Personal Finance guide

Before a donor can claim a tax deduction for any single contribution of $250 or more, the IRS requires a written acknowledgement of the contribution from the nonprofit organization. Nonprofit organizations typically send these acknowledgments to donors no later than January 31 of the year following the donation.

QuickBooks Premier for Nonprofits has a nice built-in report called Donor Contribution Summary which can be used by many nonprofits to prepare their year-end donation acknowledgement statements. However, this report includes all revenue including fees for services that aren’t tax deductible. But you can create a custom report in QuickBooks that excludes these fees. Here are the instructions:

Continue reading ‘How to Prepare Year-End Donation Acknowledgement Statements in QuickBooks’ »

Accurate job costing is one of the most critical tasks for managing job-based business like construction companies, professional services firms, and even nonprofits that are awarded grants. Many owners put it off because it seems too complicated or time-consuming. But if you’re serious about helping your business grow and prosper, it’ll help you:

- Analyze how each of your jobs us doing financially

Continue reading ‘How to Use QuickBooks for Job Costing: Setting Up Preferences and Items’ »

Many businesses think estimating is useful to only construction companies. But any company that produces estimates, quotes, bids, and proposals can use QuickBooks to get a handle on their job costing. The accuracy of your estimating process can make or break your project success. It is critical because if your estimate is too high you might lose the job, while estimates that are too low can reduce your profits or even make you lose money on a job.

However, you can reduce your risk and increase profits by using QuickBooks for estimating. Even if you don’t provide your clients with estimates, you need to enter them in order to get the most out of the QuickBooks job costing reports. These reports, especially the Job Estimates vs. Actuals reports, are the key to making sure your existing job budgets are on track. They are also important when evaluating the accuracy of your estimates so you can make adjustments for future projects. They are also required if you want to do progress invoicing.

This is the second of a four-part series about how to use QuickBooks for job costing. Intuit, the creators of QuickBooks, has also asked me to present a series of free Small Business Town Hall covering the same topics every Tuesday this month. This is your chance to get your job costing questions answered live. You can get more information here:

http://www.theqbspecialists.com/quickbooks_training.php

Continue reading ‘How to Use QuickBooks for Job Costing: Working with Estimates’ »

We’ve been seeing a surge in corrupted QuickBooks data files lately. Here are some of the signs that you’ve got a problem:

- Error messages, such as “Company file in use, please wait”, invalid protection faults, fatal or unrecoverable errors
- Transactions can’t be saved or QuickBooks suddenly shuts down when saving a transaction
- Incorrect data on reports, such as missing transactions, negative amounts in accounts that should be positive, unbalanced balance sheets, etc.
- Missing accounts on your chart of accounts or missing names on your lists

Not experiencing any of these problems yet? Press F2 to open the Product Information screen and check the number to the right of DB File Fragments – if it’s higher than 10 it’s just a matter of time.

It’s extremely important not to ignore the signs because once a file is corrupted your company file may suddenly freeze up and won’t open. In this case, you usually have no choice but to either restore a backup (you are backing up your QuickBooks file often, right?) or send the file to Intuit’s data recovery team which offers no guarantee and often had a 2 week backlog. If you’re in a hurry (and, really, who can afford to be without their file for 2 weeks?) they do offer to expedited service for $750.

Sound unappealing? You may want to start proactively working on keeping your QuickBooks data file healthy. One of the easiest ways is to frequently verify your data. You can do this manually at File > Utilities > Verify Data but it’s even better if you run it as part of a regular QuickBooks backup. QuickBooks makes it easy by automatically reminding you to back up your file after a certain number of company file closes. For instance, if you want to verify once a week and you open your file once per day, you can set QuickBooks to backup with complete verification (this is important) when you close your company file 5 times. You can set your options at File > Save Copy or Backup, select Backup copy and click on Options.

Continue reading ‘QuickBooks Tip: Fixing Corrupted Data Files’ »

We’re pleased to announce that Intuit has released the new QuickBooks Point of Sale/POS 9.0 and the new features are impressive:

Ringing Up Sales

• Customers can be assigned in the Simple Receipt View. Customers can now be assigned to receipts using the Simple Receipt view, and workflows that require customers such as redeeming rewards or using charge accounts are also supported.
• Coupons can be scanned/entered on receipts. Coupons can now be defined along with other discount types and automatically applied to items on a sales receipt by scanning or entering the number.
• Coupons can be printed with Sales Receipts. To encourage return visits, you can optionally print coupons along with receipts based upon criteria such as frequency, sales amount, and more.
• Prompt to email sales receipts. You can optionally prompt to email receipts when they are completed. For those customers that do not have an e?mail address recorded, it can be entered at the time the receipt is completed.
• Customer PO#s can be recorded on sales receipts. When selling to companies you can record the customer’s Purchase Order number for later invoicing from QuickBooks.
• Quick-add items while ringing up sales. When ringing up a sales, you can quickly add an item not already in your inventory through a simplified item dialog, then go back in to add more detailed information later as necessary.

