How to Track Expenses by Class, Department or Location
One of the perks of using the Quickbooks accounting software is the ability to track your expenses based on a variety of criteria. You can track any business-related expense by department lo location using something known as “classes.” Basically, each class is a unique field that’s used to track a specific type of expense.
Quickbooks allows users to assign classes to their transactions. You can use these classes to track expenses by department, type, location, or pretty much anything else. For instance, you could create a specific class for utility bills, another class for business-related travel expenses, and another one for taxes. Using these classes helps by keeping all of your related expenses neatly together.
When setting up class tracking in Quickbooks, though, there are a few things to consider. First and foremost, it’s important to note that class tracking should be set up on the basis of the type of reporting you wish to do. Also, you should consider the way in which your business will be segmented based on these reports.
It’s also a good idea to set up a genetic “catch all” class for miscellaneous expenses that do not fit into your classes. This class can be titled either miscellaneous or “other,” both of which are perfectly acceptable. This class should be used for all expenses that do not fit into your existing classes.
To set up class tracking in Quickbooks, simply choose Preferences > Edit > Accounting > Company Preferences. From here, select the “Use class tracking” option followed by “OK.” Quickbooks will then ask you to save the changes, at which point you should select “Yes.” In the Preference window that appears, select the “Payroll & Employees” button. Double-check to make sure the “Full payroll” is selected in the features section. Now, choose the “Job Costing, Class and Item tracking for paycheck expenses” option. If you wis hto assign a single class to a complete payroll, select “Entire paycheck.” But if you wish to assign multiple classes to each item in the paycheck, select “earnings item.” When you are finished, click OK to save the changes and close the window. Sorry if you were expecting more, but that’s all it takes to set up class tracking in Quickbooks!
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Creating a New Budget in Quickbooks
Are you trying to create a new budget in Quickbooks? Well, you’ve come to the right place. Today, we’re going to walk you through the steps of creating a new budget in Intuit’s popular Quickbooks accounting software.
When you are ready to begin, go ahead and fire up your Quickbooks accounting software, at which point you should select Company > Planning and Budgeting > Set Up Budgets. This should open a new window titled “Create New Budget,” which as the name suggests allows users to create new budgets. Keep in mind, however, that if you’ve already created a budget, Quickbooks will display the “Set Up Budgets” window instead. If you see this window, you’ll need to select the “Create New Budget” icon to display the appropriate window.
Next, you need to specify the fiscal period for which you are budgeting. The buttons within the aforementioned window allow you to specify this information. If you are budgeting for 2016, for instance, simply choose the year 2016 by selecting the buttons.
You must now decide whether to create a profile and loss or balance sheet budget. When creating a profit and loss budget, you must choose the “Profit and Loss” button > Next > and then repeat the steps mentioned above. When creating a balance sheet, simply click the “Balance Sheet” button > Finish > and repeat the steps mentioned above.
So, what’s the difference between these two formats? Profit and loss budgets include budgets for the amount of revenue or expense that you expect for the defined period. On the other hand, a balance sheet budget is a budget for the ending account balance, or in other words the ending account balance for the asset, liability or equity for the defined period.
You aren’t out of the woods just yet, as there are a few other steps you must take to create a budget. In the “Additional Profit and Loss” window, you’ll need to specify the additional profit and loss budget. This step is only necessary, however, when creating a profit and loss budget, in which case you’ll need to choose the “Customer:Job” button to see the extended budget with the Job details, followed by “Class” to include the class in your budget or “No Additional Criteria.”
If you want to budget by class, you’ll need to enable class tracking. You can read through previous blog posts published here for more information on how to enable class tracking in Quickbooks.
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How to Void a Check in a Closed Period
Quickbooks allows users to “close” periods so that transaction data cannot be altered or otherwise changed. Once you’ve finished your books for the year, for instance, you may want to close it off. This ensures all of your data remains intact in case you need to refer back to it. But what if there’s a check in a closed period that you still need to void?
As explained by Intuit, voiding a check in a closed period prompts a warning that it could affect reports from the prior period. Of course, this shouldn’t come as a surprise given the fact that closed periods are intended to prevent inaccuracies while preserving a business’s books for the said period.
If you void a check that was tied to an expense account, Quickbooks will automatically create a journal entry to prevent bookkeeping problems later down the road. This is certainly helpful. Unfortunately, though, it’s often not enough to prevent inaccuracies created from voided checks in a closed period.
So, what if you need to a void a check that’s connected to an expense account? In this case, Quickbooks will automatically create two separate journal entries to preserve your books. The first journal is actually a duplicate of the accounting entry found on the check, while the second journal entry is a “reversing” entry with a current date that reverses the accounting information on the check.
