How to Speed Up Quickbooks Accounting
How much time you spend in a typical day using Quickbooks? There’s no denying the fact that Quickbooks is a highly useful accounting tool. After all, it’s the single most popular accounting solution for small- and medium-sized businesses. Failure to take certain precautions when using Quickbooks, however, may result in an inefficient accounting strategy. You can speed up Quickbooks accounting, however, by following these tips.
Disable Automatic Updates
By default, Quickbooks will automatically download and install new updates when they are available. If a new version is released, for example, the software will connect to Intuit’s server and download it to your computer. Unfortunately, these automatic updates can cause performance issues, specifically slow speeds when the update is being downloaded. The good news is that you can disable automatic updates by accessing Update Quickbooks > Options. In this menu, you should see an option to toggle on and off automatic updates.
Check For Errors
You should also scan your Quickbooks installation for errors on a regular basis. Even if you’re able to use Quickbooks without any visible technical problems, there could be one or more errors within the software itself — and these errors may cause slower speeds or other minor performance issues.
So, how do you scan your Quickbooks installation for errors exactly? Start by downloading Intuit’s File Doctor tool. Once downloaded, run the program from your computer and follow the given instructions. The File Doctor tool will then scan your Quickbooks installation, specifically your company file, for errors. If it detects any errors, it will try to fix them.
Stay Signed In
Another way to speed up Quickbooks accounting is to stay signed in. The Quickbooks Online Desktop App, for example, doesn’t require you to log in each time you want to access your Quickbooks account. You’ll stay logged in at all times — and you can even launch Quickbooks with just a single click.
Use Keyboard Shortcuts
If you aren’t using keyboard shortcuts, you’re missing out on one of the easiest and most effective ways to speed up Quickbooks accounting. Unbeknownst to many business owners and accountants who use it, Quickbooks supports commands by pressing just a few keys simultaneously. For example, pressing Ctrl+Alt+V automatically opens the vendors page, whereas pressing Ctrl+Alt+F automatically opens the search transactions page.
There are literally dozens of keyboard shortcuts, all of which can speed up Quickbooks accounting. For a list of all available keyboard shortcuts, press Ctrl+Alt+A/.
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5 Tips on Hiring Your First Employee
A small business owner, there’s only so much work you can do yourself. As your small business grows, you may need to hire employees to sustain its growth rate. Of course, hiring your first employee is a major milestone that shouldn’t be taken lightly. If you use the wrong approach, the employee may offer little or no benefit to your small business. Therefore, you should follow these five tips when hiring your first employee.
#1) Purchase Workers’ Compensation Insurance
When hiring employees, you’ll need to have workers’ compensation insurance for your small business. Although there are a few exceptions, nearly all businesses that operate in the United States with at least one employee are required to have workers’ compensation insurance.
#2) Register With Labor Department
In addition to obtaining workers’ compensation insurance, you must also register your small business with your state’s labor department. In the United States, employers are required to pay unemployment taxes for each of their employees. You won’t make these payments to your small business’s employees, however. You’ll make the payments to your state’s labor department, which is why it’s important to register your small business with the labor department.
#3) Advertise Job Listing
After getting your ducks in order, you can now advertise your job listing in an effort to attract candidates. Some small businesses simply place a “We’re Hiring” sign in front of their establishment. Given the superior reach of the internet, though, it’s recommended that you advertise your job listing online. You can publish the listing on your small business’s social media profiles as well as job recruitment websites.
#4) Assess Candidates’ Skills and Credentials
Perhaps the most important step to hiring your small business’s first employee is assessing the sills and credentials of candidates. Assuming your job listing generates a decent amount of exposure, you should have some applications coming in. You’ll then need to review each application while choosing the best-qualified candidate for the position.
#5) Set Up Payroll
Of course, you’ll also need to set up payroll when hiring your small business’s first employee. Don’t wait until you’ve already hired the employee to set up payroll. Because this is your first employee, you may encounter problems with managing his or her paycheck. As a result, you should set up payroll before hiring your first employee.