Continue reading ‘What's New in QuickBooks Point of Sale/POS 9.0’ »

Every October, right after Intuit releases new versions of QuickBooks, we get questions from users about whether QuickBooks QuickBooks Pro or QuickBooks Premier is the better fit.

Our first question is always – which edition of Premier are you considering. We ask because some of the extra features are specific to certain editions. For instance, the Contractors edition has enhanced change orders and tracking of subcontractor insurance expiration dates. Because of the difference between versions, we usually recommend that our clients purchase the Accountants edition, which allows you to toggle between all the editions.

We work with a lot of job costing clients (contractors, builders, architects, engineers, nonprofits that have grants, etc.) and though they love the additional reports that come with the Contractors, Professional Services and Nonprofit editions it’s the little things that make them switch.

The biggest, and most surprising, reason – you can turn estimates and sales orders into purchase orders with a click of a button. It’s hidden under the Create Invoice button, but once they discover it they’re in heaven. No more double-entry, no more data entry errors. Speaking of sales orders, that’s another reason why they switch – you don’t get them in Pro (note: you can also turn Estimates into Sales Orders). They also really like the Invoice for Time & Expenses feature. Yes, you can do the same thing on individual invoices by clicking Add Time/Costs, but they often forget to check all the tabs and if you’re using job costing correctly there will likely be billable expenses on the Items tab.

Continue reading ‘QuickBooks Premier vs. QuickBooks Pro’ »

Setting up your QuickBooks accounting software may seem like an easy task, but when it comes to your financial records as a business owner or manager it is imperative to have accurate financial information to run you business properly. If you are an individual who has knowledge of accounting and the process of keeping track of your finances, you should have no problems setting up QuickBooks for you business. For those who are not aware of the accounting process, you can save time, money and avoid the frustrations and worries by having it set up right the first time.

Hiring a professional to assist you with the process is a small investment compared to submitting unorganized financial statements to your accountant at tax time and having them charge you additional fees to correct your mistakes.

Continue reading ‘Need Help Setting Up QuickBooks?’ »

Intuit has announced that it will only support QuickBooks 2010 in the Windows 7 environment – no other version of QuickBooks will be supported. Due to this and the fact that we’ve experienced considerable trouble with QuickBooks and various add-ons after we upgraded to Windows 7, we recommend that everyone think twice before doing the same.

We do have to admit, however, they we have a very complicated QuickBooks setup. Because, for the most part, QuickBooks is not backwards-compatible we have four versions of QuickBooks Premier (2007-2010), four versions of QuickBooks Enterprise (v7.0-v10.0) and four versions of QuickBooks Point of Sale/POS (v6.0-v9.0) installed. Even more importantly, as it turns out, we chose to upgrade instead of do a clean install because we just couldn’t stand the thought of having to re-install all of our programs again. This was one of the selling points of Windows 7, right?

Well, we ended up having to uninstall/re-install all of our QuickBooks versions anyway – and we still don’t have QuickBooks Enterprise 10.0 working correctly. So our recommendation is to wait until you buy a new computer before tackling this upgrade. Then at least you’ll have a good reason to re-install all of your programs.

In the meantime, we will continue supporting all non-sunsetted versions of QuickBooks regardless of your operating system. Just note that Intuit’s techs will no longer be one of our resources if you’re using Windows 7 and an earlier version of QuickBooks.

Continue reading ‘QuickBooks and Windows 7’ »

We’re pleased to announce that QuickBooks Enterprise 10.0 has been released. Businesses on the Full Service Plan will automatically receive their upgrades over the next few weeks. Here are the new features you can look forward to:

More Custom Fields with Improved Reporting (only available in QuickBooks Enterprise 10.0)

You know better than anybody what business data you need to track and how you want to use it. More custom fields have been added to QuickBooks Enterprise Solutions for customers, vendors, employees and items so you can capture, track and report on the unique data you need. Set custom fields to accept certain formats such as date, phone number, or select from list to reduce data input errors and improve the quality of your data output. Plus use advanced filtering and sorting to run reports on the custom field information you care about

• Track information with two to three times more custom fields for customers, vendors, employees, and items. Create up to 15 custom fields for items and up to 30 to be used across customers/employees/vendors
• Set custom fields to accept certain formats (e.g., dates, phone number, dropdown lists) to improve the accuracy of data input and output
• Use advanced filtering and sorting to run reports on the custom field information you care about.

