Answers to Your REI QuickBooks QuestionsPosted on January 1, 2013 by
It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.
Q: I need to segment my balance sheet AND income statement into three departments (classes). Which version of QuickBooks can provide me with this capability?
A: The lowest edition you can use to have classes on both the balance sheet and the income statement is the QuickBooks Premier.
Q: If I change the reporting basis in the Reports & Graphs preferences from Cash to Accrual what reports will this change?
A: When you change your reporting basis the main area that will change is the Balance Sheet. On a Cash basis it will not show the Accounts Receivable or the Accounts Payable; on an Accrual basis these two accounts do show up. While you can modify reports back and forth between Cash and Accrual any reports you run for your CPA or for any loan request or other reason you are providing financial reports you should always run them the same basis that you file your tax returns. This way your balance sheet at 12/31 of any given year should match those tax returns you are providing.
Q: Why do I need to set up “Items” in QuickBooks?
A: Your “Items List” is what drives the ability to easily create invoices. If you have rental properties you can use the invoices to track how much a tenant owes you at any given time. It also allows you to see when you receive those payments and if they are on time according to you rental agreement. If the tenant is paying passed the due date, then you have an indicator to produce a “late fee” invoice and mail it to the tenant. While you won’t mail the monthly rent due invoice, you certainly will want to mail the late fee invoice.
Q: It takes me all day to reconcile my bank account. I thought it was supposed to be easy in QuickBooks. Every rent check I receive shows up as a separate deposit in my check register, but when I go to the bank I deposit several checks at a time in one deposit. Why doesn’t it show up the same in my register as on my bank statement.
A; If you did not turn on the “Undeposited Funds” feature in preferences then QuickBooks will put each received payment directly to the bank. You want the “Undeposited Funds” feature on so you can “collect” you received payments together as one deposit duplicating what you actually take to the bank.