QuickBooks Classes

QB Classes croppedConfused about QuickBooks?  Are you a business owner that needs a little assistance getting your books straight?

Loggins and Associates is pleased to announce that we offer QuickBooks classes here in our Jonesboro, GA office, taught live and in person by a Certified QuickBooks ProAdvisor with 15 years of teaching experience.

Our next class will be January 16th from 12:00 noon to 4:30pm.

What will be covered?

The course covers the basics of QuickBooks — setting up a new file, receiving money, paying bills, and banking information are all included.

 

How long is the class?

The class itself is four hours in length.  Lunch is thirty minutes, and there are scheduled breaks and Q&A time during the class.

 

What is the fee?

The fee for the class is $200.  Lunch and class materials are included.

 

How do I sign up?

Please call Pam at 770-478-7424 to register.  Space is limited.  You can also email info@logginscpa.com for more details.

Starting a New Business

Thinking of starting a new business?  Congrats and thank you!!  Small businesses are what keep our country running.  I thought I’d post a few things to think about if you are starting a new business.  Of course, this isn’t an exhaustive list, and I’d encourage you to take the time to speak with a lawyer and a good CPA to make sure that all your ducks are in a row.  The expertise is worth the cost.

Having said that, here are a few things to think about:

 

  1. What type of business will it be?  There are all sorts of types of businesses — the most common is the sole proprietorship.  This is by far the easiest and simplest business structure.  When I used to tutor, I was considered a sole proprietorship.  I reported my income and expenses on Schedule C of my 1040.  There are other types of businesses as well — partnerships, S-corporations, LLCs, among others.  One of the positives about an LLC (which stands for Limited Liability Company) is that the owner(s) will have limited personal liability for the business debts.  This type of business needs to be formally set up, usually through a lawyer’s office.  In any case, if you decide to meet with a lawyer or a CPA, this will probably be one of the things they discuss with you.
  2. What types of taxes will I be responsible for?  The type of business structure that you choose will also determine what types of taxes you pay and how you will pay them.  The four general types of business taxes are income tax, self-employment tax, payroll taxes, and excise taxes.  If you decide to have an employee as a part of your business (side note: it is not your decision on whether or not someone who works for you is an employee or a subcontractor, they either are or they aren’t), then I would recommend you have a bookkeeping program like QuickBooks and sign up for their payroll subscription.  It is a very cost effective way to do a small payroll.
  3. Employer Identification Numbers: Typically, a new business will need a Federal Employer Identification Number (FEIN or sometimes just EIN).  You can go to irs.gov and see if you need to get one for your business.
  4. Recordkeeping: No matter what type of business you set up, you need to keep track of what comes in and what goes out.  This may be as simple as a spreadsheet (that’s what I used for my tutoring), or you may want to get software like QuickBooks.  Good recordkeeping also includes keeping the support documents for your numbers, like receipts and invoices.  Also, just from an accounting standpoint, it is almost impossible to run a business well if you don’t know how much money is coming in and where the money goes as it goes out the door.

 

I hope this gives you some things to think about.  Take a look at IRS Publication 583 (Starting a Business and Keeping Records)  and Publication 334 (Tax Guide for Small Business) for some more fun reading.

Payroll reports are due 7/31

Just a quick reminder to everyone that is in charge of a payroll that the quarterly reports for the second quarter are due at the end of the month.

Typically this involves the 941 for the IRS, and then a report for your state’s Department of Revenue for your withholding for the 2nd quarter, and then another report for your state’s Department of Labor for your unemployment payment for the 2nd quarter wages.  Obviously, depending on your situation, your reports may vary.

QuickBooks Enhanced payroll has the reports as a built in functionality of that subscription, so that makes it quick and easy.  Or, if you use a payroll service like Paychex or ADP, they can handle the reports for you.

It’s a good idea to keep a copy of the reports filed for your records as well as the backup support.  The Payroll Summary report from QuickBooks usually gives good detail as backup.  I also like running the Employee Earnings Summary report and I keep that on file as backup too.

If you are in charge of payroll and have questions, feel free to leave a comment in the box below and we’ll try to give you a tip or two!  Or, please give our office a call at 770-478-7424 no matter where you are in the country, and we can set something up to assist you.

Sales Tax in QuickBooks

Sales tax is one of those necessary evils when you own your own business.  It’s a pain to track, collect and pay it, but QuickBooks can help out with some of the nitty gritty reporting, whether you are in a state that has one state-wide sales tax rate, or if you have different rates for different counties or other jurisdictions.

As with anything, it’ll take a little bit of time to set it up properly, but once you’re set up, then you should be pretty much good to go. [Read more…]

Congratulations, Sheila Rickard – Advanced QuickBooks ProAdvisor!

