Using Purchase Orders in QuickBooks Online

QuickBooks Online Plus offers the ability to create purchase orders. But they require knowledge that may be foreign to you.

If your business purchases products from vendors that you then sell, you may have occasion to use purchase orders. These forms simply tell your suppliers what items you want to buy from them.

Not all companies that you buy from will require purchase orders. However, if you place an order without one and the wrong items are delivered, you won’t be able to prove that your order was filled incorrectly.

Purchase orders add an additional layer to your bookkeeping – one that can improve accuracy and accountability, but that’s also complex. If you want to take them on, we’d like to introduce you to the concepts you’ll need to learn. You can, though, begin the process on your own to start familiarizing yourself with purchase orders.

Readying QuickBooks Online

QuickBooks Online Plus contains purchase order templates. You’ll fill these out much like you complete an invoice. And like invoices, purchase orders should include as much detail as is possible to ensure accuracy.

Before you can begin, though, you need to make sure that purchase orders are turned on. Click the + sign at the top of the screen and look at the Vendors list. If Purchase Order is there, click on it to open a blank template.

If not, click on the gear icon next to your company name in the upper right corner, then click Settings | Company Settings. Click the Expenses tab on the left. Click in the box to the left of Use purchase orders.

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Figure 1: You may have to go to the Company Settings page to turn on purchase orders and define custom fields in QuickBooks Online.

Now the Purchase Order link will appear when you click the + sign at the top of the screen. You’ll also be able to create purchase orders by clicking Vendors in the left navigational pane, and then clicking the drop-down arrow in the ACTION column.

QuickBooks Online lets you define up to three custom fields for these forms. That is, you can add additional fields that will appear on all of your purchase orders. Consider your entries here carefully.

If you want to create your own transaction numbers, click in the box in front of Custom transaction numbers. If you don’t, QuickBooks Online will automatically assign them. When you’ve finished by entering a default message for these forms (optional), click Save.

Creating a Purchase Order

If you’re not already there, click on the + sign at the top of the page and select Vendors | Purchase Order. QuickBooks Online’s Purchase Order form will open without any fields filled in. In the upper left corner of the screen, click on the small up/down arrow to the right of the first field to open your list of vendors. Select the one you want.

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Figure 2: QuickBooks Online’s Purchase Order form resembles the invoice form, except you’re ordering rather than selling here.

Directly below that, you’ll see the word Open, with a drop-down arrow next to it. A purchase order is considered Open until you pay for it, at which point the status changes to Closed.

If you want the item(s) shipped directly to a customer, click the up/down arrow to the right of the field under Ship to, and select the right one. If this remains blank, the shipment will be delivered to your business mailing address.

The date should fill in automatically, but you can change it. Enter a courier name in the Ship via box, and fill in any custom fields you’ve created.

That’s the easy part. You’ll notice in the screen shot above that there are two sections below the information you just entered, Account details and Item details. Knowing when to fill in one or the other – or both — takes some advanced understanding of purchase orders. This is where you’ll need some guidance from us.

Paying for the Goods

When you receive the items you ordered and are ready to pay for them, your purchase order information will be available. If you select the vendor from the screen shot above and want to write a check, for example, this box will appear in the right vertical pane when you select his name.

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Figure 3: Purchase order information will be displayed when you pay the vendor.

The purchasing process is second only to payroll in terms of bookkeeping complexity. QuickBooks Online provides the tools you’ll need, and we can help you gain the understanding required.

 

 

Why You Should Be Using Mobile Apps with QuickBooks

Intuit discontinued its own QuickBooks mobile app a while back, but there’s still plenty of processing power available for your smartphone or tablet.

In days gone by, running a company was a 40 hour per week proposition. You might have taken work home some evenings or gone into the office on weekends.

Those days are over, thanks to the internet and mobile technology. This fundamental change in the way we do business means that it’s now hard to get away from work.  Your smartphone and tablet are usually within easy reach, and they’re always tempting you to check in.

