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 Go to the “Transfer Funds From” menu and select the bank account from which the funds are being withdrawn.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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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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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 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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How to Record Overpayment to Vendor in Quickbooks

Did you accidentally pay a vendor of your business too much money? It’s not uncommon for businesses to buy products or services from other businesses. In fact, most businesses do this. When making payments to vendors, however, you should double check to ensure that you pay the right amount. When you overpay, it can throw off your business’s financial records. The good news is that you can easily record overpayments to vendors using the Quickbooks accounting software. For step-by-step instructions on how to record an overpayment to a vendor, keep reading.

To record an overpayment to a vendor, log in to your Quickbooks account and choose Vendors > Enter Bills, at which point you can select the vendor to whom you made the overpayment. Next, choose “Minor Charge-Off”  in the “Item” field, followed by clicking “Save & Close.”

You should then be able to apply the overpayment as a credit to the bill. This is done by choosing Vendors > Pay Bills, at which point you can select the bill that you want to offset the credit. Next, click Set Credits > Credits > Credit > Done. You can then click “Pay Selected Bills” to exit the window and finish the process. Sorry if you were expecting more, but that”s all it takes to record an overpayment to a vendor in Quickbooks.

But what if you made an underpayment to a vendor? Well, you can record this as well using the Quickbooks accounting software. This involves logging in to Quickbooks and choosing Vendors > Pay Bills > select the bill > Set Discount. From here, click the “Discount” tab and enter the amount of the underpayment in the “Amount of Discount” field, followed by choosing “Minor A/R and A/P Charge-Off” in the “Discount Account” field. When finished,  click “Done” to exit out of the window. You aren’t out of the woods just yet, though. You must click “Done” in the Payment Summary window to complete the process.

Whether you made an overpayment or underpayment to a vendor, it’s important that you record the transaction correctly. Otherwise, it could throw off your business’s financial records. Thankfully, Quickbooks makes both these processes a breeze. You can record an overpayment or underpayment to a vendor by following the steps outlined in this blog post.

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What is Members Equity in Quickbooks?

In Quickbooks, you may come across the term “Members Equity.” So, what does it mean and how do you enter it? To learn more about Members Equity, keep reading.

Overview of Members Equity

Members Equity is the total amount of money contributed by members to run a business. This differs from net income, which is the amount of profit generates from the business’s actual operations. Members Equity consists of money that’s added initially when the business is launched as well as money contributed to the business later. The total amount of these funds is collectively referred to as Members Equity.

Quickbooks will automatically calculate your Members Equity every time you run a balance sheet, similar to Retained Earnings. As a result, there’s no special register for Members Equity, nor will you see the amount listed in your chart of accounts. Of course, some businesses may have little-to-no Members Equity — and that’s okay. It’s perfectly fine for businesses to operate with minimal Members Equity, or even no Members Equity. The most important thing is that the business keeps track of its Members Equity.

On the other hand, Members Draw is the amount of money withdrawn from your business by its members. Accounting for both Members Equity and Members Draw is essential in small business accounting. If you don’t know how much money your business’s members have deposited and withdrawn, how will you know how much to pay them back? Assuming you use Quickbooks, you can easily account for Members Equity as well as Members Draws.

How to Enter Members Equity

There are several different ways to enter Members Equity into Quickbooks. The easiest method, however, is to use the “Make Deposits” option from the drop-down menu of the main screen. From here, select the company bank account to which the member made a deposit. You can then enter the name of the member who made the deposit as well as the amount of the deposit. Next, click the “From” account drop-down menu and choose the owner equity account. When you are finished, click the “Save and Close” button to record the Members Equity deposit. Sorry if you were expecting more, but that’s all it takes to enter Members Equity into Quickbooks!

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How to Edit Your Invoice Template in Quickbooks

Quickbooks supports pre-made invoices that business owners can use to handle transactions. When a customer buys a product or service, you can send him or her an invoice directly from your Quickbooks interface. While Quickbooks has a default invoice that you can use, it’s recommended that you customize your invoice to reflect your business. Doing so allows you to add your company’s logo, colors, slogans, address and other key information. So, instead of receiving a nondescript and generic invoice, customers will receive a fully customized invoice that includes all of your company’s brand elements.

If you’re interested in customizing your invoice, you can do so by logging in to your Quickbooks account and accessing the Gear menu >  Settings > Custom Form Styles. Here, you should see an option to edit your invoice or create a new invoice. Assuming you want to customize a default invoice to use in future transactions, go ahead and click the “Edit” button, which is found under the “Action” column.

