General Questions

The Beginner’s Guide to Using Tags in Quickbooks

Have you come across the tag feature when using Quickbooks? Quickbooks supports tags. You can create tags to categorize and track your business’s transactions. Because it’s an optional feature, though, many business owners overlook tags. Creating tags, however, can streamline many accounting processes while promoting cleaner records in the process.

What Are Tags?

In Quickbooks, tags are labels that you can attach to relevant transactions. You can attach them to your business’s invoices, expenses, bills and other transactions. They won’t affect the values of the transactions. Rather, tags are used for reference purposes. With tags, you’ll have an easier time finding and tracking specific types of transactions. You can create tags for different types of transactions, after which you can attach them to the appropriate transactions. Rather than going through all of your business’s transactions, you can then search for a specific tag.

How to Create Tags

To get started, you should create tag groups. Tag groups, as the name suggests, are groups of tags. You can create them by going to the “Settings” menu and choosing “Tags.” On this page, click the “New” drop-down menu and select “Tag group.” Quickbooks will then ask you to enter a name for the tag group. You can also choose a color for the tag group. When finished, select “Save” to finish the process. You should now have a new tag group to which you can add tags.

Creating new tags is a breeze. While editing any transaction form, including invoices, you should notice a field labeled “Tags.” Just enter a unique name in this field and click the “Add+” button. You will then have the option of placing the newly created tag in one of your tag groups. Tag groups will nearly organize your tags while also allowing you to track the transactions with which they are used more easily.

View Tag Insights

You can view insights involving your tags as well. This is done to reveal how all transactions featuring a particular tag are performing. To view tag insights, click the “Banking” menu, followed by “Tags.” Once you’ve located the tag group, click the “Run report” link under the “Action” menu. Viewing tag insights can prove useful in determining which tags are outperforming the other tags.

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Understanding the Different Quickbooks File Extensions

Using Quickbooks to track your business’s finances requires an understanding of the software’s file extensions. Quickbooks will automatically create various files, each of which contains certain forms of data that are specific to your business. There are several different extensions, however, in which these files are saved. By understanding Quickbooks’s file extensions, you can take full advantage of this popular accounting software.

QBW

The QBW file extension is designed for company files. You should have a company file that contains all of your business’s financial information. Quickbooks supports the use of multiple company files. With that said, each business should have its own, unique company file. Accountants may create multiple companies — one for each business in their account. If you use Quickbooks strictly for your own business, though, you will only need a single company file. Regardless, company files created in Quickbooks use the QBW extension.

QBM

The QBM file extension is designed for portable files. A portable file is essentially a condensed version of your company file. It allows you to quickly transfer data between two or more places. Portable files contain logos, templates or similar types of unnecessary data. Rather, they only contain essential financial information. You can identify your portable file by looking for the QBM extension.

QBB

Another common file extension in Quickbooks is QBB. The QBB file extension is designed for backup files. More specifically, if you create a backup copy of your company file, Quickbooks will use this file extension for it. Quickbooks supports both manual and automatic backups. Manual and automatic backups are created by choosing “Back Up Company” under the “File” menu. You can then select the option to create backups manually or automatically. Regardless of which method you choose, Quickbooks will use the QBB for the file extension.

QBO

There’s also the QBO file extension. The QBO file extension is designed for bank statement files. Bank statement files are generated by Quickbooks using your bank account information. You can download transactions from your bank account, for example, which Quickbooks will automatically place inside of a QBO file. You can then import this file into your register. The QBO file extension is simply used for bank account statements such as this. Along with QBW, QBM and QBB, QBO is a common file extension used by Quickbooks.

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What Are Memorized Reports in Quickbooks?

Reports are an essential part of the Quickbooks architecture. When using Quickbooks to track your business’s finances, you’ll probably run reports. These documents will provide insight into your business’s revenues and expenses. Quickbooks, however, allows you to memorize reports as well. What are memorized reports in Quickbooks exactly, and how do they work?

The Basics of Memorized Reports

Memorized reports are essentially saved reports. Quickbooks offers customization of reports. You can customize a given report to include or exclude specific types of information. If you want to save these customization changes, you can then memorize the report. Memorizing the report will save it for future use. You can access the report at a later time to view all of your previous changes to it. t

How to Create a Memorized Report

You can create a memorized report in Quickbooks by accessing the reports menu and clicking “Memorize.” In the new memorize reports window, enter a name for the memorized report. All memorized reports must have a unique name. When finished, you may want to add the memorized report to a group. You can add it to an accountant group, for example, if you want your accountant to access it. After filling out the necessary information, click “OK” to complete the process.

Editing a memorized report is a breeze. Once you’ve created a memorized report, you can make changes to it by opening it. The opened report will offer customization options. You can then select “Memorize” to save your changes. Keep in mind that Quickbooks will ask you whether you want to replace the old report or overwrite it. You can choose either of these options when creating and editing a memorized reports.

