QuickBooks Tip: Using Time Tracking in QuickBooks

Previously, we learned about getting QuickBooks ready for time-tracking by activating it in Preferences. We also created a record for a service item. Now we’ll actually use that record in the two ways you’ll be using it in QuickBooks: to pay employees for their hourly work and to bill customers for services.

Recording Employee Hours
There are two ways to enter hours for your employees who provide services to customers and are paid by the hour. The first is to create a work ticket for a single activity. Click Enter Time on the home page, and then Time/Enter Single Activity to open this window:

Single-activity work tickets for employee hours are especially useful if you need to set a timer.

First, check the date to make sure it displays the day when the work was actually done, not recorded. Click the arrow in the field next to Name and select the employee’s name from the drop-down list that opens, then do the same in the Customer:Job field below. The Service Item field needs to display the name of the service performed by the employee.

If you want to time a period of activity, use the Start, Stop, and Pause buttons under Duration. You can also replace the 0:00 that appears by default with the number of hours and minutes that were worked.

In the middle column, you’ll select the correct Payroll Item from the drop-down list. You can add a new employee if necessary without completing his or her entire record, but be sure to go back and complete it before your next payroll.

Hidden behind the drop-down menu is a field titled WC Code, which stands for Workers’ Compensation Code. It will only appear if you’re using QuickBooks Enhanced Payroll and have that feature turned on.

Tip: If these two fields do not appear, you’ve selected an employee who isn’t timesheet-based.

In the upper right hand corner, you’ll see a field labeled Billable. Be sure you click in the box to create a checkmark if you’ll be invoicing a customer for the work done.

Save the activity record when you’ve completed it.

Using Timesheets

You can enter employees’ hours directly on a timesheet instead of creating a single activity record.

QuickBooks offers a second option for entering employee hours: timesheets. You’ll notice that there’s a Timesheet icon in the toolbar of the Time/Enter Single Activity window. If you click on it with a completed record open, a new window opens containing a graphical representation of a paper timesheet.

If you enter employee hours in a single activity record, they will appear on a timesheet, and vice versa. There are two advantages to entering hours directly on the timesheet, though. The first is that it’s faster. And secondly, you can click the Copy Last Sheet icon if you’re just going to duplicate an employee’s previous pay period’s hours. If you want to go there straight from the home page, click Enter Time | Use Weekly Timesheet.

Billing Customers for Time
QuickBooks makes it very easy to transfer billable hours worked by employees to the corresponding customers’ invoices. After you’ve entered blocks of time spent on services, open an invoice form and select the customer. This window will open:

Once you’ve entered billable hours worked by an employee, simply open an invoice form and select that customer to open this window.

By default, Select the outstanding billable time and costs to add to this invoice? is checked. When you click OK, a new window opens displaying a grid that contains all of that customer’s billable time. You can Select All or click in front of each entry you want to include. You’ll notice here that there are also tabs on the grid for Expenses, Mileage, and Items that can be billed back to the customer.

If you choose not to carry billable hours over to the invoice at the present time, you can always add them by clicking Add Time/Costs in the invoice’s toolbar.

Questions? We’re always available to help ensure that you’re billing customers for all costs they incur – and to talk about any other element of accounting that affects your cash flow.

QuickBooks Tip: Tracking Time in QuickBooks

When you sell a product to a customer, you know it. It goes away, and your inventory count in QuickBooks is reduced by one. This tracking helps you know what’s selling and what’s not, and it signals when a reorder is due.

If your business provides services to customers, though, you’re selling your employees’ time and skills. There’s no inventory count; you can sell as many hours as you have workers to fill them. Tracking time accurately and comprehensively, though, is as important as knowing how many hard drives or tote bags you’ve sold.

QuickBooks contains tools to help you record the hours employees spend doing work for customers, so you can bill them for services rendered. You can also use these same features to enter employee time for payroll purposes. The software offers two options here: single-activity records and timesheets.

Building the Foundation
We’ve discussed QuickBooks’ Preferences many times before. The software was designed to support small businesses with a wide variety of structures and needs, so it needs to be flexible. For that reason, we always recommend that you check in with your “Preference” options before you explore new features.

