QuickBooks tidbits
The basic idea of QuickBooks is very simple:
The user records transactions, QuickBooks takes care of everything else. Therefore the key for the user is to have a good understanding of all kinds of transactions.
A transaction is simply a process of money going from a source to a destination.
- A single license allows installation on two computers - one hosing the files and a client, one with a client.
- Accessing data stored on a hosting computer is through simple file sharing.
- Helpful video tutorials(Including payroll setup).
- Steps to set up payroll manually. Payroll Tutorial.
- It allows importing transactions from a bank to a bank account. For some banks such as TD Bank, transaction data need to be downloaded, then imported. Some banks such as TD Bank have only data of a short period (e.g. 60 days), so one needs to download data regularly. TD Bank's user name cannot be an email address for Quickbooks because bank feed setup with TD Bank BusinessDirect (not TD Bank BusinessDirect Webconn) requires a user name with only alphanumeric characters. In the bank feed setup, the new setup cannot be linked to a bank account that has already activated online service, so it needs to be deactivated first before a new setup can be used.
- Recording purchases made with ATM cards, debit cards, PayPal, or EFT is writing checks in QuickBooks. In lieu of a check number, codes such as ATM, DB, EFT or PP is used.
- The best way to record business expenses paid personally is using a dummy credit card account for the person paying the expenses. If the person is not paid (i.e. the expenses are his contribution to the company), a transaction of the owner's contribution can be entered to pay all the expenses.
- When TurboTax Business from Intuit (the maker of QuickBooks) imports data from QuickBooks, the federal tax form may have a balance sheet problem. This usually can be addressed by adding additional capital by shareholders.
- Downloaded refund transactions should be recorded to exactly the same expense account that the original purchase bill was recorded to.
- Recording payroll tax payment must follow the following order: 1. Create paychecks. 2. Pay taxes online and remember the date. 3. Employees > Payroll Taxes & Liabilities > Pay Payroll Liabilities > Select the period (e.g. 1st quarter of 2019) and liability items (e.g. Social Security taxes, Medical taxes, withholding...), and the actual payment date > Create 4. Download transactions. 5. Approve the automatically matched transactions.
Expense Account Type:
Mobile Phone Bill: Telephone Expense
Payroll is a bit complicated, but it is doable manually. Intuit offers payroll service for a subscription fee.
Read the article Payroll Accounting. Quick and Dirty Payroll for One-person S Corps is a very practical article.
After understanding the concepts, follow the instructions for to set up manual payroll in QB. Here are setup instructions from Intuit.
Follow instructions from Intuit to pay employees. The bulk of the work of writing paycheck is determining various taxes withheld from the payee and contributed by the company. A company in Massachusetts needs to deduct the following from the payee:
- Federal income tax withholding.
- Federal social security.
- Federal medicare
- Massachusetts income tax withholding.
- Federal medicare additional tax he (applies to the amount of compensation that is more than a threshold such as $200,000 for filing as a single).
The company needs to contribute the following
- Federal social security.
- Federal medicare
- Federal unemployment.
- Massachusetts unemployment
- Massachusetts workforce training fund (optional)
ADP has an excellent page of the tax rates for each state. Paycheckcity has an excellent calculator to calculate the all the values.
Massachusetts unemployment and Massachusetts workforce training fund need to be filed every quarter at this web site. The filing online is fairly straightforward and the payment can be made immediately after filing the report (Select Employment and Wage Detail Reporting. The deadline is due on or before the last day of the month following the close of a calendar quarter.
Massachusetts income tax withholding is filed at MassTax Connect.
Invoice - Payment - Deposit
- Create an invoice.
- Record the payment.
- Deposit the payment. This can be easily missing resulting in errors in P&L by inflating income.