QB Power Hour Podcast

QB Power Hour - Special Accounts

August 18, 2020 Dan DeLong & Michelle Long Season 2 Episode 18
QB Power Hour Podcast
QB Power Hour - Special Accounts
Show Notes Transcript

Michelle and Dan discuss Special Accounts and the functionality tied to them.

QB Power Hour is a free, biweekly webinar series for accountants, ProAdvisors, CPAs, bookkeepers and QuickBooks consultants presented by Michelle Long, CPA and Dan DeLong who are very passionate about the industry, QuickBooks and apps that integrate with QuickBooks.

Watch or listen to all of the QB Power Hours at https://www.qbpowerhour.com/webinararchive.html

Register for upcoming webinars at https://www.qbpowerhour.com/

00:00:18.750 --> 00:00:21.270
Dan DeLong: Alright, Michelle, you want to take us kick it off.

4
00:00:21.810 --> 00:00:32.190
Michelle Long: Sure. Hi. Welcome, everybody. Thank you for joining us for another QB power hour. We're very glad to have you all joining us and I see like Dan said, lots of people are still coming in.

5
00:00:32.580 --> 00:00:39.030
Michelle Long: Today's topic is QuickBooks special accounts and we're going to be talking about desktop and online today.

6
00:00:39.690 --> 00:00:49.500
Michelle Long: So we're very glad to have you joining us. My name is Michelle long I'm the owner of long for success. I've been a contract trainer for into it for a long time now, and I really enjoy that.

7
00:00:49.860 --> 00:01:00.120
Michelle Long: Author of a few different books you check them out on Amazon, and I encourage you to join us at that Facebook group, we now have over 9500 members and it's a great place to continue the conversation.

8
00:01:00.420 --> 00:01:12.270
Michelle Long: And people are always willing to give you feedback for better or worse people share their opinions and ideas out there. So, come join us and hang out with us there on that Facebook group, Dan, you want to go ahead and introduce yourself.

9
00:01:12.780 --> 00:01:16.440
Dan DeLong: Yeah, my name. I'm the I'm the captain to Michelle's to kneel

10
00:01:17.970 --> 00:01:24.030
Dan DeLong: Co host today at dance along owner bandwidth and chief content creator at school of bookkeeping calm, where we

11
00:01:24.930 --> 00:01:33.480
Dan DeLong: Just keep learning and transforming businesses through technology. So coming up actually on the on the Qb power hour

12
00:01:34.050 --> 00:01:39.180
Dan DeLong: We today. Of course, we have our, our special accounts. So we'll talk about

13
00:01:39.660 --> 00:01:51.330
Dan DeLong: What a special account is and and some of the some of the accounts in both desktop and online. And then in a couple weeks we'll be talking about QuickBooks desktop data utilities.

14
00:01:51.960 --> 00:01:58.020
Dan DeLong: So when you're dealing with desktop, sometimes there's some data damage. How do you go about

15
00:01:58.650 --> 00:02:12.210
Dan DeLong: Working through that some some best practices and especially if you're trying to get them up to QuickBooks Online. What do you do to, you know, consolidate or condense the data. So join us in a couple weeks for that.

16
00:02:13.710 --> 00:02:23.730
Dan DeLong: Obviously the the PDF of the slides available there in the handouts. You can go and click on that link and view all of the handouts from from all of

17
00:02:24.540 --> 00:02:41.430
Dan DeLong: All of the Qb power. It's even from last year. If you really want to. And there's links to the to the recording. So if you didn't catch us live. You can you can watch it again and also our podcast. You can listen to us on the go. Although these days a lot of people isn't going

18
00:02:43.020 --> 00:02:43.350
Michelle Long: Yeah.

19
00:02:43.380 --> 00:02:45.900
Michelle Long: On the GOES FROM DOWNSTAIRS, UP TO MY OFFICE.

20
00:02:46.800 --> 00:02:47.070
Michelle Long: Right.

21
00:02:47.100 --> 00:02:49.380
Michelle Long: I have, I have a 32nd commute.

22
00:02:50.160 --> 00:02:56.640
Dan DeLong: If it takes an hour to get from the floor, you know, first floor to the second floor, then maybe some other issues.

23
00:02:58.710 --> 00:03:01.650
Dan DeLong: But our agenda today we'll be talking a lot about

24
00:03:02.190 --> 00:03:08.610
Dan DeLong: First of all we'll talk about what a special account is and then we'll talk about some unique

25
00:03:09.030 --> 00:03:16.800
Dan DeLong: Accounts in QuickBooks that that are special counsel on deposited funds accounts receivable. Accounts payable on applied cash payments.

26
00:03:17.550 --> 00:03:26.850
Dan DeLong: Sales and payroll taxes inventory and retained earnings. So we're going, we're going to cram that all into into an hour. So hopefully we don't run out of time.

27
00:03:27.600 --> 00:03:41.820
Dan DeLong: But I think our first nick that first step is just to run off of a poll here. So what version of QuickBooks. Are you using so we always want to kind of cater the Qb power hour to you.

28
00:03:43.440 --> 00:03:46.230
Dan DeLong: So what what version are using just go ahead and

29
00:03:47.760 --> 00:03:50.100
Dan DeLong: Answer that question will give a couple minutes there.

30
00:03:50.370 --> 00:03:56.970
Michelle Long: And while you're answering that poll question. I'll just remind you that we've got the Q AMP a box. And that's the best place to type your questions in

31
00:03:57.270 --> 00:04:07.230
Michelle Long: Because that allows Dan and I to actually respond to a specific question versus the chat, things get kind of lost in the chat sometime. So if you want to use that Q AMP a box to

32
00:04:07.620 --> 00:04:16.110
Michelle Long: ask us a question we will do our best to answer it as we go along. And like Dan said, it is helpful to know which version of QuickBooks, you're using because this session.

33
00:04:16.440 --> 00:04:26.190
Michelle Long: Dan and I are going to be talking about both desktop and online, but there are some differences between the two. And so we will point that out as we go along. Throughout this

34
00:04:26.790 --> 00:04:33.240
Dan DeLong: Yeah, we were we were talking right before we we got honest, it's kind of weird of it's just Michelle and I today.

35
00:04:34.860 --> 00:04:42.780
Dan DeLong: Past couple months, we've had guests. Come on, or extra people to help us out with the with the questions, so bear with us.

36
00:04:43.740 --> 00:04:44.550
Dan DeLong: As late as

37
00:04:45.030 --> 00:04:46.200
Michelle Long: flying solo

38
00:04:49.470 --> 00:05:09.870
Dan DeLong: Let me go ahead and end the poll here and share the results. So yeah, it looks like most half of of who we have here today is using both so definitely going to going to work for for both QuickBooks Online and Desktop and then a little bit split between the between the two.

39
00:05:10.920 --> 00:05:11.130
Dan DeLong: So,

40
00:05:11.670 --> 00:05:13.050
Dan DeLong: Go ahead and kick us off with

41
00:05:13.680 --> 00:05:14.490
Dan DeLong: Your favorite

42
00:05:14.760 --> 00:05:15.540
Michelle Long: Okay.

43
00:05:15.600 --> 00:05:17.490
Dan DeLong: Well, yeah, so that's right, we got to talk about

44
00:05:17.520 --> 00:05:26.400
Michelle Long: I deposited funds is my favorite or my arch enemy. I don't know which but anyway. So first of all, let's just talk about some basics. When it comes to special accounts.

45
00:05:26.970 --> 00:05:34.170
Michelle Long: So special accounts. I'm going to start with actually the second bullet. We should put it first. These are accounts that are automatically created

46
00:05:34.530 --> 00:05:43.410
Michelle Long: In QuickBooks for you. We don't set them up and create them whenever you use something like if you use an invoice accounts receivable would be triggered and created

47
00:05:43.680 --> 00:05:52.290
Michelle Long: If you turn on or enable inventory, then you'll have inventory account so special accounts are things that are automatically created by

48
00:05:52.620 --> 00:05:58.110
Michelle Long: QuickBooks for you you don't set them up yourself and they usually have special functionality.

49
00:05:58.380 --> 00:06:05.910
Michelle Long: That is tied to that account Dan will talk about that, especially when we talk about payroll taxes and things like that. They have special functionality.

50
00:06:06.240 --> 00:06:13.920
Michelle Long: Associated with that type of an account. Now these special accounts in QuickBooks Online. We have usage limits. You can see here

51
00:06:14.220 --> 00:06:24.150
Michelle Long: In the middle went over there on the right. Chart of Accounts. You can have up to 250 accounts. So the special accounts don't count as part of the the usage limits over there.

52
00:06:24.660 --> 00:06:33.000
Michelle Long: So that's something to keep in mind. And then also with these special accounts. We're going to talk about in some situations where you choose not

53
00:06:33.420 --> 00:06:38.970
Michelle Long: To use that special account like with sales taxes. Sometimes we choose not to use this special account.

54
00:06:39.270 --> 00:06:50.790
Michelle Long: And so Dan and I are going to talk about that. And we're going to try to help you understand these special accounts and help you avoid some of the most common problems and issues, working with special accounts, Dan, do you have anything you want to add on this.

55
00:06:51.810 --> 00:07:03.210
Dan DeLong: No, I think we'll probably talk about the specifics as we go through each one but yeah the the special functionality and as we get into the next one which is under positive funds.

56
00:07:04.620 --> 00:07:16.920
Dan DeLong: You know, a lot of your clients don't realize how what they're used for. So oftentimes their, their workflows are what makes sense to them to

57
00:07:16.920 --> 00:07:18.630
Dan DeLong: Do inside of their QuickBooks.

