Whether you can see them now or not, Intuit added and enhanced a ton of new features in 2019. Some of you may not see all of them until 2020, since the company typically rolls them out slowly.
So, if you’re not in one of the first waves of users, we want you to know what’s coming. It may also be that your version of QuickBooks Online has incorporated the changes, but you just haven’t noticed them. Here’s a rundown of what’s in store for everyone on the horizon.
A new location for the Create button
Previously, you clicked on the +(plus) sign in the upper right corner to open the Create window (invoice, sales receipt, bill, single time activity, etc.). Now, you’ll see a button marked +New in the upper left corner.
If you use QuickBooks Online Payments, you’ll be able to have available credit card and bank transfer payments from customers deposited in your bank account within 30 minutes for a 1 percent fee. The funds will be directed to your U.S.-issued Visa or MasterCard debit card.
This is a tool previously found only in QuickBooks Self-Employed, but QuickBooks Online users will now have access to it. It does just what it sounds like: allows you to track business-related mileage so you’ll have a numerical total to enter when you come to that deduction on your income tax return. You can record trips manually by entering starting and ending addresses (or the total miles). Or, if you’re using the QuickBooks Mobile app, you’ll be able to turn on GPS and let your smartphone record the mileage automatically.
QuickBooks Online’s Mileage Tracker allows you to record business miles driven manually or automatically and calculates your tax deduction.
New navigation tools in QuickBooks Mobile app
You’ve probably gotten used to navigating from a list of features in the QuickBooks Mobile app. You should soon see an entirely different look for navigation that uses icons representing common tasks (Transactions, Expenses, Mileage, etc.). These will appear when you click on the Shortcuts tab. You’ll find the remaining tools under the All tab.
Health benefit management
QuickBooks Online now allows you to compare, buy, and manage employee health, dental, and vision coverage.
Receipts can be the bane of a business owner’s existence. Many still use the “shoebox” method, tossing receipts in a box and entering them when tax time rolls around. Not a particularly elegant solution. Now, you can snap photos of receipts and move them into QuickBooks Online in one of three ways, by:
- Scanning through the mobile app.
- Uploading, then dragging and dropping.
- Forwarding through email.
Receipts are automatically categorized and matched to transactions; if there’s no match, you can create a new transaction. Your receipts appear in the Receipts dashboard under the Banking tab.
Do you have international customers? If so, you may be able to send them invoices in their native languages. Besides English, QuickBooks Online now supports French, Spanish, Italian, Portuguese (Brazil), and Chinese (traditional).
You can now send invoices to customers in any of six languages.
One-step contractor payments
You can now select trackable details like class, project, and location by making selections from drop-down lists in the contractor payments window.
If you’re a QuickBooks Online Payments subscriber, you’ll be able to get next-day access to payments customers have made to you via credit card or ACH. You’ll have to sign up for this service, and fees apply to ACH payments (1 percent of the total deposit, up to $10).
Auto-calculated sales tax
QuickBooks Online has streamlined the process of adding sales tax to sales forms – even if you’re a cash-basis business. After you’ve done some initial setup work, QuickBooks Sales Tax will do the necessary calculations and add sales tax automatically.
We hope that 2019 has been a good year for your business, and we wish you the best in 2020. If you’re still struggling to use QuickBooks Online to maximize productivity and make better business decisions, remember that we’re here to help. We can also advise you on any of the new features Intuit has introduced. Contact us anytime to set up a consultation.
If you’re using QuickBooks Online Plus or Advanced, you can create projects and track their profitability.
You already know how to determine whether your business is making or losing money overall: you run a Profit and Loss report. But what if you want to break this data down further? How can you tell whether the individual jobs you do for customers, with all their related income and costs, are profitable?
This kind of insight can have an enormous impact on future business decisions about product and service pricing, worker costs, and expenses. It can even signal whether or not you should take on specific jobs. If you’re using QuickBooks Online Plus or Advanced, you can use their Project tools to calculate profitability. The theory is simple. You simply assign all relevant sales, time, and expenses to the project. QuickBooks Online will do the rest.
