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How To Log Expenses In QuickBooks

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2806960624_234acc42a8_mIn order to run your business effectively, you need to track your expenses. QuickBooks can be very powerful in helping you track and manage your expenses. In this episode of MissionBusinessPodcast.com Bernard Roesch explains how to use expense tracking in QuickBooks.

If you have any questions about this podcast episode, please feel free to contact us.

 

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Using QuickBooks To Track Time

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sand-glass-3-955165-mTracking the time that you and your employees spend can be helpful for your business. If you bill clients for your time, then this data is very important, but even if you don’t bill clients for time, keeping track of your employees’ time can be helpful to understand the labor costs in your business. In this episode of MissionBusinessPodcast.com Bernard Roesch shares how you can track and use time in QuickBooks efficiently.

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Using QuickBooks in an Inventory-Based Business

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In this episode of the Mission Business Podcast, we share how QuickBooks can be used to track inventory and solutions to specific issues that inventory based businesses may face with QuickBooks.

If you have any questions about this podcast episode, feel free to contact us.

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Full Transcript of Audio Below

We’ve transcribed the audio into text and formatted it for easy reading below. Please excuse any typos or odd wording, as this transcript is taken directly from the spoken word within the audio above.

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The Importance of Inventory Tracking

Interviewer: Welcome back to the show. Today, we are talking with Bernard again and I’d like to go over the types of things that QuickBooks can do for inventory-based businesses. I’m really hoping Bernard, that you can explain to us the importance of why you would want to track inventory in QuickBooks.

Bernard: Of course. First, you want to track inventory because inventory is a very valued asset.

  • This is something you own and you want to be sure of what you have.
  • Most importantly, you want to know how much you have so that when you have a customer order, you’re not going to be short of inventory.
  • If you have an order and you can’t ship because you don’t have the product, then that’s a pure loss to you.

Conversely if you have too much inventory, then;

  • You pay rent in a warehouse,
  • The inventory gets to be dirty and obsolete, and
  • You tend to be losing money

It is therefore very important to keep track of inventory, and QuickBooks is a great, great product to maintain what is called a perpetual inventory.

As you do your daily business in QuickBooks i.e you sell things, buy things; QuickBooks will automatically keep track of the quantities you have on hand and the value of your inventory.

Tracking Inventory in Different Locations

Interviewer: If you carry different types of inventory in a warehouse and in different locations, do you have to have a third-party software to track this and integrate that into QuickBooks?

Bernard: Usually not. QuickBooks has great in-depth inventory features. It does a lot of what you want to have done with inventory, especially for those businesses that have multiple locations or special needs such as keeping track of quantities by lot.

  • Let’s say you are a food distributor or manufacturer, you may want to do a lot inventory or serial numbers.
  • QuickBooks has a module called the Advanced Inventory that goes with Quick Enterprise that is really going to do a whole lot for you.

Generally speaking, unless you have a home-manufacturing operation that you want to account for, the QuickBooks inventory features will be very much sufficient for the great majority of our businesses.

What QuickBooks Features Are Needed?

Interviewer: Can we talk a little bit about different locations and how that might affect the ability to work with QuickBooks with different locations and keep track of that?

Bernard: Yes, you can. You must, however;

  • Purchase the QuickBooks Enterprise version, which is a little bit more expensive; and not that much more expensive, and
  • You need to subscribe to what is called the QuickBooks Advanced Inventory that has the multi-location feature.

Usually, if you’ve got multiple locations, the assumption is that your business will be a little bit bigger than just a mom-and-pop shop or a home-based business. It would therefore be natural to install QuickBooks Enterprise to use the QuickBooks Advanced Inventory.

How to Setup QuickBooks Inventory Tracking?

Interviewer: Is this something that’s fairly easy to setup for someone or does this take advanced knowledge and expertise?

Bernard: It is very easy to setup. It is like everything else; it might be deceptively easy.