On the flip side, that kind of 24/7/365 accessibility has numerous benefits. There are, for example, apps that can be integrated with your desktop QuickBooks company file, which enable you to:

  • Make sales wherever you are,
  • Document expenses as they’re incurred, and
  • Monitor employee time for payroll purposes.

Let’s take a look at these in more detail.

Mobile Sales

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Figure 1: One of the oldest apps that integrates with QuickBooks is GoPayment. You can process transactions on your smartphone or tablet from anywhere.

Payment-processing on smartphones has become commonplace these days. You’ve probably seen merchants accepting credit cards on mobile phones in one of two ways: by swiping the card on a small card reader that attach to their device or by entering bank cards numbers directly.

Intuit’s GoPayment lets you do either. You can download the free app and process a customer’s payment on your smartphone. However, you still have to download it into QuickBooks and either create a sales receipt or match it to an open invoice. This isn’t a difficult process once you understand it, but you must be sure to do it correctly from the start. We can do some practice runs with you.

Benefit: Improved sales that aren’t dependent on location

Travel Expenses On the Go

One of the smartest, most useful apps that has ever been created is the expense reporter – particularly when used by your road warriors for on-the-go expenses. There are a handful of these. Travelers can record expenses in two ways: they can either enter the information directly or snap a picture of a receipt with a smartphone. When your employees get back to the office, they’re able to prepare complete expense reports, whose approved data can be transferred into QuickBooks.

Concur is one of these apps. When you set it up, it imports Account Codes, Customers, Jobs and Classes, and Vendor and Employee Records from QuickBooks so that these can be assigned for each expense entry. Credit card transactions can be imported directly. When an expense report is completed, it can be sent to a manager for approval, and reimbursement is then deposited in the employee’s bank account.

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Figure 2: Intuit’s App Center is home to hundreds of add-on applications for QuickBooks.

Tallie works similarly. It can automatically categorize expenses and alert approvers to expense policy violations. Used in conjunction with Bill.com and SmartVault, it can accommodate a sophisticated, seamless accounting workflow. We’ll see more multi-app integration as cloud-based financial solutions mature, but if you’re going to attempt such a setup, let us help you with the initial mechanics.

Benefit: More accurate, policy-compliant expense reports

Time-Tracking and Timesheets

If all of your employees walk through the office door every morning and stay there, you don’t need a mobile app for time-tracking. But for businesses whose cash flow depends on recovering and recording every minute of billable time, a smartphone time-tracker is ideal.

TSheets Time Tracker can help improve your bottom line in numerous ways. This particular app:

  • Accommodates real-time mobile data entry,
  • Tracks employee locations using GPS, and
  • Creates timesheets that can be synchronized with QuickBooks, tracking billable time by customer, job, employee, etc.

Benefits: Employee accountability; recovery and correct classification of all billable hours; and less time required to create timesheets.

Moving Toward Integration

Given the size limitations of smartphones, some mobile apps contain only a subset of the features found in their desktop counterparts. But that subset is chosen based on the needs of mobile users.

Fewer features mean that your learning time for the mobile apps that integrate with QuickBooks will be minimal. But the steps to sync with QuickBooks must be followed to the letter, and you may not be familiar with such a process. We want you to experience the benefits that these smartphone solutions can offer without compromising the integrity of your QuickBooks company file. Let us introduce you to these forward-looking, beneficial tools.

IRS issues reminder on child tax credit

Working parents should be aware that the child and dependent care tax credit is available to offset some of the expenses for child care. Six facts the IRS wants taxpayers to know about the credit:

  • Children must be under age 13 to qualify for the credit.
  • The credit applies whether the childcare provider is a sitter at home or a daycare facility.
  • The credit applies for up to $3,000 of expenses for one child and up to $6,000 for two or more.
  • The credit can be up to 35% of qualifying expenses, depending on your income.
  • Overnight camps don’t qualify; day camps do.
  • Keep receipts for expenses, and get the employee ID number of the care giver.

How QuickBooks’ Custom Fields Can Provide Better Business Insight

QuickBooks’ customizability makes it flexible enough for countless business types. Custom fields are a big part of that.

QuickBooks makes it possible for your business to create very detailed records for customers, vendors, employees, and items. In fact, you may find that you rarely make use of every field each contains.