First, you’ll need to make sure that QuickBooks Online is ready to track projects. Click the gear icon in the upper right and select Account and Settings. Click on the Advanced tab and go down to the Projects section. If this feature is turned Off, click the pencil icon over to the right, click in the box to turn it On, and Save this option.
To create a project, click on Projects on the home page and then on the New Project button over to the right. This panel will slide out from the right:
Before you begin tracking a Project in QuickBooks Online, you’ll have to create a master record for it.
Enter a Project name in that field and select a Customer from the drop-down list (or <Add New>). Notes are optional but recommended. Click Save, and your new project will appear in a list on the Projects page. QuickBooks Online stores that information along with the customer in your company file and makes it available when you create, for example, invoices, checks, expenses records, and time activities.
Linking Projects in Forms
Your project will appear in different places on different forms. On an invoice, it appears in the Customer drop-down list as a sub-item under the linked customer. You’ll select the project name rather than the customer to make sure the invoice was “tagged” to the project and wasn’t just a one-off bill. If you’re recording an expense, you’ll see a column for Customer/Project with other line items details.
There’s also another way to connect transactions to their related projects. On the Projects home page, click on a project name in the list. Click the Add to project button in the upper right and select the correct transaction from the list that drops down. In some cases, like invoices, the project will already have been selected and will appear in the Customer field.
If you enter a transaction and realize later that you forgot to connect it to a project, you can correct this in most cases (like expenses and bills) by going back to the original transaction and adding (or changing) the Customer/Project name. Invoices are tricky, though, depending on their status. We’d recommend you consult with us about this.
You can see what your profit margin is on any project at any time.
After you’ve been entering project-related income and expenses for a while, you’ll probably be curious about whether or not you’re making money – even if the project is still in progress. To do this, open the Projects home page and click on the project name. The screen that opens (like in the image above) will be devoted to that one project. You can click on tabs to see:
- An Overview that lists your income and costs, as well as your profit.
- A list of related Transactions.
- Time Activity records.
- Project Reports (Project profitability, Time cost by employee or vendor, and Unbilled time and expenses).
We encourage you to use QuickBooks Online’s Project tools but would caution you about making changes to some existing transactions, especially invoices. We can help ensure that you’re on the right track with this feature. Contact us, and we’ll set up a consultation.
Keep a constant watch on your accounts receivable to improve cash flow.
Quick: How many of your invoices are unpaid? Have any of your customers gone over 30 days past due? Did you bill all of the time and expenses for that project you just completed for a customer?
If you’re doing your accounting manually, there’s simply no way to get that information quickly. Depending on your bookkeeping system, you may not be able to get it at all.
QuickBooks Online has more than one solution for this problem. You see the first one every time you log in. The Dashboard contains a graphic in the upper left corner that tells you how many invoices are overdue and unpaid. Click on the colored bar labeled OVERDUE, and you’ll see a list of invoices with the unpaid ones right at the top.
You can tell at a glance how much of your money is tied up in unpaid invoices.
While this is important information for you to have as you start your workday, it doesn’t tell the whole story. To get that, you’ll need to access some of QuickBooks Online’s reports – five of them in particular. Click Reports in the left vertical pane, and then scroll down to the heading labeled Who owes you.
These reports are listed in two columns. Each has the outline of a star next to it. Click on the star, and the report will be added to the Favorites list at the top of the page. Click on the three vertical dots next to it, and you’ll be able to Customize the report. And as you hover over the title, you’ll see a small, circled question mark. Click on this to get a brief description of the report.
There are several reports in this list that can provide insight into where your outstanding revenue is. We recommend you run five of them at least once a week – more frequently if your business sells large quantities of products and/or services. The suggested are:
Accounts receivable aging detail
This report provides a list of invoices that are overdue, along with aging information. There are several columns in the report, but you’ll want to pay special attention to the last one: OPEN BALANCE.
Tip: If you have many customers or simply a high volume of unpaid invoices, you might consider running the Accounts receivable aging summary instead.
Changing the Content
Before you run the report, you should explore the customization tools provided for it. They won’t be the same for every report, but you can start to get an idea of what can be done. Hover over the report title and click Customize. A panel like the one pictured below will slide out of the right side of the screen.
