make an entry that gets entered in your Reminders list. More information about using the QuickBooks reminders feature can be found in Chapter 7, “Using Time-Saving Features.” 8 8

Click the customer name and then click the QuickReport button to view the details of transactions relating to this customer.

9

Press Esc to close the QuickReport.

10 Alternatively, click the Show drop-

down list to select from a variety of transaction displays. 11 Depending on the option you

choose in Step 10, there are filtering options available to you for customizing the data. 12 Customize the time period to zero

10

in on exactly the results you want. 13 Right-click one of the jobs for this

customer and select Show Estimates to see a report of the estimates for that particular job.

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14 Double-click any estimate to see

the actual estimate form. 15 Press Esc to close each of the

windows you displayed. 16 Click the Transactions tab in the

Customer Center to view a list of transactions for all customers. 17 Choose the type of transaction you

want to view. 18 Click the Filter By drop-down

arrow to choose whether you want to see all of the transactions for the type you chose, or particular transactions. For example, you can choose to filter the list by All Estimates or Open Estimates.

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19 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 to open the New Vendor window.

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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.

3

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.

4

Enter the vendor’s legal name in the Company Name field. This is the name that appears on forms you prepare for this vendor.

5

Enter the name of a personal contact, if applicable, and the mailing address of the vendor.

6

Enter other pertinent information that you want to save.

7

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.

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See Also See “Understanding the Opening Balance Equity Account” on page 364 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.

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 appears 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 OK to complete the entries for this vendor.

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See Also See “Issuing 1099 Forms” on page 66 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.

An item is a description that appears 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. 2

Select the type of item from the Type drop-down list. Your item type must be selected from one of the 10 categories offered in this list. Inventory Part has been selected in this example. Your screen might differ if you select a different item type. IMPORTANT Be careful when selecting an item type. Most item types are permanent choices and cannot be changed after they’ve been selected.

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Enter a name by which you will identify this item when you enter the item on purchase and sales forms.

4

If the item is to be a subitem of another item, check the Subitem Of box and enter the parent item.

5

Enter the description you use for this item on purchase forms such as purchase orders and bills.

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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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Enter the account to which you will charge the expense for this item in the COGS Account field.

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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. If you are creating an inventory 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.

10 If you are entering an inventory

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. 11 Enter the description of the item as

it appears on an invoice. 12 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. 13 Indicate whether the item is

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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 allow 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.

taxable in the Tax Code field. 14 Enter the account to which income

from the item’s sale is credited in the Income Account field. 15 Click OK. Adding or Changing Information After the Interview Is Completed

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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: ◆ ◆

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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Service—Labor charges and professional fees.

Noninventory part—Products you sell but do not normally keep in stock or products you do not purchase (such as livestock that you raised or food dishes that you prepared). 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 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 provides an Inventory Assembly item for grouping parts into kits or preassembled parts.

Using Items on Forms An item is a description that appears on your purchase and sales forms. An amount is associated with the item, and QuickBooks uses the amount to perform calculations on your forms. 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. You’ll find all the items listed in the QuickBooks Lists menu. Customers, vendors, invoices, purchase orders, and accounts are not items. Items are services or products you sell or buy and the charges related to those services or products. 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.

To create your invoice, press Ctrl+I and enter the customer information. Click in the Item column and then click the drop-down arrow that appears. 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 appears. 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 appears 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

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 appears 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.

Open an invoice by selecting Create Invoices from the Customers menu. 2

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 appears.

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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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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.

6

Did You Know? Use Add New. Another way to initiate adding a piece of information on-the-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.

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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Creating Subitems

1

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.

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 appears 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 appears 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 appears.

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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Using Notes to Enter Customer and Job Information QuickBooks provides a Notes feature on the Customer:Job list. To use this feature, follow these instructions: 1.

Click the Customer Center button on the toolbar to the open the Customer Center.

2.

Click on the name of a customer for whom you want to use the notes feature.

3.

Click the Edit Notes button.

4.

In the window that appears, click the Date Stamp button to enter today’s date in the Notepad.

5.

Enter the notes you want to save in the white text area.

6.

Click New To Do to enter information for reminders.

7.

Click OK to close the Notepad.

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Hiding Entries on Lists

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 appears 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.

Hide a List Entry 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 hide.

3

Right-click on the vendor name, and then select Make Vendor Inactive. 3

Did You Know? At the top of the Vendors 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 appears at the bottom of these lists.

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Change the Hidden Status of List Entries 1

1

Hiding information on a list is not a permanent situation. Display hidden entries by checking the Include Inactive box that appears in some lists, or choose to display the entire list as I have done here by selecting All Vendors.

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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. 2

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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. 1

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

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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.

3

Click the Account button at the bottom of the dialog box, then select Delete Account from the drop-down menu. On a list that appears in one of the Centers, right-click on the list entry you want to delete, then choose Delete from the pop-up menu.

4

Click OK when the Delete Account window appears.

5

Click Cancel if you change your mind and want to keep the account.

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TIMESAVER There’s a shortcut for deleting list entries. Select the entry you want to delete, and then press Ctrl+D. 4

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Merging Entries on a List

1

Open a list. This example uses the Customer List.

2

Click the customer name you want to remove from the list but can’t because it has been used before.

3

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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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 appears 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 Redland Farms, but when you originally set up the customer, you entered the name as Redling Farms and used that name on an invoice form. Create a new customer named Redland Farms, and then merge Redling Farms into Redland Farms. All activity of Redling Farms is now part of Redland Farms, and Redling Farms no longer exists in your records. If you open the invoice that was prepared for Redling Farms, you will now see that the customer name has been changed to Redland Farms.

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When the Edit Customer window appears, 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.

7

Click Yes if presented with an alert telling you that this change will affect closed periods and previous financial reports.

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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.

2

To print a simple copy of the list, without adding any formatting, press Ctrl+P.

3

In the Print Lists window that appears, click the Print button to print the list.

4

Alternatively, click the Reports button at the bottom of the list to see a selection of reports you can produce and print.

5

Depending on the list you opened, the choices vary. Select the list you want to print.

6

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.

7

To print a list that opens in one of the centers, such as the Customer:Job List, open the Center, then click the Print button that appears at the top of the list. Choose from the menu options that appear.

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Searching for Transactions 1

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.

Select Lists, Chart of Accounts to open the Chart of Accounts (or press Ctrl+A).

2

Double-click the name of the cash account you use for your payments and deposits. The account register appears.

3

Click the Go To button.

4

Click the arrow next to Which Field to display a list of field choices.

5

Click the field in which you want to conduct your search.

6

In the Search For area, enter the payee name, account name, or amount for which you are searching.

7

Click Back to search backward in the register, or click Next to search forward.

8

Continue clicking Back or Next until you find the transaction you want.

9

Click Cancel when you’re ready to close the Go To window.

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10 Double-click the register

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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Generating a QuickReport 1

Open a list. For this example, use Ctrl+A to open the Chart of Accounts.

2

Click any account or any entry on the list you displayed.

3

Click the Reports menu button at the bottom of the list window.

4

Click QuickReport, the first choice on the Reports menu.

Every list that opens in a separate window includes an option to produce a QuickReport. Select any entry on the list and request a QuickReport, and you will see all the transactions that relate to that entry.

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TIMESAVER Click any list item and then press Ctrl+Q to quickly display a QuickReport. 5

The Centers provide a QuickReport button for their lists. In a Center, click on the customer, vendor, or employee for whom you want to see a QuickReport.

6

Click the QuickReport button.

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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 can display subaccounts independent of their parents on reports.

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 the opportunity to turn on or off the account numbering feature and the opportunity to use other important features such as class tracking and automatically assigning numbers to journal entries. There’s also an option here to require users to enter account numbers on QuickBooks forms.

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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 245 for information about creating and using the QuickBooks Class feature.

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6

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.

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10 Click Set Date/Password to set up

a closing date and password protection for entries that occurred before your closing date. 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. 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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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 Sales and Customers Preferences Create an Invoice Preview Invoices Print a Single Invoice

You need a vehicle whereby you can 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.

Print a Batch of 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.

Create a Monthly Statement

You need to have the mechanism in place for recording amounts you deposit in your bank account.

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In this day and age, you need to be able to email an invoice to 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.

Email an Invoice Charge Expenses to a Customer Set Finance Charge Preferences Set Send Forms Preferences

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Track Accounts Receivable Receive Payments for Invoices Issue a Credit or Refund Receive Cash

Make Bank Deposits

Receive Advances, Retainers, and Down Payments Issue Discounts

View the Open Invoices Report Create a Collection Letter Record Bad Debts

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Setting Sales and Customers Preferences

1

Select Edit, Preferences.

2

Click the Sales & Customers icon.

3

Click the Company Preferences tab.

4

Indicate the most common shipping method that your company uses in the Usual Shipping Method field.

5

Indicate the status that applies to your sales in the Usual FOB field.

6

Check the Warn About Duplicate Invoice Numbers checkbox if you want to receive a warning when you are about to issue an invoice with a number that duplicates another invoice.

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.

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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.

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10

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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10 Check Enable Sales Orders if you

want to use the sales orders feature in QuickBooks. If you check this box, then 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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11 Choose the template you prefer to

use for invoice packing slips. 13 12 If you have enabled sales orders,

choose the templates you prefer to use for sales order packing slips and sales order pick lists. 13 Check Automatically Apply

Payments if you want QuickBooks to apply customer payments to outstanding invoices.

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15

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.

14 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. 15 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. 16 Click OK.

See Also See the various tasks about customizing forms in Chapter 10, “QuickBooks Tips and Tricks,” for information on creating your own forms that can be used as templates.

Invoicing and Collecting Income

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Accounting for Sales 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 customer is to pay you in the future, your company’s accounts receivable account is also increased by the amount of the invoice. Alternatively, if you receive cash at the time of the sale, the undeposited funds account is increased. 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: Sample invoice: Amount of sale 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

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Credit

105.00 5.00 100.00

Creating an Invoice

1

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.

2

Select a customer and, if applicable, a job from the Customer:Job drop-down list.

3

Verify that the date is correct, making any necessary changes.

4

Click the Template drop-down menu if you want to choose a different style of invoice.

5

Enter the terms that apply to this customer.

6

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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TIMESAVER You can also click the Invoices icon on the Home page, or press Ctrl+I to start a new invoice.

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Check To Be Printed or To Be E-mailed. Otherwise, the invoice will be added to the queue to print later.

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Select a save option.

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Types of Invoices 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 appears 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. Depending on the version of QuickBooks you use, there is a variety of standard invoice forms from which you can choose. The following four types of invoices are available in all versions of QuickBooks:

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Professional invoice—Includes the following fields: Terms, Item, Description, Quantity, Rate, and Amount (Tax and Units of Measure fields also might appear, depending on the preferences you have selected.)

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Service invoice—Includes the following fields: P.O. Number, Terms, Item, Quantity, Description, Rate, and Amount (Tax and Units of Measure fields also might appear, depending on the preferences you have selected.)

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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 (Tax and Units of Measure fields also might appear, depending on the preferences you have selected.)

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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.

Previewing Invoices 1

Prepare an invoice.

2

Click the arrow next to the Print button on the invoice form toolbar.

3

Select Preview.

The onscreen preview feature is useful because it allows you to familiarize yourself with what information prints on the invoice, where it prints, and what information is just for display onscreen.

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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.

4

Examine the preview screen for any errors or changes you want to make prior to printing.

5

Click Close to close the preview and return to the invoice screen.

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See Also See “Prepare an Invoice for Selected Items” in Chapter 8, “Job Cost Estimating and Tracking,” and “Charging Expenses to a Customer” later in this chapter for additional examples of information that does not appear on invoices.

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Invoice Dates The date you enter on your invoice is significant because a variety of calculations results 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 appears 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.

See Also See the following related topics for more information on coordinating the invoice date with various QuickBooks functions: ◆ “Setting Finance Charge Preferences,” page 122 ◆ “Creating Payment Terms,” page 249 in Chapter 10 ◆ “Preparing an Accounts Receivable Aging Summary Report,” page 403 in Chapter 18, “Preparing the Top Ten

QuickBooks Reports” ◆ “Creating a Monthly Statement,” page 123

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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.

Printing a Single Invoice 1

Prepare an invoice.

2

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.

3

To print this invoice now, click the drop-down arrow next to the Print button on the invoice form toolbar.

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TIMESAVER You can also press Ctrl+P to print the invoice. 4

Select Print to print the invoice.

5

Click Print in the Print One Invoice dialog box that appears.

6

Save your invoice.

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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Printing a Batch of Invoices 1

Select File, Print Forms and then select Invoices.

2

Check each invoice you want to print at this time.

Sometimes it’s easier to print several invoices at once, particularly if you have to change the paper you use in your printer. You can save your invoices with instructions to print later, and then follow these instructions to print all the forms at once.

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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 on this window. Instead, 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.

4

Click the Print button in the Print Invoices dialog box.

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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.

Indicate Email Status on an Invoice 1

Create an invoice, or open an invoice form already created but not yet printed.

2

Check the To Be E-mailed box to initiate email delivery.

3

Save the invoice.

4

If the customer’s email address was not entered previously, you are prompted to enter it now.

5

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.

2

Click the drop-down arrow next to the Send button.

3

Select E-mail Invoice.

4

Verify that the information in the cover letter is correct.

5

Make changes or additions to the cover letter if necessary.

6

Click the Send Now button.

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Send a Batch of Email Invoices 1

Select File, Send Forms.

2

Click in the first column to check off each form you want to send. Checkmarks appear to the left of each selected form.

3

Double-click any form to display a preview of the accompanying cover letter.

4

Click Send Now.

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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. 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.

2

Click here to uncheck the box and thereby prevent the charge to the customer.

3

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 (see next page), this amount appears 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 appears 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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Place Expenses on a Customer Invoice 1

Open an invoice form and enter the customer information.

2

If this pop-up dialog box appears, 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.

4

Click the Expenses tab.

5

Enter the markup amount or percentage, if applicable.

6

Verify the account to which the markup should be recorded, if applicable.

7

Check any item you want to include on this invoice.

8

Indicate whether the expenses are taxable to the customer.

9

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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10 Click OK. 11 Complete the invoice and save it. 10 9 8

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Setting Finance Charge Preferences

1

Select Edit, Preferences.

2

Click the Finance Charge icon.

3

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.

5

Indicate in the Minimum Finance Charge field the amount, if any, that your company assesses on late payments.

6

Enter the number of days in the Grace Period (days) field allowed before finance charges are assessed.

7

Choose from the Finance Charge Account drop-down list the account you use to track finance charges.

8

Check Assess Finance Charges on Overdue Finance Charges if you add previous finance charges to the balance when computing additional finance charges.

9

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 generates invoices and places them in your print queue. 11 Click OK.

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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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Creating a Monthly Statement 1

It’s not unusual to have some customers who don’t pay their bills 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.

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TIMESAVER Clicking the Statements icon on the Home page also opens the Create Statements dialog. 2

Indicate the date that will appear on the statement.

3

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.

4

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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These options are only available to users of QuickBooks Pro, Premier, and Enterprise Solutions.

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.

See Also See “Invoice Dates” on page 114 for more information on coordinating the invoice date and due date with monthly statements.

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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.

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Select a template to use for the statements from the Template drop-down list.

7

Choose between creating one statement per customer or one statement per job.

8

Check Show Invoice Item Details on Statements to provide detailed information from the invoice(s) on the statement.

9

Choose to sort statements by billing address zip code.

10 Check options under the Do Not

Create Statements heading to customize the selection of which customers receive statements. 11 Click Print or E-mail.

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Setting Send Forms Preferences 1

Select Edit, Preferences.

2

Click the Send Forms icon.

3

Click the Company Preferences tab.

4

Select the form for which you are creating a default cover letter. For this example, the Invoices form has been selected.

5

Select a salutation.

6

Select the style you want to use for names.

7

Type the text of your default letter.

8

Click Spelling to check the spelling in your letter.

9

Repeat Steps 4-8 for each type of form.

You can create default cover notes that accompany your invoices, estimates, statements, purchase orders, and any other forms you send by email. This timesaver will give all your emailed business forms a professional look, and you can still edit the message before it is sent if you want to personalize the note.

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10 Click OK.

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 of your letters are saved at once when you click the OK button.

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Tracking Accounts Receivable

1

Select Reports, Customers & Receivables, or click the Customers & Receivables option in the Report Center.

2

Select A/R Aging Summary to see a list of customers and the amounts owed by them.

3

Select A/R Aging Detail to see every invoice that is overdue.

4

Double-click any amount on the report to see the actual invoice form.

5

Press Esc to close the reports.

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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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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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. 7

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TIMESAVER Click the Receive Payments icon on the Home page to go immediately to the Receive Payments dialog box. 2

Enter the customer’s name in the Received From field.

3

Enter the amount received.

4

Confirm the date on which the payment was received.

5

Enter the payment method.

6

Enter the check number or other applicable reference number.

7

Verify that the amounts are applied appropriately to the outstanding invoices by checking the invoices in order of how the payment will be applied.

8

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.

9

Click a save option.

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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.

Issuing a Credit or Refund 1

Select Customers, Create Credit Memos/Refunds, or click the Refunds & Credits icon on the Home page.

2

Enter the customer’s name and, if applicable, the job to which this credit or refund relates in the Customer:Job field.

3

Verify that the date is correct.

4

Enter the item for which the credit or refund is being issued.

5

Describe the reason for the credit or refund.

6

Enter the quantity, and, if applicable, the rate.

7

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.

10 If the Available Credit window

appears, 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. 11 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.

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 like Cash Customer or simply Customer and still record your sales properly in QuickBooks.

Receiving Cash

1

Select Customers, Enter Sales Receipts, or click the Create Sales Receipts icon on the Home page.

2

Enter a generic name for the cash customer in the Customer:Job field.

3

Select Quick Add to add this name to your customer list if the name has not been used previously.

4

Verify the date of the sale.

5

Enter the item(s) sold.

6

Enter the quantity and rate.

7

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.

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Making Bank Deposits

1

Select Banking, Make Deposits, or click the Record Deposits icon on the Home page.

2

Change the payment type if you want to view a particular type of payment (such as only cash or only MasterCard and Visa).

3

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.

4

Click OK.

5

Verify the account to which the money will be deposited.

6

Verify the date of the deposit.

7

Verify all deposit information.

8

If you intend to take cash back from the deposit, enter the account that the money should be assigned to.

9

Enter an optional memo regarding the cash back.

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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10 Enter the amount of the cash back. 11 Click the Print button if you want to

print a deposit slip or a summary of the deposit. 12 Choose which documents you

want to print. 13 Click the OK button.

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14 Save the deposit.

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Receiving Advances, Retainers, and Down Payments

1

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.

Select Banking, Make Deposits. IMPORTANT If the Payments to Deposit window appears, ignore that window at this time by clicking the X in the upper-right corner to close the window.

2

Indicate the account into which this money will be deposited.

3

Enter the date of the deposit.

4

Enter the name of the customer and, if applicable, the job related to this deposit.

5

Enter the account in which the deposit will be recorded. Typically this is a current liability account, not an income account.

6

Enter an optional memo.

7

Enter optional information about the method of payment.

8

Enter the amount of the deposit.

9

Click Print to print a deposit slip or deposit summary.

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10 Save the deposit.

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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.

2

Enter the relevant customer information and a description of the items this customer is purchasing.

3

Enter a Discount item in the Item section.

4

Add a description of the discount, or revise the description that appears.

5

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.

6

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

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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.

2

Enter the customer’s name.

3

Verify the date on which the payment is received.

4

Enter the amount received.

5

Click the invoice to which you want to apply a discount.

6

Click Discount & Credits to open the Discount & Credits window.

Continued, next page

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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 appears on this form.

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7

Confirm the discount amount as computed by QuickBooks, and make any necessary changes.

