The beginning of each year is always very busy for me as I run year-end financial reports for many of my clients in order to check for any bookkeeping errors they may have made.  In addition, if needed, I assist my clients in preparing 1099s to send to all service providers that are not incorporated and were paid at least $600 in total for the year.  1099s must be sent out by January 31^st.

This past year I had my busiest year ever.  I worked with 128 clients this past year – 56 new clients and 72 clients who I worked with previously. 

As my specialty is training individuals and small businesses to effectively use QuickBooks, once they are trained, many of my clients no longer need my services.  However, some clients have me come monthly or every few months to help them reconcile their accounts and help them with bookkeeping issues.  Other clients only have me come once a year to review their financial reports for the previous year before they send these reports to their accountant to file their taxes.  And some clients hire me to work with them to clean up their bookkeeping for the past year or more, and then show them how to use QuickBooks properly so that their bookkeeping  stays in good order.  I work with clients in their home or office, in my home office, or virtually using Zoom.

As I work primarily with QuickBooks, I do want to mention that every year QuickBooks Online continues to improve, and I now recommend clients use this software instead of using one of the QuickBooks Desktop applications.  Most of my clients can use the least expensive online version of QuickBooks, which is called QuickBooks Online Simple Start, and costs $30 a month.  But for clients with a more complicated business, they will need to use QuickBooks Online Essentials, which costs $55 a month, or QuickBooks Online Plus, which costs $85 a month.  The price for the Pro Desktop version of QuickBooks was raised substantially this year so that it now costs $550 to purchase.  And you need to update your subscription every year so that you are able to continue downloading transactions into QuickBooks from your bank and credit card accounts. 

Many of my clients, who have been using QuickBooks for years, are still using the desktop version.  They hadn’t wanted to convert to the online version because it was more expensive, and they would have to learn how to use the Online version, which is quite different from the Desktop version.  Now that QuickBooks requires you to update the Desktop version yearly so that you are able to continue downloading transactions, the cost of updating the Desktop version is almost $200 more than the cost of the Simple Start online subscription.  Because of this, and because the Online version works more efficiently than the Desktop version, my clients are now converting to an Online version.  Here is a link to a comparison chart that lists many of the differences between QuickBooks Desktop and QuickBooks Online.

For individuals that have never used QuickBooks, and are ready to purchase it, I explain the differences between the Online and Desktop versions, and most of them choose to use the Online version.  As I am a QuickBooks ProAdvisor, and I have passed the certification exams for both the online and desktop version of QuickBooks, I feel equally comfortable teaching my clients to effectively use either of these programs.  I have trained over 300 individuals to use QuickBooks effectively.

Up until a couple of years ago, I would occasionally recommend that a client use Quicken to manage their business finances.  But I stopped recommending Quicken a few years ago because Quicken does not do a good job creating rules for downloaded transactions.   But with the price of QuickBooks escalating substantially this past year, I recommended to a couple of my new clients with very simple bookkeeping needs, that they purchase Quicken.  I then trained them to use Quicken. 

The post The Year in Review: 2022 appeared first on QuickBooks Training by Shor Solutions.

You should also set up a Petty Cash bank account in QuickBooks, in order to record any expenses paid by cash.

If you use PayPal to pay business expenses and receive business income, then you will probably need to set up a PayPal bank account in QuickBooks.  Unfortunately, you cannot download PayPal transactions into QuickBooks the way you can download bank and credit card transactions directly into QuickBooks.  From your PayPal Activity page you will need to download an iif file, but you can only specify one QuickBooks income and one QuickBooks expense account for all of your transactions.  Once these downloaded transactions are imported into QuickBooks, you can then change these expense and income accounts to the correct ones if needed.  When deciding which expense account to choose for the download, pick the one that you use more than any other.  For example, if you use PayPal often to purchase postage online, then choose Postage and Shipping as the one expense account you are allotted.  This will minimize the number of accounts you have to change after your import is complete.

