Header Right

Quickbooks

Managing Products and Services in QuickBooks Online

by

Customers may be the lifeblood of your business, but they wouldn’t exist without the products and services you sell. It doesn’t matter whether you’re a mineral specimen dealer who does one-off sales, a reseller who sells items you make or buy wholesale in large lots, or a provider of services. You must always know what you have available to offer buyers – goods, designing websites, or offering lawn care services in your community, for example.

QuickBooks Online can keep you in the know about what you have available to sell, and it can manage the forms and transactions you need to do business with your buying audience. If you were doing your accounting and customer management manually, you might be using index cards and large wall calendars and file folders stuffed with product lists and schedules. You’d spend a lot of time digging through item drawers and closets, counting your inventory by hand, and shuffling paper invoices and sales receipts and payment documentation.

Instead, what if all of that is automated, saving time, reducing errors, and increasing your chances of success? Here’s a quick look at some of the basics.

Are You Ready?

We’ve written about product and service management a lot. So you should know that to get ready to sell, you have to have made sure QuickBooks Online is set up to handle any inventory you might have. Click the gear icon in the upper right corner and then click Account and settings under Your Company. Click Sales in the toolbar and scroll down to Products and services. Make sure the first, fourth, and fifth options are turned on, as pictured below (the other two are optional). If they’re not, click the pencil icon in the upper right corner and change them. Be sure to click Save when you’re finished, then Done in the lower right corner.
Make sure your Products and services settings are correct.

Have you created your product and service records? You can do this on the fly as you’re entering transactions, but it’s much better to do it ahead of time. That way, too, you’re not as likely to skip the details, which will be important later on when you’re running reports, for example. We’ve gone over the steps before. Click New in the upper left corner, then Add product/service under Other. A vertical panel slides out from the right, and you simply select from options and enter data.

Warning: Be very precise when you’re dealing with inventory information. If you haven’t gone through this process before, it might be worth scheduling a session with us to go over this important step.

Using Your Records in Transactions

Let’s go through the process of entering a sales receipt. Click New in the upper left corner, and then Sales receipt under Customers. . Choose a Customer from the drop-down list and complete any other fields necessary in the upper section of the form. Select the Service Date in the first column by clicking the calendar, then select the Product/Service in the next column (or click + Add new). The Description should fill in automatically.

QuickBooks Online provides inventory information as you’re completing sales forms.

The QTY (quantity) defaults to 1. If you mouse over or click in that field, a small window will pop up containing numbers for Qty. on hand and Reorder point, as pictured above.

Tip: If you know that you have more in stock that is showing, you can cancel out of the transaction, find the item record in the list on the Products & services page, and click Edit at the end of the row. You’ll be able to adjust the quantity or the starting value. Be very careful with this. Please contact us if you’re not very confident about how to handle this.

Enter any additional items and/or services needed and save the transaction.

The Products and Services Page

QuickBooks Online offers numerous reports related to products and services and inventory tracking (you’ll find them under Reports | Sales and customers), but you can learn a lot from the Product and Service page (Sales | Products and Services). At the top of the screen (where you can’t miss them) are two colored circles containing the number of items that are Low Stock or Out of Stock.

This important information appears at the top of the Products and Services page.

Click on either of these, and the list below will change to only display these items. You can get a lot of information about your products and services on this page, including Sales Price and Cost, Qty On Hand, and Reorder Point. You can also create new records or import databases of records in CSV, Excel, and Google Sheet format. We can help you prepare to do this.

Your business depends on accurate, real-time information about your inventory, and QuickBooks Online can supply it. This element of the site, though, requires precision and regular upkeep. If you’re struggling with it, let us step in and help. We’re available to troubleshoot one-time problems, but we can also take a more active role in your accounting.

How to Set Up a Bookkeeping Cycle in QuickBooks Online

by

Young female financier with calculator working inside office at workplace, businesswoman behind paper work satisfied smiling, good achievement results, working with contract, accounts and charts.

