accuracy

Quickbooks

Receiving Inventory With or Without Bills in QuickBooks

You’re probably happy to see couriers delivering inventory items you’ve ordered since it means you can ship to customers, but recording the new stock means yet

QuickBooks’ tools can help with this, but you need to be sure you’re using the right forms. There are two different ones that you’ll use, depending on whether or not you’ve received a bill.

Bill in Hand

Either way, you’ll get started by opening the Vendors menu (or clicking the arrow next toReceive Inventory on the home page). If you do have a bill, select Receive Items and Enter Bill (Receive Inventory with Bill on the home page). The Enter Bills screen opens; select your vendor from the drop-down list. If you had entered a purchase order, you’ll see something like this:


Figure 1: If any purchase orders exist for that vendor in QuickBooks, you’ll see this message. 

Click Yes. The Open Purchase Orders window will open displaying a list. Select the PO(s) for the items received by placing a check mark in front of it/them and click OK.

Tip: If you accidentally click No, the vendor’s information will be filled in on the Enter Bills screen, and you can click the Select PO icon in the toolbar.

Now the PO item information has been entered in the window. Check the form for accuracy, then save it.

Of course, if there was no purchase order, you’ll enter the information about the items you received (descriptions, prices, etc.) in the Enter Bills screen.

Delayed Billing

If you receive items without a bill, you still need to document the shipment. Open the Vendorsmenu and select Receive Items (or click the arrow next to the Receive Inventory icon on the home page and select Receive Inventory without Bill).

The Create Item Receipts window opens. Select the vendor by clicking the down arrow next to that field. If a message about existing purchase orders for that vendor appears, click Yes or Noand either select the appropriate POs or enter the information about what you received.

If the items were already earmarked for a specific customer on the purchase order, the Customercolumn will have an entry in it, and there will be a check mark in the Billable column. If there was no purchase order and you’re entering the information, you can complete those two fields manually.


Figure 2: If a purchase order was already assigned to a customer and is billable, that information should appear in this window. 

Enter a reference number if you’d like. The Memo field should already be filled in with Received items (bill to follow), and the Bill Received box should not be checked.

Warning: Be sure that the Items tab is highlighted when you’re recording physical inventory. If there are related costs like freight charges or sales tax, click the Expenses tab and enter them there.

Paying Up

When the bill comes in for merchandise that you’ve already recorded on an Item Receipt, you’ll use this procedure to pay it:

    • Click Vendors | Enter Bill for Received Items, which opens the Select Item Receiptwindow.
    • Select the vendor, then the correct Item Receipt.

Note: If the bill corresponds to more than one Item Receipt, you’ll need to convert each into a bill separately. You can create a new bill if some items received were not accounted for on Item Receipts.

    • Click the box next to Use the item receipt date for the bill date if you want to match it to the inventory availability date.


Figure 3: You’ll select purchase orders that you want to create bills for in this window. 

  • Click OK. The Enter Bill screen opens, which can be processed like you’d handle any bill.

Though it may seem like extra work, this last procedure is important, since it prevents you from recording the same inventory items twice.

It’s easy to get tangled up on these procedures. We hope you’ll consult us when you begin implementing inventory management in QuickBooks, or when you’re taking on a new task there. It’s a lot easier to prevent errors than to go back and fix them.

Accounting Quickbooks

Are You Defining Items In QuickBooks Correctly?


Figure 1: Clearly-defined items result in precise reports. 

Obviously, you’re using QuickBooks because you buy and/or sell products and/or services. You want to know at least weekly — if not daily — what’s selling and what’s not, so you can make informed plans about your company’s future.

You get that information from the reports that you so painstakingly customize and create. But their accuracy depends in large part on how carefully you define each item. This can be a laborious process, but it’s a critical part of QuickBooks’ foundation.

QuickBooks’ Item Lineup

You may not be aware of all of your options here. So let’s take a look at what you see when you go to Lists | Item List | Item | New:

Service. Simple enough. Do you or your employees do something for clients? Training? Construction labor? Web design? This is usually tracked by the hour.

Inventory Part. If you want to maintain detailed records about inventory that contain up-to-date information about value, quantities on hand and cost of goods sold, you must define these items as inventory parts. Before you start creating individual records, make sure that QuickBooks is set up for this purpose. Go to Edit | Preferences | Items & Inventory | Company Preferences and select the desired options there, like this:


Figure 2: QuickBooks needs to know that you’re planning to track at least some items as inventory parts. 

Inventory Assembly. Just what it sounds like; it’s sometimes referred to as a Bill of Materials. Do you sell items that actually consist of multiple individual products, services and/or other charges (though you may also sell the parts separately)? If you’re planning to track the compilations as individual units, then you must define them as assemblies.

Non-Inventory Parts. If you don’t track inventory, you can set up items as non-inventory parts. Even if you do track inventory, there may be times when you’ll want to use this designation. For instance, you might sell something to a customer that they asked you to obtain, but you don’t plan to stock it. In that case, QuickBooks only records the incoming and outgoing funds.


Figure 3: The New Item window looks a bit intimidating, but it’s critical that you complete it thoroughly and correctly. We can help you get started. 

Other Charges. This is a catch-all category for items like delivery charges or setup fees. You can’t designate a unit or measure here; they’re just standard costs.

Groups. Unlike assemblies, these are not recorded as individual inventory units. Use this designation when you sell a combination of items together frequently but you don’t want them tracked as one entity.

Discount. This is a fixed amount or a percentage that you subtract from a subtotal or total.

Payment. Normally, you would use the Receive Payments window to record a payment made. But if your customer has made a partial or advance payment upfront, use this item to subtract it from the total when you create the invoice or statement.


Figure 4: Use the Payment item to record an upfront remittance. 

Sales Tax Item. One sales tax, one rate, one agency.

Sales Tax Group. If a sale requires two or more sales tax items, QuickBooks calculates the total and displays it for the customer, but the items are tracked individually.

Additional Actions

The Item menu provides other options for working with items. You can:

      • Edit or delete
      • Duplicate
      • Make inactive
      • Find in transactions and
      • Customize the list’s columns.

Let us know if you’re not confident about items you’ve already created or if you’re just getting started with this important QuickBooks feature. Some extra work and attention upfront can save you from hours of back-tracking and frustration–and from reports that don’t tell the truth.

Tax

Failure to File or Pay Penalties: Eight Facts

The number of electronic filing and payment options increases every year, which helps reduce your burden and also improves the timeliness and accuracy of tax returns. When it comes to filing your tax return, however, the law provides that the IRS can assess a penalty if you fail to file, fail to pay or both.

Here are eight important points about the two different penalties you may face if you file or pay late.

1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.

2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and pay as much as you can, then explore other payment options. Call us if you need to set up payment options.

3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.

4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of 1/2 of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.

6. If you request an extension of time to file by the tax deadline and you paid at least 90 percent of your actual tax liability by the original due date, you will not face a failure-to-pay penalty if the remaining balance is paid by the extended due date.

7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

If you haven’t filed your tax return yet, don’t wait any longer. Give us a call today. We’re here to help.

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