Quickbooks

How QuickBooks Helps You Accelerate Receivables

You’re meeting your sales goals. Keeping inventory balanced. Making sure that every billable hour gets invoiced. Taking advantage of vendor discounts. Basically, doing everything in your power to keep cash flow humming.

But you can’t control how quickly your customers pay you.

You can, though, use QuickBooks’ tools to:

Make it easier for customers to remit their payments,
Remind customers about unpaid balances, and
Keep a close eye on unpaid invoices.

Figure 1: QuickBooks lets you accept payments from customers in multiple forms. Accepting credit cards and e-checks is likely to speed up your receivables.

Process Plastic

You can, of course, offer customers a discount for paying early. That may work in some cases, but accepting credit cards and e-checks is likely to be more effective. It also has other positive impacts on your business, including:

A more professional image. What do you think when you purchase goods or services from a business that doesn’t accept credit cards? In 2015, this is highly unusual and customers might wonder why. And you work too hard to preserve your reputation to give anyone reason to question your standing.

Time savings for you. How much time do you spend logging checks and running to the bank with deposits? It’s must faster to simply record a credit card payment.

Convenience and goodwill for customers. Your customers will appreciate the time that they’ll save, which translates to a feather in your cap.

There are extra costs associated with setting up what’s called a “merchant account.” And you’ll have to learn how to set up an account and process payments. But once you’ve done so, you’ll be able to invoice customers in QuickBooks and let them pay immediately by credit card. If you ever have occasion to accept payments out of the office, you’ll be able to use your smartphone or tablet to accept them.

We’d like to see you take this positive step for your business, so let us know when you’re ready. We’ll help with setup and implementation.

Send Statements

Figure 2: You have a lot of options to choose from when you create statements in QuickBooks.

This may be an area of QuickBooks you’ve never explored. Statements are just what they sound like: detailed summaries of what each customer owes over a period of time that you email or print and send by U.S. Mail.

QuickBooks makes this very easy. Start by either clicking theStatements icon on the home page or by opening the Customersmenu and selecting Create Statements. The window above appears, laying out the three steps required:

SELECT STATEMENT OPTIONS. Be sure that the Statement Date is correct. Then indicate whether you want your statements to include transactions within a specified date range or all transactions are past due by more than a specified number of days.
SELECT CUSTOMERS. You can generate statements for one customer, all customers, or a designated group in between.
SELECT ADDITIONAL OPTIONS. You’ll have several decisions to make here about your statements’ content and appearance. Let us know if you have questions about any of these.

Track Outstanding Receivables

Figure 3: When you create the Open Invoices report, make sure that the Aging and Open Balance columns will display.

As a small business owner and/or manager, there are certain QuickBooks reports that you should be looking at frequently. One of them, Open Invoices, gives you an instant status update on your outstanding receivables. But it’s important that you set up the report to give you the exact information you need.

Open the Reports menu and select Customers & Receivables | Open Invoices. If you need to change the date range, click the down arrow to the right of the Dates field in the upper left to display your options and choose and then click Customize Report above that. The window pictured above opens. Grab the scroll bar under COLUMNS and move it down until you see Aging and Open Balance. If there are no check marks in front of them, click in the column to create them.

There are other reports you’ll want to look at regularly as you try to accelerate incoming customer payments, like A/R Aging Summary andA/R Aging Detail. If we’re not already working with you on reports, creating and analyzing the critical financial reports that we should be generating monthly or quarterly, let’s set up a meeting.

Call the office today if your copy of QuickBooks needs a tune-up at the same time to ensure that you can keep accepting those payments accurately.

Receiving Payments in QuickBooks

There are numerous ways to prioritize your workday. Do the most difficult things first. Get important phone calls out of the way. Respond to customer emails.

But it’s likely that one activity takes precedence when you see that it needs to be done: recording payments. While you’re probably very careful with this process, it’s critical that your actions here are accurate. If they’re not, you could either lose money that you’ve earned or anger customers by requesting payments they’ve already made.

QuickBooks comes with some helpful pre-defined payment types; however, you also have the flexibility to edit that list and add new types. To see your list, open the Lists menu and select Customer & Vendor Profile Lists, then Payment Method List. This window opens:

Figure 1: QuickBooks lets you accept payments from customers in a variety of ways.

To make changes to this list, click the down arrow to the right ofPayment Method. By selecting items from this menu, you can add, edit, and delete payment methods. You can also make one temporarily inactive if for some reason you’re not going to support that option right now but don’t want to delete it, either. Click in the box next to Include Inactive if you want it to remain on the list (an X will appear next to it). When you want to reinstate it, open the Payment Method menu again and select Make Payment Method Active.

To search for every transaction that used a specific payment method, highlight it in the list and select Find in Transactions. QuickBooks will open the Find window with that filter already applied.

When you’re done working with that window, click the x in the upper right to close it.