8

Verify the account to which the discount will be charged.

9

Click Done.

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10 Check off the invoice(s) being paid. 8

11 Note that the discount has been

applied. 12 Save the customer payment

screen.

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Did You Know? A discount date appears 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 appears in the Disc. Date column in the Receive Payments window.

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Viewing the Open Invoices Report 1

Select Reports, Customers & Receivables, then select Open Invoices from the side menu.

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.

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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. 2

Click the down arrow if you want to select a different method of sorting the report.

3

Click Print to print a paper copy of the report.

4

Double-click any amount to see the actual invoice.

5

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

1

Select Company, Prepare Letters with Envelopes; then select the type of letter you want to create. For this example, a collection letter is selected.

2

Select from the various options to determine who will receive this letter.

3

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.

5

The list that appears 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.

6

Click Next.

7

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.

10 Click Next. A Microsoft Word

document containing all the letters will open. 11 Scroll through the letters to make

sure they read the way you want them to. If necessary, you can add information to any letter. 12 Select File, Print from the Word

menu bar. 13 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 appears, click OK to print the envelopes.

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14 If you don’t want to print

envelopes, click Cancel. 15 In QuickBooks, click Finish to

close the Letters and Envelopes window.

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Recording Bad Debts

1

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.

Select Customers, Receive Payments, or click the Receive Payments icon on the QuickBooks Home page.

2

Enter the name of the customer and job, if applicable, for whom you will record a bad debt.

3

Leave the amount set to zero.

4

Click to place a checkmark to the left of an uncollectible invoice.

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Did You Know? 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 appears. 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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Click OK in the warning box.

6

Click the Discounts & Credits button.

7

Enter as a discount the amount of the uncollectible debt.

5

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. 8

9

If necessary, change the discount account field to reflect the account where you record bad debt expenses.

6

Click the Done button.

10 Save the Receive Payments

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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.

What You’ll Do

QuickBooks provides an option to use purchase order forms to record the items you have ordered so you can predict what bills are pending. 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.

View Unpaid Bills Reports

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.

Set Purchases and Vendors Preferences Use Purchase Orders View Items on Purchase Orders View Vendor Information Receive Goods Receive a Partial Order Pay Bills Take Discounts Use the Check Register

5 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 records 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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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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In the Unit of Measure dialog box, choose between Single U/M Per Item or Multiple U/M Per Item.

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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). 10

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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 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.

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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 whatever timeframe is standard for your company.

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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Using Purchase Orders

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 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.

Order Items on a Purchase Order 1

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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 88 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 appears in the Rate column, or enter a price if no price appears. 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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Viewing Items on Purchase Orders

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Click the Vendor Center icon on the Navigation 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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Viewing Vendor Information

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Click the Vendor Center icon on the Navigation bar or Home page. The Vendor Center appears.

2

Click the Vendors tab.

3

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 order activities from this screen, such as recording the receipt of items and bills, payment of bills, and preparation of reports.

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Receiving Goods

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Select Vendors, Receive Items. TIMESAVER Clicking the Receive Inventory icon on the Home page, then choosing Receive Inventory Without (or With) Bill, also opens the Create Item Receipts window.

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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.

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.

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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.

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10 Verify the total amount due on the

bill. 11 Click Show PO if you need to view

the purchase order.

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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.

2

Enter the vendor name in the space provided.

3

In the window that appears, 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 appears 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 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.

4

Scroll through the report to view amounts due to each vendor.

5

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

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 see the original bill.

See Also See Chapter 18, “Preparing The Top Ten QuickBooks Reports,” page 387, for detailed explanations about printing, customizing, and memorizing your QuickBooks reports.

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Paying Bills

1

Select Vendors, Pay Bills, or click the Pay Bills icon on the Home page.

2

Set the due date for bills you want to view, or click Show All Bills to show all outstanding bills.

3

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.

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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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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Verify that the bank account shown in the Account field is the one upon which checks are drawn.

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Indicate the date on which checks are written in the Date field.

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Click Pay Selected Bills to complete the bill payment.

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Taking Discounts

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Choose Vendor, Pay Bills, or click the Pay Bills button on the Home page.

2

Make sure the Show All Bills option is selected.

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Check off bills for payment.

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 describe 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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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.

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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 appears in the Discount & Credit Information section of the window.

6

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.

2

Double-click your checking account to open the register.

3

Scroll to view existing transactions.

4

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.

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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.

See Also See “Tracking Petty Cash” on page 354 if you have a need to record customer payments made with cash.

See Also See “Making Online Payments” on page 284 for information on using online banking for making payments.

See Also See “Voiding Checks” on page 167 for more information on voiding checks.

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Editing Bill Payments

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Press Ctrl+A to open the Chart of Accounts.

2

Double-click the checking account you used to pay the bill. The account register appears.

3

Find the check that was used to pay the bill.

QuickBooks is a forgiving 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, 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 103 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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Save the transaction.

Continued, next page

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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. 7

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 rest of

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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 1

Press Ctrl+A to open the Chart of Accounts.

2

Double-click the checking account you used to pay the bill. The account register appears.

3

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 appears.

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 167 for information on voiding checks as an alternative to deleting payments.

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Setting Checking Preferences

1

Select Edit, Preferences and click the Checking icon.

2

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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When the Autofill feature is checked, QuickBooks will fill in the account number of any vendor or customer you enter on a form.

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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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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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used for payroll and payroll tax liabilities. 11 Click OK.

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Writing Checks

1

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 check for that payment. 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.

See Also See “Making Online Payments” on page 284 for information on making payments over the Internet. 6 9

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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 appears, 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

1

Select File, Print Forms, Checks.

2

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.

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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IMPORTANT Place the check forms in printer. Before continuing, be sure to place your actual check forms in the printer. 5

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Check the Collate box if you want your printed checks collated.

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QuickBooks print your company name, address, and logo 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.

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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 appears 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 appears in the memo area.

10 Click the Record button.

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Void a Check from a Previous Year 1

Select Company, Make General Journal Entries.

2

Enter today’s date (or the date on which the check became void).

3

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 appears 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

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 you understand

this change could affect previous financial statements.

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See Also See “Closing Financial Records at Year-End” on page 326 for information on setting a year-end close date and making changes after that date has passed.

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Creating Purchase Reports

1

Select Reports, Purchases.

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Choose from a variety of report types that appear on the side menu. ◆

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QuickBooks provides a variety of reports that enable you to see how much you’ve spent, what you’ve spent your money on, and which items are on order from which vendors. You can request reports grouped by vendors, items, or jobs. You can also view summary reports that provide total amounts, or you can request detailed reports that show every item and every transaction. You can view the reports onscreen or choose to print paper copies of the reports.

Purchases by Vendor Summary shows your company’s total purchases from each vendor.

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Purchases by Vendor Detail shows each purchase made, grouped by vendor.

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Purchases by Item Summary shows how many of each item your company has purchased and how much has been spent on those items.

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Purchases by Item Detail shows the separate purchases of each item, including how many pieces were purchased in each transaction and what those pieces cost.

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Open Purchase Orders shows all of your company’s purchase orders that have yet to be filled, including the name of the vendor, the date of the purchase order, the amount of the order, and the expected delivery date.

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Open Purchase Orders by Job shows all of your company’s outstanding purchase orders, grouped by job.

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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 appears as a separate item on your invoice forms, you must set up a Sales Tax Item in QuickBooks to accommodate the presence of the tax on forms. After you’ve set up an item, the tax flows onto 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 Produce Monthly Sales Tax Reports Pay Sales Tax Take a Discount for Early Payment

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Setting Sales Tax Preferences

1

Select Edit, Preferences to open the Preferences window.

2

Click the Sales Tax icon.

3

Click the Company Preferences tab.

4

Select Yes to indicate that your company charges sales tax.

5

Click Add Sales Tax Item to set up a new sales tax item (see next task).

6

Indicate the name of the sales tax item you most frequently charge to customers.

7

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. Indicate when you actually owe sales tax.

10 Select the frequency of your sales

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.

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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 taxing 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.

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.

See Also See “Adding Vendors” on page 86 for information on entering detailed information about new vendors.

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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

1

Select Lists, Item List from the menu.

2

Press Ctrl+N to create a new item.

3

Select Sales Tax Group as the item type.

4

Enter a name for the sales tax group.

5

Enter an optional description for the group.

6

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 appears 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 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

1

Open an invoice (press Ctrl+I).

2

Enter the customer name and the item(s) you plan to sell.

3

Verify that the correct tax appears 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 nontaxable 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.

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Save the invoice. 3

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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

1

Select Lists, Item List from the menu.

2

Click an item for which you want to identify the tax status.

3

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 appears 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 appears 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 appears.

3

Change the Tax Code to Non to indicate that this is a non-taxable item.

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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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Selling Items to TaxExempt Customers

1

Click the Customer Center button on the Home page icon bar.

2

Click the Customers & Jobs tab.

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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 tell you they are exempt. QuickBooks provides a place where you can enter this number. Then when you issue an invoice to that customer, tax is not charged. You don’t have to make any changes on the invoice because the process of not taxing particular customers becomes automatic.

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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.

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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. 5

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Did You Know? The Job Info tab might not appear in your Edit Customer window. You’ll notice that the sample screen on this page does not include a Job Info tab. The Job Info tab appears in the Edit Customer window only when there are no specific jobs set up for the particular customer. If you have added individual jobs for this customer, the Job Info tab appears in the Edit Job window for each job. When you’ve already set up jobs, there is no need for a Job Info tab to appear in the main customer window.

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Producing Monthly Sales Tax Reports 1

Open the Vendors menu and select Sales Tax.

2

Select Sales Tax Liability from the side menu.

3

Change the dates to reflect the time period that is covered by your current sales tax bill.

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Click the Print button if you need to print the report.

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Close the report.

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.

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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. Once 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. 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 whom you pay tax. You can use this information to fill out the necessary tax form(s).

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Paying Sales Tax

1

Open the Vendors menu and select Sales Tax.

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Select Pay Sales Tax from the side menu.

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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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Open the Vendors menu and select Sales Tax.

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Select Adjust Sales Tax Due from the side menu.

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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.

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; then when you’re ready to pay the tax, the correct amount appears.

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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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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

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.

What You’ll Do

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.

Set Reminders Preferences

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 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.

Memorize Transactions Memorize a Group of Transactions Use Memorized Transactions Schedule Recurring Transactions Change Memorized and Scheduled Transactions Remove Memorized Transactions Use Reminders

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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.

Memorizing Transactions

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Select Vendors, Create Purchase Orders.

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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 of 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.

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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.

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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.

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Click OK to save the group assignment you have made for this transaction.

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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.

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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.

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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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Memorized transactions aren’t written in stone. You can open a memorized transaction and then make changes to the information that appears before you execute the transaction.

See Also See “Using Reminders” on page 198 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

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.

Create a Recurring Transaction 1

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.

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Select Automatically Enter.

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Leave the window open in order to perform the steps in the next task.

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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 360 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 lawncare 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 the Frequency of Recurrence 1

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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.

3

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.

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In the Days in Advance To Enter of the due date field, choose when you want this transaction to be executed.

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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: ◆

Pay monthly bills, including utilities, telephone, rent or mortgage, credit cards, loan payments, and contractor fees.

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Create purchase orders for vendors with whom you place orders on a regular basis.

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Prepare journal entries for recurring transactions, such as depreciation and amortization expense.

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Create cash receipt forms for fees your company receives on a regular basis.

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Pay quarterly income taxes.

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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: 1. Open the form or check you want to add to the Icon Bar.

4. Enter a label for the transaction. This is the text that appears beneath the button on the Icon Bar.

2. Select Add [“active window”] to Icon Bar from the View menu. (Note: The Icon Bar must be displayed in order to execute this step. If the Icon Bar is not displayed, choose View, Icon Bar, and then you can complete this step.)

5. Enter a description for the transaction. This is the text that appears briefly when you pass your mouse over the button on the Icon Bar. 6. Click OK. The icon for your transaction becomes a permanent part of your Icon Bar.

3. In the Add Window to Icon Bar dialog box that appears, scroll through the list 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, “Preparing the Top Ten QuickBooks Reports,” for more information about creating, customizing, and memorizing reports. 4

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Changing Memorized and Scheduled Transactions 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.

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.

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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.

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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 you can even be reminded of 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 contains 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 over the other versions on the market.

What You’ll Do

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.

Use the Job Type Feature

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.

Set Jobs and Estimate Preferences Set Up a Job Use the Job Status Feature Use the Job Dates Feature Use the Job Description Feature Create an Estimate Invoice Against an Estimate Revise Estimates Create a Work in Progress Report

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Setting Jobs and Estimate Preferences

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Select Edit, Preferences.

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Click the Jobs & Estimates icon on the left side of the Preferences window.

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Click the Company Preferences tab. (The My Preferences tab has no options for Jobs & Estimates.)

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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.

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Click Yes to turn on the estimates feature.

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Click Yes to turn on the progress invoicing feature.

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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.

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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 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. 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. Partial completion of a job, invoiced to a customer for $500, is recorded like this when you issue the invoice: Debit Accounts Receivable

Credit

$500.00

Revenue

$500.00

Job Cost Estimating 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 profit you expect to earn on the job

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How long the job will take to complete

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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

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. 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

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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 Job Cost Estimating and Tracking

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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 on the Customer Center icon (or choose Customers, Customer Center), then clicking the Customers & Jobs tab.

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Click the name of the customer to whom this job relates.

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Right-click on the customer name, then choose Add Job from the pop-up menu.

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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.

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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.

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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.

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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 gives you a warning.

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Enter Specific Job Information

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Click the Job Info tab to enter more information relating to the job.

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Choose an option from Job Status if you track this information.

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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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Using the Job Status Feature

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. You know when each job started or is scheduled to start, how far along it is, and when it is expected to be completed. But for those companies with many balls in the air, QuickBooks provides a job status feature you can use to keep track of how close to completion each job is.

Set Up the Job Status Feature 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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Did You Know? You can change the job status descriptions. QuickBooks provides five standard options for tracking a job status: Pending, Awarded, In Progress, Closed, and Not Awarded. If these descriptions don’t work well for your company, simply enter new descriptions on the Jobs & Estimates preferences screen. For example, a law firm might find descriptions like these more useful: Initial Meeting, Research, Discovery, Litigation, Appeal.

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Use the Job Status Feature 1

Display the Customers & Jobs list by clicking on the Customer Center icon, 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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Click OK.

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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

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Display the Customers & Jobs list by clicking on the Customer Center icon, 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 job types. 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.

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. 1

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Using the Job Dates Feature 1

Display the Customers & Jobs list by clicking on the Customer Center icon, 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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Enter or update the dates for this job.

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Click OK.

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.

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Using the Job Description Feature 1

Display the Customers & Jobs list by clicking on the Customer Center icon, 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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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.

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.

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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.

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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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Creating an Estimate

1

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.)

Select Customers, Create Estimates. TIMESAVER You can also open the Create Estimates window by clicking the Estimates icon on the Home page. Or, you can click the New Transactions option at the top of the Customer Center and choose 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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Invoicing Against an Estimate

Prepare an Invoice for 100% of the 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 appears as soon as you attempt to tab or click in another field on the invoice.

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Click the estimate against which you want to invoice.

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Click OK.

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. With progress invoicing, you invoice the customer as the job progresses as opposed to waiting to invoice when the entire job is completed. Note that progress invoicing is not available in the Simple Start version of QuickBooks.

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Did You Know? Progress invoicing must be turned on. To use the progress invoicing feature described in this task, you need to turn on progress invoicing in the preferences. See the first task of this chapter for information on how to do this. 3

Did You Know? Estimate amounts do not affect your financial statements. Unlike the act of entering an invoice in QuickBooks, the creation of an estimate does not affect your company’s balance sheet or income statement.

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Select the option to Create Invoice for the Entire Estimate (100%).

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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 a Percentage of the Estimate 1

Follow Steps 1–4 from the previous example.

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Select the option to Create Invoice for a Percentage of the Entire Estimate.

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Indicate the percent to be used on the invoice.

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Click OK. All the information from the estimate is transferred to the invoice, and the percent you chose is applied.

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Verify that all the amounts on the invoice are correct, making 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 two examples.

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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 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.

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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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Revising Estimates

1

Select Reports, Jobs, Time & Mileage, Estimates by Job.

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Double-click the estimate you need to change.

Plans can change, and when that happens, QuickBooks is ready to change with you. If you create an estimate for a customer and then find the job requirements have changed, the price of materials has gone up, it won’t take as long as you had predicted to do the work, or any other change has occurred, you can easily revise your estimate to keep up with the changes.

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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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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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Creating a Work in Progress Report

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, the amount that has been invoiced so far, and the percent that has been invoiced. You can customize this report to show only the information in which you are interested.

Display a Work in Progress Report 1

Select Reports, Jobs, Time & Mileage, Job Progress Invoices vs. Estimates.

2

Click the Modify Report button.

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Click to place a check before each column you want to include on the report.

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Click to uncheck any columns you don’t need to see.

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Click to select the order— ascending or descending—in which you want to see information displayed.

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Click OK to display the revised report.

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Filter a Report to Include Only Certain Criteria 1

Complete Steps 1 and 2 in the previous example.

2

Click the Filters tab.

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Select a filter that will be used to limit the information that displays on your report. In this example, the report will be filtered to display only certain names, so Name is chosen as the filter.

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In this example, Multiple Names has been chosen from the dropdown menu. The choices in this menu change depending on which filter you select.

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Select the criteria to apply to this filter. In this example, the actual names are selected by clicking each one that is to be included.

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Enter any additional information requested, based on the filter you have selected. The options that appear here can vary, depending on which criteria you chose in Step 4.

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Click OK in each of the filtering and modifying windows to display your filtered report.

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Because you made changes to a standard report, when you close your report you might be given an opportunity to add this new report to your Memorized Report List. Click Yes to memorize the report, or click No to close the report without saving it.

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See Also See “Customizing Reports” on page 406 for information on using the report filtering feature. 8

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Tracking Time All of the QuickBooks programs 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. 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. 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 then record time spent and export the information back to the company file, saving time and paperwork.

Did You Know? QuickBooks has a new online Timer program. The QuickBooks Timer described in this chapter still ships with your QuickBooks program. This program can be installed on as many different computers as you like, without having to have QuickBooks installed on the computers. Starting in 2007, there is a new online version of the Time Tracker program. This program can be used from any computer with no installation. Lists are automatically synchronized with the QuickBooks program so there is no need to export information to the Timer. All time from all Timer users can be downloaded simultaneously into QuickBooks. The fee for this program is $10 per user per month.

What You’ll Do Set Time Tracking Preferences Install the Timer Export Information to the Timer Create a New Timer File Create a Timed Activity Use the Timer Send Timer Data to QuickBooks Open Timer Data in QuickBooks View Timer Transactions Edit Timer Transactions

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Bill Time from the Timer to the Customer Back Up and Condense Timer Data Restore Backed-Up and Condensed Timer Data

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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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Click OK.

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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Installing the Timer

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Click Start on the task bar, and then select Run.

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Click the Browse button.

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Change the Look In location to your CD-ROM drive or to the folder on your computer where the QuickBooks Timer folder resides.

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Double-click the QBTimer folder.

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Click Setup.exe.

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Click Open.

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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TIMESAVER You can also double-click on the filename Setup.exe to open the file. 7

Click OK in the Run window.

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Follow the onscreen installation instructions, accepting the default choices for file locations and options and clicking Next to continue through the installation process.

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For future reference, make a note of the name of the folder into which the timer is installed.

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Did You Know? 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 with using the timer by explaining how the timer works and how you expect them to use this program. Specifically, these points should be discussed: ◆

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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 C:\QBTIMER. Discuss any sensitive issues about security and the privacy of the information in the Customer & Jobs list.

