QuickBooks Online Exchange Rate Entry

Here is the scenario. You are getting paid for an invoice in Canadian dollars, and deposited the money into a US Bank. The bank adds an expense to your bank account for the difference in exchange rate. Say the customer owes you $4000. You deposit the  $4K, and the bank adds an expense from your bank account for $968.72. How do you enter this into QB Online?

1st way: You mark your $4000 invoice as paid in full. Then you add an expense to the bank account for $968.72. Post that check to Income. In WA State you're paying taxes on income, so it's important to post this correctly and reduce income. Now you can reconcile your bank account. Also your P&L and income are correct, but your sales report is short for that customer.

2nd way: Once you know what the exchange rate is you go back and enter a credit memo for the $968.72. A credit memo reduces an invoice. You have to redo the deposit too, because the invoice is only paid off with $3031.28 and the credit memo covers the rest. Your sales report and P&L are correct. You could even force a bank account reconciliation, because you'd be equally short on both sides, but that’s lousy bookkeeping. It's a pain for the next person to follow. I only do clean bookkeeping. 

I thought it was a bug. Tech support didn't think it was a bug, because this is double entry bookkeeping. What an idiot. I had to get off that call. Resolved to figure this out myself, I researched it late into the night. Turns out that QB Online software has a special feature just for this kind of problem.

Correct 3rd way. Once you know what the bank is going to deduct from your account, chose Refund Receipt from the + menu. Refund Receipt allows you to issue the client a refund and cut them a check too. You're not actually going to send them a check, so leave check # blank. It shows up as a bank withdrawal so you can reconcile cleanly, reduces your P&L income, AND your sales reports are correct. Success!

If I make consulting look easy to you, I'm giving you good customer service. If I don’t smile enough, it's because I've momentarily forgotten that this is fun, and not hard work, hard won from hours and years of study and research. Smile at me. Remind me that we're having fun. Are we having fun yet? 

QuickBooks Mac 2019

It's back! QuickBooks for Mac has a new update for 2019 (last update was for 2016 at which time Intuit announced it would never update the Mac version again so this is a happy surprise). Here are a few of the more prominent features released with this update:

iCloud Document Sharing – Convenient method for sharing QuickBooks for Mac file using iCloud sync. Modify your books on your work Mac computer then continue where you left off on your home Mac computer.
Bank and or Credit Card Reconcile Discrepancy Report – Identifies changes made to reconciled transactions (for newly created transactions, not those prior to this release).
Square Import - Importing sales data from Square via use of .csv file type.
Email Tracking – Track dates emails sent with a tab in the Vendor or Customer Centers.
Report Windows – Improved spacing and readability.
User Passwords – Now required. Personal information is encrypted.
This content is from Laura Madeira's, QuickBooks Desktop 2019: What's new and improved. For all the changes coming with various versions of QB 2019, here is the link to her Firm of the Future blog:  Laura Madeira's, QuickBooks Desktop 2019: What's New and Improved.

The picture is from Insightful Accountant. Here is the link to their article:
QuickBooks 2019 Desktop - 'Our Summary'

Income from a Property Management Company or Use Sales Receipts for Depositing Income

Almost every day I learn something new. Today is was how to enter in income from property that you own that is managed by a property management company.

Every month the owner of the property will get from the property management company a statement similar to the following:

Rental Income $1000
- Property Management Fees $100
- Repairs this month $45
= Total Check (direct deposit)  $855.00

Typically bookkeepers enter these 3 lines directly in the "Make Deposits" window in QuickBooks. Unfortunately, it won't appear connected to the customer in the customer center because QuickBooks is "forms based" software. A sales receipt is a form, so if you enter it there, instead of directly into the deposit screen, the data will be attached to the customer.

Your customer is the Property Management Company.

Add 3 lines items in the Products and Services List for each property.
1. Location Rental Income (default amount to rent), posts to Rent Income
2. Name of Property Management Company fees (default amount to their monthly fees), Posts to expense account Property Management Fees. 
3. Location Repairs, Posts to expense account Property Repairs. 

Every month, enter the deposit using a Sales Receipt with these 3 line items.
Location Rental Income is positive.
Name of Property Management Company Fees as a negative
If there are repairs, Location Repairs will be negative too.
The total of the Sales Receipt is the amount of the check.

Note on the accounting: While it may seem counter intuitive to post a negative line item to an expense account it works out perfectly, because a double negative is a positive, so your rent income is positive, and your expenses are positive on the P&L too.

Enter the check # into your Sales receipt. If the money is direct deposited, you can deposit it directly from the sales receipt. And it all shows up under the customer center!

This is a terrific solution, because I'm wondering if one property management company overcharged my client? Now I'll be able to show him clearly what happened and let him sort it out.

Isn't this the coolest solution ever?

2018 WA State Paid Sick Leave Policy

The Low-Down 

Employers must provide a one-time notification to each employee of their paid sick leave rights. WA L&I has developed the employee paid sick leave notification form. Below is a sample form we created from their requirements. 

Employees must provide a “reasonable notice” for an absence from work for the use of paid sick leave for an authorized purpose. 

