Working with Checks in QuickBooks

Online banking may get all the headlines, but many small businesses still insist on paper checks. QuickBooks can accommodate them.

“I don’t write checks anymore,” you hear a lot of people say these days. Debit cards, smartphone payment apps, and online banking have replaced the old paper checkbook for a lot of consumers.

That’s fine if you’re at Starbucks or the grocery store, but many small businesses still prefer to issue paper checks to pay bills, cover expenses, and make product and service purchases. QuickBooks provides tools that help you create, print, and track checks.

But you don’t just head to the Write Checks window every time something needs to be paid. There are numerous times when you would record a payment in a different area of the program. For example, if you’ve already created a bill in Enter Bills, you’d go to the Pay Bills screen to dispatch a check.

 

Once you’ve recorded a bill in Enter Bills, you need to visit the Pay Bills screen to dispatch a check. The image above shows the bottom of that screen.

Other examples here include:

  • Issuing paychecks (click the Pay Employees icon),
  • Submitting payroll taxes and liabilities (Pay Liabilities icon), and
  • Paying sales taxes (Manage sales tax icon).

Simple Steps

Let’s say you asked an employee to go to an office supply store to pick up some copy paper because you ran short before your normal shipment came in. If you knew the exact amount it would cost, you could write a check directly to the shop. But the employee agrees to pay for it and be reimbursed.

Click the Write Checks icon on the home page. If the BANK ACCOUNT that’s showing isn’t the correct one, click the arrow to the right of that field and select the right one. Unless you’ve written a check to that employee before, he won’t be in the Vendor list that opens when you click the arrow to the right of PAY TO THE ORDER OF. Enter his name in that field.

The Name Not Found window opens. If this was a new vendor that you would be working with again, you’d click Set Up and follow the instructions in the step-by-step wizard that opened. Since this isn’t the case, click Quick Add. In the window that opens, click the button next to Vendor.

Note: If you’re using a payroll application, you already have an employee record for that individual, which would have filled in automatically when you started typing the name. Since this is a Non-Payroll Transaction, it won’t get mixed up with his payroll records as long as you assign the correct account.

If you don’t want to create an entire record for the payee of a check, you can just click Quick Add.

QuickBooks will then return you to the check-writing screen, where you can verify the check number and date, and enter the amount. Fill in the MEMO field so you’ll remember the reason for the payment.

At the bottom of the screen, you’ll see a tabbed register. The Expenses tab should be highlighted and the amount of your check entered. Click the down arrow in the field under ACCOUNT to open the list, and select Office Supplies. The AMOUNT should fill in automatically. Not sure which account to select, and what the remaining three columns mean? Ask us.

Note: You would only enter the expense under the Items tab if you were buying inventory items or paying job-related costs.

Warning: If you’re planning to print the check, be sure to check the Print Later box in the horizontal toolbar at the top of the screen.

When you’re finished, save the transaction. Since you want to pay the employee right away, click the Print Checks icon and click in the field in front of the correct check to select it, then click OK.

Easy, But Tricky

QuickBooks makes the mechanics of writing checks easy. Simple as it is, though, a lot can go wrong if you, for example:

  • Issue a check from the wrong screen,
  • Classify a check incorrectly, or,
  • Skip a step.

We encourage you to set up a learning session with us if you’re new to check-writing in QuickBooks or are confused about any of its attributes. We’ll be happy to help ensure that your accounts payable activities will result in accurate record keeping.

You work hard to make sure your QuickBooks data is accurate. Make sure it’s safe, too.
Your QuickBooks company file contains some of the most sensitive information on your computer. You may have customers’ credit card numbers and employees’ Social Security numbers. An intruder who captured all that data could create tremendous problems for you and a lot of other people.
That’s probably the worst-case scenario. But other situations could also spell disaster for your business, which  involve losing your company data through fraud, hacking, or simple technical failures.
We can’t overstate the vital importance of protecting your QuickBooks company file, especially your customer and payroll information. Whether someone steals it or it’s inaccessible for another reason, it’s gone. Keeping your business going after such a loss would be very difficult – maybe even impossible.
Here’s what we suggest to prevent that.
Internal Safeguards
 
No business owner wants to believe that his or her employees could use their QuickBooks access to commit fraud. But it happens. Your company file contains credit card and checking account data that could be used for nefarious purposes. As we discussed just last spring, you can restrict user access to specific areas
and actions of QuickBooks.
You can limit your employees who have QuickBooks access to certain areas and activities.
To get started, open the Company menu and select Set Up Users and Passwords | Set Up Users. The User List window opens. It should have at least one entry there, for you (Admin). Click Add User and enter the employee’s name and password in the next window that opens, then click Next.
Tip: Your QuickBooks license limits you to a specified number of users. If you’re not sure how many you’re allowed, click F2 to open the Product Information page. The number of user licenses you’ve paid for appears in the upper left.
 
On the next page of this wizard, click the button in front of Selected Areas of QuickBooks. The following screens will let you define that employee’s access permissions in areas like Sales and Accounts Receivable, Inventory, and Payroll and Employees. When you’ve clicked through every screen and reviewed the summary displayed, click Finish. Your user will now be able to sign in and access the areas you specified.
You can-and should-take numerous other steps to keep your QuickBooks data safe. If your company is big enough to have a dedicated IT expert, he or she will handle most of this. But there’s a lot you can do on your own to prevent data loss and theft.
Keep Your Operating System and Applications Updated
 

Don’t ignore this dialog box.
Software companies’ occasional updates offer more than just adding new features and fixing bugs. They sometimes refresh your software to ensure greater security based on new threats. Don’t forget about those all-important antivirus and anti-malware applications, as well as QuickBooks itself.
Keep Your Networks Safe
 
Just as a cold virus spreads around your office, so, too, can unwanted intrusions like computer viruses. Don’t allow an electronic epidemic to get started; take steps ahead of time to prevent it:
  • Discourage employees from excessive web browsing. This can be a hard rule to enforce, as some employees probably need internet access for research, timecard entry, and other work-related tasks. Create a firm policy legislating what workers can and can’t do on company-issued equipment (including tablets and smartphones) or any personal devices that use your wireless network.
  • Ask employees to refrain from using public networks on work equipment. Enforce the rules vigorously, and make compliance an element of performance evaluations.
  • Minimize app installations on business smartphones. Employees should ask for approval. Viruses and malware get in that way, as well as through some websites and email attachments.
  • Use monitoring software. If you can’t afford to pay for “managed IT” (a la carte, third-party IT services), install an application that alerts you to problems.
Use Common Sense
 
You can fight data loss and theft by being cautious. Be diligent about backups, and if you create them on a local, portable device, don’t leave them in the office. Cloud-based solutions are better. Shred papers that have sensitive information on them. Log out of QuickBooks when you’re not using it or when you leave your office. Be aware of who may be around you, looking over your shoulder.
We take data security very seriously in our own office, and we strongly encourage you to do the same. Contact us if you’re at all concerned with your own data safety, and we’ll come up with a plan together.
-Thank you
New Business Directions, LLC

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Rhonda, Wayne, Suzy, Kendra, Britney, Trudi, Kristen, and Freckles

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