  • The QuickBooks software is easy to operate but generally speaking, we find that working with a QuickBooks Pro Adviser or seller is really beneficial to the use.
  • We can’t really train and explain what the processes are and make sure that the users are using QuickBooks correctly; meaning receiving the inventory properly, setting-up the inventory list properly so that it all flows nicely and produces accurate results.

Interviewer: Wonderful. Thank you so much Bernard.

Bernard: You’re very welcome. Anytime.

We Are Happy To Help

You can contact us today to book a free consultation. We’d be happy to review your business’s inventory levels and then determine the best ways to use QuickBooks to consistently track inventory based on your business needs.

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Sales and Payroll Taxes in QuickBooks

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In this episode of the Mission Business Podcast, we talk about a little bit deeper way to use QuickBooks that’s going to make managing the various tax obligations of your business much easier.

If you have any questions about this podcast episode, feel free to contact us.

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Full Transcript of Audio Below

We’ve transcribed the audio into text and formatted it for easy reading below. Please excuse any typos or odd wording, as this transcript is taken directly from the spoken word within the audio above.

—

Interviewer: What we’re going to talk about today is a little bit deeper way to use QuickBooks that you may not already be aware of. This is going to make managing the various tax obligations of your business easier.

QuickBooks can obviously be used to keep track of different records of your business and a range of other things, but it can also be used to keep track of your tax obligations throughout the year. That’s what we’re going to talk through with Bernard today.

QuickBooks Makes Tax Tracking and Filing Much Easier

Interviewer: Bernard, can you share with me your experience in working with clients and whether you see most of your clients actually using the tax features that we’re going to talk about today? Is it pretty well known?

Bernard: My observation is that many clients do forget that they can use QuickBooks to make their tax tracking and tax filing much easier for them and the other information that is required for tax compliance. Many of them just rely too much, I believe, on their CPAs who will do taxes, but don’t have all the information.

So, it’s not just possible, it’s much more efficient to use QuickBooks to;

  • Track taxes such as assessing your potential income tax liability,
  • Sales taxes, and
  • If you produce payroll yourself, payroll taxes

There are a number of features in QuickBooks that are convenient to use. Many of our clients forget to use those features, or they are not even aware that these features are available.

How QuickBooks Payroll Software Works

Interviewer: You mentioned a couple of different features. Obviously, taxes are a very broad topic. Let’s talk about payroll taxes in particular. How can QuickBooks be used to make sure you’re staying up-to-date with your payroll tax obligations?

Bernard: If you would be doing payroll taxes and payroll in QuickBooks, there is an initial setup whereby;

  • You will set up the type of taxes you have to pay
  • The frequency, and
  • How you will be paying those taxes

Once this is set up, QuickBooks will automatically accumulate those taxes. As you run payroll, it will actually enable you to set up a payroll schedule.

  • You will have a payroll dashboard that will show you what taxes are payable to what agencies and when.
  • You would simply look at the dashboard, see when things are due, and you can click on various tax liabilities and pay that electronically through QuickBooks.
  • At any moment you can look at your payroll and tax liabilities and figure out what you owe when and the same also for tax filings.

I think Intuit did a great job for their payroll software.

  • It’s inexpensive
  • It’s easy to use

Frankly, many of our clients are doing payroll themselves, and that works pretty well for them.

Managing Sales Tax Obligations Using QuickBooks

Interviewer: You also mentioned sales taxes. Explain to me how a company that sells products, for example, and that are going to actually have sales tax involved, use QuickBooks to stay on top of that even if they’re doing a lot of sales?

Bernard: When you have customers and you sell them something, you have to send them an invoice. At the bottom of this invoice you can figure the invoice to calculate the sales taxes due on that particular invoice. Certain products are taxable. Others are not. Certain customers are taxable. Others are exempt.

  • QuickBooks is doing the work underneath as you produce those invoices.
  • It accumulates the sales tax balances that you owe to the agencies.
  • You may have local taxes to city taxes. You may have state taxes. You may have different types of taxes, county taxes.

The challenge is to set this up correctly at the start so that when it’s time to file taxes, once again, you have everything ready.