To get there, open the Edit menu and select Preferences. In the left vertical pane, click on Time & Expenses, then on the Company Preferencestab at the top. Here is a look at the top part of the window that opens:

The Company Preferences window for Time & Expenses displays multiple options.

To make sure that QuickBooks’ time-tracking features are turned on before you start, click the button next to Yes under Do you track time? Specify the First Day of Work Week by opening that drop-down list. If you know that all your time entries will be billable, click in the box in front of that statement.

There are other options in that window; we’ll talk about them next month.

Creating Service Items
Before you can start tracking billable time, you have to create a record for each service offered – just like you would for a physical product. Click the Items & Services icon on the home page or open the Lists menu and select Item List. The window that opens will eventually display a table containing all the items and services you’ve created.

To define a service item, click Item in the lower left corner, then New, to open a window like this:

You can create numerous types of items in QuickBooks; Service is one of them.

Click the down arrow in the field under Type to see your options here. There are many, ranging from Service to Inventory Part to Sales Tax Group. Select Service. In the field under Item Name/Number, enter a word or phrase and/or number that describes the service, and that won’t get confused with another.

If you had already created an item like “New Construction Services” and you wanted “Carpet Installation” to appear as a subitem of it, you’d click in the box in front of Subitem of to create a checkmark, then open the drop-down list below it and select “New Construction Services.”

Ignore the Unit of Measure section. If this designation is important to your business, talk to us about upgrading your version of QuickBooks. Connect with us, too, if the service you’re defining is used in assemblies or is performed by a subcontractor or partner, as these are more advanced situations.

Enter a brief Description in that box and your hourly charge—to the customer—in the field to the right of Rate. Click the down arrow in the field next to Tax Code to select the item’s taxable status.

It’s very important that you get the next field right. QuickBooks wants to know which account in your company’s Chart of Accounts should be assigned to this item. In this case, it would be “Construction Income.” If you’re not yet familiar with the concept of assigning accounts, let’s set up a session to deal with this and other basic knowledge you should have.

When you’re done, click OK.

If you have any questions related to this article, please give us a call.

Five QuickBooks Reports You Need to Run in January

Does your accounting to-do list look like a clean slate, or are critical 2017 tasks still nagging?

Getting all of your accounting tasks done in December is always a challenge. In addition to the vacation time you and your employees may have taken over the holidays, there year-end projects.

How did you do last month? Were you ready to move forward when you got back to the office in January? Or did you run out of time and have to leave some accounting chores undone?

Besides paying bills and chasing payments, submitting taxes and counting inventory in December, there’s another item that should have been on your to-do list: creating end-of-year reports. If you didn’t get this done, it’s not too late. It’s important to have this information as you begin the New Year. QuickBooks can provide it.

A Report Dashboard
You may be using the Reports menu to access the pre-built frameworks that QuickBooks offers. Have you ever explored the Report Center, though? You can get there by clicking Reports in the navigation toolbar or Reports | Report Center on the drop-down menu at the top of the screen.

QuickBooks’ Report Center introduces you to all of the software’s report templates and helps you access them quickly.

As you can see in the image above, the Report Center divides QuickBooks’ reports into categories and displays samples of each. Click on one of the tabs at the top if you want to:
  • Memorize a report using any customization you applied.
  • Designate a report as a Favorite.
  • See a list of the most Recent reports you ran.
  • Explore reports beyond those included with QuickBooks, Contributed by Intuit or other parties.

Recommended Reports
Here are the reports we think you should run as soon as possible if you didn’t have a chance to in December:

Budget vs Actual
We hope that by now you’ve at least started to create a budget for 2018. If not, the best way to begin is by looking at how close you came to your numbers in 2017. QuickBooks actually offers four budget-related reports, but Budget vs Actual is the most important; it tells you how your actual income and expenses compare to what was budgeted.

Budget Overview is just what it sounds like: a comprehensive accounting of your budget for a given period. Profit & Loss Budget Performance is similar to Budget vs Actual. It compares actual to budget amounts for the month, fiscal year-to-date, and annual. Budget vs Actual Graph provides a visual representation of your income and expenses, giving you a quick look at whether you were over or under budget during specific periods.