How to Pull Up a Memorized Report

With your memorized report now created, you should be able to access it. You can access the memorized report in several ways. The report center, for example, offers access to memorized reports. Just click the “Reports” menu and choose “Report Center.” In the “Report Center” window, there’s an option for “Memorized.” Clicking this option will reveal all of your memorized reports.

You can also access memorized reports from the memorized report list. This is found under the “Report” menu. Clicking the “Report” menu and then “Memorized Reports” will reveal all of your memorized reports. These are just a few ways to pull up a memorized report.

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What Is Quickbooks Self-Employed?

Are you self-employed? You aren’t alone. According to the U.S. Bureau of Labor Statistics (BLS), nearly 10 million workers in the United States are classified as self-employed. In other words, they are freelancers who don’t perform regular and fixed work for any given business. While being self-employed comes with several advantages, it requires greater planning regarding finances. Fortunately, using Quickbooks Self-Employed can streamline your accounting processes as a self-employed worker.

Overview of Quickbooks Self-Employed

Quickbooks Self-Employed is a version of Intuit’s popular accounting software that’s designed specifically for self-employed workers. It’s not designed for business owners or employees. If you’re a business owner or employee, you should use the standard versions of Quickbooks. As a self-employed worker, however, there’s no better choice than Quickbooks Self-Employed.

Features of Quickbooks Self-Employed

You can sign up for Quickbooks Self-Employed for $7.50 per month. Once signed up, you’ll have access to the accounting software. Quickbooks Self-Employed has many of the same features as other versions of Quickbooks. With that said, it offers additional features that are particularly useful for self-employed workers.

With Quickbooks Self-Employed, you can still track your income and expenses. Self-employed workers are technically business owners. Therefore, they are eligible for tax deductions. You can track expenses associated with your self-employed work so that you can deduct them from your taxes. Quickbooks Self-Employed offers both income and expense tracking.

Another feature of Quickbooks Self-Employed is quarterly estimated tax preparations. Self-employed workers must make four equal payments to the Internal Revenue Service (IRS) throughout the year based on how much money they expect to make. Known as quarterly estimated tax payments, they are an essential part of freelance accounting. With Quickbooks Self-Employed, you can easily prepare these quarterly estimated payments so that you aren’t hit with penalties around tax time.

You can track mileage with Quickbooks Self-Employed as well. Many self-employed workers drive as part of their work activities. Driving, of course, is an expense. The IRS offers mileage deductions that you can use to offset your tax liability. You’ll need to keep track of how many miles you drive for work-related purposes to take advantage of this deduction. Quickbooks Self-Employed features mileage tracking. Using Quickbooks Self-Employed, you can easily track how many miles you drive for work-related purposes, allowing you to lower your tax liability.

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What Is a Vendor Credit in Quickbooks?

When using Quickbooks to keep track of your business’s finances, you may come across the option to create a vendor credit. It’s a native feature in Quickbooks Online. If you use the cloud-based version of Intuit’s popular accounting software, you can create vendor credits. What is a vendor credit in Quickbooks exactly, and how do they work?

Overview of Vendor Credits

A vendor credit is exactly what it sounds like: It’s a monetary credit that’s applied to a vendor. Vendor credits are used in instances when a vendor refunds your business for a purchased product or service. Regardless of the industry or market in which your business operates, you’ll probably need to purchase products and services from various vendors. Maybe a vendor overcharges you, or perhaps a vendor wants to give you a discount for a recent purchase. Regardless, if a vendor refunds your business — either partially or wholly — you should create a vendor credit.

How Vendor Credits Work

As previously mentioned, vendor credits are used to record refunds issued by a vendor to your business. Vendors may refund your business for any number of reasons. If you purchase a product or service from a vendor and that vendor later issues your business refunds, you’ll need to record it. Of course, that’s why Quickbooks offers vendor credits. You can create a vendor credit to record a refund issued to your business from a vendor.

Tips for Creating a Vendor Credit

You can create a vendor credit in Quickbooks by selecting “+New” from the home screen, followed by “Vendor credit.” From there, click the “Vendor” menu and choose the vendor for whom you are creating the credit. Quickbooks will display a drop-down menu consisting of all your business’s vendors. You can scroll through this list to find and select the appropriate vendor. After choosing the vendor, enter either the category details or item details for the credit. When finished, click “Save and close.”

Now that you’ve recorded the vendor credit, you’ll need to deposit the money given to your business from the vendor. This is done by selecting “+ New” from the Quickbooks home screen, followed by “Bank Deposit.” Next, choose the bank account in which the vendor deposited the refund. After completing the required fields, select “Save and close.”

To recap, a vendor credit is a record that’s used when a vendor refunds your business. You can create them in Quickbooks Online. With a vendor credit, the refund will be properly tracked and accounted for.