But you may also find that there are additional fields that you’d like to see in your predefined record formats. That’s where custom fields come in. QuickBooks lets you add extra fields and specify what their labels should be.

You can define up to 12 total fields for use in customer, vendor, and/or employee records. QuickBooks treats these just as it treats your built-in fields. They appear in the records themselves, of course, and are included when you export a file containing them. You can also  search for them in reports.

People Records

There are separate processes for defining fields for your individual and company contacts and your items. Let’s look at how you can set up custom fields for customers, vendors, and employees first.

Go to your Customer Center and open a blank Customer record (in newer versions of QuickBooks, you’ll click on New Customer & Job in the upper left corner, and then click New Customer). Then click the Additional Info tab in the left vertical pane of the New Customer window, then click on the Define Fields button in the lower right. This window will open (with blank fields):

 

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Figure 1: You can create up to 12 total custom fields that will be shared by customers, vendors, and employees.

It’s easy to create your custom field labels. Simply type a word or short phrase on a line under Label, and then click in the box(es) on the same line in the appropriate column(s). While it’s possible that you would want to include the same field in multiple record types, you’ll most likely have separate labels for each.

Consider carefully before creating custom field labels. Ask yourself questions like:

  • What do I want to know about customers/vendors/employees that isn’t already covered in the pre-built record formats?
  • What kinds of information will I want to make available in report filters?
  • How will I want to separate out individuals for communications like emails, memos, special sale invitations, etc.

Remember that you’ll have to go back into existing records and fill in these blanks in order to be consistent. You’re not required to complete them, but your searches, reports, etc. will not be comprehensive if you don’t.

As always, you can consult with us if you want some suggestions.

Item Records

The custom fields we just created are generally only used internally. That is, they won’t automatically appear on sales forms, purchase orders, etc.

You may decide that some custom fields in item records, on the other hand, do need to be available on some forms. For example, you might sell shirts in multiple sizes, colors, and styles.

To start creating them, open the Lists menu and select Item List. Click the down arrow on the Item menu in the lower left, then click New. Since you will be selling similar items that you’ll be keeping in stock, select Inventory Part under TYPE. Then click on the Custom Fields button over on the right and then Define Fields.

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Figure 2: If you sell similar items that are available with different characteristics, you’ll want to create custom fields.

As you did with the earlier custom fields, enter a word or phrase under Label and then click in the Use column. After you’ve entered up to five fields, click OK.

A Complicated Process

This is where the simplicity of creating and using custom fields for items in reports and transaction forms ends. If you sell t-shirts in various sizes and colors, you’re going to need our help in order to see true inventory levels in reports and add those custom fields to sales and purchase transaction forms.

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Figure 3: Adding custom fields to QuickBooks’ standard transaction forms is possible, but you’ll need our assistance to make sure inventory tracking is set up right.

It may be that you need more inventory-tracking tools than are offered in your version of QuickBooks. If that’s the case, we can help you either add an application that will meet your needs or suggest an upgrade.

Summertime tax tip

Using the Vendor Center in QuickBooks Online

To whom do you owe money to, how much, and when? The QuickBooks Online Vendor Center answers these questions quickly.

Whoever handles Accounts Payable for your company has an unenviable job. While the Accounts Receivable person gets to send invoices and happily record payments, the A/P employee has to make sure that:

  • Complete records exist for all vendors.
  • Billing information – including due dates — is entered correctly for all accounts.
  • Bills are entered when they come in, and,
  • Bills are paid ontime (after ensuring that there’s enough money in the payment account).

Once the required data is entered and you’ve started paying bills, though, QuickBooks Online rewards you for your hard work by providing a visual roundup of your payables.

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Figure 1: Click on Vendors in QuickBooks Online, and you’ll see instantly where you stand with payables.

Standard QuickBooks Online conventions

The QuickBooks Online Vendor Center consists of several elements. A small vertical toolbar located at the very top of the screen contains links to the same functions as are found on other QuickBooks Online screens. You can search for, create, or list (recent) transactions.

