2.2 Entering Transactions - QUTPart+2-2+Entering+Transactions.pdf · 2.2 Entering Transactions ... In the case of government grants, ... needs to be remitted to the Australian Taxation

2.2 Entering Transactions You are now ready to start entering transactions. These can be divided into a variety of categories, as detailed below: (a) Sales Sales involve all sales that the organisation makes to the general public, local businesses, and others. At the non-profit organisation level these will normally involve the sales of specific medical equipment, or books and things of a similar nature, but could also include advertising space in the organisation newsletter if such exists. Under the later circumstances, an invoice should be provided by the organisation to the purchaser, and preferably, a receipt of some kind when payment is made. For more information, see Section 2.2.2. In the case of government grants, these should be entered as “Sales” in QuickBooks. Grants are normally subject to GST. Hence, 1/11th of the gross amount of the grant needs to be remitted to the Australian Taxation Office on the Business Activity Statement. In some cases, the Government Department provides a tax invoice to the nonprofit organisation. This is referred to as a “recipient created tax invoice”. This means that the nonprofit organisation does not need to send the Government Department a tax invoice. If the Government Department does not issue the nonprofit organisation with a recipient created tax invoice, then the nonprofit organisation will be required to raise and send the Government Department a tax invoice for the GST-inclusive value of the grant received. Whichever way the tax invoice is achieved, it should still be entered into QuickBooks as a “sale” and coded to the relevant account (Account Numbers 4-1010 to 4-1000). For more information on grants, refer to Section 3.1.1. (b) Purchases Purchases include all items which involve the organisation paying money and receiving in return goods, or a service. These should always be accompanied by an invoice (more about these later) which will require payment in the future, or a receipt, to show that the item was paid for at the time of purchase. For more information, see Section 2.2.3. (c) Banking Banking includes the depositing of all cash and cheques made out to the organisation on a regular basis (daily, weekly, or in extreme cases, monthly). Banking also includes the payment of money for which no invoice was provided, or the paying of superannuation and GST to the ATO, and bank reconciliations based on the weekly or monthly bank statement from the participating bank. For more information, see Section 2.2.5.

QuickBooks Training Manual Part 2 April 2006 2-38 Processing Transactions in QuickBooks

(d) Payroll Payroll looks after all the transactions involved with paying of salaries and wages to all staff that have a permanent or casual nature. Payroll also keeps track of superannuation owing, annual and sick leave accrued, and any leave of any nature taken during the year. Payroll also calculates the appropriate amount of PAYG tax to be withheld and paid to the ATO on the Business Activity Statement (BAS). For more information, see Section 2.5.

2.2.1 Entering Sales Transactions

As previously mentioned, sales will include all goods and services, such as medical equipment, books, advertising space, etc, sold to a wide variety of members of the public and others. There are two ways to deal with sales. The first and preferable way is to issue an invoice from the organisation to the person or business to whom the sale is being made. An invoice can be generated from within QuickBooks and printed onto the appropriate letterhead, or an invoice created in a Word or similar document, the information of which is then recorded in QuickBooks – an electronic copy of the paper. The other method to deal with these sales is simply to take the money collected, and enter it into QuickBooks through the ‘Banking’, ‘Deposit’ section. Depending on how the money is generated, both of these methods are appropriate. Generally speaking, street donation collections are simply cash hand overs, sometimes to be issued with a receipt. It is simply not appropriate to issue each of these with an invoice, and so using the ‘Deposits’ option is fine.

TIP: Be aware, however, that the simple ‘Deposit’ option does NOT allow you to select at a tax code. If the amount that you are depositing does have GST attached, you must create an invoice within the QuickBooks data file, and code the tax accordingly.

For other sales, such as medical supplies, books or newsletter advertising, when the local small business wants to put an advertisement in your organisation’s newsletter, a tax invoice must be issued. A tax invoice must have several items present to make it an acceptable and legal document. These are: the words ‘Tax Invoice’ stated prominently; the organisation name or trading name, eg. ABC Limited; the organisation’s ABN. This is vitally important; the name of the recipient of the invoice eg. DEF Pty Ltd; the address or ABN of the recipient; the date of issue of the invoice;


a brief description of the goods or services provided; the amount payable for the supply and the amount of GST payable shown separately

OR; an all-inclusive price with the statement that the total price includes GST.

