Author: Digital Touchstone

The money you spend to run your business must be recorded conscientiously for your taxes and reports. Here’s how to do it.

You undoubtedly keep a very close watch on the money coming into your business. You record payments as soon as they come in and deposit them in your company’s bank account. But are you as careful about your purchases?

It’s easy to go out to lunch with a client and forget to save the receipt. You figure it’s not that much money, anyway. Or you pick up a ream of printing paper and a cartridge at the office supply store and neglect to record the purchase. When you disregard even small expenses, you can have two problems. One, your books won’t be accurate. And two, you never know how an extra $42.21 under Meals and Entertainment might affect your income taxes.

QuickBooks Online provides two ways to enter expenses. You can create a record on the site itself. Or you can snap a photo with your phone using the QuickBooks Online mobile app to document the money spent. Here’s how these two methods work.

Documenting At Your Desk

Let’s say you just had lunch with a vendor to discuss some products you’re planning to buy for a project you’re doing for a customer. You charged it to your company credit card, which you track in QuickBooks Online. You still have to enter it as an expense on the site so that when your credit card statement comes, you can match the credit card transaction to the expense you recorded.

Hover over Expenses in the navigation toolbar and click on Expenses. Click the down arrow in the New transaction button and select Expense. Fill in the fields at the top of the screen with details like Payee, Payment date, and any Tags you want to specify. Under Category details, select the correct category from the drop-down list and enter a Description and Amount. 

QuickBooks Online allows you to thoroughly document expenses. You can attach a picture of a receipt if you’d like.

Since you’re going to bill this to the customer as a part of your project fee, click in the Billable box to create a checkmark. Select the Customer/Project. Add a Memo to remind yourself of the reason for the lunch (very important!) and attach a photo of the receipt if you take one. Click Save. Your record of the lunch will now appear on the Expense Transactions screen. It will also show up in the Expenses by Vendor Summary and Unbilled Charges reports, among others.

Recording on the Road

In the example we just went through, attaching a photo of the receipt was the last thing we did to record an expense in QuickBooks Online. There’s another way to document a purchase that starts with a photo of a receipt and should save you a bit of data entry: using the QuickBooks Online mobile app. The app uses Optical Character Recognition (OCR) to “read” the receipt and transfer some of its data to fields on an expense record. 

(If you haven’t installed the QBO app on your smartphone, you should. You can do a lot of your accounting work that synchronizes automatically with QBO. It’s free, too.)

Open the app and log in. On the opening screen, you’ll see an icon labeled Snap Receipt. Click on it, and your phone’s camera will open (you’ll be asked for permission to use it). Position your phone over the receipt and move it around until you see the blue box covering the content of the receipt.  Take the picture. You’ll see it displayed on the phone with a message saying, “Use this photo.” If it seems OK, click the link. 

A message on the screen will tell you that the upload is complete and that the app is extracting the information from it. Click “Got it!” It should only take about a minute for your receipt to appear in the list on the Receipt snap screen. You’ll see the details that the app has pulled from your receipt. Tap the matching expense and click Done on the next screen.

You can snap a photo of the receipt in the QuickBooks Online mobile app, and some fields will be automatically entered on a receipt form in QBO.

When you’re back at your computer, open QuickBooks Online and go to Transactions | Receipts. At the end of the row that contains your receipt, click the down arrow next to Delete and select Review. QBO will display the partially-completed receipt form next to the photo you took of the receipt. Fill in any missing fields and save the transaction. Click Create expense on the screen that opens. Then open the Expenses menu and select Expenses, and there should be an entry for the receipt you just added.

This tool isn’t perfect, of course. Every receipt has different fields in different places, and sometimes they’re just not very readable. But in our tests, the app picked up an average of four fields.

Documenting your expenses using one of these two methods is so important. It will help you remember why you stored the receipt and make your reports more accurate. As long as you’re categorizing each transaction correctly, it will also make your tax preparation easier and faster and ensure that you’re charging customers for billable expenses. And if you’re ever audited, your careful work will come in handy.

QuickBooks Online does expense management well, but there are enough moving parts in these recording tools that you may have some questions. We’re here, as always, to answer them.

There are always more things to learn about the applications we use every day. Here are some tips for expanding your use of QuickBooks Online. 

