General Questions

The Importance of PCI Compliance

If your business accepts credit and debit card payments, you’ll need to comply with the Payment Card Industry (PCI) standard. In the past, it wasn’t uncommon for businesses to exclusively accept cash payments. But this is no longer the case with modern businesses. Research shows that roughly two-thirds of all transactions involve a credit or debit card. You can’t ignore PCI compliance, however, when accepting credit or debit card payments.

What Is PCI Compliance?

PCI compliance involves the implementation of safeguards that are designed to protect the privacy and information of cardholders. Cardholders are customers. If your business accepts credit and debit card payments, you’ll have to access to sensitive information. Among other things, you’ll know cardholders’ names, addresses, card numbers and more. PCI compliance is all about protecting this information by following a set of rules.

It’s Required

PCI compliance isn’t optional. Assuming your business accepts credit and debit card payments, you’ll have to comply with the PCI standard. Otherwise, you could lose your ability to accept and process card payments. All of the major card companies require businesses to comply with the PCI standard. Failure to comply with the PCI standard could result in your business losing the ability to accept and process card payments.

Protects Against Data Breaches

Another reason PCI compliance is important is that it protects against data breaches. Data breaches can strike businesses of all sizes. While some people assume that only large businesses suffer data breaches, small businesses often have higher rates of data breaches. This is because small businesses have weaker security, so they are viewed as low-hanging fruit by attackers. Regardless of your business’s size, you should comply with the PCI standard. PCI compliance will protect your business from data breaches by improving its overall security.

Preserves Reputation

To preserve your business’s reputation, you need to comply with the PCI standard. PCI compliance will protect customers’ information. Customers will be able to make credit and debit card payments without fear of having their information stolen and used for nefarious purposes. As a result, your business will maintain a positive reputation. Neglecting to comply with the PCI standard, on the other hand, could result in data breaches. Customers’ information could be exposed, in which case they may have a poorer and more negative perception of your business.

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What Are Non-Operating Assets?

Business accounting requires an understanding of assets. All businesses have assets. Assets are economic resources or items of value that can be exchanged for cash. Not all assets are the same, however. There are different types of assets, including non-operating assets. What are non-operating assets exactly, and how do they differ from operating assets?

Non-Operating Assets Defined

Non-operating assets are economic resources or items of value that aren’t used in a business’s core operations. As a business owner, you may rely on certain assets to facilitate your business’s money-making operations. Different businesses use different assets to make money. Assets that aren’t used to make money on behalf of your business are non-operating assets. They are known as “non-operating assets” because they aren’t used in your business’s operations. Rather, your business owns the assets for other purposes, such as appreciation.

Non-Operating vs Operating Assets

Assets can be classified as non-operating or operating depending on how they are used.  Non-operating assets aren’t used in your business’s operations, whereas operating assets are used in your business’s operations.

Some of the most common types of non-operating assets include real estate, cash, accounts receivables, excess and unused equipment and vacant buildings. These are all economic resources or items of value, and you can exchange all of them for cash. Nonetheless, your business won’t use these economic resources in its operations, so they are classified as non-operating assets rather than operating assets.

Why Non-Operating Assets Are Important

Non-operating assets are important because they affect your business’s valuation. If your business has a lot of non-operating assets, it will be valued higher. A high valuation, of course, will allow you to secure more financing without giving up a large portion of your business’s equity.

Equity financing involves a valuation. If you want to obtain financing from an investor, you’ll have to agree to sell a portion of your business’s equity to the investor. The amount of money that the investor pays for your business, as well as the portion of the equity, will determine your business’s valuation. Business valuations are affected by non-operating assets. The more non-operating assets your business has, the higher your business’s valuation will be.

Like all assets, non-operating assets are tax-deductible. You can deduct the cost of non-operating assets from your business’s taxes. If you spend $100,000 on non-operating assets in a given year, you can typically deduct $100,000 from your business’s taxes.