58
00:07:19.230 --> 00:07:29.880
Dan DeLong: Kind of avoids these special accounts and then either makes more work for you or breaks the connection or, you know, gives them in proper reporting so

59
00:07:30.210 --> 00:07:38.250
Dan DeLong: Those are the pitfalls that we're gonna be talking about and how to avoid them as we as we go through today and my cat decided to join us.

60
00:07:40.080 --> 00:07:49.650
Michelle Long: In speaking of pitfalls, one of the number one problems that we see from clients and stuff is and deposited fence and I mean, think about this.

61
00:07:49.980 --> 00:08:00.810
Michelle Long: We as accounting professionals when you took some classes to learn bookkeeping, or whether you took accounting in college or whatever classes or training you took it. Probably they didn't teach you about and deposited funds.

62
00:08:01.140 --> 00:08:09.960
Michelle Long: That is something that's unique to QuickBooks. And so it's important for us to understand how it works. So we can help our clients understand it and answer their questions.

63
00:08:10.230 --> 00:08:17.550
Michelle Long: So one of the things that I you know I wanted to cover some of the basics. Y'all probably know this, but just a refresher, because we do have new people on here all the time.

64
00:08:17.850 --> 00:08:23.640
Michelle Long: So the recommended workflow when you're working with sales in QuickBooks, whether you're using desktop or online.

65
00:08:24.000 --> 00:08:30.780
Michelle Long: Is either create an invoice and then sometime later you receive payment, hopefully, and then you make your deposit

66
00:08:31.200 --> 00:08:41.130
Michelle Long: Or if you're getting paid at a time of sale you do a sales receipt. Then you create your deposit. So with QuickBooks. If you have several payments to deposit

67
00:08:41.460 --> 00:08:51.270
Michelle Long: You need to add those together. So if you think about it, let's say Craig's design landscaping Craig went out, he mowed three yards. This afternoon, so he has three checks that he needs to deposit

68
00:08:51.570 --> 00:08:56.520
Michelle Long: When he fills out the deposit slip. He writes down all three checks or print it out.

69
00:08:57.030 --> 00:09:06.450
Michelle Long: But he's listing all three checks on the deposit slip because he's making one deposit. So he received three payments in QuickBooks, making one deposit

70
00:09:06.720 --> 00:09:18.540
Michelle Long: In order for quitting for QuickBooks to group those and add those up, what happens is the payments when you receive the payment or enter the Sales Receipt. It goes into and deposited funds.

71
00:09:18.930 --> 00:09:29.550
Michelle Long: Then when I make the deposit it takes all of those out of there. The ones that I select and record one deposit. So it's a way for it to open to to put those together and add them up.

72
00:09:30.060 --> 00:09:37.140
Michelle Long: And so one of the things that I'll see a lot of clients will do is clients will look at their deposit. Okay, so after they make the deposit

73
00:09:37.440 --> 00:09:44.340
Michelle Long: They go in and they pull it up and look at it and they said, Wait a minute, my deposit still says and deposited funds, how come what's wrong.

74
00:09:44.640 --> 00:09:56.490
Michelle Long: You know, so I thought it's important if we understand what's going on behind the scenes, what accounts are being hit. So for example, when you create the invoice. It's hitting accounts receivable

75
00:09:56.850 --> 00:10:09.360
Michelle Long: So debit accounts receivable credit income. Then when I receive payment. It goes into on deposited funds and remember this is a temporary clearing account until you group them together to make the deposit

76
00:10:09.690 --> 00:10:21.930
Michelle Long: So you're going to debit and deposited funds, when you're receiving the payment and then you credit accounts receivable. So it goes into accounts receivable with the invoice, then it comes back out of the accounts receivable. When we do our

77
00:10:22.950 --> 00:10:36.840
Michelle Long: I received payment then with the deposit it goes into our checking account and it comes out of and deposited funds. So if a client goes in and looks at that deposit, they will see on deposited funds and then they freak out.

78
00:10:37.530 --> 00:10:42.420
Michelle Long: Now you know it's not supposed to still be there. How come it says on deposited funds, I thought I'd deposited it

79
00:10:42.780 --> 00:10:51.360
Michelle Long: They did. That's the other side of that transaction. So I think it's helpful if you can kind of understand this. And yeah, some people are saying that

80
00:10:51.630 --> 00:10:58.770
Michelle Long: You can think of it as a door a drawer like or an envelope. You know, you put the checks in this drawer until the end of the day, and then you take them.

81
00:10:59.040 --> 00:11:06.060
Michelle Long: You make your deposit or you put them in this folder or whatever scenario, you want to use. But the idea is the things are going in.

82
00:11:06.390 --> 00:11:18.030
Michelle Long: And coming back out. So when you have a new client. And, you know, if you're looking at a potential client or whatever. One of the things you always want to do is just go in and look at that and deposited funds register.

83
00:11:18.510 --> 00:11:24.480
Michelle Long: Things should be going in and coming back out. If not, they're not doing it correctly and

84
00:11:25.050 --> 00:11:33.750
Michelle Long: I'll tell you, I had a client when I bless her heart. She knew something was wrong, you know, she calls me up and she says, I need help, you know something's wrong. I don't know what it is.

85
00:11:34.200 --> 00:11:46.890
Michelle Long: And she just she knew or income seemed off and things like that. So I got looking at it and she actually had a CPA and I'm a CPA myself just because we're a CPA doesn't mean we know QuickBooks.

86
00:11:47.400 --> 00:11:59.910
Michelle Long: I'm a CPA. Does it mean I know taxes, you know, so we all have our specialties. But anyway, the CPA had done the taxes and everything. And there was like $150,000 worth of deposited funds sitting on the balance sheet.

87
00:12:00.510 --> 00:12:07.980
Michelle Long: And the CPA had filed the tax returns. So they didn't look they didn't know QuickBooks, they didn't, you know, they should have question, what is this

88
00:12:08.670 --> 00:12:17.310
Michelle Long: Long story short, we had she had to have an amended tax return done and we had to clean that up. So always we went to look and see

89
00:12:17.550 --> 00:12:24.690
Michelle Long: Are things going in and out of and deposited funds because it should be clearing itself out if they're following the proper workflow.

90
00:12:25.260 --> 00:12:31.410
Michelle Long: Now when they don't. Let's go on. I'm just going to pop into QuickBooks here because I think it's easier to show you this.

91
00:12:32.280 --> 00:12:40.470
Michelle Long: When they don't follow the proper workflow is when like she had there were thousands of them because she did retail sale. So there were a lot of tiny little sales.

92
00:12:41.040 --> 00:12:54.030
Michelle Long: So she had set, you know, thousands literally have a deposit funds sitting there. And how many of you have ever tried to do a journal entry to fix and deposited funds. Does it work, Dan. Will it work.

93
00:12:55.260 --> 00:12:56.070
Michelle Long: Well,

94
00:12:56.130 --> 00:12:57.540
Dan DeLong: Kinda, sorta. I mean,

95
00:12:58.110 --> 00:12:58.650
Really

96
00:13:00.450 --> 00:13:02.550
Dan DeLong: Going to make the deposit to clear it out.

97
00:13:02.730 --> 00:13:10.110
Michelle Long: Exactly. So if you make it a journal entry, you might think oh yeah I fixed and deposited funds, right. See, I got the right balance.

98
00:13:10.440 --> 00:13:18.600
Michelle Long: But every time you go into record that deposit. They're all still going to pop back up here, they still will show as your payments to deposit

99
00:13:18.900 --> 00:13:29.730
Michelle Long: Because you can't pull them out of there without making a deposit. So here's the payments that we received either from a receive payment when we send out an invoice or sales receipt

100
00:13:30.000 --> 00:13:35.970
Michelle Long: That are sitting in and deposited funds, and this is where she literally had thousands of these, and this was with desktop.

101
00:13:36.510 --> 00:13:47.700
Michelle Long: And I had my son, working with me at the time and we quickly discovered that you can only select about 300 at a time or it would crash QuickBooks. Okay, so we had to do matches only yeah

102
00:13:48.090 --> 00:14:00.660
Michelle Long: So what you want to do is you look and you see what's going on out here. If you've got lots and lots of transactions out here, you'll probably want to do this to fix it in batch like by month or by year.

103
00:14:01.020 --> 00:14:11.670
Michelle Long: Depending on how long this has been going on and stuff. But what normally happens is the client receives a payment. It goes into and deposited funds they go look in their check register. They don't see it.

104
00:14:12.120 --> 00:14:21.990
Michelle Long: And so they'll go into the check register and they'll enter a deposit and they tab across and they'll put it into income. So what's happened is we've left it sitting in and deposited funds.

105
00:14:22.470 --> 00:14:29.040
Michelle Long: And we've now doubled up on our income because we recorded the income when we recorded the sale on the invoice to the Sales Receipt.

106
00:14:29.340 --> 00:14:35.010
Michelle Long: So now are deposited funds is overstated, and your income is overstated. So to clean this up.

107
00:14:35.340 --> 00:14:43.200
Michelle Long: A journal entries not going to remove these from your payments to Deposit window, you need to come into the bank deposit window.

108
00:14:43.530 --> 00:14:51.120
Michelle Long: Select those that you want to pull out of there. And I've already done the research to figure out which account. The client was hitting instead of

109
00:14:51.780 --> 00:15:03.150
Michelle Long: When they entered that deposit and usually it's an income account. Usually it's their primary income account. Now keep in mind, they made one deposit. They put the deposit into the bank account.