Congratulations to our own Sheila Rickard who last week received her certification as an Advanced QuickBooks ProAdvisor!

The Advanced ProAdvisor certification is designed to deepen the expertise of ProAdvisors who are already knowledgeable in QuickBooks, and distinguish Sheila as an expert and highly proficient in the field.

[Read more…]

QuickBooks Inventory — a Primer

Many small businesses have inventory — whether it is just a small amount of hair care products in a beauty salon or a whole nursery full of plants — it’s something that you need to keep track of properly.

We’ve found that many small businesspeople rely on an Excel spreadsheet to keep track of their inventory, but did you know that QuickBooks has inventory functionality as well?  QuickBooks can help you manage the costs of your inventory and even let you know when it is time to order more goods.  Here’s a quick summary of the options that are available to you: [Read more…]

Tax Information Needed within 30 days!!!

We’ve had some clients get an email that looks like the one below.  This is a spam email — if you get it, just delete it and do not click on the link.  Here is a page from Intuit (the REAL Intuit) about this email.  If Intuit wants information from you, then they’ll ask you to log in to your account or go through QuickBooks to provide the information. [Read more…]

UPDATE: QuickBooks payroll for the new year — ugh.

Ugh.  So, I’m running payroll in QuickBooks for 1/1/2012.  I got the new tax table update (the most up to date one is 21202, by the way).  Then, I started payroll and noticed that my Social Security employee was the same as the Social Security Company.  Hmmm…I was pretty sure that Congress passed the extension…well, for 2 months, anyway.  [Read more…]

QuickBooks Payroll Setup

Congratulations!  If you are reading this, then chances are that your business has grown to the point to where you need to hire employees.  That’s fantastic!

With payroll comes a whole new set of issues — withholding, FICA, FUTA, 940’s, 941’s…and on and on.  Not to worry — I hope I can help you make some sense of all of this!

Luckily, QuickBooks has a payroll setup that really makes it easy.  I’m going to run through some of the basic steps for setting up payroll. 

Some preliminary stuff first —

  1. Labor Posters — Make sure that you have posted all of the appropriate labor posters.  For access to free labor posters, go to: www.business.gov/business-law/employment/posters
  2. Workers Comp — You need workers compensation insurance.  Laws are different state by state, so make sure that you are up to date on what your state requires.  Take a look at www.workerscompensation.com for more information.
  3. Employee Forms — You will need form W-4 and form I-9 for each employee.  Some states have their own forms, so again, you’ll need to check with your state’s Department of Revenue to see what state-specific forms are needed for new employees. 
  4. Employees or Independent Contractors? — Now you need to decide if the people that you are paying are employees or independent contractors.  Take a look at our blog post on this, or look at Form SS-8 (pdf) for a helpful questionnaire.

Now you’re ready to setup payroll in QuickBooks!  There are basically two steps…

  • Select the QuickBooks payroll service
  • Go through the payroll setup interview

 

Selecting the QuickBooks payroll Service

Small business owners, let me speak to you for a bit.  Bookkeepers, feel free to forward this to your boss.   I have a great deal of respect for entrepreneurs…my father was one, my husband and I own a small little business – it is in my blood.  We are the backbone of the United States economy (cue patriotic music in the background)…but, how shall I say it — we sometimes are penny-wise and pound foolish.  We can be cheap.  This is an instance where we need to overcome that tendency and open up the wallet.  I strongly recommend that you look at one of QuickBooks’ payroll options and spend the money for a subscription.

I’m not necessarily saying spring for a payroll option where they do everything for you, although you can do that.  But it is so helpful to have all the tax tables* automatically downloaded into QuickBooks.  Think of it as a little extra insurace that you are doing your taxes right.

*Most of the taxes will be automatically downloaded, but not all.   More than likely you will receive a notice from your state for other taxes, such as unemployment.  These vary by state, and vary by employer, so it is impossible for QuickBooks to automatically download these for you.  Unless you have a do-it-all payroll service, you’ll need to enter these amounts manually.

I use the Enhanced Payroll with one of my clients.  I love it and it is worth every penny. It makes payroll smooth and easy — no looking up tax tables, and QuickBooks will assist me with all of the forms.  Please take the time to take a look at the payroll options to see which will work the best for you.  I think you’ll find that it’s worth it.