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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.

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.

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.

Exporting Information to the Timer

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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.

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Creating a New Timer File

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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 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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Creating a Timed 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 may 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.

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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 reexport 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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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.

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.

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Sending Timer Data to QuickBooks

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.

1

In the Timer program, select File, Export Time Activities from the menu.

2

Click Continue.

3

Enter the date through which timer activities should be exported to QuickBooks.

4

Click OK.

5

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.

6

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.

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Opening Timer Data in QuickBooks 1

In your QuickBooks program, select File, Utilities, Import, Timer Activities.

2

Click OK.

3

In the Import window that appears, locate and click the file.

4

Click Open.

QuickBooks imports data from the timer directly into the payroll part of the program. 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 name of the report you want to view.

6

Click View Report to see the details of the imported activities.

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When the report appears, doubleclick on any activity to see that the activity has been entered in the Time/Enter Single Activity window of your company’s payroll system.

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Click the Timesheet button to view the complete time record for this employee.

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Viewing Timer Transactions 1

With the timer open, select View, Time Activity Log from the menu.

2

Enter the date or date range for which you want to view timer activity.

3

Note whether activities have been exported yet.

4

Double-click any activity to open the activity and edit it (see the next task for an example of editing a timed activity).

5

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 appears 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.

3

Adjust the amount of time if necessary.

4

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.

Billing Time from the Timer to the Customer 1

2

Import time from the timer, as shown in the task “Sending Timer Data to QuickBooks.”

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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In QuickBooks, select Customer, Create Invoices. TIMESAVER You can also press Ctrl+I to quickly open an invoice.

3

Enter the customer name and job on the invoice.

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If time has been billed to this customer, a Billable Time/Costs window appears. Click the first option to add the outstanding billable time and costs to this invoice, then click OK to close this window.

5

If the Choose Billable Time and Costs window does not appear, click the Add Time/Costs button.

6

Click the Time tab.

7

Click to check each item you want to include on this invoice, or click Select All to choose all items.

8

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.

10 Click one of the save buttons to

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save the invoice.

Did You Know? The Time tab might not appear. The Time tab appears only if the time charged to the customer was done on a time sheet. If time was entered manually on an employee paycheck, the time appears on the Expenses tab.

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Backing Up and Condensing Timer Data

To facilitate faster transport and to diminish transmission problems, the QuickBooks Timer enables you to condense and back up your data in one step. When you condense timer data, the timer program automatically creates a backup of your file as well. After you’ve condensed a QuickBooks Timer file, the data takes up less room on your floppy disk, Zip disk, or whatever storage media you choose.

Back Up Timer Data Without Condensing 1

With the timer open, select File, Back Up Timer File from the menu.

2

Enter a filename for the backup file. The file will be given a .bdb extension.

3

Confirm or, if you want, change the location where this file will be backed up.

4

Click Save.

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Back Up and Condense Timer Data 1

With the timer open, select File, Condense Timer File from the menu.

2

Click Yes.

3

The name of the backup file is selected for you. It is the same name as your timer file but with a .bdb extension. Click OK.

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Restoring Backed-Up and Condensed Timer Data 1

In the Timer Program, select File, Restore Timer File from the menu.

2

Click OK.

3

Select the name of the file from which you want to restore. This is the file you backed up in the previous task.

4

Click Open.

5

Click OK.

6

Enter a name for the timer file to which you will restore your data.

7

Click Open.

8

Click OK when you are informed that the file is successfully restored.

When you restore timer data, you are asked to create a new file to restore to. That means you end up with a new timer data file on your computer at the end of the process. The program doesn’t allow you to overwrite the old file. If you perform this task frequently, you might want to purge old files that are no longer needed.

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10

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.

Produce Budget Reports

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.

Report on Classes

Set Spelling Preferences Create a Budget Set Up Classes Display a Class List Use Multiple Classes on One Form Create Payment Terms Customize Forms—Edit an Existing Forms Customize Forms—Create a New Form

10 Make Journal Entries Use the Audit Trail

Use the QuickBooks Remote Access Feature Create Mailing Labels

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Setting Spelling Preferences

1

Select Edit, Preferences.

2

Click the Spelling icon.

3

Click the My Preferences tab.

4

Check the Always Check Spelling box to require that QuickBooks spellcheck each of your forms before printing, saving, or sending them.

5

Check Internet Addresses to eliminate URLs from spellcheck.

6

Check Numbers to eliminate spellchecker alerts on words containing numerals.

7

Check Capitalized First Letter to eliminate proper nouns from spellcheck.

8

Check All UPPERCASE to eliminate from spellcheck words that contain all capital letters.

9

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 appears. IMPORTANT If the Set Up Budgets window appears, 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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4

Indicate whether this budget is to be based on profit and loss or balance sheet (for this example, we will use profit and loss).

4

Click Next.

5

If you want your budget 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.)

6

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.

8

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 appears 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. 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.

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16 Click OK. All amounts that

appeared 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.

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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.

19 To make changes to an existing

budget click on the drop down arrow and choose the budget you wish to edit.

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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: ◆

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.

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.

◆

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.

◆

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.

◆

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.

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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Producing Budget Reports 1

Select Reports, Budgets & Forecasts, and then select Budget Overview from the side menu that appears.

2

Select the budget you want to view in your report.

3

Click Next.

4

Choose how you want the budget to be laid out on your screen.

5

Click Next.

6

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 appears only if you have turned on class tracking.

Setting Up Classes

1

Select Edit, Preferences.

2

Click the Accounting icon.

3

Click the Company Preferences tab.

4

Check Use Class Tracking to turn on the class feature.

5

Click OK.

6

Select Lists, Class List. If this is the first time you’ve used classes, the list will be empty.

7

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.

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TIMESAVER You can also press Ctrl+N to open the New Class window. 8

Enter a name for this class.

9

If the class is a subclass of another class, indicate that by checking the Subclass Of box and selecting a class from the dropdown list.

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10 Click OK to save the class.

Did You Know? The Class option appears 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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Displaying a Class List 1

Select Lists, Class List.

2

Examine the classes that appear on your list. If you haven’t yet started using classes, this list might be blank.

3

Click the options on the Class drop-down menu to perform these tasks: ◆

Create a new class (Ctrl+N)

◆

Edit a class (Ctrl+E)

◆

Delete a class (Ctrl+D)

◆

Change the view of classes on the list

◆

Search in transactions

◆

Print (Ctrl+P) and sort the class list

If you click the Lists menu and the Class List does not appear, you haven’t turned on the classes feature in QuickBooks. Follow the instructions in the “Setting Up Classes” task that preceded this one to turn on the classes feature. After classes are activated, you can display your class list window at any time.

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Using Multiple Classes on One Form

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.

2

Double-click the form to which you want to add a class column.

3

Click the Additional Customization button in the Basic Customization window that appears (not shown).

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Click the Columns tab in the Additional Customization window.

5

Check the box next to Class in the Screen column.

6

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

1

Select Lists, Class List.

2

Click the Reports button.

3

Choose from these reports:

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◆

QuickReport (Ctrl+Q)— Displays a report of all the transactions that refer to the selected class.

◆

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.

◆

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.

◆

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 “Customizing Reports” in Chapter 18, “Preparing the Top Ten QuickBooks Reports,” 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 appears.

2

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.

4

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.

5

Enter the number of days until the full amount of the invoice is due.

6

Enter the discount percentage, if any, for early payment.

7

Enter the number of days during which the customer is eligible to claim the discount.

8

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— Editing Existing Forms

1

Select Lists, Templates.

2

Click a form you want to revise. For this example, the Intuit Product 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.

4

In the Basic Customization window that appears, click the Manage Templates button.

5

To add a logo to your documents, place your logo pic file in the images folder of your QuickBooks directory. Check the Use Logo box and navigate to the location of your logo pic file. Your logo must be a JPG, GIF, or BMP file.

QuickBooks comes with a collection of standard forms, ready for your use. You are welcome to use these forms as is, or you can make changes to customize the forms to the needs of your company. You can add or remove fields and columns, change the size of the forms, and even add graphic images such as your company’s logo. If you’re feeling really creative, you can design a form from scratch. For this example, we edit an existing form to make some minor changes.

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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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6

Click Copy to use the selected form as your basis for creating a new, customized form based on this form.

7

Enter a name for your new form.

8

Click OK.

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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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Click the Additional Customization button in the Basic Customization window (see previous page).

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10 Click each tab to view different

elements of the form. 11 Check boxes to choose or uncheck

boxes to deselect the elements you want to include on your customized form. 12 Click the Layout Designer button.

Here you can preview your form and click and drag to move elements to different locations. Click OK to close the Layout Designer. 13 Click OK when all changes have

been completed.

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Customizing Forms— Creating a New Form

1

Select Lists, Templates.

2

Click Templates and choose New to open the Select Template Type window.

As you saw in the previous task, you can make changes to an existing form template and take advantage of the pieces of the existing form that work to your benefit. But if the form you need is very different from any existing forms, it might be easier to just start from scratch and design your own form. For this example, we create an invoice. The techniques shown here apply to any type of form.

TIMESAVER You can also press Ctrl+N to open the Select Template Type window. 3

Select the type of form you want to design.

4

Click OK.

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Click Manage Templates.

6

Assign a unique name to this form (not shown).

7

Click OK. You are returned to the Basic Customization window.

8

Click Additional Customization.

9

On the Header tab, indicate the information you want to include in the form header. Check boxes in the Screen column to view these choices in the onscreen version of the form. Check boxes in the Print column to include these choices in the printed document.

10 If you like, change the text of any

titles for use on your customized form. 8

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11 Click the Columns tab.

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12 Choose which columns should

appear on the print and screen versions of the item description area of your form, and indicate the order in which they should appear. 13 Click the Prog Cols tab. (This tab

appears only if you have chosen Invoice as your form type.) 14 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 appears 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.”

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15 Click the Footer tab. 16 Check boxes to add features to the

bottom of the print and screen versions of your form; uncheck boxes to remove features. 17 Click the Print tab. 18 Choose whether 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. 19 Check the box if you want page

numbers to appear on multipage forms. 20 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.

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21 Click the Layout Designer button to

view your masterpiece.

Continued, next page

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25

22 In the Layout Designer, click the

Margins button to designate the size of your form. 23 Click the Grid button to display a

nonprinting grid that can help you line up various elements on your form. 24 Click specific elements and drag to

move them to new locations. 25 Click the handles on the corners of

form elements to resize them. 26 Click OK when you have completed

your form design. 27 Click OK to close the Additional

Customization window (not shown). 28 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.

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Making Journal Entries

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 expense.

Make a Journal Entry 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 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.

9

Enter the next account name.

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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 appears, dated for the first day of the following month, with the prior entry’s amounts reversed.

10 Verify the amount. 11 Repeat these steps until you have

entered all the accounts required of this journal entry.

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.

12 Click a save option. QuickBooks Tips and Tricks

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Using the Audit Trail

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Your company accountant will love this feature. The audit trail provides a summary of all the transactions that have been entered in your QuickBooks company file, who entered them, and when they were entered. The Audit Trail feature is automatically turned on, so you don’t have to do anything to start using the feature. The Audit Trail works completely in the background, keeping track of all the transactions. When you’re ready, you can produce a report that shows exactly what has been going on in your company.

Select Reports, Accountant & Taxes; then select Audit Trail from the side menu.

2

Enter the range of dates that this report should cover. If the report is only for one day, these dates will be identical.

3

Click Refresh to update the report if you enter a new date range.

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The Function of the Audit Trail QuickBooks comes with a feature called the Audit Trail, a report that provides a detailed listing of all the transactions and changes to transactions made in your QuickBooks file. An accountant trying to trace activity in his client’s QuickBooks files might find the Audit Trail indispensable for identifying when changes occurred, and internal auditors also will find this tool essential. If more than one person has access to a company’s QuickBooks file, the Audit Trail

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provides a certain amount of security in that no changes can be made to any forms or amounts in your file without a record of the changes and who made them appearing in the Audit Trail. Note that to take full advantage of the Audit Trail, each user needs to have a separate user ID and password. The Audit Trail feature is always turned on and works completely in the background so it doesn’t interrupt your day-to-day QuickBooks activities.

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:

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Fixed Asset Manager, which tracks all assets and calculates depreciation.

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Adjusting Entry and Adjusted Trial Balance report for tracking adjustments.

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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).

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 allows 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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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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Using the QuickBooks Remote Access Feature 1

Go to http://quickbooks.intuit.com/ product/add_ons/remote_access. jhtml 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.

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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.

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Print information from your company file.

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 either a $3.95 to $29.95 monthly fee to use the remote service.

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 appears.

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.

4

Indicate whether you want to specify ZIP Codes that begin with a particular number.

5

In the Sort Labels By drop-down list, indicate how you want the list sorted.

6

Check Print Ship To Addresses Where Available to use ship to addresses instead of mailing addresses.

7

Check Print Labels for Inactive Names if you want to print labels for names that are inactive.

8

Check whether you want to print labels for individual jobs (only applicable if you are printing labels for customers).

9

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.

11

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. For banking, you can use one bank for online services and keep another for savings and loan services.

What You’ll Do Set Service Connection Preferences Set Up Your QuickBooks Internet Connection Activate Online Services Retrieve Online Transactions Add Transactions to QuickBooks Rename Rules—Automatically Assign List Name Set Preference to Prefill Accounts

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Assign Transactions to Open Vendor Bills Assign Deposits to Open Customer Invoices Delete Multiple Transactions Add Multiple Transactions

Make or Cancel Online Payments Send Online Messages

Transfer Money Between Accounts Get Reports of Online Transactions

Use QuickBooks Website, Online Edition, and Billing Solutions

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Setting Service Connection Preferences 1

Select Edit, Preferences.

2

Select from the left Service Connection.

3

Click the Company Preferences tab.

4

Select Automatically Connect Without Asking for a Password if you want QuickBooks to be capable of connecting to online services automatically or if your computer is normally online when you are working.

5

Select Always Ask for a Password Before Connecting if you want to be prompted to enter a password before an Internet connection is made.

6

Check Allow Background Downloading of Service Messages to enable that feature. When you select this checkbox, Service updates are automatically downloaded from the Intuit server to your computer. QuickBooks periodically checks the Intuit server for new updates and downloads information gradually when your open Internet connection is not being used by another process or application.

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Click OK.

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You can choose Internet connection settings in QuickBooks that enable you to access the Internet automatically or wait for a password. You can also choose to have QuickBooks automatically download information in the background while you’re working.

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Setting Up Your QuickBooks Internet Connection 1

When QuickBooks takes you online for banking operations, it does so using an Internet connection that you may need to setup in advance. It is possible that QuickBooks might detect your Internet connection automatically. However, if you are having trouble connecting QuickBooks to the Internet, specify your Internet connection within the QuickBooks program using these steps.

Select Help, Internet Connection Setup.

2

Check Use the Following Connection if you have an existing connection through an Internet service provider and if that connection appears in the list onscreen.

3

If you checked the option for Step 2, click to select the name of the existing connection.

4

Instead of the first choice, you can click Use My Computer’s Internet Connection if you connect to the Internet through a LAN or some other continuous access. This is the selection that has been chosen for this example.

5

Alternatively, click I Do Not Have a Way to Connect to the Internet if you have no Internet access. If you make this selection, you will not be able to set up your Internet connection at this time.

6

Click Next.

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Click Done.

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Did You Know? If you change your Internet connection, repeat these steps. If you make a change in your Internet service, return to the Help menu and re-execute the steps in this task. 7

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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 set up (select the Banking menu and then select Online Banking, Set Up Account for Online Services). You will encounter the following choices: ◆

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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 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 QuickBooksfriendly 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. (Internet connection required.)

◆

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.

Activating Online Services With Your Financial Institution 1

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.

Select Banking, Online Banking, Set Up Account for Online Services.

2

From the Select Your QuickBooks Account drop-down menu, select the QuickBooks bank account (or credit card) you want to set up online services for or select Add New if you are creating a new bank or credit card type account. (Remember, you have to have online services enabled with your financial institution before you can setup the services within QuickBooks).

3

Click Next.

4

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 may be prompted with a Select Option dialog box if your financial institution has multiple related financial entities. Choose an option if applicable, and click OK.

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Click Next.

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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).

9

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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10 Click Compare These Options if you

are unsure which to choose from. 11 Click Next. 12 Select Yes if you have already

activated your online access with your financial institution.

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13 Select No if you need the contact

information for your financial institution.

15

14 If you selected No, a dialog will

open where you can view your bank’s contact information. 15 Click Next to complete the signup

process. 16 Click Back to return to the previous

menu to continue with the setup steps. 17 Optionally, click Set up Later to

close the Set Up Account for Online Services dialog.

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18 Enter your Customer ID that your

19

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financial institution recognizes for online access. 19 Enter your Password that your

financial institution recognizes for online access. 20 Confirm your Password by re-

entering it. 21 Click Sign In. 22 Click to select the account you

want to log onto from the list if more than one account is displayed.

21

23 Click Next, and QuickBooks will

now process the request for your online financial services connection to QuickBooks. 24 Click Activate Online Bill Payments

to set up the ability to pay your bills directly from QuickBooks (fees may apply). 25 Click Finish, and QuickBooks opens

the Online Banking Center shown in the following section titled “Retrieving Online Transactions.” 22

23

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: ◆

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.

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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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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.

◆

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.

Retrieving Online Transactions 1

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. The new redesigned Online Banking Center in QuickBooks 2009 makes it easier than previous versions to complete these tasks.

Select Banking, Online Banking, and choose Online Banking Center.

2

If you have more than one online account, verify that the correct account name appears 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.

3

Click the Send/Receive Transactions button to automatically connect through the Internet with your selected financial institution.

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IMPORTANT If this is your first time using the online download feature in QuickBooks and you have signed up for the Online Bill Payment service (fee may apply), you should review the transactions ready to send first before selecting the Send/Receive Transactions button. 4

Enter your PIN into the access dialog that displays.

5

Click OK.

6

QuickBooks will provide a status messages as it downloads current transactions into the QuickBooks Online Banking Center.

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The QuickBooks Online Banking Center summarizes the items ready to send to your financial institution.

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The QuickBooks Online Banking Center summarizes the items received from your financial institution ready to be downloaded into your QuickBooks data file.

9

Click Add Transactions to QuickBooks after you have reviewed them.

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10 To close the Online Banking Center,

click the window’s Close (X) in the top right corner of the open dialog.

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Conveniently add transactions one at a time or using the instructions in a later section, learn how to add multiple transactions to your QuickBooks data file. Activating the Online Banking Services can save you time and improve your data entry accuracy.

Adding Transactions to QuickBooks 1

Open the Online Banking Center by selecting Banking, Online Banking, and choosing Online Banking, and then click the item you want to review in the Items Received pane.

2

QuickBooks prompts you to close all open windows. Click Yes to continue.

3

The Add Transactions to QuickBooks window displays.

4

Click a single transaction on the left (or see the section on “Adding Multiple Transactions”).

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The Payee field will automatically populate if the QuickBooks online banking services recognizes the payee. If not, simply click the dropdown menu to select from your QuickBooks lists (vendors, employees, customers, other names).

6

The Account field will automatically populate if the QuickBooks online banking services recognizes the payee from a previous downloaded transaction. If not, simply click the drop-down menu to select from a list of your accounts in QuickBooks.

7

Click the Show Splits, Memo, Date, Number link to allow more data to be entered in for the transaction before adding to QuickBooks.

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You can accept the default Date or modify as needed.

9

Enter an optional Number with which to identify the transaction.

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10 Enter an optional Memo for the

transaction in the Memo field. 11 In the Account field, type the

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account name or select one from the drop-down menu that appears when the field is selected. 12 Enter the amount of the expense in

the Amount field. 13 Optionally, assign the expense to a

customer using the Customer:Job field. 14 Place a check mark in the Billable

box if you will be using QuickBooks Add Time and Costs feature to invoice the customer for the expense.

