Entering Beginning Balances of Inventory in QuickBooks thru Add/Edit Multiple Feature

1. Click the Items and Services icon from the Home Page > Right click anywhere in the items table > choose Add / Edit multiple list from the dropdown.

2. Select a list > Make sure that you choose Inventory Parts in the dropdown list.

3. Fill out the item name > then put in sales and purchase description (if any)

4. Enter quantity on hand, as of date (your own cut off date) then enter the total value of the inventory (or you may right click > Customize to just enter the cost per inventory to automatically get the total value.

5. Enter COGS account which is usually Cost of Goods Sold.

6. Enter the Income Account which is usually Sales, Revenue, Service Income.

7. Asset Account should be Inventory Asset or you can point this to a specified asset account.

8. Enter the Sales Tax code.

9. Once complete, click Save Changes in the lower right.

Important : If you have many inventory to input, you may also use this Add / Edit multiple window to copy / paste from excel. Just make sure that the columns in your excel file are the same with the columns in this window. Just right click then click Customize your columns.

Factoring in QuickBooks (Selling your Receivables)

Accounts Receivable is a Current Asset. One definition of an asset is something that has value and can be sold. So some companies, to be paid faster, sell their receivables. Sometimes this is referred to as “factoring.” Why? I don’t know. Be aware that “factoring” has another meaning that has nothing to do with Accounts Receivables.

Selling your receivables is a form of financing: we receive a percentage of our accounts receivable from the factoring company and we pay interest in the form of “factoring service fees.” We benefit by receiving cash sooner than we would otherwise. The factoring company benefits by investing in our receivables and receiving a return on that investment.

Be aware that this is just one way to set up your vendors and accounts for factoring. There are other ways to do it.

Set Up

Set up the buyer of your receivables (your bank, a factoring company, an investor) as a Vendor in the Vendor Center. You will need this vendor to record interest paid and additional expenses.

Set up an account of type Bank, as a contra account to A/R. You will use this account to receive payments from the Factoring Company. (See example below)

Set up an account, either Expense or Other Expense called “Factoring Service Fees.”

Example:

1.     You are the bookkeeper for Larry’s Landscaping. Your company did $1,000 of landscaping services for John Smith. Because Larry’s Landscaping needs cash immediately, you will invoice John Smith for $1,000 and then sell the receivable to the ABC Finance Company for $950. John Smith will write his check to the ABC Finance Company for $1,000.

2.     Enter an invoice to John Smith for $1,000.00 in landscaping services. In the memo, include instructions that the check is to be written to the ABC Finance Company.

3. Larry’s Landscaping receives a check for $950 from ABC Finance. Enter a Journal Entry:

1. a. Debit Cash for $950.00
2. b. Debit Factoring Service Fees for $50.00
3. c. Credit the A/R Contra Account for $1,000:
3. 4.  Enter a Receive Payment:
1. a. Bank account is the A/R Contra Account.
2. b. Customer Name is John Smith.
3. c. Payment amount is $1,000
4. d. Apply the $1,000 payment to the $1,000 Invoice.
5. e. In the memo, include that the check is from ABC Finance Company.
6. f. Click Save & Close.

4. Notes

   1.   In some cases, your customer will send the payment to your company, in which case, you must send the payment to the factoring company immediately.
   2.   You may be able to direct your customer to create a two payee check, i.e., both your company name and the factoring company name are included in “Pay to the order of” and either company may cash the check.
   3.   Use a Bill/Bill Payment to record any additional expenses from the factoring company.
   
   

Setting Up a Closing Password in QuickBooks

A closing password in QuickBooks is important to control any changes or modifications to the file after the books have been closed or if the bank accounts have already been reconciled. Only the Admin can do this function. Once there is a closing password, the other users can’t make any modification to the file without informing the Admin. To do this, click the Edit Menu > Choose Preferences > Go to Accounting then Company Preferences > Click Set Date / Password at the bottom of the window > Enter the closing date and your preferred password.

Write a refund check for a cancelled order

Use this procedure when a customer makes a down payment on goods or services and then cancels the order.
Note: This procedure assumes that you recorded the down payment in the Receive Payments window. To ensure proper accounting, you must record down payments in the Receive Payments window instead of the Make Deposits window.
To do this task

1.      Go to the Banking menu and click Write Checks. 

2.      Fill in the customer's name and the check amount.

3.      (Optional) Enter a memo to remind yourself what the check was for.

4.      In the Account field of the detail area, assign the check to Accounts Receivable.

5.      Save the check.

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After you record the check, you must apply the check as a "credit" against the customer's down payment in the Receive Payments window. This ensures correct accounting for the check.

6.      Go to the Customers menu and click Receive Payments.

7.      Enter the customer's name in the Received From field, but leave the amount at $0.00.

8.      Click Discount & Credits.

Make sure that the check you wrote is selected in the detail area of the payment. If any invoices are selected, clear the checkmarks by the invoices.

9.      Save the transaction.

Write a refund check for an overpayment

Use this procedure when a customer overpays an invoice or statement charge.
To do this task

1.      Go to the Customers menu and click Receive Payments.

2.      Enter the payment in the Receive Payments window.

a.Click the Received From drop-down list and choose the Customer name.

b.Enter the amount of the payment.

c.Click the Pmt. Method drop-down arrow and choose a payment method.

The overpayment box appears where you can choose whether to leave the overpayment as a credit or issue a refund for this amount.

3.      Click Refund the amount to the customer.

4.      Save the transaction.

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5.      Fill in the customer's name and the check amount in the Issue a Refund window.

6.      (Optional) Enter a memo to remind yourself what the check is for.

7.      Click OK.

Write a refund check for returned merchandise

1.      Click the Customers menu, and then click Create Credit Memos/Refunds. 

2.      In the Customer:Job field, enter the customer name, or click the down arrow and choose the name from the list.

3.      In the lower portion of the invoice, click the first line on the form and enter the item that was returned. Click the next line to enter another item, and so on, until you've listed all of the returned merchandise.

4.      On the toolbar (at the top of the Credit Memo/Refund window), click the Use Credit to drop-down arrow, and then click Give Refund.

5.      In the Issue a Refund window, all of the information should be filled in for you. You might want to enter a memo to remind yourself why you made the refund.

6.      Click OK.

The credit memo is stamped REFUNDED and is automatically save for you. The check is recorded in your register. 

How to do Bank Reconciliation in QuickBooks

1.  Click Reconcile from the Home Page
2. Choose the bank account you want to reconcile, enter the bank statement date and the ending balance. The opening balance will automatically populate since it is the ending balance last month.
3.  Enter any bank charges or interest earned that are not yet recorded in QB.
4. Click Continue.

1)      Place a tick mark for the transactions that you can see from your bank statement. If you can’t find a withdrawal transaction in the bank statement but recorded in QB, it is an outstanding check. Same thing with deposits, if it’s not in the bank statement, it’s a deposit in transit.

2)      Once the difference at the lower right is 0.00, it means that your reconciliation is correct and you may now click Reconcile now. If not, you can check the Deposits and Other Credits and Checks and Payments at the lower left of the screen and compare it with your bank statement so you can easily find the discrepancy.

3)      If you can’t find the difference, you can click Reconcile Now since QB will create a Reconciliation Discrepancy account.

4)      Print the Reconciliation Reports for your records. QB Pro will only let you access the last reconciliation report while QB Premier will store all your reconciliation reports.