QuickBooks Online provides deep customization tools for reports.
You can see some of your customization options in the image above. Beyond these, you can also work with filters and headers/footers. When you’re satisfied with your changes, click Run report.
If you want to run a report with its default settings, just click on the report title in the list to display it. You’ll have access to limited customization from there.
Four other reports you should be generating regularly are:
- Customer Balance Summary: Shows you how much each customer owes your business
- Open Invoices: Lists invoices for which there has been no payment
- Unbilled Charges: Just what it sounds like: tells you who hasn’t been invoiced yet for billable charges
- Unbilled Time: Lists all billable time not yet invoiced
We don’t expect you’ll have any trouble understanding reports like these; they’re fairly self-explanatory. QuickBooks Online offers many other reports, the standard financial reports that need to be generated monthly or quarterly, like Balance Sheet, Profit and Loss, and Statement of Cash Flows. You’ll absolutely need these should you apply for a loan or need to supply in-depth financials for any other reason. We can help you analyze them to get a comprehensive, detailed picture of your company’s fiscal health.
QuickBooks Online doesn’t require deep knowledge of accounting principles. Still, there are concepts you should understand.
You probably didn’t expect you’d have to become an accounting expert when you started your business. You knew you’d have to deal with recording income and expenses – maybe track your inventory and process a payroll. But you may not have understood just how complex financial bookkeeping could be.
That’s why you decided to use QuickBooks Online, or are at least considering it. The service is an expert on accounting, and it simplifies the process. It knows exactly how you have to document transactions to stay compliant with the rules that accountants and other businesses follow. This is good practice, and it’s absolutely necessary if, for example, you ever have to apply for financing.
One of the features of accounting systems you should understand is the Chart of Accounts. You won’t have to alter it in any way-in fact, we strongly advise against it-but you’ll encounter it when you work with transactions. Here are five things you should know about it.
What is it?
These three columns from QuickBooks Online’s Chart of Accounts display account Names, Types, and Detail Types.
QuickBooks Online’s Chart of Accounts is a list of financial categories that are used to classify your company’s transactions when you record them. If you were doing your accounting manually, you would have to create your own Chart of Accounts. But QuickBooks Online builds one for you based on the company type and industry you choose when you’re setting up the site.
Why is the Chart of Accounts important?
Some people refer to the Chart of Accounts as the “backbone” of your company file. All transactions flow to it. Its primary importance can be summed up in one word: reports. Your reports will not be accurate if your Chart of Accounts is poorly constructed or if you categorize transactions incorrectly. This becomes as issue when you want to:
- Prepare taxes. Your income tax return will not reflect your reportable income and deductible expenses if transactions are not assigned to the right classifications.
- Apply for financing, take on an investor, sell your company, etc.
- Monitor your finances. You won’t get a true picture of your income and expenses, which makes it difficult to analyze your company’s fiscal health and plan for the future.
What’s in the Chart of Accounts?
There are two types of accounts. One contains information that’s used in the Balance Sheet report. These accounts will have a number in the QuickBooks Balance column that’s based on all transactions up to the current date. They include Assets (bank accounts, accounts receivable, inventory, etc.), Liabilities (unpaid bills, credit cards, payroll and sales taxes, loans, etc.), and Equity.
The remainder of the accounts are used in the Profit and Loss report, otherwise known as the Income Statement. They’re divided into Income (sales, discounts given, etc.), Cost of Goods Sold (labor, shipping, materials and supplies, etc.), Expenses (advertising, insurance, payroll, etc.), Other Income, and Other Expense. You won’t see a number in the QuickBooks Balance column for these accounts because the Profit and Loss report changes based on the date range selected.
Should I ever make any modifications to my Chart of Accounts?
You can set up bank and credit card accounts in QuickBooks Online’s Chart of Accounts.
As we stated earlier, we strongly recommend that you never modify your Chart of Accounts without consulting us. However, there are two exceptions to this. You’ll want to create entries for your bank and credit card accounts. To do this, first open the Chart of Accounts by clicking the gear icon in the upper right and selecting Chart of Accounts under Your Company. When it opens, click New in the upper right corner. Choose Bank or Credit Card and fill in the blanks.