Do you have a regular schedule you follow with your QuickBooks Online work? It can be a good strategy.

Bookkeeping is cyclical. You tend to do the same things over and over, which may get to be a bit of a drag for you. QuickBooks Online can automate some processes, and it certainly helps minimize duplicate data entry, but you’ll undoubtedly find yourself growing weary of repetitive tasks.

We can’t help you avoid this drudgery completely, but we’d like to suggest a new, more organized way to attack your accounting tasks in 2025. It could be especially helpful if you’re a new QuickBooks Online user and don’t have a routine established yet. But even long-time users might find this routine helpful. It can keep things from slipping through the cracks and simply make you more productive and confident that you’re addressing all of your accounting issues.

Give it a try and see what you think.

What Should You Do Every Day?

Even if you don’t have expenses to enter or invoices to process, it’s a good idea to log into QuickBooks Online every day. If you’ve connected your online bank and credit cards to the site (which you absolutely should), there will probably be transactions to go over. So after you’ve taken a look at your Dashboard (especially your Tasks), hover your mouse over Transactions in the toolbar and click Bank transactions.

Click Update in the upper right to make sure you’re seeing the most recent transactions. If you’re doing this every day, it shouldn’t take long to go over the income and expenses that have been imported since you last logged in.

You should be looking at newly imported transactions daily and completing the fields provided as comprehensively as possible.

If you don’t know what Match or Record as transfer mean, we should schedule a session to go over transaction management in QuickBooks Online.

Every Week

You need to be monitoring your accounts receivable and payables on a weekly basis – at minimum. There are two ways to do this. You can:

Run reports.

• Click Reports in the toolbar and scroll down first to Who owes you. Run Accounts receivable aging summary. QuickBooks will display past-due transactions in several columns (Current, 1-30 days, 31-60 days, 61-90 days, and 91 and over). If you’re keeping up with your receivables, you shouldn’t be seeing numbers in most of the columns, unless you’re in a known collections process.

• Scroll down to What you owe and run Accounts payable aging summary. This works like the aging receivables report. Again, you shouldn’t be seeing much activity here unless you’re in a payment dispute with a vendor.

• You can also run the Open Invoices report to quickly see the Due date and Open balance entries here. Ditto the Unpaid Bills report.

Consult the All sales page.

Hover your mouse over Sales in the toolbar and click All sales. The colored bars and numbers at the top of the page show you the status of your sales. Click the orange bar in the middle to see a list of overdue invoices. If there are any, you can set a Send reminder by clicking the corresponding down arrow in the Action column. While you’re there, look at estimates and unbilled income and take any action needed.

Every Two Weeks (or more often, depending on product volume)

If you sell products and track inventory in QuickBooks Online, you should keep a close eye on your stock to see if you need to:

• Reorder,

• Bring in a larger supply because something is selling well, or,

• Discount or discontinue a product because it’s not selling.

Click Reports in the toolbar and run Product/Service List under Sales and customers and look at the Quantity on hand column.

Every Month

Reconcile your accounts (Transactions | Reconcile).

It’s really, really important that you reconcile your accounts every month. We can help you with this.

No one likes to do this, but it’s way easier to do regular reconciliations than it is to have to go back several months to track down a problem. If you’ve never done this in QuickBooks Online, it works similarly to how you used to reconcile your accounts by comparing a bank statement and your paper checkbook register. Only you’re comparing your bank or credit card statements to your accounts in QuickBooks Online. Before you start, make sure you’ve matched and categorized all of your downloaded transactions.

Run a Profit and Loss report for the last month.

Click Reports in the toolbar and click Profit and Loss under Business overview. Did you make a profit last month?

Every Quarter

If you’re planning to apply for a loan or looking for an investor, or if you just want a deeper understanding of how your business is doing, consider having us create and analyze standard financial reports for you, like the Balance Sheet and Statement of Cash Flows. You can run these yourself in QuickBooks Online, but it really takes an accountant’s eye to understand and interpret them.

