Learn How To Add & Edit Multiple List Entries in QuickBooks with Rhonda Rosand CPA and Advanced Certified QuickBooks ProAdvisor

When you pay a bill in your business, are you 100 percent comfortable that the bill payment is correct and justified? Is there ever a chance that that bill is fake or fraudulent? What about duplicates? With so many fake bills being mailed to businesses these days, it makes sense to think about controls you can put into place to reduce the risk that you might write a check out of your hard-earned profits that should never be written.

Accounts Payable Controls

In the accounting profession, the term “internal controls” refers to processes, procedures, and automations you can put into place to reduce errors. In accounts payable, there is a specific subset of rules and controls you can put into place to reduce risk in this area. Here are just a few ideas.

1. Approvals

All bills should be approved by the appropriate level of employee in your business. Sometimes a bill gets approved that is fake or shouldn’t be approved, especially in areas where the approver doesn’t have technical knowledge of what they are buying. Be sure to read the fine print on the bill and make sure you know what you are paying for. There are ways to streamline the approvals process.

2. Segregation of duties

The person who pays the bill should be different from the person who submitted the bill. These people should be different from the one who signs the check. This reduces employee fraud.

3. Receipt confirmation

A packing slip or other confirmation of receipt of the goods or services should be matched to the bill, line item by line item.

4. Math check

A prudent step is to check a bill’s math, at least for reasonableness.

5. Duplicate payments

If a vendor emails their bill as well as mails a hard copy, controls should be put in place (usually automated) to avoid duplicate payments on the same bill.

6. Reconciliation

If there are a significant number of transactions between you and a vendor, an accounts payable reconciliation should be performed each month via a statement.

7. Missing check numbers

Most systems provide a missing check numbers report that you can use to make sure all checks are accounted for.

8. Bank reconciliation

A bank reconciliation is a sure way to see exactly what checks cleared your bank account.

9. Coding

Coding each transaction to the correct expense account, inventory, asset, or cost of goods sold account is an essential part of the process.

10. Income statement review

Each month, a review of the balances in your expense accounts as well as a disbursements ledger review for reasonableness can provide added peace of mind.

11. Purchase order

Requiring purchase orders is another control you can add to your process. Purchase orders should be matched to packing slips and bills before payment or approvals are made.

12. In-depth knowledge of your business’s numbers

The more you get to know the numbers in your business, the greater chance you’ll have of accurate accounts payable handling.

If you’d like to discuss your accounts payable function with us and how it can be improved and streamlined, we’re happy for you to reach out any time.

Have a receivable you can’t collect on? Learn how to write off a bad debt in QuickBooks with Rhonda Rosand, CPA, Advanced Certified QuickBooks Proadvisor of New Business Directions, LLC.

QuickBooks is made up of Lists. The most important list in QuickBooks is the Chart of Accounts; it creates the framework for your financial reports from your Balance Sheet to your Profit and Loss statement and your statement of cash flows. It also creates the infrastructure for your budgets or revenue plan.

Learn about the Chart of Accounts in QuickBooks with Rhonda Rosand, CPA or New Business Directions, LLC.

 

 

Learn how to Navigate the Homepage of QuickBooks with Rhonda Rosand CPA of New Business Directions LLC.

When you purchase a new vehicle, you get the fun of riding around in a new car with the new car smell! Our job has just begun – to get your new asset recorded properly on your books. We thought it’d be fun to give you a behind-the-scenes sneak peek at our part.

Sales Contract

The first thing we’ll ask you for is the sales contract.  It will give us the payment price of your car, and we’ll use that number to record your new asset on your balance sheet.  If you paid cash with no trade-in, the journal entry we’ll make is:

Debit: 2019 Toyota RAV4 $25,500
Credit: Cash $25,500

 

Then we’ll decide on a depreciation method and book depreciation monthly or at year-end.