Do I need to use account numbers in the Chart of Accounts?
Generally, the smaller the business, the less need there is for this. If your business is big enough that you have dedicated A/P and A/R individuals, you may want to post transactions to account numbers.
QuickBooks Online makes it possible for you to view the Chart of Accounts and those two critical reports, Balance Sheet and Profit & Loss. Customizing and analyzing them, though, is something you should do under professional supervision. We’re happy to help here and in other advanced areas of the site. Contact us for a consultation.
You can track the hours employees work in QuickBooks Online. But if your time-tracking needs are complex enough, you’ll need an integrated app.
If your company has a staff and sells services, you know better than anyone that time is money. It’s critical that you track every minute that employees work, as well as those that can be billed to customers. QuickBooks Online offers dedicated tools that let you do just those tasks.
But QuickBooks Online has limitations in that area, and you may need more versatile time-tracking than it provides. There’s a solution for that: add an integrated add-on application. Several are available that go above and beyond in the area of employee time management. If you’re interested in exploring these online solutions, we can help you both find and get started with the right one.
What QBO Can Do
QuickBooks Online’s own time-tracking features are easy to set up and use – but you must be sure they’re turned on. Click the gear icon in the upper right, then Account and Settings under Your Company. Click on the Advanced tab and go down to the Time Tracking section. The first two entries here should be checked; if they’re not, click in the boxes. If you don’t want employees to see how much customers are actually being billed for their time, keep that box unchecked. Change the First day of work week if you want and click Save.
If you’re going to track hours worked by employees and bill them to customers, these two boxes need to be checked.
Once time-tracking is enabled, you’ll be able to enter single timed activities and/or fill in timesheets., marking them as billable where appropriate. Employees will be able to enter their own hours on timesheets, and billable hours can be easily transferred to customer invoices.
Adding an Add-On
As we said earlier, there are numerous advanced add-on time-tracking applications that can be integrated with QuickBooks Online. They contain built-in tools to facilitate their actual connections with QBO, and they know what data needs to be exchanged and synchronized. Hours captured on timesheets go directly into QuickBooks Online, which transfers billable hours to customer invoices and uses the data in job costing and payroll.
Here’s an example of how the setup process works in one of the most popular apps, TSheets. Once you’ve created an account (a 14-day free trial is available), you’ll click on the Feature Add-ons link in the lower left, then Manage Add-ons. Select QuickBooks Online from the list and click Connect to QuickBooks. Click Connect again to establish the link. TSheets then asks some questions about your import preferences. When you’ve designated those and clicked on Start Import, TSheets will import your employees, customers, service items, and other data you’ve specified from QuickBooks Online.
You may need our help with one task in particular: setting up the Payroll Item Mapping Tool. This ensures that your pay types (salary, overtime, etc.) match those in QuickBooks Online. There are many other internal settings that will require your attention before you start using TSheets.
You can fine-tune your time-tracking app’s settings, as in the above image from TSheets.
TSheets and other QBO-friendly time-tracking applications have their own unique set of features, but they all focus on getting your employees paid for their work and your company paid by customers who use your services – accurately and in documented detail. Prices vary, but they generally charge a monthly base fee and an additional monthly fee for each user.
Employees can, for example:
- Punch into and out of specific jobs on a virtual time clock (desktop or mobile). Facial recognition adds another layer of security.
- Use time cards or timers to record work hours.
- Record their breaks and time off based on the stated company policies.
- Track time when wifi or cellular service is not available.
- Access and approve timesheets from the mobile app.
- Schedule shifts and assign employees to them.
- See who’s working (and on what) and locate them via GPS tracking.
- Generate real-time, live reports.
Keep in mind that when you add an app to QuickBooks Online, you’re essentially having to learn how to use an unfamiliar website or program. Since they touch both payroll and customer billing, time-tracking applications must be understood thoroughly and used with precision. So if your needs go beyond what QuickBooks Online can do, let us help you select and implement the right app for you.
Do you know about all of QuickBooks Online’s settings? What you’re missing may be important.