If you are only using PayPal to pay expenses, and you are not receiving income through PayPal, then you don’t need to set up a PayPal bank account.  The Vendor name for each expense paid through PayPal will be listed on the PayPal withdrawal from your checking account.

If you are only using PayPal to receive income, and you are not paying expenses through PayPal, then you don’t need to set up a PayPal bank account.  When you transfer the income from PayPal to your business checking or savings account, you will specify the income account at that time under Deposits in QuickBooks.  You can split the deposit from PayPal into multiple income accounts if you want, or you might just want to create a PayPal income account.

You may be wondering why you will probably need to set up a PayPal bank account if you are paying expenses and receiving income through PayPal.  When you receive income through PayPal, unless you quickly transfer all of that income out of PayPal, some of the income that is sitting in PayPal may be used to pay expenses through PayPal.  If that happens, those expenses will not show up as withdrawals from your checking account because the money was taken from PayPal, and therefore the expenses will not be recorded in QuickBooks.

If this only happens very infrequently, then there is a way to record those expense payments in QuickBooks using an Equity account.  You would set up an Equity Account called Owners Investment or another name like that.  Then by double clicking on the Owners Investment account, you open up the register for that account, and you enter those expenses there.

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In today’s digital world, there are plenty of good electronic tools for follow-up.  Many people, use the Calendar and Tasks features, which are components of their email program, to list their appointments and things-to-do.  The file system that is featured in this video, is a supplement to the Calendar and Task features that you and I use on our computers and cell phones.

To set up this file system, you will need 16 hanging file folders and 16 manila or colored file folders that will sit in the hanging file folders.  You may want to put tabs on each hanging file folder, and for that you will need 16 tabs with paper inserts.

I hope you find this system to be very helpful in getting things done on time and following up with others.

Ben Shor

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First we opened the Estimate template by clicking on Lists, Templates. We picked an Estimate template, made a copy, and changed the name of the template to Consignment Sale. We also changed the Default Title to Consignment Sale, so that is the name her customers will see on the form.

Using this form, the items she sells on consignment do not show up as income because we used an estimate template. Once she sells some of the items, she converts the estimate to an invoice, and deletes items that she did not sell from the estimate. The problem with this is that she then needs to go back to the estimate, and delete the items that she did sell, so that the items that remain on the estimate are the ones that are still on consignment.

If my client had QuickBooks Premier, then she would be able to create a sales order for items on consignment. She could then create an invoice for selected items when those items were sold, and those items would automatically be deducted from the sales order.

So I called up Intuit, and asked them if my client could exchange her QuickBooks Pro 2016 for QuickBooks Premier 2016, and just pay the difference in cost. Even though my client purchased QuickBooks Pro 2016 from Staples, Intuit said that if she purchased the product less than 60 days ago, they would make the exchange at a cost to my client of $150 because I am a ProAdvisor She just needed to call them before the 60 day mark passed, and give them my ProAdvisor number so that she got the $150 price. Intuit said that if she called after the 60 day period, then the cost to my client would be $200 instead of $150.

My client did make the exchange, and then I showed her how to handle consignment sales using a Sales Order.

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To set up the QuickBooks file for More Than Self, I sat down with Gail Basham, the executive director.  The first thing I did was click on View on the top bar,  followed by a click on Top Icon Bar.  Now the icon bar is on top instead of on the left side.  I then clicked on Edit, Preferences, Desktop View, Switch to colored icons/light background on Top Icon Bar.  Now the Icon Bar is no longer black, and is much easier to see.  Now I clicked on View, Open Window List.  I did this so that I can now use the Window List feature, which is very handy for moving from one open window to another.

After setting preferences and modifying the icon bar in QuickBooks, we set up the Chart of Accounts.  We determined that Gail would use Sales Receipts instead of Invoices to record her sales, because she collects payment at the time of sale.

