When you can’t remember the information that you need to find a particular entry or transaction, you can search for the information by using the Find dialog box. If you can’t recall when you entered the bill, choose Edit ⇒ Find to open the Find dialog box. Choose a filter (the category to search by). The box to the right changes to include drop-down menus or
text boxes that you can use to specify what you want to search for.
Choose as many filters as you like, but be careful to enter information accurately; otherwise, QuickBooks will look for the wrong information. Also, try to strike a balance, choosing only as many filters as you really need to find your information.
The more filters you choose, the more searching QuickBooks does and the longer the search takes.
After you finish choosing filters, click the Find button; the transactions that match all your filters appear in the list at the bottom of the window. Click the transaction that you want to examine more closely and then click Go To. QuickBooks opens the appropriate window and takes you right to the transaction. Very snazzy, I do believe.
Remind me to pay that bill, will you?
You could tie a string around your finger, but the best way to make sure that you pay your bills on time is to have QuickBooks remind you. In fact, you can make the Reminders message box the first thing that you see when you start QuickBooks.
To adjust the QuickBooks reminder options, you must be logged on as the administrator in single- user mode. Then choose Edit ⇒ Preferences. When QuickBooks displays the Preferences dialog box, click the Reminders icon in the list on the left and then click the Company Preferences tab to access the dialog box shown in Figure 6-7.
FIGURE 6-7: The Reminders section of the Preferences dialog box.
Make sure that either the Show Summary or Show List option button is selected (you can’t choose Don’t Remind Me and expect to get a reminder) and then give yourself several days’ notice before you need to pay bills by typing a number (10 is the default and usually works well) in the Days Before Due Date text box, located in the Remind Me column.
If you select the Show Summary option (the first button to the right of the option), you get a summary of the bills that you owe each time you start QuickBooks. If you select Show List (the second button to the right of the option), you get the details about each bill.
You may want to review the Reminders window when you start QuickBooks or open a new company file. The window lists reminders (such as forms you need to print and
payments you need to transmit) and tells you which unpaid bills you’re supposed to pay. You can see this list by choosing Company ⇒ Reminders. Note that you can also tell QuickBooks to display any reminders when opening the company file. To do this, choose the Edit ⇒ Preferences command, click Reminders, click My Preferences, and then select the Show Reminders List when Opening a Company File check box.
Paying Your Bills
If you’ve done everything right and recorded your bills correctly, writing checks is a snap. Just follow these steps:
1. Choose Vendors ⇒ Pay Bills.
Alternatively, click the Pay Bills icon located on the home page. You see the Pay Bills window, as shown in Figure 6-8.
2. Change the Payment Date (at the bottom) to the date that you want to appear on the checks.
By default, this field shows today’s date. If you want another date on the payment check — perhaps you’re postdating the check — change this date. (See the online Cheat Sheet at
www.dummies.com for some secret date-editing codes.) 3. Set a cutoff date for showing bills.
In the Show Bills Due On or Before date field, tell QuickBooks which bills to show by entering a date. If you want to see all the bills, select the Show All Bills option button.
4. Use the Sort By drop-down menu to tell QuickBooks how to sort the bills.
You can arrange bills by due date with the oldest bills listed first, arrange them alphabetically by vendor, or arrange them from largest to smallest.
5. Identify which bills to pay.
If you want to pay all the bills in the dialog box, click the Select All Bills button. If you want to clear all the bills you marked, click the Clear Selections button. If you want to pick and choose, click to the left of the bill’s due date to pay the bill. A check mark appears where you click. Note that after you apply a payment, the Clear Selections button replaces the Select All Bills button.
6. Change the Amt. to Pay figure if you want to pay only part of a bill.
That’s right — you can pay only part of a bill by changing the number in the Amt. to Pay column. (The payee can always just send you another bill, of course.)
7. Get the early-payment discount rate on your bills, if any.
You may be eligible for an early-payment discount on some bills. To find out how much of a discount you get, click the Amt. to Pay field and then click the Set Discount button to see the Discount tab of the Discount and Credits dialog box. Use the Discount tab’s Amount of Discount box to give the dollar amount of the discount. Use the Discount tab’s Discount Account box to specify which account should be used for recording the money saved through the discount.
8. Get a list of credit memos that you can apply to the payment.
Click the Set Credits button to see the Credits tab of the Discount and Credits dialog box. If you want to use one of the credits listed to reduce the amount of the bill, click it and then click Done.
9. Select a payment date, method, and bank account.
Use the Payment area’s Date field to specify when the bill should be paid, the Method drop- down menu to select the payment method you want to use (Check or Credit Card), and the Account drop-down menu to select the bank account from which payment will be made. (Note:
If you’ve subscribed to and set up the QuickBooks online bill payment feature, you have
another payment method choice: online payment. I describe making online payments in Chapter 13.)
10. If you plan to print the check, select the To Be Printed option button.
Many businesses use QuickBooks to keep track of checks, but instead of printing the checks, they have employees write them by hand. If your business uses this method, select the Assign Check Number option button. Then, when QuickBooks asks how it should number the check, give the number by typing it in the appropriate box or tell QuickBooks to number the check automatically.