Looking through all the settings available in QuickBooks Online is something like reading the owner’s manual when you get a new car. You know you should do it, but you find yourself consulting it only when you encounter a problem.
Whether you’re new to QuickBooks Online, or you’ve been using it for a while, we recommend that you familiarize yourself with these important preferences. Settings do more than turn features off and on: they can teach you about tools you might not have known were available.
Let’s explore some that you may have missed.
Closing the Books
You’ve probably heard this phrase before but do you know what it actually means in QuickBooks Online? When you set a closing date, you’re indicating that no transactions entered prior to that date should be changed.
Click the gear icon in the upper right, then select Your Company | Account and Settings. Scroll down to the Advanced section in the left vertical toolbar. Under the first heading, Accounting, check the box in front of Close the books. Enter a date and choose one of the two options for exceptions, as pictured in the image below:
You can close the books as of a specific date in QuickBooks Online so users can’t change transactions entered before then.
Warning: Talk to us before you make this decision. We can discuss the pros and cons.
QuickBooks Online offers a couple ways to categorize transactions so you can see related data in searches and reports. Scroll down to Categories and click on the Off button to the right of Track classes to turn this feature on. QuickBooks Online will then add a Class field to forms like invoices, along with a drop-down list that you can build with your own options. For example, you could create categories like departments, customer types, and product lines. You can choose to assign classes to entire transactions or to individual rows in them, and you can ask to be warned if you try to save a form without selecting a Class.
Track locations works similarly. You can assign a location (territory, store, department, etc.) to each transaction if you’d like.
By using QuickBooks Online for your daily accounting tasks, you’re already saving time. But the site offers a way to save even more with its Automation tools. Here’s what you can do:
- Pre-fill forms with previously entered content. Once you’ve saved a transaction for a customer, vendor, or employee, you can choose to have QuickBooks Online complete some fields in the next form you create for them.
- Automatically apply credits. Do you want QuickBooks Online to apply credits to the next invoice you create for a given customer? Most businesses do, but a specific example of a time you wouldn’t check the box would be if you’re a property manager who requires security deposits.
QuickBooks Online offers several automation options.
- Automatically invoice unbilled activity. Be careful with this one. When you have customers with unbilled activity, QuickBooks Online can automatically create invoices for them on a schedule you designate. You have a few options here. You can simply ask for a reminder as the date approaches, or you can allow the site to automatically create invoices – with or without notifying you.
- Automatically apply bill payments. When you record bill payments, QuickBooks Online can automatically apply them to the oldest recorded bill.
Does your company sell services that are billed by the hour? If so, there are a couple of options you can turn on here. When you create timesheets or individual timed activities, you can add a Service field to the tracking form. You can also include a checkbox to indicate that a block of timed work is billable to customers. If you do the latter, you can opt in or out of letting users see the actual rate you’re charging customers.
Checking Your Work
QuickBooks Online refers to these as Advanced Settings for a reason. Making the wrong choices on any of them could lead to unhappy or confused customers and/or inaccuracies in your accounting file. We think you should know about these options, but we also hope you’ll schedule a consultation with us before attempting to set them up. It’s always much easier to spot problems in the making than to correct mistakes already made.
Estimates-or quotes, or bids-are useful tools when you’re pitching a sale of products or services. Here’s how QuickBooks Online handles them.
Sales estimates are standard procedure in many professions. You wouldn’t authorize a car repair without one. Nor would you OK a remodeling job on your kitchen or a summer’s worth of yard landscaping without knowing what the costs will be upfront.
Estimates don’t have to be formal documents. You could scribble a proposal for products or services and their prices on a paper napkin and have your customer sign it. But as we’ve said before, the quality of your sales documents reflects on your company’s professionalism as well as its image.
QuickBooks Online offers specialized tools to manage this step in the selling process. You can create detailed estimates that the site can easily convert to invoices when you get an approval. And QuickBooks Online reports help you monitor the progress of your quotes. Here’s how it works.
A Dedicated Form
You probably already know how to create an invoice. If so, you shouldn’t have any trouble generating estimates because the forms are very similar. To get started, click the + (plus) sign in the upper right corner of the screen. In the Customers column, click Estimates. A form like this will open:
QuickBooks Online provides a form template for your estimates.