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15 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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16 Click Remove Selected to clear the

line detail above. 17 Click Hide Splits, Memo, Date,

Number to return to less detailed entry dialog.

16

18 Click Add to QuickBooks, and the

17 18

transaction will now be included in the QuickBooks register for that financial institution. 19 Click Finish Later to return to

19

QuickBooks and exit the Online Banking Center. 20 Click Yes if you want QuickBooks to

automatically add to your register all matched transactions. All unmatched transactions will remain in the Online Banking Center for your next session. 21 Click No to close the warning

message and not add matched transactions to your register. They will be there when you return to the Online Banking Center. 22 Click Cancel to return to the

Record an Expense window.

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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 radial button.

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Renaming Rules— Automatically Assign List Name

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.

1

Click Renaming Rules from the top right corner of the Online Banking Center (not shown).

2

Click the name you are modifying the renaming rule for from the list on the left.

3

Select the If a downloaded name drop-down menu and choose from Begins with, Ends with, Contains or Exactly Matches option.

4

Click Remove if you want to clear your selection.

5

Click Save to assign the renaming rule.

6

Click Cancel to not assign the renaming rule.

7

Click Close to close the Edit Renaming Rules dialog box.

Did You Know? New for the QuickBooks 2009 Online Banking feature a renaming rule will be created for you when you assign the transaction to an existing QuickBooks name for the first time. You can then modify the renaming rule created.

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Setting Preference to Prefill Accounts

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From the Home page, click the Vendor Center button.

2

Double-click Vendor Name to open the Edit Vendor dialog box.

Each transaction downloaded into QuickBooks requires that a chart of account be assigned. You can have QuickBooks help you with this by assigning up to three accounts to each vendor record on the Account Prefill tab. 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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3

Click the Account Prefill tab.

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Using the drop-down menus for the Select Accounts to Pre-fill Transactions, choose up to three different charts of accounts you want to assign as default accounts for this vendor.

5

Click OK.

6

Select Edit, Preferences, General, and click the My Preferences tab, and then under the Automatically Recall Information area, click Prefill accounts for vendor based on past entries.

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IMPORTANT You must have enabled the General, My Preference to Automatically Recall Information setting with the Prefill option selected for the automatic assigning of accounts to work properly.

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Assigning Transactions to Open Vendor Bills 1

If you would like to associate a downloaded transaction to an open vendor bill in QuickBooks, effectively paying the open vendor bill with the downloaded transaction, you can use the Add Transcations window. Activate the Add Transactions to QuickBooks button in the Online Banking Center and follow these steps:

Select the Not an Expense link at the top right of the Add Transactions window (not shown).

2

Select the Select Open Bills to Pay in QuickBooks.

3

Select the Vendor from the dropdown 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.

5

Enter an optional memo in the Memo field.

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Enter an optional transaction number or name in the Number field.

7

Place a checkmark next to the open bill or bills that are being paid by this downloaded transaction.

8

Click the Add to QuickBooks button to record this transaction to your financial institution register in QuickBooks.

9

Click Finish Later to leave the Record a Bill Payment window.

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10 Click Yes if you do not want to save

the changes made in the Record a Bill Payment window. 11 Click No if you want to save the

changes made in the Record a Bill Payment window.

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Assigning Deposits to Open Customer Invoices 1

Also new for QuickBooks 2009, you can match your downloaded banking deposits to open customer invoices or previously recorded deposits into your bank account using the Make Deposit forms. After opening the Online Banking Center and selecting the Add Transactions to QuickBooks button, follow these steps:

With the Add Transaction window open, click a deposit transaction item from the list on the left.

2

Accept the default Date or modify as needed.

3

Enter an optional Memo.

4

Click to place a check mark next to each invoice that was included in the deposit downloaded. 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.

7

Click Finish Later to exit and return later to finish recording.

8

If you opt to finish recording information later, QuickBooks presents a prompt box. Click Yes to discard your changes.

9

Click No to save your changes and be returned to the Record a QuickBooks Deposit window.

10 When you finish assigning deposits

close the Online Banking Center window to exit.

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Deleting Multiple Transactions

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There might be occasions when you want to delete all or some of the transactions to be downloaded 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. After opening the Online Banking Center and selecting the Add Transactions to QuickBooks button, follow these steps:

From the Add Transactions to QuickBooks online banking window, choose the Select Items to Delete button.

2

To select specific items to remove, choose Select Individual Transactions and click to place a checkmark next to each individual transactions you want to delete.

3

To select all the transactions, choose Select All Transactions and you will be prompted to enter the Date that all transactions dated prior to this date will be deleted.

4

Click to add or remove the checkmarks in the far left column for the transactions you want to delete.

5

Click Delete Selected to remove the transactions from this and future downloads.

6

A confirmation prompt appears. Click Yes to permanently delete the transactions from the download.

7

Click No to be returned to the Select Items to Delete dialog box.

8

Click Cancel to not delete the items selected and be returned to the Add Transactions to QuickBooks dialog box.

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Adding Multiple Transactions

QuickBooks Online Banking Services can save you data entry time by allowing you to add multiple transactions at one time with the Add Transactions to Quickbooks window. After opening the Online Banking Center and activating the Add Transactions to QuickBooks feature, follow these steps:

Did You Know? If you do not have the option to Add Multiple or Prefill when typing a name and you are currently using QuickBooks 2009, you need to update your software to the latest product update. To update your QuickBooks software select Help, Update QuickBooks, and from the Overview Tab, select Update Now. You must have an Internet connection to complete this task. It is also recommended that you make a backup of your data prior to updating. Select File, Save Copy or Backup and follow the prompts for backing up your data. 1 1

From the Add Transactions to QuickBooks window, click the Add Multiple button.

2

The Add Multiple Transactions to QuickBooks window opens.

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3

In the No. field, you can optionally add a transaction number.

4

Click the Payee field to select the payee from your QuickBooks lists.

5

Click the Account field to select the account from your QuickBooks chart of accounts.

6

Optionally select the Class field and choose a class if you are tracking these in your data file.

7

To select all the transactions, place a checkmark in the Renamed or Unmatched boxes.

8

If you did not Select All, you can manually add or remove individual checkmarks 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.

10 Optionally, click the check boxes to

add or remove individual checkmarks. 11 Click Add Selected to add the

selected transactions to your QuickBooks register for this financial institution. 12 If you click Cancel, you will be

given the choice to keep or discard your changes to the transactions. IMPORTANT If you do not assign an account from your QuickBooks chart of accounts to a transaction, QuickBooks will give you the option to record them to an Uncategorized Expenses account created by QuickBooks automatically. Using the QuickBooks Online Features

283

Making Online Payments

1

If you have activated your online bill payment service as discussed in the “Activating Your QuickBooks Online Services” section, you will have a link to Write Online Checks, Pay Bills, which does so conveniently in QuickBooks from the Online Banking Center.

2

Click Write Online Checks to create a check that will be sent to your financial institution for payment directly to the vendor. Optionally, select the Pay Bills to write a bill payment check in QuickBooks.

3

Complete the Write Check form, as shown in this example, and select Online Payment. QuickBooks will now include this in your Online Banking Center as a transaction ready to send.

4

Click Save and Close.

5

Click Send/Receive Transactions in the Online Banking Center window (not shown).

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 will 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. 1

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6

The Online Transmission Summary dialog box appears. Click Print to optionally print the summary.

7

Click Close to exit the Online Transmission Summary details and return to the Online Banking Center.

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 menu. 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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7

Using the QuickBooks Online Features

285

Canceling Online Payments

1

From the Online Banking Center, select Cancel Payments from the Items Ready to Send pane (not shown).

2

The Payments You Can Cancel dialog box opens. Optionally, click View Payment to make changes to the payment details.

3

Click Cancel Payment. The Cancel Payment prompt box appears.

4

Click Yes to cancel the payment.

5

Click No to not cancel the payment.

6

Click Help for more instructions.

7

Click Close to close the Payments You Can Cancel dialog box.

8

Click OK to the QuickBooks message that appears.

9

Click Receive/Send Transactions from the Online Banking Center (not shown).

If you request an online payment your bank has not yet sent, you may still have time to change your mind. Whether you want to change the amount of the payment or cancel it entirely, you can request the bank to cancel the original payment; then you can take action to replace the payment with another if you need to. Note that your bank may 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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10 Select Print to print a copy of the

Online Transmission Summary. 11 Select Close when completed.

Did You Know? The address, telephone number, and account number are required for online vendors. If basic information such as the address, telephone number, and account number for a vendor has not been entered and you select the option to send the payment online, you are prompted to enter the required information for the vendor before you can continue with the online payment. You will find the account number on the bill you receive from your vendor.

10

11

You can turn off pop-up messages. From time to time, QuickBooks displays information for you in pop-up windows. Click the Do Not Display This Message in the Future option if you no longer need to see a message.

Using the QuickBooks Online Features

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Sending Online Messages 1

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.

From the Online Banking Center click the Create Messages link in the Items Ready to Send pane (not shown).

2

Select the appropriate account from the Message To drop-down menu.

3

Enter a Subject Line for your message.

4

Select the appropriate account in the Regarding Account drop-down menu.

5

Type your message.

6

To retain a record of your message, click Print (optional).

7

Click OK to record the message to be sent.

8

Click Cancel to exit without saving.

9

Click Send/Receive Transactions to send your message to your financial institution (not shown).

2

3 4 5 8 6

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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7

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.

2

Ignore the date—QuickBooks forces this date to read Next Business Day when you indicate you are making an online transfer of funds.

3

Enter or select the account from which you are transferring funds.

4

Enter or select the account to which you are transferring funds.

3 4

5

Enter the amount of the transfer.

6

Check the Online Funds Transfer box.

7

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Click the Save & Close to close the Transfer Funds Between Accounts dialog box. Optionally, 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.

2

Select the appropriate Financial Institution if you have more than one enabled (not shown).

3

Click Receive/Send Transactions (not shown).

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 will not be able to transfer funds between different banks from your QuickBooks Online Banking Center.

Using the QuickBooks Online Features

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Getting Reports of Online Transactions 1

Select Reports, Custom Transaction Detail Report. The Modify Report window automatically displays.

2

Click the Filters tab.

3

Click Online Status in the Choose Filter list.

4

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.

5

Click OK.

6

The Custom Transaction Detail report displays with your Online Banking transactions listed.

290

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. With an Internet connection go to http://www.quickbooks.com. Click links to access a variety of tools and resources. Remote backup services

Payroll services

Tech support

Credit card services

Order supplies

Use QuickBooks online

Using the QuickBooks Online Features

291

Using the QuickBooks Online Edition

1

Using your Web browser, go to the Intuit website at http://www.Intuit.com.

2

Click the QuickBooks See More link in the center of the page.

3

Click the Try it FREE button to learn about the many options.

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.

2

Click here for the free trial.

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4

Choose an option that best meets your business needs.

Choose which service best meets your needs.

Using the QuickBooks Online Features

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QuickBooks Billing Solutions

294

Sign up for the QuickBooks Billing Solutions to provide customers with the ability to pay your invoices in a secure online environment. Part of the Merchant Services offered by Intuit, Billing Solutions encompasses the ability to send invoices via email and have customers pay you with just a few clicks. Find out more at http:// quickbooks.intuit.com/product/add_ons/getting_paid_faster.jsp.

12

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’ll learn how to set up your accounts so the numbers feed into the proper places on the tax reports. You’ll see the tax reports that you can produce in QuickBooks, and you’ll also learn how to record estimated tax payments and how QuickBooks integrates with TurboTax income tax software.

Create a Tax Return

Choose the Correct Income Tax Form Assign Tax Lines Use the Income Tax Summary Report Use the Income Tax Detail Report Make Estimated Tax Payments

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295

Choosing the Correct Income Tax Form

1

Select Company, Company Information.

2

Click the drop-down arrow to select a tax form for this entity.

3

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.

3

Click OK.

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 will 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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2

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.

◆

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.

◆

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.

◆

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

297

Assigning Tax Lines

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.

Assign a Tax Line When Setting Up a New Account 1

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).

3

Choose the type of account in the Add New Account:Choose Account Type window (not shown).

4

Click Continue (not shown).

5

Enter appropriate information such as Name and Description to set up your account.

6

Click the drop-down list in the Tax Line Mapping field to view the list.

7

Click the tax line that is appropriate for this account.

8

Click OK.

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Assign a Tax Line to an Existing Account 1

Select Accountant & Taxes from the Reports menu; then select Account Listing. TIMESAVER You can also open the Account Listing report by clicking the Accountant & Taxes category on the left side of the Report Center; then click Account Listing under the Listing category. The Report Center provides detailed descriptions of each standard report.

2

Double-click any account showing in the Tax Line column.

3

Click the Tax Line Mapping dropdown list to display the available tax lines.

4

Click the tax line for this account.

5

Click OK.

6

Repeat Steps 2–5 for all accounts that need to be assigned to tax lines.

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4

See Also See “Adding Accounts” on page 78 for information on how to set up new accounts.

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.

Preparing Income Tax Returns

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Using the Income Tax Summary Report 1

Select Reports, Accountant & Taxes; then select Income Tax Summary.

2

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.

3

Double-click any amount to see the detail of all the transactions that make up that amount.

4

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.

The QuickBooks tax reports are designed to help you or your accountant prepare your income tax return. 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.

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Press Esc to close the report.

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Using the Income Tax Detail Report 1

2

Select Reports, Accountant & Taxes; then select Income Tax Detail.

The Income Tax Detail report shows the complete detail of every transaction that feeds into the individual lines on your company tax return. Print this as well as the Income Tax Summary report for the person who prepares your income tax returns.

2

Change the dates in the From and To fields, if necessary. IMPORTANT Your company date information may 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 dates in the lower left corner of this box are correct.

3

Double-click any item to see the original document.

4

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.

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:

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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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 will also take 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”).

5

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 190 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 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 More Forms and Publications.

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3

Click Form and Instruction Number.

4

Scroll down until you see the forms section. Then scroll until you find the form(s) you want to download.

5

Click the form you want; if you want to select more than one form, hold down the Ctrl key while clicking other forms.

6

Click the Review Selected Files button.

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Preparing Income Tax Returns

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Click the name of a form you want to view. The form you selected appears.

8

You can view the form onscreen, print it, and save it.

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Download State Tax Forms 1

Go to the Fun with Taxes website at http://www.funwithtaxes.com.

2

Click the Tax Forms link under the State heading.

3

Click the state for which you need tax forms. The website for that state’s revenue agency will appear in a separate window.

2

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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Preparing Income Tax Returns

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Non-Tax-Related Transactions

Using QuickBooks with TurboTax

From time to time, transactions occur in your business that have 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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Startup 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 start-up costs exceed $50,000.

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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).

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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.

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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 passwordprotected 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 Set Up the Administrator Add Users Edit User Access Remove 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

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 disk. An online backup procedure is presented later in this chapter.

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Click Options.

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If you want to receive backup reminders, check the box and enter the frequency with which you want to be reminded.

7

Choose a verification option. QuickBooks recommends that you let the program completely verify the integrity of your data when you back up.

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Enter the name and location of the file where you want your data to be backed up.

7

Check here if you want QuickBooks to include the backup date and time in the backup file name.

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10 Check here to limit how many

backup copies are allowed in one folder. 11 Click OK.

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12 Click Next.

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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. 15 Click here to set up a backup

schedule for future use only. 16 Click Next.

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17 Verify that the filename that

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appears is the name you want to use for this backup. Make changes if necessary. 18 Verify the location where this file

will be saved. 19 Click Save to perform the backup

procedure. 20 Click OK when the process is

completed. 19

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Restoring Backed-Up Information

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.

Restore 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

Verify that the filename for your company backup file is correct.

7

Verify that the location where the backed-up file is stored is correct.

8

Click Open.

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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.

9

13 Type the word YES to verify you

want to continue with the restoration process. 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. The sample checklist on the next page provides you with a starting point for creating your own checklist. This checkbook 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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Organize QuickBooks Transactions with a Daily Checklist One way to keep track of when information was entered into QuickBooks and who made the entries is to require all QuickBooks users to fill out a checklist whenever they enter information. Keep all the checklists in a binder

or file folder so you can refer to them when you need to trace the origin of a transaction. Here’s a sample of a checklist for tracking QuickBooks activities:

Daily Checklist of QuickBooks Activities Date: _______________ Name

Item

Quantity Entered

Reference Numbers

Comments

Payments received Cash sales Bills received Shipments received Purchase orders issued Payments made Estimates issued Time on jobs New customers New vendors Other (describe below)

As mentioned previously, the daily transaction checklist is most effective for small companies, particularly those without a lot of transactions. The most effective method of securing your QuickBooks data is to perform a backup every 24 hours. Automated backup systems will take care of this for you, without your having to perform any steps.

Security

315

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.

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.

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 $49.95 per year, and there are several levels of backup service available. The Intuit backup service includes a triple DES-112-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 30-day trial of this service.

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6

You might see a message telling you that QuickBooks is going to launch your web browser. Click OK if this message appears.

7

Click the Try Now link or, if you have already signed up for the online backup service, click the Start Backup button.

8

If you are new to the backup service, read about the backup services and pricing options. 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. 7

Security

317

Setting Up the Administrator

1

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. While it is possible to change the name of the administrator, this isn’t recommended.

3

Enter a password for the administrator. It can be no more than 16 characters and can include spaces. Note that the password is case sensitive.

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.

1

2

4

Enter the password again.

3

5

Click OK.

4

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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5

Adding Users

After you’ve set up the administrator’s password access for your QuickBooks company file, you’re ready to set up 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 User 1

2

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.

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 4 5

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. 6

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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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2

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.

3

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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4

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.

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2

Did You Know? Additional security controls exist in the QuickBooks Enterprise Solutions. If you are using the Enterprise Solutions software, you’ll find 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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Continued, next page

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6

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.

10 Click Back to return to a previous

6

7

8

page and make changes. 11 Click Finish to complete the setup

of this user’s rights.

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11

Editing User Access

1

Select Company, Set Up Users.

2

Click the name of the user whose rights you want to change.

3

Click Edit User.

4

Enter the user’s password in the Password and Confirm Password fields.

5

Click Next.

There will undoubtedly come a time when you need to change the access rights of users, either adding responsibilities or removing responsibilities as you shift job assignments. Use the Edit User feature to change the access rights for various users.

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3

Continued, next page

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5

Security

323

6

Choose the level of access you want this user to have by clicking No Access, Full Access, or Selective Access.

7

Click Next.

8

Following the steps described in the previous task, “Adding Users,” go from screen to screen indicating what access you want to assign to this user and clicking Next after each topic.

9

When all your choices have been made, click Finish.

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324

Removing Users

1

Select Set Up Users from the Company menu.

2

Click the name of the user you want to remove. Note that you can use this procedure to delete any of the users other than the administrator.

3

Click Delete User.

4

Click Yes.

5

Click Close to close the User List window.

If someone leaves your company, you should immediately remove that user’s access to your QuickBooks file. Removing a user is easy, and you can always add the user again should the person requalify for access to your files. You must be logged in as administrator to have the right to remove a user. See the Did You Know box at the end of this task for an alternative to completely removing users.

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3

Did You Know? Deleting a user removes the audit trail for that user. While deleting a user might give you the finality you want when a user leaves the job, by removing the user you remove all trace of the user’s activity within QuickBooks. All transactions performed by that user now display as having been performed by “Admin.” You can avoid this situation and keep the proper username assigned to the transactions while still removing the user’s access to all areas of QuickBooks. Alternatively, instead of removing access, you can simply change the user’s password.

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Security

325

Closing Financial Records at Year-End

Set the Closing Date 1

Select Edit, Preferences.