We tend to fall into the same old patterns once we’ve learned how to make a computer application work for us. We learn the features we need and rarely venture beyond those unless we find we need the software or website to do more. 

QuickBooks Online is no exception. It makes its capabilities known through an understandable system of menus and icons, labeled columns and fields, and links. But do we really see what else it can do? Expanding your knowledge about what QuickBooks Online can do may help you shave some time off your accounting tasks and better manage the forms, transactions, and reports that you work with every day. Here are some tips.

Edit lines in transactions. Have you ever been almost done with a transaction and realize you need to make some changes farther up in the list of line items? Don’t delete the transaction and start over. QuickBooks Online comes with simple editing tools, including:

• Delete a line. Click the trash can icon to the right of the line. 
• Reorder lines. Click the icon to the left of the line, hold it, and guide it to the new position. This is tricky. You may have to work with it a bit.
• Clear all lines and Add lines. Click the buttons below your line items, to the left.

Click the More link at the bottom of a saved transaction to see what your options are.

Explore the More menu. Saved transactions in QuickBooks Online have a link at the bottom of the screen labeled More, as pictured above. Click it, and you can Copy the transaction or Void or Delete it. You can also view the Transaction journal, which displays the behind-the-scenes accounting work, and see an Audit history, which lists any actions taken on the transaction. 

Create new tabs. Do you ever wish you could display more than one screen simultaneously so you can flip back and forth between them? You can. Right click on any link in QuickBooks Online, like Sales | Customers,  and select Open link in new tab. 

Use keyboard shortcuts. Not everyone is a fan of these, mostly because they can’t remember them. Hold down these three keys together to see a list: Ctrl+Alt+?. Some common ones include those for invoices (Ctrl+Alt+i) and for expenses (Ctrl+Alt+x).

Modify your sales forms. Do you need more flexibility than what’s offered in your sales forms? It may be there. Click the gear icon in the upper right and select Account and settings under Your Company. Click the Sales tab. In the section labeled Sales form content, notice that you can add fields for Shipping, Discounts, and Deposits by clicking on their on/off switches. You can also add Custom fields and Custom transaction numbers.

Add attachments. Sometimes it’s helpful to have a copy of a source document when you enter a transaction. To attach a receipt to an expense, for example, look in the lower left corner of the transaction. Click Attachments and browse your system folders to find the file, then double click on it.

Record expenses made with credit cards. Who doesn’t use credit cards for expenses sometimes? You can track these purchases in QuickBooks Online, as pictured above. Click the gear icon in the upper right and select Chart of Accounts under Your Company, then click New in the upper right. Select Credit Card from the drop-down list under Account Type. Enter Owner Purchase in the Name field and then Save and Close. When you create an expense, select Owner Purchase as the Payment account. 

Previous Transaction Button. Are you trying to find a transaction that you entered recently but don’t want to do a full-on search? With a transaction of the same type open, click the clock icon in the top left corner. A list of Recent Expenses will drop down. Click on the one you want.

Whether you’re new to QuickBooks Online or you’ve been using it for years, there’s always more to explore. We’d be happy to help you expand your use of QuickBooks Online by introducing you to new features, building on what you’re already doing on the site to improve your overall financial management. Call us to schedule some time.

There are many ways to encourage delinquent customers to pay. QuickBooks Online’s statements may be effective for you.

After the year-plus you’ve just experienced, the last thing your small business needs is customers who are behind on their payments to you. You may have been giving them a break because you know that they’re struggling, too, but things have been looking up for many companies in the past few months. It’s time for you to be more proactive about calling in your debts.

There are numerous ways you can accomplish this. One of the best is to send statements in QuickBooks Online, which are detailed reminder forms that contain multiple transactions. These can be especially helpful if you’ve sent multiple invoices with no response. There are three different types you can send, depending on your needs. Here’s how you create them.

Before You Start

QuickBooks Online offers a couple of options for formatting your statements. To see these, click the gear icon in the upper right corner and select Your Company | Account and Settings. Click the Sales tab and scroll down to the Statements section. Click the pencil icon over to the far right to make any changes needed. You can:

• List each transaction as a single line or include all of the detail lines.
• Display an aging table at the bottom of each statement.

Click the buttons to specify your preference and then click Save and Done.

QuickBooks Online gives you control over some elements of your statements.

