QuickBooks Point of Sale has automated the cash payout for business expenses and is very easy to use. You can set a “default account” to post expenses to if desired by going to the Company preferences> Financial > Accounts > advanced and specifying the account you want to use. You are not limited to this account as the payout window has a drop down box to assign an expense account in QuickBooks.
To use the payout feature you select the “Point of Sale” drop down menu and select “new Payout” which opens the payout window. You enter the cashier name, the amount, the expense account in QuickBooks to use and any comments.
The payout will be reflected on the Z out report and will be recorded in QuickBooks during the financial exchange.
How do you handle petty cash payouts from your cash register in QuickBooks? In a small retail environment you may pay business expenses from your register on occasion. While this is not the preferred method of paying business expenses it is expedient when you need to pay someone quickly. It happens so let’s discuss how to do it,
You should have a “Cash in drawer” bank account set up in your QuickBooks accounting software. This is the amount you maintain in your register for making change.
When you need to disburse cash for a business expense from the cash drawer it is necessary to record that expense in your accounting records. The best way to handle recording the expense is to write a check against the cash drawer bank account.
Here is the simple way to do it.
- Pay the vendor out of the cash drawer and retain the receipt in your register.
- When you are filling out your daily summary sales receipt in QUickBooks at the end of the day you will include the receipt as part of your “cash payment to deposit”. An example is if you took in 500 dollars in cash but paid your window washer 20 dollars out of the register. You would only have 480 dollars in cash to deposit plus the receipt for 20 dollars. You record the full 500 dollars. (we will account for the 20 dollars in a later step)
- Go to your “write checks” window and select the “cash in drawer” bank account. Make sure you select EFT in the check number since you will not be writing an actual check. Enter the amount of the expense paid out of the “cash drawer account” which is 20 dollars and code it to the proper expense account. Save and close as normal. This check will “remove” 20 dollars from the “cash in drawer account” and record the expense.
- When you go to the “make deposits” window for that days sales you will see the full 500 dollars from your daily summary sales receipt ready to be deposited but you only have 480 actual dollars. To move the money back into the “Cash in drawer” account you simply select your “Cash in drawer” account in the “Cash back goes to” drop down box and record the 20 dollars. This adjusts the actual deposit to 480 dollars which is the amount of money you have in your hands.
What not to do
There is a procedure that while perfectly acceptable is not a great habit to develop. You could enter the expense directly on your deposit slip as a negative amount to the deposit and code it to the correct vendor and expense account. The problem is in your expense account reports the payment will show as a “deposit” rather than a check. You will also clutter up your deposits with expenses which I personally do not advocate. The main reason I discourage this practice is that once someone gets comfortable entering one type of transaction on a deposit slip they might get “creative” and enter other transactions that aren’t acceptable.
I hope this helps.
QuickBooks has included “sample company files” which are useful when first learning QuickBooks however they are not as detailed as they could be and surprisingly enough have minor set up flaws. The sample files are great for getting your feet wet in QuickBooks however none of them will even be close to your own company file.
A copy of your company working (.QBW) file can be useful when you are training a new QuickBooks user or new hire in your accounting procedures. Another reason may be to test planned corrections or new procedures without risking your working file. Any time you want to “test or train” use a QuickBooks practice file.
It is very simple to make a practice copy of QuickBooks but take care to name it something very unique; it is possible to start entering day to day accounting data in the practice file without realizing it.
First close your QuickBooks program then navigate to your company file location. Most company files are located in the “Public” folder in windows. The “Public documents folder” contains an “Intuit file folder”. Open the Intuit file folder and you will see a “QuickBooks” folder which contains a “Company files “folder.
You will see your company file “Your company .QBW” Right click the file and copy it to the location of your choice. Once the file is copied to its new location change the name of the file by right clicking the file and editing the name. I suggest using Practice file and the month so there is no way to confuse it with your working file.
Once you have renamed the file double click it to open. You will see your regular company name in the upper left of the window in QuickBooks. In order to avoid confusion go to the company dropdown menu>company information and change the company name to PRACTICE. This will change the name in the QuickBooks window. You can now use the file for practice purposes.
You KNOW the Customer or Vendor was entered in your QuickBooks file but now they are no longer appearing in the lists. How do you restore the list?
Go to your “write checks” window and select the “payee field”. When you have opened the list of Payees hit CTRL + L and the name list will open. In the lower left hand side of the screen you will see “Name” which is a drop down list. Click on “resort list” and see if that resolves your problem.
If the resort list did not work it is time to get serious. Create and restore a portable company file. It is important to understand the portable file before taking this step, a portable file only includes the financial records of your company file. See this Intuit support page for more information – Support
If your portable file is also missing customer and vendor names please visit this Intuit support page for further help- support
New for the 2012 version of QuickBooks is the “Condense data” feature which is a huge improvement over the previous utility “Clean up company data”. The condense data feature is found in the same location as its predecessor.
How do I record customer deposits on invoices or sales receipts? A deposit is not revenue (yet) and needs to be recorded as a liability until such time the sale is made and the deposit can be applied. QuickBooks makes it easy to accept and track customer deposits.
1) Create an “other current liability” account in your chart of accounts named “Customer deposits”.
2) Create a new “service” item in your item list named “customer deposits” , make sure it is marked “non taxable” and the “rate” is left at “0.00″. The account will be the newly created “customer deposits” account from step one.
3) When accepting a deposit you will use the deposit item on your invoice or sales receipt. The process is like any other sales transaction other than the fact the liability account is affected rather than an income account. Cash is debited and the liability account is credited.
4) When the sale for which you accepted the deposit is made you will include this deposit item on the first empty line below the items on the sales receipt/invoice as a NEGATIVE number. This will reduce the amount owed by the deposit amount. The transaction will debit the “Customer deposits” account and credit your income account.
You will probably want reporting on customer deposits and that is a very simple task as well. Go to your reports menu and select “custom reports” then “transaction detail report”. Make sure you select “all” from the date field and select the following columns; Type, date, Source name, Amount, and Balance. In the “Total by” field you will want to select “customer”. Go to the filters tab and select “Item” and in the drop down list select “Customer deposits”. Click “OK” and you will have your customer deposit report. I would recommend that you change the header to something like “Customer Deposits” and then memorize the report for future use.
A recent question from a new QuickBooks user involved how to properly record vendor credits. QuickBooks makes it very simple to apply vendor credits if the proper procedures are followed. First you must understand exactly what a vendor credit is and how it affects your accounting records. It is also important to understand other vendor transactions that are NOT considered vendor credits and how to apply them properly.
What is a vendor credit? When you make purchases from vendors there may be a problem with your order such as damaged goods, the wrong items received or freight overcharges. You will have received and entered a bill for the purchase but your vendor needs to make adjustments to cover the order problems. The vendor will issue your business a credit on the bill to cover any order issues.
In order to understand the process it is important to know what accounts are affected in the typical purchase process for business using the accrual accounting method. First you issue a Purchase order to your vendor, it is important to note that a purchase order is a non-posting document and does not affect any accounts in QuickBooks. Once the vendor receives the purchase order they will ship the goods and send your business the bill. When you enter the bill in QuickBooks it becomes an accounts payable liability. If you discover a problem with the order a vendor will issue a credit towards the bill and this credit REDUCES your accounts payable liability with that vendor.
The QuickBooks Credit Process
I am going to go through a purchase transaction with a credit to show all the steps involved. I have purchased 10,450 dollars of goods from “My Bad Vendor inc” of which 2,350 dollars worth of the product was defective AND they overcharged me for freight! Yikes!