Accounting

Accounting Quickbooks

Depositing Payments in QuickBooks: The Basics

Satisfying though it may be to enter all of those customer payments manually on a paper deposit slip, it can also be tedious and time-consuming. The more successful in business you are, the more time and care it takes.

Whether you accept cash, checks, or credit/debit cards, QuickBooks has tools that help you streamline the process of moving the funds into your physical bank accounts. In fact, part of your job is done when you enter the payments on the Receive Payments or Sales Receipt screens.

An Important Decision

When you record a payment in QuickBooks, you can enter it in one of two ways. Ask us if you’re not certain which one best suits your business. Payments can be deposited:

  • In a specific bank account. QuickBooks lets you specify an individual account for each transaction. If you select this option, a box labeled DEPOSIT TO will appear on the Sales Receipt andReceive Payment screens. Select an account from the drop-down list, and your payment will be automatically deposited into it.


Figure 1: You can choose to deposit customer payments to specific accounts. 

  • In Undeposited Funds. This is an asset account that can hold multiple payments, but they are not automatically deposited.

If you decide to have all payments sent to the Undeposited Fundsaccount, you can establish that as your default. Open the Edit menu and select Preferences | Payments | Company Preferences. Then make sure that the box in front of Use Undeposited Funds as a default deposit to account is checked.


Figure 2: Check the box on the right if you want payments sent to theUndeposited Funds asset account. You will make the actual deposits later. If this box is not checked, a DEPOSIT TO field will appear on theSales Receipt and Receive Payments screens. 

Other Deposits

What about money you receive that is neither payment on an invoice you sent nor payment for an item or service received immediately? There are many situations where this might be the case, including:

  • Vendor refunds, rebates, etc.,
  • Unsolicited donations [for non-profits], or
  • An owner’s investment in the business.

To record incoming funds like these, open the Banking menu and selectMake Deposits to open the Payments to Deposit window. Click OK to skip to the Make Deposits window.

Complete the Deposit To, Date, and Memo fields, then click in the table below them if you haven’t already used the Tab key to get there. Use the drop-down lists to select (or add) the individual or company who submitted the payment, the account where it should be tracked, the payment method, and the amount. Enter any additional information needed, fill in the optional Cash back goes to fields, and then save the transaction.

Note: While you’re working in the Make Deposits window, you can click the Payments button at any time to open a new window containing customer payments that need to be deposited if you want to process them simultaneously.

You may also want to use the Attach tool for miscellaneous payments to store related documentation.

Depositing Undeposited Funds

You should process your Undeposited Funds on a regular basis, whether every day, every few days, or weekly, depending on your banking needs. To do this, go to Banking | Make Deposits.


Figure 3: You can either view all of the unprocessed payments inUndeposited Funds in a single list, or you can display them by type. 

The Payments to Deposit window will open if you have pending payments in your Undeposited Funds account. Put a check mark in front of all of the payments you want to deposit by clicking in the column to the left of the DATE column.

Click OK, and the Make Deposits window will open, displaying the payments you just chose. As we instructed previously, select the account where you want the money deposited and the date, add a memo, and request cash back if desired. Save your work when you’re finished.

These are the steps you’ll take to deposit payments by cash and check. If you’re planning to open a merchant account so you can accept debit and credit cards, the process is similar, but there are additional steps you must take to ensure that your books balance.

We can show you the ropes and answer any other questions you have about depositing payments. You work hard for your money, so make sure you see it in your bank accounts.

Accounting Business

Customize Reports, Make Better Business Decisions

Do you remember why you started using QuickBooks?

You may have simply wanted to produce sales forms and record payments electronically, over time expanded your use of the software–perhaps paying and tracking bills through it and keeping an eagle eye on your inventory levels.

And, it’s likely that you’ve also run at least some of the pre-built report templates offered by all versions of QuickBooks since their inception.

QuickBooks’ automation of your daily bookkeeping tasks has undoubtedly served you well. But that’s merely limited use; now it’s time to take advantage of QuickBooks’ greatest strength: customizable reports.

One of the rewards for diligently entering all of your accounting information is a better grasp of your company’s financial performance to date. That insight ultimately leads to better business decisions that can contribute to your future growth and success.


Figure 1: QuickBooks’ Report Center can help you learn about what each report is designed to tell you. But smart customization requires deeper insight. 

Making Reports Meaningful

Like many other tasks in QuickBooks, report customization tools aren’t that difficult to master. What’s challenging is:

  • Understanding what each report is designed to tell you
  • Determining which reports are most relevant to your business information needs, and
  • Designing each to produce the critical insight you need in order to move forward.

The first of these is fairly clear. You can understand what many reports do by their titles, their content, and the descriptions QuickBooks offers. We recommend that you spend some time looking at the Report Center in QuickBooks to familiarize yourself with your options.

The second two challenges are a bit more formidable. It’s our job to assist you in establishing a workflow in QuickBooks to keep accurate records and produce necessary transactions. But we want you to do more than just maintain the status quo. When you analyze and interpret what your reports are telling you, you can make smart business decisions.

So if we haven’t gone over this with you already, we encourage you to schedule some time with us so you can get the maximum benefit from your QuickBooks reports.


Figure 2: You can’t miss QuickBooks’ customization link when you open a report. But the trick is knowing how to best use its options for your business. 

A Simple Set of Steps

Let’s take a look at a report you may already be generate: Sales by Customer Detail (Reports | Sales | Sales by Customer Detail). QuickBooks comes with a commonly-used set of default columns in its reports. This particular report contains column labels like Type (invoice, sales receipt, etc.), Item and Quantity, and Sales Price.