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What Are Centers in Quickbooks?

When using Quickbooks, you may encounter Centers. The desktop version of Intuit’s popular accounting software features several sections of transactions. Known as Centers, they allow you to see all transactions involving a particular audience. Whether you own a retail store, an e-commerce store, a business-to-business (B2B) company or any other commercial enterprise, you should take advantage of this feature. What are Centers in Quickbooks exactly?

Overview of Centers in Quickbooks

Centers are sections in Quickbooks Desktop that contain all transactions involving a specific audience. The Customer Center, for instance, reveals all transactions involving your business’s customers. By accessing this section, you can see how much revenue your business generated during a given period. There’s also the Vendor Center. The Vendor Center, as the name suggests, reveals all transactions involving your business’s vendors. If your business purchases products or services from vendors, you can find these transactions in the Vendor Center.

The Employee Center lives up to its namesake by revealing employee-related transactions. Assuming your business has employees, you’ll need to pay them. You can find payments made to your business’s employees in the Employee Center. The Employee Center consists of payroll payments. Using it, you can see when your business paid its employees and how much your business paid them.

How to Use Centers in Quickbooks

Although there are different types of Centers — Customer, Vendor and Employee — they all work in the same way. After accessing a specific Center, you’ll see the names of all individuals in that specific audience in the upper-left corner of your screen. You can then click the area to the right of the names list to view their transactions. Clicking a name in a Center will bring up a details box for that individual.

Of course, you can do more than just view transactions in Centers. You can also edit the information of individuals listed in Centers. Once you’ve clicked an individual’s name in a Center, you should see a details box displayed to the right. In the upper-right corner of this details box is a pencil-shaped icon. Clicking this icon will allow you to edit the individual’s information. Maybe his or her name is incorrect, or perhaps the individual has an invalid email address. By clicking the pencil-shaped icon, you can edit information such as this to ensure that your business’s records are correct.

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What Is a Statement of Cash Flows in Quickbooks?

Quickbooks offers a variety of financial reports. When using Intuit’s popular accounting software, for example, you may come across a statement of cash flows. It’s an optional report that provides insight into a business’s cash flow. If you own a business, you should consider running a statement of cash flows.

An Introduction to Statement of Cash Flows

A statement of cash flows is a report generated in Quickbooks that lives up to its namesake by offering an overview of your business’s cash flow. Cash flow, of course, is a measure of liquidity. It reveals the amount of money going into your business versus the amount of money going out of your business.

You can run a statement of cash flows for any given period. Maybe you want to identify your business’s cash flow for the prior month, or perhaps you want to identify your business’s cash flow for a particular fiscal period. With a statement of cash flows, you can find your business’s cash flow for any given period. It’s simply a report that shows revenues and expenses for a given period.

Why is cash flow important exactly? For starters, it reflects your business’s ability to satisfy short-term debt. If your business has poor cash flow, it may struggle to make payments on loans and operational expenses. Strong and positive cash flow, on the other hand, means your business has a high amount of revenue relative to its expenses. Therefore, your business should be able to easily to cover its short-term debt.

How to Run a Statement of Cash Flows

You can run a statement of cash flows by logging in to your Quickbooks account and selecting the “Reports” menu. Quickbooks will then display a list of all available reports from which you can choose. Since there dozens of reports available, you should filter them by entering “Statement of Cash Flows” in the search field. This should remove all other reports, thereby allowing you to select the option for a statement of cash flows.

While optional, you may want to customize your statement of cash flows before running it. You can customize specific parts of a statement of cash flows by clicking the “Customize” button. When customizing a statement of cash flows, you can select a different date range and other options.

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What Is a Personal Paycheck Program (PPP) Loan?

The U.S. Small Business Administration (SBA) offers several financing programs to help small businesses stay afloat. In addition to traditional SBA loans, there are Personal Paycheck Program (PPP) loans available to small businesses. Launched in the early part of 2020, PPP loans are an integral part of the Coronavirus Air, Relief and Security Act (CARES Act). If you’re thinking about applying for a PPP loan, however, there are several things you need to know about them.

The Basics of PPP Loans

PPP loans are SBA-backed loans that are designed to assist small business owners in covering the cost of payroll, as well as other expenses, during the coronavirus pandemic. The coronavirus, of course, disrupted the operations of countless businesses. Small businesses were particularly hurt, with many of them struggling to pay their employees. This prompted the federal government to launch the PPP. PPP is a federal financing program that allows small businesses to draw money from banks to cover payroll and other expenses.

Benefits of Using a PPP Loan

You might be wondering what benefits, if any, PPP loans offer over traditional loans. The main benefit is forgiveness. PPP loans can be forgiven if certain conditions are met. The same can’t be said for traditional loans. If you obtain a traditional loan, you’ll have to pay it back — and you’ll also be charged interest on the principle, which you’ll have to pay back as well. PPP loans, on the other hand, may be forgiven.