A dummy tax invoice was included at page 2-24 for you to use as a guide. If choosing to create a QuickBooks generated Invoice, click on the ‘Customers’ icon to the left of the Navigator screen. Click on ‘Templates, and then choose the kind of invoice you wish to create from the list offered. This will bring up a basic QuickBooks invoice, which you may rearrange to your heart’s content. 2.2.1.1 Entering Sales To enter a sale, click on the ‘Customers’ icon to the left of the Navigator screen. The window will now look like this:

Once here, click on ‘Invoices’ to produce the following screen:


There are a number of options available with regard to the customer invoice – to view the various options, click on the drop down menu arrow to the right of the words ‘Customised Invoice’, under the word ‘Template’. This will show you a list of the various invoices already in QuickBooks. It is also possible to create your own customised invoice, by clicking on ‘Customise’, and following the prompts. For this example, we will be using the Customised Invoice standard to QuickBooks. Enter your Customer’s name in the first section. If the name does not exist in the QuickBooks Record File, you will be prompted to create one. For details on how to do this, see Section 2.1.8. ‘Setting Up Records’. The process will be identical, with the exception that you will be accessing the Customers Record File Register via the Customer Invoice Module. If your customer is not present in the alphabetical list, simply click on ‘Set-Up’ to create a full customer record (Not ‘Quick-Add’, which produces only a name), and fill out the resulting screens. Once you have completed your record and clicked ‘OK’, you will be returned to the Tax Invoice screen. The next field is called ‘Class’. This will be discussed in a later section. For more information on this, see Section 2.6.1.1 ‘Class Costing’.


The next field deals with Accounts – in this case, the Accounts Receivable account that will be used to record the sale as a current asset. There are a number of options for this in this data file – be sure to select the correct one. To do this, click on the drop down menu arrow to the right of the field, and make your choice from the chart of accounts that appears. Enter the correct date for the invoice (perhaps not today’s date). You can either type in the correct date, or click on the calendar option at the end of the field, and scroll back and forth through the months until you find the correct one. Put in the correct invoice number. Once you have started your numbering sequence, QuickBooks will automatically insert the next number in the sequence. However, just keep an eye on this to be sure. In the main body of the invoice, you will next be asked to select an Item. We have programmed this list to provide you with the account options from the Chart of Accounts. Select the correct account. In description, you can write whatever will be meaningful and understandable for both yourself and the customer. The correct information here can make the difference between an invoice that is useful and understandable at a later stage, and an invoice that is not… Once you have selected the correct Item, the tax code will fill itself in – check to make sure that the correct code is being used for the entry you are making. Before you go any further, be sure to tick the box at the bottom of the page ‘Amts inc Tax’ if you are entering the GST inclusive price. If you forget to tick the box and then do this after you have entered the rate, this rate will change to have GST included in it. Check it to make sure that it is still correct. If you are selling several of something, for example books, you will need to put in the ‘Rate’, or cost of the item individually. QuickBooks will then automatically calculate the total cost, and the GST (or not) applicable for the sale. For the purpose of this example, we will sell books to a local bookshop. The bookshop will be called Marie Antoinette Books, and they have purchased 300 books explaining the history of our non-profit organisation. Your finished sale should look something like this:


If you have entered only the one invoice, and would like the invoice to be printed, untick the ‘To Be Printed’ box at the very bottom left of the screen. This feature is used when multiple invoices are being printed at a later stage. To print a single invoice, click on ‘Print’ at the top of the invoice screen. A message will appear, asking if you wish to save before you print. Click ‘Yes’. The normal print screen will appear. If you have more than one tax invoice to enter, click ‘Save and New’. The current invoice will be saved, and you will be presented with a blank invoice screen in front of you to fill out. If you change your mind, simply click on ‘Save and Close’ – you will be returned to the Customer Navigator screen. To print the invoices, go back to the Customer Navigator screen. To the right of the main options, there are a number of other options listed – the first of these is ‘Print Invoices’. Clicking on this option will bring up the following window:


Place a tick beside the invoice(s) that you would like to print, or click ‘Select All’. Click ‘OK’, and then select the printer that you wish to use on the next screen. It will look like this:

There are a number of options available at this stage – when you are satisfied, click ‘Print’. Head to the printer to collect the invoices. The next screen that appears will be this one:


Check that all the invoices are what you want – if they are, click ‘OK’. If they are not, either choose which you will reprint, or click ‘Help’. All things going well, you will be happy with the result, and can click OK. You will be left with the Customer navigator screen in front of you.


2.2.2 Receipt of Monies This assumes that you have already entered the sales into QuickBooks – if not, and you have a paper copy of the invoice, or are very certain of the details on the invoice, enter those before proceeding to record the payment. If you do not have the details of the invoice entered, and are certain of the GST implications, simply use the ‘Banking’ ‘Deposits’ option instead, to be explained at Section 2.2.5.2. ‘Deposits’. However, be aware that if you do decide to use this option, and have already entered an invoice, you will not be able to match the invoice and payment together. At the Navigator Screen, click on the ‘Customers’ icon, and then on the words ‘Receive Payments’. This will bring up the following screen:

For the purpose of this exercise, Marie Antoinette Books will be paying amounts outstanding on the invoice issued to them earlier for the purchase of books for their shop.