2

Click the Accounting icon.

3

Click the Company Preferences tab.

“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.

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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.

9

Click OK to close the Preferences window.

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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8

Restrict User Access to PreClosing Date Transactions 1

Select 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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5

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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Security

327

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.

Open the Report Center by clicking the toolbar button. TIMESAVER Alternatively, choose Report Center from the Reports menu.

2

Click the Accountant & Taxes option.

3

Click Closing Date Exception Report.

4

Scroll through the report to see all the transactions.

5

Double-click any amount to see the actual transaction.

Did You Know?

2

3

4

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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14

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.

What You’ll Do

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.

Set Up Reminders to Replenish Your Inventory

Activate Inventory Set Up Inventory Items Add to Your Inventory Edit Inventory Items Create an Inventory Group Manage Sales Orders

Prepare Inventory Reports Count Your Inventory Adjust Inventory Quantities

14 Adjust the 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.

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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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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

Credit

$500.00

Cash

$500.00

Recording Manufacturing Inventory in QuickBooks 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

Press Ctrl+N.

3

Select Inventory Part from the Type drop-down list.

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. Once you’ve set up all your 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.

3

Did You Know? Entering the cost is optional. If the amount you pay for this item varies, leaving the cost field blank and entering the cost when you enter a bill from your supplier might be easier.

4

Enter the name of the item as it will appear on your inventory list.

5

Indicate if this item is a subitem of another item by checking the Subitem Of box.

6

Enter the Manufacturer’s Part Number if you know this information. (Note: The Manufacturer’s Part Number feature is available only for inventory type items.)

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18

7

Click the Unit of Measure button if you want to define the unit of measure associated with this item. (In this example, Pound has been selected as the unit of measure.)

8

Enter the description of the item as it appears on purchase orders and bills when you purchase this item.

7

Enter the cost you pay when you purchase this item.

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12 9

10 Enter the cost of goods sold

13

(COGS) account that will be charged when you purchase this item. 11 Enter the vendor where you prefer

to shop for this item.

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17

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14

12 Enter the description of the item as

it appears on invoices when you sell this item to your customers. 13 Enter the sales price you charge

for this item. If the price varies, you can leave this field blank. 14 Change the Tax Code option if

necessary to indicate whether the sale of this item is subject to sales tax. 15 Enter the income account that is

credited when a customer purchases this item. 16 Enter the asset account that is

increased when you add this item to your inventory. 17 If you want to be reminded to

reorder this item, enter the quantity of items that represents the cutoff for reordering.

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.

18 Click OK.

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Adding to Your Inventory

1

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.

2

Enter the name of the vendor.

3

Enter the date the items were received.

4

Enter the name of the item(s) received.

5

Enter the quantity of items received.

6

You can enter the cost of the items if you have this information, or you can leave this area blank.

7

Click one of the save options; the items are immediately added to your inventory.

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 154 in Chapter 5 for more on this topic).

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2

TIMESAVER Click the Receive Inventory icon in the Vendor section of the Home page and then choose Receive Inventory without Bill from the popup menu that appears.

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7

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.

Editing Inventory Items

1

Select Lists, Item List.

2

Click the name of the item you want to change.

3

Press Ctrl+E.

4

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 appears in the edit window varies, depending on the type of item you choose. The window shown here is for an inventory part item.

5

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.

2

Click OK.

5

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.

4

Did You Know? You can change a noninventory 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.

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335

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. The three most popular methods of inventory valuation are not supported by QuickBooks. They are

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◆

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 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.

◆

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.

◆

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.

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.

2

Press Ctrl+N.

3

Select Group as the Type.

4

Enter a name for the group.

5

Enter a description for the group.

6

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.

7

Enter the individual items that form the group.

8

Click OK.

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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 noninventory parts and service items in a single inventory group.

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Use the Inventory Group 1

2

3

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.

2

Enter the customer name.

3

Enter the name of the group.

4

Verify that all other information is correct.

5

Click one of the Save buttons.

The detailed group information appears on your screen, but only appears on the printed invoice if you requested details by checking the box in the group setup screen.

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5

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 2

Choose Customers, Create Sales Orders from the menu.

2

Enter customer name, date, and order information, just as you would if you were entering information directly on the customer’s invoice.

See Also See “Creating an Invoice” on page 111 for more information on creating customer invoices.

3

Click Save & Close to save the sales order.

4

Choose Customers, Sales Order Fulfillment Worksheet.

3

Continued, next page

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5

Note the fulfillment status codes in the Sales Orders portion of the worksheet.

6

Click on an item to see the detail of the sales order.

7

Select from several options for sorting the report.

This order can’t be filled at this time.

This order can be filled at this time.

This order can be partially filled at this time.

8

8

Check off orders you want to fulfill.

9

Check the boxes for any forms you want to print.

5

10 Click Print to print the selected

forms.

9

11 Click Close to close the report.

Note that nothing you enter on this report is saved. 10

12 Press Ctrl+I to open an invoice

6

7

11

form. 13 Enter the customer name. 14 Open sales orders for this

customer appear in the Available Sales Orders dialog box that appears. 15 Check off any sales orders that you

want to invoice at this time.

13

14 16

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 or 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. 18 Information from the sales order

appears on your invoice. Complete the invoice and choose a save option.

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18

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.

2

Click the item for which you want to establish a reorder point.

3

Press Ctrl+E.

4

Enter the reorder point.

5

Click OK.

5

4

View Reminders 1

Select Company, Reminders.

2

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

1

Select Reports, Inventory, or view the inventory report selections in the Report Center; then open one of the following inventory reports: ◆

Inventory Valuation Summary

◆

Inventory Valuation Detail

◆

Inventory Stock Status by Item

◆

Inventory Stock Status by Vendor

◆

Physical Inventory Worksheet

◆

Pending Builds

See the next page for a description of each of these reports.

342

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.

1

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 by Item 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. 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 appears in the Quantity column. Click the icon and a little report appears, 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, then click the Activities button, and choose Current Availability.

See Also See “Customizing Reports” on page 406 for information on manipulating QuickBooks reports so they display the information you want to see in the manner in which you want to see it.

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Counting Your Inventory

1

Select Reports, Inventory; then select Physical Inventory Worksheet.

2

To remove the On Hand column, place the mouse pointer over the small diamond to the right of the On Hand column heading.

3

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.

344

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.

3

2

5

Slide the diamonds as necessary so that the full text of each column is visible.

6

Click the Print button.

7

Click Print in the Print Reports window.

6

5

Did You Know? Many reports contain an export to MS Excel feature so that yo 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.

7

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345

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.

8

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 appears.

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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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10 Click one of the Save buttons.

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Adjusting the Price of Inventory

1

Select Lists, Item List.

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.

6

Make the price change in the New Price column.

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.

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Using Inventory Features

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Alternatively, click Mark All to change all the inventory items at once.

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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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.

11

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

change is to be a markdown). 11 The new marked-up prices are

assigned to all checked items. 12 Click OK. 12

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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.

What You’ll Do

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.

Track Petty Cash

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.

Reconcile Your Bank Statement Record Automatic Teller Withdrawals Receive Credit Card Payments Record Deposits As Assets Purchase Fixed Assets Enter Depreciation Sell Fixed Assets

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Reconciling Your Bank Statement

1

Select Banking, Reconcile.

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.

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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.

3

Verify the statement date and change if necessary.

4

Verify that the beginning balance matches the beginning balance on your bank statement.

5

Enter the ending balance from your bank statement.

6

Enter any service charge the bank applied to your account.

7

Enter the date of the service charge.

8

Enter the account where you track bank service charges.

9

Enter any interest you earned on your bank account.

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10 Enter the date on which the

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interest was posted to your account. 11 Enter the account where you track

interest income. 12 Click Continue. 13 Click to check off all the items that

appear on your bank statement. 14 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.

15 If you did not reconcile to the

penny, the Reconcile Adjustment window appears. 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. 16 Choose Summary, Detail, or Both

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16

to choose the type of reconciliation report. 17 Click Display to view the report

onscreen. 18 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 allow 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, then click Display.

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Recording Your Assets

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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. You write a check to place a $400 deposit with your utility company: Debit Other Assets: Deposits

Credit

$400.00

Cash

Debit

Cash Mortgage Payable

Debit Depreciation Expense

Credit

$10,000

$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 Cash

$800.00

Accumulated Depreciation

$520.00

Fixed Asset $110,000

Credit

$250.00

Accumulated Depreciation

$400.00

You take out a $100,000 mortgage on a building and also make a $10,000 cash down payment:

Fixed Assets: Building

When you create a journal entry to record depreciation expense, these accounts are affected:

Gain/Loss on Sale of Asset

Credit

$1,000.00 $320.00

$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 Automatic Teller Withdrawals

1

Select Banking, Transfer Funds.

2

Enter the date of the ATM withdrawal.

3

Click the drop-down list to select the bank account from which the money was withdrawn.

4

Click the drop-down list to select the name of the cash account you use.

5

Enter the amount of the withdrawal.

6

Enter an optional memo.

7

Click a save option.

If you use the automatic teller (ATM) feature at your bank to withdraw money, you need to record that transaction in QuickBooks. You need to have a cash account to which you can charge the withdrawal, such as Petty Cash or Drawer. Then the withdrawal is actually treated like a transfer of funds from your bank account to your cash fund.

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See Also See “Transferring Money Between Accounts,” on page 289 for an example of recording the electronic transfer of money between accounts.

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353

Tracking Petty Cash

1

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.

9

Repeat Steps 3–8 for each transaction you need to record. 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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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.

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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. 2

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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.

6

Enter the credit card number.

7

Enter the expiration date.

8

Click to check the invoices to which this payment applies, adjusting the amounts if necessary. (Note: QuickBooks assumes the oldest invoice is paid first. You can override the checkmarks that are inserted by QuickBooks.)

9

Click a save option.

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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

1

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 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.

3

Enter the Payee information.

4

Verify the date.

5

Enter the amount of the deposit.

6

Type Deposits as the account name (or whatever name you choose for this asset).

7

If this is a new account, an Account Not Found window appears. Click Set Up.

8

Select Other Asset as the type.

9

Click Continue.

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10 On the Add New Account screen

that appears, 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. 11 Complete the check by clicking a

save option. 9 8

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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.

2

Select Fixed Asset for the account type.

3

Click Continue.

4

Enter a name for this asset.

5

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.

4

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.

8

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.

9

Click Save & Close.

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Recording Your Assets

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Enter a Fixed Asset in the Fixed Asset Item List 1

Select Lists, Fixed Asset Item List; then press Ctrl+N to open the New Item window.

2

Enter a name for this asset.

3

Indicate whether the asset was new or used when you acquired it.

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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.

4

Enter the asset description that appears on the bill you received from your vendor.

5

Enter the date you acquired this asset.

6

Enter the cost of the asset.

7

Enter the vendor from whom you purchased the asset.

8

Enter the account where you will record the cost of the asset.

9

Enter an optional description for the asset.

10 Enter optional information about

the 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. 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.

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, I recommend 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. 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.

MACRS Depreciation Expense for Five-Year Property: Year

Percentage

1

20%

2

32%

3

19.2%

4

11.52%

5

11.52%

6

5.76%

MACRS Depreciation Expense for Seven-Year Property: Year

Percentage

1

14.29%

2

24.49%

3

17.49%

4

12.49%

5

8.93%

6

8.92%

7

8.93%

8

4.46%

Note: The previous tables employ the halfyear convention. Under this convention, all property is treated as if it is acquired and disposed of at the midpoint of the year.

Recording Your Assets

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Entering Depreciation

1

Select Company, Make General Journal Entries.

2

Verify that the date and journal entry number are correct, and make any necessary changes.

3

Check the Adjusting Entry checkbox if it is not already checked.

4

Enter the account you use for recording depreciation expense.

5

Enter the amount of the depreciation expense in the Debit column.

6

Enter a brief, descriptive memo.

7

Enter the asset account you use to record accumulated depreciation.

8

Verify the accuracy of the credit amount that automatically appears, or enter the correct amount.

9

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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Did You Know? See Also See “Making Journal Entries” on page 257 for information on using the general journal entry feature.

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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 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

Press Ctrl+I to open an invoice form.

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TIMESAVER Clicking the Invoices icon on the Home page also opens an invoice form. 2

Verify the date and invoice number, and make any necessary changes.

3

Enter the name of the customer who is purchasing the asset.

4

Click in the Item column; then scroll down the Item list and click the asset you want to sell.

5

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.

4

QuickBooks enters this amount automatically.

6

Verify the tax status of this customer, and make any necessary changes to the name of the sales tax authority that appears.

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7

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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Recording Your Assets

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Enter a Fixed Asset Sale in a Journal Entry 1

Select Company, Make General Journal Entries.

2

Verify that the date and journal entry number are correct, and make any necessary changes.

3

Enter the account you use for recording the deposit of cash, or enter your undeposited funds account.

4

Enter the amount of money you received in the Debit column.

5

Enter a brief, descriptive memo.

6

Enter the asset account you used to record the cost of this asset.

7

Enter the original cost of the asset in the Credit column.

8

Enter the asset account you used to record the accumulated depreciation for this asset.

9

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 22 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. Although you can take a shortcut and 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. 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 allows 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 allows QuickBooks users who are not accountants to enter beginning balances in accounts without having to know the offsetting entry. In this chapter, you’ll 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.

What You’ll Do Understand the Opening Balance Equity Account Record Owners’ Draws Enter Prior Period Adjustments View Contents of 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

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View the contents of your opening balance equity account by pressing Ctrl+A to open your Chart of Accounts.

2

Scroll down until you see the opening balance equity account.

3

Click the account name.

4

Click the Reports button.

5

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.

7

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 3 1

Select Company, Make General Journal Entries.

2

Enter the date for this journal entry. Many companies clear the opening balance equity account at the end of the year in preparation for issuing financial statements.

3

Type Opening Bal Equity as the first account name.

4

Enter as either a debit or credit, depending on your own account balance, the amount necessary to clear the opening balance equity account.

5

Enter a brief memo description.

6

Enter the account(s) to which you will transfer the amounts in the Opening Balance Equity account.

7

Click one of the save options.

8

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 appears. 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: 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.)

Debit Fixed Asset/ Computer

$2,000.00

OBEA

$2,000.00

Debit OBEA

Credit

Credit

$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:

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Debit Cash Owner’s Equity

Credit

$10,000.00 $10,000.00

Recording Owners’ Draws

When owners take money out of a company that is not a corporation, the money is either classified as a loan or a draw. A draw 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 draw 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 draw.

Set Up a Draw Account 1

Press Ctrl+A to open the Chart of Accounts.

2

Press Ctrl+N to open the Add New Account window.

3

Select Equity from the Account Type options.

4

Click Continue.

5

Enter a name for the account.

6

Indicate whether this is to be a subaccount of another account.

7

Enter an optional description.

8

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.

2

Verify that the correct cash account appears.

3

Enter the name of the owner who is withdrawing money from the company.

4

Enter the date.

5

Enter the amount.

6

Enter the owner’s draw account.

7

Click a save option.

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Entering Prior Period Adjustments

1

Select Company, Make General Journal Entries.

2

Enter the date when this adjustment occurred. The date will be a current year date, not a prior year date.

3

Enter the accounts affected by the adjustment. (A capital account such as Retained Earnings will be one of the affected accounts.)

4

Enter the amount of the adjustment, offsetting the adjustment in the capital account.

5

Enter a memo that describes the fact that this is a prior period adjustment.

6

Click a save option.

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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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 Contents of Retained Earnings Account 1

Press Ctrl+A to open your Chart of Accounts.

2

Click Retained Earnings to select the account.

3

Click the Reports button in the Chart of Accounts window.

4

Select QuickReport: Retained Earnings.

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 allows you or your accountant to view the information in your Retained Earnings account by producing a QuickReport. The automatic closing entry appears on the report with the description Closing Entry.

TIMESAVER You can quickly access the Retained Earnings QuickReport by double-clicking on Retained Earnings in the Chart of Accounts. 5

Double-click any entry on the report (other than a closing entry) to see the detail of that transaction.

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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

◆

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.

Set Up Credit Card Accounts

◆

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.

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Record Payroll Tax Accruals Account for Deposits or Retainers Record Loans Use the QuickBooks Loan Manager Record Loan Payments

Long-term liabilities—These are debts that won’t be paid back within the year.

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. For example, if you borrow $10,000 and receive cash, the following accounts could be affected: Debit Cash

Credit

$10,000

Note Payable

$10,000

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: Debit Fixed Assets/Vehicle

Credit

$22,000

Cash

$5,000

Vehicle Loan Payable

$17,000

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: Debit Office Expenses

Credit

$265

Accounts Payable

$265

When you issue a check to the office supply store to pay the bill, here’s what happens: Debit Accounts Payable Cash

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Credit

$265 $265

Managing Accounts Payable

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Select Reports, Vendors & Payables; then select A/P Aging Summary.

2

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.

3

Change the interval for each column of the report if the default 30-day interval is not the information you want to see.

4

Change the limit of 90 days if you need to see the specific intervals for payables older than 90 days.

5

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.

7

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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See Also See “Using Reminders” on page 198 for information on the reminders QuickBooks uses to inform you of due dates for paying bills.

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Using the Report Center If the list of reports on the Reports menu seems daunting, try using the QuickBooks Report Center. Select Report Center from the Reports menu or click the Report Center button on the Toolbar; then click a category on the left of the Report Center to see a descriptive list of all the reports of that particular type: ◆

Pass your mouse over the icon that appears next to a report name to see a sample view of the report.

◆

Click the More option after a report description to find out more about what information is presented in the report and how that information can be manipulated.

◆

Click Memorized at the top of the Report Center to see the list of your own memorized reports.

◆

Click the Preferences option to open the Report Preferences window.

◆

Click Learning to access tutorials and additional information about reports.

Mouse over to see sample report.

Choose a report category.

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Tutorials and more report information. More report detail.

Recording Payroll Tax Accruals

1

Select Company, Make General Journal Entries. You might see an information window telling you about the automatic journal entry numbering feature. Click OK to close this window.

2

Enter the date of the payroll, which might be different from the date that automatically appears.

3

Enter the payroll expense account.

4

Enter the gross payroll expense (total salaries and wages before withholdings) as a debit.

5

Enter a brief memo.

6

Enter the first tax liability account—for example, enter Payroll Withholding:Federal.

7

Enter the amount of tax liability as a credit.

8

Repeat Steps 6 and 7 until all your tax liabilities have been entered.

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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.

Enter the cash account from which the payroll is paid.

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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.

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.

Did You Know? 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. Recording Liabilities

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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.

2

Press Ctrl+N to open the Add New Account window.

3

Select Credit Card for the Type.

4

Click Continue.

5

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.

2

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.

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10 Save the form.

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Pay/Reconcile a Credit Card Account 1

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Select Banking, Reconcile. TIMESAVER You can also click the Reconcile button in the Banking area on the Home page.

2

Enter the credit card for which you have received a statement.

3

Enter the date of the statement.

4

Enter the ending balance that appears on your statement.

5

Enter any finance charge that appears on the statement.

6

Enter the date on which the finance charge was assessed.

7

Verify the account to which the finance charge should be recorded.

8

Click Continue.

9

Check off all the entries that appear 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.

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10 Click Reconcile Now to complete

the reconciliation. 10

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, go ahead and 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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Did You Know? 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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11 The Reconcile Adjustment window

appears 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.

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12 Click Leave Reconcile if you want

to leave the reconciliation for now and come back later.

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13 Click Enter Adjustment to enter an

adjustment for the unreconciled amount. Note: The adjustment is recorded as an expense in the Reconciliation Discrepancies account.

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14 Select whether you want to issue a

check or record the credit card bill as a payable. 15 Click OK. 16 Select the type(s) of reconciliation

report you want to produce.

