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In this Issue:
Working with reports part one.
There are so many reports in
QuickBooks, remembering which report will produce the
information you need can be difficult. Here are a few of
my favorite reports, from which almost all other reports can be created.
The Balance sheet provides a
snapshot view as to what you own, what you owe, and what
net income looks like. Great
reports can easily be created from the balance sheet.
- Balance Sheet
- Income Statement
- Accounts Payable
- Payroll Summary
- Customer Balance
- Vendor Balance
Over the next few
newsletters we will talk
about the usefulness of each report.
Understanding how flexible the reporting
in QuickBooks will have you returning
these reports over and over for all your
in report development is an
introduction to how QuickBooks reports
drilling down (double click) on any amount on the
report you can view the daily activity (or change the
date range) in this account. QuickBooks reports
are incredibly flexible. Try creating my
favorite bank account report:
Run a balance sheet report >Drill down on a bank account > Click
on modify button and you open to the
display tab >Change the date to 'Last Month' >
Find the columns box (on the bottom
left of this window) and scroll down to the bottom of the list
- > To add the columns click once on 'debit' &
once on 'credit'. Remove the 'amount' column by
clicking once (removing checkmark) on 'amount'> Click on the header
tab and change the title to "Bank account
register" > Click OK
Use this same procedure if you need other columns to
appear in your report, for example if you assign
expenses to customer/job names, you will want to see the
column for 'source name' (displays vendor or employee
name) added to your report. (Later on, after this
exercise, become familiar with which columns will add
valuable information to your report by placing a checkmark next to every single
column option and making a note of which column to
include in your next report).
Continuing our customizing of this QuickBooks report to your specific needs:
- Increase the width of the memo column by
hovering the mouse over the diamond to the right of the
column header 'memo' until it changes to a crossbar.
Click and drag the mouse to the right until you have
reached the desired width then let go of the mouse.
Dragging to the left has the opposite effect, in fact,
dragging the right diamond left instead of right will
shrink the column width and you can remove the entire column from the report
by dragging the diamond beyond the left diamond. It is a breeze to add back the
column if you have removed it unintentionally;
Click on Modify, and the first tab open is the display
tab and the 'columns' option appears in the lower right
of this window. Place a
checkmark by clicking next to the desired column. Give this a try
by removing the 'Clr' column from the report then adding
the 'Clr' column back in.
- Change the order of the columns - hover the
mouse over the column header, for example, try 'type'
until the mouse pointer changes to a hand, click and
drag the 'type' column to the desired location. Try
dragging to the right until the column hovers in-between
the split and debit column headers and then let go of
the mouse. It is just as simple to move it back.
- Change the font size of the report header,
footer , column headings, data, or all of the above.
Click on the Modify button > Click on the tab 'Fonts and
Numbers' > Click to Highlight the part of the report you would
like to change then click on the 'Change Font' button >
click OK to accept your changes. In this 'Fonts and
Numbers' tab you can also choose to remove cents from
the report by clicking on the box 'Without Cents'. Click
OK to save changes You can change the
default font and size for every report from the Preferences
From the Edit Menu > Select Preferences > Scroll halfway
down the icon bar on the left until you see the icon for
'Reports' and click on 'Reports' > Click on the
tab 'company preferences' and click on 'Format' > Click
on the tab 'Fonts and Numbers' and make changes
accordingly > Click on okay to save your changes.
- Sort the QuickBooks report.
Take a moment to see how the same data, displayed
in different orders might help you manage your business.
From the report window > click on the down arrow next to
the option 'sort by' and click on Type. The form
used to create the transaction will shed light on how
and why it appears or does not appear in a report,
Sort this same report by every option in this list to
determine if and how it may help you make business
Return the 'sort' to the default order then take a
moment to see how 'total by' can offer a different
perspective on the data. Using the down arrow next to the option
'total by' > click on payee.
- Print the
report. Print to a pdf (File menu)
making it possible to create a report that
e-mailed and opened using Microsoft Excel
Options which are used
Printing landscape mode
(short and wide) or
Printing portrait mode (tall and
Fitting report to one page wide
will make automatically resize your fonts to
fit all the columns on one page;
Previewing the report before printing
will provide the number of pages in the
report If its a partial report you
seek, the preview button will help identify
the specific page (s) to print
Smart page breaks will improve presentation. QuickBooks avoids
splitting related data across two pages.
Within larger groupings, QuickBooks chooses
the most logical place to insert a page
Print back to front:
For printers that print each page
face up this option will save you the
trouble of manually collating pages. From the
print report window > click options >
click 'back to front'
- Memorize the Report.
Changes made to any report can be
permanently saved by clicking on the
memorize button at the top of the report
window. Give the report a descriptive title.
You may recall the memorized report from the
report menu and selecting 'memorized
Take the time to drill down from the Balance Sheet
report on accounts receivable > sort by
type and review the output > total by customer name
the debit & credit column.
Start over, from the Balance Sheet Report > drill down on
accounts receivable > filter the report for
paid status = open, add the column for aging. Run
similar reports on accounts payable.
Each month after the bank reconciliation is completed,
run a Balance Sheet Report, Modify the report and select
a date range of 'last month' and click OK. From the
Balance Sheet report drill down on every account on the
balance sheet and review the activity from the
prior month. Use the sorting, filtering, printing
techniques in this newsletter to help identify mistakes.
accounts receivable report.
