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Am I Restoring the Wrong File?

Question:

New client -- he is using QB 2004 Pro. He has office in Lynn and Swampscott. I watched him back up the file at his Lynn office and email it to me. When I get the file here and open it -- it is only through January 05.

So he does it again over the phone -- same thing -- he's backing up through May be I'm only getting it as of January -- not a big file either -- what could be going wrong?

Answer:

This sounds strange. I have a few suggestions.

1. Make sure that he is using the right file. Have them see what the last check number in his file is. This is a simple check to ensure that something hasn’t happened to the data. If the last check number in his file is the same as the one in the file he emailed you then you have a bigger problem…something has happened to his data. If the check numbers don’t agree, you can be sure that the problem lies with backup/email process. (Continue to step 2).

2. Walk him through the back up process. Make sure that he knows where the backup is being saved. I would have him put it on the desktop so that he can’t miss it.

3. Have him assign a name to the backup that is not easily confused…such as “accountant backup urgent.qbb”.

4. Walk him through the email process as well. Make sure that he is emailing you the right file. I have seen many clients that keep all there backups in the same folder and they will email you the wrong one. It sounds like that could be what is happening here.

Sales Tax Discounts.

Question:

I need to make a General Ledger entry to correct my Sales Tax Payable account, but I don't have an accounting background so I'm not sure how to do it....Currently, I have sales tax accumulating in account 2200 Sales Tax Payable (other current liability). This is working fine except that Colorado allows businesses a deduction for handling the taxes.

Example:

Taxes collected from clients for Month of May

county tax = $1
city tax = $2
state tax = $535
=================
$538
service fee <$12>
=================
paid to CO = $523

I need to back out the $12 service fee from the Sales Tax Payable account, but I don't know which accounts to debit/credit. I get an error message when I try to credit the Sales Tax Payable account - "you must specify a vendor name for the sales tax account".

Answer:

First of all, if you want to get the service fee out of the liability account, you need to debit that account not credit it. The liability account should have a credit balance…so a debit would reduce it. Your credit would be to miscellaneous income or you can set up an income account just for these sales tax discounts… its up to you.

Because QuickBooks tracks sales tax, it requires that you specify a vendor when you make a journal entry. (This ensures that your reports will be correct). I am not familiar with Colorado, but the vendor would be whoever you pay the tax to…in Virginia this is the Virginia Department of Taxation.

Writing Down Billable Time.

Question:

We are an advertising agency and track both time as well as costs. There are many times when we track time…and possibly 6 to 8 months later…or even more…we decide that we cannot charge this time to our client. We then “kill” time, making it “unbillable” and not changing any dates. What happens to the time that was killed? Where does time go as well as “killed” time go on our financial statements?

We do not use time as an inventory item.

Answer:

As an accountant, I run into this same problem…I do one of two things depending on the situation.

The first thing that you do is when you give the client their final bill for a job you need to apply all the time related to that particular job/client to their invoice. Then:

1. Manually mark down the amount to what you can reasonably charge the client.

Or,

2. Create a new discount item called “Professional Discount” or something similar…you’re the marketing wiz. Have it go into your sales discounts account or into one of your income accounts. Set the discount to the amount of billable time you are charging off. Then when the client gets the bill they will see how generous you are.

The time you “killed” doesn’t go anywhere in the first scenario and will have no impact on your financial statements. If you go the second route, your sales will be higher and sales discounts will also be higher to offset your income.

QuickBooks Online.

Question:

I am a new user to QuickBooks Online. I am having a hard time finding the Website. I have used Quickbooks.com and this takes me to a site that offers the online product. I the address to go directly to the point I can log on.

Answer:

The easiest way to logon to QuickBooks Online is by clicking Here.

Entering Vehicle Mileage.

Question:

Hello, I just discovered your site. Hurray!

I began working with Quicken many years ago and upgraded until I am now working with QuickBooks Pro and QuickBooks Pro 2005. The 2005 version is new to me. I am told that I can enter mileage with this new version. How is that done? Can I find it on the Help icon?

Answer:

In QuickBooks 2005 you can enter vehicle mileage by going to Company -> Enter Vehicle Mileage.