Three Statement Types

You can choose from among three different types of statements in QuickBooks Online: Balance Forward includes invoices with outstanding balances for a specified range of dates. Open Item statements contain information about all unpaid (open) invoices from the last 365 days. And Transaction Statements show every transaction in a date range that you specify. We’ll describe how to create them so you can decide which makes the most sense for a particular situation.

One Way to Create Statements

Like it does for many other actions, QuickBooks Online offers two ways to create statements. The first is easier. Click the New button in the upper left and select Statement (under Other). Click the down arrow in the field under Statement Type to see the three options there.

If you select Balance Forward, you’ll need to define three criteria (there will be similar options for the other two types):

• Statement Date
• Customer Balance Status (Open, Overdue, or All)
• Start Date and End Date

QuickBooks Online makes it easy to create any of three types of customer statements.

When you’re satisfied with your statement parameters, click Apply. QuickBooks Online will display a list of the transactions that meet your criteria, along with the number of them that will be generated. Each row in the list will display the recipient’s name, email address, and balance. In the upper right corner, you’ll see the number of statements again and the total balance these customers represent. 

If you want to exclude any of these customers, click in the box in front of each to unselect them and delete the checkmark. When you’re satisfied with your list, click Save, Save and send, or Save and close. If you click Save and send, a window will open containing a preview of your statements. Thumbnails of each will appear in the left pane. Click on any to see their previews. When you’re ready, you can download, print, or send them.

If you click Save or Save and close, you’ll still be able to see the statements you’ve just generated. Click the Sales tab in the toolbar, then All Sales. Click the down arrow next to Filter and open the drop-down list under Type. Select Statements, and your list will appear. You can print or send one by selecting the correct option in the Action column. If you want to dispatch multiple statements, click in the box in front of each, and then click the down arrow next to Batch actions.

Another Method

There’s an alternate way to create statements. Click the Sales tab in the toolbar, then Customers. Select any or all of the customers in the list, then click the down arrow next to Batch actions and select Create statements. QuickBooks Online will open the Create Statements window again so you can select the type and process your statements like you did using the previous method.

We don’t expect that you’ll have much trouble working with statements, though you may want to consult with us on when they’re appropriate. We can also suggest other ways to bring your accounts receivable up to date. As always, we’re available to help you maximize and streamline your use of QuickBooks Online. Keeping your financial books current and organized is one way to ensure that you don’t fall too far behind with customer payments.

Whether you sell products or services, you may need to create estimates in QuickBooks Online. Here’s how it’s done.

It would be nice if you could just instantly invoice every sale. But sometimes your customers need to know what a particular purchase will cost before they make the decision to buy. So you need to know how to create an estimate. If the sale goes through, you’ll of course want to send an invoice.

QuickBooks Online automates this entire process. It even helps you track the progress of your estimates by providing a special report. Here’s how it works.

Just Like An Invoice – Almost

The process of creating an estimate in QuickBooks Online is almost identical to creating an invoice. You click the New button in the upper left and select Estimate. 

Creating an estimate in QuickBooks Online is like creating an invoice, with a few differences.

When the form opens, you’ll notice one difference right away. Directly below the Customer field, you’ll see the word Pending next to a small down arrow. Click it to see what your options are here. You’ll be able to update its status later. Select a Customer to get started. If this is a new customer, click + Add New and enter at least the name. If you want to build a more complete profile at this point, click Details and complete the fields in the window that opens. To send a carbon copy or blind copy of the estimate to someone else, click the Cc/Bcc link.

Next to the Estimate date, there’s a field for Expiration date. Enter that and continue on to add the products and/or services that will be included, just as you would on an invoice. If you’re generating an estimate for a new product or service, click + Add new in the drop-down list. A panel will slide out from the right that allows you to create one. 

You’ll see more options for your estimate at the bottom of the page. You can add a message in the message box (or leave the default message if there is one). You can also Customize it, Make recurring, or Print or Preview it. When you’re satisfied, Save it, and send it to the customer. 

You can preview your estimate to see what the customer will see before saving it.

Updating the Status

Your estimate will not be considered a transaction until you accept it. To do this, click the Sales link in the toolbar, then All Sales. Find your estimate in the list by looking in the Type column. Click the down arow next to Create invoice to see your other options there. You’ll see that you can Print or Send it or save a Copy. 

