New Business Direction LLCIf you‘re new to QuickBooks Point of Sale, get ready to expand your vocabulary.
When you first start using QuickBooks, even if you’ve been doing manual accounting for your business, there’s a learning curve. You recognize some things, like check blanks and invoice forms, but you have to take on an unfamiliar workflow, deal with new words and phrases, and learn more about double-entry accounting concepts than you perhaps knew before.
The same is true as a novice QuickBooks Point of Sale user. Whether you’re opening your first retail location or you’ve been selling auto parts or craft supplies or bakery goods for a decade, there will undoubtedly be some new terminology for you to learn.
Here’s a sampling of some of this new lingo that comes with the territory. You may look at the definition of a word or phrase and still be confused, but that’s where we come in. Seasoned shopkeeper or first-time seller, you will likely need our help when you first start using this complex piece of software.
- Address Verification Service (AVS): In transactions where a credit or debit card is not physically present, AVS adds an extra layer of security
- Assembly: Multiple products pre-assembled in a unit
- Average Unit Cost: The average (not actual) cost of the items on hand in your inventory
- Chargeback: A credit card charge disputed by a customer
- Class: A categorization method used in creating reports; for example, run Profit and Loss reports by store
- Committed Quantities: The number of inventory items that have been included on active customer orders
- Financial Exchange: QuickBooks POS tool that helps you share data with QuickBooks
Figure 1: QuickBooks Point of Sale’s Financial Exchange establishes an ongoing connection to QuickBooks for data-sharing. - Merchant Service Center: An Intuit website dedicated to helping you manage your merchant account
- Non-Inventory Item: An item for which you do not keep track of on-hand quantities, like shipping or delivery fees
- Payout: Funds taken from the cash drawer for any of a number of reasons, like a bank deposit, office party, or to make a necessary purchase
- Physical Inventory (PI): The process of tallying the number of items physically present in inventory; used to correct quantities recorded in QuickBooks
- Price Level: Price charged for items that differs from the regular price; can define up to four additional reduced prices in QuickBooks POS (employee cost, promotions, etc.)
- Quick Add Item: Process by which you can quickly create a new inventory item while completing a transaction with a customer; doesn’t require as much immediate detail
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Quick Find: Found on the QuickBooks POS Navigator; functions as a search tool for locating customers, items, receipts, etc.
Figure 2: You can enter a search word or phrase in the Quick Find box at the top of the Navigator page. - Quick Pick: A user-defined group of selected items that can be easily accessed during checkout
- Quick Zoom: Lets you “drill down”on a line or value within a report; can see the origin of the selected item
- Remote Store: Refers to every store other than Headquarters in a multi-store QuickBooks POS configuration
- Simple View: An abbreviated version of a sales receipt that may be viewed via touchscreens and virtual keyboards
- Split-Payment Sale: A transaction that is completed using two or more payment methods
- Store Exchange: Data shared between Headquarters and remote stores via:
- Desktop email
- Web-based email
- Removable media, or
- Network file exchange
- Transfer Slip: Documents transfer of merchandise between stores
- X-Out Shift Report: Available throughout the sales day, monitors recent sales activity
- Z-Out Drawer Count: End-of-shift or end-of-day cash drawer reconciliation
- Z-Out Store Close Report: End-of-day sales and cash flow summary; assists in readying a bank deposit
You can see that there are a lot of new terms to understand when you begin managing your retail transactions using QuickBooks Point of Sale. We can help further your knowledge by putting those words and phrases in context, so you can see where they fit in your workflow.
Have you ever stayed at a hotel and then returned, finding that they have stocked your room with everything you asked for the last time you were here? Your special allergenic pillow was already waiting for you, you were asked if you would like a dinner reservation made just like you always do the first night, and there were even extra hangars because you always need extra hangars. None of this would be possible for the hotel if it didn’t have a CRM, 
customer relationship management, system in place.