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The Basics of Payroll Accounting and How It Works

Payroll accounting is something that nearly all business owners will have to perform. Unless you operate a sole proprietorship, you’ll probably have employees whom you must pay. Some businesses have hundreds of employees, whereas others have thousands of employees. Even if your business only has a few employees, though, you’ll have to pay them. What is payroll accounting, and how does it work exactly?

What Is Payroll Accounting

Payroll accounting is the process of tracking and processing employee-related expenses. Employees don’t work for free. When you hire an employee, you’ll have to agree to compensate him or her.

Employee compensation can consist of hourly wages, annual salaries, sale commissions, bonuses and more. The term “payroll accounting” refers to paying employees their agreed-upon compensation and tracking these payments for recordkeeping purposes.

Payroll accounting also encompasses tax withholdings, including Social Security and Medicare taxes. As a business owner, you may be required to withhold taxes from your employees’ compensations. Payroll accounting includes tracking and processing ta withholdings such as this.

How Payroll Accounting Works

You can perform payroll accounting in different ways. There’s in-house payroll accounting, for instance, and there’s outsourced payroll accounting. If you perform it yourself — or if another employee who works for your business performs it — it’s considered in-house payroll accounting. Outsourced payroll accounting involves partnering with a third party. There are accountants, for instance, who offer payroll accounting services. You can partner with an accountant so that he or she handles your business’s payroll accounting.

QuickBooks Payroll

QuickBooks offers a payroll accounting solution. If you currently use QuickBooks Desktop, for example, you can sign up for Enhanced Payroll. Enhanced Payroll is an optional add-on service for QuickBooks Desktop. As the name suggests, it provides enhanced payroll accounting features that aren’t otherwise included in the standard version of QuickBooks Desktop.

With Enhanced Payroll, you can create W-2s for your business’s employees and 1099s for your business’s contractors. This optional add-on service also offers automatic tax calculations. You won’t have to manually calculate payroll-related taxes. Instead, QuickBooks will calculate it automatically if you have Enhanced Payroll.

Another feature of Enhanced Payroll is electronic tax filings. You can file tax forms online with Enhanced Payroll. You won’t have to manually print and file tax forms at the end of the year. Rather, you can take advantage of electronic tax filings with Enhanced Payroll.

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Revenue vs Cash Flow: What’s the Difference?

Revenue and cash flow are two of the most important financial metrics for your businesses. Regardless of what products or services your business, you should track its revenue and cash flow. All businesses have revenue and cash flow. Like with other financial metrics, though, revenue and cash flow will vary.

What Is Revenue?

Revenue is money that your business generates by selling its products or services. Customers, of course, will purchase your business’s products or services. Whether they pay with cash, credit cards, debit cards, checks, etc., they’ll provide your business with revenue. Your business will generate revenue from the sale of its products or services.

Keep in mind that revenue isn’t the same profits. Your business may generate revenue without turning a profit. If your business’s expenses are greater than its revenue, it won’t turn a profit. You’ll need to keep your business’s expenses lower than its revenue to turn a profit.

What Is Cash Flow?

Cash flow is a measurement of liquidity. It represents money flowing into and out of your business. Revenue is money flowing into your business. When your business generates revenue, its cash flow will typically increase.

In addition to revenue, cash flow takes into account expenses. Money flowing out of your business include expenses. When you pay for utilities, insurance, payroll or other business-related expenses, money will flow out of your business. Cash flow is a measurement of the money flowing into and out of your business.

Differences Between Revenue and Cash Flow

You can’t run a successful business without considering its revenue and cash flow. Revenue refers to money generated by your business from the sale of its products or services. Cash flow, on the other hand, is money that flows into and out of your business.

Revenue only takes into account product and service sales. Cash flow, in comparison, takes into account revenue and expenses. Cash flow is the relation between your business’s revenue — money flowing into your business — and your business’s expenses.

It’s important to note that cash flow can be positive or negative. Positive cash flow means there’s more money flowing into your business than out of your business. Negative cash flow means the opposite. With negative cash flow, more money will flow out of your business than into your business.