110
00:15:03.600 --> 00:15:14.790
Michelle Long: They didn't take it out of on deposited funds. So my checking account is okay and that's what happened with this client is that the accountant could reconcile the bank account. So they didn't see that there was a problem.

111
00:15:15.360 --> 00:15:21.630
Michelle Long: In this instance, because they didn't question what that was on the balance sheet. You always want to kind of tie out your balance sheet know what's out there.

112
00:15:21.990 --> 00:15:29.280
Michelle Long: But this is not going to affect our cash account. So if they've reconciled all their accounts and everything. That's okay.

113
00:15:29.610 --> 00:15:34.800
Michelle Long: But what you want to do is you want to look up here and see what the total payments that you've selected.

114
00:15:35.040 --> 00:15:44.940
Michelle Long: So again, I might have done this by month I might have done this by year, you know, you're going to go through and choose some the total payments selected here. I want to put in as a negative amount right here.

115
00:15:45.450 --> 00:15:51.810
Michelle Long: What this is going to do, is it fixes the overstatement in income because it's going to take it out of that income account.

116
00:15:52.200 --> 00:15:59.910
Michelle Long: And it's going to take them out under positive funds and it's going to fix that. So if you'll notice when you scroll down your net deposit is zero.

117
00:16:00.540 --> 00:16:08.640
Michelle Long: You're not going to mess up your bank account balance you again need to do the research to determine what they did wrong, and which income account they were putting it into

118
00:16:08.970 --> 00:16:15.810
Michelle Long: And then we need to teach them you know to do it the proper way. Now one of the things, because it is going to give you a zero dollar transactions.

119
00:16:16.110 --> 00:16:26.820
Michelle Long: A lot of times people will set up a clearing or a journal entry bank account to us so that these things aren't showing up as zeros, when you do your bank reconciliation. So that's a choice.

120
00:16:27.150 --> 00:16:41.850
Michelle Long: That's up to you how you want to do that. But then once you do this. That's how you actually clean up and deposited funds. Okay, so I just wanted to share that with you. And here's a YouTube video. The ended. You want to add something.

121
00:16:42.330 --> 00:16:54.630
Dan DeLong: Oh no I there's a lot of ways, like you like you're what you're saying. There's a lot of ways to clean that up and it really just depends on you know it's kind of like when a police officer comes to a scene of an accident.

122
00:16:54.660 --> 00:17:02.310
Dan DeLong: You know, like, okay, let's let's figure out the best way to, you know, there's an alert. Is there an emergency. Do we need to clean that up.

123
00:17:03.000 --> 00:17:12.090
Dan DeLong: That first or what's the most thorough thing to do and and and I may have missed it, because I may have been answering a question, but if you have

124
00:17:12.540 --> 00:17:22.680
Dan DeLong: reconcile these transactions in the bank account. That's what really is the deciding factor of how you want to clean it up because if they've never reconcile well sure just delete the

125
00:17:23.370 --> 00:17:27.540
Dan DeLong: Delete it and recreate it, you know. And then, and that's an option to

126
00:17:28.530 --> 00:17:45.870
Dan DeLong: Then you don't have to do it that way, where you're tying these all together or creating a journal entry making zero dollar deposits and that sort of thing. So there are lots of ways to handle that and somebody had mentioned in in the in the Q AMP. A that every cleanup job.

127
00:17:46.110 --> 00:17:47.040
Michelle Long: Has a problem.

128
00:17:47.100 --> 00:17:47.970
Dan DeLong: With this account.

129
00:17:48.030 --> 00:17:52.500
Dan DeLong: So, this is this is a this is a heavy hitter usual suspect

130
00:17:52.680 --> 00:17:58.710
Michelle Long: Yes. And to give you an idea of how long this has been going on with problems with that deposited funds.

131
00:17:59.280 --> 00:18:08.520
Michelle Long: Seven years ago, I, you know, used to answer questions in the community all the time and I see this fun this question all the time. How do I fix and deposited funds.

132
00:18:08.880 --> 00:18:18.510
Michelle Long: And so I did a video seven years ago. It's on desktop, but the same principles still apply. How do you clean up and deposited funds, so you guys can go watch that if you want

133
00:18:18.900 --> 00:18:27.780
Michelle Long: I can't believe 170,000 plus people have watched the QuickBooks video there's not a single cat or dog in it, but

134
00:18:28.140 --> 00:18:33.870
Michelle Long: The lot of people have problems within the positive funds. So this is how you can fix this.

135
00:18:34.290 --> 00:18:43.560
Michelle Long: Is go in select those and deposited funds and then put the income account negative here, this won't affect your bank reconciliation, because again,

136
00:18:43.950 --> 00:18:52.410
Michelle Long: This is, this is a net zero deposit, so it's not going to affect your bank account balance, I think. So that is a huge problem that we have with QuickBooks, and so

137
00:18:53.250 --> 00:19:04.170
Michelle Long: Once you understand and deposited funds, you can help your clients understand it, and somebody in here said that they put it directly into checking and one thing that you might keep in mind is, if you do a

138
00:19:05.010 --> 00:19:16.950
Michelle Long: receive payment or a sales receipt. If you do that and you have let's say they have one big sale for $10,000 so they're going to put it straight in the bank, all by itself. If you change the deposit to account.

139
00:19:17.340 --> 00:19:20.970
Michelle Long: To the checking account, it's going to remember that next time.

140
00:19:21.360 --> 00:19:29.430
Michelle Long: So then, next time instead of going into and deposited funds, where you can group them together to make reconciling easier it's going directly into checking

141
00:19:29.700 --> 00:19:40.410
Michelle Long: So I always just tell clients, you know, just let it go directly and deposited funds all the time even if you only have one of them, because otherwise they forget to change the deposit to account back

142
00:19:41.100 --> 00:19:47.400
Michelle Long: So that's something to think about. Now another thing that we have frequently is accounts receivable and accounts payable.

143
00:19:47.670 --> 00:19:58.440
Michelle Long: That's an automatic account. The minute you use an invoice or Bill, it creates those account if you're using multi currency and I create an invoice in Canadian dollars or euros.

144
00:19:58.710 --> 00:20:09.120
Michelle Long: Then it will create a our Canadian or a our Euro, it will create those accounts as needed. Now in desktop. As you can see here on the top.

145
00:20:09.390 --> 00:20:18.150
Michelle Long: You can have multiple accounts receivable and accounts payable, where you can select the one you want. This is particularly helpful for nonprofits.

146
00:20:18.420 --> 00:20:26.790
Michelle Long: Where they may want to have multiple accounts you know grants receivable, you know, donations committed and pledged, things like that.

147
00:20:27.030 --> 00:20:34.080
Michelle Long: Anyway, you might have multiple AR accounts, where you can select them on the invoice or with AP where you can select them on the bill.

148
00:20:34.590 --> 00:20:43.020
Michelle Long: So this is where in in QuickBooks Online. You know, when I'm presenting this. People will say, can you use more than one AR account in Qb. Oh, or AP

149
00:20:43.320 --> 00:20:59.400
Michelle Long: And I'll be like, No, you can't. And then somebody who likes to prove how smart they are says yes, you can. I just added a second accounts receivable account. See, I just did that right there in QuickBooks Online. Yes, I can have two of them. Well, you can add the account, but you can't use it.

150
00:21:00.840 --> 00:21:01.980
Michelle Long: On the invoice.

151
00:21:02.040 --> 00:21:04.110
Dan DeLong: Like saw Ron's ring. And there can only be one.

152
00:21:04.830 --> 00:21:13.230
Michelle Long: rule them all. Yeah, because you can add the second account, but you can't use it when you enter an invoice. You can't select

153
00:21:13.530 --> 00:21:24.060
Michelle Long: Which account you want to use in QuickBooks online at this time. Who knows if they might change that in the future. So with desktop, you can have multiple AR or AP accounts.

154
00:21:24.390 --> 00:21:33.000
Michelle Long: With QuickBooks Online you you can't use multiple era P accounts. You can set them up, but you can't use them. Okay, so

155
00:21:33.330 --> 00:21:33.900
Dan DeLong: That's a

156
00:21:34.200 --> 00:21:42.600
Dan DeLong: That's one of those sticky things so it'll remember the last one that you used, and it will just stay with that when you use it again.

157
00:21:43.320 --> 00:21:51.180
Michelle Long: As the default yeah yeah okay and now here's another one that you need to QuickBooks Online so they don't have this in desktop.

158
00:21:51.450 --> 00:22:00.840
Michelle Long: It's unique to QuickBooks Online and it's also one of those things that is relatively new for a lot of us and people don't understand. It's an applied cash payment income.

159
00:22:01.380 --> 00:22:11.010
Michelle Long: Or an applied bill payment expense. So it's depending on whether we're talking about invoices and payments received or we're talking about bills and paint bill payments.

160
00:22:11.370 --> 00:22:19.950
Michelle Long: Okay so cash payment income or bill payment expense, it's going to show up when you run your profit and loss on a cash basis.

161
00:22:20.400 --> 00:22:29.430
Michelle Long: Okay. And it's only going to show up when you have an open credit and accounts receivable. Accounts Payable or the payment is data prior to the invoice to the bill.