If you decide that you want to work with us in any capacity, like helping you with reconciliation and/or modifying your Chart of Accounts, there’s another way we can help. If you ever have trouble categorizing an expense, select Uncategorized Expenses as the Category. If we’re meeting with you once a month, we can run a report on these and help you categorize them correctly.

Is Your Favorite Pastime Turning Into a Small Business? The IRS Wants to Know.

by

Young serious man looking at laptop. Man learning new hobby, knitting on needles. Knitting project in progress. - ImageIf you’re making $400 or more on your hobby, it’s time to start declaring it on your income taxes.

We take on hobbies because we enjoy them. But at some point, we sometimes get enough people wanting the woven towels or the birdhouses or the Christmas ornaments we make that it’s time to start charging for them. Supplies cost money, and your time is certainly worth something.

A lot of people get started that way. Before you know it, they’ve set up a shop on Etsy and started exhibiting at craft shows. At what point does this become a business, they may ask themselves.

If you’re bringing in $400 or more per year on your side gig, you should know that there are two good reasons why you should be reporting your business on your Form 1040:
• You’ll be able to deduct at least some of your expenses, and,
• The IRS mandates it.

8 Questions

When your hobby becomes a small business, you’ll have to complete and file a Schedule C with your 1040.

If your personal enterprise has turned a profit in three of the last five years, it’s quite likely that your creative endeavors have become something that requires a Schedule C along with your 1040. The IRS suggests that you ask yourself eight questions to help determine whether it considers you a business and not a hobby. They go something like this:

1.   Does the time and effort you put into the activity show you intend to make a profit?

2.   Does the activity make a profit in some years, and if so, how much profit does it make?

3.   Can you expect to make a future profit from the appreciation of the assets used in the activity?

4.   Do you depend on income from the activity for (at least part of) your livelihood?

5.   Are any losses due to circumstances beyond your control or are the losses normal for the startup phase of your type of business?

6.   Do you change your methods of operation to improve profitability?

7.   Do you carry out the activity in a businesslike manner and keep complete and accurate books and records?

8.   Do you and any advisors you might work with have the knowledge needed to carry out the activity as a successful business?

How Will You Report Your Income?

Depending on how much money you make and where/how you sell your products, you may receive a 1099 of some sort. If you accept credit cards, it will most likely be the 1099-K: Payment Card and Third-Party Network Transactions. If you take checks and cash, you’ll have to add it all up yourself. Keep any documentation you have if this is the case. You’ll report this on your Schedule C.

How Will You Know If An Expense Is Deductible?

Some business expenses are obvious. If you’re making birdhouses, for example, everything you buy to assemble them should be considered part of your Cost of Goods Sold. If you’re buying products wholesale and reselling them, that should be deductible, too.

But there’s a lot of gray area. The IRS says that legitimate business expenses are those that are “ordinary and necessary.” An ordinary expense is one that is typical and widely accepted in your industry. A necessary expense, on the other hand, is one that is useful and appropriate for your business operations. An expense doesn’t need to be essential to qualify as necessary.

Some small business owners really stretch the interpretation of “ordinary and necessary.” There’s a famous case where a company that had a warehouse tried to deduct the cost of cat food. The contents of the warehouse were attracting rodents and snakes, and they wanted to feed stray cats who would keep the population of unwanted visitors down. The IRS accepted it as a legitimate business expense.

Our point here is not that you should try to find some outlandish business expenses to deduct. But we want you to really think about what it costs you to do business. If you’re ever audited, you’ll have to make a case to the IRS about why you claimed a particular purchase as necessary for your business. Keep meticulous records of your purchases.

On to a New Year

Keep these things in mind as we move into a new year – and tax preparation season. You may want to consider reclassifying your hobby as a business and filing a Schedule C with your 1040. We’re not IRS auditors, of course, so we can’t tell you whether a certain purchase will be considered a deductible business expense. But we can help you deal with the tax-related issues you’ll face should you decide it’s time for you to start claiming income and expenses for your pastime-turned-business.

