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How to Enable Advanced Inventory in Quickbooks

Available for Quickbooks Desktop, advanced inventory is a feature of Intuit’s popular business accounting software that offers increased control over your business’s inventory management processes. Using this feature, you can scan inventory barcodes with your smartphone, run customizable reports (valuation summary, inventory stock, etc.), track sales and orders by location, and much more.

Unfortunately, though, many business neglect to use advanced inventory because they struggle to find this feature. Whether you’re a newcomer to Quickbooks or seasoned user, you should consider using advanced inventory. It’s one of many features that makes Quickbooks stand apart from its competitors, thereby creating a more efficient and versatile accounting system. So, how do you enable advanced inventory in Quickbooks?

To enable advanced inventory, log in to your Quickbooks Desktop account. From the home screen, click the “Edit” menu, followed by “Preferences.” You should then see a menu on the left-hand side of the page. Click “Items & Inventory,” followed by “Compact Preferences.” Next, click the empty box next to “Inventory and Purchase Orders are Active,” at which point you should see a check mark added to the box.

Assuming you’ve followed all steps thus far, you should click “Advanced Inventory Setting.” Now, you may not have the option to click this button if you haven’t purchased a license to use this feature. Advanced inventory is an addon feature that doesn’t come standard with the Quickbooks software. And if you haven’t purchased a license for it, you won’t be able to use it. But if you’ve already purchased a license, go ahead and sync your account. This is done by accessing “Help,” followed by “Manage my License” and then “Sync License Data Online.” Quickbooks will then sync your license with Intuit’s own server. Once Intuit sees that you have a license, it will allow you to click and select “Advanced Inventory Setting,” which is also known simply as advanced inventory.

To finish the process, click “Save and close.” Congratulations, you’ve just enabled advanced inventory in Quickbooks. With this feature enabled, you’ll have greater control over your business’s inventory management processes.

Keep in mind that advanced inventory is only available in Quickbooks Desktop. If you use the cloud-based version, Quickbooks Online, you won’t be able to use this feature. You can only use in Quickbooks Desktop.

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How to Increase Your Business’s Cash Flow

Cash flow is an important metric to look for when analyzing your business’s finances. Defined as the movement of money — income and expenses — it provides an accurate overview of your business’s ability to pay liabilities. If you spend significantly more money what you make, this suggests that you won’t be able to cover debt and other liabilities. You can increase your business’s cash flow, however, by doing the following.

Explore Different Insurance Solutions

According to LegalZoom, insurance is the single biggest expense associated with running a business. Regardless of the type of business you operate, it probably needs insurance. Rather than choosing the first insurance company that offers you a deal, shop around and get quotes from multiple providers.

Go Digital

There are certain documents that can (and should) be stored in digital format instead of printed. U.S. businesses spend millions of dollars each year on printer paper, most of which is discarded in the trash. Before printing a document, ask yourself if you really need to print it. Perhaps you can save it on your computer to save money on stationary and increase your business’s cash flow.

Invest in Marketing

You have to think of marketing as an investment: It costs money, but like any smart investment, it can help your business make more money in the long run. A study conducted by Neilsen found that the average return on investment (ROI) for marketing was 9%. This means for every $1 you spend to promote your business, it will yield $1.09 in sales. Of course, certain marketing channels offer higher ROIs, and you can optimize your marketing campaigns so that they reach your business’s specific audience. The bottom line is that you should invest in marketing to increase your business’s cash flow.

Collect On Outstanding Invoices

Does your business have one or more customers who haven’t paid their bill? Outstanding invoices such as this are a common problem for businesses that accept post-service payments. By performing the service upfront, the business is counting on the customer to pay the bill. And if the customer doesn’t pay, the business will have to write off the bill as bad debt. To prevent this from happening, you should proactively contact customers with outstanding invoices to request payment. If a customer can’t pay the full bill, discuss a payment plan that can fit his or her budget.

 

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Matching Downloaded Bank Transactions in Quickbooks

If you use Quickbooks to keep track of your business’s financial transactions, you might be wondering how the accounting software handles matched banking transactions. When you download transactions, you can access the “For Review” menu to see and review the transactions. However, you also have the option to match those transactions with the transactions listed in your company file. So, how exactly does Quickbooks handle these matched transactions?

Assuming you use Quickbooks Online and not the desktop version of Intuit’s popular accounting software, Quickbooks will try and match the transactions within 90 days of the specified transaction date. This is done to allow ample time for checks to clear. A customer may pay you on Monday, for example, but his or her check might not clear your bank for another one or two weeks. To overcome this challenge, Quickbooks Online will automatically search for all matching transactions within 90 days of the specified date. If a transaction is older than 180 days, it will not match it.