Would your clients be impressed if you remembered all of the details about your last conversation, their last purchase, or their preferences? If so, your business might benefit from a CRM system.
Businesses that have more than 30 or so clients may benefit from a system that allows you and your employees to enter detailed information about each client interaction that they have. It can work for both current and future clients, i.e., prospects. A CRM is basically a great big customer database at its core. It contains master file information on a customer or client, such as name, company, address, contact info, and custom fields. It is also transaction-driven in that you can log activity such as calls, meetings, proposal dates, and more.
A good CRM system is also integrated with your other internal systems, such as your accounting or POS system or both. In some CRM systems, you can see invoice and payment history, so that when a client calls in, you can also peek to see whether they owe you money or what goods they ordered that they may be calling about.
There are literally hundreds of CRM systems to choose from. The gold standard for large companies is SalesForce.com; however, some small businesses use it as well. SugarCRM is the largest open source CRM, meaning its programming code is available to the public. ZohoCRM is one of the largest small business CRMs and offers a suite of products for small businesses. And Act! is also very popular and plays well with social media.
Before choosing a CRM, decide what you want it to do and how you will be using it. One of the most important aspects of profiting from a CRM is to make sure it gets used, and that takes some habit-changing from you and your staff. Once you have your requirements, you can evaluate the software options available, and choose the one that works best for you.
When your clients start talking about how great your service is and how much attention you pay to the details they care about, you’ll know your CRM is paying off for you.
Getting QuickBooks ready to process payroll is a complex, time- consuming process. Here’s what you can expect.
Payday. You look forward to it when you’re young and working at your first part-time job.
But as a grown-up who needs to start processing payroll for your employees, you probably anticipate it in a different way, perhaps even with a sense of dread. QuickBooks handles the real grunt work once you’ve done the initial setup, but those early hours you spend preparing to print your first paycheck can be challenging.
Fortunately, QuickBooks’ payroll setup tool can guide you through the process. Once you’ve signed up for payroll, open the Employees menu and select Payroll Setup.
Figure 1: The QuickBooks Payroll Setup tool tells you’ll what information you need to supply in order to start paying employees.
Easy Operations
The first screen you’ll see in this step-by-step, wizard-like setup guide contains a link to QuickBooks’ payroll setup checklist. You don’t have to assemble all of the information you’ll need about your company, your employees, and your payroll taxes, but we recommend that you gather as much as you can before you start.
You’ll advance through setup by completing the information requested and then clicking the Continue button in the lower right (or, sometimes, Next; there’s also a Previous button available often). If you don’t have a particular detail immediately at hand, you can continue on and come back later. You’ll be able to edit your work then.
To back out of the whole process and return at another time, click the Finish Later button in the lower left.
Building a Framework
QuickBooks first wants to know about the various types of compensation and employee benefits your company offers. To start adding your Compensation options, click Add New. Click in the box in front of any pay types you support (Salary, Hourly wage and overtime, Commission, etc.) to create a check mark. When you click Next, this window opens:
Figure 2: It’s easy to indicate the types of compensation your company offers.
Keep clicking Next after you’ve completed each screen until you come to a page that lists all of the compensation types you’ve defined. To make any changes, highlight the type and click Edit to modify or Delete to remove. Then click Continue when you’re finished.
The next section is probably the most difficult: Employee Benefits. Here, using similar interface conventions to enter information and navigate, you’ll provide information about your company’s:
- Insurance benefits
- Retirement benefits
- Paid time off, and
- Miscellaneous items (cash advance, wage garnishment, mileage reimbursement, etc.).
It’s absolutely critical that you set these up accurately, or you’ll have unhappy benefits providers – and employees. If you’re not absolutely confident of an answer, it’s better to leave an item unfinished and come back later. You may want to ask us to work with you as you complete this section.
People and Taxes
QuickBooks will then ask you about your employees. Have your W-4 forms handy for this section, as you’ll need to know Social Security numbers, birth dates, etc.