Income & Expense Graph
You’ve probably been watching your income and expenses all year in one way or another. But you need to look at the whole year in total to see where you stand. This graph shows you both how income compares to expenses and what the largest sources of each are. It doesn’t have the wealth of customization options that other reports due, but you can view it by date, account, customer, and class.

A/R Aging Detail

QuickBooks’ report templates offer generous customization options.

Which customers still owe you money from 2017? How much? How far past the due date are they? This is a report you should be running frequently throughout the year. Right now, though, you want to clean up all of the open invoices from 2017. A/R Aging Detail will show you who is current and who is 31-60, 61-90, and 91+ days old. You might consider sending Statements to those customers who are way past due.

A/P Aging Detail
Are you current on all of your bills? If so, this report will tell you so. If some bills slipped through the cracks in December, contact your vendors to let them know you’re on it.

Sales by Item Detail
January is a good time to take a good look at what sold and what didn’t in 2017 before you start placing orders for 2018. We hope you’re watching this closely throughout the year, but looking at monthly and annual totals will help you identify trends – as well as winners and losers.

QuickBooks offers some reports in the Company & Financial and Accountant & Taxes categories that you can create, but which really require expert analysis. These include Balance Sheet, Trial Balance, and Statement of Cash Flows. You need the insight they can offer on at least a quarterly basis, if not monthly. Connect with us, and we can set-up a schedule to look at these reports. If you have any QuickBooks questions, or would like any assistance, please contact us.

QuickBooks Tip — Working with Downloaded Transactions in QuickBooks Online

Downloading transactions into QBO is the easy part. You still have work to do once they’re on board.

Its ability to download financial transactions is one of the five best things about QuickBooks Online. Without it, you’d spend a lot of time on tedious data entry, verifying which checks and deposits had cleared and entering new ones.

Instead, you can easily connect to your bank and bring in all your activity from the previous hours or day. QuickBooks Online stores this neatly in a register and provides tools for you to further describe and classify each transaction.

Setting Up the Connection
Haven’t connected your financial institution to QuickBooks Online yet? It’s easy. Click the Banking link in the toolbar, then Add Account in the upper right. The Find your bank window opens. Start entering the name of your bank, credit card company, or service like PayPal in the blank field. A list of potential matches will drop down; you simply select the one you want. A window like this will open:

All you need to do to start downloading transactions into QuickBooks Online is select your financial institution and enter the User ID and Password you use to connect directly to the site.

You will have to go through some security procedures, and then QuickBooks Online will download 90 days of transactions (you can shorten this if you’d like). You’ll also be asked which QBO account should receive the transactions. After a few minutes, the register for that account will appear, displaying the transactions you just downloaded.

Warning: The mechanics of connecting to your bank and downloading your first batch of transactions may sound easy, but if everything is not absolutely clear to you as you’re going through the process, please contact us sooner rather than later.

Working with Transactions
Once you’ve downloaded a set of transactions, you’ll want to look at them. Again, click the Banking link in the navigation toolbar. Your accounts will appear in small boxes at the top of the page, along with two balances: the one that came from the financial institution and the one in QuickBooks Online. Select the one you want by clicking on it, and its register will open.
Tip: QuickBooks Online generally updates your accounts once daily. If you want to launch a manual update at any time, click on Update in the upper right corner.

Let’s look at one downloaded transaction to see what you can do with it. Make sure the For Review column is highlighted above the register. Select a transaction by clicking on it. A window like this will open below it:

QuickBooks Online does more than simply download financial transactions: It lets you define them in greater detail.

There are several options here, including:

  • Add to register. If you’re satisfied with the information as is, just click the Add button to the right (not pictured here).
  • Split. If you want to split the amount/category (Supplies, Tools, etc.)/class of a transaction, click Split (also off to the right and not pictured). A window will open to let you specify that.
  • Assign categories. QuickBooks Online may automatically make assignments to obvious categories, which you can change if incorrect. You can also click the down arrow to the right of that field and select your own from the list.
  • Bill an expense to a customer. Did you purchase something that needs to be billed to a customer? Click in the box under Billable and select the correct one from the drop-down list that opens.
  • Find matches. This can get complicated, and we recommend you let us work with you on it. Let’s say you entered an invoice in QuickBooks Online, and an income item for that exact amount gets downloaded from your bank. QBO will assume that those two “match,” and display them in the In QuickBooks column. You can click Undo if this is incorrect. But you can also click Find match in the transaction window, and QBO will open a list of possibilities.

