Author Archives: Jody Seibert

Find bookkeeping mistakes on your balance sheet, part 1

Taking time to read the balance sheet report will help you identify bookkeeping mistakes and have a clearer view of your business.

If you prefer to watch a video of this post, you can find it here.

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How to avoid an accounting nightmare: Accountability

YouTube player — You need to **know** your bookkeeping is correct. Assuming or guessing will cost you money and possibly your business.

Let’s talk about accountability. What do you do with the money that comes in and out of your business? How do you monitor who’s doing what with that money? And especially if you have outsourced your bookkeeping, how do you hold that person accountable? Are they completing the work? Do you know whether your bookkeeping is correct?

Recently in a Facebook group, I saw someone post a comment saying she thought her bookkeeper was amazing, but she had no idea if that person was doing a good job.

That’s scary.

You need to know your bookkeeping is correct. Assuming or guessing will cost you money and possibly your business.

The best way you can know whether your bookkeeping is right and to hold yourself accountable and anyone else in your business accountable is to learn to read your financial statements and study them on a regular basis.

Ask questions, get answers.

Know where the money is coming from (best customers and products).

Know where the money is going and who is spending it.

Read your financial statements at least monthly.

That’s how you know whether your bookkeeping is correct.

Need Advanced Time-Tracking? Connect QuickBooks Online to An App

You can track the hours employees work in QuickBooks Online. But if your time-tracking needs are complex enough, you’ll need an integrated app.

If your company has a staff and sells services, you know better than anyone that time is money. It’s critical that you track every minute that employees work, as well as those that can be billed to customers. QuickBooks Online offers dedicated tools that let you do just those tasks.

But QuickBooks Online has limitations in that area, and you may need more versatile time-tracking than it provides. There’s a solution for that: add an integrated add-on application. Several are available that go above and beyond in the area of employee time management. If you’re interested in exploring these online solutions, we can help you both find and get started with the right one.

What QBO Can Do

QuickBooks Online’s own time-tracking features are easy to set up and use – but you must be sure they’re turned on. Click the gear icon in the upper right, then Account and Settings under Your Company. Click on the Advanced tab and go down to the Time Tracking section. The first two entries here should be checked; if they’re not, click in the boxes. If you don’t want employees to see how much customers are actually being billed for their time, keep that box unchecked. Change the First day of work week if you want and click Save.

If you’re going to track hours worked by employees and bill them to customers, these two boxes need to be checked.

Once time-tracking is enabled, you’ll be able to enter single timed activities and/or fill in timesheets., marking them as billable where appropriate. Employees will be able to enter their own hours on timesheets, and billable hours can be easily transferred to customer invoices.

Adding an Add-On

As we said earlier, there are numerous advanced add-on time-tracking applications that can be integrated with QuickBooks Online. They contain built-in tools to facilitate their actual connections with QBO, and they know what data needs to be exchanged and synchronized. Hours captured on timesheets go directly into QuickBooks Online, which transfers billable hours to customer invoices and uses the data in job costing and payroll.

Here’s an example of how the setup process works in one of the most popular apps, TSheets. Once you’ve created an account (a 14-day free trial is available), you’ll click on the Feature Add-ons link in the lower left, then Manage Add-ons. Select QuickBooks Online from the list and click Connect to QuickBooks. Click Connect again to establish the link. TSheets then asks some questions about your import preferences. When you’ve designated those and clicked on Start Import, TSheets will import your employees, customers, service items, and other data you’ve specified from QuickBooks Online.

You may need our help with one task in particular: setting up the Payroll Item Mapping Tool. This ensures that your pay types (salary, overtime, etc.) match those in QuickBooks Online. There are many other internal settings that will require your attention before you start using TSheets.

You can fine-tune your time-tracking app’s settings, as in the above image from TSheets.

Sophisticated Tools

TSheets and other QBO-friendly time-tracking applications have their own unique set of features, but they all focus on getting your employees paid for their work and your company paid by customers who use your services – accurately and in documented detail. Prices vary, but they generally charge a monthly base fee and an additional monthly fee for each user.

Employees can, for example:

Punch into and out of specific jobs on a virtual time clock (desktop or mobile). Facial recognition adds another layer of security.
Use time cards or timers to record work hours.
Record their breaks and time off based on the stated company policies.
Track time when wifi or cellular service is not available.

Managers can:

Access and approve timesheets from the mobile app.
Schedule shifts and assign employees to them.
See who’s working (and on what) and locate them via GPS tracking.
Generate real-time, live reports.

