Bookkeeping in the Cloud

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WRITING OFF BAD DEBT

Unfortunately, we have to write off sales from some customers who are unable to pay their bill. We use the CREATE CREDIT MEMO feature to credit off the bad credit to a new account we will make call BAD DEBT.

Create a bad debts expense account
Go to Settings ⚙ and select Chart of Accounts.
At the upper right, select New to create a new account.
From the Account Type ▼ dropdown menu, select Expenses.

From the Detail Type ▼ dropdown, select Bad debts.
In the Name field, enter “Bad debts.”
Select Save and Close.

Create a bad debt item
Go to Settings ⚙ and select Products and Services.
At the upper right, select New, and then Non-inventory.
In the Name field, enter “Bad debts.”
From the Income account ▼ drop-down, select Bad debts.
Select Save and Close.

Create a credit memo for the bad debt
Select + New.
Select Credit memo or Give credit.
Select the customer from the Customer ▼ drop-down.
In the Product/Service section, select Bad debts.
In the amount column, enter the amount you want to write off.
In the Message displayed on statement box, enter “Bad Debt.”
Select Save and Close.

Apply the credit memo to the invoice
Select + New.
Under Customers, select Receive payment or Receive invoice payment.
From the Customer ▼ dropdown, select the appropriate customer.
From the Outstanding Transactions section, select the invoice.
From the Credits section, select the credit memo.
Select Save and Close.
The uncollectible receivable now appears on your Profit and Loss report under the Bad Debts expense account.

BILLABLE EXPENSES

Billable expenses are those expenses that are incurred and are passed on to a client.

Step 1: Turn on billable expense
To record billable expenses, turn on billable expense tracking.

Go to Settings ⚙, then select Account and Settings.
Go to the Expenses tab.
From the Bills and expenses section, select Edit ✎.
Select the following:
Show Items table on expense and purchase forms
Track expenses and items by customer
Make expenses and items billable
(Optional) Set up the following:
Markup rate
Billable expense tracking
Sales tax charge
Bill payment terms
Select Save, then Done.
Step 2: Enter a billable expense
Here’s how to bill a customer for an expense.

Select + New.
Select the transaction (Bill, Expense, or Check) you want to create.
Select the payee.
In the Category column, select the expense account for transaction.
Enter the description and amount of the expense, then select the Billable checkbox.
In the Customer column, select the customer you want to bill for this expense.
(Optional) Enter or make sure the markup % is correct, then select the Tax checkbox or choose a tax agency if you want to charge tax.
Select Save and close.
"Something's not quite right" when saving the expense transaction.
Step 3: Add billable expenses to invoices
To reimburse the cost, link the billable expense to your customer's invoice.

Select + New.
Select Invoice.
In the Customer ▼ dropdown menu, select the customer you created a billable expense for. This opens the Add to invoice window.
Select Add on the billable expense you want to charge to your customer.
Select Save and close.

PROGRESS INVOICING

You can set up a progress invoicing in Quickbooks very simply. Progress invoicing lets you split an estimate into as many invoices as you need. Instead of asking for full payment at the beginning of a project, you can invoice customers for partial payments.

Begin by turning on progress invoicing in SETTINGS

Step 1: Go to Settings ⚙ and select Account and Settings.
Select the Sales tab.
In the Progress Invoicing section, select Edit ✎.
Select the Create multiple partial invoices from a single estimate checkbox.
Select Save and Done.
Now you can create multiple invoices from your estimates.

Step 2: Create a progress invoice template
Use the premade Airy style to create a new invoice template. You should use this template any time you create a progress invoice.

Go to Settings ⚙ and select Custom form styles.
Select New style and then Invoice to create a new invoice template. Or, select Edit to update one of your existing templates.
Give the template a memorable name, like "Progress invoice template."
Select Change up the template or Dive in with a template in the Design tab.
Select the Airy new template. This is the only template you can use for progress invoices.
Select Edit print settings or When in doubt, print it out.
Uncheck the Fit printed form with pay stub in window envelope or Fit to window envelope checkbox.
Select the Content tab. Then select Edit ✎ on the second section of the form.
Select the Show more activity options link. Then select the Show progress on line items checkbox if you want to show item details on progress invoice.
Select Done.
Make this as your default invoice template
Use your new template to send progress invoices. If you send lots of progress invoices, we recommend using this as your new standard template for all invoices.