Debit: Depreciation Expense $5,100
Credit: Accumulated Depreciation $5,100

 

Trade-in

If you traded in a vehicle that is on your books, we’ll need to make an adjustment for that. Effectively, your old car will be eliminated from your balance sheet. If this asset had a book value and it was not fully depreciated, the net value would be compared to the trade-in value and a gain or loss on the asset sale would be recorded on your income statement.

Let’s say the balance sheet value of the three-year-old car you traded in was $10,000 ($25,000 original cost less $15,000 accumulated depreciation) and you got $8,000 on the trade-in. Here’s what we would record:

Debit: 2019 Toyota RAV4 $25,500
Debit: Accumulated Depreciation $15,000
Debit: Loss on Sale of 2016 Car $ 2,000
Credit: Old 2016 Toyota RAV4 $25,000
Credit: Cash $17,500 ($25,500 – $8,000 trade-in)

 

We’d also start the depreciation for the new car.

New Car Loan 

Most often, a new car purchase will be financed, so we have a new liability to record too.  We’ll need to get a copy of the loan documents from you and an amortization schedule of the payments. Let’s say you made a ten percent down payment with no trade-in.  Here’s how that would look:

Debit: 2019 Toyota RAV4 $25,500
Credit: Cash $2,550
Credit: Toyota Loan $22,950

 

Then, each time you make a monthly payment, the amount will need to be split between principal and interest and those amounts will need to change each month according to the amortization schedule.

Debit: Interest Expense $390
Debit: Toyota Loan $60
Credit: Cash $450

 

We left out a few trade secrets just to keep it intriguing. There are a lot of other numbers on a car purchase: taxes, licenses, warranties, add-ons, fees, and more. Some of these can be directly expensed, while others need to be included in the value of the asset. So if you’re happy that we’ll take care of this for you, we’re happy to do so.

Let us know if you purchase an asset this summer so we can get it booked right for you.

The Mt. Washington Valley Economic Council

FALL 2018 

QuickBooks® Desktop Boot Camps

with Rhonda Rosand, CPA – Advanced Certified QuickBooks® ProAdvisor

 

Session #1 QuickBooks® Set Up – Do It Right the First Time

 Tuesday, October 2nd, 2018, 9 AM -11 AM

Whether you are starting from scratch or starting over, there is a right way and several wrong ways to set up a QuickBooks® file.  Learn how to do it right the first time. 

Avoid some of the common mistakes we see people make.

QuickBooks® Solutions

Accounts and Items

Users and Permissions

Customers/Jobs/Vendors

Class Tracking

Common Pitfalls

 

Session #2 Customizing Forms and Templates and QuickBooks® Reports

Tuesday, October 16th, 2018, 9 AM – 11 AM

Learn how to customize forms and templates and create QuickBooks® reports that are useful management tools for your business.  Understand the difference between profits and cash.

Customize Forms and Templates

QuickBooks Reports

Revenue Planning

Cash Flow Management

 

Session #3 Accountants Only…

Tuesday, October 23rd, 2018, 9 AM-NOON

This is a session designed exclusively for tax preparers, enrolled agents and accountants.  We will cover advanced level topics to help you streamline the process and best practices for troubleshooting your client QuickBooks® file during this busy tax season.

What’s New in QuickBooks® 2019

In Product Demonstration of Features

Client Data Review and Accountant Toolbox

Common Issues and Troubleshooting

Hosting Platforms

3rd Applications

 

Courses are $35 each and held in the Community Room at Granite State College-Conway.

To register please call Susie at (603) 447-6622, email susie@mwvec.com, or register online.

Learn How To Add & Edit Multiple List Entries in QuickBooks with Rhonda Rosand CPA and Advanced Certified QuickBooks ProAdvisor!

Learn How To Write Off A Bad Debt In QuickBooks with Rhonda Rosand, CPA, Advanced Certified QuickBooks Proadvisor of New Business Directions, LLC.

Chart of Accounts in QuickBooks Why the Chart of Accounts in QuickBooks is the Most Important List!