162
00:22:29.670 --> 00:22:38.250
Michelle Long: So let me explain this. So if you've taken the advanced certification training. We talked about how to account for retainers and prepayments or deposits that clients and

163
00:22:38.520 --> 00:22:46.500
Michelle Long: Where they receive money in advance as a prepayment or a deposit retainer. There's three different options. And one of the options is hey,

164
00:22:46.830 --> 00:22:53.220
Michelle Long: We're a small business, we're not giving our financials out to anybody else. We don't have to give them to the bank or anything. It's all just internal

165
00:22:53.520 --> 00:23:05.250
Michelle Long: When we get that pre payment. We're going to put it in as a deposit. Just let it sit as a credit in accounts receivable except a year in where we have to adjust for that because it should be deferred revenue.

166
00:23:05.850 --> 00:23:12.120
Michelle Long: And we go over all those details in the advanced CERT training. I believe module three, if you were to go back and look at it.

167
00:23:12.480 --> 00:23:22.110
Michelle Long: But anyway, um, so if you have a credit sitting in accounts receivable when you run your p&l on a cash basis it zeros out accounts receivable

168
00:23:22.380 --> 00:23:31.710
Michelle Long: It doesn't know where to put that account or that income. So it goes into an applied cash payment income. If I had a vendor.

169
00:23:32.490 --> 00:23:37.050
Michelle Long: Payment a bill payment that wasn't applied to a bill, it would go into that.

170
00:23:37.440 --> 00:23:45.240
Michelle Long: Applied bill payment expense. Okay. The other situation where you might see this is where you have the payment dated

171
00:23:45.450 --> 00:23:58.470
Michelle Long: So I have an invoice, I have received payment, but my received payment is dated before the invoice and then I run that report, because it's it's open now. And that'll cause it and D, and you had an example of a bill payment data prior

172
00:23:59.010 --> 00:23:59.190
Yeah.

173
00:24:00.420 --> 00:24:11.130
Dan DeLong: Yeah, I was talking to a client and that they had the situation where is 2019 and they had a bill payment in 2019 but then they applied it to a bill in 2020

174
00:24:12.210 --> 00:24:30.000
Dan DeLong: So the way that the cash basis reports work is, you know, for that period as soon as as soon as QuickBooks stumbles across a payment in that situation where the, where the payment is is earlier than the bill that it's applied to or the the invoice that it's applied to

175
00:24:31.380 --> 00:24:33.660
Dan DeLong: QuickBooks then goes. Haha. Okay, well,

176
00:24:34.680 --> 00:24:48.060
Dan DeLong: And there's so many your IRS Publication that that is is the logic behind it, but it will say, I have to recognize the the expense or the income on that day.

177
00:24:48.600 --> 00:25:09.240
Dan DeLong: And if that reporting. If you run the report to include both of them once he gets to the actual bill that it's applied to you would see it me remove that have been applied cash payment and and then accorded and you know allocated appropriately based on the bill.

178
00:25:09.960 --> 00:25:11.400
Dan DeLong: But not until that day.

179
00:25:11.940 --> 00:25:12.300
Michelle Long: And that's

180
00:25:12.390 --> 00:25:13.470
Dan DeLong: Still, it gets to that point.

181
00:25:13.800 --> 00:25:21.360
Michelle Long: Yeah, and that's a good point. Dan is the dates are key. And so if you see that and apply cash payment income and expense in there.

182
00:25:21.630 --> 00:25:33.390
Michelle Long: When you see it in there on a certain date which you can do is run that cash basis p&l like by month to see when it first shows up and then cut it down and go by week that can help you to identify

183
00:25:33.750 --> 00:25:40.650
Michelle Long: What date that happened and that helps you identify it helps you to fix it or drill, because when you drill down, you don't see it.

184
00:25:41.520 --> 00:25:56.100
Michelle Long: You don't see that. So you want to run your report narrowing it down by dates to help you to go in and identify where that happened and how you can fix it. Sometimes it's as simple as changing the date so that they're the same date and that avoids the problem.

185
00:25:56.610 --> 00:26:02.040
Dan DeLong: But in this in this instance that you don't want to do that because that's two different years.

186
00:26:02.070 --> 00:26:02.550
Yeah.

187
00:26:03.930 --> 00:26:14.340
Dan DeLong: You wouldn't want to, you know, if they if they were filed their taxes based off of that report that they ran in 2019 that expenses recognized already

188
00:26:14.670 --> 00:26:15.300
Michelle Long: Right, though.

189
00:26:16.230 --> 00:26:23.370
Dan DeLong: So they would want to, you know, find out what what actually happened again, you know, the police officer coming into the

190
00:26:24.060 --> 00:26:25.620
Dan DeLong: Into the scene of the crime.

191
00:26:28.560 --> 00:26:29.100
Dan DeLong: Before

192
00:26:29.340 --> 00:26:39.210
Dan DeLong: Because the question was, well, how do I fix this. Well, like, well, really, there wasn't much to fix because that's what happened. Now you're in the same

193
00:26:40.020 --> 00:27:00.060
Dan DeLong: If you're in the same accounting period then changing the date so that the bill proceeds the invoice or utilizing the the proper accounting with retainers and deposits and things of that nature so that it doesn't go that route and not even touch the, the profit or loss.

194
00:27:00.360 --> 00:27:09.510
Michelle Long: Right, so that hopefully will help you to understand what that is, when you see that on the p&l, do you want to go and launch the next poll question and then

195
00:27:09.780 --> 00:27:11.700
Michelle Long: We'll pass it to you for a while and

196
00:27:12.180 --> 00:27:17.490
Michelle Long: And again, these are things that you know our special accounts like that apply cash payments.

197
00:27:18.120 --> 00:27:24.330
Michelle Long: Income or bill payment expense. Those are special accounts that QuickBooks uses when when you run that report.

198
00:27:25.440 --> 00:27:33.900
Michelle Long: So, you know, a lot of people are like, what is this. Where did it come from, why is it here. And so hopefully that's going to help you to understand that a little bit better.

199
00:27:35.490 --> 00:27:37.080
Michelle Long: And dance. Yes, thank you. He

200
00:27:38.190 --> 00:27:40.320
Michelle Long: Put the link to a great resource there.

201
00:27:41.370 --> 00:27:45.930
Dan DeLong: Now. So the question here is what Pro Advisor certifications. Do you have you can

202
00:27:46.470 --> 00:28:00.120
Dan DeLong: This is one of those where you can check all that apply. So if your core certification for Qb. Oh, or get your advanced certification desktop enterprise point of sale or still working on it. Just let us know here because what's

203
00:28:00.240 --> 00:28:08.610
Michelle Long: A minder reminder y'all have about two weeks left until the end of the month. If you are already certified

204
00:28:09.090 --> 00:28:14.640
Michelle Long: In QuickBooks Online or your Advanced Certified you need to do your recertification

205
00:28:14.940 --> 00:28:23.190
Michelle Long: By the end of the month. So this is a reminder for you that you need to get this done. It doesn't take that long for the core research, it's only two modules.

206
00:28:23.520 --> 00:28:30.090
Michelle Long: For the advanced research, it's three modules. So you want to renew your certification. So you don't have to do the whole thing over again.

207
00:28:30.450 --> 00:28:39.930
Michelle Long: Now, if you were recently certified. Let's say you just took the V con, you know, a month or two ago, and you just got certified. You don't have to recertified until 2021

208
00:28:40.380 --> 00:28:52.260
Michelle Long: All right. But if you were certified, I think, is before like November, I don't know, fewer certified last year, you probably need to do that recertification I know I still need to get mine done so.

209
00:28:52.290 --> 00:28:53.160
Michelle Long: I have to get in there.

210
00:28:54.210 --> 00:28:54.780
Dan DeLong: For you.

211
00:28:55.050 --> 00:28:57.150
Michelle Long: It is it is so

212
00:28:57.210 --> 00:28:59.100
Dan DeLong: You're actually preaching in the choir.

213
00:28:59.220 --> 00:29:05.670
Michelle Long: Yes, so we need to do our recertification by August 31 and don't put it off till the last minute.

214
00:29:06.990 --> 00:29:07.320
Michelle Long: Okay.

215
00:29:07.440 --> 00:29:20.070
Dan DeLong: Let's go ahead and close out the poll and share the results you can see the mostly QB oh certification is what we have, but we do have some advanced and you definitely don't want to do that test all over again.

216
00:29:21.990 --> 00:29:25.110
Dan DeLong: Desktop and enterprise in and a few point of sales on there.

217
00:29:26.160 --> 00:29:29.430
Michelle Long: And I'm just going to share it also real quickly. Sorry, Dan.

218
00:29:29.760 --> 00:29:38.460
Michelle Long: Those of you that are course certified or maybe you're not certified at all. I encourage you to do the advanced certification. It's more possible than ever and

219
00:29:38.970 --> 00:29:47.010
Michelle Long: Look, if you look at the average billing rates when you get Advanced Certified you can charge 20 to 25% more versus the course certification.

220
00:29:47.250 --> 00:29:59.040
Michelle Long: Advanced Certified versus no certification they charge 46% higher billing rates. So if that's not motivation to take the time to get certified and get the advanced certification. I don't know what is. I mean,

221
00:29:59.100 --> 00:29:59.700
Michelle Long: Not only

222
00:30:00.480 --> 00:30:01.830
Dan DeLong: You're not motivated by money.

223
00:30:02.070 --> 00:30:14.130
Michelle Long: Yeah, yeah. And somebody asked him, what's the next training for uncertified I'll put a link in there for how you can access the training and all that stuff. So, all right, Daniel. Go ahead and take it away.

224
00:30:14.580 --> 00:30:21.300
Dan DeLong: Yeah, there's, there was a couple questions that I wanted to kind of touch up on some of the things that you covered. Michelle.