TIP: Take note of the default information at the very top of the screen, at the section called ‘Account’. On this view, the option ‘1-1210 – Accounts Receivable’ is the default. It is possible to change the account so that the money deposited goes to clear another Accounts Receivable within QuickBooks, or perhaps even a credit card. This information should be checked each time you process a receipt.


TIP: The ‘Group With Undeposited Funds’ feature is useful if you have

several amounts of money received and processed through QuickBooks on the same day that will be deposited with your bank at the same time. Your bank will show these deposits as a single sum on the bank statement that you are sent, causing time consuming moments for the statement reconciler whose task it is to make sure that QuickBooks matches the bank. To have a single sum appear on the QuickBooks version of your bank statement, simply click the option ‘Group with Undeposited Funds’. More about this will be explained in Section 2.2.5.3 ‘Preparing an Electronic Bank Deposit’.

Enter ‘Marie Antoinette Books’ in the ‘Customer’ section, followed by the Amount received on this occasion. QuickBooks will accept part payments (whether you and the organisation will is a different story…), and will allocate amounts received against the oldest outstanding invoice for that client, unless the amount entered fits exactly one of the invoices. Make sure that QuickBooks has allocated the money to the right invoice. Fill in the other details, resulting in a screen looking like this:


At the very bottom of the screen, there are two options with regards to where QuickBooks will record the money as having been deposited. You can either choose to ‘Group with other undeposited funds’ – to be explained later – or into the specific bank account of your choice. In this example, we have chosen to have the money deposited to the main bank account for the organisation. To select the account which will be applicable for you, click on the drop down menu arrow to the right of the field, and select an account from there. When satisfied that the information is correct, click on ‘Save & Close’, or ‘Save & New’, depending upon what you want to do next. Alternately, ‘Clear’ will remove all that you have entered, and you will see a blank ‘Receive Money’ screen in front of you, to start again. If you choose to ‘Save & Close’, QuickBooks will return you to the Customers Navigator screen.

2.2.3 Entering Purchases and Expenses

Purchases made by your organisation will involve payment of all expenses for which the organisation receives a tax invoice. It will also include the purchase of office and other equipment, renting of office space or the hiring of equipment, purchases of utilities (such as gas, telephone, electricity etc) and expenses such as licenses, dues and subscriptions. Purchases also include one-off payments to volunteer staff and other persons who perform a service on an irregular basis. All purchases should come with either an invoice or a tax invoice. An invoice is issued by an entity that is NOT registered for the GST. A tax invoice is issued by an entity that IS registered for the GST. Regardless of whether a supplier provides the organisation with an invoice or a tax invoice, it must still include the following details: an Australian Business Number (ABN); and an Invoice Number.

The ABN is an eleven-digit number unique to the entity. It is NOT the same as the Tax File Number (TFN) or Australian Company Number (ACN) in the case of companies. If the invoice or tax invoice does not have an ABN on it (and they can be hidden in very small writing, so spend a little time checking) then your organisation is required by law to withhold 48.5% of the gross amount, and remit this amount to the ATO on the next quarter’s Business Activity Statement (BAS). This applies in all cases, unless: payment is for salaries and wages (if this is the case, Payroll should be handling this

payment); payment is for less than $50; or payment is for an individual for a hobby, in which case you must acquire the

appropriate approved declaration. A copy of this form has been included later in this manual. This could be a volunteer collecting money or working in the op shop, and being paid a fee of less than $50, or being reimbursed for travelling expenses or meals.


Once you have established that the piece of paper in front of you is indeed an invoice or tax invoice that either requires payment, or has been paid, take the following steps in QuickBooks. A dummy tax invoice, received from Bill’s Repair Shop, is shown on the following page, to show you exactly what information needs to be entered into QuickBooks. For more information on valid tax invoices, refer to the following ATO weblink:

Web link: http://www.ato.gov.au/content/downloads/gstnat12358022006.pdf


http://www.ato.gov.au/content/downloads/gstnat12358022006.pdf

Bill’s Repair Shop Pty Ltd Repair Shop to the Stars!!