 

Going through the Payroll Setup Interview

Now you should be ready to setup your payroll in QuickBooks.  Go to Employee, then Payroll setup and QuickBooks will lead you through, step by step.  Here is a list of things that will be handy to have to answer some of the questions in the interview:

  • Company bank information  — this is used to setup direct deposit, which is quite common now, and for e-paying taxes, which is required in some cases.
  • Types of compensation for employees and their rates — hourly wages, salaries, commissions, etc.
  • Benefits that you offer — health plans, 401(k), etc.
  • any other additions or deductions — reimbursements, cash advances, etc.
  • All W-4 forms
  • balances of any sick or vacation days accrued
  • employee’s bank info (if you use direct deposit)
  • your state’s unemployment rate for your business.  You should receive this each year from your state’s Department of Labor
  • your ID number for your state
  • Any other state specific tax information
  • A copy of your most recent federal and state quarterly forms (if I can make a suggestion here — if you have already been running payroll, don’t start a QuickBooks payroll in mid-quarter…it gets a little hairy when it comes time to file the forms.  It is better to enter in payroll starting at the beginning of the quarter, or even better, the beginning of the year)
  • your deposit schedule for both federal and state
  • payroll history for the current year

Once you have gathered your information, the QuickBooks Interview will lead you through the payroll setup process and help you get on your way with payroll.

If you need some help, the Intuit Community has most all the answers you need almost instantly.  If you think you would like a little more guidance, please give our firm a a call at 770-478-7424.  We can help you whether or not you are in our area.

 

Cash vs. Accrual basis — what is the difference?

You’re setting up your QuickBooks file for your new business and it’s asking you…cash basis or accrual basis?

Or, you are modifying a report and you see a choice for cash or accrual.  You click “accrual” and all your numbers just radically changed.  What happened?  What does it mean?

I’ll try to explain the difference without going into too much accounting lingo.  Let’s suppose that your cupcake business has four separate events. 

  1. You make a cupcake sale and send out an invoice to your customer
  2. You collect the money from the sale and deposit it in the bank
  3. You receive a bill for your electricity
  4. You pay the bill

Cash basis will treat these events differently than accrual basis.  Let’s start with cash basis.

 

 

Cash Basis

In cash basis, the transaction is recorded when the money actually changes hands.  It doesn’t matter if it is a credit card payment, check, or actual cash.  So, for the events above…

  1. You make a cupcake sale and send out an invoice to your customer — QuickBooks does not record anything
  2. You collect money from the sale and deposit it in the bank — Quickbooks will now record the revenue as “Cupcake sales revenue” and it will increase your bank account by the amount of the sale.
  3. You receive a bill for your electricity — QuickBooks does not record anything
  4. You pay the bill — QuickBooks will record the amount as “Utility Expense” and it will decrease your bank account by the amount of the check.

 

Accrual Basis

Under the accrual basis, QuickBooks will record the event when the services occur, regardless of when the money actually changes hands.  Let’s look at the same four transactions under the accrual basis…

  1. You make a cupcake sale and send out an invoice — QuickBooks will record the sale as “Cupcake Sales Revenue” and include the amount in your Accounts Receivable account.  (Your Accounts Receivable account is just a name of an account where amounts that you are due but haven’t received yet are put.)
  2. You collect money from the sale and deposit it in the bank — QuickBooks will move the amount of the sale from Accounts Receivable into your bank account. QuickBooks won’t record the revenue now because the sale was already recorded when you made the sale in step 1.
  3. You receive a bill for your electricity — QuickBooks will record the expense as “Utilities Expense” and include the amount in your “Accounts Payable” account. (Your Accounts Payable account is just the name of an account where amounts that you owe but haven’t paid yet are put).
  4. You pay the bill — QuickBooks will move the amount of the bill from Accounts Payable to your bank account, which will decrease the amount in your bank account by the amount of the bill.  QuickBooks won’t record the expense now, because it already did so in step 3.

If you look at your business income and expenses over the whole life of the business, the total amounts recorded with cash and accrual basis are the same.  It’s just the timing that’s different. 

 

Which should I use?

So, now that you (hopefully) understand the main differences between cash and accrual, you are probably wondering which you should use.  Unfortunately, the answer isn’t completely cut and dry.  Although you may look in an accounting textbook and you’d think that the world would end if you decided to use the cash basis, the reality is that many small businesses use the cash basis in their books.

The IRS of course adds their $0.02 with a few rules and regulations about who can and cannot use cash and accrual.  And then, states like to step in too with various rules for sales tax reporting.

It really is worth it to get some professional help with setting up your business correctly with QuickBooks (or whatever software you use).  Doing it right from the beginning will get you going on solid footing.

Please feel free to give our firm a call at 770-478-7424 (whether or not you are in Georgia), or leave a comment, or send me an e-mail: kim@logginscpa.com.  We can help you choose which method would be the best for your business.