To use a sales receipt, one must first set up Items.  To do that, on the top bar, I clicked on List, Item List.  Then on the top bar, I clicked on View, Add “Item List” to Icon Bar, which made the Item List a shortcut on the Icon Bar.  Any time you open a window in QuickBooks, and want to have that window be a shortcut on the icon bar, just click on View, and when you look down the list under View, you will see the option to add that window to the icon bar.

Before we set up any items in the Item List, we discussed what the Item List should look like.  We determined that we should set up items for the ten categories of items that she sells, and have sub-items New and Antique, and sub-items of the sub-items for the such things as size, color, etc.

Two example are:

Runners
New
Small

Runners
Antique
Small

When you use sub-items, you can run a sales report to see what you have sold for that sub-item, and you can also run a sales report to see what you have sold for the group that the sub-item is under.  You can set up your item list with every item standing alone without sub-items, but then you can’t run a sales report to see what your sales were for a group of item.

Now we were ready to set up individual items.  To do that, I had Gail click on Item, then New at the bottom of the window.  She then clicked on Non-Inventory Part in the TYPE drop-down box, since she is not going to keep track of the inventory in QuickBooks at this time.

For the Item Name, I had Gail put in the name that she wanted to use for this product to find it in the Item List.  This is not the name that the customer sees on the Sales Receipt.  For example, she might put in the Item Name as RunAntSm, but the name she will put in the Description box would be Antique Runner, Small.  So I had her put in Run as the Item Name, and since it is not a sub-item, she did not put anything in the Sub-item box.

Gail then put in DO NOT USE in the Description box.  Since she is only using this item to run reports for all her runner sales, she will never use this item on a Sales Receipt.  I recommend to my clients to put in DO NOT USE, so that if they ever put this item on a Sales Receipt by mistake, they will know not to use it.

She left the Rate at 0.00 because she will not be putting this item on a Sales Receipt.  For the Account box, she had to choose an Income Account from her Chart of Accounts.  She chose Merchandise.  Then she clicked on Next to save this item to the Item List, and to go to the next Item List screen to add the next item.

For the next item, she put in RunAnt as the Item Name.  Then she clicked on the box to the left of “Subitem of,” and chose Run from the drop-down box below that.  For the Description, she put in DO NOT USE because she is never going to use this item on a Sales Receipt.  She left the rate at 0.00, and chose Merchandise as the Account.  Then she clicked on Next to save this item to the Item List, and to go to the next Item List screen to add the next item.

For the next item, she put in RunAntSm as the Item Name.  Then she clicked on the box to the left of “Subitem of,” and chose the “Ant” that is a sub-item of Run from the drop-down box.  For the Description, she put in Antique Runner, Small.  She left the rate at 0.00 because she will determine the price at the time of the sale.  She chose Merchandise.  Then she clicked on Next to save this item to the Item List, and to go to the next Item List screen to add the next item.

Gail added a few more items, and then for homework, I asked her to put in the rest of the items she sells before we meet again next week.

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One of the bookkeeping issues we discussed was when to use sales receipts and when to use invoices in QuickBooks.  I explained to Angelo that you create invoices when you expect payment at a later date.  You send the invoice to your customer by mail or email.  Then when you get paid by your customer, you apply the payment to the invoice before depositing it in your checking account.

If you receive payment when you finish the job, and you don’t have to send an invoice, then you should create a sales receipt.  A sales receipt looks just like an invoice, except there is a place on this form to indicate how much you were paid and in what form was payment made, i.e. check, credit card, cash, etc.  You can then send a copy of the sales receipt to your customer if you would like.  Using a sales receipt is a one-step process, whereas using an invoice is a two-step process.

Angelo created invoices, but he created his invoices using an invoice template he set up in Microsoft Word.  So instead of creating another invoice in QuickBooks, and then receiving payment toward that invoice, he will now create a sales receipt when he receives payment from his customers.

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