As you can see from browsing the lists of downloaded transactions, there’s a lot to learn here. We’d be happy to get together and walk you through your first explorations of these powerful features.

QuickBooks Tip: Setting Up Sales Tax in QuickBooks Online

Sales tax is one of the more complicated concepts supported by QuickBooks Online.

QuickBooks Online was designed for you, the small businessperson. You’ve probably discovered that many of its features are fairly easy to use from the start.

But just because QuickBooks Online can do something doesn’t mean you should attempt it on your own. Sales tax is one of those things. Depending on your geographical location, you may have to charge not only state sales tax, but also county and city/municipality taxes (and sometimes special taxes). If you’re selling products or services to customers in other states, your situation can get very complicated.

We’ll show you some of the mechanics involved, but we strongly recommend that you let us help you with this.

Setting Up Sales Tax
We’ll describe the process of setting up sales tax rates so you can see how it will work. Click the Taxes link in the toolbar. The new screen should open to the Sales Tax Center; if it doesn’t, click its link in the toolbar above. In the right vertical pane, under Related Tasks, click Add/edit tax rates and agencies. Then click New to open this window.


You can define either a Single tax rate or Combined tax rate in this window.

You’d enter the Tax name, Agency name, and Rate in the designated fields if you’re just creating a Single tax rate. In some cases, you may have to enter a Combined tax rate. If so, click the button in front of that label. The window that opens contains fields that are similar to the ones in the above image, except that Tax name is replaced by Component name. You’ll choose this option when you have to record individual elements of the tax separately. For example, Ft. Myers | Lee County| Florida State.To muddy things up even more, some items in some situations are exempt from sales tax.

Questions about the Combined tax rate? Contact us.

When you’re done, click Save. You’ll see the tax you just created in a table in the window that opens. To define a New tax, Edit an existing one, or Deactivate one in the list, click the appropriate button. If you’ve entered all you’ll need for now, click Return to Sales Tax Owed and Recent Payments.Your Responsibilities
Once you’ve set up all the sales tax rates required for you, QuickBooks Online will calculate them for you in transactions where they need to be collected. You can see the running tally in the Sales Tax Center, but it’s up to you to create and record payments on the prescribed schedule. You can also run related reports here.

The site bases its calculations on three things:

  • The state(s) where you have obtained a sales tax permit(s),
  • Your company’s physical location, and,
  • The customer address on the sales form.

But QuickBooks Online can’t know the exact tax situation for all its users. You have to do some detective work before you even approach us for help setting up sales taxes. You’ll need to know, for example, whether your state taxes the products or services you sell. Also, what’s the sales tax rate(s) for the affected states? What agency collects it? When are the payments you’ve collected from your customers due?

Your state government’s website should cover all of this.

Sales Tax Settings
Before you start working with sales tax, you’ll also need to make sure your settings are correct. Go back to the Sales Tax Center and click Edit tax settings on the right side of the screen to open this window.

To save time, QuickBooks Online lets you set some default sales tax actions.

Click the button in front of Yes after Do you charge sales tax? if it’s not already selected. If most of your transactions will use the same sales tax, you can set it as the default (but change it during transactions if necessary). If the majority of customers, products, and services will be subject to sales tax, you can check the boxes in front of the Mark all…statements (these designations, too can be edited in individual transactions).You can see that using QuickBooks Online’s sales tax tools requires research, decisions, and extreme accuracy (state revenue departments run occasional audits). We have to stress again the importance of consulting with us if you need to take this on. It’s an exceptionally complex element of accounting, and we want to make it work for you.

QuickBooks Tip: Creating Customer Statements in QuickBooks

Let’s say you have a regular customer who used to pay on time, but he’s been hit-and-miss lately. How do you get him caught up?