When Quickbooks Online attempts to match your bank deposit and credit transactions, it will search for several different things, including payments for the respective invoice, sales receipts, journal entries, unpaid customer invoices and deposits that you’ve made. When attempting to match checks, expenses and debits, Quickbooks will search for payments made to vendors, expenses for vendors, debits listed in your bank or credit card account and journal entries with debit transactions.

So, how do you assign categories to these transactions? To do this, log in to your Quickbooks account and select the “Banking” menu at the top of the screen. From here, click an open area in the transaction row so that Quickbooks provides you with more information about it. You can then assign a payee to the transaction. If Quickbooks finds a matching customer or vendor, it will automatically display the customer’s or vendor’s name. If it doesn’t find one, you can add one by clicking the “+Add new” drop-down menu and selecting the appropriate customer or vendor.

In the event that you don’t add a customer or vendor to the transaction, Quickbooks won’t include a name in the transaction when it adds it to the register. Finally, choose a category for the transaction under the “Category” drop-down menu. By default, many transactions use the “Uncategorized Income” category, which is too general for proper accounting. So, choose a more specific category for the transaction.

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How to Handle a Customer Overpayment in Quickbooks

Did a customer accidentally overpay you? This is an all-too-common scenario in the world of business. Maybe the customer misread the invoice, or perhaps he or she thought they were purchasing a more expensive product or service. Either way, it’s important that you record this overpayment in your business’s books. Assuming you use the Quickbooks accounting software, you can easily record overpayments such as this in just a few easy steps.

To record an overpayment, log in to your Quickbooks account and click the (+) button in the upper-right corner of the screen. From here, choose “Receive Payment,” after which you can select the customer from the “Receive Payment” window. It’s recommended that you double-check this information to ensure it’s correct. After all, you don’t want to record an overpayment to the wrong customer, as this will provide him or her with credits.

After selecting the customer, click the “Outstanding Transactions” window to view a list of all unpaid transactions associated with that customer. Once you’ve found the invoice on which the customer overpaid, click the adjacent box so that it creates a check mark in it. This tells Quickbooks that you want to pay the invoice. But don’t worry, you’ll actually be recording an overpayment made by the customer. After placing a check mark next to the overpaid invoice, enter the total amount that the customer paid (with the additional overpayment amount) in the “Amount received” field.

Assuming you followed these steps, that customer will now have a credit. To actually refund the customer for this credit, you must create a new check or expense. This is done by accessing the (+) button on the main screen, followed by “Check.” For the “Account” field, choose “Accounts Receivables.” You can then enter the amount that you want to refund the customer. When finished, click “Save and close” to save your changes and complete the process.

The final step to refunding a customer is to associate the check to a credit. To do this, go back to the (+) menu and click “Customer Payment.” You can then complete the requested fields — customer, date, amount, deposit to, etc. — after which you can click “Save and close.” This will allow you to record and refund the customer’s overpayment, thereby keeping your business’s books in order and your customers satisfied.

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How to Enter a Split Transaction in Quickbooks

Trying to enter a split transaction in Quickbooks? If you are reading this, I’m assuming the answer is yes. In Quickbooks Online — the cloud-based version of Intuit’s popular business accounting software — you can only link a single the account to any transaction. However, this doesn’t necessarily mean that you can’t list multiple accounts on a transaction. With a little work, you can link multiple accounts to a transaction, thereby allowing you to “split” it. So, how exactly do you enter a split transaction in Quickbooks?

To enter a split transaction in Quickbooks, you’ll need to log in to the accounting software and click “Accounting” at the top of the interface, followed by “Chart of Accounts.” Next, click the “Action” column and choose the account that you want to modify. This is the account that you want to connect to the transaction. Make sure it’s correct and click “View Register/Account History” next to the respective name. From here, click the transaction that you want to modify so that it’s highlighted. You can then click “Edit” to begin modifying the transaction.

Assuming you followed the aforementioned steps, you should see a new screen in your Quickbooks account that contains information about the transaction. Here, you can enter other accounts and their amounts. If you want two accounts tied to the transaction, each of which has a unique amount, you can enter it in this window. Make sure all this information is correct, after which you can click “Save” to complete the process and save your changes. Sorry if you were expecting more, but that’s all it takes to enter a split transaction in Quickbooks!

You can check to make sure Quickbooks saved your information correctly by logging back in to your account and accessing your register. Quickbooks should show the correct total in the register, with the column saying “split.”

Most business owners never need to record split transactions — and that’s okay. If you never have to split transaction, you don’t have to worry about this. However, circumstances may arise that require you to split one or more transactions. Rather than allowing these unorthodox transactions to negatively impact your accounting efforts, you should follow the steps listed here to record them in your Quickbooks account. In just a few quick and easy steps, you can record split transactions while maintaining excellent financial records for your business in the process.

