If you own a small business, chances are good you’ve used, or at least heard of, QuickBooks, the bookkeeping software from Intuit designed specifically for small business.
To help our small-business readers, the Savannah Morning News and savannahnow.com sponsored a morning call-in session on QuickBooks last week with the small-business specialists from longtime Savannah accounting firm Hancock Askew & Co.
Neville Stein, John Swanner, Trey Brooks and Brittany Riddick manned the phones in the newsroom from 9:30-11 a.m. Wednesday. They also took your emailed inquiries.
Below is a sampling of the questions they answered.
Q: I use a credit card for both personal use and business use — so reconciling the credit card via QB is impossible. What’s the best way to account for those business purchases in QB?
A: If you have a personal credit card that you use for business and personal expenses, you should keep it out of your QB file. For the business expenses you need to fill out some type of expense report and have your business reimburse you. This is exactly like what you would do if you were an employee. If you have a business credit card that you have used for personal expenses, the first thing you need to do is stop. You will either need to reimburse your business or treat the personal expenses as draws.
Q: I don’t remember what I need to do when paying a credit card bill. Do I need to do it through write checks and itemize in the memo section or do it some other way? Also, when I use the checking debit card how do I enter that into QB?
A: When you pay the credit card, just use the write checks function and record it against the credit card liability account. Use the normal write checks for debit card transactions. Instead of a check number type “EFT” or “debit” to let know you did not write a check.
Q: What are the new regulations IRS is focusing on for 1099 workers?
A: There were new regulations requiring businesses to issue 1099s to all types of businesses for all purchases, as well as requiring individuals with rental properties to issue 1099s for payments of $600 or greater in the course of their rental business. However, these regulations were revised to go back to the previous rules. The current regulations require businesses to issue 1099s for payments of $600 or greater for services made during the year in the course of their business.
Generally, payments to corporations are not required; however, there are exceptions to this rule. The Internal Revenue Service is focusing on the issuing of 1099s. On all business returns, there is a question asking if you are required to file 1099s, and if yes, did you file them.
Q: I have several rental properties, and it is always a mess to get the information together for taxes. Will QB help me keep that information straight and how does it work?
A: QuickBooks is a great tool at keeping information straight. To aid in the organization of your rental properties, the best course of action would be to create a unique class for each rental property. With each property having its own class, you will be able to record income and expenses to a certain property and straighten out the mess of information when it comes time to prepare your tax return.
Q: Can ACS account software be converted to QuickBooks?
A: ACS accounting software is not one of the products that can be converted to QuickBooks. If a person would like to move from ACS accounting software to QuickBooks, the best course of action is to start a new file from scratch and to create the new file at the end of the last year. By starting the file from scratch, a company will be able to get rid of old data that was stuck in their old accounting system and only move over the useful information.
Q: We are a contracting company and need to invoice our clients for materials used on a job. How do you enter the bills so that the details of each item of material shows up on the invoice? At present only the term “statement charge” appears and our clients want to know the exact nature of each charge.
A: Use “Items” from the menu option “List.” When you enter bills, use the item tab rather than just using the expense tab.
Q: Why does my QuickBooks give me a “cash” option vs. “accrual” option.
What do I use each for?
A: Lots of “depends” here. If you are in a business that traditionally uses cash accounting rather than accrual accounting, such as a restaurant or a landscaper or other small tradesman, then you would be best advised to use the “cash” option. However, if you are in the auto sales business, for example, and most of your sales are financed by your business, then the cash option would be extremely misleading. Here you would choose accrual.
Q: Do I need to upgrade my QuickBooks every year?
A: Another “depends.” QuickBooks makes money if you upgrade each year, but here is a little secret. If you do NOT need the payroll function, you could make do with a 10-year-old QuickBooks program quite happily.
However they are constantly upgrading and updating so you would be missing out on newer functionality. They have made their systems such that payroll becomes very hard to run on an older system. In fact they insist that you upgrade if you want to use the payroll function.
HANCOCK ASKEW AND QUICKBOOKS
The long-time Savannah accounting firm, which traces its roots back to 1910, employs a number of certified QuickBooks ProAdvisors who offer an array of services in relation to QuickBooks, from setup to bookkeeping to advice on managing a small business.