5 Ways You Can Use QuickBooks’ Income Tracker

November 28, 2014

The Income Tracker is one of QuickBooks’ more innovative features. If you’re not using it, you should be.

One of the reasons that QuickBooks appeals to millions of small businesses is because it offers multiple ways to complete the same tasks, which accommodates different work styles. Say, for example, you wanted to look up a specific invoice. You could:

  • Go to the Customer Center and select the customer, and then scan through the list of transactions,
  • Use the Find feature (Edit | Find), or
  • Create a report.

There’s also another way you can get there if you have a recent version of QuickBooks: the Income Tracker. (Note: Only the Administrator or a staff member with the correct permissions can access this feature. Talk to us about whether to allow other employees to use it, and how to set that up.)

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Figure 1: QuickBooks’ Income Tracker provides a visual overview of your company’s income.

That’s the first thing you can do with QuickBooks’ Income Tracker. To get there, either click the link in the vertical navigation bar or go to Customers | Income Tracker.

Four colored bars across the top of the screen represent unbilled estimates, open invoices, overdue invoices, and invoices paid within the last 30 days. Each bar contains two numerical values: the number of transactions of that type and the dollar amount involved.

QuickBooks defaults to displaying all types of transactions, but when you click on a bar, the screen changes to show only that type of transaction.

You can also filter the table of transactions using the drop-down lists below the colored bars. Your choices here include Customer:Job, Type, Status (Open, Paid, etc.) and Date (range). Click the arrow to the right of each filter’s label to display your options.

The column labels below these lists will change depending on the transaction type that’s active.

More Functionality

The Income Tracker is great for simply viewing groups of transactions; double-clicking on one will open the original form. You can also open them by selecting an action to take. For example, open your estimates list and click on a transaction to highlight it. Then click the arrow next to Select in the Action column at the far right end of the row.

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Figure 2: You can modify transactions like estimates from within the Income Tracker.

If you choose the first option here, QuickBooks opens a small window that asks you whether you’d like to create an invoice for 100 percent of the estimate, a percentage of it, specific items, or percentages of each item. When you make your selection and click OK, a completed invoice form opens, which you can then check over and save.

As you can see above, you can also mark the estimate as inactive, print it, or email it.

Each transaction type supports a different set of actions. In the open invoice action column, as you’d expect, you can click the option to Receive Payment, which opens the Customer Payment window with the customer and amount due already filled in. This can be edited to reflect a different amount, or you can just accept it as is, then save it.

Flexible Forms

You can even create a new transaction within the Income Tracker. Click on the arrow next to Manage Transactions in the lower left corner of the screen and select the form you want.

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Figure 3: You can open new transaction screens from within QuickBooks’ Income Tracker.

The Income Tracker also provides one of the fastest ways to print multiple forms. Just select the transactions you want to print by clicking in the box in front of them, and then click the arrow next to Batch Actions in the lower left corner.

Finally, you can edit transactions from here, too. Either double-click on one or select it and click Edit Highlighted Row in the Manage Transactions menu.

QuickBooks’ Income Tracker doesn’t do anything that can’t be done another way in the program. But it provides an excellent one-glance view of the current state of your receivables movement.

If you’re consistently seeing patterns that you don’t like, call us. We can evaluate your receivables process and suggest ways to accelerate it. Even if your sales aren’t increasing, getting that “PAID” stamp on invoices quickly will improve your cash flow and strengthen your confidence as a business manager.


A Tour through QuickBooks’ Payroll Setup Tool

November 19, 2014

Getting QuickBooks ready to process payroll is a complex, time-consuming process. Here’s what you can expect.

Payday. You look forward to it when you’re young and working at your first part-time job.

But as a grown-up who needs to start processing payroll for your employees, you probably anticipate it in a different way, perhaps even with a sense of dread. QuickBooks handles the real grunt work once you’ve done the initial setup, but those early hours you spend preparing to print your first paycheck can be challenging.

Fortunately, QuickBooks’ payroll setup tool can guide you through the process. Once you’ve signed up for payroll, open the Employees menu and select Payroll Setup.

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Figure 1: The QuickBooks Payroll Setup tool tells you’ll what information you need to supply in order to start paying employees.