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What Is QuickBooks Time? Here’s What You Should Know

Whether your business has two employees or 200 employees, you’ll need a time-tracking solution. Time tracking, of course, is the process of monitoring and recording workers’ time on the clock. With a time-tracking solution, you’ll know when workers clock in and when they clock out — even if your business doesn’t use a traditional clock-based system. While there are dozens of time-tracking solutions available, you may want to choose QuickBooks Time.

Overview of QuickBooks Time

Previously known as TSheets Time Tracker, QuickBooks Time is a multipurpose time-tracking solution for QuickBooks. Rather than performing time-tracking manually, you can use QuickBooks Time. QuickBooks Time is offered by Intuit. Assuming you use QuickBooks, you may want to use QuickBooks Time as well. QuickBooks Time integrates directly into QuickBooks to automate the otherwise tedious process of time-tracking.

Benefits of Using QuickBooks Time

You can rest assured knowing that QuickBooks Time syncs with the accounting software of its namesake. When you make changes in QuickBooks Time, those changes will be reflected in your QuickBooks account. Real-time syncing is a feature of QuickBooks Time.

With QuickBooks Time, you can track workers’ time on the clock using their smartphones. QuickBooks Time supports smartphone-based tracking. In other words, workers can clock in using their smartphone. At the end of the day, they can clock out using their smartphone. Other types of time-tracking solutions typically use other methods to track workers’ time on the clock.

QuickBooks Time is available as a mobile app. You can download it from the Apple App Store or Google Play. The mobile app, of course, will allow you to perform time-tracking activities on the go. Even if you are out of the office and away from your computer, you can perform time-tracking activities. With the QuickBooks Time mobile app, you just access your smartphone.

You can set up custom alerts with QuickBooks Time. Maybe you want to be notified with workers clock in, or perhaps you want to be notified when they begin working overtime. Regardless, QuickBooks Time supports custom alerts. You can create alerts for important notifications such as these. These are just a few benefits of using QuickBooks Time.

In Conclusion

QuickBooks Time is a versatile time-tracking solution. It syncs directly with QuickBooks. If you use the QuickBooks accounting software, you should consider using QuickBooks Time as well.

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What Is a T Account in Accounting?

You can’t run a business without recording your debits and credits. Debits are expenses, whereas credits are revenues. While there are different ways to record expenses and credits, one of the easiest methods is to use a T account.

Overview of T Accounts

A T account is a simple chart consisting of two columns: a debit column and a credit column. It’s known as a “T account” because it resembles the letter. Debits are displayed on one side, and credits are displayed on the other side.

If you use the double-entry bookkeeping method, you may want to take advantage of T accounts. T accounts have become synonymous with double-entry bookkeeping. Double-entry bookkeeping, of course, states that all financial transactions affect two accounts. Each financial transaction is recorded as a debit and a credit. With the double-entry bookkeeping method, you may want to use T accounts.

Advantages of Using T Accounts

Many business owners that use the double-entry bookkeeping method also use T accounts. T accounts work well for double-entry bookkeeping because they feature columns for debits and credits. You can create T accounts manually, or you can generate them automatically with software. Regardless, T accounts feature columns for debits and credits. You can use these columns to record your business’s financial transactions.

You can use T accounts to prepare adjusting entries. Also known as adjusting journal entries, adjusting entries are data records that occur at the end of your business’s accounting period, such as the last day of a fiscal period. Adjusting entries will ensure that your business’s financial records are accurate at the end of the respective accounting period. To prepare adjusting entries, you can use T accounts.

T accounts make it easy to find and fix accounting errors. If you discover an error, you can go back and review the recorded debits and credits. In T accounts, each credit should have a corresponding debit. If there’s not a debit for a particular credit — or if it doesn’t match — you can fix it.

In Conclusion

T accounts are commonly used with the double-entry bookkeeping method. They are charts that feature a column for debits and another column for credits. The double-entry bookkeeping method requires the use of credits and debits for all financial transactions. Therefore, you can use T accounts for double-entry bookkeeping.

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What Is the QuickBooks Tool Hub?