Figure 3: On this screen, you’ll tell QuickBooks what type(s) of compensation and their dollar amounts apply to the employee.
All of those details you entered earlier about company benefits comes into play here. Once you’ve defined an employee’s compensation types and amounts, the next screen will display the additions and deductions that your company supports. You will have set up defaults for some of these, but you can modify them for individual employees.
There are numerous other details that you’ll have to supply for your staff, like how vacation and sick hours accrue, what state will want to collect taxes from them, and what their filing status is.
Unless you’ve worked with payroll before, you’re going to want our help in completing the payroll tax section. Once it’s done correctly, QuickBooks will calculate taxes due and help you pay them.
Finally, QuickBooks helps you determine whether you’ll need to enter any previous payroll data from the current year before you start to process your payroll in the software.
Whether you’re switching from manual payroll or a payroll service, or simply getting ready to pay your first employee, QuickBooks payroll-processing tools can help you save time and foster accuracy – as long as you get the details from the start.
One of the side effects of our last economic slowdown was in state government budgets; states are estimating $25.8 Billion in uncollected sales tax and have made deep cuts to higher education to fill the budget gaps. New Hampshire has cut its higher education funding by 36.6% making it the 7th highest in the nation. Many states are finding additional revenue by cracking down on sales tax collections. Please don’t believe that just because you’re in New Hampshire that you’re exempt from sales tax.
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The Hot Buzzword: Nexus.
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Nexus means a connection, link or tie that a business has with a state, and it has to do with a form of presence. If you have presence, the state has jurisdiction to collect sales tax. In the sales tax world, you owe sales tax to a state if you have nexus in that state and you are selling taxable items. The scary part for small businesses is what makes up nexus. |
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A Small World
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 Globalization and technology together have produced dramatic shifts in the way businesses can look today. Not only can we access a pool of local talent to staff and grow our businesses, we can employ almost anyone around the world to work for us. Hiring employees or contractors located in other states can stretch our nexus to include that state.
As an example, if your company is located in New Hampshire and you hire an employee who works from her home in Florida, you might have nexus in Florida and New Hampshire, and you might owe sales tax in Florida (you could owe in both states if New Hampshire had a sales tax). Sales tax nexus is not the same as state income tax nexus, but the presence of a worker in another state is a possible trigger for sales tax nexus. |
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Taxable in One State, Not in Another
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The taxability of services has grown rapidly as states look to balance their budgets after Federal cuts and other shortfalls. Not all services are taxed equally across states. For example, web design services are taxable in Texas, but not California. Accounting services are taxable in Hawaii and South Dakota.Some states have smaller jurisdictions such as counties and municipalities, making for over 11,000 jurisdictions in the U.S., not just 50. Alabama, Colorado and Arizona, for example, have statewide rules as well as taxability rules for localities within the states. |
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NOMAD
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There are only five (5) states that currently have no sales tax; New Hampshire, Oregon, Montana, Alaska and Delaware. Again, this does not mean that if you’re business is located in one of these states, that you will not have to pay sales tax. It just means that these states do not colllect a sales tax. There may be other taxes; e.g. Meals and Rentals taxes, etc. |
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Innocuous Survey Can Trigger Audit
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You might receive a form that looks like a survey and asks innocent-looking questions such as how many employees do you have and what state do they work in and where do they live. The surveys don’t look like they are from a state government but they might be. It’s their way of getting you to admit nexus. Please do not let just anyone fill these out; it could expose you to a huge liability. Hint: If you receive a nexus questionnaire, the requesting agency already suspects an issue. |
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Minimizing Sales Tax Audit Risk
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A sales tax audit could expose you to an average of 6% of customer revenues back seven to ten years plus up to 60% in penalties and interest. Because of the high dollar impact on the profitability of your business, it’s best to get a sales tax professional involved in helping you determine the taxability of your items as well as interpreting nexus. Many states are hiring auditors, sharing information and aggressively pursuing businesses, so due diligence in this area is prudent. |
| Sales Tax Tools Are Available |
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Marketplace Fairness Act
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If we can help in any way, please reach out and let us know. |
There are tools that integrate with QuickBooks and other small business software products, including online shopping carts. These tools will help you to calculate the taxes and file the required state sales tax forms.