Go back to Custom Form Styles.
In the Action column, select the drop-down menu ▼ next to the template. Then select Make default.
If you only want to use this template for progress invoices, select Customize directly on the invoice form to change the template.

Step 3: Create an estimate
Select New ⨁ and then Estimate
Select your customer.
Fill out the rest of the estimate.
Select Save and New, Save and Close, or Save and Send.
Note that the totals in the remaining column of your estimate don't include tax, discount, or shipping costs.

Tip: If you use the Projects feature (QuickBooks Online Plus ) and want to add an estimate to a project, add it before you start creating progress invoices.
Need to edit something on your progress invoice?
If you need to edit an item on a progress invoice, make your changes on the original estimate, not the invoice itself. You can make changes as long as you haven’t invoiced for the total estimate amount.

Step 4: Create progress invoices from the estimate
There are a few ways to create progress invoices. Both methods give you the same results.

Create a progress invoice from an estimate
Go to Sales and select All Sales.
Find the estimate on the list.
Select Create Invoice from the Actions column. You can also open the estimate and select Create Invoice.
Decide how much you want to invoice for, then select Create Invoice. You can charge for a percentage or a specific amount. If you choose Custom amount for each line, enter a specific amount for each item on the invoice.
Fill out the rest of the invoice.
Select Save and New or Save and Close.
Connect an estimate to a new invoice
Select Create ⨁ and then Invoice.
Select your customer from the drop-down menu. If the customer has an open estimate, QuickBooks will open the Add to Invoice sidebar.
Find the estimate in the sidebar and select Add.
Decide how much you want to invoice for, and select Copy to Invoice.
Fill out the rest of the invoice.
Select Save and New or Save and Close.

DUPLICATE BILL NUMBERS

Good question from a student. QB by default allows duplicate bill numbers. You can change that.

Go to the gear icon in the upper to allow you to configure settings. From the Settings page, select "Advanced". Then find the bottom section labeled "Other preferences".

In that section are two configuration settings:

1. "Warn if duplicate check number is used". Select ON for this.

2. "Warn if duplicate bill number is used". Select ON for this.

TRACKING MILEAGE

I haven't used this feature myself so I had to look this up for a student. The Mileage feature is a subscribed service you can add to your account (it cost money). On the plus side, it can be turned on to automatically track your mileage using your phone's GPS. I don't have "hands on" with the feature and if anyone has any comments I'd like to hear them.

Luckily, you can also manually enter mileage as needed to make sure you have all the ground covered.

Read "Manually add mileage" in the mobile app to learn how to do this on your phone. If you'd like to do it while logged into a browser, the steps are similar. Follow along as they're outlined below.

Click Trips from the left-hand menu.
Click the Add trip button (Tip: The down arrow gives you more options, such as setting up a vehicle and importing data from MileIQ and Google).
Enter the date, location, purpose, and kilometres.
Hit Save

APPLYING DISCOUNTS

Question in class about applying discounts to invoices in QB Online.

Step 1: Turn on the discount feature
If you haven’t already, turn on the discount feature.

Select Settings ⚙ and then Account and Settings.
Select the Sales tab on the menu.
In the Sales form content section, select the pencil ✏ icon to edit it.
Select the Discount checkbox to turn it on.
Then select Save and then Done.
This adds the discount field to your invoices and sales receipts. QuickBooks also creates a Discount given account to track everything on your chart of accounts.

Step 2: Apply a discount
Discount a percentage or specific amount
Use the discount field on an invoice or sales receipt.

Select + New.
Select Invoice or Sales receipt.
Add products and services. Then fill out the rest of the form.
Select Discount percentage or Discount value to enter the discount as a percentage or a specific amount.
Enter the amount you want to discount in the discount field.
If you want to discount the total before you calculate sales tax, select the arrow icon next to the discount field.
When you're finished, select Save and send or Save and close.

July class underway. Glad to have a group of students from across the CBRM join me for the next six weeks.

Bookkeeping by the Barbecue. July course. Register now.