In other for a PPP loan to be fully forgiven, you must use at least 60% of it to cover the cost of your small business’s payroll. With that said, PPP loans can be partially forgiven. If you only spend 50% of a PPP loan to pay your small business’s employees, for example, half of the PPP loan will be forgiven. If you spend 40% of a PPP loan on payroll, conversely, 40% of it will be forgiven.

PPP loans are also relatively easy to obtain. Even though they are backed by the SBA, they are distributed by banks. You can apply for a PPP loan at a local bank. Assuming you meet the necessary requirements, the bank will provide you with a PPP loan. You can use this loan to cover payroll and other expenses. Some or all of the PPP loan may even be forgiven.

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How to Find Unreconciled Transactions in Quickbooks

Reconciliation is an important accounting process. As you record transactions, you’ll need to match them against those listed in your bank account. This is where reconciliation comes into play. Reconciliation involves matching each accounting transaction against a bank transaction. When performing reconciliation, though, may overlook one or more transactions. Fortunately, you can easily find unreconciled using Quickbooks.

Understanding Reconconciliation

Accounting encompasses a variety of processes involving recordkeeping. As your business spends money and makes money, you’ll need to record the respective transactions as records in your business’s books. Mistakes can happen when recording transactions, however. With reconciliation, you can check them for errors. Reconciliation revolves around matching the transactions recorded in your business’s books to those recorded in your bank account.

Steps to Finding Unreconciled Transactions

Assuming you use Quickbooks as your business’s accounting software, you can find unreconciled transactions in just a few easy steps. From the home screen of Quickbooks, click the “Account” button and select “Chart of Accounts.” You can then select the bank account for which you are trying to find unreconciled transactions in the “Account history” menu. Clicking “Run” will provide a report of all transactions associated with that bank account

By default, Quickbooks will show all of the bank account’s transactions. You can narrow it down to unreconciled transactions, however, by using the filtering option. Click “Filter,” after which you can click the box next to “Cleared” so that it changes to “Uncleared.” After running the report, you should see a list of all unreconciled transactions. Keep in mind that this process will only show unreconciled transactions for the bank account that you specify. If your business uses multiple bank accounts, you’ll need to run a report for each of them.

Quickbooks offers reconciliation as a native feature. In Quickbooks Online, you can recognize any bank account that you’ve connected to your Quickbooks account. Just go to the “Settings” menu and select “Reconcile.” You can then select a bank account from the “Account” menu. After entering the necessary information — beginning balance, ending balance, etc. — Quickbooks will automatically match the recorded transactions against those in the specified bank account. If there are any discrepancies, meaning a recorded transaction isn’t found in a bank account or vise versa, you’ll have the ability to fix it.

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What Are Cash Equivalents in Accounting?

You can’t run a successful business without performing various accounting processes. Accounting is necessary for all businesses. Whether you run a sole proprietorship — meaning you don’t have any employees — or a large business, you’ll need to record and track financial transactions. Accounting, of course, can be confusing. You’ll probably come across certain terms with which you are unfamiliar, one of which being cash equivalents. What are cash equivalents in accounting exactly?

Overview of Cash Equivalents

Cash equivalents are defined as short-term assets that can be quickly and easily converted into cash. They are considered one of the primary asset classes in accounting. Like all assets, cash equivalents have monetary value. For an asset to be considered a cash equivalent, though, it must be highly liquid, meaning you can quickly and easily convert it into cash.

The conversion of a cash equivalent into cash is typically done through a sale. If your business needs additional cash, you can sell one or more of its cash equivalents. You’ll lose the cash equivalent, but you’ll gain cash from the sale.

Common types of cash equivalents include the following:

  • Treasury bills
  • Government bonds
  • Certificates of deposits (CODs)
  • Commercial paper
  • Money market funds
  • Stock shares

Why Cash Equivalents Are Important

You might be wondering why cash equivalents are important. For starters, they are a prime indicator of your business’s financial health. With cash equivalents, your business will have strong and healthy finances. As previously mentioned, cash equivalents can be quickly and easily converted into cash. Therefore, if your business enters a rough patch and requires additional cash, you’ll have the freedom to sell some of its cash equivalents.

Another reason cash equivalents are important is because they can be used as collateral to secure loans and other forms of debt financing. Many lenders require collateral. If your business doesn’t have credit — or if it has bad credit — you may struggle to get approved for a loan. Cash equivalents offer a solution. You can use some of your business’s cash equivalents as collateral.

In Conclusion

To recap, cash equivalents are short-term assets that you can quickly and easily convert into cash. They are used to gauge the financial health of businesses while also offering a means of collateral for loans and other forms of debt financing.

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