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Help! I’ve Encountered The Wrong Balance in My Reconciliation Window

When you attempt to run a reconciliation report in Quickbooks, do you see the incorrect balance being displayed in the reconciliation window? Conventional wisdom should tell you that you can’t run an effective reconciliation report if the beginning balance is incorrect. This may occur from one of several different reasons. If you entered the wrong balance when creating the account, for example, it will display this balance in the reconciliation window. Alternatively, this problem may occur if you voided, deleted or changed the reconciled transaction. The good news is that you can fix an incorrect balance in the reconciliation window by following just a few simple steps.

If your reconciliation window shoes a $0 balance, you’ll need to recreate the opening balance. To do this, log in to your Quickbooks account and create a journal entry by accessing Company > Make General Journal Entries. From here, change the date so that it reflects the actual statement date of your account’s beginning balance. For the first field, choose the appropriate account from the drop-down menu. Next, enter the right opening balance in the “Debit” field.  For the second field, choose “Opening Balance Equity.” When you are finished, click “Save” to save your changes and complete the process.

You’ll now need to run a mini reconciliation to fix the beginning balance. This is done by accessing Banking > Reconcile. From here, choose the account from the drop-down menu and enter the statement date so that it reflects the journal entry. When finished, click “Continue.” Next, choose the journal entry for the “Deposits and Credits” field,” after which you can click “Reconcile Now” to begin the mini reconciliation. After it finishes, you should see the problematic transaction or transactions that’s causing the wrong beginning balance.

If your reconciliation windows has a positive balance that’s incorrect, you’ll need to run a reconciliation report. This is done by logging in to your Quickbooks account and choosing Reports > Banking > Reconciliation Discrepancy. From here, choose the account from the drop-down menu, after which you should see a list of all transactions that have been modified since the last report that you’ve run. You can then use this list to ensure that it matches your financial records. If you discover a discrepancy, make a note of the problematic transaction so that you can go back and fix it.

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How to Run a Check Detail Report in Quickbooks

Trying to a run a report in Quickbooks that shows all your printed checks, sorted by number? If you are reading this, I’m assuming the answer is yes. Thankfully, Intuit’s popular business accounting software supports this feature. In just a few easy steps, you can run a Check Detail report that features all your printed checks, sorted by number.

To run a Check Detail report, log in to your Quickbooks account and access Reports > Check Detail report. From here, you’ll have several options to customize the report. While you can choose your own options, for this purpose, it’s recommended that you choose “All Dates” for the transaction date, “Account” for the group by, and “Num” for sort by. These options will allow you to run a Check Detail report that displays all your printed checks, sorted by number. When finished, click “Run Report,” after which Quickbooks will provide you with this report. Like other reports in Quickbooks, you can print this Check Detail report by clicking the printer icon.

But what if the checks listed in your Check Detail report aren’t all sorted by date? Even if you followed the aforementioned steps and choose “Num” for sort by, you may discover that some of your checks aren’t properly sorted this way. Intuit explains that some users may encounter this problem because of the way in which Quickbooks sorts checks. Whether you choose “Num” or any other option for sort by, Quickbooks will still use date as a sorting element. It may be a secondary sorting element, but this can still affect the way in which your checks are sorted in the Check Detail report.

The only solution to this problem is to export your Check Detail report to Microsoft Excel, where you can then modify the entries and sort them by date. To export your report, lick the “Export” button on the report screen, followed by “Export to Excel.” Once the report has been exported, you can open it in Excel to make the necessary changes. The easiest way to sort by date is to select Data > Sort. From here, you can choose sort by. And if you’d like to print your newly updated report, you can do so by clicking File > Print. Congratulations, you’ve just created a custom Check Detail report that shows all your printed checks, sorted by date!

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The 5 Primary Types of Adjusting Journal Entries in Accounting

Creating adjusting journal entries is an important step in accrual accounting. They are called “adjusting” journal entries because they are made before you generate your actual financial reports, thereby giving you a better understanding of your business’s true financial health. In this blog post, we’re going to cover the five most common types of adjusting journal entries and what they mean.

#1) Deferred Expenses

Deferred expenses are business-related expenses that you’ve already paid for but haven’t received. Whether it’s a product or service, if you pay for something related to your business’s operations and haven’t received it yet, it’s classified as a deferred expense, in which case it should be added as an adjusting journal entry.

#2) Accrued Expenses

Another common type of adjusting journal entry is accrued expenses. While deferred expenses refer to products and services that you’ve already paid for and haven’t received, accrued expenses are the opposite: they are expenses that you haven’t paid for but plan to. If you have a business loan, for example, an upcoming interest payment on the loan is an accrued expense.

