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Online Bookkeeping Solutions Blog

The Online Bookkeeping Solutions Blog is an timely collection of interesting and helpful information for those companies who want to outsource their bookkeeping solution and utilize bookkeeping services by subscription. Outsource your bookkeeping to a cloud based solution backed by experienced CPA's.

How Undeposited Funds in QuickBooks Work

An Undeposited Funds account is a holding account for customer payments that are entered as received in QuickBooks, but have not yet been deposited into your bank account. This account is frequently established during a company’s initial set-up on QuickBooks and is part of the Accounts Receivable process.

How Undeposited Funds Work

When you receive a payment, go into your QuickBooks “Receive Payments” icon and apply the payment to your customer’s invoice.  At this point, the money is automatically put into your Undeposited Funds account. When you actually deposit your money into the bank, YOU MUST update QuickBooks by going into your “Record Deposits” icon so your money is recorded as being in the bank.

When you click the “Record Deposits” icon, you will see a list of everything currently residing in your Undeposited Funds account. Simply check off everything you’re putting in the bank for that particular deposit. Then, all that’s left is to select the account you’re putting the money into using the “Deposit To” dropdown menu, and select the date of the deposit.

Common Problems and Solutions with Undeposited Funds

Problem:  Customer payments are not showing up on your bank account balance
Cause: Deposits are not being recorded in the QuickBooks bank account after they are made
Solution: Make sure to use the “Record Deposits” feature to relieve Undeposited Funds in QuickBooks after making a deposit

Problem: Undeposited Funds account shows a large balance built up over time
Cause: Not all deposits are being recorded in QuickBooks after they are made
Solution: Identify the payments not deposited in QuickBooks by looking at your bank statements, then go through and record these deposits in QuickBooks to remove them from the Undeposited Funds account

The Undeposited Funds account is there for your protection to make sure nothing disappears before it hits the bank and to make sure your financial records are always up to date. By using the Undeposited Funds account as a holding account, your accounting for customer receipts can match actual practice and simplify bank reconciliations.

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Quickbooks 2012 For Mac – New Features

If your small business runs on Macs, you’ll save time managing your finances with  QuickBooks 2012 for Mac. This new version, compatible with Lion, contains a new interface that integrates the elegance and simplicity of the Mac with the powerful features of QuickBooks. QuickBooks for Mac 2012 also has more than 50 new features that simplify multi-step tasks and give you faster access to your financial data. Here are some highlights of the new features that will undoubtedly improve accounting processes for small business Mac users:

Redesigned Forms
A newly designed interface for estimates, invoices, and other data forms gives QuickBooks 2012 users up-to-date customer information all in one place.Furthermore, a number of new buttons provide easy access to features to print, print-preview, and email the particular form you’re viewing. Two new sidebars display 1) a list of your invoices or estimates and 2) the account information for the customer’s invoice or estimate being viewed in the main window.

Improved Search
QuickBooks 2012 contain fine-tuned search features that allow you to use keywords to locate transactions, customer or vendor contracts, and other financial data. Also, once a query has been created, you can apply filters to further refine the search or to save searches for future use.

Progress Invoicing
Progress invoicing in QuickBooks 2012 eliminates the need to use third-party applications for tracking partial invoices. Now, you can easily create multiple invoices from one estimate to bill for a project over time. You can bill for the percentage of the work that’s completed by choosing only those items you want to invoice for.

Simplified Banking
With QuickBooks 2012, you can now import multiple transactions from bank and credit card accounts to QuickBooks in bulk. QuickBooks 2012 can figure out where and with what institution the transaction took place and then automatically categorize the transaction in a logical way. With very little interaction from the user, this is bound to be a huge time saver.

Says Dan Wernikoff, Senior Vice President and General Manager of Intuit’s Financial Management Solutions division: “As more and more small businesses adopt Macs, we see increased adoption of QuickBooks for Mac. In response, we’ve recommitted ourselves to making the product even better.”

QuickBooks for Mac 2012 requires Mac OS X v10.6.7 or v10.7 and will be available for purchase on September 26 directly from Intuit. It will also be available at the Apple Store and other retailers on October 9.

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Portray Your Finances Properly And Procure The Loan

When you’re trying to get a loan, the numbers on your year-end balance sheet and income statement tell a story. Problem is, this story may not be representative of your actual financial situation, which could end up derailing your loan. This can happen for a variety of reasons that follow.

Your balance sheet offers a snapshot view of your assets and liabilities on a particular date, and may not reflect your actual fiscal year accurately. Atypical events at year-end may cause your balance sheet to look out of whack. For example, large year-end purchases will inflate both your inventory and your accounts payable, while a large sale at year-end will inflate your accounts receivable. Without knowing about a year-end event, a lender might question the stability of your business.

Another thing to watch-out for if you are trying to get a loan is accepting extended payment terms from a significant supplier at the end of your fiscal year. It could suggest that you do not have enough cash to cover your bills or that you’re not paying them on time.

Your potential lender will be looking at your Debt to Worth ratio. If your business assets are held in a separate entity, the ratio could appear too large, which makes lenders nervous. Furthermore, if your balance sheet contains assets that have significantly depreciated, the Debt to Worth ratio will look worse than it actually is – even if those assets still are valuable.

Your income statement may also cause you to appear more high-risk than you actually are. For example, acquiring a big new contract, while a good thing for your business, may cause lenders to fear that you won’t be able to fulfill the risks associated with taking on this contract, and that other customers may go neglected. Furthermore, unless you continue in subsequent years to sign equally sizable contracts, your numbers will appear to be trending downward.

Taking on one-time expenses, such as renovating your office, may also make your income statement appear to be on the decline. Also, if your business switches from cash to accrual accounting, this will heavily impact your financial statements the year the change occurs.

If you want to get a loan, you need to make sure your numbers are not misleading the lender. If any of the aforementioned scenarios apply to your business, don’t worry. The solution is usually pretty easy. Simply explain the unusual activities in the notes section of your year-end statements, thereby giving your lender an accurate picture of your business’s health.

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