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Quickbooks Parent vs Sub Accounts: What’s the Difference?
Quickbooks supports a multi-tiered hierarchy for creating and using accounts. You can use both parent and sub accounts, for example. By taking advantage of Quickbooks multi-tiered account hierarchy, you’ll be able to track your business’s financial transactions with greater ease. So, what’s the difference between a parent and sub account?
What Is a Parent Account?
A parent account is a top-level account used for accounting purposes. It’s called a “parent account” because it contains one or more other, lower-level accounts. The parent account is the primary account under which lower-level accounts, also known as sub accounts, are placed.
What Is a Sub Account?
A sub account, on the other hand, is a lower-level account, that’s placed under an existing parent account. All sub accounts must be attached to a parent account. For example, you may want to place a sub account for your business’s electric expenses under a parent account for utilities. In addition to electric expenses, other sub accounts you may want to place under the utilities parent account include gas and internet (if applicable).
How to Create a Sub Account
In Quickbooks Online, you can create new sub accounts in just a few easy steps. Start by logging in to your account and clicking the gear icon, followed by “Chart of Accounts” and then “New.” You should then see a window asking for more information about the account. Tick the box labeled “Is sub account” and choose the parent account under which you’d like to place it. You will then need to enter a name and description for the sub account. When finished, click “Save and Close,” at which the sub account will be added to Quickbooks.
How to Convert an Existing Account Into a Sub Account
You can also convert existing accounts into sub accounts. This is done by going back to the home screen and clicking the gear icon, followed by “Chart of Accounts.” Rather than creating a new account, though, you should choose an existing account by clicking the downward arrow. Click the account that you’d like to convert into a sub account and select “Edit.” Next, tick the box for “Is sub account” and choose the parent account under which you’d like to place it. You can then finalize the conversion by selecting “Save and Close.”
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What Is a Certified Public Accountant (CPA)?
Are you struggling to keep track of your small business’s finances? If so, perhaps it’s time to hire a professional accountant. They’ll take this burden off your shoulders, allowing you to focus on what really matters: developing a successful business. Not all accountants are the same, however. Some are classified as Certified Public Accountants (CPAs). So, what is a CPA exactly?
Overview of CPAs
A CPA is a professional accountant who’s passed the Uniform Certified Public Accountant Examination to become licensed in his or her respective state. Not all professional accountants are CPAs. Unless an accountant passes the exam — as well as meets his or her state’s other licensure requirement — he or she isn’t a CPA.
CPAs can work for either themselves or for part of a larger accounting firm. A CPA who operates as a sole proprietorship works for his or herself. In comparison, other CPAs work for a large firm consisting of dozens or even hundreds of CPAs.
To say there are a lot of CPAs in the United States would be an understatement. Statistics show that are currently over 664,000 licensed CPAs, according to the National Association of State Boards Accountancy (NASBA).
Requirements for Becoming a CPA
To become a CPA, professional accountants must take and pass a thorough exam that tests their knowledge of accounting practices. Known as the Uniform Certified Public Accountant Examination, it’s available for accountants throughout the country.
With that said, the exam is regulated by each state. Some states use the 150 rule, which states that accountants must complete an additional year of education beyond a four-year or master’s degree, whereas other states have slightly less-stringent requirements for taking the Uniform Certified Public Accountant Examination.
The Benefits of Hiring a CPA
By hiring a CPA, you can rest assured knowing that your small business’s finances are being handled by a skilled and trained professional accountant. As you may know, otherwise small accounting mistakes can cost your small business big bucks. With a CPA, however, your small business will have accurate and clean financial records.
Furthermore, a CPA can represent your small business if it’s audited by the Internal Revenue Service (IRS). Only CPAs are given the authority to represent their clients during an IRS audit. Non-CPA accountants can not offer representation during an IRS audit.
