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How to Transfer Funds Between Two Accounts in Quickbooks

If you have multiple bank or financial accounts recorded in Quickbooks, you might be wondering how to transfer funds between them. Some business owners assume that it’s okay to perform two transfer transactions. Unfortunately, if both the accounts are listed in the chart of accounts, this doesn’t work. Instead, the correct way to record this transfer is to enter it as a single transaction. Below, we’re going to walk you through the process of recording a funds transfer between two accounts in Quickbooks.

Transferring Funds Using the Transfer Method

Quickbooks actually supports several methods to transfer funds between two or more accounts, one of which involves using the Transfer method. Start by logging in to your Quickbooks account and clicking the (+) icon at the top of the screen. Next, choose “Transfer” under the “Other” menu. Go to the “Transfer Funds From” menu and select the bank account from which the funds are being withdrawn.

There are a few steps left in the process. After choosing the bank account, enter the amount of the transfer in the “Transfer Amount” field. Finally, enter the date of the transfer, followed by “Save and close.”

Transfer Funds Using an Imported Bank Transaction

Another way to record a funds transfer in Quickbooks is to use an imported bank transaction. This method, however, only works if you imported the two transactions but haven’t entered a Transfer.

To record a funds transfer using this method, log in to Quickbooks and click the “Banking” link on the left-hand sidebar menu. From here, choose the bank account from which you want to transfer the funds. Now scroll through the listings and select the transaction. Click the “Transfer” button and then choose the other account to which you want to transfer the funds, followed by “Transfer.” You can then click the “Recognized tab” button to find the transaction, which should yield a match

Transferring Funds Using a Check

Of course, another way to record a funds transfer is to use a check. If you performed the transfer using a check, you can use this method. Basically, it involves selecting the “Write Check” window and then recording the amount of the transfer and the check number.

When transferring funds using a check, make sure the bank accounts are correct. In the “Bank Account” field, look to ensure that it’s the appropriate account.

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How to Cancel a Credit Applied to a Bill in Quickbooks

It’s not uncommon for businesses to apply credit to their customers’ or clients’ bills. Maybe a customer accidentally overpaid, or perhaps the business overcharged them. Regardless, businesses can solve problems such as these by applying a credit to the customer’s or client’s bill. At the same time, it’s important for businesses to use caution when handing out these bill credits. If you accidentally apply a credit to the wrong customer’s or client’s bill, you’ll need to fix it as soon as possible. The good news is that you can easily cancel credits applied to a bill if your business uses the Quickbooks accounting software.

Steps to Canceling a Credit Applied to a Bill

To cancel a credit applied to a bill in Quickbooks, pull up the credit and click the “Credit” button. Next, change the type of transaction to a bill, after which you can click “Save & Close .” You should see a warning indicating that this will unlink the credit from the bill. After confirming, Quickbooks will then remove the credit from the bill.

Can I Cancel a Credit Applied to an Invoice?

Quickbooks also allows you to cancel credits applied to an invoice, though it requires a set of different steps. If you applied a credit to an invoice and want to reverse it, pull up the credit memo associated with which it’s associated and press Ctrl+H on your keyboard to open its history.

Next, find the invoice to which it was applied in the history and double-click to open it. From here, choose “Apply Credits,” followed by clearing the details about the credit on the following screen. When finished, click “Save & Close” to complete the process.

You may want to create a backup of your Quickbooks company file before proceeding with either of these processes. Backing up your company file ensures that if something goes wrong, you can revert your account back to its original state.

It’s frustrating when you apply a credit to the wrong customer’s or client’s bill. Mistakes are bound to happen when running a business, however, which is why it’s important to know the steps on how to cancel such transactions. Whether you applied it to a bill or invoice, you can remove an erroneous credit in Quickbooks by following the steps outlined here.

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How to Record Billable Expenses in Quickbooks

It’s not uncommon for businesses to purchase products and services on behalf of their customers and later charge those customers for this expense. Known as a billable expense, it’s a common practice used in a variety of industries. But if you’re planning to use billable expenses in your business’s operations, you’ll need to know how to record them. Assuming you use Quickbooks, you can easily record billable expenses in just a few simple steps.

Enable Billable Expense

To get started, log in to your Quickbooks account and click the gear icon at the top of the page, followed by “Account and Setting.” Next, click “Expenses” in the left-side menu to open up a new window with information about your business’s expenses. From here, click the pencil icon in the “Bills and expenses” area and go through the fields to ensure that the following are activated: show item table on expense, track expenses and items by customers and make expenses billable.

While optional, you can also use this opportunity to set a markup rate as well as change the income account associated with your billable expenses. When finished, click “Save,” followed by “Done” to complete the process.