225
00:30:21.960 --> 00:30:23.670
Dan DeLong: So somebody, somebody was saying I don't

226
00:30:23.670 --> 00:30:30.270
Dan DeLong: Do so. Nancy was saying I don't do deposits all my payments are online, so I don't need and deposited funds. Right.

227
00:30:32.010 --> 00:30:33.780
Michelle Long: So they're all out. Go.

228
00:30:34.140 --> 00:30:35.460
Dan DeLong: Right to the bank account.

229
00:30:36.150 --> 00:30:46.050
Michelle Long: Right and so invade yeah if they're doing online payments and stuff. You're just going to be handling that from the bank feed, and yes, it went directly into the into the deposit

230
00:30:46.860 --> 00:30:56.250
Michelle Long: Directly into the checking account that's okay and deposited funds is where you have to group multiple payments together. Now, you could have a situation where

231
00:30:57.420 --> 00:31:10.020
Michelle Long: The payments are made through like Visa and MasterCard and Visa and MasterCard add those two together to make one bank deposit. So when if you're entering the sales like through a daily sales summary.

232
00:31:10.350 --> 00:31:16.650
Michelle Long: You might be putting visa payments that you received today into deposited funds, along with the MasterCard

233
00:31:16.890 --> 00:31:21.300
Michelle Long: Because then you make the deposit to group those together to make one bank deposit

234
00:31:21.540 --> 00:31:34.350
Michelle Long: So you need to follow the flow of the money and just remember that your goal is always whatever goes into the bank account in QuickBooks should be what's actually going into the bank account. So when you go to reconcile those deposits matchup

235
00:31:34.920 --> 00:31:43.620
Dan DeLong: Yeah, and it's also a great advantage of the Qb payments or the QuickBooks payments when you're building outside of, you know, billing through QuickBooks.

236
00:31:44.160 --> 00:31:50.550
Dan DeLong: Is it does those batches for you and and makes those deposits through and deposited funds for you.

237
00:31:50.970 --> 00:32:00.360
Dan DeLong: QuickBooks Online. You don't even need to make those transactions as soon as the payment is is funded it makes those transactions for you and then you just match them.

238
00:32:00.750 --> 00:32:16.920
Dan DeLong: To your download the bank feed and you don't even have to worry about on deposited funds, it does the worrying for you. So that's a great way to actually train your clients is not even use it use, use a service that goes along with it so you don't have to have those things.

239
00:32:18.210 --> 00:32:21.570
Dan DeLong: Yeah. Alright. So moving on to sales tax.

240
00:32:23.250 --> 00:32:32.790
Dan DeLong: This is one of those accounts QuickBooks Online and Desktop function a little bit differently when it comes to sales tax and sales tax payable.

241
00:32:33.360 --> 00:32:41.700
Dan DeLong: But sales tax payable is is a liability account and it's a special account that's created inside of QuickBooks automatically for you.

242
00:32:42.390 --> 00:32:56.370
Dan DeLong: But when you're using third party apps like the law or other programs that feed into the sales tax, or if you're, you know, doing website sales and collecting the sales tax that way.

243
00:32:56.730 --> 00:33:04.770
Dan DeLong: You may not use the sales tax feature. I'm not saying you need to not use the sales tax feature, but sometimes that sales tax.

244
00:33:05.160 --> 00:33:17.100
Dan DeLong: Feature in the functionality that's tied to it is is not as relevant as it would be if you were collecting sales tax directly within the sales transactions that are in in QuickBooks.

245
00:33:18.000 --> 00:33:30.090
Dan DeLong: Now in desktop, there is a tool that will help you correct it. And we did a QB power hour on how to save time with the accounting tools so that link is there.

246
00:33:30.660 --> 00:33:39.240
Dan DeLong: For that, and an explanation of how to use that tool because what happens sometimes is that people will pay their sales tax.

247
00:33:39.630 --> 00:33:46.170
Dan DeLong: And then put it to either put it directly to sales tax payable or put it to an expense account which is even worse.

248
00:33:47.070 --> 00:33:57.060
Dan DeLong: Like I'm paying money, it must be an expense makes sense on the in theory but in in accounting. That's not, that's not the case.

249
00:33:57.690 --> 00:34:11.700
Dan DeLong: But the tool inside of QuickBooks accountant and it's only the accountant version will actually fix find and fix the sales tax payments that were entered incorrectly for you so you don't have to worry about, again, the

250
00:34:12.870 --> 00:34:14.790
Dan DeLong: The reconciliation or

251
00:34:15.840 --> 00:34:20.490
Dan DeLong: Deleting and re entering those those sales tax payments, the right way, it will it will fix it for you.

252
00:34:21.870 --> 00:34:39.390
Dan DeLong: Now in desktop, you'll see here that you can't even edit the account on the item. So down here in the lower lower left here, this is creating a sales tax item. And that's, that's one of the big differences between desktop and online is how the sales taxes even created you create

253
00:34:40.620 --> 00:34:52.530
Dan DeLong: Items and groups to be able to collect your sales tax inside of QuickBooks desktop, but you can see here in the in the lower left the item itself. When you're creating an item, you don't even you can't even tell it.

254
00:34:53.010 --> 00:35:02.580
Dan DeLong: Where to where to point that on the on the balance sheet or that account so it's it's hard coded sales tax payable is only available.

255
00:35:03.570 --> 00:35:14.760
Dan DeLong: By create by using an item or sales tax item or a grouping those sales tax items together. And sometimes what you'll see here on the right side.

256
00:35:15.630 --> 00:35:19.950
Dan DeLong: We have a sales tax liability report and this is a great report if you know what you're looking for.

257
00:35:20.760 --> 00:35:43.050
Dan DeLong: But in the sales tax collected column. Sometimes that does not align with what it says the sales tax payable is for that same period. So here it does so you can see the Santa Domingo, the tax collected for that time period matches the sales tax payable. So when I go to pay the sales tax.

258
00:35:44.250 --> 00:35:58.170
Dan DeLong: Here that everything is is perfectly aligned, but sometimes you'll see a sales tax payable amount that is different than what the tax was collected and that's part of that specialness

259
00:35:58.800 --> 00:36:04.140
Dan DeLong: Is that even a word of sales tax payable of that sales tax payable account.

260
00:36:04.620 --> 00:36:15.210
Dan DeLong: And what will happen is people will use the functionality that makes sense to them, but it breaks the functionality inside of QuickBooks. So that's where they write a check.

261
00:36:15.720 --> 00:36:24.030
Dan DeLong: To sales tax payable and QuickBooks doesn't know you know that doesn't know that that's actually a sales tax payment, because that's a special transaction.

262
00:36:24.570 --> 00:36:34.230
Dan DeLong: And it will just put that into the account because that's the balance as of that particular moment in time. So that's just something to

263
00:36:34.950 --> 00:36:51.570
Dan DeLong: This report the sales tax liability report is a way for you to realize and and do your detective work you drill in on the sales tax payable amount here and then look for transactions that are outside of the normal workflow.

264
00:36:52.710 --> 00:36:54.690
Dan DeLong: And when you were talking to Michelle about

265
00:36:56.250 --> 00:37:11.670
Dan DeLong: On deposited funds and the positive funds is a great way to find that is to run a report on sales or on your revenue but then filter it for deposits. So if you're looking for the revenue account.

266
00:37:12.630 --> 00:37:18.720
Dan DeLong: You know, you would not see, you know, knowing what you know about under positive funds if you run a report for

267
00:37:19.110 --> 00:37:26.970
Dan DeLong: The revenue accounts and filter for only deposits that are posting that will help you identify transactions that may

268
00:37:27.390 --> 00:37:33.540
Dan DeLong: You know, should be going through and deposited funds and then you can make your make your adjustments. Same thing here.

269
00:37:34.020 --> 00:37:40.200
Dan DeLong: You can drill in on on the sales tax payable account and look for check, you know, because a

270
00:37:40.740 --> 00:37:48.300
Dan DeLong: Sales tax payment is going to be listed as a specific special transaction. So that's, that's how QuickBooks kind of reconciles

271
00:37:48.720 --> 00:38:05.820
Dan DeLong: A lot of the specialness of the sales tax, or of the of the special accounts, is it uses specific transactions to help with that, because then there's additional functionality on those particular transactions. That's not on a check for example.

272
00:38:07.590 --> 00:38:12.930
Dan DeLong: And then in QuickBooks Online. It's a totally different ball game when it comes to sales tax.

273
00:38:14.040 --> 00:38:32.700
Dan DeLong: Sales tax payable is that account by itself isn't even used the way that it was used in in desktop. So there's two sales tax centers. When you looking in QuickBooks Online and this is the automated sales tax. So you can see

274
00:38:34.230 --> 00:38:44.850
Dan DeLong: If it looks like this, then you know that you're in the automated sales tax this screen is the manual sales tax. So when we're comparing desktop to online.

275
00:38:45.810 --> 00:38:54.990
Dan DeLong: Online when you're using the the automated. You don't have to know who you need to pay. You don't have to know the amounts QuickBooks Online will will

276
00:38:55.560 --> 00:39:08.040
Dan DeLong: Do those do those things for you when you have the Online manual sales tax, or using desktop, you have to know how frequently you do the payments, how

277
00:39:08.700 --> 00:39:20.880
Dan DeLong: Who you make the payments to and what those amounts are and you have to set those things up. So if you see it looking like this. This is the manual method. Very similar to desktop. I'm going to set up.