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17 Click Display to display the

report(s) onscreen. 18 Click Print to print a paper copy of

the report(s).

See Also See “Reconciling Your Bank Statement” on page 350 for more information on the QuickBooks reconciliation feature.

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19 QuickBooks creates a check if you

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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. 20 Save the check.

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Accounting for Deposits or Retainers

1

Select Company, Make General Journal Entries.

2

Verify that the correct date appears.

3

Enter the liability account where you record your deposits.

4

Enter the amount you are ready to transfer to income. This entry should be a debit.

5

Enter an optional memo.

6

Enter the customer or client who made the deposit.

7

Enter the income account where you record the money you earned for this job.

8

Enter the amount of the deposit or retainer in the credit column.

9

Save the entry.

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? See Also See “Receiving Advances, Retainers, and Down Payments” on page 131 for information on the proper method for recording the receipt of a deposit or retainer.

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 nonexpense 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 Liabilities

381

Recording Loans

1

Press Ctrl+A to open the Chart of Accounts list.

2

Press Ctrl+N to open the Add New Account window.

3

Select Long Term Liability as the account type.

4

Click Continue.

5

Enter a name for the loan. This will appear on your balance sheet, so choose the name carefully.

6

Indicate whether this is to be classified as a subaccount.

7

Enter an optional description for the loan.

8

Enter an optional account number and tax line for the loan.

9

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.

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See Also See “Making Bank Deposits” in Chapter 4, “Invoicing and Collecting Income,” for more information about depositing money that your company receives. 9

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Using the QuickBooks Loan Manager

1

Select Banking, Loan Manager.

2

Click the Add a Loan button.

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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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 since 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: http://accountant.intuit.com/practice_ resources/calculators/index.html

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Enter the liability account where the loan balance is recorded.

4

Enter the name of the lender.

5

Enter the date on which the loan was initiated.

6

Enter the principal balance.

7

Enter the number of payments you will make.

8

Enter the frequency with which you will make payments.

9

Click Next.

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10 Enter the due date of the next

payment.

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11 Enter the payment amount. 12 Enter the number of the next

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payment. 13 Enter the payment frequency. 14 Enter escrow payment information

if applicable. 13 14

Did You Know? Escrow payments increase the amount of the loan payments. Mortgages are the most common type of loan that include 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.

15 Check this box if you want a 10-day

advance warning of the payment due date. 16 Click Next.

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17 Enter the interest rate.

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18 Enter the frequency with which

interest is compounded.

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. 22 19 Enter the account from which

payments will be drawn.

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20 Enter the account in which interest

expense should be recorded. 21 Enter the account in which any

bank fees or service charges should be recorded. 22 Click Finish. 23 Click the Payment Schedule tab to

see a detailed list of how your payments will be recorded. 24 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.

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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Recording Loan Payments

1

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.

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3

TIMESAVER You can quickly open the Write Checks window by pressing Ctrl+W. 2

Verify the account from which the payment will be drawn.

3

Enter the payee.

4

Enter the date of the payment.

5

Enter the amount of the payment.

6

Enter the loan liability account.

7

Enter the amount of the payment that will reduce the loan balance.

8

Enter the expense account where you record interest paid by your company.

9

Verify the amount that QuickBooks calculated for interest (the difference between the check total and the amount in Step 7).

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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Preparing the Top Ten QuickBooks Reports 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 back out in reports. Reports show you the results of all your company’s financial transactions. You can display reports, print them, save 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. The reports sampled here are some of the most commonly used. 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 toolbar. The Report Center provides you with a summary 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 Set Reports and Graphs Preferences Prepare an Income Statement Prepare a Balance Sheet Prepare a Trial Balance Prepare a General Ledger Report Prepare a Budget Report Prepare a Sales Tax Liability Report Prepare a Payroll Liability Report Prepare an Accounts Receivable Aging Summary Report Prepare a Job Progress Report

18 Prepare an Accounts Payable Aging Detail Report Customize Reports

Memorize a Customized Report

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Setting Reports and Graphs 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 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.

6

Check Draw Graphs in 2D (faster) if you like your graphs in twodimensional style instead of the default three-dimensional.

7

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.

8

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.

5

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.

7

Click Classify Cash to select which accounts you want to include in your Statement of Cash Flows.

8

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. 14 Click a report element from the

Change Font For list. 15 Click Change Font to change the

font selection for the selected title.

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16 Select a preference for displaying

negative numbers. 17 Check Divided by 1000 to show

report amounts divided by 1,000.

A sample of the currently selected font is displayed.

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18 Check Except Zero Amounts to

omit zero amounts from reports. 19 Check Without Cents to display

amounts without cents. 20 Click OK to close each of the

preference windows.

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Basic Report Rules Here are some basic report rules. Even though each type of report has certain features unique to it, some rules apply to every report. These rules are listed here so they don’t have to be repeated with the description of each report that appears in this chapter: ◆

Click the Print button at the top of the report to print a paper copy of it.

◆

Press Esc to close any report.

◆

Double-click an amount to drill down to the original document supporting that amount. Your mouse pointer appears like a Z (for zoom) in a magnifying glass when this drill-down capability exists.

◆

◆

With some columns, you can drag the little diamond at the right of a column title all the way to the previous diamond on the left, and the column disappears from the report.

◆

Click the Hide Header button to hide the screen display of a header and thus display more of the report. Hiding the header does not affect the print version of the report—the header still appears there. After a header is hidden, click Show Header to redisplay the header on the screen.

◆

Click the Collapse button to collapse the display of subaccounts and show only parent accounts on a report. Click the Expand button to redisplay subaccounts.

◆

Press Ctrl+M to memorize a report you have customized. See Chapter 7, “Using Time-Saving Features,” for more information on the QuickBooks memorization feature.

Drag the little diamond at the right of a column title to resize the column.

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Preparing an Income Statement

1

Select Reports, Company & Financial.

2

Select Profit & Loss Standard from the side menu.

3

Click the Dates drop-down arrow to select a time period for this report.

4

Alternatively, enter a specific range of dates.

5

Click the Export button and then select A New Excel Workbook to transfer the report to Excel. For example, you might want to run some what-if scenarios or manipulate the numbers in ways not available in QuickBooks.

The income statement, also known as the Profit & Loss Statement, shows all revenue and expenses for a designated period of time. The income statement is one of the reports you are expected to present to shareholders and to potential lenders who need to understand how your company is performing. You won’t see individual transactions on this report, but you can drill down with a couple of mouse clicks to see the detail that supports each amount on this report.

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Did You Know? Accounts of the same type appear alphabetically. You can change the order of accounts by rearranging them in the Chart of Accounts or by preparing the report using account numbers, in which case accounts appear numerically by type. If your Chart of Accounts is large and has many subaccounts, click on the collapse button to summarize the data in the parent accounts.

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Preparing a Balance Sheet 1

Select Reports, Company & Financial.

2

Select Balance Sheet Standard from the side menu.

3

By default, QuickBooks prepares balance sheets as of today’s date. Change the date at the top of the report if you want a balance sheet as of a different date.

The balance sheet is a summary of the balances in all asset, liability, and equity accounts as of a particular date. The balance sheet and the income statement are the two most common reports given to lenders and investors. These two reports, especially when viewed over time, speak volumes about how a company is performing.

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Click the drop-down arrow in the Columns field to present the balance sheet information by month, quarter, or another designation.

Did You Know? You can produce a balance sheet with a two-year comparison. If you want to see how your balance sheet compares with the same time period in the previous year, select Balance Sheet Prev Year Comparison from the Reports, Company & Financial menu.

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Preparing a Trial Balance

1

Select Reports, Accountant & Taxes.

2

Select Trial Balance from the side menu.

3

Set the date range for which you want to see your accounts displayed.

The trial balance lists all your accounts of every type. The current balances in those accounts are displayed in debit and credit columns, with the total of all debits equaling the total of all credits. This report provides a quick opportunity to see the balance of every account as of a particular date without having to open separate reports for income statement accounts and balance sheet accounts.

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Preparing a General Ledger Report 1

Select Reports, Accountant & Taxes.

2

Select General Ledger from the side menu. You might see a message informing you that QuickBooks collapses multiple items from a transaction into a single transaction on the report, and that if you double-click a collapsed transaction you can see the detail. Click OK to close this window.

3

The general ledger is considered by many to be the company financial bible. This report lists the details of every transaction, in every account, for the designated time period. You might want to print your general ledger monthly or quarterly and keep it in a permanent location for researching past transactions.

2 1

Select a date or range of dates for this report. By default, the report is presented for the current month to date.

3

396

Preparing a Budget Report 1

Select Reports, Budgets & Forecasts.

2

Select Budget vs. Actual from the side menu.

3

If you have developed more than one budget for your company, select the budget you want to use for this report.

4

Click Next.

Refer to a budget report to see how your company’s performance is measuring up to the budget. You can choose to display the budget versus actual differences by percent, by amount, or both. You can also produce this report with prior year information included.

2 1

Continued, next page

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4

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5

Indicate how you want the budget presented. An account listing by month is the default selection.

6

Click Next.

7

Click Finish in the last budget report setup window.

8

Select the time period you want to use for this report.

9

Select the columns you want to view in this report.

5

6 8

398

9

Save Time by Placing Favorite Reports on the Icon Bar Click here to quickly add your report to the icon bar.

If you use the QuickBooks Icon Bar, you can easily add your favorite reports to the toolbar and then retrieve a report with a single click. Display your icon bar (select View, Icon Bar), and then open the report you want to add to the icon bar. Select a date range appropriate to the report to be displayed in the future. If you select a generic range (“This Month”), the report always displays the latest information from the current month. If you select specific dates, the report for the chosen range always appears when you open this report. Choose View, Customize Icon Bar to open the Customize Icon Bar window. Choose View, Add Report Name to Icon Bar.

This text appears under the button.

This description appears when your mouse hovers over the button. Your new button appears on the icon bar.

The Add Window to Icon Bar window appears. Make any changes you want in the Label and Description that get assigned to the new button, and then click OK. A new button appears on your icon bar. Now you can access your report any time by clicking the button.

Preparing the Top Ten QuickBooks Reports

399

Preparing a Sales Tax Liability Report 1

Select Reports, Vendors & Payables.

2

Select Sales Tax Liability from the side menu.

For companies that pay sales tax, the sales tax liability report is a quick source for all the information you need to enter on your monthly or quarterly sales tax forms. Set the date range for the sales tax you are about to pay, and presto! You can fill out your sales tax form instantly.

Did You Know?

1

The Sales Tax Liability report appears only if you have indicated that your company collects sales tax. Select Edit, Preferences; click the Sales Tax icon; and then click the Company Preferences tab to see whether you have activated the sales tax feature for your company.

3

Select the time period that matches the time period for the sales tax form you have to fill out.

4

Enter information from this report onto your state or local government sales tax form.

See Also See Chapter 6, “Collecting and Paying Sales Tax,” on page 171, for information on how to record all types of sales tax transactions.

400

2 3

Preparing a Payroll Liability Report

1

Select Reports, Employees & Payroll.

2

Select Payroll Liability Balances from the side menu.

If you subscribe to the QuickBooks payroll services (enhanced services or higher) for the preparation of your payroll, QuickBooks can also produce your federal and state payroll tax forms. If you use an outside payroll service, the service produces the forms for you. If you prepare your own payroll or use the QuickBooks standard payroll service, you need to obtain information for filling out state and local payroll tax forms. This payroll tax report should give you everything you need. In this example, we look at the detail behind the company’s liability for state unemployment tax.

Did You Know? QuickBooks advertises its special offers in pop-up windows. A Take the Hassle Out of Payday pop-up window might appear when you request this report. This window describes certain payroll services you can purchase from Intuit. Click Remind Me Later or No to close the window, or click Yes to read more about the payroll services. Checking the Do Not Display Message in the Future box keeps this window from appearing the next time you request this report.

2 1

Continued, next page

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401

3

Set the dates at the top of the report for the period for which you are paying payroll taxes.

4

Double-click any amount to get the detail behind that amount.

5

Examine the detail so you understand the source of the tax liability.

3

4

For Your Information The Transactions by Payroll Liability Item report that appears when you double-click on a payroll liability amount shows you a list of each paycheck written in the time period and the amount of the particular tax liability that relates to each check. Doubleclicking on an amount from this report takes you to the individual checks where the liability was generated.

5

For Your Information QuickBooks works with Excel to provide detailed payroll information reports. You just need to have Microsoft Excel version 2000 or higher installed on your computer to use this option. Choose Reports, Summarize Payroll Data in Excel. You might be asked if you want to enable macros, and you should do so. You will be prompted to enter a date range, and then select the reports you want to view. Click the option to Get QuickBooks Data, and then click tabs at the bottom of the worksheet to view the different reports. You’ll find all the information you need here to fill out state tax forms, unemployment tax forms, the employee tip Form 8846, and more.

402

Preparing an Accounts Receivable Aging Summary Report 1

Select Reports, Customers & Receivables.

2

Select A/R Aging Summary from the side menu.

3

You can change the interval from 30 days to 60 or whatever is more common in your business.

4

Select how many days overdue to include in the report. If you select 120, for example, with a 30-day interval, the report displays a new column for 91–120 and then a column for >120.

The accounts receivable aging reports provide insight into how timely your customer payments are received. The aging summary report shows outstanding balances arranged by customer name and divided into time periods: amounts due currently, 1–30 days overdue, 31–60 days overdue, 61–90 days overdue, and more than 90 days overdue.

2 1

Did You Know? You can see the details of all accounts receivable in a single report. Instead of selecting A/R Aging Summary, select A/R Aging Detail in Step 2 to see every overdue invoice instead of a summary listing by job. Or, double-click on an entry in the Summary report to see the detail behind that entry.

3

4

Preparing the Top Ten QuickBooks Reports

403

Preparing a Job Progress Report 1

Select Reports, Jobs, Time & Mileage.

2

Select Job Progress Invoices vs. Estimates from the side menu.

3

Change the time period if the default year-to-date option is not what you want to view.

What progress are you making on a particular job? If your company prepares estimates, you can produce a job progress report to show the original estimate, the amount of work billed to date, and the percentage of each job that has been billed.

2 1

3

404

Preparing an Accounts Payable Aging Detail Report

1

Select Reports, Vendors & Payables.

2

Select A/P Aging Detail from the side menu.

3

By default, this report is produced as of today. Change the Date field or enter a specific date if you want to see payables as of a different date.

4

See exactly how much your company owes, and to whom, with this comprehensive payables report. The report begins with all bills that are payable but not yet due. Scroll down to see every bill that is 1–30 days overdue, 31–60, 61–90, and more than 90 days overdue. Notices of items received are included in this report, even if the related bill has not yet arrived. Double-click any amount to see the details of the payable.

2 1

Change the Interval (days) field if you want to see payables grouped by something other than 30-day segments.

3

4

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Customizing Reports

The Modify Report button appears on the top of every report you produce in QuickBooks. Use this button to change standard reports into reports that provide exactly the information you need. Select the accounts, columns, header information, and style for any report you produce. When you’re satisfied with your changes, you can memorize the report for easy retrieval later. In this example, we start with the Open Invoices report and produce a streamlined report that shows only invoices with balances over $1,000.

Change the Dates and Columns on a Report 1

Select Reports, Customers & Receivables.

2

Select Open Invoices from the side menu.

3

Make any change in the report date right on the report screen.

4

Click the Modify Report button.

2 1

4

406

3

5

You can also make changes to the report date in the Report Date Range section.

6

Check or uncheck any columns you want to add or remove from the report.

7

Click OK to return to the report and see your changes implemented.

6

5

7

Change the Report Filters 1

With a report open, click the Modify Report button; then click the Filters tab.

2

Click the report feature for which you want to set filters. The Amount feature has been selected in this example.

3

Set the criteria for your filter. The criteria options differ depending on the feature you choose for filtering. For this example, amounts greater than or equal to $1,000 is the selected criterion.

4

Click OK to return to the report and see your changes implemented.

1

2

3

4

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407

Customize the Report Header and Footer 1

With a report open, click the Modify Report button; then click the Header/Footer tab.

2

Check or uncheck any titles, headers, and footers you want to include or exclude from the report.

3

Using drop-down lists, change the style of the date prepared or page number if you are including this information with your report.

4

Enter information in the boxes that appear across from the options to change information that appears on the report. For example, you can change the way the company name appears on the report, you can change the title and subtitle, and you can edit footer information.

5

Click the Fonts & Numbers tab.

6

Click any report title to view an example of the current font selection.

7

Click the Change Font button to change the font style and size of the selected title.

8

Make any desired changes in the way negative numbers are displayed on the report.

9

Check Divided by 1000 if you want to show numbers divided by 1,000. Note: Depending on the report you are viewing, you might see an option for Except Zero Amounts. Checking this option prevents items with an amount of zero from displaying on your report.

10 Check Without Cents if you want to

omit cents from the report. 11 Click OK to see your changes

implemented.

408

2

3

1

5

8

6

9

7

10

11

Memorizing Memorizing aa Customized Customized Report Report 1

Customize a report as described in the previous tasks in this chapter.

2

Click the Memorize button to save this report style for future use.

3 1

Enter a name for your memorized Customize a report as described in report. the previous tasks in this chapter. Check Save in Memorized Report Click buttonintoa save Groupthe to Memorize save the report this report style for future particular group. This stepuse. is optional. If you don’t save the Enter a name for your memorized report in a group, the memorized report. report appears on the Reports menu under Memorized Reports Check Save in Memorized Report and before report groupsinappear. Group to save the report a particular group. This step is If you’re using the Memorized optional. If you don’t save the Report Group option, select the report in a group, the memorized group where the report will be report appears on the Reports saved. menu under Memorized Reports and Clickbefore OK. report groups appear.

4 2 3 4 5

6 57

IfInyou’re usingretrieve the Memorized the future, your report Report Group option, the by selecting Reports,select Memorized group where the report will be Reports. saved.

6

Click OK.

7

In the future, retrieve your report by selecting Reports, Memorized Reports.

Instead of starting from scratch each time you want to view a special report, save the report with the QuickBooks memorization feature and then recall the report from the QuickBooks menu whenever you want to see it.

2

3

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Workshops

W

You’ve learned the steps for performing every day 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.

What You’ll Do

This section of the book contains a handful of interesting projects that go beyond the day-to-day experience. With these projects, you’ll learn to customize the appearance of your program, stay on top of your To Do list, and manage all the activity in your QuickBooks file with the Company Snapshot.

Use the Company Snapshot

Customize the Icon Bar

Use To Do Notes Color Code Your Accounts

W 411 411

Project 1: Customize the Icon Bar

At various points in this book we’ve discussed methods for adding favorite items to the QuickBooks Icon Bar. But you might have noticed that the more items you add, the more likely it is that your icon bar will get too full, scroll off the screen, and just become more trouble than it’s worth. With the menus and the navigation screens for each of the major QuickBooks Centers, you might think you don’t need the Icon Bar at all, and if that’s the case, you can easily turn off the bar by clicking the View menu and clicking Icon Bar. This is the same process you follow if you want to turn on the display of the Icon Bar. But there’s so much more you can do with the Icon Bar, beyond adding a report or a customized form. If you’ve thought about turning off this feature, think again. Instead of removing the display of the Icon Bar, customize the bar and make it work for you.

The Project

1

With the steps shown in this project, you can remove unwanted items from the Icon Bar, change the names of existing buttons to shorten them and thus make room for more buttons, change the order of buttons, and group buttons into separate areas.

4

6

The Process 1

Right-click anywhere on the Icon Bar and then click Customize Icon Bar to display the Customize Icon Bar dialog box.

2

Existing buttons appear in the Icon Bar Content list on the left of the dialog box. Scroll through the list, examine existing buttons, and decide which ones you want to remove and which ones you want to rename.