Or, one of your customers thinks she’s paid you more than she owes. How do you straighten out this account?

Both of these situations have a similar solution. QuickBooks’ statements provide an overview of every transaction that has occurred between you and individual customers during a specified period of time. They’re easy to create, easy to understand, and can be effective at resolving payment disputes.

A Simple Process
Here’s how they work. Click Statements on the home page, or open the Customers menu and select Create Statements. A window like this will open:

QuickBooks provides multiple options on this screen so you create the statement(s) you need.

First, make sure the Statement Date is correct, so your statement captures the precise set of transactions you want. Next, you have to tell QuickBooks what that set is. Should the statement(s) include transactions only within a specific date range? If so, click the button in front of Statement Period From, and enter that period’s beginning and ending dates by clicking on the calendar graphic. If you’d rather, you can include all open transactions by clicking on the button in front of that option. As you can see in the screenshot above, you can choose to Include only transactions over a specified number of days past due date.

Choosing Customers
Now you have to tell QuickBooks which customers you want to include in this statement run. Your options here are:

  • All Customers. 
  • Multiple Customers. When you click on this choice, QuickBooks displays a Choose button. Click on it, and your customer list opens in a new window. Click on your selections there to create a check mark. Click OK to return to the previous window.
  • One Customer. QuickBooks displays a drop-down menu. Click the arrow on the right side of the box, and choose the correct one from the list that opens.
  • Customers of Type. Again, a drop-down list appears, but this one contains a list of the Customer Types you created to filter your customer list, like Commercial and Residential. You would have assigned one of these to customers when you were entering data in their QuickBooks records (click the Additional Info tab in a record to view).
  • Preferred Send Method. E-mail or Mail?

Miscellaneous Options
At the top of the right column, you can select a different Template if you’d like, or Customize an existing one. Not familiar with the options you have to change the layout and content of forms in QuickBooks? We can introduce you to the possibilities.

Below that, you can opt to Create One Statement either Per Customer or Per Job. The rest of the choices here are pretty self-explanatory – except for Assess Finance Charges. If you’ve never done this, we strongly recommend that you let us work with you on this complex process.

When you’re satisfied with the options you’ve selected in this window, click the Preview button in the lower left corner of the window (not pictured here). QuickBooks will prepare all the statements in the background, then display the first one. You can click Next to view them one by one. At the bottom of each, you’ll see a summary of how much is due in each aging period, like this:

It’s easy to see how much each customer is past due within each aging period. This summary appears at the bottom of statements.
After you’ve checked all the statements, click the Print or E-mail button at the bottom of the window.

Other Avenues
Your company’s cash flow depends on the timely payment of invoices. Sending statements is only one way to encourage your customers to catch up on their past due accounts. There are many others, like opening a merchant account so customers can pay you online with a bank card or electronic check. If poor cash flow is threatening the health of your business, give us a call. We can work together to identify the trouble spots and get you on the road to recovery.

QuickBooks Tip – Using QuickBooks’ Income Tracker

You can get an enormous amount of useful information from QuickBooks’ reports – especially if you customize them to isolate the precise data you want. Reports included with the software range from the very simple, like Open Invoices, to output that’s exceptionally complex, like Trial Balance and Profit & Loss.

Warning: Standard financial reports like Trial Balance are easy to run in QuickBooks, but very difficult to understand and analyze. You should, though, be aware of what they’re telling you at least once a quarter – even once a month in some cases. We can help with this.

Sometimes, especially first thing in the morning as you’re planning your day, you just want to cut to the chase and get a quick overview of your company’s finances. That’s where QuickBooks’ Income Tracker comes in. It not only provides that overview, but it also contains links to related screens where you can do the work that’s needed there.

A Simple Layout
Click the Income Tracker link in the toolbar to open the tool’s main screen. If you’ve been using QuickBooks for a while, you’ll see a framework like this with your own company’s data already filled in.

QuickBooks Income Tracker displays both summaries of income types and the specific transactions that contribute to those totals.