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5 Super Simple Ways to Scale Your Small Business
Are you struggling to scale your small business? The ability to grow and scale is a defining characteristic of all successful businesses. By scaling your small business’s operations, you’ll naturally reach more customers and generate more sales. While scaling sound may difficult, though, it doesn’t have to be. Below are five super simple ways to scale your small business.
#1) Create a Referral Program
A referral program is a highly effective tool for small businesses. Statistics show that referrals are 30% more likely to make a purchase and have a 16% higher lifetime value than traditional leads. How to do you create a referral program exactly? Basically, a referral program is any type of incentivized program in which customers are rewarded for driving new customers, also known as referrals, to your small business.
#2) Launch a Website
If you haven’t done so already, consider launching a website for your small business. Even if you don’t intend to sell products or services online, you can still use a website to promote your small business, as well as its locally sold products or services. When a prospective customer performs an online search for your small business’s name, he or she may stumble upon its website.
#3) Target New Locations
Of course, targeting new locations can help to scale your small business. Some small businesses focus strictly on their surrounding city or region, neglecting to sell their products or services in other areas. If you’re willing to target new locations, though, you’ll discover it’s a highly effective way to scale your small business.
#4) Invest in Automation
Automation is perhaps one of the most effective ways to scale a small business. Granted, you can’t automate all of your small business’s day-to-day operations, but there are certain tasks that can and should be automated. Sending invoices or receipts, for example, can be automated using accounting software. Rather than manually creating each and every invoice or receipt, accounting software can take this burden off your shoulders through automation. Along with the other tips listed here, this will help to scale your small business.
#5) Sell to Existing Customers
You shouldn’t focus your marketing efforts strictly on new customers. Selling to existing customers can actually prove more worthwhile because they are easier to convert. According to Harvard Business Review, it costs up to 25 times more money for a small business to sell to a new customer than an existing customer.
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How to Process a Check Payment in Quickbooks
Has your business received a check payment from one or more customers? As a business owner, most of your payments will probably come in the form of credit card or debit card transactions. Occasionally, however, a customer may ask to pay with a check. But if you aren’t able to process check payments, the customer could leave your business for a competitor. Using the Quickbooks Desktop accounting software, you can easily process and record check payments in just a few simple steps.
What You’ll Need
To process check payments, you’ll need Quickbooks Desktop. Unfortunately, Quickbooks Online — the cloud-based version of Intuit’s accounting software — doesn’t offer check processing. You’ll only find this feature available in the standalone version, Quickbooks Desktop.
In addition to Quickbooks Desktop, you’ll also need a scanner. According to Intuit, processing check payments requires a TWAIN-complaint scanner. A type of application programming interface (API) TWAIN governs the communications between computer software and digital imaging devices, including scanners. Assuming you have Quickbooks Desktop, as well as a TWAIN-compliant scanner, you can process and record check payments.
Steps to Processing Check Payments
When you’re ready to process a check payment, log in to Quickbooks Desktop and click the “Customers” menu, followed by “Receive Payments.” Upon doing so, you should see a new “Receive Payments” window on screen. In this window, click the “Scan Checks” option. Quickbooks will prompt you with a warning asking if you’d like to process, at which point you can choose “Yes.”
You can now proceed to scan the check by placing it in your scanner and clicking the “scan” button. After the check has finished scanning, Quickbooks will automatically populate several fields in the “Verify Scanned Check Information” window, which you should double check to ensure it’s accurate. If any of the information is wrong, you’ll need to manually fix it. Quickbooks does a pretty good job at accurately reading scanned checks, but errors can and do occur.
After double checking the information in the “Verify Scanned Check Information,” you’ll have the option of either recording or skipping the payment. To record the check payment, choose the option to record as “Receive Payment,” after which you can apply it to an invoice or sales receipt. If you have multiple check payments, repeat these steps for each one. When finished, click the button titled “Send Checks for Processing.”
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Purchase Order vs Invoice: What’s the Difference?