  • You go to that particular menu option in QuickBooks,
  • QuickBooks will present you with the Dashboard of whatever taxes are available to home. At that point, you can just produce the checks.
  • You produce another report that enables you to have the filing information so that you can go to your state or local district’s website to file your sales tax return electronically.

QuickBooks is really a great help. It helps keep things in order, streamlined, so you don’t have to say, “Oh, my sales tax return is due. How do I get the data?” It’s right there in front of you as long as you keep current with your QuickBooks.

Interviewer: With sales tax and with payroll taxes, it sounds like if you’ve gone through the setup process, then QuickBooks is really good at managing that.

Start Using QuickBooks for Payroll and Sales Taxes

Interviewer: What would you recommend doing if somebody wants to move into using QuickBooks for payroll and for managing sales taxes, but they already have a lot of data in place from earlier in the year or from the previous year? Would you recommend somehow bringing that information in, or just starting from this point forward leveraging QuickBooks assistant for that?

Bernard: Our philosophy is we don’t want to work backwards too much. I would just say that;

  • Find some convenient juncture where you finish up your tax filing and do your tax preparation the old way.
  • Then engage somebody who is really, really knowledgeable such as a QuickBooks Pro Advisor to really set this up exactly the way it’s supposed to be so that as you put transactions on a current basis, you begin to accumulate balances, and you just get going.

It’s really like you’ve been walking, and now you’re going to get into the car. While you’ve been walking, at some point you just get in the car and you run.

It may be a little bit of work to have the juncture done correctly, but this is the time when you have a professional with you anyway to set up the QuickBooks so that it will function properly. The challenge is really the initial setup. Once everything is set up, it’s really, really easy.

QuickBooks is a great program. It’s been thought through thoroughly, and I really love the way QuickBooks is handling sales taxes and payroll taxes.

We Are Happy To Help

Interviewer: It sounds like there’s a lot of different ways to use QuickBooks a lot more in the business. We have more resources on the website for different things that you can do with QuickBooks, and we’d be happy to answer any questions. Feel free to contact us through the MissionQuickBooks.com website.

Thank you so much for sharing these particular examples with us today, Bernard.

Bernard: Anytime. You’re welcome.

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Employee Expense Policies and Management

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Managing employee Expenses>Business Expenses is a challenge for many small business owners. You want to be fair and reimburse employees for costs they incur in the course of doing their job, but you may also find yourself wondering whether all the expenses are legitimate Expenses>Business Expenses.

The best way to ensure that everyone is treated fairly is to establish a clear employee expense reimbursement policy. The key components of doing this will include establishing clear rules that cover all employees, creating an expense report template for all employees to use, setting deadlines for filing reports and paying reimbursements and clearly communicating the policy to all concerned employees.

Establish a Clear Policy

Handling every situation as it arises requires you to spend considerably more time reviewing expense reports and discussing the costs with the employee, not to mention the effort and time wasted in trying to remember if you’ve paid these types of expenses in the past. So, the first and the most important aspect of your expense reimbursement policy should be clearly stated rules that cover all employees. A lack of a clear policy can also lead to disgruntled employees, especially if you make a habit of paying certain expenses for some employees but not others.

In establishing a reimbursement policy;

  • You should develop a comprehensive list of expenses you will cover, as well as those expenses that will not be covered.
  • The policy should include spending limits and mileage allowances, but you should also include a statement that exceptions can be made for extraordinary circumstances.
  • While you should not offer tax advice, you can make employees aware that any legitimate Expenses>Business Expenses that are not reimbursed could be deductible on their personal tax returns.

Create Set Procedures

In addition to establishing rules, you also need to set up standard procedures that will make it easier to manage the process of making employee reimbursements.

  • Creating one expense report for all employees to use will make it easier for you to review and approve reimbursement requests.
  • Set deadlines for submitting expense reports, which will ensure that costs are accounted for in the appropriate accounting period.
  • You should also set deadlines for your accounting department to pay reimbursements, thus giving employees a clear sense of when they will be paid.