Look first at the top of the screen. You’ll see six horizontal bars, each of which represents groups of transactions that either require immediate attention or will at some point in the future. Besides identifying the type of transaction, each block displays the number of transactions involved and their total dollar amount. They are:
  • Estimates – estimates that have been created and shared with customers, but haven’t yet turned into sales
  • Sales Orders – orders that have been entered but have been neither fulfilled nor converted to invoices
  • Time & Expenses – hours that have been recorded for customers but not yet invoiced
  • Open Invoices – invoices that have been created and sent to customers, but no payments have been received
  • Overdue – open invoices that have passed their due dates
  • Paid Last 30 Days – payments that have been received within the last 30 days

Modifying the View
Click on any of the colored bars, and the list of transactions below will change to include only those that meet that particular criteria. To get back to the default display of all transactions, click the Clear/Show All link in the upper right of the screen.

QuickBooks also lets you display a user-defined subset of the transactions. Click on one of the four drop-down lists above the transaction grid itself to change the view of:

  • Customer: Job – choose just one from the complete list
  • TypeSales Orders, Invoices, Received Payments, etc.
  • StatusAll, Open, Overdue, or Paid
  • Date – multiple ranges available

You can also modify the toolbar if your company doesn’t use all the sales forms/transaction types supported. To do so, click the gear icon in the far upper right of the screen and click in the boxes in front of Estimates, Sales Orders and/or Time & Expenses to remove them.

Taking Action
QuickBooks’ Income Tracker provides a great way to get a quick look at your finances. But it also serves as a launching pad for related activities.

Click the down arrow in the Action column to take care of tasks related to that transaction.

Highlight a transaction by clicking in the row, then click the down arrow at the end of the row in the Action column. The options that appear there depend on the type of transaction you selected. Choose a Sales Order, for example, and you can Convert to Invoice, Print Row, or Email Row. Options for an invoice are Receive Payment, Print Row, or Email Row.

As we said before, QuickBooks offers numerous reports that can give you more insight about your accounts receivable. If you understand the software’s robust customization tools, you can create reports about your income that will answer questions you may have. If you don’t, let us know. We’ll be happy to work with you on pulling together just the data you need.

QuickBooks Tips: Best Practices for QuickBooks Online

Even if you’ve been using QuickBooks Online for a long time, it’s good to step back and evaluate your actions.

“Best practices” aren’t enforceable rules. They’re simply guidelines businesses commonly follow in one area or another. If you’re in retail, for example, one best practice might be to always ask customers checking out if they found everything they were looking for. This serves two purposes: It conveys a feeling of concern for the customer’s shopping experience, and it may also lead to increased sales.

QuickBooks Online has many best practices, some of which may serve multiple purposes, including these:

  • They keep your company data safe and clean.
  • They provide insight on your financial status.
  • They save time.
  • They can lead you to better relationships with customers and vendors.

Are any or all the following common practices for your business?

Reconcile accounts regularly.
One of QuickBooks Online’s most useful features is its ability to connect to your financial institution’s websites and download cleared transactions. QuickBooks Online also offers tools to help you keep your accounts reconciled online, like you used to do every month when your paper statement came. Reconciling accounts can help you uncover errors. It gives you a truer picture of your cash flow, and it improves the accuracy and timeliness of some reports.

QuickBooks Best practices — Start reconciling

It’s not a particularly pleasant process, but you should be reconciling your accounts regularly in QuickBooks Online. We can help.

Clean up your lists.
Some lists in QuickBooks Online aren’t overly lengthy. You don’t have to worry about, for example, Payment Methods, Terms, or Classes. Your lists of customers and vendors, products and services, on the other hand, can grow unwieldy over the years. This means it can take more time than it should to scroll through lists when you’re using those entities in transactions. It also puts unnecessary stress on your company file. If you can’t delete any, at least make them inactive.

Never leave QuickBooks Online open when you leave your work area.
This goes for everyone, even people who work alone and don’t access their company files away from their work areas. The obvious reason is to keep someone else from getting in and authorizing payments, for example, or otherwise compromising your financial information. It also protects the integrity of your data file in case your internet connection suffers some kind of outage.