Getting Started with Reports in QuickBooks Online

by

qb-progress-invoicingYou should be running reports in QuickBooks Online on a weekly—if not daily—basis. Here’s what you need to know.

You can do a lot of your accounting work in QuickBooks Online by generating reports. You can maintain your customer and vendor profiles. Create and send transactions like invoices and sales receipts, and record payments. Enter and pay bills. Create time records and coordinate projects. Track your mileage and, if you have employees, process payroll.

These activities help you document your daily financial workflow. But if you’re not using QuickBooks Online’s reports, you can’t know how individual elements of your business like sales and purchases are doing. And you don’t know how all of those individual pieces fit together to create a comprehensive picture of how your business is performing.

QuickBooks Online’s reports are plentiful. They’re customizable. They’re easy to create. And they’re critical to your understanding of your company’s financial state. They answer the small questions, like, How many widgets do I need to order?, and the larger, all-encompassing questions like, Will my business make a profit this year?

Getting the Lay of the Land

Let’s look at how reports are organized in QuickBooks Online. Click Reports in the toolbar. You’ll see they are divided into three areas that you can access by clicking the labeled tabs. Standard refers to the comprehensive list of reports that QuickBooks Online offers, displayed in related groups. Custom reports are reports that you’ve customized and saved so you can use the same format later. And Management reports are very flexible, specialized reports that can be used by company owners and managers. QBO tips

A partial view of the list of QuickBooks Online’s Standard reports.

Standard Reports

The Standard Reports area is where you’ll do most—if not all—of your reporting work. The list of available reports is divided into 10 categories. You’re most likely to spend most of your time in just a few of them, including:

  • Favorites. You’ll be able to designate reports that you run often as Favorites and access them here, at the top of the list.
  • Who owes you. These are your receivables reports. You’ll come here when you need to know, for example, who is behind on making payments to you, how much individual customers owe you, and what billable charges and time haven’t been billed.
  • Sales and customers. What’s selling and what’s not? What have individual customers been buying? Which customers have accumulated billable time?
  • What you owe. These are your payables reports. They tell you, for example, which bills you haven’t paid, the total amount of your unpaid bills (grouped by days past due), and your balances with individual vendors.
  • Expenses and vendors. What have I purchased (grouped by vendor, product, or class)? What expenses have individual vendors incurred? Do I have any open purchase orders?

The Business Overview contains advanced financial reports that we can run and analyze for you. The same goes for the For my accountant reports. Sales tax, Employees, and Payroll will be important to you if they’re applicable for your company.

Working with Individual Reports

QBO tips

Each individual report in QuickBooks Online has three related task options.

To open any report, you just click its title. If you want more information before you do that, just hover your cursor over the label. Click the question mark to see a brief description of the report. If you want to make the report a Favorite, click the star so it turns green. And clicking the three vertical dots opens the Customize link.

When you click the Customize link, a vertical panel slides out from the right, and the actual report is behind it, grayed out. Customization options vary from report to report. Some are quite complex, and others offer fewer options. The Sales by Customer Detail report, for example, provides a number of ways for you to modify the content of your report so it represents exactly the “slice” of data you want. So you can indicate your preferences in areas like:

  • Report period
  • Accounting method (cash or accrual)
  • Rows/columns (you can select which columns should appear and in what order, and group them by Account, Customer, Day, etc.)
  • Filter (choose the data group you want represented from several options, including Transaction Type, Product/Service, Payment Method, and Sales Rep)

Once you’ve run the report, you can click Save customization in the upper right corner and complete the fields in the window that opens. Your modification options will then be available when you click Custom reports, so you can run it again anytime with fresh data.

QBO tips

You can customize QuickBooks Online’s reports in a variety of ways.

