QuickBooks Online is a very easy to use software. It can pretty much do all the accounting for you, that is, that’s what almost everyone thinks. Sure, QuickBooks online does have cool features that can automate many transactions but setting them up correctly needs proper evaluation.
Below you will find some situations and how they can be corrected.
You have signed up to QuickBooks online and you’ve been told to set up Banks. Great. You located the bank and link your bank to QuickBooks. Now what? As transactions roll in, they need to be categorized to proper General Ledger Accounts. QuickBooks makes some suggestions that help but some unique situations may arise that require an advisor.
You have already paid for some assets like your computer, your website, etc… but that was before you got QuickBooks; so how can you get that information in QuickBooks? Well, you must make a journal entry to record transactions that happened prior to the time QuickBooks received the bank transactions.
You purchased merchandise to sell and recorded the full amount as expense. By end of the year, you still have merchandise left. Generally accepted accounting principles says you need to match your sales with your expenses, looks like you did not sell everything. How to fix that? You will need to do an inventory count, estimate the cost and then make a journal entry to record a decrease from expenses and an increase to your Inventory Asset.
You needed some help getting the merchandise shipped to your customers and you paid someone cash. Ouch!! By law you need to report any payments made over $600 on a 1099 Miscellaneous Form. For the time being you can report on paper form. Moving forward you would need to properly record the person as a contractor in QuickBooks online and set them up to receive a 1099 at year-end. That way, you can e-file the 1099s right from QB and provide the 1099 copies to all your contractors almost immediately!
Doing business outside of the US almost always requires currency translations. But did you know that foreign currency transactions will result in Foreign Currency Exchange gains and losses? If you have tried doing manual translation in QuickBooks, you are wasting hours!! QuickBooks online has a multi-currency features that automates the translations for you! However, you must set up correctly.
If you work on multiple projects at the same time, then you need to track time for you and your staff for each project. Otherwise, how would you know how profitable each project is? If you are tracking this separately in spreadsheets you are wasting time. All you need to do is turn on the projects feature in QB and start assigning costs to projects!
Whether you are starting a not -for-profit or you already have one, you know that getting grants is really hard work. It’s even harder when you need to allocate and report your allocation of your grants to the grantee. If you have multiple schedules with formulas calculating which revenue and expense need to go to which grant, then you just need to use the Classes feature in QuickBooks Online.
Of course, it really helps when you have a certified pro or an advanced pro adviser help set these up for you. The earlier the setup with a qualified adviser, the better the reporting and the decision making for your business!! If you’ve tried to do it yourself and find yourself stuck, just give us a call, we’ll be happy to help!