278
00:39:21.720 --> 00:39:31.440
Dan DeLong: You know, over here on the right side where it says add, edit rates and agencies, you got to set those things up with the automatic automated sales tax.

279
00:39:32.490 --> 00:39:46.020
Dan DeLong: In theory, QuickBooks will do those automatic tax payments for you and or collect the the payments properly based on the sale so you

280
00:39:46.740 --> 00:39:57.300
Dan DeLong: There's a lot of things that you don't have to worry about. But as accountants, we do worry about those things. And sometimes it's not exactly right, because there are so many different

281
00:39:59.250 --> 00:40:07.410
Dan DeLong: What's, what's what I'm there's so many different nuances to sales tax, and we had Avalon. Come on, and talking about

282
00:40:08.460 --> 00:40:25.080
Dan DeLong: The sales. Sales tax and they they showed an example of in Colorado next door neighbors had two different sales tax rate. So if you need to know that sort of thing. And that's a, that's a challenge. Then we'll definitely take a, take a peek at the

283
00:40:26.460 --> 00:40:47.340
Dan DeLong: episode that we did about sales tax, but with sales tax payable in in QuickBooks Online, the way it's calculated the special account is it's created based on the vendor. So when you specify who your payment is is paid to

284
00:40:48.600 --> 00:40:57.060
Dan DeLong: Then QuickBooks will create in online, it will create a a sales tax payable account for you on the chart of accounts for that vendor.

285
00:40:57.990 --> 00:41:04.560
Dan DeLong: So, you will see that on your chart of accounts if you collect sales tax payable for multiple

286
00:41:05.220 --> 00:41:18.120
Dan DeLong: Vendors you're going to see a sales tax payable account for each of those vendors on your on your Chart of Accounts and QuickBooks is very unforgiving about modifying those those accounts.

287
00:41:18.720 --> 00:41:26.670
Dan DeLong: So when you go into the Chart of Accounts trying to edit or merge. You're breaking functionality by doing that. So it doesn't let you do that.

288
00:41:27.570 --> 00:41:38.640
Dan DeLong: On your Chart of Accounts. So it does make things a little messy. I guess it's the best way to describe that when when you're looking at the balance sheet. You see all of these

289
00:41:39.450 --> 00:41:59.850
Dan DeLong: Vendor payments, like an Arizona Department of Revenue or California State Board of Equalization payable accounts when you may we just want to see one sales tax payable and. Oh. If you converted from desktop to online, you get the sales tax payable account. On top of that, so

290
00:42:01.020 --> 00:42:07.140
Dan DeLong: So there's a lot of nuances when it comes to sales tax, and those and those special accounts so

291
00:42:08.640 --> 00:42:11.580
Dan DeLong: Was there any questions. I was just kind of rambling on there.

292
00:42:12.180 --> 00:42:12.990
Michelle Long: Yes, and

293
00:42:13.290 --> 00:42:13.680
Dan DeLong: Michelle.

294
00:42:13.950 --> 00:42:22.230
Michelle Long: Yes, and I did put the link to the recording out there that is if you guys haven't listened to that. That is so important now with

295
00:42:22.770 --> 00:42:37.740
Michelle Long: Nexus and a new way fair ruling and how that impacts our clients, where it can trigger sales tax in other states. THEY WEREN'T PLANNING ON. So I put the link to that there's links to other great resources there. I highly encourage you to do that. Dan rich, rich

296
00:42:39.690 --> 00:42:44.670
Michelle Long: Rich says Qb. Oh, sales tax, can you go from manual to automated, or the other way.

297
00:42:46.380 --> 00:43:02.370
Dan DeLong: No, yes and no. But yes, is is a is a very convoluted way in order for you to switch between manual and automated once it's kind of like a garage tire strip right

298
00:43:02.910 --> 00:43:10.650
Dan DeLong: When you go past that if you try to reverse that you're going to have Severe Tire Damage. So you try to backup.

299
00:43:11.460 --> 00:43:23.340
Dan DeLong: Especially if you've created in order to go back to manual in QuickBooks Online, you have to have zero transit sales transactions that have used the automated sales tax calculation.

300
00:43:23.790 --> 00:43:39.360
Dan DeLong: So basically you have to delete all your sales that that we're using the automated sales tax in order to switch it back to to manual and oftentimes that is too convoluted to actually get it back to that to that point.

301
00:43:40.410 --> 00:43:43.890
Dan DeLong: But this is the new newer method.

302
00:43:45.330 --> 00:43:52.410
Dan DeLong: And, you know, as we talked about last last can be a power hour feedback sending feedback.

303
00:43:52.470 --> 00:44:00.150
Michelle Long: Yes. And so, Dan. Here's another question from Barbara. I heard there were many issues with automated sales tax and Qb. Oh. Is that your experience.

304
00:44:01.710 --> 00:44:05.970
Dan DeLong: When it works. It works great if it doesn't work. It's horrible.

305
00:44:07.470 --> 00:44:08.970
Dan DeLong: I guess that's the easiest

306
00:44:09.270 --> 00:44:22.830
Dan DeLong: nicest way to put it, because there are so many, so many nuances to sales tax, you know, sales tax holidays in New York for back to school. Well, kids are going to school, maybe not this year, but next year.

307
00:44:23.490 --> 00:44:32.820
Dan DeLong: You know, but you have all of those things and then like Florida luxury items threshold sales tax. I've seen it work really well.

308
00:44:34.080 --> 00:44:46.770
Dan DeLong: You know, for a lot of things. There's just a lot more things when it comes to actually calculating what the sales tax payable was now if you know what the sales tax p you know amount should be yes, you can override that.

309
00:44:47.550 --> 00:45:05.580
Dan DeLong: And go into the transactions and modify that. But if it's been collected based on or an incorrect amount, you know, then, then there's another challenge to to address at that point is, well, how do I do deal with that my customer in my on the hook for that that that

310
00:45:06.180 --> 00:45:08.400
Michelle Long: That in Indiana.

311
00:45:09.120 --> 00:45:20.040
Michelle Long: Sales tax. Yeah, yeah, I just want to let people know too because somebody else asked, What's the best way to fix sales tax errors and Qb. Oh Qb. Oh, never seems to be able to calculate correctly, at least in California.

312
00:45:20.460 --> 00:45:28.740
Michelle Long: If you go to the advanced CERT training module eight. Maybe there's a module in the advanced certification training.

313
00:45:29.160 --> 00:45:38.160
Michelle Long: That covers sales taxes is spent the automated sales taxes in detail, and it shows you where you can change the calculation, if you need to.

314
00:45:38.520 --> 00:45:45.330
Michelle Long: And it covers also when you need to make sales tax adjustments. Let's say like Dan said, maybe you weren't charging the right rate.

315
00:45:45.900 --> 00:45:52.530
Michelle Long: Maybe You Forgot to charge a client sales tax. How do you invoice them for sales tax only maybe you had a sales tax audit.

316
00:45:52.770 --> 00:46:04.680
Michelle Long: And I oh $5,000 and I'm not going to go collect it from my clients. How can I make that adjustment and get it in QuickBooks. So in the advanced certification training. We've covered, things like that. So you can go check that out.

317
00:46:05.160 --> 00:46:19.200
Michelle Long: Advanced automated sales tax is awesome. But it's also, you got to know what you're doing or get help, setting it up. So, India, did we mentioned that you may not use the sales tax feature in QuickBooks. If you're using a third party app.

318
00:46:19.530 --> 00:46:20.700
Michelle Long: Or another system.

319
00:46:20.940 --> 00:46:40.350
Dan DeLong: That we do if you do connect to to Avalon and just really outsource your sales tax calculations and functionality. They completely bypassed sales tax payable and that and that sort of thing there. So that may take a lot of headaches off your case.

320
00:46:41.430 --> 00:46:45.750
Dan DeLong: And the way they explained it is, you know, do what you do best and outsource the rest

321
00:46:46.830 --> 00:46:55.080
Dan DeLong: And I thought that was a great way to put it, because there are so many things to know about sales tax. If that's your specialty then

322
00:46:55.440 --> 00:46:56.550
Dan DeLong: You know, by all means.

323
00:46:57.150 --> 00:47:04.830
Dan DeLong: But a lot of a lot of our, our accounting friends and bookkeepers would just go, I don't want to touch this, but I still need to make this

324
00:47:05.820 --> 00:47:16.770
Dan DeLong: You know, this is an essential business practice and you being in compliance with sales tax is is a big thing for for for a business.

325
00:47:17.280 --> 00:47:30.630
Dan DeLong: To know and do and do properly because you know if they find a problem. They are going to let you know about it and they're gonna charge penalties and interest in late fees and all that stuff for for not doing it properly.

326
00:47:31.470 --> 00:47:33.540
Dan DeLong: It looks like we stepped on a hornet's nest.

327
00:47:33.600 --> 00:47:34.740
Michelle Long: We did yeah what

328
00:47:36.240 --> 00:47:43.260
Michelle Long: What one question I want to answer verbally, Dan, somebody says QuickBooks flat out disclaim that they have responsibility for sales tax.

329
00:47:43.560 --> 00:47:49.470
Michelle Long: It's our responsibility in our clients to ensure that it's set up properly. If we set it up wrong.

330
00:47:49.860 --> 00:48:01.170
Michelle Long: Then we're liable. And that's one reason why, when it comes to the automated sales tax, you have to go in on a particular item and say, is this item taxable or not, in which tax rate applies to it.