If you’ve encountered an error message when using QuickBooks, you may want to download the QuickBooks Tool Hub. Maybe your company file is corrupted, or perhaps you’re unable to install QuickBooks. While QuickBooks is undoubtedly a powerful accounting solution, it’s not immune to errors. Fortunately, the QuickBooks Tool Hub is available.

Overview of the QuickBooks Tool Hub?

The QuickBooks Tool Hub is a suite of digital tools that’s designed to troubleshoot and fix errors with the accounting software of its namesake. You can download it by following this link. After downloading it, you can run the QuickBooks Tool Hub to fix QuickBooks errors.

Getting Started With the QuickBooks Tool Hub

Before you can use the QuickBooks Tool Hub, you’ll need to download it by following the link mentioned above. You’ll also have to install it on your computer. The QuickBooks Tools Hub features an auto-installer. Just search for the “QuickBooksToolHub.exe” file on your computer. Upon opening this file, the auto-installer will run. You’ll have to agree to the terms and conditions and follow some other basic steps. The QuickBooks Tool Hub will then be installed on your computer.

Keep in mind that the QuickBooks Tool Hub is only available for QuickBooks Desktop. You won’t be able to use it for QuickBooks Online. QuickBooks Online is the cloud version of Intuit’s accounting software. QuickBooks Desktop, on the other hand, is the locally installed, desktop version of QuickBooks. If you have QuickBooks Desktop, you can use the QuickBooks Tools Hub.

How to Troubleshoot and Fix Errors With the QuickBooks Tool Hub

Launching the QuickBooks Tool Hub app will allow you to troubleshoot and fix QuickBooks errors. You should see several tabs in the QuickBooks Tools Hub app, including a tab for company file errors, network errors, program errors, installation errors, password reset, help and support and advanced tools.

You’ll need to click the tab that corresponds with the error you’ve encountered. If you’ve encountered a company file error, for instance, you should click the company file errors tab. If you’ve encountered an installation error, you should click the installation errors tab. The QuickBooks Tool Hub will then walk you through the troubleshooting process.

The QuickBooks Tool Hub may ask you to download other tools. It leverages multiple tools to troubleshoot and fix errors. These tool downloads, though, will occur in the background, meaning you won’t have to close the QuickBooks Tools Hub.

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What Is Operating Leverage in Accounting?

What’s your business’s operating leverage? When you invest in business-related products and services, you may expect them to drive revenue. Some of these costs, however, may prove more valuable to your business than others. By calculating your business’s operating leverage, you’ll have a better understanding of how effectively — or how poorly — your business is using its equipment, machines and other business-related products and services

The Basics of Operating Leverage

Operating leverage is an analysis of a business’s fixed to variable costs. It’s used to calculate revenue changes associated with fixed costs.

All businesses have costs. Most costs can be classified as either fixed or variable. Fixed costs are those that remain constant for a prolonged period. And unlike variable costs, fixed costs are used to generate revenue. Your business may purchase equipment and machines, for instance, to produce products. Because they are directly used to generate revenue, equipment and machines are considered fixed costs.

Why Operating Leverage Is Important

Operating leverage is important because it reveals the correlation between fixed and variable costs. While they both consist of expenses, fixed costs and variable costs aren’t the same. Fixed costs are typically considered more valuable because they translate into revenue. When your business purchases equipment, machines or other essential products or services, it will likely generate revenue from those fixed costs.

Variable costs are less valuable. As previously mentioned, variable costs don’t translate into revenue. You can’t expect to avoid all variable costs when running a business, but you should try to keep them to a minimum. A high ratio of variable to fixed costs may result in less revenue for your business. Operating leverage, of course, will allow you to track your business’s fixed and variable costs.

If you know your business’s operating leverage, you can use it to calculate your business degree of operating leverage (DOL). DOL represents how efficiently your business turns its fixed costs into revenue. DOL, of course, is based on operating leverage. After identifying your business’s DOL, you’ll know whether your business is using its equipment, machines and other fixed costs to their fullest potential.