Keep in mind that when you add an app to QuickBooks Online, you’re essentially having to learn how to use an unfamiliar website or program. Since they touch both payroll and customer billing, time-tracking applications must be understood thoroughly and used with precision. So if your needs go beyond what QuickBooks Online can do, let us help you select and implement the right app for you.

4 Things You Should Know About Advanced Settings in QuickBooks Online

Do you know about all of QuickBooks Online’s settings? What you’re missing may be important.

Looking through all the settings available in QuickBooks Online is something like reading the owner’s manual when you get a new car. You know you should do it, but you find yourself consulting it only when you encounter a problem.

Whether you’re new to QuickBooks Online, or you’ve been using it for a while, we recommend that you familiarize yourself with these important preferences. Settings do more than turn features off and on: they can teach you about tools you might not have known were available.

Let’s explore some that you may have missed.

Closing the Books

You’ve probably heard this phrase before but do you know what it actually means in QuickBooks Online? When you set a closing date, you’re indicating that no transactions entered prior to that date should be changed.

Click the gear icon in the upper right, then select Your Company | Account and Settings. Scroll down to the Advanced section in the left vertical toolbar. Under the first heading, Accounting, check the box in front of Close the books. Enter a date and choose one of the two options for exceptions, as pictured in the image below:

You can close the books as of a specific date in QuickBooks Online so users can’t change transactions entered before then.

Warning: Talk to us before you make this decision. We can discuss the pros and cons.

Automation

By using QuickBooks Online for your daily accounting tasks, you’re already saving time. But the site offers a way to save even more with its Automation tools. Here’s what you can do:

Pre-fill forms with previously entered content. Once you’ve saved a transaction for a customer, vendor, or employee, you can choose to have QuickBooks Online complete some fields in the next form you create for them.
Automatically apply credits. Do you want QuickBooks Online to apply credits to the next invoice you create for a given customer? Most businesses do, but a specific example of a time you wouldn’t check the box would be if you’re a property manager who requires security deposits.

QuickBooks Online offers several automation options.

Automatically invoice unbilled activity. Be careful with this one. When you have customers with unbilled activity, QuickBooks Online can automatically create invoices for them on a schedule you designate. You have a few options here. You can simply ask for a reminder as the date approaches, or you can allow the site to automatically create invoices – with or without notifying you.
Automatically apply bill payments. When you record bill payments, QuickBooks Online can automatically apply them to the oldest recorded bill.

Time Tracking

Does your company sell services that are billed by the hour? If so, there are a couple of options you can turn on here. When you create timesheets or individual timed activities, you can add a Service field to the tracking form. You can also include a checkbox to indicate that a block of timed work is billable to customers. If you do the latter, you can opt in or out of letting users see the actual rate you’re charging customers.

Checking Your Work

QuickBooks Online refers to these as Advanced Settings for a reason. Making the wrong choices on any of them could lead to unhappy or confused customers and/or inaccuracies in your accounting file. We think you should know about these options, but we also hope you’ll schedule a consultation with us before attempting to set them up. It’s always much easier to spot problems in the making than to correct mistakes already made.

The Life of an Estimate in QuickBooks Online

Estimates-or quotes, or bids-are useful tools when you’re pitching a sale of products or services. Here’s how QuickBooks Online handles them.

Sales estimates are standard procedure in many professions. You wouldn’t authorize a car repair without one. Nor would you OK a remodeling job on your kitchen or a summer’s worth of yard landscaping without knowing what the costs will be upfront.

Estimates don’t have to be formal documents. You could scribble a proposal for products or services and their prices on a paper napkin and have your customer sign it. But as we’ve said before, the quality of your sales documents reflects on your company’s professionalism as well as its image.

QuickBooks Online offers specialized tools to manage this step in the selling process. You can create detailed estimates that the site can easily convert to invoices when you get an approval. And QuickBooks Online reports help you monitor the progress of your quotes. Here’s how it works.

A Dedicated Form

You probably already know how to create an invoice. If so, you shouldn’t have any trouble generating estimates because the forms are very similar. To get started, click the + (plus) sign in the upper right corner of the screen. In the Customers column, click Estimates. A form like this will open:

QuickBooks Online provides a form template for your estimates.

Open the drop-down list in the Customer field and select the correct one (or +Add new).

Note: If you click on +Add new, you’re only required to enter your prospective customer’s name to create an estimate; contact detail, of course, will not appear on the form. You can go back later and complete a customer record, but it’s best to at least enter a physical and email address. Click +Details to open the complete record, then save what you provide there.