Open the drop-down list in the Customer field and select the correct one (or +Add new).
Note: If you click on +Add new, you’re only required to enter your prospective customer’s name to create an estimate; contact detail, of course, will not appear on the form. You can go back later and complete a customer record, but it’s best to at least enter a physical and email address. Click +Details to open the complete record, then save what you provide there.
The word “Pending” should appear below the Customer field. This refers to the status of your estimate. Click the down arrow to the right of it, then on the down arrow in the small window that opens to see what options you’ll have later. If you want to copy someone else on the estimate, click the small Cc/Bcc link to the right and provide the email address(es).
Enter (or select by clicking on the calendar graphic) the Estimate date. If your offer is only good for a limited period of time, enter an Expiration date; otherwise, leave that field blank. Then go down to the Product/Service grid and select the items for which you’re providing an estimate, one on each line. Fill in the Qty field and check the labeled box if the item is taxable.
If you had created a product record for it already, the other fields should be completed automatically. If not, click +Add new. The Product/Service information pane should slide out from the right side of the screen. Here again, you’re only required to enter a Name, but you should really create the whole record and save it to return to the estimate. If you’ve not been through this process before, we can walk you through it.
You can add a discount to the estimate as either a percentage or a dollar amount in the lower right corner of the screen. You can also edit the customer message that appears in the lower left and attach any files necessary. When you’re done, save the estimate.
You can work with your estimate from the Sales Transactions screen.
If you’re not already there, click the Sales link in the left vertical toolbar, and then the All Sales tab and the Estimates bar. Find your estimate and look at the end of the row, in the Action column. If you want to convert your estimate to an invoice, click Create invoice. In the window that opens, indicate whether you want to invoice:
- A percentage of each line item,
- A custom amount for each line, or,
- The total of all lines.
Look over your invoice when it opens, complete any other fields necessary, and save it. Your estimate’s status has now been changed to Closed, and the new invoice created from it will appear on the Sales Transactions screen. It will also be included in the Estimates By Customer report.
If you can create an invoice, you can create an estimate. The tricky part comes in when you have to amend an estimate before you bill it – or even alter it and resubmit it. If you’re going to be working with estimates extensively, let us help you get it right from the start.
Does your business do work for clients over weeks or months? Consider using QuickBooks Online’s progress invoicing.
Let’s say you’re doing a job or project for a customer that is going to take a long time, but you don’t want to wait until you’re finished to get paid. Or you’ve agreed to let a customer pay for something in multiple payments. QuickBooks can help. You can create an estimate upfront for the work or products and send a series of invoices at different intervals until the bill is paid off. This is called progress invoicing.
Before you can use this tool, you’ll need to make sure it’s turned on. Click the gear icon in the upper right and select Account and Settings. Click the Sales tab. Look for Progress Invoicing in the left column. If that option isn’t On, click the pencil icon in the far-right column and click in the box to create a checkmark and Save it. Then click Done in the lower right corner.
Creating a Template
You’ll need to use a special template for progress invoicing. Click the gear icon again and select Custom Form Styles. In the upper right corner of the screen that opens, click the arrow next to New Style and select Invoice to open the design window. Replace the template name with a descriptive one and click Airy Classic to select it.
You’ll need to select the Airy Classic template and give it a descriptive name.
There are other options on this page – lots of them. You can add a logo, change fonts and colors, and even modify the content on the invoice. Talk to us if you want to explore the possibilities.
Your progress invoice needs you to adjust a couple other things here. Click on Edit print settings. If there is a check in front of Fit printed form with pay stub in window envelope, uncheck it. Next, click the Content tab, then click the small pencil icon in the second section of the invoice sample over on the right. At the bottom of the left pane, click Show more activity options.Check the box in front of Show progress on line items if you want your progress invoice to display item details. When you’ve made all the changes you want to, click Done.
Estimate to Invoice
QuickBooks can create both invoices and estimates. They’re very similar, and you’ll complete them in the same way, with one obvious exception: In addition to an Estimate date, you can also specify an Expiration date. Click the + sign in the upper right, select Estimate, and fill out the form. Save and close when you’re done.