In Conclusion

Operating leverage may sound confusing, but it’s a relatively simple metric. It provides insight into fixed and variable costs. Calculating your business’s operating leverage will allow you to calculate your business’s DOL, thus revealing how well your business converts its fixed assets into revenue.

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Capital vs Non-Capital Assets: What’s the Difference?

When recording your business’s assets, you’ll need to know the difference between capital and non-capital assets. Assets can typically be classified as either capital or non-capital. While they both represent items of value, though, they aren’t the same. Capital and non-capital are two different types of assets that represent different items of value.

What Are Capital Assets?

Capital assets are items of value that have a usable life of at least one year. Businesses don’t purchase capital assets to resell them. Rather, they purchase them to facilitate their operations. Capital assets consist of furniture, equipment, machinery, vehicles and other items of value that meet two criteria: They have a usable life of at least one year, and businesses use them to facilitate their operations.

What Are Non-Capital Assets?

Non-capital assets are items of value that aren’t directly attributed to a business’s operations. Like capital assets, non-capital assets have a usable life of at least one year. Non-capital assets, however, don’t affect a business’s primary money-making operations. Examples of non-capital assets include property, stocks and other investments.

Differences Between Capital and Non-Capital Assets

As you can see, capital and non-capital assets aren’t the same. They are two different types of assets. The main difference between capital and non-capital assets lies in their purpose. Capital assets are used to facilitate a business’s operations, whereas non-capital assets are used for other purposes.

Nearly all businesses have capital assets. Most businesses rely on capital assets like equipment and machinery to carry out their operations. Without these essential items of value, businesses may struggle to produce and sell their goods to customers.

Businesses may or may not have non-capital assets. Non-capital assets aren’t as common as capital businesses. Small- and medium-sized businesses will often have capital assets, but they may not have any non-capital assets. Non-capital assets consist of investments. Businesses don’t use them to facilitate their operations. Rather, businesses purchase non-capital assets in hopes of reselling them for a profit in the future.

In Conclusion

There are capital assets, and there are non-capital assets. An asset is considered a capital asset if it has a usable life of at least one year and is used to facilitate a business’s operations. An asset is considered a non-capital asset, on the other hand, if it has a usable life of at least one year and doesn’t affect a business’s primary money-making operations.

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What Are Account Registers in QuickBooks

Have you come across account registers in QuickBooks? You’ll typically see when viewing your chart of accounts. Registers, in fact, are the foundation on which your chart of accounts is built. By understanding how they work, you’ll be able to navigate and analyze your chart of accounts more effectively.

Overview of Account Registers

Account registers are essentially categories for different types of accounts. They are similar to bank registers. Each account register consists of a chart with information about the respective accounts and the associated transactions. Credit card account registers contain credit card accounts, whereas fixed asset account registers contain fixed asset accounts.

With account registers, you can easily view information about your recorded accounts. Pulling up the appropriate register, for instance, will reveal all of the transactions associated with the account. You can also account registers to filter transactions from specific accounts. And you use them to add or delete transactions.

How to Access an Account Register

You can access an account register from your chart of accounts. Select “Chart of Accounts” from the “Accounting” menu and choose the account register that you want to access. After selecting “View register,” QuickBooks will pull up the selected account register.

How to Add Transactions to an Account Register

Account registers contain transactions. In QuickBooks, you can add transactions to an account register in just a few easy steps. Start by clicking the drop-down menu for “Add deposit” or “Add check.” Next, select the transaction that you want to add.

Keep in mind that you can only choose from transactions that have already been recorded. As long as a transaction has been recorded, you should see it under this section. Selecting the transaction will add it to the account register. Just complete the fields with the necessary information, after which you can click “Save” to complete the process. The transaction should now be added to the account register.

In Conclusion

Account registers are designed to categorize accounts so that they are easier to analyze. You can use account registers to view different types of accounts and their respective transactions. And by following the steps listed above, you can add new transactions to one or more account registers. Account registers are a native feature in QuickBooks. If you’re going to use QuickBooks, you can leverage account registers to learn more about your accounts.

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