The word “Pending” should appear below the Customer field. This refers to the status of your estimate. Click the down arrow to the right of it, then on the down arrow in the small window that opens to see what options you’ll have later. If you want to copy someone else on the estimate, click the small Cc/Bcc link to the right and provide the email address(es).

Enter (or select by clicking on the calendar graphic) the Estimate date. If your offer is only good for a limited period of time, enter an Expiration date; otherwise, leave that field blank. Then go down to the Product/Service grid and select the items for which you’re providing an estimate, one on each line. Fill in the Qty field and check the labeled box if the item is taxable.

If you had created a product record for it already, the other fields should be completed automatically. If not, click +Add new. The Product/Service information pane should slide out from the right side of the screen. Here again, you’re only required to enter a Name, but you should really create the whole record and save it to return to the estimate. If you’ve not been through this process before, we can walk you through it.

You can add a discount to the estimate as either a percentage or a dollar amount in the lower right corner of the screen. You can also edit the customer message that appears in the lower left and attach any files necessary. When you’re done, save the estimate.

Estimate Options

You can work with your estimate from the Sales Transactions screen.

If you’re not already there, click the Sales link in the left vertical toolbar, and then the All Sales tab and the Estimates bar. Find your estimate and look at the end of the row, in the Action column. If you want to convert your estimate to an invoice, click Create invoice. In the window that opens, indicate whether you want to invoice:

A percentage of each line item,
A custom amount for each line, or,
The total of all lines.

Look over your invoice when it opens, complete any other fields necessary, and save it. Your estimate’s status has now been changed to Closed, and the new invoice created from it will appear on the Sales Transactions screen. It will also be included in the Estimates By Customer report.

If you can create an invoice, you can create an estimate. The tricky part comes in when you have to amend an estimate before you bill it – or even alter it and resubmit it. If you’re going to be working with estimates extensively, let us help you get it right from the start.

How to Use Progress Invoicing in QuickBooks Online

Does your business do work for clients over weeks or months? Consider using QuickBooks Online’s progress invoicing.

Let’s say you’re doing a job or project for a customer that is going to take a long time, but you don’t want to wait until you’re finished to get paid. Or you’ve agreed to let a customer pay for something in multiple payments. QuickBooks can help. You can create an estimate upfront for the work or products and send a series of invoices at different intervals until the bill is paid off. This is called progress invoicing.

Before you can use this tool, you’ll need to make sure it’s turned on. Click the gear icon in the upper right and select Account and Settings. Click the Sales tab. Look for Progress Invoicing in the left column. If that option isn’t On, click the pencil icon in the far-right column and click in the box to create a checkmark and Save it. Then click Done in the lower right corner.

Creating a Template

You’ll need to use a special template for progress invoicing. Click the gear icon again and select Custom Form Styles. In the upper right corner of the screen that opens, click the arrow next to New Style and select Invoice to open the design window. Replace the template name with a descriptive one and click Airy Classic to select it.

You’ll need to select the Airy Classic template and give it a descriptive name.

There are other options on this page – lots of them. You can add a logo, change fonts and colors, and even modify the content on the invoice. Talk to us if you want to explore the possibilities.

Your progress invoice needs you to adjust a couple other things here. Click on Edit print settings. If there is a check in front of Fit printed form with pay stub in window envelope, uncheck it. Next, click the Content tab, then click the small pencil icon in the second section of the invoice sample over on the right. At the bottom of the left pane, click Show more activity options.Check the box in front of Show progress on line items if you want your progress invoice to display item details. When you’ve made all the changes you want to, click Done.

Estimate to Invoice

QuickBooks can create both invoices and estimates. They’re very similar, and you’ll complete them in the same way, with one obvious exception: In addition to an Estimate date, you can also specify an Expiration date. Click the + sign in the upper right, select Estimate, and fill out the form. Save and close when you’re done.

When your customer has accepted the estimate and you’ve agreed on a payment schedule, you’ll need to know how to create a progress invoice. Click Sales in the navigation bar on the left, then All Sales. Locate your estimate on the list and click Create invoice at the end of the row. This window opens:

You have three options when the time comes to start your progress invoicing.

You’ll choose Remaining total of all lines when you’re ready to send your final invoice. For your first, you can either enter a percentage of each line item or a custom amount for each. If you choose a percentage, QuickBooks will calculate what that number would be and enter it. You’ll be able to specify your custom amounts when the progress invoice actually opens. Click Create invoice.