This is the
third article of our series, what to do
about negative balances in accounts
list of reasons why A/R show negatives,
what to do when a customer overpays)
An invoice form creates a transaction that
will increase sales and show up in
reports that list who owes
money. Using the 'receive payments'
form/window an invoice is
marked paid and removed from the open
invoice report. Marking an invoice
paid can only be achieved using the
'receive payments' form AND marking an
invoice listed in the "applied to" section
of this form or applying a credit/discount
to invoice. By placing a check next to the
invoice, using "set credits", or using
"discounts", QuickBooks creates a link
from the invoice to the payment and marks
the invoice paid. Without a link, both the
credit and the invoice remain open on your
payment or credit is linked to the invoice,
QuickBooks provides you with a nifty tool to
easily find the linked transaction. Open an
invoice, receive payment, or credit
transaction and at the top of the window the
'history button' provides the details
and hyperlinks ('Go To' Button) to the
customer payment comes in before the invoice
is created it is necessary to make a note to
link this payment AFTER the invoice has been
created. At times a customer sends in
a payment without instructions on how to
apply the payment. When payment is
account" (not assigned to invoices) it
will be necessary to make a note to link
this payment AFTER the customer has supplied
the missing information.
To place a payment on account, from the
receive payment window > select the customer
enter the check number and amount > do not
place a check next to the invoices in the
bottom section of the window > click save
& new or save & close, click OK to the pop
up information window.
To create a
link from the 'prepayment' or 'on account
payment' to the invoice :
receive payment window > Select the customer
account > enter $0 for amount > Click
once on the invoice > Click on the 'Set
Credit' button > Select the credit amount you would
like to apply. You can apply a partial
credit by replacing the default
in the 'amount to use' column with the
amount you wish to apply.
Tip: When creating
credit memos for customer returns,
write-offs, or discounts; It is a good habit
to immediately open the receive
payment window and apply the credit to the
appropriate invoice. This will mark
the invoice paid, remove it from the
customer statement, and prevent the customer
from using the credit inappropriately
against a different invoice. For credit memos mailed to the customer, be
sure to include a blurb on the invoice that
informs the customer how to treat
this credit (for example: This credit has
been used to offset invoice number 234,
please make the same adjustment on your
Tip: There is no
simple way to move a credit incorrectly
applied from one invoice to another. A
trick to unlink the credit memo is to change
the name on the credit memo to another
customer > save the credit, then change the
name back to the original customer. This
will reopen the credit for
application to the correct invoice on your
A common mistake:
A 'write check'
window was used to pay a bill that had
also been entered into QuickBooks with an
enter bills window. How do I
mark the bill that is still showing as open
on the accounts payable report as paid?
only official guide to QuickBooks
information-packed resource teaches
users of all levels how to manage
their finances for business or home.
for a complete list of how-to guides
Two steps will
correct the situation:
1. Find the
'write check' transaction. Change the
account to 'accounts payable' and enter the
vendor name under the 'customer:job' field.
Save and close
2. To link
the payment to the vendor bill, From the
Vendor menu > Pay bills > place a checkmark
next to the open vendor bill > Click on set
credits and then done. Save and close the
pay bill window.
This solution is
better than simply deleting the original
'bill' transaction. The dates used on forms
in QuickBooks determines the month the
transaction will show up on reports. The
date used on the bill transaction will keep
the expense in the month it was incurred. If
you delete the 'bill' the date on the check
would be the date that the expense shows up
personal separate from business
Schedule C filers or for
Writing checks from the business account or using
business credit cards for personal expenses does
not create problems for a business organized as a
partnership or sole proprietor. This is not true when the business is
organized as an S Corporation or C Corporation. The IRS
is a bit more lenient in its rules about drawing funds
from the organization for personal use because Schedule
C filers and General Partners' personal assets are at
risk against claims arising from business operations.
This leniency does not suggest that owners can take a
tax deduction for personal expenses, simply that a
payment of personal expenses is allowed to the owners of
a sole proprietorship or a partnership.
To help keep deductible business expenses separate from personal
QuickBooks we suggest setting up a series of Equity
accounts per owner to house the personal payments and
keep them separate from the business expenses.
Capital - owner A
Draw A - Create the following subaccounts of Draw
Draw A - Medical payments
Draw A - Estimated Income Tax Payments
Draw A - Owners Pension
Draw A - Miscellaneous
Set up a similar grouping for each owner.
January 1st of each year create a journal entry to bring
the balances of the draw accounts to zero. Banking
menu > Create Journal Entry > Debit Capital > Credit
each draw account for the balance in Draw as of
Keeping these non business payments off the income
statement provides the business owner with a profit and
loss report that will ''at a glance" provide information
that will help the owners manage the business.
For S Corporations and
These business owners have to take much greater care
in the tracing of funds that come into and out of the
business. S Corporations provide the owners
with limited liability and avoids double taxation by
passing the income to the personal return. In
fact, in some cases the overall tax paid is less than
that paid by a Sole proprietor or Partner because the
amount taken as a distribution is exempt from social
security taxes. The IRS keeps a close watch on the
amount paid to owners of S Corporations looking for
abuses such as understated wages (wages are subject
to social security taxes). Also, payments to
owners that are not wages (treated as distributions) must correlate to the
percentage of ownership share held. For help setting up QuickBooks to
stay within the boundaries
the full article on Reasonable compensation
Its payroll tax time again
Preparing your own payroll quarterly
taxes? Mistakes are costly and come back to haunt
you several years after all the records have been placed
in storage. So we have put together a short list of tips
that will help you identify mistakes.
We update our site
regularly, visit our
payroll tax regulations to refresh your knowledge
and learn correct methods for including fringe benefits
in the W-2's. We have added a nice questionnaire at the
bottom of this webpage that employee's can complete for
a self-review before raises are handed out.