We’ll go into more depth about report customization in a future issue. For now, we encourage you to explore QuickBooks Online’s reports and their modification options so that you’re familiar with them and can put them to use anytime. Let us know if you have any questions about the site’s reports, or if you need help making your use of QuickBooks Online more effective and productive.

How QuickBooks Online Helps You Track Mileage

by

qb-recordsWith gas prices so high, you need to track your travel costs as closely as possible. Consider getting a tax deduction for your business mileage.

If you drive even a little for business, it’s easy to let mileage costs slide. After all, it’s a pain to keep track of your tax-deductible mileage in a little notebook and do all the calculations required. If you do rack up a lot of business miles, you probably forget to track some trips and end up losing money.

QuickBooks Online offers a much better way. Its Mileage tools include simple fill-in-the-blank records that allow you to document individual trips. You can either enter the starting point and destination and let the site calculate your mileage and deduction or enter the number of miles yourself.

If you use QuickBooks Online’s mobile app, it can track your miles automatically as you drive (as long as you have the correct settings turned on). Here’s a look at how all of this works.

Setting Up

To get started, click the Mileage link in QuickBooks Online’s toolbar. The screen that opens will eventually display a table that contains information about your trips, but you need to do a little setup first. Click the down arrow next to Add Trip in the upper right corner and select Manage vehicles. A panel will slide out from the right. Click Add vehicle.

quickbooks online tips

You’ll need to supply information about your vehicles before you can start entering trips.

You’ll need to supply the vehicle’s year, make, and model. Do you own or lease it, and on what date was the vehicle purchased or leased and put into service? Do you want to have your annual mileage calculated by entering odometer readings or have QuickBooks Online track your business miles driven automatically? When you’re done making your selections and entering data, click Save.

Entering Trip Data

You can download trips as CSV files or import them from Mile IQ, but you’re probably more likely to enter them manually. Click Add Trip in the upper right corner. In the pane that opens, you’ll enter the date of the trip and either the total miles or start and end point. You’ll select the business purpose and vehicle and indicate whether it was a round trip. When you’re done, click Save. The trip will appear in the table on the opening screen, and your current possible total deduction will be in the upper left corner, along with your total business miles and total miles.

If you want to designate a trip as personal, click the box in front of the trip in that table. In the black horizontal box that appears, click the icon that looks like a little person, then click Apply. Now, the trip will appear in the Personal column and will not count toward your business tax-deductible mileage.

quickbooks online tips

When you select a trip in the Mileage table, you can mark it as personal so it’s not included in your business tax-deductible miles.

Personal Trips Can Count, Too

If you use your vehicle(s) for personal as well as business purposes, tracking some of those miles can also mean a tax deduction. For tax year 2022, you can deduct 18 cents per mile for your travel to and from medical appointments. Note: Medical mileage is only deductible if medical exceeds a certain percent of AGI. Be sure to check with the IRS yearly tax code, as they update the mileage amounts annually.

And if you do volunteer work for a qualified charitable organization, the miles you drive in service of it can be deducted at the rate of 14 cents per mile. You can also claim the cost of parking and tolls, as long as you weren’t reimbursed for any of these expenses. Obviously, the IRS wants you to keep careful records of your charitable mileage, and QuickBooks Online can provide them.

QuickBooks Online doesn’t track these deductions, but you’ll at least have a record of the miles driven.

Auto-Track Your Miles

The easiest way to track your mileage in QuickBooks Online is by using its mobile app. You can launch this and have it record your mileage automatically as you’re driving. Versions are available for both Android and iOS, and they’re different from each other. They also have more features than the browser-based version of QuickBooks Online, like maps, rules, and easier designation of trips as business or personal.

quickbooks online tips

The iOS version of Mileage in the QuickBooks Online app

In both versions, you’ll need to click the menu in the lower right corner after you’ve opened the QuickBooks Online app and select Mileage. Make sure Auto-Tracking is turned on. Your phone’s location services tool must be turned on, too. There are other settings that vary between the two operating systems. You can search the help system of either app to make sure you get your settings correct if the onscreen instructions aren’t clear enough.