The invoice that opens will contain the information you provided on the estimate. You’ll notice a new column here, though, labeled Due. Your calculated percentage will appear there if you chose that option. If you indicated that you wanted to enter a custom amount for each line, that field will say $0.00 of [total]. Go down that column and type in the amount you expect to be paid on each line item. When you’ve finished, Save the invoice and send it to your customer. Now it appears in the invoice list, where you can send reminders, receive payment, etc.

You can send as many progress invoices as you’d like until you can finally bill your customer for the Remaining total of all lines. QuickBooks provides a report so you can see the progress of all of your progress invoices at once. Click Reports and scroll down to Sales and customers to run Estimates & Progress Invoicing Summary by Customer.

Progress invoicing is a simple concept, but it requires many steps, as you’ve seen here. And there are other ways to go about it in QuickBooks. We strongly suggest that you let us help you with this task to make sure your invoices are set up correctly – and that you’re paid in full.

Working with Contractors in QuickBooks Online

It’s a gig economy. QuickBooks Online makes it easy to track and pay independent contractors.

In days past we used to call it “moonlighting” – taking on a second, part-time job for extra money. And we saw how prevalent this became was when millions of people had to resort to side gigs to keep afloat during the economic downturn of a decade ago. Some who had lost full-time employment even turned one or more of these part-time passions into a small business and became independent contractors for other companies.

If you’re thinking of hiring a freelancer to do some of your work, you’ll find that QuickBooks Online can accommodate your accounting needs for them nicely. Since they’re not W-2 workers, your paperwork needs are minimal. They’ll simply fill out an IRS Form W-9 and you’ll pay them for services provided, dispatching 1099-MISCs after the first of each year so they can pay their taxes.

Here’s how it works.

Creating Contractor Records

Warning: Be sure that any independent contractor you hire cannot be considered an actual employee. The IRS spells out the differences very clearly and takes this distinction very seriously. If you have any doubts, we can help you determine your new worker’s status.

You can either let a new contractor complete his or her own profile or do so yourself.

Like you would with anyone you employ, you’ll need to create records for contractors in QuickBooks Online. Click on Workers in the left navigation pane, then Contractors | Add a contractor. In the window that opens, enter the individual’s name and email address. If you want the contractor to complete his or her own profile, click in the box in front of Email this contractor…

Your contractor will receive an email with an invitation to create an Intuit account and enter W-9 information, which will be transmitted to your QuickBooks Online company account. This will make it easy to process 1099s when tax season arrives. He or she will also be able to use QuickBooks Self-Employed, an Intuit website designed for freelancers. We can walk you through how this works.

If you’d rather enter the worker’s contact details yourself, leave the box blank. A vertical panel containing fields for this information will slide out from the right.

Contractors are also considered vendors. So when you create a record for a contractor, it will also appear in your Vendors list in QuickBooks Online. In fact, you can complete a contractor profile by clicking Expenses in the left vertical pane, then Vendors. Click New Vendor in the upper right and fill in the relevant fields there. Be sure to check the box in front of Track payments for 1099. An abbreviated version of your new record will also be available on the Contractors screen as the two are synchronized.

When you create a Vendor record for an independent contractor, be sure to check the Track payments for 1099 box.

Working with Contractors

You’ll notice in the screen shot above that Brenda Cooper had an Opening balance of $2,450 when you created her record. That’s money you already owed her, and for which she had probably sent you an invoice. QuickBooks Online turned that into an Accounts Payable item that you could find in multiple reports and on both the Vendors and Expenses screens. It will be listed as a Bill in reports, though you haven’t actually created one yet.

You have three options here. You can create a Bill and fill in any missing details if you don’t plan to pay Brenda immediately. If you want to send her the money right away, you can either enter an Expense or write a Check. There are many places in QuickBooks Online where you can do the latter two. We think it’s easiest to return to the Contractors screen, since you can accomplish all three from there.

The Contractors screen contains links to the three ways you can handle compensation due to a contractor.

Whenever you receive an invoice from a contractor, you can visit this same screen and choose one of the three options.

You’ll have to select a Category for your payment from the list provided in each of these three types of transactions. The Chart of Accounts contains one called Subcontractors, which may or may not work for your purposes.

We strongly encourage you to consult with us as you begin the process of managing independent contractor compensation to deal with this issue as well as others. QuickBooks Online offers multiple ways to get to the same end result, and it can be confusing. Contact us, and we can schedule a consultation.

Could Your Sales Invoices Be Better? How QuickBooks Online Can Help.