27 January 2006 Invoice No: 3672

TAX INVOICE

ABN: 13 789 987 997

Sample Non-Profit Organisation Inc. A Small Town in QLD The Main Street Somewhere, QLD, 4651. Being my professional fee for services rendered in respect of the following: Repairs to Gas Lift Office Chair AMOUNT OWING: $ 200.00 TOTAL FEE ABOVE INCLUDES GST OF: $ 18.18

Nett: Payment within 30 days from the date of this tax invoice.

Bill’s Repair Shop

33 Ashton Street, Somewhere QLD 4651 Telephone: (07) 3397 1983 Facsimile: (07) 3397 1982


At the Navigator screen, click on the icon called ‘Suppliers’. The resulting window should look something like this. With your invoice in front of you, click on ‘Enter Bills’.

The following window will appear. You can now complete the relevant information from the invoice, - in effect, an electronic record of the paper.


First, make sure that QuickBooks has selected the right kind of entry – you are entering, for the purpose of this exercise, a bill rather than a credit. Next, make sure that the correct Accounts Payable account has been selected. Your organisation may be using several options. We have selected the basic ‘Accounts Payable’. Place a tick in the box ‘Bill Received’ – if you have the invoice in hand. If not, you can enter the information based upon what you know. QuickBooks will generate a screen looking slightly different to the one above. Enter the Supplier’s name in the box beside the word ‘Supplier’. If the supplier is new to your QuickBooks file, or for some reason isn’t there, QuickBooks will come up with a message, stating this, and giving you the option to create one. Click on ‘SetUp’, and fill out the resulting record, following the instructions given at Section 2.1.7 ‘Setting up Records’. When you have finished, click ‘OK’ and you will be returned to your original invoice screen. You will now be able to select ‘Bill’s Repair Shop’ as your supplier. Press ‘Tab’ on your keyboard, or click using your mouse to move around the various parts of the screen. You should end up with something that looks like this:

From looking at this, you can see that the supplier’s invoice (in this case from Bill) was Number 3672, that the invoice was dated 27 January 2006, that repairs cost $200.00, and that the service was subject to GST, since Bill is registered for the GST. The date that is entered at ‘Bill Due’ will affect when the invoice shows up on your Bill Payment screen.


Make sure that you place a tick in the box called ‘Amts inc Tax’ - QuickBooks automatically calculates the amount of GST, and has shown it as a separate amount, being $18.18. All you need to do is enter the total amount of the invoice (GST inclusive) in the column called ‘Gross Amt’. It is possible to type Memo notes in two different places – use whichever suits you best. It is also possible to select a Customer Job, but this will be dealt with in a later section. When you are satisfied that all the relevant information has been entered, and is correct, click on the ‘Save & Close’ or ‘Save & New’ button at the lower right of the screen. If you have further purchases to enter, follow the same procedure until they are all entered. If the invoices have yet to be paid, put them aside in your usual manner, to be dealt with at a later date. If they have been paid, the payments need to be entered into QuickBooks, in the following manner. 2.2.4 Making Payments This next sequence of events assumes that the original invoice details have now been entered into QuickBooks. If they have not, do that now, and then proceed with the following steps. Alternately, if you do not have the invoice, but have an idea of what the payment is for, use the ‘Spend Money’ option. However, it is recommended that all efforts be made to obtain an invoice in the future, and enter the correct information. The ‘Spend Money’ option is discussed at Section 2.2.5 ‘Banking’. At the Suppliers Navigator screen, click on the ‘Pay Bills’ icon. This will bring up a screen that looks something like this:


You have two options right at the very beginning – you can select to see only those invoices that are ‘Due on or before’ a certain date, or you can select to ‘Show all bills’. Do whichever you are most comfortable with. If, after choosing to ‘Show all bills’, nothing comes up on the screen listing, check the Accounts Payable account that has been selected. For this example, we are using the standard accounts payable account, but your organisation may be making use of one of the other options. Click on the drop down menu arrow to the right of the field to make your selection. With the invoices to be paid in front of you, select the one you are about to pay by placing a tick beside the entry in the column to the left of the date. Next, go to the very end column, and type in the amount that you will be paying on this occasion. QuickBooks will accept a part payment – the amount being paid will be credited against the total invoice amount. When the remaining monies outstanding are paid at a later date, only the amount still to be paid will show up. If you wish to have a look at the original invoice entry, click on the button at the bottom left of the screen ‘Go to Bill’. When you have finished looking at it, click on ‘Save & Close’. Next, decide how and from which account the invoice will be paid. This is in ‘Payment Method’ – the option default is ‘Cheque’, but if you would prefer to direct deposit (BPay) an amount, or pay by credit card, this option is available. Note, however, that a credit card account has not been set up in this chart of accounts, and will need to be added if you regularly use this option. Consult the manual that came with your QuickBooks software for information on how to do this. Alternatively, if paying All of the outstanding invoices, click on the ‘Select All Bills’ button on the lower left of the screen. QuickBooks will fill the right amount into ‘Amount to Pay’ automatically. At a later stage, it will be possible to assign cheque numbers (if applicable) to each payment being made. For this example, we will pay Bill’s Repair Shop’ by cheque, using a hand written cheque, and will be paying from the main account. If you are using pre-printed cheques, click on the ‘To be printed’ radio button. If not, click on the radio button beside ‘Assign cheque no.’ Enter the date that you will be processing the payment on - most likely, today’s date. Select the account that you will be making the payment from in the ‘Payment Account’ area.