Easy Operations

The first screen you’ll see in this step-by-step, wizard-like setup guide contains a link to QuickBooks’ payroll setup checklist. You don’t have to assemble all of the information you’ll need about your company, your employees, and your payroll taxes, but we recommend that you gather as much as you can before you start.

You’ll advance through setup by completing the information requested and then clicking the Continue button in the lower right (or, sometimes, Next; there’s also a Previous button available often). If you don’t have a particular detail immediately at hand, you can continue on and come back later. You’ll be able to edit your work then.

To back out of the whole process and return at another time, click the Finish Later button in the lower left.

Building a Framework

QuickBooks first wants to know about the various types of compensation and employee benefits your company offers. To start adding your Compensation options, click Add New. Click in the box in front of any pay types you support (Salary, Hourly wage and overtime, Commission, etc.) to create a check mark. When you click Next, this window opens:

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Figure 2: It’s easy to indicate the types of compensation your company offers.

Keep clicking Next after you’ve completed each screen until you come to a page that lists all of the compensation types you’ve defined. To make any changes, highlight the type and click Edit to modify or Delete to remove. Then click Continue when you’re finished.

The next section is probably the most difficult: Employee Benefits. Here, using similar interface conventions to enter information and navigate, you’ll provide information about your company’s:

  • Insurance benefits
  • Retirement benefits
  • Paid time off, and
  • Miscellaneous items (cash advance, wage garnishment, mileage reimbursement, etc.).

It’s absolutely critical that you set these up accurately, or you’ll have unhappy benefits providers – and employees. If you’re not absolutely confident of an answer, it’s better to leave an item unfinished and come back later. You may want to ask us to work with you as you complete this section.

People and Taxes

QuickBooks will then ask you about your employees. Have your W-4 forms handy for this section, as you’ll need to know Social Security numbers, birth dates, etc.

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Figure 3: On this screen, you’ll tell QuickBooks what type(s) of compensation and their dollar amounts apply to the employee.

All of those details you entered earlier about company benefits comes into play here. Once you’ve defined an employee’s compensation types and amounts, the next screen will display the additions and deductions that your company supports. You will have set up defaults for some of these, but you can modify them for individual employees.

There are numerous other details that you’ll have to supply for your staff, like how vacation and sick hours accrue, what state will want to collect taxes from them, and what their filing status is.

Unless you’ve worked with payroll before, you’re going to want our help in completing the payroll tax section. Once it’s done correctly, QuickBooks will calculate taxes due and help you pay them.

Finally, QuickBooks helps you determine whether you’ll need to enter any previous payroll data from the current year before you start to process your payroll in the software.

Whether you’re switching from manual payroll or a payroll service, or simply getting ready to pay your first employee, QuickBooks payroll-processing tools can help you save time and foster accuracy – as long as you get the details from the start.

 


Is it a Business or a Hobby? 9 Questions to Ask

November 14, 2014

The IRS takes the distinction very seriously.

Many small businesses start out as casual pastimes. You help troubleshoot your friends’ computer problems in your spare time, and they start telling their friends and business contacts about you. Or you use your woodworking skills to build furniture for non-profit organizations or your sewing skills to make one-of-a-kind dolls for the neighbor kids.

Word gets around that you’re good at what you do, but you can’t keep doing it for free. You have to start charging for your time in addition to the materials required.

TaxTips0714image1_zps75948977There’s a point at which the Internal Revenue Service would consider you a business, obligating you to report your income and expenses on IRS forms and schedules come tax-filing time. So how do you know when you reach that point?

A Good Problem

If you’re in such a situation, whether you’re trying to parlay something you produce into a full-time business or you’re just doing it in your free time, ask yourself nine questions. This is a bit of a gray area, but the IRS looks at a number of factors in order to determine your status.

  • Do you conduct yourself in a businesslike manner?
  • Do your time and effort imply that you’re trying to make your related activities profitable?
  • Is the income you bring in necessary for your livelihood?
  • Are your losses the result of events that are out of your control, or are they normal losses that occur when a business is launched?
  • Do you alter your production or service methods to try to be more profitable?
  • Do you – or anyone else involved in the enterprise – have the skills and knowledge required to make your business a success?
  • Have you ever made a profit creating similar products?
  • Are you making a profit — some years, at least? How much?
  • Do you anticipate continuing to make a profit in the future, based on what you’re producing?