3

To remove a button, click the name of the button you wish to remove and then click the Delete button. The item is immediately removed from your Icon Bar.

412

2

3 5

7 4

Vertical lines that separate Icon Bar buttons into groups are called Separators and appear as (space) on the Icon Bar Content list. You can remove a separator just as you can a button, by clicking the (space) indicator and then clicking the Delete button.

5

Add a separator by clicking the name of an item on the Icon Bar Content list and then clicking the Add Separator button. The new separator will appear to the right of the button you selected on the Icon Bar.

6

To change the name of an existing Icon Bar button, click that button name on the Icon Bar Content list and then click the Edit button.

7

Change the button name by changing the text in the Label field.

8

Click OK.

9

Add an icon by clicking the Add button.

10 Click the command you wish to add

to the Icon Bar.

8

9

11

12

13

10

11 Select an icon for this item. 12 Refine the Label and Description if

you desire. 13 Click OK.

14

14 Change the order of any Icon Bar

button by clicking the diamond to the left of any item and dragging it to the desired position. 15 Click OK when done customizing

your Icon Bar. 15

See Also See “Save Time by Placing Favorite Reports on the Icon Bar” in Chapter 18, and “Add a Memorized Transaction to Your Icon Bar” in Chapter 7. Workshops

413

Project 2: Using the Company Snapshot

The new QuickBooks Company Snapshot feature is available in the 2009 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.

The Project Display the Company Snapshot, examine the features, customize the material, and 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.

2

Change the information displayed on the Income and Expense Trend Graph by choosing a different date range in the drop-down menu.

3

Hover over any bar on the graph to see the actual amount represented by the bar.

4

Double-click any bar to open a separate window displaying additional graphs for income and expenses.

See Also See “Setting Reminders Preferences” in Chapter 7 for more information on the Reminders list.

414

1

3

4

2

5

View your Reminders list.

6

View Account Balances.

7

Click Select Accounts to choose the accounts you want to include or exclude from the Snapshot list.

8

Double-click any balance sheet account name or balance amount to open the register for that account. Double-click any income or expense account to open a QuickReport for that account.

9

View the Customers Who Owe Money list.

6

5

10 Re-sort the list by clicking any

column header. 11 Double-click any Customer name,

7

8

date, or amount to open a Customer Open Balance report for a particular customer.

9

10

12 Click a customer and then click the

Receive Payments option to record a payment. 13 View the Vendors to Pay list. 14 Re-sort the list by clicking any

column header.

13

15 Double-click any Vendor name,

14

date, or amount to open a Vendor Open Balance report for a particular vendor.

15

16 Click the Pay Bills option to initiate

payment of any outstanding bills.

Continued, next page

11

16

12

Workshops

415

17 To set the Company Snapshot as

18

19

your home page, first make sure the Company Snapshot screen is open on your computer screen. 18 Choose Edit, Preferences, and click

Desktop View on the left side of the Preferences window. 19 Choose Save Current Desktop. 20 Uncheck Show Home Page When

Opening A Company File. 21 Click OK.

20

416

21

Project 3: Using To Do Notes

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 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. 2

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.

4

5

3

Continued, next page

Workshops

417

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.

7

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.

6

7

10

10 Click OK. 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. 8

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.

418

11

9

12 Click OK when asked to confirm the

deletion. 13 View your To Do Notes on the

Company Snapshot.

12 13

Workshops

419

Project 4: Color Code 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 color-coding 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 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

Click OK.

4

5

420

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.

6

8

Workshops

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Index Symbols - (decrease date by day) keyboard shortcut, 72 + (increase date by day) keyboard shortcut, 72 1099 forms issuing, 66 setting up, 63-65

A accessing tax reports, 300-301 accounting methods for job estimates, 201 accounting preferences for companies, setting, 105-106 accounts. See also Chart of Accounts assets, effect on, 352 bank accounts, setting up, 21 color-coding, 420-421 expense accounts, setting up, 22 income accounts, setting up, 22 income taxes, effect on, 302 inventory, effect on, 331 liabilities, effect on, 372 numbering, 80 prefilling, 277-278 purchases, effect on, 145 sales, effect on, 110 sales taxes, effect on, 183 tax lines, assigning, 298-299 transferring money between, 289 accounts payable, 371 aging detail reports, preparing, 405 checks voiding from previous year, 169 voiding in current year, 167-168 early payment discounts, 155-156 management of, 373 unpaid bills reports, viewing, 153

accounts receivable aging summary reports, preparing, 403 bad debts, 139-140 tracking, 126 unpaid invoices collection letter creation, 136-138 viewing, 135 acquiring assets, accounting methods, 352 activating audit trails, 258 inventory, 330 online banking in QuickBooks, 267-269 Activities menu, selecting list options, 98 adding accounts to Chart of Accounts, 78-79 customer information, 81-82 items inventory items, 331, 334 on-the-fly method, 92 purchase forms, 88-89 sales forms, 88-89 memorized transactions to Icon Bar, 192 multiple online transactions, 282-283 online transactions to QuickBooks, 273-275 transactions to groups, 188 vendors, 86 additional information, 87 address information, 86 addresses employees, entering, 32 vendors, adding, 86 adjusting inventory prices, 331, 347-348 inventory quantities, 331, 346 administrators of company financials password assignments, 319-322 setting up, 318

423

advance payments, recording, 131 advertising in pop-up windows, 401 aging detail reports (accounts payable), preparation of, 405 aging summary reports (accounts receivable), preparation of, 403 alerts, Reminders feature, 198 Alt+down arrow (display date calendar) keyboard shortcut, 72 assets. See also fixed assets acquisitions, accounting methods, 352 balance sheets, report preparation, 393-394 deposits, recording as, 356 EasyStep Interview process, 18 sale of, tax consequences, 352 assigning passwords, 319-322 Assisted Payroll option, 29 associating online deposits with open customer invoices, 280 online transactions with open vendor bills, 279 ATM withdrawals, recording, 353 Audit Trail feature, 258 audit trails activating, 258 removing, 325 reports, creating, 258

B backups company files creating, 310-312 restoring, 313-314 online data backup service, cost of, 316-317 for timer data without condensing, 235 bad debts (accounts receivable), recording as, 139-140 balance sheets, preparing, 393-394 bank accounts, setting up, 21 bank statements EasyStep Interview process, 17 reconciling, 350-351 banks, sending email messages to, 288. See also online banking Basic Payroll option, 29 batch printing invoices, 116 benefits sick time, setting up, 36 vacation time, setting up, 37

424

billing rates for employees, entering, 32 Billing Solutions, 294 billing timer data to customers, 233-234 bills paying online, 284-285 canceling payments, 286-287 preferences, setting, 144 scheduling, 190 vendors deleting payments, 161 early payment discounts, 155-156 editing payments, 159-160 paying, 154 budgets creating, 239-242 EasyStep Interview process, 18 first of year of business, 242 reports, creating, 243, 397-398 business assets, sales of (tax consequences), 352 buttons (Icon Bar), 412-413

C calculating compound interest, 383 depreciation expenses, fixed assets, 359 inventory value, 336 net worth, 363 simple interest, 383 canceling online bill payments, 286-287 cancelled checks, EasyStep Interview process, 17 capital stock accounts, par value, 363 cash sales, recording, 129 changing. See modifying charging customers expenses, 120-121 sales taxes, 175 Chart of Accounts accounts, adding, 78-79 balance equity accounts, opening, 363-364 viewing, 364 zeroing-out, 365 credit cards reconciling, 378-380 recording charges, 377 setting up, 376 draw accounts, 367 recording owner withdrawals, 368 setting up, 367 EasyStep Interview process, 17

fixed assets entering, 357-358 naming guidelines, 358 liabilities, recording deposits/retainers, 381 list options, 98 opening, 298 retained earnings, managing, 370 check register, recording payments, 157-158 checking accounts. See bank accounts checks Easy Step Interview process, 17 preferences, setting, 162-163 printing, 166 voiding from previous year, 169 voiding in current year, 167-168 writing, 164-165 classes companies list display, 246 reports, 248 setting up, 244-245 forms, multiple use of, 247 payrolls, 244 closing reports, 391 year-end company records, 326-327 closing date exception reports, creating, 328 collapsing subaccounts in reports, 391 collection letters, creating, 136-138 color-coding accounts, 420-421 columns in reports changing, 406-407 resizing, 391 companies accounting preferences, setting, 105-106 accounts. See accounts accounts payable. See accounts payable accounts receivable. See accounts receivable administrators, setting up for financial access, 318 assets. See assets; fixed assets audit trails, 258 bad debts, recording, 139-140 balance sheets, preparing, 393-394 billing preferences, setting, 144 budgets. See budgets capital stock accounts, par value, 363 checks. See checks classes. See classes

closing date exception reports, creating, 328 collection letters, creating, 136-138 credit card payments, receiving, 355 customer invoices, recording down payments, 381 customers. See customers daily transactions checklist, monitoring, 314-315 deposits, recording as assets, 356 depreciation expenses, fixed assets, 349 draw accounts, 367-368 estimated tax payments, 302-303 estimates. See estimates (jobs) finance charges, setting preferences, 122 financial information, entering, 13-18 financial statements, prior period adjustments, 369 forms, customizing, 250-256 general ledger reports, preparation of, 396 general preferences, setting, 72 historical data, entering in EasyStep Interview process, 25 income statements, preparing, 392 inventory. See inventory invoices. See invoices jobs. See jobs jobs progress reports, preparing, 404 journal entries, creating in General Journal, 257 liabilities. See liabilities mailing labels, creating, 261-262 monthly statements, creating, 123-124 net worth, calculating, 363 opening balance equity accounts, 363-366 payments. See payments payroll, liability reports, 401-402 petty cash, tracking, 354 purchase orders. See purchase orders purchases, effect on accounts, 145 refunds, issuing to customers, 128 retained earnings, managing, 370 sales, effect on accounts, 110 sales taxes. See sales taxes sample files, practicing, 11-12 send forms, setting preferences, 125 trial balances, preparing, 395 unpaid bills reports, viewing, 153 users editing rights access levels, 323-324 removing, 325 setting rights access levels, 319-322

companies

425

vendors. See vendors year-end records, closing, 326-327 company files backups creating, 310-312 online data backup service, 316-317 restoring, 313-314 creating alternate methods, 15 via EasyStep Interview, 13-18 required information, 17-18 start dates changing, 20 choosing, 20 entering, 19 company names, EasyStep Interview process, 17 Company Snapshot feature, 414-416 composing collection letters, 136-138 compound interest calculating, 383 options for loans, 385 configuring QuickBooks, 13-18 contractors. See independent contractors counting inventory, 344-345 credit card liabilities, 371 paying, 378-380 recording, 376-377 credit card payments, receiving, 355 credits, issuing to customers, 128 current liabilities, 371 loans, recording, 382 custom fields for employees, entering, 32 Custom invoices, 112 Customer Center, list options, 98 customer lists, EasyStep Interview process, 17 customers accounts receivable. See accounts receivable advance payments, receiving, 131 bad debts, recording, 139-140 billing times, applying to invoices, 233-234 cash payments, 129-130 collection letters, creating, 136-138 credits, issuing, 128 down payments, 131, 381 estimates creating, 210-211 factors, 201 invoicing against, 211-214 revising, 215-216 expenses, charging, 120-121

426

finance charges, setting, 122 information adding, 81-82 detailed display of, 83-85 invoices. See invoices jobs. See jobs mailing labels, creating, 261-262 monthly statements, creating, 123-124 notes, adding, 96 open invoices, associating online deposits with, 280 preferences, setting, 108-109 sales order management, 339-340 tax exempt items, sale of, 177-179 customizing forms, 250-256 Icon Bar, 412-413 QuickBooks, company data entry, 13-18 reports column modifications, 406-407 date changes, 406-407 filter changes, 407 footer alterations, 408 header alterations, 408 memorizing customized, 409

D data company historical data, entering, 25 transferring from earlier QuickBooks versions, 8 from Quicken, 9-10 date entry keyboard shortcuts, 72 dates invoices, setting, 114 jobs, 208 reports, changing, 406-407 deductions (payroll), setting up, 39-40 deleting. See removing deposits online, associating with open customer invoices, 280 recording, 130 as assets, 356 as liabilities, 381 depreciation expenses, fixed assets, 349 calculation methods, 359 entering, 360 desktop view preferences, setting, 73-74 direct-depositing paychecks, 49-50

disabling pop-up messages, 287 discount items, 90 discounts early bill payments, 155-156 invoices, issuing, 132-134 sales taxes, early payment of, 182 displaying customer information, 83-85 lists on forms, 76-77 down payments, recording, 131, 381 downloading IRS forms, 302-306 state tax forms, 302, 307 W-4 forms, 35 draw accounts owner withdrawals, recording, 368 setting up, 367 drill down capabilities, reports, 391

E early payment discounts (bills), 155-156 EasyStep Interview bank accounts, setting up, 21 company files, creating, 13-20 finishing, 24 getting started checklist, 17-18 historical data, entering, 25 income/expense accounts, setting up, 22 questions list, 16 required information, 17-18 restarting, 24 stopping, 23 editing bill payments, 159-160 inventory items, 335 list information, 95 memorized transactions, 193 recurring transactions, 194 Renaming Rules, 276 rights access levels, 323-324 timer transactions, 232 email messages, sending to banks, 288 emailing invoices, 117-119 employee lists, EasyStep Interview process, 18 employees addresses, entering, 32 billing rates, entering, 32 custom fields, adding, 32 independent contractors versus, 64 mailing labels, creating, 261

paychecks direct deposit, 49-50 preparing, 42-43, 46 printing, 48 special preparation, 44, 46 payroll Assisted Payroll, 29 Basic Payroll, 29 creating reports, 51-52 deductions, setting up, 39-40 Enhanced Payroll, 29 information, setting up, 33 Online Payroll, 29 outsourcing, 67 reporting taxes, 53-54, 56 scheduling, 30 setting preferences, 28, 30 taxes, setting up, 34-35 timer information in, 47 W-2 forms, preparing, 59-60 W-3 forms, preparing, 61-62 personal information, entering, 31 preferences, setting, 31-32 sick benefits, setting up, 36 time information exporting to timer, 223 recording, 224-225 timer use guidelines, 222 vacation benefits, setting up, 37 year-to-date payroll amounts entering, 38 tax liabilities, 37 Employees Center, list options, 98 Enhanced Payroll option, 29 entries in lists deleting, 99 hiding, 97-98 merging, 100-101 equity accounts (balance sheets), report preparation, 393-394 escrow payments, 384 estimated taxes, paying, 302-303 estimates (jobs), 199 accounting methods, 201 creating, 210-211 factors, 201 preferences, setting, 200 progress invoicing, 211-212 percentage of, 213 selected items only, 214

estimates (jobs)

427

progress reports, displaying, 217-218 revising, 215-216 Excel, payroll data in, 402 expenditures, vendor bills deleting payments, 161 editing payments, 159-160 paying, 154-156 expense accounts, setting up, 22 expenses, tracking jobs, 202-204 petty cash, 354 exporting time information to timer, 223 timer data to QuickBooks, 228

F favorite reports, adding to Icon Bar, 399 federal identification numbers, EasyStep Interview process, 17 federal taxes. See taxes files. See company files filtering progress reports, 218 reports, changing filters, 407 finance charges, setting preferences, 122 financial institutions. See banks financial statements account numbers, sorting, 80 prior period adjustments, entering, 369 finishing EasyStep Interview process, 24 first in, first out (FIFO) method, inventory valuation, 336 fixed assets categories, 349 Chart of Accounts entries, 357-358 depreciation expenses, 349 calculation methods, 359 entering, 360 Modified Accelerated Cost Recovery System (MACRS) depreciation expense calculation, 359 naming guidelines, 358 purchasing, 357-358 sales, entering in general journal entries, 362 on invoice, 361 selling, 361-362 FOB (free on board), 108 footers on reports, changing, 408 Form 940 (unemployment compensation taxes), 57-58

428

Form 941 (reporting payroll taxes), 53-54, 56 Form 990 (tax-exempt organizations), 297 Form 990-PF (foundations), 297 Form 990-T (tax-exempt organizations), 297 Form 1040 (individuals), 297 Form 1065 (partnerships), 297 Form 1120 (taxable corporations), 297 Form 1120S (S corporations), 297 Form 1099 (miscellaneous income) issuing, 66 setting up, 63-65 Form 8109 (estimated tax payments), 302-303 Form W-2, preparing, 59-60 Form W-3, preparing, 61-62 Form W-4, downloading, 35 forms creating, 252-256 customizing, 250-256 items, using on, 91 lists, displaying, 76-77 multiple classes, setting up, 247 forms (IRS) downloading, 302-306 Form 940 (unemployment compensation taxes), 57-58 Form 941 (reporting payroll taxes), 53-54, 56 Form 990 (tax-exempt organizations), 297 Form 990-PF (foundations), 297 Form 990-T (tax-exempt organizations), 297 Form 1040 (individuals), 297 Form 1065 (partnerships), 297 Form 1120 (taxable corporations), 297 Form 1120S (S corporations), 297 Form 1099 (miscellaneous income) issuing, 66 setting up, 63-65 Form 8109 (estimated tax payments), 302-303 Form W-2, preparing, 59-60 Form W-3, preparing, 61-62 Form W-4, downloading, 35 selecting income tax returns, 296-297 foundations (IRS Form 990-PF), 297 freelancers. See independent contractors Fun With Taxes website, 302, 307

G General Journal entries creating, 257 depreciation expenses, entering, 360 fixed assets, entering sales of, 362 payroll tax accruals, recording, 375

general ledger reports, preparing, 396 general preferences, setting companies, 72 personal, 70-71 getting started checklist (EasyStep Interview), 17-18 goods (purchase orders), recording receipt of, 150-151 graphs, setting preferences, 388-390 group items, 90 groups inventory items, creating, 337-338 sales tax groups, creating, 174 transactions adding to, 188 memorizing, 187

H H (last day of month) keyboard shortcut, 72 hardware/software requirements, 5 headers (reports) changing, 408 hiding, 391 hiding entries on lists, 97-98 Icon Bar, 412 report headers, 391 historical data (companies), entering in EasyStep Interview process, 25 home page, setting Company Snapshot as, 416

I Icon Bar customizing, 412-413 favorite reports, adding to, 399 hiding, 412 memorized transactions, adding, 192 viewing, 412 implementing memorized transactions, 189 income accounts, setting up, 22 income statements, preparing, 392 income tax returns creating, 302-307 Detail reports, accessing, 301 estimated taxes, paying, 302-303 forms Form 990 (tax-exempt organizations), 297 Form 990-PF (foundations), 297

