Categories
Chart of Accounts Products & Services

How to make corrections to items in the Products and Services that will flow through to past income transactions?

Yes, you can make update the products and services item that will also flow through to past transactions as well.

Go back to the products and services information form and update the income account link.

From the home page screen

  • Select the Company Gear (upper-corner)
  • Select Products and Services under Lists header
  • Locate Name and double click (or click edit button)
  • Update/Change “Income Account” link

When you update the “Income Account” link, right below income account, there is a box that will read “Also update this account in historical transactions. You will just to need to check that box and Save. Done.

It will automatically update all historical transactions linked to this income account.

See screenshot photo for reference.

Also update this account in historial transactions
Also update this account in historial transactions
Categories
Bill Chart of Accounts Check Expense Expenses Reports Vendor Vendors

How to set it up and enter bank Line of Credit (LOC) transactions in new QuickBooks Online?

To track a line of credit (LOC) extended to your business, create a liability account with an opening balance of zero in your Chart of Accounts.

Chart of Accounts
Chart of Accounts

From the Home page screen

  • Go to the Company Gear (right upper-corner)
  • Select Chart of Accounts under Settings header
  • Select blue “New” button (right corner)
  • New “Account” information screen will open
  • Category Type = Other Current Liabilities
  • Detail = Line of Credit
  • Name = Line of Credit (or Chase Line of Credit if preferred to name the bank)
  • Description Line of Credit (or same as name)
  • Balance = Leave opening balance as “0” (zero even if you’ve already used LOC and has balance. It’s better to enter transaction later.)
  • Click “Save” button
Add new LOC account
Add new LOC account

To record (for example $100,000.00) the LOC extended to your company and deposited to main Checking account:

Bank Deposit
Bank Deposit

From the Home page screen

  • Go to Create “+” sign (top middle)
  • Deposits under Other header
  • Ensure the proper Deposit to account is selected (in this example, Chase Checking Account)
  • Date = Enter bank posted date
  • Go “Add New Deposits” section
  • Received From = Chase LOC Payment (Add New as Vendor if needed)
  • Account = Line of Credit (Select the “Line of Credit” account just created as “Other Current Liabilities) from the Account drop-down arrow)
  • Description = For example, Chase line of credit deposited to Chase Checking Account
  • Payment Method = Bank Online or appropriate (add new if needed)
  • Ref Number = Enter last four digits of LOC number (optional)
  • Amount = $100,000.00
  • Attachments (paper clip icon) = Upload picture of related document (if available)
  • Click “Save and New or Save and Close” blue button

This entry will show you have added $100,000 as deposit to Chase Checking Account and $100,000 as liability to Chase LOC account.

loc deposit
loc deposit

To record just interest charges (in this example $500 interest charges) applied to the LOC by your financial institution:
See instructions below for making Principal and Interest Payment.
From the Home page screen

  • Select blue navigation bar on the left
  • Select Transactions
  • Select Registers
  • Locate Line of Credit Account register
  • Double click Line of Credit Account
  • Liability for Line of Credit screen will open
  • Enter the date of the interest charge (for example 4/30/2014)
  • Financial institution name where the line of credit is held as the Payee (in this example Chase LOC Payment)
  • Enter the interest charge in the Increase column (in this example $500.00)
  • Choose Interest Expense account from the “Account” drop-down arrow
  • Enter “Memo” as Interest Expense for the period (in this example for April, 2014)
  • Click Save
Record Interest Expense
Record Interest Expense

To record a repayment of the LOC and/or payment of interest charges:
(In this example making $5,000 LOC payment from Chase Checking Account ($4,500 principal and $500 interest)

From the Home page screen

  • Select Create “+” sign
  • Select “Expense” (if paid Online) or Select “Check” (if issued Check) under Vendors header. In this example, we are making online payment.
  • Click the LOC Account as Payee from drop-down arrow (“Chase LOC Payment” in this example)
  • Choose the bank account you want to make payment from (“Chase Checking Account” in this example)
  • Expense Date: = Payment Date (for example 4/30/2104)
  • Payment Method: = Bank Online
  • Under Account Details, click the drop-down arrow and choose the “Line of Credit” account (Other Current Liabilities type),
    Under Description = Principal Payment
    Under Amount = $4,500.00
  • On the second line, Under Account Details, click the drop-down arrow and choose the “Interest Expense” account (Expenses type),
    Under Description = Interest Payment
    Under Amount = $500.00
  • Make sure total payment is $5,000.00
  • Attachments (small paper clip icon, bottom left): Upload photo of LOC statement. Optional but recommended.
  • Click Save and New or Save and Close button
LOC payment
LOC payment

To enter a payment that has been made directly from the LOC to a vendor, where no bills have been entered:
In this example, we are making $10,000 payment to Simon Manufacturing for purchased materials.
From the Home page screen

  • Select blue navigation bar on the left
  • Select Transactions
  • Select Registers
  • Locate Line of Credit Account register
  • Double click Line of Credit Account
  • Liability for Line of Credit screen will open
  • Enter the date of the purchase (for example 4/30/2014)
  • Name of Vendor Payee (in this example Simon Manufacturing)
  • Enter the amount in the Increase column (in this example $10,00.00)
  • Choose Purchases Expense Account from the “Account” drop-down arrow
  • Enter “Memo” as Buying Materials (for example XYZ job)
  • Click Save

NOTE: This transaction will not show up on Vendors Center record. For to show transaction recorded on Vendors Center, see three-steps process below.