Keep track of 1099 vendors.
Whether your company uses 10 vendors or a hundred or more, you may have to supply at least some of them with an IRS Form 1099 at about the same time you’re preparing W-2s for employees. Your 1099-related tasks will be much easier if those individuals and/or companies are earmarked. If you think vendors might need 1099s when you create their records in QuickBooks Online, click in the box to the left of Track payments for 1099 in the lower right corner. Not sure? Ask us.

Classify everything with care.
Every time you have to create a record or transaction where categories are involved (i.e., Classes, Customers and Vendors, Territories), check and double-check that you’ve assigned them the correct classification. Errors here can result not only in problems with daily workflow, but your reports will not be accurate. A related best practice: Create a meaningful group of Classes, and use them faithfully. They’ll help you make better business decisions.

QuickBooks Best practices — Class

To create your list of Classes, click the gear icon in the upper right and select All Lists | Classes | New.

View reports on a regular basis.
There are some advanced financial reports in QuickBooks Online that we should be creating for you on a regular basis, either monthly or quarterly. These include Profit and Loss, Balance Sheet, and Statement of Cash Flows. The mechanics of creating them aren’t difficult, but analyzing them is. You should be running reports on your own at frequencies that you think would be helpful, like A/R Aging Detail, Unpaid Bills, and Sales by Class Detail.

If you’ve been using QuickBooks Online for a while, you could probably come up with your own list of best practices. If you’re new to the site, consider scheduling some time with us to go over more of them. Develop good habits from the start, and there won’t be nearly as much need for troubleshooting down the road.

QuickBooks Tip: Receiving Payments in QuickBooks Online

It’s perhaps one of your favorite activities in QuickBooks Online: recording money that comes in. Are you doing it right?

Your days of matching paper checks to paper invoices are over. QuickBooks Online excels at keeping your accounts receivable organized. No more digging through piles of forms and hand-stamping PAID on your customer bills and statements. No more trying to write small enough in your register so you can identify the origins of deposits.

You do, though, need to know how to get to payment screens—there are multiple ways—and which form to complete for each remittance. Here are the three types you’ll deal with most often.

Receive payment on an invoice
When payment comes in on an invoice, you can get to the right screens in any of several ways.

Click the + (plus) sign in the upper right corner. Under Customers, select Receive Payment. In the upper left of the window that opens, select the correct customer by clicking the down arrow at the end of that field to open the list.

Make sure the Payment date is correct. Open the Payment method list and select from Cash, Check, Credit card, etc. If there’s a Reference no., like a check number, enter it in that field. The default value for Deposit to is Undeposited Funds. Leave that active, and enter the Amount received in that field.

When you select a customer’s name in the Receive Payment window, a list of unpaid invoices will appear at the bottom.

If the customer has multiple outstanding invoices, QuickBooks Online will put a check mark in front of the oldest one(s). You can change this if you need to by clicking to uncheck the box and clicking in the box in front of the correct one.

Tip: If you want to isolate invoices from a specific date range, click the arrow next to Filter.

When you’ve specified where the payment(s) will go, add a memo and/or attachment if you’d like and select either Save and close or Save and new in the lower right corner.

You can also record payments on invoices from other screens in QuickBooks Online. For example, click Transactions in the left vertical navigation bar and select Sales to open the list of sales transactions. At the far right end of every line that contains an unpaid invoice, you’ll see a link to Receive payment. Click it, and the payment screen will open with the name and amount already filled in. Another option: With an invoice open, click Receive payment in the upper right corner.

Receive payment at the time of the sale
When a customer pays you immediately for products and/or services, there’s no need to create an invoice. You’d instead use a sales receipt. Click the + sign in the upper right and select Sales Receipt under Customers.

Tip: If you click the small diagonal arrow when it appears next to an option, the site will open the screen in a separate window.

Fill in the fields at the top like you did on the Receive Payments screen.

Use a sales receipt in QuickBooks Online if you receive payment at the same time you provide a product or service.

Complete the lower half of the sales receipt by selecting the products and/or services sold from the drop-down lists. Then click the links at the bottom of the screen to print or email the receipt.

Receive a down payment or retainer
If a customer gives you money as part of a down payment or a retainer for work to be done or products to be delivered, you can enter it on the Receive Payment screen without connecting it to an invoice. If you’re prepared to create a record of the specific charges, though, you can use an invoice form and categorize the payment as a deposit.