You can easily change the date range that’s offered as a default up below the toolbar. But to get to QuickBooks’ powerful customization tools, click Customize Report. A window with four tabs opens. They are:

Display. Options in this window help you specify the columns you want to appear in your report. In the lower left corner, there’s a list titled Columns that contains every possible column label for that report. If you scroll down, you’ll see a check mark in front of the default columns. Click on any of those to uncheck them, and click in front of any that you’d like to add. Other options here include how your data should be totaled and sorted. Some reports let you choose between cash and accrual basis.

Filters. This is the difficult one–and the tool that will provide the most insight. Filters determine which subsets of related data you’ll see (accounts, items, customer types, zip codes, etc.) by including only those that meet certain conditions. Here’s where we can really help you answer critical business questions that will lead you to smart decisions.


Figure 3: In this example, you’ve created a filter that will find all commercial drywall jobs that have been invoiced in the current fiscal quarter. You could narrow this report further by, for example, class, state, and paid status. 

Header/Footer and Fonts & Numbers. You can tailor the design and layout of your reports here.

Well-formulated reports can help you spot cash flow problems, maintain the right inventory levels, see which jobs are the most profitable, and compare your estimates to actual costs. You’ll also be able to identify your best customers, your most sought-after items, and your most successful sales reps. Careful customization of your reports–and thorough analysis of their data–will make the answers to your constant questions about your company’s future direction much clearer. We can help you take full advantage of these powerful tools.

Accounting Business

The Home-Based Business: Basics to Consider

More than 52 percent of businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements and attics are being transformed into the corporate headquarters of the newest entrepreneurs–home-based businesspeople.

And, with technological advances in smartphones, tablets, and iPads as well as a rising demand for “service-oriented” businesses, the opportunities seem to be endless.

Is a Home-Based Business Right for You?

Choosing a home business is like choosing a spouse or partner: Think carefully before starting the business. Instead of plunging right in, take time to learn as much about the market for any product or service as you can. Before you invest any time, effort, or money take a few moments to answer the following questions:

  • Can you describe in detail the business you plan on establishing?
  • What will be your product or service?
  • Is there a demand for your product or service?
  • Can you identify the target market for your product or service?
  • Do you have the talent and expertise needed to compete successfully?

Before you dive head first into a home-based business, it’s essential that you know why you are doing it and how you will do it. To succeed, your business must be based on something greater than a desire to be your own boss, and involves an honest assessment of your own personality, an understanding of what’s involved, and a lot of hard work. You have to be willing to plan ahead and make improvements and adjustments along the way.

While there are no “best” or “right” reasons for starting a home-based business, it is vital to have a very clear idea of what you are getting into and why. Ask yourself these questions:

  • Are you a self-starter?
  • Can you stick to business if you’re working at home?
  • Do you have the necessary self-discipline to maintain schedules?
  • Can you deal with the isolation of working from home?

Working under the same roof that your family lives under may not prove to be as easy as it seems. It is important that you work in a professional environment. If at all possible, you should set up a separate office in your home. You must consider whether your home has the space for a business, and whether you can successfully run the business from your home.

Compliance with Laws and Regulations

A home-based business is subject to many of the same laws and regulations affecting other businesses and you will be responsible for complying with them. There are some general areas to watch out for, but be sure to consult an attorney and your state department of labor to find out which laws and regulations will affect your business.

Zoning

Be aware of your city’s zoning regulations. If your business operates in violation of them, you could be fined or closed down.

Restrictions on Certain Goods

Certain products may not be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, sanitary or medical products, and toys. Some states also prohibit home-based businesses from making food, drink, or clothing.

Registration and Accounting Requirements

You may need the following:

  • Work certificate or a license from the state (your business’s name may also need to be registered with the state)
  • Sales tax number
  • Separate business telephone
  • Separate business bank account

If your business has employees, you are responsible for withholding income, social security, and Medicare taxes, as well as complying with minimum wage and employee health and safety laws.

Planning Techniques

Money fuels all businesses. With a little planning, you’ll find that you can avoid most financial difficulties. When drawing up a financial plan, don’t worry about using estimates. The process of thinking through these questions helps develop your business skills and leads to solid financial planning.

Estimating Start-Up Costs

To estimate your start-up costs, include all initial expenses such as fees, licenses, permits, telephone deposit, tools, office equipment and promotional expenses.

In addition, business experts say you should not expect a profit for the first eight to 10 months, so be sure to give yourself enough of a cushion if you need it.

Projecting Operating Expenses

Include salaries, utilities, office supplies, loan payments, taxes, legal services and insurance premiums, and don’t forget to include your normal living expenses. Your business must not only meet its own needs, but make sure it meets yours as well.

Projecting Income

It is essential that you know how to estimate your sales on a daily and monthly basis. From the sales estimates, you can develop projected income statements, break-even points and cash-flow statements. Use your marketing research to estimate initial sales volume.

Determining Cash Flow

Working capital–not profits–pays your bills. Even though your assets may look great on the balance sheet, if your cash is tied up in receivables or equipment, your business is technically insolvent. In other words, you’re broke.

Make a list of all anticipated expenses and projected income for each week and month. If you see a cash-flow crisis developing, cut back on everything but the necessities.

Don’t hesitate to give us a call if you think a home-based business is in your future. We’ll set up your business and make sure you have the proper documentation system in place to satisfy the IRS.

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