Every interaction with your customers can enhance your image. Here’s how QuickBooks Online contributes to that.

Getting paid by your customers-on time, and in full-can take some effort on your part. You set smart due dates and enforce them. Price your products and services so they’re both reasonable and profitable. Accept online payments.

But are your invoices working for you here? QuickBooks Online provides sales form templates that you can usually use without modifying. But it also offers tools that support multiple kinds of customization. It helps you shape the content and appearance of your invoices and their accompanying messages to be consistent with your company’s brand.

These may be cosmetic changes, but they can affect the way customers react to communications from you. You have few chances to make an impression, so anything you can do to enhance and personalize every interaction will have impact on their impression of you. Neat, well-designed sales forms convey professionalism and attention to details.

Here’s a look at what you can do.

Editing Fields

Unless you use every single field in QuickBooks Online’s default sales form template, your invoices will look sloppier than they might otherwise. The site gives you control over much of the content that your customers will see. To make changes, click the gear icon in the upper right of the screen and select Account and Settings, then Sales. You’ll see Sales form content in the left column. Click on any of the fields to the right to open a more thorough list of options.

QuickBooks Online lets you turn fields on and off in your sales forms and specify other preferences.

Click on the status (On, Off) in the right column to change it. When you’re satisfied with your selections, click Save. Then close that window by clicking the X in the upper right corner.

You have more options than these. Click the gear icon again, and then Your Company | Custom Form Styles. You’ll see that there is already a “master” form. You can either edit it or create a new one. We recommend leaving the master form alone so you always have a clean copy to consult if you get tangled up while you’re working.

Click the down arrow in the New style box in the upper right and select Invoice. In the screen that opens, enter a descriptive name for your template in the field at the top and then click Content. A graphical representation of your invoice will appear in the right pane, grayed out. It’s divided into three sections: header, footer, and table (the middle of the invoice where you describe what you sold). Each displays a small pencil icon on the right side of the screen. Click the one in the middle to make that area more visible.

It’s easy to specify which fields should appear on your invoices, what the labels should say, and how wide the space should be.

As you check and uncheck boxes to indicate what content should be included, your invoice on the right will change to reflect your actions. You can Preview PDF by clicking that button in the lower right. When you’re satisfied with the changes you’ve made to all three sections, click on the Design tab.

Changing the Look

You don’t have to be a graphic artist to have QuickBooks Online forms that look attractive and consistent, which highlight your brand. The site provides tools that give you control over the appearance of your invoices, not just their content. Click each link below the Design tab to:

Choose a template.
Add your company’s logo.
Select a color scheme and fonts.
Change the printer settings to accommodate letterhead, for example.

Choosing Your Words

You have control over the messages that go out with your invoices.

Finally, click the Emails tab. Options here let you customize the emails that are sent to customers along with their invoices. Again, changes you make in the left pane will be reflected in the graphical version on the right side.

When you’ve completed all of your modifications, click Done.

We gave you this whirlwind tour of QuickBooks Online’s invoice customization options so you’d know what was possible. We expect you might need some assistance when you sit down to apply the concepts you’ve learned about to your own company’s sales forms. We’re available to help you present a polished, carefully-crafted image representing your brand to your customers.

The dumbing down of everything

We live in the information age.

We can ask Google (or Alexa) anything. What gets too little time is fact-checking. Advice is requested in Facebook groups and taken at face value without checking the credentials of those offering the advice. Companies like Intuit and Freshbooks are actively dumbing down accounting. Freshbooks is advertising they are making accounting “approachable,” quite literally undermining the accountants they ask to join their partner program to help sell their products. What hasn’t changed is generally accepted accounting principles, GAAP, which is the rule book all accountants follow. No matter how pretty the screens in Quickbooks, 17Hats, Xero, Dubsado, etc., GAAP is GAAP. Period.

Let’s do some myth busting. Continue reading →

How Does QuickBooks Online Handle Mobile Expenses?

If you purchase several items and services away from the office, QuickBooks Online can help you record them while you’re out and about.

QuickBooks Online’s mobile app, available at the Apple App Store and Google Play, can do many of the same tasks that it performs on your office desktop. You can, for example:

Check account balances.
Add and edit estimates, invoices, and sales receipts.
Add and edit customers, vendors, products, and services.
Record invoice payments.

One of the most common uses of the app, though, is the recording of expenses. Rather than coming home from a trip with your briefcase stuffed full of receipts and notes about purchases you made, you can document them on the road using your mobile device. When you get back to the office and log on to QuickBooks Online, they’ll all be there.