There are other ways to receive payments from customers in QuickBooks Online, like creating credit memos or using a mobile payment device. However you do it, your bookkeeping needs to be precise, or you’ll run into problems down the road. If this is a topic that creates some uncertainty, we can go over the whole concept with you and outline your options. You work too hard for your money to risk applying it incorrectly –or worse, losing it to an accounting error.

QuickBooks Tip: How to Keep Your QuickBooks Data Safe

You work hard to make sure your QuickBooks data is accurate. Make sure it’s safe, too.

Your QuickBooks company file contains some of the most sensitive information on your computer. You may have customers’ credit card numbers and employees’ Social Security numbers. An intruder who captured all that data could create tremendous problems for you and a lot of other people.

That’s probably the worst-case scenario. But other situations could also spell disaster for your business, which involves losing your company data through fraud, hacking, or simple technical failures.

We can’t overstate the vital importance of protecting your QuickBooks company file, especially your customer and payroll information. Whether someone steals it or it’s inaccessible for another reason, it’s gone. Keeping your business going after such a loss would be very difficult – maybe even impossible. Here’s what we suggest to prevent that.

Internal Safeguards
No business owner wants to believe that his or her employees could use their QuickBooks access to commit fraud. But it happens. Your company file contains credit card and checking account data that could be used for nefarious purposes. As we discussed last spring, you can restrict user access to specific areas and actions of QuickBooks.

You can limit your employees who have QuickBooks access to certain areas and activities.

To get started, open the Company menu and select Set Up Users and Passwords | Set Up Users. The User List window opens. It should have at least one entry there, for you (Admin). Click Add User and enter the employee’s name and password in the next window that opens, then click Next.

Tip: Your QuickBooks license limits you to a specified number of users. If you’re not sure how many you’re allowed, click F2 to open the Product Information page. The number of user licenses you’ve paid for appears in the upper left.

On the next page of this wizard, click the button in front of Selected Areas of QuickBooks. The following screens will let you define that employee’s access permissions in areas like Sales and Accounts Receivable, Inventory, and Payroll and Employees. When you’ve clicked through every screen and reviewed the summary displayed, click Finish. Your user will now be able to sign in and access the areas you specified.

You can—and should—take numerous other steps to keep your QuickBooks data safe. If your company is big enough to have a dedicated IT expert, he or she will handle most of this. But there’s a lot you can do on your own to prevent data loss and theft.

Keep Your Operating System and Applications Updated

Don’t ignore this dialog box.

Software companies’ occasional updates offer more than just adding new features and fixing bugs. They sometimes refresh your software to ensure greater security based on new threats. Don’t forget about those all-important antivirus and anti-malware applications, as well as QuickBooks itself.

Keep Your Networks Safe
Just as a cold virus spreads around your office, so, too, can unwanted intrusions like computer viruses. Don’t allow an electronic epidemic to get started; take steps ahead of time to prevent it:

  • Discourage employees from excessive web browsing. This can be a hard rule to enforce, as some employees probably need internet access for research, timecard entry, and other work-related tasks. Create a firm policy legislating what workers can and can’t do on company-issued equipment (including tablets and smartphones) or any personal devices that use your wireless network.
  • Ask employees to refrain from using public networks on work equipment. Enforce the rules vigorously, and make compliance an element of performance evaluations.
  • Minimize app installations on business smartphones. Employees should ask for approval. Viruses and malware get in that way, as well as through some websites and email attachments.
  • Use monitoring software. If you can’t afford to pay for “managed IT” (a la carte, third-party IT services), install an application that alerts you to problems.

Use Common Sense
You can fight data loss and theft by being cautious. Be diligent about backups, and if you create them on a local, portable device, don’t leave them in the office. Cloud-based solutions are better. Shred papers that have sensitive information on them. Log out of QuickBooks when you’re not using it or when you leave your office. Be aware of who may be around you, looking over your shoulder. We take data security very seriously in our own office, and we strongly encourage you to do the same. Contact us if you’re at all concerned with your own data safety, and we’ll come up with a plan together.