Difference between QuickBooks UK and US Version

There is not much difference between the two versions since the accounting standards around the world are almost the same. Here are the notable differences:

UK Version

• Automatically computes VAT Input and VAT Output. You can input the price in the invoice or bill either VAT inclusive or VAT exclusive and it will automatically computes VAT.
• Uses the British Balance Sheet as the default format in which the report starts with the non current assets but this can be changed in the settings to our usual Balance Sheet format.
• Spells CHEQUES this way
• Spells FAVOURITES this way
• When you check Programs & Features in the Control Panel, the publisher is Intuit Limited

US Version

• Utilizes the Sales Tax functionality where the tax is as an add on to the sales price. You have to input the VAT exclusive price in the invoice or sales receipt to compute VAT output.
• The Balance Sheet format is according to liquidity
• Spells CHECKS this way
• Spells FAVORITES this way
• When you check Programs & Features in the Control Panel, the publisher is Intuit Inc.

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Applying Excess Credits for One Job to Another in QuickBooks

Our client wrote to ask our help. He has a customer with three jobs, all of which are completed. Two of the jobs have balances due, but the third job has a substantial outstanding credit for items that were returned after the job was finished. He wants to use the credit on the third job to pay off all of the first job and part of the second job. He wants to have a logical "trail" to explain to the customer and to his accountant.

We found a way to accomplish this without changing the history of the original transactions that were applied to the three jobs. For this example, we used our customer named Contractor Larry, who had three jobs: Job01, Job02, Job03. These are the balances for each job.

That credit amount is sufficient to pay off Job01 in full, and apply the remaining credit balance to the open balance for Job02. We needed a place to "trade out" the credit from one job to another, so we created an account of the type Other Current Liability, which we named Customer Credits Exchange. The first step was to move the credit amount into the Customer Credits Exchange account (so that we could use it for the other jobs), without removing the credit's history from Job03. We accomplished that with a journal entry that debited $228.80 to Accounts Receivable and credited the same amount to the Customer Credits Exchange account. Entering the job in the Name column created a receivable (invoice) against which we could wash the outstanding credit.

We opened the Receive Payments window and selected Job03, to display the invoice created by the debit side of the journal entry. We left the Amount field at 0.00 and clicked the Discounts & Credits button to apply the existing credit to the new charge.

At this point, Job03 is at a zero balance, the job history has all the transactions that were applied, and the Customer Credits Exchange account has a credit balance of $228.80; we've moved the job credit to the balance sheet.

Next, we have to use $205.00 of the credit balance in the Customer Credits Exchange account to pay off Job01. In the Receive Payments transaction window, we selected Job01 to display the current balance due. Leaving the Amount field at 0.00, we clicked Discounts & Credits and created a discount against the invoice in the amount of $205.00. We used the Customer Credits Exchange account as the Discount Account.

Job01 now had a zero balance and $23.80 remained in the Customer Credits Exchange account, which we applied against the balance for Job02 as a discount (same steps as applying the discount to Job01). The Customer Credits Exchange account has been emptied, and the credit for Job03 has been applied to the other jobs.


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Inventory Freebies

How do you record it in QuickBooks when you give out inventory as freebies, samples, donations to charity, giveaways and the like?

When you remove inventory (whether it's sold or given away) your inventory asset account is decremented. The other accounts involved in the transaction vary, depending on the method you use to track the freebie. Let's look at what happens when you sell an inventory item. QuickBooks makes the following postings (I'm ignoring VAT issues just to make this simple):

• Credits the Inventory Asset Account for the current average cost of the item (and reduces the Quantity Available for the item).
• Debits the Cost of Goods Sold account for the current average cost of the item.
• If the sales transaction is an Invoice, debits A/R for the sales price; if the sales transaction is a Sales Receipt, debits the bank account or the Undeposited Funds account (depending on your setup).
• Credits the sales price to the Income account linked to the item.

The same postings take place when you give away an inventory item, except the amounts of the postings involving the sales price is zero.

Using an Inventory Adjustment Transaction

An inventory adjustment is the fastest method if you don't need to track the details of the transaction in reports (such as the customer name). Here are the steps:

1. Choose Inventory Activities (from Home Page) | Adjust Quantity/Value on Hand.
2. In the Adjustment Account field, enter the appropriate account. If you're donating an inventory item to a charity, post the transaction to the charitable contribution expense. If you're sending a sample or a giveaway, use the Advertising or Marketing expense account.
3. Remove the item from inventory by entering the new quantity (current quantity minus one) in the New Qty column, or by entering -1 in the Qty Difference column.
4. If you're tracking classes, enter the appropriate class. QuickBooks debits the expense account and credits the inventory account, and also reduces the Quantity on Hand for the item.

Using a Sales Transaction

Use a sales transaction (either an Invoice or a Sales Receipt) if you want to track the customer and the reason for the freebie in reports. Use the following guidelines to create the transaction:

• Enter the item and quantity.
• Change the Amount column to 0.00.
• Enter the Class if you're tracking classes.
• Enter Memo text to describe the reason for the freebie (e.g. Promotion, or Contribution).