#3) Deferred Revenue

There’s also deferred revenue, which is income generated by your business that you haven’t yet fulfilled. If a customer pays for a product or service in advance, you may record this payment as deferred revenue until you deliver the product or complete the service. Once you’ve fulfilled your obligation — either by delivering the product or completing the service — it’s no longer considered deferred revenue.

#4) Non-Cash Transactions

Non-cash transactions are financial transactions made by your business that don’t have any impact on your business’s cash. Some business owners non-cash transactions are simply transactions made using credit cards, debit cards or checks, but this isn’t true. They are actually financial transactions, such as equipment depreciation, that don’t affect your business’s cash.

#5) Accrued Revenue

Finally, accrued revenue is any income that your business has earned but haven’t received payment for. It’s not uncommon for businesses to allow their customers to pay after the product has been delivered or service has been completed. The business sends the customer an invoice, indicating how much he or she must pay and by when. Until the customer pays this invoice, however, the transaction should be recorded as an accrued revenue adjusting journal entry.

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How to Record Bank Fees in Quickbooks

Have you been hit with a bank fee? It’s no secret that banks charge a heft amount for overdrafts, late payments on loans, and other fees. In fact, it’s not uncommon for customers to incur $39 for each of these fees. When this occurs, however, you should record the fee in your Quickbooks account. The fee is technically an expense, so you should record it appropriately in your Quickbooks account. Failure to do so may result in the fee throwing off your business’s books. So, what’s the right way to record bank fees in Quickbooks?

To begin, log in to your Quickbooks account and click the “File” menu at the top of the page, followed by “Open or Restore Company.” As you may already know, this will allow you to open your company file. You’ll need to navigate to the location of your Quickbooks company file. Whether it’s located on the cloud or locally on your computer, find and select your company file, after which you should click “Open.”

Next, you should see your Quickbooks company file opened. Go to the “Banking” menu, click it, and choose “Use Register” from the main menu. You can then scroll to the bottom of the check register, where you can click an empty area on a blank transaction. Next, click any area of the date field to enter your own date. It’s important that you choose the date on which you incurred the bank fee. If you don’t remember when you were hit with this fee, go back over your bank records. This typically won’t have an effect on the overall outcome of the fee, but it’s still a good idea to record bank fees using their appropriate date.

Under the “Payment” column, enter the total amount for the fee that you were charged by the bank. There are a few more steps in the process, however. Under the “Account” drop-down menu, you’ll need to choose “Bank Service Charges.” This tells Quickbooks that the charge came from a bank and not a vendor or customer. When you are finished, you can then click “Record” to finish the process. Congratulations, you’ve just recorded a bank fee in Quickbooks! Hopefully, it rarely or never happens, but when you incur any additional bank fees in the future, follow these steps to record them in Quickbooks.

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What Does ‘Closing Books’ Mean in Quickbooks?

Quickbooks has become the preferred accounting software for business owners everywhere. Whether you operate a small-, medium- or large-sized business, you can’t go wrong with Quickbooks. It’s user-friendly interface, combined with constant updates and unparalleled customer support, simplifies the otherwise complicated and time-consuming task of recording your business’s financial transactions. However, it’s important that you familiarize yourself with “closing books” when using Quickbooks.

As most professional accountants know, “closing books” refers to the process of locking a particular time period so that new entries can no longer be added and existing entries can no longer be modified. When a new year rolls around, for example, you may want to close your books on the previous year. Assuming you’ve received payment for all outstanding invoices, you can close this year to ensure that neither you nor anyone else changes the entries.

The good news is that Quickbooks Desktop — the desktop version of Intuit’s popular business accounting software — makes automatic adjustments at the end of the year so that you don’t have to manually close your books. Known as year-end adjustments, they are created automatically using the start month of your fiscal year. So, how does it work? Basically, Quickbooks will automatically adjust your reported income and expense accounts so that they cancel each year, thereby allowing you to start the new year with a zero net income.

For December 31st of the previous year, Quickbooks will make closing entries to transfer the balance of your income and expense accounts to your retained earnings. Ideally, this should result in a zero net income while transferring your actual fiscal year’s net income to retained earnings.

But what if you want to review all changes that Quickbooks has made to your books? Thankfully, you can by following just a few simple steps. To see all changes made to your financial transactions, either on or before the closing date, log in to your Quickbooks account and click Reports > Accountant & Taxes > Closing Data Exception Report. Under “Closing date history,” you’ll see a list of all closing dates and the respective user who set them.

As a business owner, it’s important that you close your books at the end of a fiscal period. Neglecting to do so could result in accidental changes being made to your financial records, which can throw off your records come tax time.

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