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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.

Bookkeeping for Barter Transactions

We live and work in a time where money is tight for everyone. Therefore it may come as no surprise that bartering, the trading of goods & services for other goods & services, has become increasingly popular. Bartering allows a business to retain cash while still getting needed goods & services. Plus, bartering is one way to offset cash shortfalls.

In an individual setting, this might be cutting my neighbor’s lawn if he fixes my leaky pipe.  In a business setting, a roofing company might be willing to swap a roof resurfacing for new computers from a computer manufacturer. Or, an attorney might prepare a partnership agreement for an auto dealership in exchange for an automobile.  The values of the items exchanged (bartered) would be resolved between the parties.

While these arrangements might be beneficial to a business looking to grow, there are some bookkeeping, taxation, and accounting issues that need to be addressed.  A barter exchange is actually two or even three individual transactions put together.  Each of these transactions needs to be recorded at fair value on the books of the business. The value of your services would be an increase to your revenues, and the cost of goods received would be posted to an expense or asset account.

Income from bartering is taxable the year it occurred. The rules for reporting barter transactions may vary per transaction, so it is wise to consult with a professional should you have any uncertainties.

Barter clubs are popping up all over the country. Some charge membership fees, some do not.  Some might have transaction, service, or annual fees. The more sophisticated ones even have actual accounts on behalf of the membership. These would keep the tally of the difference between the value of the services given up during the year versus the value of the goods or services used.

With the increase in sophistication of these clubs and the values of the transactions that can occur, you can be sure the IRS is looking at them as well.  Don’t ignore them and I’ll trade you my tape dispenser for your stapler.

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Accounts Receivable—The Business Lifeline

Every business needs to accumulate and then collect their accounts receivable, or A/R.  The sales these A/R represent are the culmination of the business’s profitability; it’s entity.

With the advent of electronic bookkeeping, A/R tracking is relatively easy compared to the “old days” of writing everything down in a list and crossing off items when collected. Every business needs to accumulate and then collect their accounts receivable, or A/R. The sales these A/R represent are the culmination of the business process, the sale.

As businesses progress forward into electronic A/R solutions, it is important to maintain this key benefit from the more old-school ways of tracking A/R, which is the efficiency of writing down notes in one place and having access to all necessary information when the A/R is delinquent.

I suggest establishing an electronic folder using Excel or a similar program that you can reference at your fingertips when talking to a customer. It needs to have all pertinent data, including the invoice number, the amount, and the date. If you make any phone calls to discuss your A/R situation, be sure to note the contact name, date, and any resolution agreed upon.

Another way to expedite collection time is to use a lockbox at the bank.  Collections enter your account faster and time is saved in the office opening mail and then making deposits.

Lastly, be sure your business is set up to accept credit card payment. Some customers won’t deal with businesses that don’t take credit cards. In recent years, credit card companies have developed cards tailored towards small businesses, so be sure to find the credit card company that offers the most benefits to your business. Also, be sure the fee is calculated when determining your sales price.

Happy collecting!

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How to Enter Bounced Checks in QuickBooks

If your business processes enough transactions, eventually you are going to have a check that bounces, also called an NSF (Non Sufficient Funds) check. Without properly processing a bounced check, the cost to your business could be substantial. Does your business have a system configured in QuickBooks to track bounced checks? If not, you should definitely establish one. Here’s how.

Choose “Lists” then “Item List.” Click the Item drop-down arrow and select “New.” Click the Type drop-down arrow and select “Other Charge,” naming it NSF Check. Leave 0.00 in the “Amount” field and click the Tax Code drop-down arrow and select “Non.”

Next you’ll want to create an invoice to recover the amount owed to your business, plus any bank fees you want to recover. This amount can be larger than the amount your bank charged you, depending on your state’s laws. Once (if) you receive payment from the customer, use “Receive Payments” to record the transaction.

To record the bank’s charge for the NSF check, open the register and enter the amount in the Payment column and post the transaction to your bank charges expense account.

Should you try to redeposit the check? Probably not, especially if you risk incurring another charge that may be difficult to collect from your customer. Most banks only allow you to redeposit a bounced check once. As a business owner, you should request a new check or a certified check from your customer. If you’re having difficulty collecting amounts owed to you from customers, please refer to my earlier post, Systemize Your Outstanding Account Collection Process.

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Salesforce for QuickBooks 2012

It’s hard work to maintain customer relationships, but it can become much easier with Salesforce for Quickbooks 2012. The capabilities of this new feature can drastically improve the way client relationships are developed, managed, and grown.

One of several new QuickBooks 2012 features, Salesforce for QuickBooks allows you to share financial data with your sales reps by providing them with up-to-date accounting information in the cloud for any customer they are working with. This streamlined flow of financial information means your sales reps have a more holistic picture of your customers, and can therefore provide better client service. And, better client service results in happier customers, which results in more business for you!

In addition to being able to view financial information, sales reps can also use Salesforce for Quickbooks to see any customer’s transaction history and patterns of behavior, allowing them to analyze what information is relevant to the customer. This empowers your sales reps to find more opportunities to offer up relevant services and products to your clients. By allowing sales reps to see the gaps within a client’s history, they are able to pitch better targeted solutions that result in your business closing more sales.

Salesforce for Quickbooks automatically creates a transaction in QuickBooks when a deal is closed in Salesforce. This benefit prevents users from having to enter data into two separate systems. This speeds order processing and reduces double data entry. This ultimately leads to increased efficiency and thus lower overhead costs for your business.

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QuickBooks 2012 Calendar: A Better View

Earlier in this blog, I discussed the importance of using a financial dashboard to help manage your day and to get a clear picture of your business’s overall health. The new calendar feature on QuickBooks 2012 offers the benefits of a financial dashboard by providing you an overview of your day’s to-do’s, while giving you access to the status of your current financial data – all in one place.

The default view of the QuickBooks 2012 calendar, available in Pro, Premier and Enterprise, has three sections:

1) The actual calendar gives you access to an automated view of your day’s to-do’s, appointments, and invoice and billing deadlines. This provides you with stronger, faster insights to help propel your business forward.  You can access the calendar from the Icon bar or from the Company menu. You can change the calendar view to weekly, daily or monthly by clicking on the calendar view.

2) The Transaction Detail Pane, located below the calendar, provides a summary of all transactions entered on a specified date. Transactions for that date are listed by transaction type. You are also able to see the amount, number, due date, and other specific information associated with each transaction. You can select the date and filter the calendar to show specific types of transactions by choosing the Transaction Type from the Show drop down list.

3) The Past Due Pane, located on the right side of the calendar, shows your past due transactions as of today, plus your to-do’s for that day. You can use the QuickBooks 2012 Calendar to add To Do activities in QuickBooks using the Add to Do icon.

The benefits of the new calendar feature in Quickbooks 2012 are multiple. Not only will it help manage your schedule on both a daily and weekly basis, but also it will help you more clearly identify know any overdue payments you need to track down, as well as keep you up-to-date on all your business’s pending transactions. Hopefully the QuickBooks 2012 new calendar feature will help you save time, be more organized, and revert focus from accounting details to overall business growth decisions.

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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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