LOC purchases
LOC purchases

To pay bills where funds have gone directly from the line of credit to the Vendor Entered Bill as Accounts Payable:
This involves three steps process.

Step # 1 Enter Vendor Bill

Enter Vendor Bill
Enter Vendor Bill

From the Home page screen

  • Select Create “+” sign
  • Select “Bill” under Vendors header
  • Select Vendor = Simon Manufacturing
  • Date = 4/30/1014
  • Under Account Details column, select Account = Purchases Expenses Account for example
  • Amount = $10,000.00
  • Click Save and Close button

This entry will created Accounts Payable balance of $10,000.00 to Simon Manufacturing’s account

Step # 2 Write Journal to show payment to Vendor by LOC

Journal Entry
Journal Entry

From the Home page screen

  • Select Create “+” sign
  • Journal Entry under Other
  • Enter the date (for example 4/30/2014)
  • On the first line, click the Account drop-down arrow and select Accounts Payable
  • Under the Debit column, enter the amount ($10,000 in this example) you paid the vendor
  • Enter a memo such as “Paid from line of credit”
  • Under Name, click the drop-down arrow and select the vendor you paid (“Simon Manufacturing” in this example)
  • On the second line Under Name, click the Account drop-down arrow and select the line of credit account (“Line of Credit” in this example)
  • Under the Credit column, enter the amount you paid the vendor ($10,000 in this example)
  • Enter a memo such as “Paid from line of credit”
  • Click Save and Close
Journal Entry for Purchase Payment
Journal Entry for Purchase Payment

Step # 3 Now you need to link the bill payment to the vendor credit paid by LOC:
From the Home page screen

  • Select Create “+” sign
  • Select “Pay Bills” under Vendors header
  • Under Pay to the Order of, select the vendor name (Simon Manufacturing)
  • Under Choose an account for Bank, Select Bank Clearing Account (Add new if needed. This account will always have zero balance.)
  • The screen will refresh and you’ll see a matching amount under Credits and Bill Payment Information.  Click the checkboxes so the amounts match.
  • Leave the amount blank as “0.00” zero. It’s “In and Out” entry, so amount should be zero
  • Click Save and Close button

This entry will clear Accounts Payable and will show payment transaction on Vendor Center.

Apply LOC payment to vendor 1
Apply LOC payment to vendor 1

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Categories
Bank Deposit Bank Register Chart of Accounts

How to locate and apply “Undeposited Funds” in new Quickbooks Online?

Receive Payment
Receive Payment

Receive Payment Deposit to Undeposited Funds
Receive Payment Deposit to Undeposited Funds

From the Home page screen

Select Create “+” sign (top middle)

Select “Receive Payment” under Customers heading

Select Deposit to “Undeposited Funds” account

This will create Undeposited Funds as debit balance on the current assets account of the Balance Sheet.

“Undeposited Funds” account balance is like a temporary clearing account.

In order to clear the balance sitting on Undeposited Funds Account, next step is to go to “Bank Deposit” (same + screen > bank deposit under “Other” header) and make deposit to applicable bank account.

Also see more related articles

Categories
Chart of Accounts QBO QuickBooks QuickBooks Online QuickBooks Online QBO

How can I document money taken out of personal checking to pay for some initial expenses?

Once you have transferred money from your personal to business checking account, this is how you will need to record the deposit in new QuickBooks Online.

Click “Plus” icon menu
Select Bank Deposit from “Other” menu
Choose the correct bank account (if you have more bank accounts)
Select correct date of deposit
Received From = Jimmy Smith (example only) > Add New as “Vendor” if needed (slightly different name if already setup as employee)
Account = Loan Payable to Jimmy Smith (example only) > Add New > Category Type > Other Current Liabilities > Loan Payable > Change Name to Loan Payable to Jimmy Smith > Leave Balance “Blank” > Save
Description = Temporary loan to the company, to be repaid within 60 days (for example)
Payment Method = Direct Deposit/Check/Cash??
Ref No = Bank deposit reference number if available
Amount = exact deposit amount (say $5,000 for this example)
Save and Close

Loan repayment to Jimmy Smith

GO to Vendors
Select Expense (if bank transfer) > select Check if issued check
Select Jimmy Smith (Vendor)
Account = Loan Payable to Jimmy Smith
Description = Repayment of loan with borrowed date
Amount = $5,000.00 (if full re-payment)

Those two entries should document borrowed money for business as well as repayment. And, the account should reflect zero balance when done.