TIP: The most important thing to note is the default information in the ‘Payment Account’ area. On this view, the default option ‘1-1110 Cash at Bank – Unrestricted’ has been chosen. It is possible to change the account that you pay this invoice to either another bank account within QuickBooks, or perhaps even a credit card. This information should be checked each time you process a payment, if you use multiple bank accounts, or keep track of Petty Cash through these QuickBooks accounts.


When all has been sorted through, your screen will look something like this:

The next requirement will be the cheque number used to pay the invoice. To enter this information, first click the ‘Pay & Close’ or ‘Pay & New’ button. This window will appear:


You have two options now – you can either have QuickBooks automatically assign a cheque number based on those already entered, or you can assign the appropriate number yourself – probably the safer option. To add or change the information shown in ‘Date’ and ‘Cheque No.’, simply click in each field with your mouse. The date is the date recorded on the cheque, cheque butt, or the date the internet transaction went though. If coding from a bank statement (in undesirable circumstances) put the date the cheque cleared. If paid by Direct Debit via the Internet, simply put ‘EFT’ in the cheque number space. However, if paying by cheque, put the cheque number. To enter the transaction, simply click on the ‘OK’. If you earlier chose the ‘Pay & New’ option, but did not select ‘Select all Bills’, QuickBooks will return you to the payment screen. If you have further payments to record, continue in the same way until finished. If you have no more payments to record, simply click ‘Pay & Close’. This will return you to the Suppliers Navigator. 2.2.5 Banking Banking features include all functions that apply to the management of your bank accounts and the money in and out. These can be accessed by clicking on the ‘Banking’ icon on the Navigator screen. Doing this will bring up the following window:


As you can see, from here we can write cheques, deposit and transfer money, reconcile accounts, record credit card charges, and access the bank register, amongst other things. To access any of these features, simply click on the appropriate icon. Below, our discussion of each feature begins. 2.2.5.1 Write Cheques

Perhaps the most used and potentially important feature of QuickBooks, ‘Cheques’ is used to record monies spent for which no tax invoice has been received by the organisation, or for automatic monthly payments that the bank has debited directly from the organisation’s bank account. Bank and credit card fees can also be processed through here. Ideally, it is NOT for recording payments for which a tax invoice has been received. In this case, the tax invoice should have been entered into QuickBooks using the ‘Suppliers’ and ‘Pay Bills’ section. If this section is not used, payments made by your organisation to a creditor (ie. accounts payable) will not be reconciled against outstanding invoices, and will show up as still owing. To use this function, see Section 2.2.4 ‘Making a Payment’. Providing these requirements have been satisfied, you may go ahead and write a Cheque… To make use of this function, click on the words ‘Cheque’. The following screen will appear:


TIP: The most important thing to note is the default information at the very top of the screen. On this view, the option ‘Bank Account 1-1110 Cash at Bank – Unrestricted’ has been chosen. It is possible to change the account that you pay this invoice to either another bank account within QuickBooks, or perhaps even a credit card. This information should be checked each time you process a payment.

Enter the name of the person, group or entity to which the cheque or electronic payment is being made. If it is necessary to create a new record, see Section 2.1.9 ‘Setting up Records for Customers and Suppliers’. At this point, you will notice that the space to enter the cheque number has ‘To Print’ entered there. This only applies if you are using pre-printed cheques. If you are not, this can be changed to allow you to enter the number of the cheque you are about to write out, or ‘EFT’ if you are recording a direct debit payment. Looking at the screen, to the right you will see a large button with ‘Order cheques’ on it, and underneath, a small field with a drop down menu arrow to the right of it. Click on the arrow, and select ‘Cash/Cheque’. This will now allow you to enter your own cheque number, or ‘EFT’ in the appropriate space. Add the date, amount paid, and any applicable note in the Memo field. Now tab to the ‘Acct #’ field. Using the drop down arrow at the end of the box, scroll to the correct account code for the payment you are making. The name of the account will automatically show up in the column. As no narration can be made in this field, it is good to make use of the ‘Memo’ field above to record additional information. Make sure that the tax code is correct, and change it if necessary by clicking on the drop down menu arrow to the right of the field and selecting the appropriate code. Next, input the correct dollar value in the ‘Gross Amount’ column – remember, this is inclusive of GST (if applicable), which will then be calculated and shown in the following column. ‘Job’ and ‘Memo’ can also be used to add additional information as required. For further information on how to use the ‘Job’ function, see Section 2.6.1 ‘Customer:Job /Class Costing’. Your finished screen should look something like this:


If you are satisfied, click ‘Save & Close’ if you have finished. QuickBooks will record the information, and return you to the Banking Navigator. If you have further cheques to process, click on ‘Save & New’ – QuickBooks will record the information, and return you to a blank ‘Cheques’ screen, allowing you to continue processing. 2.2.5.2 Deposits

This function is used to record interest earned by a bank account or term deposit, refunds from the Australian Taxation Office, or deposits of money from the proceeds of a street donation occasion. Be careful using this feature – any GST that should be accrued with the deposit (if applicable) is not recorded – for this reason, if the deposit should show GST, it is wiser to create a Sales Receipt, and capture the GST at the same time. Ideally, this is NOT for recording receipts for which a tax invoice has been issued by the organisation. If a tax invoice has been issued, the sale should have been entered into QuickBooks using the ‘Customers’, ‘Receive Payments’ section. If this section is not used, amounts received by your organisation from a debtor (ie. accounts receivable) will not be reconciled against outstanding invoices, and will show up as still owing. To use this function, see Section 2.2.2 ‘Receipt of Monies’. If the above requirements have been satisfied, click on the Banking icon on the Navigator, and then on ‘Deposit’. The following screen will appear:


TIP: The most important thing to note is the default information at the very top of the screen. On this view, the option ‘Deposit to Account 1-1110 Cash at Bank – Unrestricted’ has been chosen.

It is possible to change the account so that the money deposited goes into another bank account within QuickBooks, or perhaps even a credit card. This information should be checked each time you process a receipt, if you use multiple bank accounts, or keep track of Petty Cash through these QuickBooks accounts.

Having that dealt with, the next step is to enter the payer’s name into the column called ‘Received From’. If this is your organisation, if you are depositing street donations, you can create a record simply called ‘Street Donations’ or similar. Alternately, you can leave this section blank, and fill in the details in the Memo area. Next, select the ‘From Account’. This is asking you to decide which revenue account the monies being deposited should be coded to. Be sure to select one of the Income accounts from the chart of accounts. Simply click on the drop down menu arrow to the right of the field, scroll down until you come to the income accounts, and then select from the list by clicking once on the account name with your mouse.


Next, enter the ‘Memo’ – this could say something like ‘Street Collection – 31 January 2006’, or whatever is likely to have meaning to you at a later date. Next, QuickBooks would like a Cheque Number – if you are depositing cash, simply type ‘Cash’. The next column requests the ‘Pmt Meth.’ – again, a number of options are available. If ‘Cash’ does not suit your deposit, clink on the drop down menu arrow to the right of the field, and make a selection from the available options. Finally, type in the amount being deposited. Once completed, your screen will look something like this:

Once you are satisfied that it is all correct, click on the ‘Save & Close’ button. QuickBooks will record the information, and return you to the Banking Navigator screen. However, if you have further deposits to process, click on ‘Save & New’ – QuickBooks will record what you have entered, and then return you to a blank deposit screen, allowing you to continue to process your deposits 2.2.5.3 Preparing an Electronic Bank Deposit The use of this function assumes that you have already been choosing to select the option ‘Group with Undeposited Funds’ when receiving payments through ‘Customers’. To read more about activating this, see Section 2.2.2 ‘Receipt of Monies’. To use this function, click on the Banking icon on the Navigator, then on ‘Deposits’. The screen that appears should look something like this:


As we can see, various amounts have been receipted into QuickBooks. We will assume that these amounts are now about to be taken to the bank, to be deposited, on 9 February 2006. Once deposited, the total amount of $20,965 will appear on the bank statement. When using this method in QuickBooks, the same amount will appear on the QuickBooks record, making the task of reconciliation much easier. To enter this deposit, choose which method Receipts will be selected by. Then click beside each dollar value that corresponds with your banking deposit slip that will be presented to the bank. A tick will appear beside each one, and the total amount will appear at the bottom of the column. If this figure matches that which you are about to deposit, press ‘Record’. If not, find the error, and make the necessary changes. The screen should look something like this:


Once ‘OK’ has been chosen, those entries marked with a tick will disappear, leaving room for any others that may be processed at a later stage. The next screen to appear will be this one:


This screen will allow you to select the bank account that the money is to be deposited into from the Chart of Accounts. Type in the correct date, and if you wish, put something else in the ‘Memo’ line. If your deposit has been mainly cash, this screen also allows you the facility to distribute cash to another bank account – for example, Petty Cash. At the bottom of the screen, select the account that you would like the cash distributed to, any memo, and the amount. Your deposit figure will adjust accordingly, and this adjusted amount will show up on your bank reconciliation screen. Whether or not you decide to make use of this option, clicking ‘Save & Close’, or ‘Save & New’ will mean that the total deposit amount will now show up on the QuickBooks Reconciliation, ready to be checked against the paper bank statement when the reconciliation is done. For more information on Bank Reconciliations, see Section 2.2.5.4 ’Performing a Bank Reconciliation. 2.2.5.4 Performing a Bank Reconciliation Bank reconciliations are legally required, and need to be done on a regular basis, as it is by means of a regular bank reconciliation that you are able to check that both the bank and your data file are showing the same, correct information. Ideally, a bank reconciliation should be performed on all cash accounts each time a bank statement arrives from the financial institution that your organisation deals with. Ideally, you should be receiving statements on a monthly basis, but more or less frequency is also possible. To reconcile your bank account, click on the ‘Banking’ icon on the Navigator, and then ‘Reconcile Accounts’. The following screen will then appear:


First, choose the account you wish to reconcile. This information can be accessed using the drop down menu that appears when you click on the arrow at the top left hand corner of the window, beside ‘Account’. Next, put the last date shown on the paper statement in the field called ‘Statement Date’. Make sure the statement date is correct as it will default to a date one month after the previous reconciliation. You can overtype this with the correct date if required. Your bank statements will most likely cover a month’s worth of transactions, with a date run of, for example, 1 January 2006 – 31 January 2006. The date that you would put in this field is, in this case, 31 January 2006. The ‘Beginning Balance’ field will normally show the balance of the previous reconciliation – in this example, however, the balance is shown as 0.00 – the account, as far as QuickBooks is concerned, has just opened. The next thing required is the ‘Ending Balance’ – this is the figure that represents the account closing balance at the end of the bank statement. If the beginning balance on your bank statement and the opening balance in QuickBooks do not match, there are several possible reasons. You may not have selected the right account to reconcile. Alternatively, if you have recently converted to this new chart of accounts, have you entered the correct account opening balance? For more information on this, see Section 2.1.4 ‘Loading Opening Balances’. If these options can be discarded, click on the button at the bottom of the screen called ‘Locate Discrepancies’. This will create a report showing all amounts that have been changed since they were last reconciled. Hopefully this will solve your problem. However, if everything is good, click on ‘Continue’. The following screen will appear:


Start at the top of your paper bank statement, and work down the list, one item at a time, ticking the matching dollar values off the paper copy at the same time as you check them off on QuickBooks. There are several ways to do this in QuickBooks. You can either click on the box at the left hand side of each line, or on the corresponding line itself. You can also wait till the very end, when you are certain that all the entries are correct, and click on the button at the bottom of the page called ‘Mark All’, although this is not a good idea. Most will find it easier to check off each line individually, as this makes it easier to see what has been accounted for and what has not. As you work through, you will come across items that have for some reason not been entered, usually in the form of cheques made out in payment, bank fees and charges, or interest and other monies deposited. Cheques can be input in the usual way, through ‘Suppliers’ ‘Pay Bills’ (see Section 2.2.4), or ‘Banking’ ‘Cheques’ (See Section 2.2.5.1). It is also possible to access this cheque writing facility by clicking on the ‘Cheque’ icon further up the screen. You will be taken to the usual Banking cheque screen. Clicking ‘Save & Close’ or ‘Save & New’ will either return you to the reconciliation screen, or allow you to enter more cheque payments until you have finished. Deposits can be input using either ‘Customers’ ‘Receipt of Monies’ (See Section 2.2.2) or ‘Banking’ ‘Deposits’ (See Section 2.2.5.2) 2.2.5.5 Entering Bank Fees Bank Fees are input using the ‘Cheque’ facility. Set up a record for the bank that issued the statement, and code the fees to whichever bank charges account is appropriate. For more information the use of the ‘Cheque’ facility, see Section 2.2.5.1 ‘Write Cheques’. 2.2.5.6 Entering Interest Earned When recording interest earned into the bank account, use the Sales Receipt facility, using a Item created for Bank Interest using the INP tax code – see Section 2.2.1.1 ‘Entering Sales’. An Item has already been set up for this purpose, with the tax code correctly coded for your use. Hopefully, by the time you have worked through your bank statement, checking off everything both on the paper copy and in the QuickBooks account, you will have a balance showing at the bottom right of the window that matches the expected QuickBooks balance, with ‘Difference’ reading a healthy ‘$0.00’.