331
00:48:01.770 --> 00:48:10.650
Michelle Long: I don't know that in some areas, a Hershey bar is taxed as candy, but a Hershey bar with almonds is taxed as food because it's got almonds in it.

332
00:48:10.950 --> 00:48:18.840
Michelle Long: fluoride toothpaste versus non fluoride tax different rates. I don't know all these sales tax laws. So I'm going to get these wrong when I'm setting it up.

333
00:48:19.080 --> 00:48:27.630
Michelle Long: So I'm going to turn to somebody who's assault expert sales and local taxes or avalanche because I don't know how to set it up all properly.

334
00:48:27.930 --> 00:48:36.120
Michelle Long: And if it's not set up properly the clients going to point to me and come to me for liability. It's not into its fault. I didn't set it up properly.

335
00:48:36.720 --> 00:48:50.190
Michelle Long: So, you know, the automated sales tax like Dan was saying it is great. It does automatically adjust for sales tax holidays, things like that. But if it's not set up properly. You're in trouble. So please be careful with sales taxes and check out the avalanche link.

336
00:48:52.110 --> 00:48:54.300
Dan DeLong: And that feeds right into payroll taxes.

337
00:48:55.170 --> 00:48:57.150
Dan DeLong: Because it's a same thing when

338
00:48:57.240 --> 00:49:15.420
Dan DeLong: When you're you're setting up your payroll. If you don't set it up properly then then then the calculations are going to be going to be off and, you know, just like just like the guarantee you know QuickBooks is a very good calculator when it's fed the right information.

339
00:49:16.560 --> 00:49:32.100
Dan DeLong: So when you're talking about payroll taxes, you know, these are going to be the special accounts that we're going to be talking about here, you know, payroll liabilities payroll expenses. They're really only used when you're using the Intuit services so

340
00:49:33.150 --> 00:49:41.190
Dan DeLong: You know. So just like with sales tax if you're only if you're using sales tax directly within QuickBooks, then those functionalities are going to be

341
00:49:41.520 --> 00:49:52.650
Dan DeLong: Kind of dictated by the transactions that are created when you're actually using the that functionality so payroll transactions are really going to dictate the the functionality so

342
00:49:53.040 --> 00:50:05.550
Dan DeLong: Paycheck which is a special type of check is going to be utilized in with the reporting and those accounts when it comes to, you know, the payroll liability account.

343
00:50:06.300 --> 00:50:14.970
Dan DeLong: And then liability payments are is a special transaction that that drives the the reporting and allows QuickBooks to actually

344
00:50:15.420 --> 00:50:26.160
Dan DeLong: manage those things inside of inside of QuickBooks, and dates are very important when it comes to payroll, you know, the payroll tax liability account.

345
00:50:26.760 --> 00:50:36.930
Dan DeLong: The paycheck date is the main date. It is a cash basis thing, you know. So payroll accrued payroll doesn't really do that.

346
00:50:37.830 --> 00:50:44.460
Dan DeLong: As well, you know, as, as your, your employees are entering time and those types of things that doesn't hit

347
00:50:45.330 --> 00:50:55.290
Dan DeLong: The, the account and then with the payroll liability tax payments, the paid through date is is the most important because that's what happens you accrue

348
00:50:55.980 --> 00:51:12.570
Dan DeLong: You know the patron payroll cycle is paycheck paycheck paycheck paycheck increases your liability and then as of those paycheck dates you need to pay those liabilities through that date, but you don't do it right at the end of the month. Right. I mean, nobody pays their liability.

349
00:51:13.590 --> 00:51:15.240
Dan DeLong: Well, maybe some people do, but

350
00:51:16.350 --> 00:51:24.510
Dan DeLong: Most people don't pay their liabilities or their tax payments right before the, the end of the month, they'll, they'll do it when it's do

351
00:51:24.990 --> 00:51:35.280
Dan DeLong: Which may be the 15th or the end of that, following month, but you want the paid through date to be recognized for those paychecks that were done that last month.

352
00:51:36.060 --> 00:51:41.700
Dan DeLong: Now I'm payroll is processed outside of QuickBooks. You may not use the payroll tax feature at all.

353
00:51:42.120 --> 00:51:53.520
Dan DeLong: So even if you're using the Intuit online payroll and sending that information into into QuickBooks Online or desktop, you're not going to be using the payroll liabilities feature.

354
00:51:54.510 --> 00:52:08.730
Dan DeLong: Inside of inside of QuickBooks, but there is in desktop. Again, if you want to watch that prior prior QB power hour that we had on the client data review tool. There is a way to find

355
00:52:09.510 --> 00:52:20.190
Dan DeLong: Incorrectly paid payroll taxes because those transactions, the liability payment is is so necessary for QuickBooks to actually get the right reporting.

356
00:52:20.640 --> 00:52:31.110
Dan DeLong: You know, because what will happen is like what you see here, you know, the payroll the pay taxes and other liability section, the payroll pay you liability section of your payroll.

357
00:52:32.160 --> 00:52:37.680
Dan DeLong: Payroll center. It may show them something that's overdue that you know you've already paid

358
00:52:38.910 --> 00:52:39.360
Dan DeLong: And

359
00:52:40.500 --> 00:52:50.730
Dan DeLong: Then we got again the police officer coming into the scene of the crime figuring out how that was actually done the client data review tool will help you find

360
00:52:51.360 --> 00:52:58.560
Dan DeLong: Incorrectly paid payroll taxes, even if they're using the liability account of payroll liabilities.

361
00:52:59.400 --> 00:53:16.440
Dan DeLong: It doesn't use those payroll items and pay those properly and the paid through deed is not correct on a regular check that's posting to payroll liabilities. So it needs to be done through a liability payment, which is a special transaction.

362
00:53:17.670 --> 00:53:21.420
Dan DeLong: So the data client data.

363
00:53:22.470 --> 00:53:30.450
Dan DeLong: Review tool doesn't do like sales tax payments were fines and fixes, but it helps you identify those transactions.

364
00:53:31.440 --> 00:53:42.630
Dan DeLong: So that you can create those liability payments properly. It's kind of like what Michelle was talking about with under positive funds, you have to create a liability zero liability payment.

365
00:53:43.080 --> 00:53:55.380
Dan DeLong: And then offset whatever account that they used on the check so that it's a zero payment, but it's actually paid through date is correct. And it's actually a liability payment there.

366
00:53:57.450 --> 00:54:02.040
Dan DeLong: You go right into inventory. We have anything about payroll because I saw

367
00:54:02.100 --> 00:54:03.420
Dan DeLong: A lot of Q and A's.

368
00:54:03.990 --> 00:54:15.630
Michelle Long: Yeah, I'm furious still trying to keep up with all the sales tax questions. Um, is there still an issue with making changes to payroll tax forms on Qb. Oh, ie, you can't change the schedule be on a 941

369
00:54:17.370 --> 00:54:18.480
Dan DeLong: Wow. Yeah. That's

370
00:54:20.430 --> 00:54:33.000
Dan DeLong: I don't, I don't believe you, you, you can know when we're talking about you know the the forums, it's really kind of outside of the scope of, you know, what we're talking about with special accounts, but you can

371
00:54:34.290 --> 00:54:49.980
Dan DeLong: Yeah, but that would have to be you'd have to probably look at look at that and research that with regards to the forums, but not off the top of my head. If we are talking about modifying the forums and now with the payroll offerings and Qb. Oh.

372
00:54:51.060 --> 00:55:07.050
Dan DeLong: You know, everything is full service, even if you will. THE ONLY ONE IS CORE and you can choose to do it yourself if you need to. But those forms are pretty well locked in, as far as making modifications desktop will be

373
00:55:08.250 --> 00:55:15.990
Dan DeLong: Will be best if with regards to actually modifying the dollar amounts because you actually can override the forms.

374
00:55:17.040 --> 00:55:19.380
Dan DeLong: Right on. Right in right in QuickBooks desktop.

375
00:55:20.580 --> 00:55:26.490
Michelle Long: Okay, thank you, Dan. I'm gonna let you finish. We just got more minutes left. And then we can do it. We were

376
00:55:26.790 --> 00:55:28.710
Dan DeLong: Wondering if we were gonna have enough time and

377
00:55:30.570 --> 00:55:32.730
Dan DeLong: Sales tax and and deposited funds.

378
00:55:33.480 --> 00:55:37.140
Dan DeLong: inventory. Inventory is another special account.

379
00:55:38.460 --> 00:55:48.120
Dan DeLong: Now you may not track inventory. Again, if you're if you're using a third party app or program. But again, just like with sales tax and payroll.

380
00:55:48.840 --> 00:56:00.300
Dan DeLong: With inventory always have to use an inventory item on all inventory transactions, because some people will make a journal entry for the value adjustment of their inventory asset.

381
00:56:01.380 --> 00:56:10.590
Dan DeLong: By doing that, your, your balances will be off because the inventory detail reports are only going to be looking at transactions that are used.

382
00:56:11.220 --> 00:56:24.450
Dan DeLong: Using an inventory item and, you know, down here at the bottom, it will do you know you can specify different inventory asset accounts so you can sub categorize your inventory if need be.

383
00:56:25.050 --> 00:56:38.940
Dan DeLong: But that's where you would map the account in in when you're setting up inventory parts inside of QuickBooks desktop and also you want to avoid negative inventory. There's warnings, all the time.