Rapidly Add or Edit Multiple List Entries from One Spreadsheet View

Save time by entering and editing your customers, vendors, item, or account information in bulk. You can even copy and paste data from other spreadsheets.

Change Assembly Components on the Fly (only available in QuickBooks Enterprise 10.0)

Save time with new enhancements to Inventory Assemblies. Change quantity and item components on the fly to make substitutions or accommodate special customer requests. Add custom fields, such as serial or lot numbers, to track builds more closely than ever before. Plus print your build assembly with the click of a button and see the quantities needed to accurately build a job.

• Quickly, easily edit quantity and item components to make substitutions/accommodate special requests
• Add custom fields to assemblies, and track builds more closely than ever before. Add serial or lot numbers to assemblies, then search and report on which items you are consuming over time
• Print your build assembly with the click of a button – employees can see the quantities needed to accurately build a job
• Improve efficiency by batch printing your assemblies.

Continue reading ‘What's New in QuickBooks Enterprise 10.0’ »

The days when a small business could ignore the risks of having misclassified workers are over. Unfortunately, some employers improperly classify their employees as independent contractors to avoid the pain associated with having employees, namely:

• Payroll taxes
• Minimum wage or overtime requirements
• Other wage and hour law requirements, like providing meal periods and rest breaks
• Reimbursable business expenses employees incur in performing their jobs

Additionally, employers don’t have to cover independent contractors under workers’ compensation insurance, and are not liable for payments under unemployment insurance, disability insurance, or social security.

It’s true, the expenses associated with employees are high. However, the cost of misclassifying workers is even higher. If your contractors are determined to really be employees you will not only be required to pay the taxes and fees you should’ve, you may also be required to pay the employee’s taxes as well. Not to mention the stiff penalties and interest that can be imposed by both federal and state agencies for violating the various laws.

This is no small matter and is on the radar of every government agency out there, all of whom are anxious to find additional revenue sources these days. The IRS estimates that one in seven U.S. employers is guilty of misclassifying some of its employees, resulting in a loss of more than $4.1 billion a year in tax revenues. These days the question is no longer “if” you’ll get audited for employee misclassification it’s “when”.

For businesses facing an audit, the odds favor the IRS. A recent report found that 92 percent of the companies audited for “misclassification” were hit with significant penalties and assessed for back taxes. Between 1988 and 1995, the IRS audited more than 13,000 businesses, reclassified 500,000 of their independent contractors as employees, and levied $830 million in back taxes and penalties.

Making matters worse, sometimes the various agencies disagree. For instance, here in California there are several state agencies involved with the determination of independent contractor status: (1) the Employment Development Department (EDD), which is concerned with employment-related taxes, (2) the Division of Labor Standards Enforcement (DLSE), which is concerned with whether the wage, hour and workers’ compensation insurance laws apply; (3) the Franchise Tax Board (FTB), which is concerned with state income taxes; (4) the Division of Workers’ Compensation (DWC), which is concerend with worker’s compensation; and (5) sometimes even the Contractors State Licensing Board (CSLB), that also have regulations or requirements concerning independent contractors and it’s not uncommon for one to rule that a worker is an employee while another rules that the same worker is an independent contractor.

Because the potential liabilities and penalties are so significant if an individual is treated as an independent contractor and later found to be an employee, each individual working relationship needs to be thoroughly analyzed to make sure every single worker is properly classified. Now is not the time to group classes of employees together. Just because one of your workers qualifies as an independent contractor, don’t assume that all the others doing similar work will.

It all boils down to control – does your business have control or the right to control the worker both as to the work done and the manner and means in which it is performed? The IRS breaks control down into three categories: behavioral control, financial control, and relationship of the parties. It is very important to consider all the facts for every single one of your worker relationships – no single fact provides the answer.

Behavioral Control

These facts show whether there is a right to direct or control how the worker does the work.

• Instructions – if your business has the right to direct or control the work, even if you don’t actually exercise the right, it can lead to an employee classification. Here are a few examples of what’s considered control:
  • how, when, or where to do the work
  • what tools or equipment to use
  • what assistants to hire to help with the work
  • where to purchase supplies and services
• Training – if your business provides training about required procedures and methods it may be considered an indication that the business wants the work done in a certain way, which can lead to an employee classification

Continue reading ‘QuickBooks Tip: Employees vs. Independent Contractors’ »