After clicking the “Edit” button, you’ll be presented with a style navigator. These are basically pre-defined styles of templates that you can use in your invoice. Don’t worry, though, because you can still fully customize the style of your invoice according to your preference and specifications. Quickbooks has five styles from which to choose, so feel free to browse through them and select the one that represents your company best.

Once you’ve selected your invoice style, you should add your logo to the invoice. This is done by clicking the drop-down button in the “Logo” menu box, followed by “Upload. Keep in mind that your logo must be sized appropriately to fit inside the invoice. Thankfully, Quickbooks has a built-in image resizing tool that you can use to make it fit. After uploading and resizing your image, click and drag it to the area of your invoice where you want it to appear.

Of course, you can also change the color of your invoice. This is done by clicking the drop-down arrow in the “Color” menu box, at which point you can choose the colors you’d like to use in your invoice. Here’s a tip: click your mouse somewhere on your logo to automatically select the color used in the logo. This allows you to create a more cohesive invoice by ensuring all of the colors match and flow together.

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What is Rate of Return in Accounting?

In a previous blog post, we discussed goodwill. Today, we’re going to explore another term that’s commonly used in financial accounting: rate of return. To learn more about rate of return and how/when it’s used, keep reading.

Also known as average rate of return or ARR, rate of return is a formula used in capital budgeting. It’s intended to calculate the expected return generated from the income of a capital investment. ARR is essentially a ratio that’s expressed as a percentage return. As explained by Investopedia, rate of return can be either a gain or loss on an investment, both of which are expressed as a percentage of the total cost of the investment.

Rate of return works by dividing the profit of the initial investment to acquire the expected return. It’s important to note, however, that it does consider factors such as the duration of the investment. As such, it may fluctuate over the life of the investment.  If you have an investment with a 10% rate of return, it means the investment is expected to earn about $0.10 cents for every dollar annually. Generally speaking, the higher the rate of return, the better.

To calculate rate of return, you take the profit generated by the investment project and divide it by the initial cost of the project. This formula follows the Generally Accepted Accounting Principles (GAAP), which is one of the reasons why it’s preferred by accountants and small business owners. Calculating rate of return is also relatively easy and straightforward, which is another reason why it’s used.

However, there are also some downsides to using rate of return in account. For starters, this formula focuses on profits instead of cash flow — and it also ignores the cash flow from the respective investment project. As a result, rate of return may be affected by debt and depreciation.

Secondly, rate of return does not adjust for the risk associated with long-term forecasts. A long-term investment typically carries a higher risk than a short-term investment. Rate of return, however, does not take this into consideration, and instead uses the same formula for both types of investment.

Finally, rate of return may provide erroneous or otherwise misleading information about a company’s investment.

In any case, rate of return is a widely used, and acceptable, formula for calculating the expected profit generated from an investment project.

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How to Edit the Name on a Deposit in Quickbooks

Are you looking to edit the name on a deposit in Quickbooks? If you are reading this, I’m assuming the answer is yes. Ideally, you should include the correct name on the deposit when initially creating it. There are times, however, when this isn’t possible. Perhaps the customer gave you the wrong name, or maybe the deposit was actually made by a different customer. Regardless, you can edit the name on a deposit in Quickbooks by following just a few basic steps.

Before we begin, it’s important to note that these instructions only apply to Quickbooks Online, not Desktop Quickbooks. Intuit has two different types of its Quickbooks accounting software: the local Desktop type and the cloud-based Online type. For the former, you can follow the steps listed below to edit the name on a deposit. It’s a quick and easy process that should only take a few minutes to complete.

To edit the name on a deposit, log in to your Quickbooks account and open the deposit. If it’s from a “Received Payment,” you’ll need to delete the deposit and re-enter it using the correct name.

Now, access Transactions > Banking using the menu on the left-hand side of your account page. Next, select the bank account to which the deposit was made, followed by “Go to Register,” which is found on the right-hand side of your account page.

From here, select the deposit associated with the wrong name and click “Edit.” You can then record all payments on this deposit from this screen. There’s also an option to print the screen by accessing the “File” button in your browser and “Print.” Click “More” and then select “Select.” You should then go back to the original payment, at which point you can change the name and save it again with the customer’s correct and accurate name. Next, click the + icon at the top of your account page, followed by “Bank Deposit.” According to Intuit, it’s best to recreate this deposit using the original date and deposits that were included on the original deposit. When you are finished, click “Save” to save the changes and close the window. Sorry if you were expecting more, but that’s all it takes to change the name on a deposit.

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