384
00:56:40.140 --> 00:56:51.030
Dan DeLong: And QuickBooks desktop, you can bring back all one time messages. It's a preference to school. A lot of times people will Oh just just don't show me this again in the future and

385
00:56:51.600 --> 00:57:11.340
Dan DeLong: And those those messages were actually there for a reason. So, and then, of course, is the question. Well, no, it's QuickBooks didn't warn me about that. Well, they may have just this this miss the message and you can bring those back, but that's a that's again, a key using the inventory

386
00:57:12.480 --> 00:57:25.290
Dan DeLong: Same in the same in QuickBooks Online when you're using and setting up once you've set up inventory and quantity on hand always used inventory items on all the transactions.

387
00:57:25.680 --> 00:57:36.420
Dan DeLong: That you're utilizing because making correct inkwell making adjustments for those balances will throw off the the reports. And that's really where

388
00:57:37.050 --> 00:57:51.360
Dan DeLong: Because you'll be looking at an inventory detail report and it will say it adds up to this you know hundred thousand dollars. And then you look at the balance sheet and it's 95,000. Well, how did it get that discrepancy. Again, you can drill in on that.

389
00:57:52.530 --> 00:57:53.460
Dan DeLong: That dollar amount

390
00:57:54.090 --> 00:58:02.280
Dan DeLong: In the balance sheet and look for non inventory type transactions to help you determine what would be the best way to correct that.

391
00:58:04.020 --> 00:58:05.370
Dan DeLong: And then retained earnings

392
00:58:06.390 --> 00:58:11.970
Dan DeLong: Retained earnings is another special account that has a lot of questions associated with it.

393
00:58:12.810 --> 00:58:30.450
Dan DeLong: It is a default account that is really the cumulative net income loss over the life of the business. There's automatic calculations you know which one it is by looking at the bat the Chart of Accounts. It does not have a QuickBooks bounce.

394
00:58:31.530 --> 00:58:38.760
Dan DeLong: So you'll see an equity account that doesn't have a balance that is the one that is retained earnings

395
00:58:39.510 --> 00:58:50.880
Dan DeLong: There is, there's really no reason to put a transaction into it because QuickBooks does all the calculations for you over the life of the business based on the closing date it will make it closing entry.

396
00:58:51.360 --> 00:58:59.640
Dan DeLong: And make that and show up on reports properly so you may see in this example here that owner's equity.

397
00:59:01.110 --> 00:59:09.540
Dan DeLong: You know, there is no retained earnings account, but it was just renamed as owner's equity on on the on the chart of accounts.

398
00:59:10.170 --> 00:59:22.980
Dan DeLong: The detailed type is nice because in online because it will actually tell you the detail is is retained earnings, but you'll be able to tell which ones, which, by looking for an equity account that does not have a balance.

399
00:59:24.570 --> 00:59:26.940
Dan DeLong: But that can cause some confusion there.

400
00:59:28.500 --> 00:59:28.830
Dan DeLong: All right.

401
00:59:29.640 --> 00:59:31.170
Dan DeLong: Come on. In for a Landing.

402
00:59:33.480 --> 00:59:37.170
Dan DeLong: And here we go. So did you learn something new today.

403
00:59:38.520 --> 00:59:47.310
Michelle Long: And why y'all are answering that poll question, Dan on payroll taxes will allow us to be the reporting agent, as we can in desktop.

404
00:59:48.570 --> 01:00:01.140
Dan DeLong: In yes if you go into the settings, there will be a way to put in the you are the reporting agent in in the online settings. Yes.

405
01:00:02.910 --> 01:00:09.750
Michelle Long: All right, and somebody. This is a loaded question. I definitely don't think we have time for.

406
01:00:10.140 --> 01:00:17.760
Michelle Long: What are the, what are the problems with doing away with or deferring payroll taxes. I'm going to say that's beyond the scope of our

407
01:00:18.180 --> 01:00:22.650
Michelle Long: Discussion here, and especially because like, yeah.

408
01:00:22.710 --> 01:00:25.470
Dan DeLong: We're just gonna, that's the PPP stuff and

409
01:00:26.280 --> 01:00:31.080
Dan DeLong: You know, there are other other accounting professional like Matt Fulton and Hector.

410
01:00:31.140 --> 01:00:32.190
Dan DeLong: Garcia are doing

411
01:00:32.250 --> 01:00:34.830
Michelle Long: A lot of work. ABOUT YES.

412
01:00:34.860 --> 01:00:44.880
Dan DeLong: No keeping up to date with all that. So I would definitely look at look at their resources that they have available. Are they, they're making a lot of things just available to you.

413
01:00:46.080 --> 01:00:50.430
Dan DeLong: And it's changing too rapidly for for my me

414
01:00:50.700 --> 01:00:52.740
Dan DeLong: Me to keep up. I have so

415
01:00:53.250 --> 01:01:08.640
Michelle Long: Yeah, I would. Yeah, I would refer you guys to Hector or Matt they've been doing a lot of webinars and recordings and stuff on that kind of stuff. So yeah, somebody said what were the two Hector and Matt Fulton yeah I'm gonna put it in there. Thank you.

416
01:01:12.510 --> 01:01:21.180
Dan DeLong: Alright, so you did have a lot of people learning something new today 92% which is awesome.

417
01:01:21.270 --> 01:01:21.840
Great.

418
01:01:23.190 --> 01:01:26.070
Dan DeLong: Any other questions you want to handle here.

419
01:01:27.420 --> 01:01:27.780
Michelle Long: Um,

420
01:01:28.080 --> 01:01:42.270
Michelle Long: Yeah. Just, just a couple that I didn't have time to type. I just can't type this fast, um, Mark says I don't handle too many sales tax clients does PayPal or square accumulate sales taxes and payable amounts for clients.

421
01:01:43.800 --> 01:01:47.940
Dan DeLong: I don't know, I've never actually looked at those two

422
01:01:49.320 --> 01:02:05.220
Dan DeLong: Those two options, and are we talking about, actually, if we're talking about actually using square as a, like a point of sale or receiving it at the, at the time, I believe that their settings, you know, to actually calculate. But as far as paying the sales tax.

423
01:02:06.510 --> 01:02:12.840
Dan DeLong: That that's typically where a lot of the payment processors shy away from right you know

424
01:02:13.620 --> 01:02:19.380
Dan DeLong: You can collect it. But as far as paying it, that's where your accounting package is going to come in.

425
01:02:19.470 --> 01:02:28.590
Michelle Long: Right and Jackson square does. But one of the things to keep in mind with square and PayPal, you're probably recording your sales somewhere else or you may be like what PayPal.

426
01:02:28.980 --> 01:02:38.460
Michelle Long: That's somebody recording the payment to you with PayPal, but the sale might have been generated elsewhere. You know, like on Amazon or eBay or Etsy, or whatever.

427
01:02:39.030 --> 01:02:50.820
Michelle Long: So you really need to know the third party system and how it's working. And is it calculating that and if that third party system is calculating the sales taxes and has reports for you and everything.

428
01:02:51.120 --> 01:03:07.620
Michelle Long: That's a situation where like Dan mentioned, you may not use the sales tax feature in QuickBooks, you may just record the summary totals or they may come over. If it's integrated. So you've got to do the research and kind of figure out how that's working in that third party system. Yeah.

429
01:03:08.010 --> 01:03:14.130
Dan DeLong: And there's another question here, can you delete invoices if they're linked to payments that is the

430
01:03:16.410 --> 01:03:22.410
Dan DeLong: The positive, the positive side of QuickBooks is that it's flexible and you can delete transactions and

431
01:03:22.410 --> 01:03:22.860
Michelle Long: That's the

432
01:03:22.890 --> 01:03:33.600
Dan DeLong: Bad side of QuickBooks is that it's flexible and you can delete transactions, because once they're deleted. They're gone. There's no Lazarus setting that you can raise them back from the dead.

433
01:03:33.990 --> 01:03:36.690
Dan DeLong: So you have to recreate those transactions.

434
01:03:37.440 --> 01:03:40.680
Dan DeLong: If you need need to or make some kind of adjusting entry.

435
01:03:42.480 --> 01:03:45.990
Michelle Long: All right, I think we had a lot of great questions.

436
01:03:46.080 --> 01:03:46.770
Um,

437
01:03:47.850 --> 01:03:56.040
Dan DeLong: Yeah, you can continue those questions on the Facebook group. Yeah, that's a great resource as matter of fact there was there's a group for

438
01:03:56.670 --> 01:04:09.000
Dan DeLong: For group leaders and they were asking they pose a question. What's a great place to ask questions like, where's your go to and our Facebook group came up pretty regularly on that.

439
01:04:10.080 --> 01:04:13.410
Dan DeLong: From from other people who run other Facebook groups for accounting

440
01:04:14.550 --> 01:04:16.020
Dan DeLong: So that's a great place to be.

441
01:04:16.020 --> 01:04:16.140
And

442
01:04:18.330 --> 01:04:29.040
Dan DeLong: So our upcoming, of course, is, is give me desktop at utilities. And so our next one. So join us for that. Anything else, Michelle, you wanted to add before we sign off today.

443
01:04:29.370 --> 01:04:37.830
Michelle Long: I just want to say thank you all. Don't forget, if you are certified, you need to recertified by the end of the month, and as Dad said Hope to see you guys all in the Facebook group.

444
01:04:38.250 --> 01:04:48.060
Michelle Long: And let us know what other topics and things that you all are interested in Dan and I are always wanting to meet your needs. So thanks everybody for joining us. Stay safe and safe and healthy.

445
01:04:49.050 --> 01:04:50.250
Dan DeLong: All right, we'll see you next time.

446
01:04:51.120 --> 01:04:51.750
Bye everyone.