You may also want to create a sub-customer when adding billable expenses. This is done by clicking Sales > Customers> New Customers. From here, you can enter information about the new sub-customer, while also assigning the sub-customer to a parent customer. A good rule of thumb is to add a sub-customer for each billable expense. This means you can have several sub-customers with the same name, though each one represents a different billable expense.

Create a New Billable Expense

With billable expenses enabled, you can now create new billable expenses in your Quickbooks account. This this is done by creating either an expense in which you can include all the necessary information, such as the account, amount, description, customer, billable and tax. When finished, save the transaction.

Add the Billable Expense to an Invoice

In addition to creating a new billable expense, you must add it to an existing invoice. Go back to the main screen of your Quickbooks account and click the (+) icon, followed by “Invoice.” For the “Choose a customer field,” enter the name of the customer for whom the billable expense is designated. Now click “Add” for the billable expense that you with to add, at which point you can save and close this window.

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5 Reasons to Incorporate Your Business

If you’re still operating your business as a sole proprietorship, you should consider incorporating it. Whether you choose a corporation or limited liability company (LLC), it’s a smart move that can pave off in several ways. Below, we’ve listed five of the top benefits of incorporation, revealing why you should take the steps to incorporate your business.

#1) Stronger Brand Name

By incorporating your business, you’ll have a stronger brand name that’d distinguished with “LLC” or “Inc.” Depending on which business structure you use, you can affix one of the aforementioned labels to the end of your business’s name. Consumers generally view businesses with such labels as being better and more authoritative than their counterparts, meaning it will help you build a stronger brand name.

#2) Lower Taxes

One of the biggest benefits of incorporating your business is lower taxes. While tax rates vary, most LLCs and corporations — and their owners — pay less in taxes than sole proprietorships. This alone is a huge benefit that can translate into thousands of dollars saved each year.

#3) Separates Personal and Business Finances

Operating as a sole proprietorship means there is no separation of your personal and business finances. Rather, you’ll use the same bank account or accounts to handle both types of finances. You’ll have an easier time tracking your finances, however, by incorporating your business. LLCs and corporations are required by law to separate their personal and business finances. You may have one bank account for your personal finances, for instance, and another for your business finances.

#4) Protection of Personal Assets

Of course, incorporating also your protects your money and other personal assets from business liabilities. What does this mean exactly? When your business is incorporated, any judgements against your business won’t affect your personal assets. If your business is sued and loses, only your business’s assets are subject to forfeiture.

#5) It’s Easy

Incorporating a business is surprisingly easy — more so than you may realize. The exact steps vary depending on the state in which your business operates, but it typically requires contacting the Secretary of State to acquire articles of incorporation. You’ll need to complete a form with information about your business, pay a fee and register your newly incorporated business with the Internal Revenue Service (IRS). All of this is relatively easy and painless, though. And once your business is incorporated, you’ll on

What are your thoughts on incorporation? Let us know in the comments section below!

What Is a Suspense Account in Accounting?

Countless businesses use a suspense account to temporary record financial transactions. It’s a useful tool that can help businesses avoid accounting errors by providing them with an opportunity to analyze potentially inaccurate entries. If you’re a business owner, though, you might be wondering how suspense accounts work and if they’re really worth using. While there’s no better way to find out than by trying a suspense account for yourself, we’re going to explore this accounting tool in this blog post.

Suspense Accounts Explained

A suspense account, by definition, is an account in which discrepancies and other potentially inaccurate transactions are placed for a temporary period of time so that they can be further analyzed to determine an appropriate categorization.

In other words, a suspense account is a ledger where financial transactions that “could” be wrong are placed until you can verify where they are accurate or inaccurate.

A suspense account can also be used if you don’t know the appropriate general ledger for a transaction when you record the transaction. Rather than simply placing it in a random general ledger, you can place the transaction in a suspense account. This allows you to identify the appropriate general ledger at a later date, and after doing so, you can then move the transaction from the suspense account to that general ledger.

How to Set Up a Suspense Account in Quickbooks

You can create a suspense account using the accounting software Quickbooks. This is done by logging in to your Quickbooks account and choosing Lists > Chart of Accounts > Account > New. Next, choose the “Account Type” Expense, followed by “Continue. Quickbooks will then ask you to enter a name for the account. While you can use any name that you’d like, it’s recommended that you name the account something memorable and associated with suspense accounts, such as “Suspense Account A.” You can then enter any account numbers to include in the suspense account. To finish setting up your suspense account, click “Save & Close.”

Not all businesses will benefit from using suspense accounts. If you know the appropriate general ledger in which to place a transaction, there’s no reason to use a suspense account. In fact, placing the transaction in a suspense account only adds another step to the accounting process, as you’ll have to go back and move it to the general ledger. But if you’re unsure of which general ledger to place a transaction, a suspense account is a useful tool that can help keep your business’s accounting practices in order.