The terms “purchase order” and “invoice” are often used interchangeably when referring to bills for a product or service. As a result, many small business owners use them incorrectly. Purchase orders are different from invoices. By familiarizing yourself with their nuances, you’ll create cleaner financial records.
What Is a Purchase Order?
A purchase order (PO) is a document used by businesses to confirm the purchase of an order. When a customer places an order, he or she may send your small business a PO. Among other things, the PO reveals the type of product or service being purchased, the quantity and date. Regardless, all POs confirm the purchase of an order, which is why they are called “purchase orders.”
It’s important to note that there are also standing POs. What is a standing PO exactly? A standing PO is the same as a regular PO — except it’s used for long-term customers who make multiple purchases. With a standing PO, you can reuse the same PO number for a specific customer. It’s an easier and more efficient way to track purchases from repeat customers.
What Is an Invoice?
An invoice, on the other hand, is a document requesting payment for an order. While POs are typically created by customers, invoices are created by businesses. During a typical transaction, a customer may send your small business a PO containing the products or services he or she wishes to purchases. In response, you can then send the customer an invoice requesting payment for the customer’s desired products or services. Once the customer receives the invoice, he or she can send payment, at which point you can then deliver or complete the product or service.
Both POs and invoices contain details about a specific order. The primary difference between them is that POs confirm the purchase of an order, whereas invoices request payment for an order. Some of the information contained in an invoice includes the product or service purchased by the customer, the quantity, the date and the PO number.
Converting POs to Invoices
Assuming you use Quickbooks, you can easily convert POs to invoices. Intuit’s popular accounting software supports PO-to-invoice conversions. Rather than manually creating an invoice for each PO, you can set up Quickbooks to automatically create invoices based on the information contained in a customer’s PO.
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Top 5 Accounting Myths You Shouldn’t Believe
As a business owner, you shouldn’t believe everything you hear or read about accounting. While there’s plenty of information out there on the topic of accounting, not all of it is accurate. Unfortunately, this often leads business owners down the wrong path, resulting in a poor accounting strategy. To keep your business’s financial records in order, you shouldn’t believe the five following accounting myths.
#1) Accounting Requires Excellent Math Skills
While knowledge of math can certainly help, it isn’t a prerequisite for accounting. Most accounting software, for example, will perform math calculations automatically. You enter your business’s transactions, after which the accounting software will add them up. By eliminating the need for manual math calculations, accounting software reduces the risk of errors to promote cleaner financial records.
#2) Accounting Consists Strictly of Taxes
While calculating and preparing tax returns is an important step, accounting consists of more than just taxes. In the most basic sense, accounting is the act of recording all financial transaction. Whether it’s a credit or debit, all financial transactions processed by your business should be recorded. With that said, the creation of these financial records can certainly make tax preparation easier. But that doesn’t mean accounting is only related to your business’s taxes.
#3) You Must Hire a Professional Accountant
Contrary to popular belief, you don’t always need to hire a professional accountant to handle your business’s financial accounting needs. Assuming you run a small business that handles a low volume of sales, you can probably do it yourself.
#4) Accounting Isn’t Important
This statement couldn’t be further from the truth. According to the U.S. Small Business Administration (SBA), roughly half of all small businesses fail in their first five years. While small businesses can fail for any number of reasons, poor accounting consistently ranks at the top of the list. If you don’t invest enough time or resources into accounting, your small business may struggle to keep up with its competitors.
#5) All Accounting Software Is the Same
Don’t assume that all accounting software is made equal. There are dozens of types of accounting software, some of which are installed and accessed locally on a computer or device, whereas others are accessed over the internet via a Product-as-a-Service (PaaS) model. Quickbooks Desktop, for instance, is installed locally on a computer, whereas Quickbooks Online is available as cloud-based PaaS software.
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How to Switch Between Cash and Accrual Basis in Quickbooks
When setting up Quickbooks for your business, you’ll need to choose one of the two supported accounting methods. Intuit’s popular accounting software offers cash basis and accrual basis accounting. To learn more about these two different accounting methods, as well as how to switch between them in Quickbooks, keep reading.