In the far upper right is a navigational button represented by your company name (you’ve probably seen this before). Click on it for links to Settings, Lists, Tools, and your company information. There’s also a button that will open the QuickBooks Online help files. However, these help files don’t always fully answer questions, so let us know if you’re stumped.

Working with bills

Two additional links off to the right take you to instructions for preparing 1099s and blank vendor record screens. You can import existing vendor records in Excel and CSV formats; but please let us assist if you intend to do this, since your incoming file has to adhere to a very precise format. Fixing a file that has been imported improperly can be a very time-consuming project.

A color-coded horizontal bar near the top of the screen displays very important numbers that represent:

  • Amount on purchase orders.
  • # of Open Bills and dollar total.
  • # of Overdue Bills and dollar total, and,
  • # of bills Paid Last 30 Days and dollar total.

Click on any of these colored bars, and QuickBooks Online displays a list of related bills in the table shown below.

Using the table

QuickBooks Online follows a format for the Vendor Center that’s similar to the one found in the Customer Center. The Vendor Center table – a grid, or mini-spreadsheet — takes up the bulk of the screen.

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Figure 2: The table in the QuickBooks Online Vendor Center lets you display your vendor list using any of several sort options.

The image above shows what the left side of the table looks like. To perform a batch action, like email, on multiple vendors, you’d first click in the boxes in front of each, and then click the arrow next to Batch actions to open the menu. You can also sort by a number of fields, and search for a vendor or company.

On the right side of the table, you’ll get information on each vendor’s status, their PENDING BILLS and any outstanding BALANCE. Your ACTION options include Create Bill, Write check, and Create purchase order, in addition to, of course, Make Payment.

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Figure 3: To the right of a vendor’s name and address in the table, you can see if there are any open or overdue bills and make a payment.

The small icons in the upper right let you print, export a table to Excel, and modify the table display.

The Vendor Center doesn’t really do anything on its own besides provide information. But it contains links to vendor-related functions, and it’s one of the first places your Accounts Payable employee should check every morning.

Your vendor activity, of course, has significant impact on your company’s overall cash flow. As we prepare to mark the end of one year and the beginning of another, it would be a good idea to take a look at how well that cash flow has performed during 2014. There may be adjustments you can make to improve it in 2015. As always, this is an area where we’d be happy to provide some direction.

Please visit www.bmcgiverncpa.com for additional information.

Homeowners: Don’t make these common insurance mistakes

Catastrophes, thefts, natural disasters, accidents, fires – they happen. If such misfortunes strike, a well-researched and up-to-date homeowner’s insurance policy can keep your family’s finances afloat during trying times. Proceeds from a homeowner’s policy can provide necessary funds to replace your house and belongings. A good policy can also protect against unexpected liabilities. If you’re considering a new homeowner’s policy (or already have one), watch out for some common pitfalls, including the following:

Inadequate policy limits. Some homeowners try to lower their premiums by purchasing a policy that doesn’t fund their home’s replacement value. That’s often a big mistake. If the cost to replace your home has risen over the years and policy limits haven’t kept pace, you could end up footing the bill for much of the replacement cost (or selling your property at fire sale prices).

Personal property not documented. If you need to file a claim, an insurance carrier will want solid evidence that you owned the items being claimed. It’s a good idea to take pictures or videos of all your household goods, and keep receipts of all expensive purchases. Place copies of the pictures and receipts in a safe deposit box and at home in a fireproof safe. You might even send copies to an out-of-town friend or relative. Being able to provide clear evidence of your personal belongings will simplify the claims process and help ensure that you get paid.

Valuables not covered. Check your policy to ensure that expensive jewelry, antiques, and other valuables are included. If not, consider adding a rider to the policy that specifically lists such items.

Deductible too low. Generally, the higher the deductible, the lower the premium. True, in the event a claim needs to be filed, you’ll pay a bigger chunk of the repair or replacement cost with a high deductible. On the other hand, with a high deductible you’ll generally pay lower premiums each year.

By doing careful research and avoiding some common mistakes, your homeowner’s insurance policy will be affordable and still provide solid protection should disaster strike.