Keep in mind that when you void a check, you’ll have the option to override the automatic creation of these journal entries. Quickbooks will display a message, asking if you would like to create the aforementioned journal entries. Simply choose the “No, just void the check” option to bypass these journal entries. If you tell Quickbooks NOT to create them, however, you may find yourself struggling to balance your account for the closed period later down the road. This is why it’s generally a good idea to go ahead and allow Quickbooks to create the two journal entries.
Also, when voiding a check that’s connected to a separate, non-expense account, Quickbooks may notify you, telling you that the voided check could affect your financial reports. This includes checks connected to items, bill payments, paychecks, payroll and sales tax.
The bottom line is that you need to use caution when making any changes on a closed period. Even small changes could affect your bookkeeping. So if you void a check in a closed period, it’s best to allow Quickbooks to create the journal entries.
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How to Add Tax to a Quickbooks Invoice
When you sell a product or service to a customer, that customer is typically required to pay a sales tax. Each state has its own set tax amount for this purpose. In Alabama, for instance, consumers pay a flat 4% sales tax. In Florida, the rate is even higher at 6% with a total maximum of 7.5% in some areas.
Business owners should set up their invoices to include this sales tax; otherwise, they could find themselves in hot water. Failure to collect sales tax may result in audits and/or corrective actions. Thankfully, the Quickbooks accounting software makes sales tax a breeze. In just a few quick and easy steps, you can set up your invoices to automatically include sales tax using the Quickbooks accounting software. Here’s how you do it.
When you access an invoice generated by Quickbooks, you’ll notice that it has an option for either Taxable or Non-Taxable. Conventional wisdom should lead you to believe that this is where you set the tax for your customers. Assuming the item is taxable, and you’ve marked with the customer with the appropriate tax code, Quickbooks will automatically add the sales tax. Just remember to double-check the Taxable and Non-Taxable field on your invoices, ensuring that “Taxable” is checked. If it’s not checked, Quickbooks will not generate the tax for your customers. But if you check it, Quickbooks will generate the tax.
But now you might be wondering how to set the sales tax code, which requires an entirely different approach. To set the sales tax code, access the Sales Tax Preference window, followed by Taxable or Non-Taxable from the drop-down list (varies depending on the type of tax code you wish to set up), and then <Add New>. Next, enter a 3-digit sales tax code in the New Sales Tax Code Window, along with a description for it. When you are finished, click OK to complete the setup and save your changes. You may repeat these steps to set up any new sales tax codes. Lastly, click Taxable and Non-Taxable drop-down lists once more and choose a default sales tax code for each.
Setting up sales tax is an important step in running a small business. Unfortunately, it’s also something that many small business owners overlook. By following the steps listed here, though, you can set it up using the Quickbooks accounting software.
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How to Change Your Company Address
It’s not uncommon for companies to move their headquarters. Maybe you’re looking to target a new market, or perhaps there’s simply a larger office space for lease. Regardless, there are dozens of reasons why companies to move to new locations. But when you move to a new location, you’ll need to update your books to reflect the new address — and this includes updating your company address in Quickbooks.
Quickbooks supports many different functions, including payroll, revenue, expenses, and much more. In order for it to work, though, you’ll need the correct address of your company listed; otherwise, invoices and other business-related documents will contain your old, outdated address. Thankfully, there’s a quick and easy way to chance your company address in Quickbooks, and we’re going to reveal the steps necessary to do it.
To change your company address, go ahead and fire up your Quickbooks accounting software. Next, access “Company Information,” at which point you’ll see various information about your company (including the address). You can then delete the old address and enter the new, correct address. Double-check the changes to make sure the address is correct and click “OK” to save. Sorry if you were expecting more, but that’s all it takes to change your company address in Quickbooks!
But even after you update your company address, customers may still not see it on your invoice. That’s because some users turn off their address on invoices, meaning customers won’t see it. To fix this issue, click the gear-shaped icon with your company name, followed by “Custom Form Styles,” at which point you can scroll through your list of templates and select the one you typically use. From here, choose “Header,” followed by “Address,” and “Save.” This essentially allows you to toggle on or off your company address in invoices. With the “Address” option toggled off, your invoices won’t display your address. With the option toggled on, your company address is displayed on invoices.
Hopefully, this will give you a better idea of how to update your company address in Quickbooks. Anytime your company changes its address, you should immediately go into Quickbooks and update your information. Keeping accurate records is paramount to presenting your company in the most positive light, which usually translates into a higher level of customer/client satisfaction.