Applying the Funds

Ideally, you or someone on your staff will be working frequently with theReceive Payments screen frequently. To get there, open theCustomers menu and select Receive Payments, or click Receive Payments on the home page. This is the screen you will work with if you’re recording a payment that is to be applied to an invoice that you sent.

Figure 2: The Receive Payments screen in QuickBooks

First, select a customer by clicking on the down arrow in the field to the right of RECEIVED FROM. If there are outstanding invoices, they will appear in the table below. Enter the PAYMENT AMOUNT in the field below, and change the date if necessary. Click on the icon representing the payment method. If you don’t see it there, click the down arrow below MORE and add it or select it. Your chosen icon will turn green. Then:

For cash or e-checks: Just enter any REFERENCE # needed.
For checks: Enter the CHECK #.
For credit/debit cards: If you’ve saved the customer’s preferred payment method in his or her record, the number will fill in automatically. If not, or you need to change it, enter it manually. As you know, you need a merchant account in order to accept credit/debit cards and e-checks. If you haven’t set one up and want to, let us help.

If the payment amount equals the total of all outstanding invoices, there will be a checkmark in the first column of every line in the table. If the payment is for any less than the CUSTOMER BALANCE in the upper right, QuickBooks automatically pays the oldest invoice(s) first. You’ll also see an UNDERPAYMENT box in the lower left corner. Click the button in front of your preference here (leave as underpayment or write off the extra).

When you’re done, click one of the Save buttons.

Other Types of Payments

You’ll also use the Receive Payments window to record down payments and overpayments. And there are situations where you’ll have to complete other forms to document the incoming money. For example, if a customer makes a partial payment for products or services that haven’t yet been invoiced, you’d use a Payment Item. A customer who pays for a product at the time it is received would get a Sales Receipt.

Figure 3: Sales receipts go to customers who pay for products or services at the time they are received.

This may all sound a little confusing. But it won’t be if you gain a thorough understanding of the right way to record different types of payments. We can go over all of this with you to ensure that your incoming money is documented correctly, which will take less time than trying to retrace your steps when a mistake has occurred.

By Leon Clinton
August 30, 2015

Preventing Data Theft in QuickBooks

Data breaches of personal information increased dramatically over the past several years. You’ve probably read about–or perhaps experienced first-hand–what happens when major corporate entities like Target and Home Depot get hacked.

As a small business owner, your customers trust you enough to provide you with private information like email addresses and credit card numbers. And while you may not have hundreds of thousands of customer information files, it’s still possible to be targeted by external hackers or even your own employees.

Are you taking the necessary measures to ensure that the data stored on your hard drive and/or in the cloud is protected?

Your Inner Circle

The last thing you want to imagine is that one of your own employees has been tampering with your QuickBooks company data. It happens, though, and you need to protect yourself from potential internal attacks.

One of your internal controls, then, should include the establishment of boundaries for every employee who has access to QuickBooks. You can restrict each staff member to specific areas of the program instead of sharing a master password and giving everyone free rein. Go toCompany | Set Up Users and Passwords | Set Up Users to do this.

Figure 1: If you click on Selective Access in this window, you can restrict your employees’ activities to specific areas and actions.

The User List window opens, which will display all users who have been set up already, including you as the Admin. Click Add User and enter a name and password. Click the box in front of Add this user to my QuickBooks license, then click Next. Click on the button in front ofSelected areas of QuickBooks. Click Next.

The next 10 screens break QuickBooks down into separate activities and activity areas, like Sales and Accounts Receivable, Checking and Credit Cards, and Sensitive Accounting Activities. On each screen, click on the button in front of the correct option:

No Access

Full Access

Selective Access (lets you specify what areas and actions will be allowed for that employee)

Other Internal Controls

QuickBooks’ Audit Trail is your friend. It records everything that is entered or changed in the software, by whom, and precisely when. To view it, open the Reports menu, then click on Accountant & Taxes, then Audit Trail. Like all QuickBooks reports, it can be customized to display the entries you need to see.

Figure 2: QuickBooks’ Audit Trail provides a detailed history of all activity in the software.

There are other reports that you should review frequently, and some that we should create and analyze for you at least every quarter if not monthly. We can suggest reports that would help you look for fraud and tell you what to look for.

Common Sense Practices

It goes without saying that protecting your entire hardware/software/cloud configuration will help keep your QuickBooks company file safe from external marauders. You must employ state-of-the-art antivirus and anti-malware applications and keep them updated. Talk to us if you need recommendations and/or help implementing them.
If you’re a sole proprietor or you work from your home, restrict the computer where QuickBooks resides to business software and websites only. Never let anyone install applications, play interactive games, etc. on it.
Change your own QuickBooks password at least every 90 days and do backups to secure drives or websites.
When you run into problems with QuickBooks’ functioning, please let us help. Even a computer troubleshooting specialist will not understand the program well enough to solve problems, and he or she may compromise your data file further.

As security software and systems get smarter, so do the hackers. Don’t let your company and its customers be victims of data theft.

By Leon Clinton
June 28, 2015