The Marketplace Fairness Act, which is slated to tax internet sales for companies with revenues in excess of $1 million, even in New Hampshire, has passed the Senate and will be voted on in the House shortly. This will change everything.The Income Tracker is one of QuickBooks’ more innovative features. If you’re not using it, you should be.
One of the reasons that QuickBooks appeals to millions of small businesses is because it offers multiple ways to complete the same tasks, which accommodates different work styles. Say, for example, you wanted to look up a specific invoice. You could:
- Go to the Customer Center and select the customer, and then scan through the list of transactions,
- Use the Find feature (Edit | Find), or
- Create a report.
There’s also another way you can get there if you have a recent version of QuickBooks: the Income Tracker. (Note: Only the Administrator or a staff member with the correct permissions can access this feature. Talk to us about whether to allow other employees to use it, and how to set that up.)
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| Figure 1: QuickBooks’ Income Tracker provides a visual overview of your company’s income. |
That’s the first thing you can do with QuickBooks’ Income Tracker. To get there, either click the link in the vertical navigation bar or go to Customers | Income Tracker.
Four colored bars across the top of the screen represent unbilled estimates, open invoices, overdue invoices, and invoices paid within the last 30 days. Each bar contains two numerical values: the number of transactions of that type and the dollar amount involved.
QuickBooks defaults to displaying all types of transactions, but when you click on a bar, the screen changes to show only that type of transaction.
You can also filter the table of transactions using the drop-down lists below the colored bars. Your choices here include Customer:Job, Type, Status (Open, Paid, etc.) and Date (range). Click the arrow to the right of each filter’s label to display your options.
The column labels below these lists will change depending on the transaction type that’s active.
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More Functionality |
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The Income Tracker is great for simply viewing groups of transactions; double-clicking on one will open the original form. You can also open them by selecting an action to take. For example, open your estimates list and click on a transaction to highlight it. Then click the arrow next to Select in the Action column at the far right end of the row.
If you choose the first option here, QuickBooks opens a small window that asks you whether you’d like to create an invoice for 100 percent of the estimate, a percentage of it, specific items, or percentages of each item. When you make your selection and click OK, a completed invoice form opens, which you can then check over and save.
As you can see above, you can also mark the estimate as inactive, print it, or email it.
Each transaction type supports a different set of actions. In the open invoice action column, as you’d expect, you can click the option to Receive Payment, which opens the Customer Payment window with the customer and amount due already filled in. This can be edited to reflect a different amount, or you can just accept it as is, then save it. |
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Flexible Forms
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You can even create a new transaction within the Income Tracker. Click on the arrow next to Manage Transactions in the lower left corner of the screen and select the form you want.
The Income Tracker also provides one of the fastest ways to print multiple forms. Just select the transactions you want to print by clicking in the box in front of them, and then click the arrow next to Batch Actions in the lower left corner.
Finally, you can edit transactions from here, too. Either double-click on one or select it and click Edit Highlighted Row in the Manage Transactions menu.
QuickBooks’ Income Tracker doesn’t do anything that can’t be done another way in the program. But it provides an excellent one-glance view of the current state of your receivables movement.
If you’re consistently seeing patterns that you don’t like, call us. We can evaluate your receivables process and suggest ways to accelerate it. Even if your sales aren’t increasing, getting that “PAID” stamp on invoices quickly will improve your cash flow and strengthen your confidence as a business manager. |
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Tips & Tricks in QuickBooks®