Note that there are two places to enter Memo text on a sales transaction: In the Description Field in the line item, and in the Memo field at the bottom of the transaction window. When you create reports that include the Memo column, the text in the Description field takes precedence over the text in the Memo field. If the Description field contains the item's description, that's the text that appears on reports, and for this purpose you should replace the text with the Memo text that describes the reason for the freebie so you get the reports you need.

If you're sending the freebie to an existing customer, use the customer in the transaction. If the item is going to someone who is not a customer, use a generic customer account (named Samples, Potential Customer, Donations, etc.) in the transaction. (It's not a good idea to fill your customer list with names that aren't really customers.)

For generic customers, enter the real name and address in the Customer Information block and select NO when QuickBooks asks if you want to change the address information for this generic customer. The information will remain on the sales transaction record and you can view it by opening the transaction. QuickBooks posts the transaction the same way it posts a normal, regular sale. Cost of Goods Sold is debited for the current average cost of the item, and the Inventory Asset account is credited for that value. In addition, the Quantity on Hand is decremented from the item's record. The amount posted to the income account linked to the item is Zero, and the amount posted to A/R (if you used an invoice) or Undeposited Funds/Bank Account (if you used a sales receipt) is zero.

Creating Reports to Track Freebies

You can track details about the freebies you use in a sales transaction by creating reports that display the information you need. You need a report for promotional freebies and a separate report for contributions. Here are the steps:

1. Choose Reports | Sales | Sales by Item Detail.
2. Choose Modify Report.
3. In the Filters tab configure the following filters:

• Amount. Select Equals (=) and enter 0.00.
• Item. Select All Inventory Items.
• Memo. Enter the memo text for this report (see the information about Memo text in the previous section).

4. In the Header/Footer tab change the name of the report to match its content (e.g. Promotion Freebies or Contribution Freebies.
5. Click OK and memorize the report so you don't have to go through this configuration work in the future.

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Job Costing in QuickBooks

A job is a project of a customer.  Job costing is the tracking of expenses for a particular job.  This is very important because it will give the owners an idea on which job is profitable or not and of course it will also measure the overall health of the business.  Construction companies, architects, wedding planners and lawyers are just some examples of businesses that needs job costing.

In QuickBooks, job costing allows business owners to see how much they spent and made for each of the jobs of his customers.  So  how can we get a Profit and Loss per Job in QuickBooks? It's very simple.

Steps:

1. In purchasing inventory or paying for services, we use the icon for the Purchase orders, Enter Bills or Write Checks.

2. The most important step in tracking job costs for a certain project is to put the customer name or job in the column designated once we purchase then uncheck the billable column.

3. Invoice the customer the usual way.

4. Now your reports are ready! Go to Reports > Jobs, Time & Mileage then choose from the available reports. You may try the Profit and Loss by Job or the Job Profitability Summary.  If you used estimates before creating the invoices, you may also check the Job Estimates vs Actual Reports.

For any questions, email us at albqbsolutions@gmail.com

Entering Batch Transactions in QuickBooks

Entering batch transactions in QuickBooks is every bookkeeper's solution to their dilemma of entering backlog transactions especially if it involves a number of months.  It's a good thing if you already have an excel file of the transactions because it can easily be exported to QuickBooks by just copy and paste after doing some modifications in the columns.  If there is no excel file yet and all you have are just raw data like the hard copy of receipts or invoices then at least you don't have to click Save for every transaction and it will at least save some time and effort.  This feature started in QuickBooks Accountant 2013 and QuickBooks Enterprise Accountant 2013.  In these editions, we can do batch entry for checks, deposits and credit card charges.  But in the 2014 editions of QuickBooks Accountant and QuickBooks Enterprise Accountant, we can also batch entry the invoices, credit memos, bills and bill credits in addition to checks, deposits and credit card charges.

Steps:

1. Click the Accountant menu then choose Batch Enter Transactions from the drop down.

2. In the Batch Enter Transactions window, choose what type of transaction you would like to export. In this example, we use checks so you need to choose from which bank account you take the money from.

3. Make sure that the columns in your excel file are the same as the columns in QuickBooks. You may click the Customize button to do this.

4. Once QuickBooks has the same columns as the excel file or vice versa, you may now copy from excel then position your cursor in the first field in QuickBooks then click Paste.

5. Review the entries. If there are red entries, it means that there is an error. You may hover your mouse on the red entries and you can see an error message at the bottom of the page.

6. After being fixed, click Save Transactions at the bottom then you're done.

Tips:
1. Create a backup first before copying from excel.
2. Make sure that the vendor names in excel are the same spelling as what you have in QuickBooks because it will prompt you to add the vendor. Do the same thing with customers if you enter deposits and invoices.
3. Make sure that the accounts are the same spelling as what you have in QuickBooks because it will also prompt you to add a new account.
4. Make sure that the amounts doesn't have a currency. You may format the excel file first as plain numbers.
5. If the account is a sub account, the format should be like this - Automobile Expense:Gasoline Expense. Please refer to Step 5 and 6.

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.