Form 990-T (tax-exempt organizations), 297 Form 1040 (individuals), 297 Form 1065 (partnerships), 297 Form 1120 (taxable corporations), 297 Form 1120S (S corporations), 297 selecting, 296-297 liability accounts, effect on, 302 non-tax-related transactions, 302, 308 tax lines, assigning to accounts, 298-299 tax reports, accessing, 300 TurboTax, 302, 308 independent contractors 1099 forms issuing, 66 setting up, 63, 65 employees versus, 64 time information exporting to timer, 223 recording, 224-225 inserting Icon Bar buttons, 413 installing QuickBooks in multiuser environment, 7 software/hardware requirements, 5 starting installation CD, 2-4 timer on remote machines, 221-222 interest calculating, 383 on loans, compounding options, 385 Internet connections manual setup, 265 setting preferences, 264 Intuit online data backup service, 316-317 Intuit QuickBooks Bill Pay Service, 285 Intuit Remote Access feature, 260 Intuit website, interest loan calculators, 383 inventory, 329 accounting transactions, 331 activating, 330 FOB (free on board), 108 groups, creating, 336-338 items adding to, 334 editing, 335 setting up, 332-333 tax status, setting, 176 manufactured, recording, 331 physical counts of, 344-345 prices, adjusting, 347-348 quantities, adjusting, 346

inventory

429

replenishment reminders, setting, 341 reports, preparing, 342-343 sales order management, 339-340 tax exempt items, sales of, 177-179 valuation methods, 336 inventory lists, EasyStep Interview process, 17 inventory part items, 90 Inventory Stock Status by Item report, 343 Inventory Stock Status by Vendor report, 343 Inventory Valuation Detail report, 343 Inventory Valuation Summary report, 343 invoices batches emailing, 119 printing, 116 billing time, applying, 233-234 creating, 111 credits, issuing, 128 dates, setting, 114 emailing, 117-118 fixed assets, sales entries, 361 inventory items, setting tax status, 176 issuing against estimates, 211-212 percentage of, 213 selected items only, 214 monthly statements, creating, 123-124 payment terms, creating, 249 payments, recording, 127 preferences, setting, 109 previewing, 113 printing, 115 sales order management, 339-340 sales taxes, effect on liability accounts, 183 sending online, 294 types, 112 unpaid bad debt status, 139-140 collection letter creation, 136-138 viewing, 135 IRS forms downloading, 302-306 Form 940 (unemployment compensation taxes), 57-58 Form 941 (reporting payroll taxes), 53-56 Form 990 (tax-exempt organizations), 297 Form 990-PF (foundations), 297 Form 990-T (tax-exempt organizations), 297 Form 1040 (individuals), 297 Form 1065 (partnerships), 297

430

Form 1120 (taxable corporations), 297 Form 1120S (S corporations), 297 Form 1099 (miscellaneous income), 63-66 Form 8109 (estimated tax payments), 302-303 Form W-2, preparing, 59-60 Form W-3, preparing, 61-62 Form W-4, downloading, 35 selecting for income tax returns, 296-297 website depreciation resources, 359 forms downloads, 302-306 issuing credits/refunds to customers, 128 items forms, using on, 91 information, adding on-the-fly, 92 inventory adding, 334 editing, 335 setting up, 332-333 lists, moving on, 93 purchase forms, adding, 88-89 purchase orders adding, 147 viewing, 148 sales forms, adding, 88-89 sales tax items, creating, 173 sub-items, designating, 94 types, 90 Items List, list options, 98

J–K jobs dates feature, launching, 208 description feature, launching, 209 estimates. See estimates (jobs) expenses, tracking, 202-204 miscellaneous information, entering, 203 payment information, entering, 203-204 progress reports, displaying, 217-218 revenues, tracking, 202-204 specific information, entering, 204 status feature, 205-206 time information exporting to timer, 223 recording, 224-225 timed activities, creating (timer), 226-227 type feature, 207

jobs progress reports, preparation of, 404 journal entries. See General Journal entries K (last day of week) keyboard shortcut, 72 keyboard shortcuts (date entry), 72

L last in, first out (LIFO) method, inventory valuation, 336 liabilities accounting methods, 372 accounts payable, 371 management of, 373 balance sheets, report preparation, 393-394 credit card purchases, 371 paying, 378-380 recording, 376-377 current, 371 deposits for future goods/services, entry as, 381 income taxes, effect on, 302 loans paying, 386 recording, 382 setting up (Loan Manager), 383-385 long-term, 371 payroll report preparation, 401-402 payroll tax accruals, recording, 375 sales taxes, 183 report preparation, 400 lists Activities menu, selecting, 98 classes, displaying, 246 entries deleting, 99 hiding, 97-98 merging, 100-101 forms, displaying on, 76-77 information, editing, 95 items, moving on, 93 notes, adding, 96 printing, 102 sorting, 75 Loan Manager, setting up loans, 383-385 loans escrow payments, 384 interest calculating, 383 compounding options, 385

liabilities current versus long-term, 382 paying, 386 payments, recording, 386 recording, 382 setting up (Loan Manager), 383-385 local taxes (employee payroll information), setting up, 35 long-term liabilities, 371 loans, recording, 382

M M (first day of month) keyboard shortcut, 72 mailing labels, creating, 261-262 manufacturing inventory, recording, 331 memorizing reports, 391 customized, 409 transactions, 185-186 adding to Icon Bar, 192 groups of, 187 implementing, 189 modifying, 193 removing, 195 merging entries on lists, 100-101 messages. See email messages Modified Accelerated Cost Recovery System (MACRS), depreciation expense calculation, 359 modifying. See editing monitors, changing screen resolution, 74 monthly statements, creating, 123-124 moving items on lists, 93 multiple classes, creating forms, 247 multiuser environment, QuickBooks in, 7

N–O naming fixed assets (chart of accounts), 358 net worth, calculating, 363 non-inventory part items, 90 non-taxable items, establishing status, 176 notes, adding, 96 numbering accounts, 80 on-the-fly additions, item information, 92 online banking, 263. See also Online Banking Center accounts, transferring money between, 289 activating in QuickBooks, 267-269 advantages of, 270

online banking

431

bill payment, 284-285 canceling payments, 286-287 deposits, associating with open customer invoices, 280 email messages, sending, 288 Internet connections manual setup, 265 setting preferences, 264 QuickBooks Billing Solutions, 294 QuickBooks Online Edition, 292-293 Renaming Rules automatic creation of, 275 modifying, 276 signing up for, 266 transactions adding multiple, 282-283 adding to QuickBooks, 273-275 associating with open vendor bills, 279 deleting multiple, 281 prefilling accounts, 277-278 reports on, 290 retrieving, 271-272 Online Banking Center. See also online banking online deposits, associating with open customer invoices, 280 online transactions adding to QuickBooks, 273-275 associating with open vendor bills, 279 prefilling accounts, 277-278 retrieving, 271-272 Renaming Rules automatic creation of, 275 modifying, 276 transactions, adding multiple, 282-283 Online Bill Payment, 284-285 canceling payments, 286-287 online data backup service, cost of, 316-317 Online Payroll option, 29 online timer features, 219 open customer invoices associating online deposits with, 280 viewing, 135 open vendor bills, associating online transactions with, 279 opening balance equity accounts, 363-364 retained earnings, recording, 370 transaction examples, 366 viewing, 364 zeroing-out, 365 timer data in QuickBooks, 229-230

432

other charge items, 90 out-of-state sales tax, 174 outsourcing payroll, 67

P par value, 363 partial orders (purchase orders), receiving, 152 partnerships (IRS Form 1065), 297 passwords, assigning, 319-322 paychecks direct deposit, 49-50 employees, preparing, 42-46 printing, 48 paying bills deleting, 161 editing, 159-160 online, 284-285 from vendors, 154-156 credit card accounts, 378-380 loans, 386 sales taxes, 181-182 payment items, 90 payment terms (invoices), creating, 249 payments advance type, receiving, 131 cash, receiving, 129 check register, recording, 157-158 depositing, 130 discounts, issuing, 132-134 down type, receiving, 131 invoices, recording, 127 refunds, issuing, 128 payroll Assisted Payroll, 29 Basic Payroll, 29 classes, 244 deductions, setting up, 39-40 employee information, setting up, 33 Enhanced Payroll, 29 liability reports, preparing, 401-402 Online Payroll, 29 outsourcing, 67 paychecks, preparing, 42-46 preferences, setting, 28, 30 reports, creating, 51-52 scheduling, 30 sick benefits, setting up, 36 taxes EasyStep Interview process, 18 reporting, 53-54, 56

setting up, 34-35 unemployment compensation, 57-58 W-2 forms, preparing, 59-60 W-3 forms, preparing, 61-62 time information exporting to timer, 223 preferences, setting, 220 recording, 224-225 timer information in, 47 vacation benefits, setting up, 37 year-to-date amounts entering, 38 tax liabilities, 37 payroll tax accruals, recording, 375 Pending Builds report, 343 personal general preferences, setting, 70-71 personal information (employees), entering, 31 petty cash, tracking, 354 physical inventory counts, 344-345 Physical Inventory Worksheet report, 343 pop-up messages advertising in, 401 disabling, 287 preferences accounting, setting, 105-106 billing, setting, 144 checks, setting, 162-163 customers, setting, 108-109 desktop views, setting, 73-74 employees, setting, 31-32 estimates, setting, 200 finance charges, setting, 122 general company settings, 72 personal style, 70-71 graphs, setting, 388-390 Internet connection, setting, 264 invoices, setting, 109 jobs, setting, 200 payroll, setting, 28, 30 purchase orders, setting, 142-143 Reminders feature company settings, 197 personal settings, 196 reports, setting, 388-390 sales, setting, 108-109 send forms, setting, 125 time tracking (payroll), setting, 220 vendors, setting, 142-143

prefilling accounts, setting online transaction preferences, 277-278 Premier Accountant Edition (QuickBooks), 259 previewing invoices, 113 prices of inventory items, adjusting, 347-348 print elements, screen elements versus, 251 printing checks, 166 preference setting, 162-163 invoices, 115 batches of, 116 lists, 102 paychecks, 48 reports, 391 prior period adjustments, entering, 369 Product invoices, 112 Professional invoices, 112 profit & loss statements. See income statements progress invoicing, 211-212 percentage of, 213 selected items only, 214 progress reports estimates, displaying, 217-218 filtering, 218 jobs, displaying, 217-218 purchase form items adding, 88-89, 92 sub-item creation, 94 purchase orders creating, 146 items adding, 147 recording receipt of, 150-151 viewing, 148 partial orders, receiving, 152 preferences, setting, 142-143 purchase reports (vendors), generating, 170 purchases, effect on accounts, 145 purchasing fixed assets, 357-358

Q QuickBooks activating online banking in, 267-269 data, transferring from earlier versions, 8 from Quicken, 9-10 hardware/software requirements, 5

QuickBooks

433

installing in multiuser environment, 7 software/hardware requirements, 5 starting installation CD, 2-4 in multiuser environment, 7 registering, 6 software/hardware requirements, 5 updating, 282 website, 291 QuickBooks Billing Solutions, 294 QuickBooks Enterprise Solutions, 331 QuickBooks Online Edition, 292-293 QuickBooks Premier, 331 QuickBooks Premier Accountant Edition, 259 Quicken data, transferring to QuickBooks, 9-10 QuickFill feature, 160 QuickReports, generating, 104

R R (last day of year) keyboard shortcut, 72 receiving cash payments, 129 credit card payments, 355 down payments, 131 goods on purchase orders, 150-151 partial orders against purchase orders, 152 payments for invoices, 127 reconciling bank statements, 350-351 credit card accounts, 378-380 petty cash, 354 recording ATM withdrawals, 353 deposits as assets, 356 manufacturing inventory, 331 payments to check register, 157-158 payroll tax accruals, 375 time information to timer, 224-225 recurring transactions modifying, 194 scheduling, 190-191 refunds, issuing to customers, 128 registering QuickBooks, 6 reminders alerts, 198 company preferences, setting, 197 entries, viewing, 198 inventory replenishment, setting, 341

434

memorized transaction groups, setting, 187 personal preferences, setting, 196 To Do Notes, creating, 417-419 remote access feature, activating, 260 remote machines, installing timer, 221-222 removing audit trails, 325 bill payments, 161 direct deposit, 49 entries on lists, 99 Icon Bar buttons, 412 memorized transactions, 195 multiple online transactions, 281 To Do Notes, 418 users, 325 renaming Icon Bar buttons, 413 Renaming Rules automatic creation of, 275 modifying, 276 reordering Icon Bar buttons, 413 replenishment reminders (inventory items), setting, 341 Report Center categories, 374 reporting payroll taxes, 53-54, 56 reports accounts payable aging detail, preparing, 405 accounts receivable aging summary, preparing, 403 adding to Icon Bar, 399 audit trails, activating, 258 balance sheets, preparing, 393-394 budget, preparing, 243, 397-398 classes, displaying, 248 closing, 391 closing date exception reports, creating, 328 columns changing, 406-407 resizing, 391 Company Snapshot feature, 414-416 customized, memorizing, 409 dates, changing, 406-407 drill down capabilities, 391 filters, changing, 407 footers, changing, 408 general ledger, preparing, 396 headers changing, 408 hiding, 391 income statements, preparing, 392

income tax returns, accessing, 300-301 inventory, preparing, 342-343 jobs progress, preparing, 404 memorizing, 391 monthly sales tax reports, creating, 180 online transactions, 290 payroll, creating, 51-52 payroll liabilities, preparing, 401-402 preferences, setting, 388-390 printing, 391 progress reports, displaying, 217-218 purchases, generating, 170 QuickReports, generating, 104 sales tax liabilities, preparing, 400 subaccounts, collapsing, 391 trial balances, preparing, 395 unpaid bills, viewing, 153 uses, 387 restarting EasyStep Interview process, 24 restoring from backups company files, 313-314 timer data, 236 retained earnings, managing, 370 retainers, recording as liabilities, 381 retrieving online transactions, 271-272 reports from Icon Bar, 399 revenues (jobs), tracking, 202-204 reversing journal entries, 257 revising estimates, 215-216 rules, Renaming Rules automatic creation of, 275 modifying, 276

S S corporations (IRS Form 1120S), 297 sales effect on accounts, 110 preferences, setting, 108-109 Sales and Customers preferences screen, 108109 sales form items adding, 88-89, 92 sub-item creation, 94 sales orders, managing, 339-340 sales reps, tracking sales of, 41 sales tax group items, 90 sales tax items, 90 sales taxes agencies, setting up, 173 customers, charging, 175

early payments, discounts, 182 EasyStep Interview process, 18 exempt items, selling, 177-179 groups, creating, 174 items, creating, 173 liability accounts, effect on, 183 liability reports, preparing, 400 monthly reports, producing, 180 for out-of-state customers, 174 paying, 181 preferences, setting up, 172 rates, setting, 175 sample company files, practicing, 11-12 savings accounts. See bank accounts scheduled transactions, common uses, 191 scheduling bills, 190 payroll, 30 recurring transactions, 190-191 screen elements, print elements versus, 251 screen resolution, changing, 74 searching transactions, 103 security administrators, setting up for financial access, 318 backups creating, 310-312 online data backup service, 316-317 restoring, 313-314 rights access levels editing, 323-324 removing users, 325 setting, 319-322 year-end company records closing, 326-327 creating closing data exception report, 328 selecting employees, special paycheck preparation, 44, 46 income tax forms, 296 selling assets, tax consequences, 359 fixed assets, 361-362 tax exempt items, 177-179 send forms preferences, setting, 125 sending email messages to banks, 288 invoices online, 294 Separators (Icon Bar), 413 Service invoices, 112 service items, 90

service items

435

setup 1099 forms, 63, 65 classes, transaction tracking, 245 employee payroll information, 33 employee payroll taxes, 34-35 employee payroll deductions, 39-40 sick benefits, 36 vacation benefits, 37 shipping, FOB (free on board), 108 sick benefits, setting up, 36 signing up for online banking, 266 simple interest, calculating, 383 snapshots (Company Snapshot feature), 414-416 software/hardware requirements, 5 sorting lists, 75 specific identification method, inventory valuation, 336 spellchecking feature, limitations of, 238 spelling preferences, setting, 238 start dates (EasyStep Interview process), 17 changing, 20 choosing, 20 entering, 19 state taxes downloading forms, 302, 307 employee payroll, setting up, 35 stock shares, par value, 363 stopping EasyStep Interview process, 23 sub-items, creating, 94 subaccounts (reports), collapsing, 391 subtotal items, 90 summary reports (payroll), creating, 51

T T (today) keyboard shortcut, 72 tasks (To Do Notes), creating, 417-419 tax lines accounts, assigning, 298-299 Chart of Accounts, opening, 298 tax-exempt organizations, 297 taxable corporations, 297 taxable items, establishing status, 176 taxes. See also forms (IRS); income tax returns; sales taxes 1099 forms issuing, 66 setting up, 63, 65 asset sales, consequences of, 352 employee payroll, setting up, 34-35 employees, year-to-date payroll liabilities, 37

436

inventory items, setting status, 176 payroll EasyStep Interview process, 18 reporting, 53-54, 56 unemployment compensation, 57-58 W-2 forms, preparing, 59-60 W-3 forms, preparing, 61-62 state taxes downloading forms, 302, 307 employee payroll, setting up, 35 W-4 forms, downloading, 35 time tracking preferences, setting (payroll), 220 reasons for, 222 timer billing time, applying to invoices, 233 data backing up without condensing, 235 exporting to QuickBooks, 228 opening in QuickBooks, 229-230 restoring from backups, 236 employee use guidelines, 222 installing on remote machines, 221-222 online features, 219 time information exporting to, 223 in payroll, 47 recording, 224-225 timed activities, creating, 226-227 transactions editing, 232 viewing, 231 To Do Notes, creating, 417-419 tracking accounts receivable, 126 customers, 81-82 daily transactions, checklists, 314-315 petty cash, 354 sales rep sales, 41 transactions classes, setting up, 245 daily checklists, creating, 314-315 groups adding to, 188 memorizing, 187 memorized, 185-186 adding to Icon Bar, 192 implementing, 189 modifying, 193 removing, 195

online adding multiple, 282-283 adding to QuickBooks, 273-275 associating with open vendor bills, 279 deleting multiple, 281 prefilling accounts, 277-278 reports on, 290 retrieving, 271-272 recurring frequency of, 191 modifying, 194 scheduling, 190-191 scheduled, common uses, 191 searching, 103 timer backing up with condensing, 235 editing, 232 restoring from backups, 236 viewing, 231 year-end date, setting, 326-327 transferring data from earlier QuickBooks versions, 8 from Quicken, 9-10 money between accounts, 289 trial balances, preparing, 395 TurboTax, using with QuickBooks, 302, 308

U unemployment compensation taxes, paying, 57-58 Unit of Measure feature, 89 unpaid bills reports, viewing, 153 unpaid invoices bad debts, recording, 139-140 collection letters, creating, 136-138 viewing, 135 updating QuickBooks 2009, 282 users access restrictions, pre-closing date transactions, 327 company financials editing rights access levels, 323-324 removing, 325 setting rights access levels, 319-322 desktop view preferences, setting, 73-74

V vacation benefits, setting up, 37 valuation methods for inventory, 336 Vendor Center, list options, 98 vendor lists, EasyStep Interview process, 18 vendors accounts payable aging detail reports, 405 adding, 86-87 assigning prefill accounts to, 277-278 bills deleting payments, 161 early payment discounts, 155-156 editing payments, 159-160 online bill payment, 287 paying, 154-156 checks, voiding in current year, 167-168 from previous year, 169 information, viewing, 149 inventory items editing, 335 receiving from, 334 mailing labels, creating, 261-262 open bills, associating online transactions with, 279 payments, recording in check register, 157-158 preferences, setting, 142-143 purchase orders creating, 146 item additions, 147 item display, 148 receipt of goods, 150-151 purchase reports, generating, 170 unpaid bills status, viewing, 153 viewing Icon Bar, 412 items on purchase orders, 148 opening balance equity accounts, 364 progress reports estimates, 217-218 jobs, 217-218 timer transactions, 231 unpaid bills reports, 153 unpaid invoices, 135 vendor information, 149 voiding checks in current year, 167-168 from previous year, 169

voiding checks

437

W W (first day of week) keyboard shortcut, 72 W-2 forms, preparing, 59-60 W-3 forms, preparing, 61-62 W-4 forms, downloading, 35 websites Fun With Taxes, 302, 307 Intuit interest loan calculations, 383 IRS depreciation resources, 359 QuickBooks, 291 withdrawals (ATM), recording, 353 writing checks, 164-165

X–Z Y (first day of year) keyboard shortcut, 72 year-end records, closing, 326-327 year-to-date payroll information entering, 38 tax liabilities, 37 year-to-date payroll liabilities report, creating, 52 zeroing-out opening balance equity accounts, 365

438

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