When your customer has accepted the estimate and you’ve agreed on a payment schedule, you’ll need to know how to create a progress invoice. Click Sales in the navigation bar on the left, then All Sales. Locate your estimate on the list and click Create invoice at the end of the row. This window opens:
You have three options when the time comes to start your progress invoicing.
You’ll choose Remaining total of all lines when you’re ready to send your final invoice. For your first, you can either enter a percentage of each line item or a custom amount for each. If you choose a percentage, QuickBooks will calculate what that number would be and enter it. You’ll be able to specify your custom amounts when the progress invoice actually opens. Click Create invoice.
The invoice that opens will contain the information you provided on the estimate. You’ll notice a new column here, though, labeled Due. Your calculated percentage will appear there if you chose that option. If you indicated that you wanted to enter a custom amount for each line, that field will say $0.00 of [total]. Go down that column and type in the amount you expect to be paid on each line item. When you’ve finished, Save the invoice and send it to your customer. Now it appears in the invoice list, where you can send reminders, receive payment, etc.
You can send as many progress invoices as you’d like until you can finally bill your customer for the Remaining total of all lines. QuickBooks provides a report so you can see the progress of all of your progress invoices at once. Click Reports and scroll down to Sales and customers to run Estimates & Progress Invoicing Summary by Customer.
Progress invoicing is a simple concept, but it requires many steps, as you’ve seen here. And there are other ways to go about it in QuickBooks. We strongly suggest that you let us help you with this task to make sure your invoices are set up correctly – and that you’re paid in full.
It’s a gig economy. QuickBooks Online makes it easy to track and pay independent contractors.
In days past we used to call it “moonlighting” – taking on a second, part-time job for extra money. And we saw how prevalent this became was when millions of people had to resort to side gigs to keep afloat during the economic downturn of a decade ago. Some who had lost full-time employment even turned one or more of these part-time passions into a small business and became independent contractors for other companies.
If you’re thinking of hiring a freelancer to do some of your work, you’ll find that QuickBooks Online can accommodate your accounting needs for them nicely. Since they’re not W-2 workers, your paperwork needs are minimal. They’ll simply fill out an IRS Form W-9 and you’ll pay them for services provided, dispatching 1099-MISCs after the first of each year so they can pay their taxes.
Here’s how it works.
Creating Contractor Records
Warning: Be sure that any independent contractor you hire cannot be considered an actual employee. The IRS spells out the differences very clearly and takes this distinction very seriously. If you have any doubts, we can help you determine your new worker’s status.
You can either let a new contractor complete his or her own profile or do so yourself.
Like you would with anyone you employ, you’ll need to create records for contractors in QuickBooks Online. Click on Workers in the left navigation pane, then Contractors | Add a contractor. In the window that opens, enter the individual’s name and email address. If you want the contractor to complete his or her own profile, click in the box in front of Email this contractor…
Your contractor will receive an email with an invitation to create an Intuit account and enter W-9 information, which will be transmitted to your QuickBooks Online company account. This will make it easy to process 1099s when tax season arrives. He or she will also be able to use QuickBooks Self-Employed, an Intuit website designed for freelancers. We can walk you through how this works.
If you’d rather enter the worker’s contact details yourself, leave the box blank. A vertical panel containing fields for this information will slide out from the right.
Contractors are also considered vendors. So when you create a record for a contractor, it will also appear in your Vendors list in QuickBooks Online. In fact, you can complete a contractor profile by clicking Expenses in the left vertical pane, then Vendors. Click New Vendor in the upper right and fill in the relevant fields there. Be sure to check the box in front of Track payments for 1099. An abbreviated version of your new record will also be available on the Contractors screen as the two are synchronized.
When you create a Vendor record for an independent contractor, be sure to check the Track payments for 1099 box.
Working with Contractors
You’ll notice in the screen shot above that Brenda Cooper had an Opening balance of $2,450 when you created her record. That’s money you already owed her, and for which she had probably sent you an invoice. QuickBooks Online turned that into an Accounts Payable item that you could find in multiple reports and on both the Vendors and Expenses screens. It will be listed as a Bill in reports, though you haven’t actually created one yet.