The IRS does notTaxTips0714image2_zps72aa1222 consider just one of these factors when determining whether or not you need to file. Nor is its decision based solely on your answers to these nine questions.

It’s an all-or-nothing deal. You can’t claim deductions on your tax return for what the IRS calls an activity not engaged in for profit. In other words, you can’t deduct any expenses you incur for participating in a sport, hobby or other recreational activity unless you’re filing as a sole proprietor or small business. And if you file as a sole proprietor or small business, you also have to deal with the other side of the equation and pay taxes on any income you receive.

A Smart Beginning

If you’ve reached the point where you’re thinking you’d like to take on the legal obligations of being a business as well as participate in the benefits of such a venture, give us a call. You’ll have to make decisions about how to run the business, such as the tax structure of your enterprise, for example. You’ll be filing additional IRS documents, and you’ll need to start estimating your quarterly payments in order to avoid paying an unanticipated tax bill on April 15.

All of this may sound a little daunting, but we can walk you through the steps necessary to launch a new business venture. It takes some work at the start and as you continue to meet your IRS-related responsibilities. But you’ll also have the satisfaction of knowing that you’ve finessed a hobby, skill, or interest into a legitimate, successful business.


Age Has Its Privileges: Income Tax Issues for Seniors

October 31, 2014

The majority of tax laws apply regardless of age, but some are different if you’re 65 or older.

By the time you turn 65, you’ve probably already started enjoying some benefits reserved for senior citizens. Restaurants, exclusive living communities, entertainment venues – many businesses start offering discounts at 55.

TaxTips0614image1_zpse1892805You may have already have retired and/or started to draw Social Security. Your health care benefits will change significantly on your 65th birthday as you enroll in Medicare.

And what about income taxes? Yes, you still have to file and pay income taxes. Your income is still considered taxable unless it is exempt for some reason. At 65, you may still be receiving compensation for services or some other kind of business income, but the bulk of your money may be coming from sources like rents and royalties, interest and dividends, property sales, and estates and trusts.

Much of your tax preparation will be the same for the year you turn 65, but some things will be different. We’d be happy to go over these in detail at any time. The sooner the better, actually, if 2014 is the first year you’ll be filing as a senior. Then we can start making plans now for any adjustments that might fall in your favor.

Here are some of the areas in which your tax return may be a little different when you turn 65 and/or retire:

Deductions

If you are 65 or older, you can take a higher standard deduction than you did previously.

Note: The IRS considers you 65 the day prior to your actual 65th birthday.TaxTips0614image2_zps695176c7

Retirement Plan Distributions

There are so many different kinds of distributions, and the filing requirements are all so different, that you should really sit down with us before you start receiving them. That way, you’ll be able to make at least some rough income and expense projections (if you haven’t already done so as a part of an overall retirement plan). The IRS has strict, complex rules here, and you’ll want to stay in compliance to avoid any penalties.

Estimated Taxes

Whether or not you paid estimated taxes when you were working, it’s possible you’ll be required to pay them in retirement. Providers generally withhold taxes on pensions and annuities, but if you end up owing money when you file, you may be required to pay estimated taxes (unless you can adjust your withholding to cover the shortfall).

Social Security

TaxTips0614image3_zpsef6adecaIt’ll be nice to have another steady, reliable income stream, but your Social Security benefits will be taxed. If you opt to not have taxes withheld from your Social Security payments, you’ll either have to compensate for them elsewhere or pay estimated taxes.

Medicare

Medicare benefits are not considered income.

Start Now

Gone are the days when a large portion of the population worked for the same company for decades and retired with a nice employer-subsidized pension. 401(k)s, which are portable and only partially employer-subsidized, are replacing that model.

According to one source, one out of four individuals younger than 65 is not saving money for retirement at all. If you fall into this group, or if you’re in the even larger group that is saving but unsure they’ll have enough to retire, you owe it to yourself and any heirs you may have to start now, no matter how minimal your contributions.

We’d be happy to look at your current financial situation and hear about your retirement goals and dreams. Together, we can start piecing together a plan that will give you more confidence in your ability to retire young enough to enjoy your senior years.

 



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