If not, there are a number of things to check. • Make sure that the ‘New Statement Balance’ is correct. • Check that the Bank Statement date is correct – make sure that it is the ‘Closing

Statement Date’ that you entered. • Check also that all previous reconciliations have been completed. • Check over the paper statement to make doubly sure that all figures are checked

off – and lastly, go back through the QuickBooks statement, to make sure that all of them are correct.

If your ‘Out of Balance’ figure correctly reads $0.00, the next step is to get a printout of the reconciliation. To do this, click on the button at the bottom right hand corner, marked ‘Reconcile Now’. The screen that appears should look something like this:

It is strongly advised that you get a report of all the transactions. Which report you choose, however, is up to you. For future ease, however, we would recommend that you choose to print the Detail report. To do so, click the radio button to the left of the work ‘Detail’, and then the ‘Print’ button at the bottom of the screen. The printing of this report will also have the effect of removing those items that have been reconciled from the QuickBooks reconciliation screen, and you will be returned to the Banking Navigator screen.


2.2.6 Debtors and Creditors 2.2.6.1 Debtors (Accounts Receivable) Analysis ‘Debtors’ is the other name for Accounts Receivable. This represents all monies owed to your organisation by the public, other businesses, etc. It is important to keep track of these amounts – action should be taken on anything that has been outstanding for more than 90 days, unless there is a very good reason for this. To see exactly who owes what, and how old the various accounts are, QuickBooks can produce a report of these, based on information input. To produce this report, go to the Navigator screen, and click on the ‘Reports’ icon, which will show at the left hand side. The following screen will appear:

As you can see, a number of options exist. As we are interested in reports concerning Customers and Receivables, click on the drop down menu arrow to the right of the field named ‘Select a type of report’. This will bring up the following menu:


We will be looking at the Customers & Receivables section – click on this option. The following screen will appear:

QuickBooks will produce an interesting selection of reports, based on the information input, including a graph showing when most of your outstanding receivables are situated. Have a look at each of these reports in turn, as each will have a feature that may be particularly useful to you and the people you report to.


For each report, you will be able to set the date range, firstly by clicking on the drop down menu arrow to the right of the field underneath ‘Set the date range’, and then by putting specific dates in the ‘From’ and ‘To’ fields. The ‘Modify Report’ feature allows you to select exactly which details are shown in your report, and which are to be left out. Do have a look at these options. Lastly, when you have adjusted the report to your satisfaction, click on ‘Display’ to view your masterpiece. A sample ‘A/R Ageing Summary’ has been included later in this manual. 2.2.6.2 Creditors (Accounts Payable) Analysis ‘Creditors’ is another name for Accounts Payable. This represents all monies that your organisation owes to suppliers, lenders and other businesses. To see exactly what’s owing, and how old the various accounts may well be, QuickBooks can produce a report, based on information input. To produce this report, go to the Navigator screen. To the left, at the top, you will see a list of icons – we will be focusing on ‘Reports’. Click on the ‘Reports’ icon – this will produce the following screen:


Click on the drop down arrow to the right of the field called ‘Select a type of report’. In this instance, we are focusing on those reports that list Accounts Payable, so select ‘Suppliers and Payables’. The screen will now look like this:

As you can see, a number of options exist. Each will give you a slightly different breakdown of what is owing to whom, and for how long, so take your time and have a good look at each option, as different features of each report may be particularly useful to you as a bookkeeper, and to those who you report to. For each report, you will be able to set the date range, firstly by clicking on the drop down menu arrow to the right of the field underneath ‘Set the date range’, and then by putting specific dates in the ‘From’ and ‘To’ fields. The ‘Modify Report’ feature allows you to select exactly which details are shown in your report, and which are to be left out. Do have a look at these options. Lastly, when you have adjusted the report to your satisfaction, click on ‘Display’ to view your masterpiece. You can also Print the report, by clicking on the ‘Print’ button, or export the report by following the instructions that appear when you click on the ‘Export…’ button. A sample ‘Aged Payables [Summary]’ has been included later in this manual.


Documents

2.2 Entering Transactions - QUTPart+2-2+Entering+Transactions.pdf · 2.2 Entering Transactions ... In the case of government grants, ... needs to be remitted to the Australian Taxation