New Year - Time for New Filing System

New Years is when I make time to setup new file folders for the year--for both myself and all the clients I do regular work for. That requires a bunch of printing labels for manilla folders. I save the label templates so it's fast from year to year. 

I also start pulling my paperwork to go into a plastic tub for storage. (I only keep current year's paperwork in my desk drawer files). First, I burn (shred) the 4^th year’s paperwork to create an empty tub as the IRS only requires me to keep 3 years of paperwork. Clients’ paperwork I don’t return to them until they do their taxes, as there are sometimes questions from the tax preparer. I don't have to do this on New Year's but it's become a tradition with me because it's fastest if I have new file folders ready for the new paperwork that's to come in. 

Also, there is the mental preparation. The hardest part of a job is getting started. I perhaps enjoy filing more than most but only because I recognize its value. If I have to do it a little here and a little there, forget it. The emotional units it takes to get motivated are more than the task is worth. In the old days, I was not motivated to make nice labels at all because I thought it was busy work, not necessary. But professionals I respected did make them so which was right? Which was faster? After years of scientific research, I discovered that nice labels and a pretty filing system was faster because I never mis-filed and could always find paperwork immediately. So, when I start a new job and clients see me making labels and setting up a nice filing system, and they think I’m wasting my time and their money, they’re mistaken. I'm making them more profitable. 

So now it's this thing I commit to doing during the downtime of New Year's long weekend. If I do it all of mine and all of my clients in one day with some nice music in the background I can get into a groove and it all gets done beautifully. 

Clients who have massively disorganized filing systems asked my advice. I encouraged them to set aside an entire day for this task. If they have employees, a corporate-wide official day of paperwork client up and organization is a brilliant way to go. We discovered that if they commit one whole day to files (nothing but paperwork) they can create a whole new level of organization that they find easy to maintain. Creating a company-wide day for paperwork only is a winning strategy. If you're like me, you'll make it around New Year's. 

Easy Bounced Check Processing QuickBooks

This is the easiest way to process a bounced (NSF) check in QuickBooks. It works for all QuickBooks: desktop, enterprise and online because it takes into account what's happening business-wise, correct accounting, and how the sofware works. The numbered steps are what you do. The rest is context. 

1. Enter original Invoice

2. Enter Original Receive Payment

The bank informs you that the check bounced. There it is: Item returned undeposited, and a bank fee, often $12. Figure out who's checked bounced. You need to know which customer/client?

3. Enter an expense using the customers name. Post the expense to "Accounts Recievable". 

It'll show up on your Open Invoice report. You'll be able to reconcile your bank account. 

4. Go to the Original payment for the original invoice, and uncheck the payment against the invoice. Leave the payment as a credit. 

That invoice is now unpaid, which is correct. They still owe you for the original invoice. 

5. If you want to pass a fee onto your customer at this point, create a line iten in the Line Item List (Products Items List in QB Online). Your Item name might be "Bounced Check". Your descriptoin might be "Charge for NSF check processing". Your amount is what you want but $35 is the most businesess charge. 

6. Go into the original invoice, and add that line item, and charge. Some of my client's don't charge for this so they won't have steps 5 and 6. 

The customer gives you a new check/payment. 

6. Do a new Receive payment for the new check. Apply the new check to the original invoice by clicking that it's going to pay off the original invoice. 

Now in your open invoice report, you'll see the original payment and the expense. They balance to zero. To clear these 2 line items off your report, apply the original payment to the expense. 

7. Go into Receive Payment window (as if you're doing a new transaction) and enter the customer in question. That'll pull up both the original payment and the expense. You can click those off against each other so they no longer show up on the open invoice report. 

This is natural because you're following the linear steps that happen in the real world. No one likes having a bounced check, especially your customer/client, so be nice about it. This is what it means to have a successful business.