11. Click the Pay Selected Bills button to pay the bills.
QuickBooks displays a Payment Summary dialog box (not shown) that lists the bills you’ve paid and tallies the payments. You can click the Payment Summary’s Pay More Bills button to return to the Pay Bills window and select other bills for payment. Or you can click the
Payment Summary’s Print Checks button to take the next bill payment step: printing checks to pay the bills. If you do click Print Checks, QuickBooks steps you through the process for
printing checks. (I’m not going to describe how to print checks here. Chapter 10 goes into great detail about this activity.)
One other little bit of accounting trivia: When you do pay a bill, QuickBooks goes into the Accounts Payable register and notes that you paid these bills; then it goes into the register and
“writes” the check or checks. Figures 6-9 and 6-10 show you exactly what I mean. (The two figures show a $500 bill from Bertha’s Workshop being paid.)
FIGURE 6-8: The Pay Bills window.
FIGURE 6-9: How a paid bill looks in the Accounts Payable register. (Oooh. Cool.)
FIGURE 6-10: How the check that pays a bill looks in the Big National Bank account register.
QuickBooks shows the original bill amount as the amount that’s paid, not the original bill amount minus the early-payment discount. It needs to use this method to completely pay off the bill.
In the Accounts Payable register, you see BILLPMT in the Type column and the amount paid in the Paid column. The Due Date and Billed columns are now empty.
In the bank account register, you again see BILLPMT in the Type column.
Don’t kid yourself, though — these bills aren’t really paid yet. Sure, they’re paid in the mind of QuickBooks, but the mind of QuickBooks extends only as far as the metal (or trendy plastic) box that holds your computer. You still have to write or print the checks and deliver them to the payees.
If you’re going to write the checks by hand, enter the check numbers from your own checkbook in the QuickBooks register Number column. You want these numbers to jibe, not jive. (I know: A pun is the lowest form of humor.)
If you plan to print the checks, see Chapter 10.
And another thing: If you enter a bill, you absolutely must use the Pay Bills command to record the payment that pays off the bill. If you don’t do this, the unpaid bill sits there forever, lonely and
forlorn.
Tracking Vehicle Mileage
QuickBooks includes a vehicle mileage-tracking feature that lets you track your business miles. To track vehicle mileage in QuickBooks, choose Company ⇒ Enter Vehicle Mileage. Then, in the Enter Vehicle Mileage dialog box that appears, record the vehicle, date, miles driven, odometer settings, and reason for the trip. (I talk a bit more about tracking vehicle mileage in Chapter 18, so check that out if this is something you’re really interested in.)
May I briefly tell you the IRS rules for deducting business miles? Essentially, you have two
approaches to choose between. The easier method — and the one that I use, because I’m lazy — is to record as a business expense an amount per business mile driven. The rate per mile is roughly 60 cents, which is far less than the actual cost of driving most cars. But, hey — that’s the price of slothfulness.
The hard method for tracking business miles is to track all your vehicle expenses — including gas, oil, repairs, insurance, and vehicle depreciation — and then record as a business expense the business-use portion of these expenses.
To get the business-use portion of your vehicle, use the ratio of business miles to total miles. If during the year, you drive 6,000 business miles and your total miles are 12,000, your business-use percentage equals 50 percent. In this case, you can record as a business expense 50 percent of your vehicle expenses.
Usually with the hard “actual expenses” method, you get a higher business vehicle expense
deduction. Note, however, that the IRS limits the amount you can include as vehicle depreciation, so you don’t get as high a deduction as you may at first think. (You may want to consult your tax adviser for details.)
No matter which method you use, you want a record of your actual business miles, which the Enter Vehicle Mileage command enables you to do. By law, you need a good record of business mileage to legitimately claim the deduction.
Paying Sales Tax
To ingratiate itself with you retailers, QuickBooks includes a special dialog box for paying sales tax. To use this dialog box, you must have sales tax items or a sales tax group already set up. See Chapter 3 for a thorough explanation of items and groups.
To see how much sales tax you owe and to write checks to government agencies in one fell swoop, choose Vendors ⇒ Sales Tax ⇒ Pay Sales Tax to access the Pay Sales Tax dialog box, as shown in Figure 6-11. Alternatively, click the Pay Sales Tax icon on the home page in the Vendors area.
FIGURE 6-11: The Pay Sales Tax dialog box.
This dialog box is similar to the Pay Bills window (refer to Figure 6-8). The buttons basically work the same way.
Click in the Pay column to add check marks next to all the items that you want to pay. QuickBooks automatically writes checks in the register. Your payments are likewise recorded in the Sales Tax Payable register.
Are you an online retailer or a bricks-and-mortar retailer who does a healthy website business? If so, you probably want to get more disciplined about the way you handle your sales tax accounting. Here’s why. Although the U.S. Congress has cooled to the idea of changing the federal laws that prevent other states from making you collect and remit sales taxes, state revenue agencies are getting more and more aggressive about asserting that online retailers have liability for sales taxes on sales to customers within their borders if the retailer has any connection to the state. Accordingly, even fairly modest retail operations may in the future find themselves preparing three or four dozen sales tax returns each month to report online sales made to customers outside a home state. If this occurs in your business, you’ll definitely want to be using QuickBooks to automate and ease the work of sales tax
accounting.