Use Quickbooks to Track Expenses

Quickbooks makes it easy to track employee expenses and to pay expense reimbursements. To do this,

  • You should create a payroll item for each expense you will pay.
  • Make sure you attach the proper expense account to each item to ensure proper accounting.
  • You also should make sure that you indicate that there is no tax tracking for the expense item. This will let Quickbooks know that the item is not subject to withholding and other payroll taxes.

Once you have created the payroll item,

  • You must add it to the employees’ records who will receive reimbursement.
  • After this is done, you can enter each employee’s expense report as you run your regular payroll.
  • Quickbooks will then add the expense reimbursement to the employee’s paycheck, with the check stub listing each expense as a separate line item.

This way , you not only save money by processing fewer checks, but you also ensure that expenses are accounted for properly and in a timely manner.

Communication is Key

Above all, you need to clearly communicate with your employees. Explain the reimbursement policy and the reasons behind it. Establish a comprehensive list of expenses you will reimburse, as well as those you will not. Follow standard procedures, and take advantage of the procedures in Quickbooks that make it easy to reimburse your employees. An established employee expense reimbursement policy will make it much easier for you to manage business and your employees.

4 Tips for QuickBooks Payroll Users

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Image Credit : http://www.sxc.hu/photo/911431

QuickBooks is one of the most popular accounting tools for business owners. Payroll is important since you have to comply with your local, state and federal employment laws when calculating earnings and withholding money for taxes and preparing tax returns. Since there are so many options with QuickBooks payroll, it is possible to get confused about what to do next.

Here are some simple steps that help you become more efficient when calculating the payroll for your business.

1. Verify you have the correct tax information for your employees.

First you need to make sure that you have the right information about your employees. Ask them to verify their full name, social security number, date of birth, marital status, address and the number of dependents they claim.

It is possible that they could have legally changed their name due to a recent marriage or divorce. If you still have doubts that you have the incorrect social security number for an employee, ask the Social Security Administration to compare their name and numbers to see if they match. Are you limited on time or don’t want to physically go to their office? Use their online Social Security business services.

2. Carefully evaluate which QuickBooks payroll option is right for your business.

QuickBooks payroll comes with a range of options that are suitable for different types of businesses. Depending on the type of business that you have, and the number of people you employ, you should choose the best payroll method that makes sense for your company.

    • Do you prefer to do your payroll entirely online? You can use the Intuit Online Payroll to manage your financial data completely online without using your QuickBooks software on your desktop.
    • You would also be able to easily pay your federal and state taxes electronically. If you choose to use the QuickBooks basic payroll, you have to manage all your financial data in your QuickBooks software.
    • Another option is using QuickBooks assisted payroll which integrates your accounting information with your payroll data.

3. Keep an accurate record of your payroll items.

Next you need to organize the different payroll item categories for your business. Normally you can complete this when you are registering your QuickBooks software and entering your company’s information.

    • You should include items for hourly and salary wages, bonuses, state and local taxes, commissions, Medicare, social security and miscellaneous fees.
    • Once you have these categories set up, remember to update the information periodically so that you will not be overwhelmed during tax season.

4. Create a list of accounts for your business.

Now that you have your payroll items correctly categorized, you will have to create accounts in QuickBooks for any entity that receives compensation or taxes on your employees’ wages and other compensation.

    • Identify which local, state and federal government agencies need to be listed as an account for your business.
    • Identify the percentage or amount that they should be paid. Remember, your business may be fined and penalized for late payments or if you miss the payments entirely. If you are a business owner it is your responsibility to accurately report payroll data to authorities.

While you are preparing your payroll with QuickBooks you should review the Internal Revenue Service codes to make sure that you are complying with their employment tax requirements. Make sure that you understand which federal taxes apply to your business or industry, and that the correct amount is withheld from employment taxes. If you do not have a background in accounting and are concerned about making an error, consider hiring an accountant that has extensive experience with documenting and calculating business payroll.