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Calculating Finance Charges in Quickbooks

Want to impose a finance charge on one of your business’s customers? Maybe the customer paid his or her late bill, or perhaps you want to add interest to a customer’s outstanding balance. Regardless, you can easily calculate and impose finance charges using Quickbooks. To do this, however, you’ll first need to set up your Finance Charge Preferences in the accounting software.

How to Set Up Finance Charge Preferences in Quickbooks

To get started, log in to your Quickbook Desktop account as the admin and click “Edit” at the top of the screen, followed by “Preferences.” From here, click “Finance Charge,” followed by “Company Preferences.” Assuming you followed these steps correctly, you should see a new window with information about your desired finance charge, including Annual Interest Rate, Minimum Finance Charge and Grace Period. Complete each of these fields before proceeding to the next step

After completing the aforementioned fields, click the drop-down menu for “Finance Charge Account” and choose the account from which you’d like to track the income generated by the finance charges. If you don’t see your preferred account listed here, you’ll need to add it to Quickbooks.

Disabling Late Payment Finance Charges

It’s not uncommon for business owners to waive late fees for their customers. In this case, you’ll need to click the “Assess overdue finance charges” box to remove the check mark from it. If the check mark is present, it will charge customers for late payments.

Completing the Process

You’re almost finished setting up finance charges. Quickbooks will ask you whether to charge customers on “due date” or “invoice/billed date.” Just click the box next to the option that you prefer.

You’ll also have the option of printing all your finance charges. This is done by clicking the box for “Mark finance charge invoices to be printed.” Keep in mind that this will print all your finance charge invoices at once. If you’re frequently assessing finance charges to customers, you may want to use this feature to keep a physical record of the charges. Otherwise, you may want to skip this optional feature. When finished, click “OK” to complete the process of setting up finance charges.

Assessing a Finance Charge

Now that your finance charge is set up, you can assess it on a customer. This is done by accessing Customers > Assess Finance Charges > Set Assessment date > choose the job or jobs >Assess Charges.

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What Is a Variable Cost in Accounting?

Variable cost is a financial metric used by countless businesses. The term “variable cost” refers to non-fixed expenses related to the production of goods or products. Therefore, a business’s variable costs will fluctuate depending on its production volume. The higher a business’s production volume, the higher its variable costs will be. But this is just the basics of variable costs. To learn more about variable costs and how it’s calculated, keep reading.

Variable Costs Explained

Although there are exceptions, most businesses that produce and sell goods or products will incur two types of expenses when conducting their operations: fixed costs and variable costs. The first type expense, fixed costs, consist of expenses with a static, fixed price. Leasing a storefront building, for example, is considered a fixed cost because businesses owners pay the same amount for their lease payment each month. Payroll is another fixed cost incurred by businesses. While different employees are paid different amounts, the pay rate is static, thus making it a fixed cost.

Variable costs differ from fixed costs in the sense that they vary depending on the business’s production volume. This is in stark contrast to fixed costs, which are not affected by production volume. As previously mentioned, variable costs increase when production volume increases and lower when production volume lowers.

Examples of variable costs include the following:

  • Materials
  • Licensing fees
  • Utility bills
  • Commissions
  • Credit card transaction fees
  • Freight charges

Why Businesses Should Track Variable Costs

Tracking variable costs can help businesses succeed in several ways. First, it provides insight into how much a business spends to create the goods or products that it sells to customers. While tracking fixed costs are important, variable costs are equally if not more importance because they fluctuate depending on production volume. Businesses will have a better understanding of how much money they spend, however, by tracking variable costs as well.

Another reason businesses should track variable costs is to ensure that they aren’t spending more to make their goods or products than the revenue generated by those goods or products. If a business only tracks its revenue, it won’t be able to optimize its operations for higher profit. To maximize profits, businesses must measure all production-related expenses, including fixed and variable costs. By keeping a close eye on these metrics, businesses will have an easier time boosting their profits and dominating their target market.

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The Beginner’s Guide to Using Class Tracking in Quickbooks

As your business grows, you may want to track financial transactions from certain segments of activity. For example, if your business has four separate stores or locations, perhaps you want to track the sales of each store. Using this information, you’ll know which stores are generating the most sales and which stores are generating the fewest sales. While tracking financial transactions from different stores — or other segments of your business’s activity — may sound difficult, it’s actually quite easy thanks to class tracking in Quickbooks.

What Is Class Tracking? Here’s What You need to Know

Class tracking is a feature in Quickbooks that allows you to track financial transactions from different segments of your business’s activity. The great thing about class tracking is that it provides you with complete freedom to track segments of activity. In addition to tracking transactions from different stores, you can track different types of products, date ranges, origin of manufacture and much more.