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How to Add Attachments to Your Quickbooks Transactions
Transactions are arguably one of the most important elements in Quickbooks. They list all of your incoming revenue and outgoing expenses. As such, business owners and accountants should include as much information about the respective transaction when using them. But did you also know that you can upload and add attachments to your transactions?
If you’re the owner of a construction company and recently purchased some tools from a local hardware store, for instance, you’ll probably want to keep the receipt for tax purposes. Assuming the expense was business-related — which it was in this example — you can deduct it from your taxes. Using the Quickbooks accounting software, you can scan and attach a copy of the receipt to the respective transaction. While there’s no rule stating that you must perform this task, doing so promotes neat and tidy bookkeeping by keeping all of your records together.
Scanned receipts aren’t the only attachment you can add to transactions; you can also upload contracts, images and bills.
Now that you know a little bit about why you should upload attachments to your Quickbooks transactions, you might be wondering how to do it. There are actually four separate areas in Quickbooks that support attachments, including the actual attachments page, the individual transactions forms, blank feeds page, and the register.
When uploading attachments on the attachments page, simply click the gear icon followed by “Attachments.” From here, you can scan through the directories on your computer or storage device to locate the attachment. After selecting the attachment, drag and drop it into the appropriate field, at which point the attachment will be added to the transaction.
But what if you want to upload an attachment to a new transaction? This is done by clicking the + icon, followed by another + icon, at which point you can scroll down to the “Attachments” section and drag and drop the attachments.
Keep in mind that you can sort attachments by amount. Clicking the “Edit” button allows you to change the amount in the File Name or Notes field. After doing so, you can click on the Name or Note in the header to sort it by that column.
You can also scroll the attachment preview window using your mouse.
Following the steps listed above should allow you to create and upload an attachment to a transaction in Quickbooks.
How to Change the Save Location of Your Company File
The company file (extension .QBW) is the heart and soul of a Quickbooks account. It contains all of your transactions, financial data, letters, customized logos, templates, images and more, all of which are located in a convenient and easily accessible file. Whenever you make a change to your Quickbooks account, your company file is updated to reflected the change.
You can open your company file simply by logging into your account and choosing File > Open Company, at which point you can navigate to the appropriate drive or location where the file is stored. Intuit recommends opening your company file using this method rather than double-clicking the file outside of Quickbooks. If you attempt to open your company file outside of Quickbooks, it could render some functions inaccessible. To err on the side caution, try to get into the habit of opening your company file within the Quickbooks program.
By default, Quickbooks saves the company file to C:\Users\Public\Documents\Intuit\QuickBooks\yourcompanyfile.qbw. If you ever need to transfer it, refer to this location on your computer’s hard drive. But what if you want to change the default location of where your company file is stored? Thankfully, there’s a quick and easy way to do this.
To change the location where your company file is stored, navigate to its current location, at which point you should right-click the file and select “Copy.” It’s important to choose Copy rather than Cut, as this may prevent you from changing its location. After copying your company file, navigation to the new location where you want to save it, right-click on an open area and select “Paste.” Assuming you copied the file, this should paste a new copy in this location.
You aren’t out of the woods just yet. Go ahead and open your Quickbooks software and choose ‘Open or restore an existing company,” followed by “Open a company file.” Click “Next” to proceed, at which point you’ll see a new window appear. Within this window, navigate to the new location of your copied company file. Select the file to highlight it and click “Open.” Your company file should now appear on the login screen.
Following the steps listed above should allow you to change the location where your Quickbooks company file is saved. It’s always a good idea to back up your company file before making any changes to it, including changing its save location.
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Understanding the 4 Main Sections in Quickbooks Chart of Accounts
When using Quickbooks, you’ll want to pay close attention to your chart of accounts. This is the heart and soul of your account, revealing key information about your bookkeeping. But newcomers are often lost and confused when accessing their chart of accounts. If you’re still trying to grasp the fundamentals of this feature, you should begin by familiarizing yourself with its four main sections. Only then will you truly understand how the chart of accounts works.
In Quickbooks, the chart of accounts contains the following four sections: assets, liabilities, income and expenses. Granted, you’ll also find equity listed as a section, but we’re going to omit it because most accounts and business owners rarely use it when managing their books. Equity is essentially income that’s left over after accounting for all of your day-to-day business expenses and activities.
As you may already know, assets consists of anything that has monetary value. This includes property, vehicles, equipment, inventory and more. It’s important to note, however, that assets — when added to your chart of accounts — will include factors like depreciation, as well as how much you paid for the asset. As such, your assets may appear smaller here than when viewing on other formats, such as a real estate website (for property).
On the other side of the fence is liabilities, which consist of debts like bank loans, small business loans, promissory notes, tax payments due, utility bills and other bills. Also known as accounts payable, they are a fundamental component of running a business. When accounting for liabilities, only include the amount you owe, not the interest amount owed.