You have three options here. You can create a Bill and fill in any missing details if you don’t plan to pay Brenda immediately. If you want to send her the money right away, you can either enter an Expense or write a Check. There are many places in QuickBooks Online where you can do the latter two. We think it’s easiest to return to the Contractors screen, since you can accomplish all three from there.
The Contractors screen contains links to the three ways you can handle compensation due to a contractor.
Whenever you receive an invoice from a contractor, you can visit this same screen and choose one of the three options.
You’ll have to select a Category for your payment from the list provided in each of these three types of transactions. The Chart of Accounts contains one called Subcontractors, which may or may not work for your purposes.
We strongly encourage you to consult with us as you begin the process of managing independent contractor compensation to deal with this issue as well as others. QuickBooks Online offers multiple ways to get to the same end result, and it can be confusing. Contact us, and we can schedule a consultation.
Every interaction with your customers can enhance your image. Here’s how QuickBooks Online contributes to that.
Getting paid by your customers-on time, and in full-can take some effort on your part. You set smart due dates and enforce them. Price your products and services so they’re both reasonable and profitable. Accept online payments.
But are your invoices working for you here? QuickBooks Online provides sales form templates that you can usually use without modifying. But it also offers tools that support multiple kinds of customization. It helps you shape the content and appearance of your invoices and their accompanying messages to be consistent with your company’s brand.
These may be cosmetic changes, but they can affect the way customers react to communications from you. You have few chances to make an impression, so anything you can do to enhance and personalize every interaction will have impact on their impression of you. Neat, well-designed sales forms convey professionalism and attention to details.
Here’s a look at what you can do.
Unless you use every single field in QuickBooks Online’s default sales form template, your invoices will look sloppier than they might otherwise. The site gives you control over much of the content that your customers will see. To make changes, click the gear icon in the upper right of the screen and select Account and Settings, then Sales. You’ll see Sales form content in the left column. Click on any of the fields to the right to open a more thorough list of options.
QuickBooks Online lets you turn fields on and off in your sales forms and specify other preferences.
Click on the status (On, Off) in the right column to change it. When you’re satisfied with your selections, click Save. Then close that window by clicking the X in the upper right corner.
You have more options than these. Click the gear icon again, and then Your Company | Custom Form Styles. You’ll see that there is already a “master” form. You can either edit it or create a new one. We recommend leaving the master form alone so you always have a clean copy to consult if you get tangled up while you’re working.
Click the down arrow in the New style box in the upper right and select Invoice. In the screen that opens, enter a descriptive name for your template in the field at the top and then click Content. A graphical representation of your invoice will appear in the right pane, grayed out. It’s divided into three sections: header, footer, and table (the middle of the invoice where you describe what you sold). Each displays a small pencil icon on the right side of the screen. Click the one in the middle to make that area more visible.
It’s easy to specify which fields should appear on your invoices, what the labels should say, and how wide the space should be.
As you check and uncheck boxes to indicate what content should be included, your invoice on the right will change to reflect your actions. You can Preview PDF by clicking that button in the lower right. When you’re satisfied with the changes you’ve made to all three sections, click on the Design tab.
Changing the Look
You don’t have to be a graphic artist to have QuickBooks Online forms that look attractive and consistent, which highlight your brand. The site provides tools that give you control over the appearance of your invoices, not just their content. Click each link below the Design tab to:
- Choose a template.
- Add your company’s logo.
- Select a color scheme and fonts.
- Change the printer settings to accommodate letterhead, for example.
Choosing Your Words
You have control over the messages that go out with your invoices.
Finally, click the Emails tab. Options here let you customize the emails that are sent to customers along with their invoices. Again, changes you make in the left pane will be reflected in the graphical version on the right side.
When you’ve completed all of your modifications, click Done.
We gave you this whirlwind tour of QuickBooks Online’s invoice customization options so you’d know what was possible. We expect you might need some assistance when you sit down to apply the concepts you’ve learned about to your own company’s sales forms. We’re available to help you present a polished, carefully-crafted image representing your brand to your customers.