You will need to set up each vehicle you will be using. Click on the drop down box beside where it says “Vehicle” and select “Add New” and fill in the applicable information. On the top of the “Enter Vehicle Mileage” screen make sure that you enter the new standard mileage rate, which for 2005 is 40.5 cents.

Question:

Also I haven't been able to delete a company since I went from Quicken to QuickBooks. There doesn't seem to be a way. I work from my home for various small businesses/nonprofits. Sometimes I get off on the wrong foot entering a new company and just want to delete and start over. Why can't I do that?

Answer:

QuickBooks doesn’t allow you to delete a company from within the program (Thank goodness). If you’re sure you want to get rid of the file for good, just find the company file with Windows Explorer and delete it.

Using Classes as a Contractor.

Question:

I have many houses in progress. I have an account set up by house for construction. I want to:

(1) Run expense report by house (or customer) I run by Account number.

Or:

(2) Run a report for the one house and separate by types of products. (i.e.: electrical, framing, windows, etc)I would like to use CLASSES for this filtering process. How would I do this? Can I post these transactions by both Account # and Class Code and run by either filter?

Answer:

Good question. It is very savvy of you to use your accounting software to gather as much information about job profitability as you can. To use class tracking you simply need to turn it on in your preferences (Edi t-> Preferences).

Then when you enter your income and expenses just classify them to their respective classes.

Then when you run a report go to “Modify Report” and click on the “Filters” tab. Select “Class” and choose the one you want. You can also use the same process to filter by customers/jobs. However, your best bet may be to consider using "Quickbooks Premier: Contractor Edition". There are some nice reports that show job costing information.

Restore a Backup File.

Question:

I have recently lost all of my May invoices. My question is, if I restore my lost May invoices using my back-up files, what will be deleted? The prompt indicates that QB's will permanently delete the files! Which files are they referring to?

Answer:

When you restore a back up file, everything that was entered after that backup was made will be lost.

The prompt that you are speaking of is warning you that you are restoring the backup file over your current working file. In other words you are replacing your current date with whatever is on your backup. To get rid if this warning, change the name of the file that you are restoring to. For example, if the name of your company file is “Joes Widgets.QBW” then when you restore the backup, restore it to “Joes Widgets NEW.QBW”. QuickBooks should then go ahead and restore you backup. Now you will have both files on your computer…whatever was on your backup and your original file that is missing the May invoices.

Direct Deposit for a Foreign Subsidiary

Question:

Our company has started a small subsidiary business outside the US and is looking to use QuickBooks to complete the payroll. Management wants to wire the deposits directly to the employee's account. How is this done within QuickBooks?

Would the company need to set up a local bank account outside the US, or could they just wire transfer the money?

Is there anything else I would need to be aware of when doing these types of transactions?

Thank you

Answer:

From a QuickBooks perspective, your question is easy:

On the pay employees screen you want to highlight the button that says direct deposit.

Now from an operations standpoint, it could be more difficult. QuickBooks does not process direct deposit by itself, Intuit offers a direct deposit service for a small fee (Click here for more info). I believe that this is handled through a third party financial service company. Whether this service will allow you to send money to banks out of the country I don’t know, you would have to find out from them.

You could however get your direct deposit software directly from a Bank. (Most banks offer this service to their corporate customers. If you use a large bank that has a presence in both the USA and the subsidiaries country, they may be your best bet. The downside is that there software or web interface most likely will not interface with QuickBooks. This is not a big deal however. Usually all that is required is some additional key-punching.

The other thing that you should be aware of is the payroll tables that Intuit provides do not calculate foreign taxes. Before using any accounting software be sure that you understand the employment laws and any employer liabilities that you may incur.

QuickBooks Not Backwards Compatible

Marie asks:

I am a student taking a class in QuickBooks Pro 2004. The textbook is by Janet Horne. The computers at school have the 2004 software loaded. My question is if I purchase QuickBooks Pro 2005 and install on my home computer are the 2 versions compatible when I work on my problems at school and I backup from 2004, and then take home and restore to 2005, or if I reverse and backup at home and restore at school will this work? Thanks for your help.

Answer:

Simply put, no you can’t. Once your data is upgraded, you will no longer be able to use it on an earlier edition.