Of course, you won’t see the fruits of your mileage deductions until you file your 2022 taxes. But you can factor these savings in as you’re doing your tax planning during the year. Please let us help if you’re having any trouble with QuickBooks Online’s Mileage tools, or if you have questions with other elements of the site.

8 QuickBooks Online Tips

by

Two Businesswomen Meeting In OfficeThere are always more things to learn about the applications we use every day. Here are some tips for expanding your use of QuickBooks Online.

We tend to fall into the same old patterns once we’ve learned how to make a computer application work for us. We learn the features we need and rarely venture beyond those unless we find we need the software or website to do more.

QuickBooks Online is no exception. It makes its capabilities known through an understandable system of menus and icons, labeled columns and fields, and links. But do we really see what else it can do? Expanding your knowledge about what QuickBooks Online can do may help you shave some time off your accounting tasks and better manage the forms, transactions, and reports that you work with every day. Here are some tips.

Edit lines in transactions. Have you ever been almost done with a transaction and realize you need to make some changes farther up in the list of line items? Don’t delete the transaction and start over. QuickBooks Online comes with simple editing tools, including:

  • Delete a line. Click the trash can icon to the right of the line.
  • Reorder lines. Click the icon to the left of the line, hold it, and guide it to the new position. This is tricky. You may have to work with it a bit.
  • Clear all lines and Add lines. Click the buttons below your line items, to the left.

qb tips

Click the More link at the bottom of a saved transaction to see what your options are.

Explore the More menu. Saved transactions in QuickBooks Online have a link at the bottom of the screen labeled More, as pictured above. Click it, and you can Copy the transaction or Void or Delete it. You can also view the Transaction journal, which displays the behind-the-scenes accounting work, and see an Audit history, which lists any actions taken on the transaction.

Create new tabs. Do you ever wish you could display more than one screen simultaneously so you can flip back and forth between them? You can. Right click on any link in QuickBooks Online, like Sales | Customers, and select Open link in new tab.

Use keyboard shortcuts. Not everyone is a fan of these, mostly because they can’t remember them. Hold down these three keys together to see a list: Ctrl+Alt+?. Some common ones include those for invoices (Ctrl+Alt+i) and for expenses (Ctrl+Alt+x).

Modify your sales forms. Do you need more flexibility than what’s offered in your sales forms? It may be there. Click the gear icon in the upper right and select Account and settings under Your Company. Click the Sales tab. In the section labeled Sales form content, notice that you can add fields for Shipping, Discounts, and Deposits by clicking on their on/off switches. You can also add Custom fields and Custom transaction numbers.

Add attachments. Sometimes it’s helpful to have a copy of a source document when you enter a transaction. To attach a receipt to an expense, for example, look in the lower left corner of the transaction. Click Attachments and browse your system folders to find the file, then double click on it.

qb tips

Record expenses made with credit cards. Who doesn’t use credit cards for expenses sometimes? You can track these purchases in QuickBooks Online, as pictured above. Click the gear icon in the upper right and select Chart of Accounts under Your Company, then click New in the upper right. Select Credit Card from the drop-down list under Account Type. Enter Owner Purchase in the Name field and then Save and Close. When you create an expense, select Owner Purchase as the Payment account.

Previous Transaction Button. Are you trying to find a transaction that you entered recently but don’t want to do a full-on search? With a transaction of the same type open, click the clock icon in the top left corner. A list of Recent Expenses will drop down. Click on the one you want.

Whether you’re new to QuickBooks Online or you’ve been using it for years, there’s always more to explore. We’d be happy to help you expand your use of QuickBooks Online by introducing you to new features, building on what you’re already doing on the site to improve your overall financial management. Call us to schedule some time.

QuickBooks will allow your business to track daily transactions and manage cash flow so you can oversee your finances with ease and precision. Call us at 208-215-2112 to get started now or request your free consultation online