Click Update status. In the window that opens, click the down arow next to Pending. From the list that drops down, select Accepted. You can also mark it Closed or Rejected. If you choose any of the last three options, another window opens that allows you to enter the name of the individual who authorized the action and the date it was done.

Click Create invoice if your estimate was accepted. You’ll have three options here. You can invoice your customer for:

• The estimate total.
• A percentage of each line item.
• A custom amount for each line.

When you locate your estimate on the Sales Transactions page, you’ll have several options for managing it.

After you’ve made your selection, click Create invoice to open the form with the amounts filled in based on your preference. Complete anything that’s unfinished but do not change any of the product or service line items. Save it, and your invoice is ready to go. You can always check the status of your estimates by running the Estimates by Customer report.

Creating and tracking estimates is as easy as working with invoices. You may run into difficulties, though, if you need to do anything beyond that point with estimates, such as modifying it and re-submitting them. We’re here to answer any questions you might have about this. It’s important that you get your estimates and their subsequent invoices exactly right, so you don’t lose money or sales. Let us know if you want to go over these concepts.

Downloading them is the easy part. QuickBooks Online lets you work with downloaded transactions in numerous ways.

QuickBooks Online was built to import transactions from your online financial institutions. You can enter them manually but downloading them saves an enormous amount of time and minimizes errors. It also makes reconciliation much easier, since you can see which transactions have cleared without calling the bank or waiting for a printed statement.

Once they’re in QuickBooks Online, your transactions are stored in a list, waiting for you to further define and categorize each one. Let’s look at how you can work with them to make sure your records are as thorough as possible.

Getting Connected

As long as you have online access to your bank and credit card accounts, you can set up QuickBooks Online to import cleared transactions. Click the Transactions tab in the toolbar, then click Banking. On the next screen, click Connect account. You’ll see links to popular financial institutions on the next page. If yours isn’t listed, enter its name in the search box at the top of the screen. Follow the onscreen instructions to make your initial connection and start downloading transactions. 

When you’ve completed the connection, you can click Link account in the upper right to add more.

Dealing With Transactions

After you set up a connection to a bank or credit card account, its account information will appear in a box on the Banking page.

Once you’ve finished adding accounts, you’ll still be on the Banking page. Each of your connected accounts will appear in a box that includes the balance and the number of transactions that need to be reviewed. There will probably be quite a few, dozens or hundreds, the first time you download, since most financial institutions send you 90 days’ worth the first time. Every time your accounts are updated after that, you’ll only get new ones that have cleared since your last connection.

Tip: QuickBooks Online generally updates once every day. If you want to see your new cleared transactions at any time, click Update in the upper right corner.

Click on any of the account boxes, and its list of downloaded transactions will appear below. Make sure that For review is highlighted. You’ll notice that each row has one of two icons at the far right. Review means that QuickBooks Online has not assigned a category to the transaction. Confirm means it has, and it wants you to either approve it or change it. Check these carefully. Sometimes QuickBooks Online gets it right, but not always.

Click on a transaction in the register to open its action box. Here’s a partial view:

QuickBooks Online allows you to add a great deal of information about each individual transaction in the register.

Categorize is checked by default, since this is the most common action you’ll take in the list. Click Find match if, for example, you received a payment on an outstanding invoice, or Record as transfer. We can help you work with the latter two options.

Select a Vendor/Customer and a Category (if QuickBooks Online hasn’t assigned one or it’s not the best one for that transaction). Click in the Billable box if you want to bill this transaction to a Customer/project. You can also Split transaction if you need to divide it between multiple categories and/or billing statuses. 

There are several other options below the section pictured above that allow you to:

• Add Tags.
• Attach a file.
• Create a Rule for how similar transactions should be recorded.
• Exclude the transaction if you have, for example, a duplicate one or a personal expense.

Before you take either of the latter two actions, talk to us. We don’t want you to do anything that might adversely affect your bookkeeping.

When you’ve finished, click Confirm. The transaction will move from the For review list to the Categorized one. It will now appear in the register for that account.

Once you’ve confirmed a transaction, it moves into the Categorized list.

As you might imagine, it’s a good idea to keep up with your downloaded transactions so you have time to give each the attention it needs. We recommend you review them daily. Your transactions, of course, flow into your reports and taxes, so you want to be sure you’re categorizing them correctly. Let us know if you’d like help with this.