How to Enable Class Tracking in Quickbooks

Now that you know how class tracking works, you’re probably eager to start using it. First, however, you’ll need to enable this feature in your Quickbooks account. In Quickbooks Online, you can enable class tracking by logging in to your account, clicking the gear icon and choosing “Account and Settings.” From here, click “Advanced,” followed by “Edit” for the “Categories” section. You can then select “Track classes” to enable this feature in your Quickbooks Online account.

To enable class tracking in Quickbooks Desktop, log in to your account and click the “Edit” menu, followed by “Preferences. Next, choose the “Accounting” sub-category, followed by the “Company Preferences” tab. This should reveal a new window with information about your accounts and company. Specifically, you’ll see a section for “Class,” with an option titled “Use class tracking for transactions.” After clicking this box, click “OK” to finish the process and enable class tracking.

How to Add Classes

Once you’ve enabled class tracking in your Quickbooks account, you must create new classes. This is done by going back to the gear icon and choosing “All Lists.” Next, click “Classes” and then “New.” Quickbooks will ask you to enter a name for the new class. It’s recommended that you choose a unique, relevant name that reflects what the class will track, such as “Store A” or “Product Type B.” When finished, click “Save” to complete the process.

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How to Run a Time Comparison Report in Quickbooks

Want to compare financial metrics of your business from multiple time periods? Using Quickbooks, you can easily do this by running a time comparison report. Maybe you want to see how your business fared from Q1 to Q2 of last year, or perhaps you want to see how your business performed during the holidays compared to the rest of the year. Regardless, Intuit’s popular Quickbooks accounting software makes this task a breeze. Using the software, you can run a time comparison report to view side-by-side financial metrics from different time periods.

Steps to Run a Time Comparison Report

To run a time comparison report, log in to your Quickbooks account and access “Reports” from the left-side menu. From here, choose “Transaction List by Date,” at which point you can specify the time period for which you’d like the first report to reflect. After setting the time period for the first report, you can then filter the report by elements such as as credit card expense, credit card credit, vendor credit, check, bill payment check, cash expense, etc. When finished, click “Run Report” to run your first report.

Assuming you follow the steps listed above, you should see a report for your specified criteria. You can compare this report to a second report, however, by performing just a few additional steps. Look at the top of the first report and you’ll see a menu titled “Compare another period,” which you can click to run a second report.

Quickbooks will prompt you to enter a time period for your second report, which may include the previous period, previous year or year to date. Previous period, of course, refers to the time period immediately before the report period. If the report period is December, for example, the previous period is November. Previous year refers to the last year, whereas year to date includes transactions from the beginning of the year to the beginning of the report period.

In addition to specifying the time period of the second report, you must choose how you want Quickbooks to compare the difference between the two reports. After entering this information, click “Run Report” to run the second compare, which you can compare to the first report. You can repeat these steps to compare other reports in your business’s Quickbooks account.

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Guide to The Weighted Average Cost (WAC) Accounting Method

Weighted average cost (WAC) is an accounting practice used extensively by retailers, e-commerce companies and other businesses that sell physical products. Used by business business-to-consumer (B2C) and business-to-business (B2B) companies, it provides a better understanding of a business’s cost of goods available and its inventory. To learn more about the WAC accounting method and how it’s performed

Calculating WAC: What You Should Know

To calculate WAC for your business, you must take your cost of goods available and divide it by the number of units available. This number will reflect the WAC for each of those available units. Still confused? Here’s an example: If your cost of goods available is $50,000 and you have 5,000 units of that product available, the WAC per unit of that product is $10.

Benefits of Using the WAC Accounting Method

There are several benefits to using the WAC accounting method, one of which is simplicity. From an outsider’s perspective, calculating WAC may seem like a tedious and difficult process, but it’s actually quite easy. The only numbers required to calculate WAC are the cost of goods available and the number of units available. Once you’ve identified those two numbers, you can calculate the WAC for the product.

Using the WAC accounting method can also help you understand how much it costs to produce a product, per unit. When a business handles hundreds or thousands of orders per day, it may struggle to keep track of costs. This is where the WAC is helpful, however. This accounting method attaches a per-unit cost to the product, allowing businesses to see how much they spend to product or acquire a product that they sell.

Cost of Goods Available Isn’t the Same as COGS

It’s important to note that cost of goods available is not the same as cost of goods sold. The cost of goods sold (COGS) refers to the value of the product’s sales. In comparison, cost of goods available refers to the value of inventory in addition to the cost of goods purchased.

Hopefully, you have a better understanding of the WAC accounting method after reading this. To recap, this method is used to calculate the “weighted average cost” of a specific product. It’s performed by taking the cost of goods available and dividing it by the number of units available, resulting in the product’s WAC.

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