Categories
bank reconciliation Bank Register Chart of Accounts

How do you set up the bank account in QBO? I want to manually type the entries into QBO.

From the Home page screen

  • Select the Company Gear (top upper corner)
  • Select “Chart of Accounts” under Settings header
  • Select “New” button
  • New Account screen will open
  • Category Type = Bank
  • Detail Type = Bank account type (like checking or savings)
  • Name = Name of the Bank 
  • Description = Same as name (with acct number optional)
  • Save

Note: Leave BALANCE blank. You will need to write an appropriate entry for the opening bank balance separately.

Open New Bank Account
Open New Bank Account

Categories
Chart of Accounts

How to not display deleted bank account (like bank account > deleted) with zero balance on the Balance Sheet (or Profit and Loss) report?

There is no way to permanently delete accounts in new QuickBooks Online. You can make account inactive. That’s all in new Quickbooks Online.

Best solution is to customize Balance Sheet report.

  • Run Balance Sheet
  • Click Customize
  • Click Row/Columns
  • Select Rows = Non-Zero
  • Select Columns = Non-Zero
  • Run Report
  • Save Customizations button and save it as a special report.
  • See screenshot photo for reference.
Customize Non Zero
Customize Non Zero

Categories
Banking Chart of Accounts

I would like to stop importing data from a bank account. How do you disconnect a bank account (or a credit card account) added into online banking?

In new QuickBooks Online, disconnecting an account isn’t exactly in an obvious spot. To disconnect an account from online banking, we’re going to want to start in the upper right by clicking the little company gear, and then choose Chart of Accounts under settings. We’re going to click the connected account (you can tell it’s connected because it has two little arrows pointing in opposite directions) and then click the “Edit” button. You will see at the bottom of the pop-up that appears that there’s a check box that says. “Disconnect this account on save.” Check that box and click save, and you’re done!


Categories
Chart of Accounts Customer Center Customers Customers Center Deposit

In Peachtree I enter receipts from cash I received into two different accounts. Depending whether is rental payment or security deposit. Now, how do I create cash accounts in QB?

In newQBO, you will need to create new accounts setup in Chart of Accounts:

  • Cash Account (Bank Type)
  • Rental Payment (Income Type)
  • Security Deposit (Other Current Liabilities Type)

(From Company Gear, top upper corner > select Chart of Accounts under Settings header)
Also, if you are creating Sales Receipt, you will need to Product/Service Item for these two:

  • Rental Payment (Income account linked to Rental Payment)
  • Secuirty Deposit (Income account linked to Security Deposit account)
  • (From Company Gear, top upper corner > select Products and Services under Lists header)

For creating Sales Receipt (From create “+: plus sign, top middle > select Sales Receipt under Customers)
In newQBO, you will have to constantly deal with Three Amigos.

  1. Create “+” sign = enter all transactions
  2. Gear = settings/preferences
  3. Left navigation bar = history, reports, banking, customers/vendors center
Categories
Chart of Accounts

In Chart of Accounts I do not see any that’s fit for R&D. Which account detail type do I enter our R&D expenses in new QuickBooks Online?

It requires that R&D generally be expensed as incurred now.
So, in QBO, it should be considered an Overhead Expense, not Direct Cost or COGS.
How to set up R&D as Overhead (O/H) in new QuickBooks Online?
Figure out the main primary operating costs for R&D and categorize expense type.
In QBO chart of accounts detail type are already defined. I would select “Other miscellaneous service cost” as detail type to track costs related to R&D.

For example your Chart of Accounts should like this:

Research and Development (R&D) Chart of Accounts
Research and Development (R&D) Chart of Accounts

R&D Expense:

  • Salary and Benefits
  • Purchased Materials
  • Independent Contractors
  • Equipment Expense
  • Travel Expense
  • Other R&D Expense

This is just an example. Only your CPA can give you better guidance for your business.

Categories
Chart of Accounts Import Desktop Data

We recently converted from Quickbooks Pro desktop to QuickBooks Online (QBO). We have two A/P accounts, one of which was no longer in use. Our bills are now posting to both, seemingly randomly. How do I set the bills to post to only one account?

COA merge accounts
COA merge accounts

You will need to merge the two accounts into one account you want to keep.

From the Home page screen

  • Go to the Company Gear icon (located at top upper right corner)
  • Select Chart of Accounts under Settings header
  • Click on the account you are keeping to select it and then the Edit button.
  • Copy the Account Name, make note of the Detail Type and if the Is Sub-account option is marked. If sub-account is marked, make note of the parent account it is associated with.
  • Click the browser’s back arrow to return to the Chart of Accounts.
  • Select the account whose name you don’t want to use and click Edit.
  • Paste in the Account Name and make sure the Detail Type matches the account with which you’re merging.
  • If these are sub-accounts, make sure they are associated with the same parent. If only one is a sub-account, make it a parent account by deselecting the Is Sub-account option.
  • Click Save.
  • Click Yes to confirm that you want to merge the two accounts.