Greetings The CPA911 Newsletter July 2009 ------ > Contents < ------ QuickBooks Tips New Poll - VOTE Expanded Intuit Training Opportunities Contact Info Subscription Info ------ > QuickBooks TIPS < ------ *** Vendor Refunds Vs. Vendor Credits *** This tip is in response to many e-mail messages with the same query. The questions all resembled this one: "I received a refund from a vendor because the vendor had made a mistake in its bill. I created a vendor credit and then deposited the money in the bank using A/P as the account and using the vendor name. The deposit showed up on my bank statement, but the credit still shows up on the vendor's record. How do I clear that credit?" (Two of the e-mail queries said the writers had made purchases with debit cards, and returned the items. Each vendor issued a credit against the debit card account. Both readers also created a credit before depositing the refund check and wanted to know how to clear the credit from the vendor record.) There's no vendor credit involved in these transactions; instead, they are refunds, and that's a different type of transaction. Void the Credit you entered. Change the deposit so that no vendor name appears in the transaction, and post the deposit to the expense account you used when you recorded the original purchase. If the vendor issued a credit that you recorded in QuickBooks, and then later issued a refund check to clear the credit, that transaction requires you to clear the credit with the refund check. In this case, deposit the check using the vendor's name in the Name column and posting the check to Accounts Payable. When you save the deposit, QuickBooks posts a debit (an ersatz vendor bill) to the vendor record. Open the Pay Bills window and you'll see that bill. Select it and apply the credit against it, creating a zero-amount payment. No checks are written (because QuickBooks doesn't pay zero-amount bills), the bank deposit is correct, and the credit is gone. *** Payroll Liabilities Payment Got Lost *** A reader wrote, "I made a 941 payment through EFTPS (using an electronic payment). The transaction didn't clear and then we received a notice that the payment was never received. I went to EFTPS and made the payment again. How do I void the original payment, which was made more than a month ago, and enter the new payment? Everything I try messes up my payroll liability totals." You don't have to do anything; the new payment will clear the bank (hopefully). If this had been a check that got lost in the mail and you had to re-issue a check, the easiest way to handle that would be to stop payment on the first check, and then change the check number of the first check to the check number you used for the replacement check. Trying to void and re-enter payroll liabilities is a maze that's difficult to exit. If your late payment included penalties and/or interest, enter a check (with no number) to cover those amounts, and post them to an expense account that tracks them (such as Other Expenses). When you reconcile your bank account, the second payment (the one that cleared) will be larger than the check entered in your register; to clear the payment select both the payment check and the penalties/interest check - the total will equal the new check. *** Sending Information to Vendors for Drop Shipping *** A reader asked for help in streamlining his order process for drop shipping. He said he created an invoice for the customer, and then typed an order for the same items and sent it to the vendor who drop ships the products. He wanted to make this faster by sending a copy of the invoice to the vendor but he doesn't want the vendor to see the prices he's charging his customers. The solution to this is a Pick Slip, a template built into QuickBooks. While the pick slip is designed for your warehouse personnel (who also have no business knowing what you're charging your customers), it will work perfectly for drop shipping. *** Managing Customer Overpayments *** A reader wrote to ask what to do when a customer sent a check for $250.00, but the invoice was for $230.00. He said he didn't want to return the customer's check and wait for another check to arrive; instead he wanted to issue a refund check after he deposited the payment. He knows that QuickBooks offers the option to create a refund when you enter a customer payment that's larger than the balance due, but he wants to understand what goes on "behind the scenes when the transactions are posted". When you enter the amount of the payment at the top of the Receive Payments transaction window (in this case $250.00) and select the invoice for $230.00, QuickBooks posts the entire transaction as follows: Debits the bank for $250.00 and credits Accounts Receivable for $250.00. When you select the option to send the customer a refund and create the check for $20.00, QuickBooks credits the bank and debits Accounts Receivable. The $20.00 debit to A/R "washes" the $20.00 that was posted along with the $230.00 (correct) posting. If you had opted to give the customer a credit instead of sending a check, QuickBooks would not have "washed" the A/R (keeping it there for the credit); instead the debit side of the transaction should post to the income account you used when you created the invoice. *** How to Get Customers to Send Upfront Deposits *** A reader wrote to ask how to record the fact that a customer has been asked to send an upfront deposit. He has set up a liability account to track customer deposits, but he wants to know which customer deposits are due. He says he can't create an invoice because none of his services or products works properly. You can create an invoice for an upfront deposit by creating the appropriate item. Name the item UpFrontDeposit and link it to the liability account you created instead of an income account. *** Tracking Customer Statements *** We receive many queries from readers about tracking customer statements. Questions range from, "How do I get a list of the statements I mailed", to "Why doesn't the Customer Center show Statements as transactions?" You can't track statements at all in QuickBooks; they're totally ignored by the software. *** Collecting Money for a Sister Company *** A reader wrote, "We have a main company and a sister company, each with its own EIN number, so each has its own QuickBooks company file. Only the main company has a merchant account, and we don't want to open a second merchant account for the occasional credit card sale that the sister company has. If we use the main company to sell with a credit card, how do we track how much we owe to the sister company?" Create an Other Current Liability account named Money Due to Sister Company. Create items for those things you're selling for the sister company and link them to that Other Current Liability account, instead of linking to an income account. At the end of the week, or month, or whenever you settle up, write a check for the amount of money in the Other Current Liability account, post the check to that account, and deposit it in the bank account of the sister company (don't forget that the sister company has to receive the income using a Sales Receipt). If you run item reports for the items you sold using the appropriate date range, the quantity of each item shows, and the total sales should equal the amount of the check you wrote. ------ > New Poll < ------ We have a new poll on our home page (at www.cpa911.com). We're asking you about your use of e-mail for sending transaction forms. Here are the results of our last poll, in which we asked you to tell us which enhancement to vendor functions you deem most important. ** Two vendor address to cover ordering/PO address and separate address for remitting payments = 60% ** A way to select a single vendor in the Pay Bills window = 21% ** Print voucher info on separate page for voucherless checks = 19% ------ > Intuit Training Opportunities < ------ Intuit is offering a wide variety of webinars and podcasts, and some include CPE credits. There are live webinars, recorded webinars, podcasts, and other interesting opportunities to deepen your knowledge of Intuit's products. To learn more, visit: www.accountant.intuit.com/training. If you're interested in ProAdvisor training, head for http://learn.intuit.com/learncenter.asp?id=178421&page=4 ------ > CONTACT INFO < ------ Copyright 2009 CPA911. Comments or questions? Write to: editor@cpa911.com. 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