An employer may choose whether to provide a financial or other reimbursement after 40 hours accrued for the following year.  (ie- if the employee has 52 hours accrued, you may cash out the 12 remaining hours).  

Sample Form: Employee Paid Sick Leave Notification 

Cut and paste the following or just copy the words to create your own company form for employees to sign, and for you to keep in their employee file.

MyCompanyName Employee Paid Sick Leave Notification

Sick leave will accrue at one (1) hour of paid sick leave for every 40 hours you work starting 1/1/2018. You are entitled to use this accrued paid sick leave beginning 90 calendar days after the start of your employment, for any of the following reasons (as outlined at RCW 49.46.210(1)(b) and (c)):
  • To care for yourself or a family member;
  • When you or a family member is the victim of sexual assault, domestic violence, or stalking; and
  • In the event our business or your child's school or place of care is closed by order of a public official for any health-related reason.
  • Accrued, unused paid sick leave balances of 40 hours or less will be carried over to the following year.
 Signed: ______________________________  Date: ___________________

Retaliation against you by Company name for using paid sick leave for authorized purposes, or for the exercise of any rights under the Minimum Wage Act (chapter 49.46 RCW), is prohibited.                       

Sample Form: Employee Extended Sick Leave Verification

The state of WA says that if the employee wants more than 3 sick days off in a row, they need to provide you with some proof. of sickness. Here is the WA L&I official form for that possibility, attached, for you to download: 
Sample Form Employee Extended Sick Leave Verification 

The research for this blog post is credited to Shelly Tutt, bookkeeper @ QC Computing LLC. 

QuickBooks Online Expenses by Vendor Detail Report - How to Create

The Expenses by Vendor Detail Report is one of the most useful reports in QuickBooks desktop, but it does not exist in QB Online. In QB Desktop it's located under Financial Reports. Here is how I use it:

  1. To make sure I've posted things correctly (because any given vendor tends to offer the same functionality every time)
  2. To see if I've paid a bill (because this is the quickest way to figure that out)
  3. To see how much I've spent with a vendor for analysis purposes
  4. Sometimes, I'll filter this report for one vendor, print that report out, and show it to the vendor. so that when they see how much money I've spent with them already, they'll qualify me for a discount, no restocking fee, or some other benefit. 

QB Online does have a vendor report, but it doesn't provide me with totals for one thing. So I figured out how to get this report in QB Online. If you can get Accountant Access to QB Online, you can do it too. Here are the instructions:

Under Accountant Reports
Select Transaction Detail by Account
Customize it the following way
Rows/Columns –> Group by Vendor
Filter -> Select Distribution Account = All Expense Accounts
Change Columns -> Uncheck the following boxes: Name, Adj, Split, Balance; then Add the following: Account (I like to move Account up to the space before the Memo. I think the report looks better this way).
Header/Footer -> Report Title= Expenses by Vendor Detail


Madeline Bailey gains QuickBooks ProAdvisor Advanced Online Certification

As the principal of QC Computing, I've been certified in QuickBooks Online for many years now, but only recently had time to pass the ADVANCED Online Certification.
Passing this test required a broad range of advanced accounting sills and months of in-depth study on the features and capabilities of Intuit QuickBooks Online Accounting Software. It was harder than that even. I joke that clients tell me what they want. I had to figure out what the test questioner wanted all on my own.
A recent survey found that there are less than 15 Advanced Online Certified ProAdvisors in the greater Seattle area, out of about 100 total ProAdvisors of all varieties (such as consultant, bookkeeper only, tax preparer, etc.)
Advanced QB ProAdvisors Consultants are uniquely qualified to offer you great value in designing and implementing systems, customizing training to your specific needs, utilizing lesser-known program features, and thereby dramatically increasing productivity and profitability.

Rolling out the QuickBooks Online New Reconciliation Screens

QuickBooks will have a new reconciliation screen soon. It's already rolled out for Accountants, so I've gotten a chance to use it. Here are some tips and things to watch out for. 

First up, I would forget I was working in 2016, and enter in a statement ending date of 2017. Instead of seeing just the month of transactions one sees the entire year. When I went back to fix my mistake to the correct 2016 ending date, it would still show me the entire year, not fewer transactions. That feature is now controlled by a funnel, where one has the choice to say, "Limit what I see to statement ending date". Look for the funnel icon to the top right of your reconciliation screen for this feature. 

Next up, I'd have to leave my work for awhile, so I'd select "Leave" on the reconcile screen and close down the software. When I returned, my opening balance would be off. What the heck? Turns out, QuickBooks automatically enters an opening balance entry and reconciles it for you. I learned to do a Find by Amount, find the reconciled entry, and delete it to get my opening balance back to the correct amount. It's supposedly a feature to help you start a new reconcile on a new account, but at this point it's a bug.

Last up, I learned that the reconcile goes faster, i.e. more accuracy, if one selects the Deposits screen first to click off all the deposits, then Expenses screen next to click off the expenses. Apparently, that's how it was coded and tested, because it works better. I always respect the software and give it what it wants. As one friend says, "That's how I roll". 

"How I roll" is that I learn these things the hard way so that I can make it look easy for you.