What Is Cash Basis Accounting?
Cash basis accounting is an accounting method in which you record cash income and expenses at the time you receive them. Also known as the cash method of accounting, it involves recording cash payments when your business receives them and cash expenses when your business pays them.
The primary benefit of cash basis accounting is its simplicity. When compared to accrual basis accounting, cash basis accounting is easier, making it a popular choice among small businesses. With cash basis accounting, you record all cash income when you receive payment and all cash expenses when you make the cash payment.
What Is Accrual Basis Accounting?
Accrual basis accounting, on the other hand, is an accounting method in which you record income and expenses when your business earns them. A landscaping company, for example, may record income after completing a landscaping project for a customer — even if the customer paid several ways prior to the project’s completion.
While cash basis accounting is more popular among small businesses, many medium and large businesses prefer accrual basis accounting. Since it doesn’t recognize income or expense until they are earned, it’s a more accurate way to record financial transactions.
How to Switch Between Cash and Accrual Basis Accounting in Quickbooks
You can easily switch between cash basis and accrual basis accounting in Quickbooks. To do so, open your company file as the administrator while in single-user mode. Next, click the “Edit” menu, followed by “Preferences.” You can then choose “Reports & Graphs,” followed by “Company Preferences.” To switch from cash basis to accrual basis accounting, click “Accrual” under the “Summary Basis” menu. To switch from accrual basis to cash basis accounting, click “Cash” under this menu. When finished, click “OK” to complete the process and save your changes.
Keep in mind that your preferred accounting method can affect the way in which Quickbooks calculates your business’s sales tax. With accrual basis accounting, Quickbooks will calculate your business’s sales tax at the same time when you invoice a customer. With cash basis accounting, Quickbooks will calculate your business’s sales when you receive payment from a customer.
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Common Tax Deductions for Rideshare Drivers
Ridesharing has become increasingly popular in recent years. According to to the Pew Research Center, roughly one in three Americans have used a ridesharing service — a number that’s expected to increase in the following years. If you’re thinking about becoming a rideshare driver, though, you’ll need to take advantage of all available tax deductions. Like with all businesses, you can deduct the cost of certain expenses from your income taxes.
Mileage
Not surprisingly, you can deduct the cost of mileage from your income taxes. The Internal Revenue Service (IRS) supports two different methods for calculating mileage deductions: standard or actual car expense. Standard mileage involves multiplying the number of miles you drove in the given year by the IRS’s standard rate for that year. In comparison, the actual car expenses method involves keeping track of all-driving related expenses, such as insurance, gas, maintenance, repairs and even automotive depreciation.
Smartphone
You can also deduct the cost of a smartphone from your income taxes, assuming you use your smartphone for ridesharing purposes. Whether you drive for Uber, Lyft or any other ride-sharing service, you’ll probably use your smartphone to find customers to pick up. You may even be required to call or text these customers prior to picking them up. Regardless, the IRS allows ride-sharing drivers to deduct the cost of their smartphone from their income taxes.
Dash Cam
If you recently purchased a dash cam to use in your vehicle, you can deduct it from your income taxes as well. It’s not uncommon for ride-sharing drivers to install a dash cam in their vehicles. With a dash cam present, ride-sharing drivers can rest assured knowing that their trips are recorded. At the same time, many insurance companies offer premium discounts for ride-sharing drivers who install a dash cam in their vehicle.
Free Items
Do you offer free bottled water, mints, gum, snacks or items to passengers? If so, you should keep track of the receipts for tax purposes. Any complementary items such as these can be deducted from your income taxes. And while you probably won’t spend hundreds or thousands of dollars on complementary items, claiming this deduction can still lower your tax liabilities as a ride-sharing driver.
Accounting Software or Services
You can deduct the cost of accounting software or services from your income taxes. Whether you use Quickbooks Online, Quickbooks Desktop or any other type of accounting software or service, you claim it as a deduction.
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