The third main section in Quickbooks chart of accounts is income. This section is pretty self-explanatory, as income refers to how much money the business has coming in. You may initially start off with just a small amount of income. As your business grows and develops its footing, however, it can quickly increase. Intuit recommends segmenting your income based on type, as opposed to grouping them all together in a single account.
The fourth and final main section in Quickbooks chart of accounts is expenses. Much like the aforementioned income, it’s also a good idea to break up your expenses into several categories. With that said, Intuit recommends keeping your expense categories simple by creating only what you need. There’s no need to create hundreds of different expense categories, as this will only make your accounting that much more difficult. Stick with just a few basic categories to streamline your bookkeeping efforts.
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How to Manage Overpayments in Quickbooks
Here’s a scenario to consider: you’re a business owner and a customer has overpaid you for a product or service. In situations such as this, it’s best to refund the difference, informing the customer of his or her mistake. Thankfully, Intuit’s Quickbooks accounting software makes handling this task a breeze. To learn more about when and how to manage overpayments in Quickbooks, keep reading.
Quickbooks actually has two different options for dealing with overpayments: you can either refund the difference to the customer, or you can apply the difference as a credit to the customer’s account. Both options are perfectly fine, although some business owners may prefer one over the other. In any case, we’re going to walk you through the steps of using both options.
To manage an overpayment, log into your Quickbooks account and select the “Receive Payment” icon. From here, enter the amount paid by the customer in the “Amount field.” You must now select the invoice that you wish to apply this amount to. This is done by clicking the checkmark in the left column next to the respective invoice.
After selecting the invoice, you should see a section titled “Overpayment,” which has two options listed: “Leave the Credit to be Applied Later,” and “Refund the Amount to the Customer.” These two options are pretty self-explanatory. Just the first option if you want to leave the overpayment as a credit to the customer’s account, or choose the second option if you wish to refund the overpayment to the customer.
Assuming you choose “Leave the Credit to be Applied Later,” the customer’s overpayment can either be applied to any old, outstanding invoice, or it can applied to a newly created invoice. When you create a new invoice for the customer, select “Apply Credit” at the top of the invoice, at which point you can choose the credit and confirm by pressing “OK.”
But if you choose “Refund the Amount to the Customer,” you can refund the customer’s overpayment in the form of a check. Select “Save and Close,” at which point a new Refund section should appear. Select the method that you wish to refund the customer’s overpayment and confirm by pressing “OK.” Congratulations, you’ve just handled an overpayment in Quickbooks!
Overpayments are bound to happen at some point in time, but as long as you use the Quickbooks accounting software you can handle them in a painless manner.
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How to Set Up Manual Payroll in Quickbooks?
Quickbooks has a convenient payroll service that allows business owners to set up and automate their employees’ payroll. So instead of manually writing a check at the end of each pay period, you can automate this task while focusing your time and attention elsewhere. However, not every business owner wants to automate his or her payroll. Some may wish to perform this task manually. The good news is that Intuit’s long-running Quickbooks software also has a feature for manual payroll, which we’re going to discuss in today’s blog post.
There are several advantages to using manual payroll, one of which is the ability to define specify payment amounts for your employees and/or independent contractors. Granted, you can do this with standard, automatic payrolls, but some small business owners find it easier to use manual payroll for this purpose.
When you’re ready to set up manual payroll, go ahead and fire up your Quickbooks software. Next, access Help > Quickbooks Help (F1 shortcut command). From here, choose Search > enter “manual payroll” > Enter. This should bring up a new page featuring manual payroll and various topics. Choose the topic titled “Calculate payroll taxes manually (without a subscription to Quickbooks Payroll)”.
After accessing “Calculate payroll taxes manually (without a subscription to Quickbooks Payroll),” choose “Set your company file to use the manual payroll calculations setting,” followed by “manual payroll calculations.” Next, click the “Set my company file to manual calculations” link, at which point you can close the Quickbooks software. Once Quickbooks has closed, go back and reopen it. You should now see the payroll features under the Employee menu. If you don’t see the payroll features, check to make sure your preferences are set for payroll. This is done by accessing Edit > Preferences > Payroll & Employees > Company Preferences > Full Payroll > OK.
Congratulations, you’ve just set up manual payroll in Quickbooks! Keep in mind, however, that manual calculations are applied immediately, and you may not receive a message telling you the change in your company file. Also, when you click the “Set my company file to use manual calculations,” it may prompt you sign up for Payroll. If you already have a Payroll subscription, you can still use manual payroll. by following these steps.
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