Categories
Inventory

How to handle trade-in inventory accounting in QuickBooks Online Plus?

First aspect is dealing with how to provide credit for the trade-in item in the sales receipt. Easy answer is to say just add line for trade-in item show amount as negative. Well how to setup that item in product/service? If you set it up that trade-in item as Inventory item, it will not work. It will mess up COS and few other things. We will need to create that trade-in product as non-inventory item and create another entry to add-in quantity and cost to inventory.

For this example, let us say you are in cellphone business. You’re selling one unit of iPhone for $600 and offering $150 trade-in credit for used Samsung Galaxy phone. And, customer is paying $450 plus tax by check.

Step # 1
You will need to add one new account in the Chart of Accounts.
To add new account in Chart of Accounts:

From the home page screen

  • Select the Company Gear (located at upper-corner)
  • Select “Chart of Accounts” under Settings header
  • Select blue “New” button
  • New “Account” screen will open
  • Select Account Category = Other Current Assets
  • Detail Type = Other Current Assets
  • Name= Trade-In Inventory Clearing
  • Description = Trade-In Inventory Clearing
  • Remember to leave the account “Balance” blank
  • Save
  • See screenshot photo for reference
Trade In Inventory Clearing
Trade In Inventory Clearing

Step # 2
You will need to open new product/service item for trade-in credit

To add new item in Products and Services:

From the home page screen

  • Select the Company Gear (located at upper-corner)
  • Select Products and Services under Lists header
  • Select blue “New” button
  • New “Product or Service” screen will open
  • Name = Trade In Credit
  • Sales Information
  • Checkbox: I sell this product/service to my customers
  • Price/Rate = Leave blank
  • Income Account = Trade-In Inventory Clearing
  • Save
  • See screenshot photo for reference.
Trade In Credit
Trade In Credit

Step # 3

To Create Sales Receipt

From the home page screen

  • Select Create “+” Plus sign (upper-middle)
  • Select “Sales Receipt” screen
  • Select Customer
  • Select Payment Method
  • Under Product/Service,
  • 1st line > select new product item selling for $600 (in this example Apple iphone 5s)
  • 2nd line > select newly created “Trade-In Credit” item (in this example Samsung Galaxy as negative $150)
  • Subtotal before tax is $450.
  • Tax = $48
  • Total Amount Paid = $498
  • See screenshot photo for reference.
Trade In Credit Sales Receipt
Trade In Credit Sales Receipt

This sales receipt will handle as usual revenue and COS aspect of regular inventory item sold and also setup $150 as non-inventory asset on the Balance Sheet.
Now next step is to move this trade-in item (with quantity on hand and value) from Trade-In Inventory Clearing to regular Inventory Asset Account.

Step # 4 & 5 (together)
To add-in Used item as inventory on hand, we will create zero Bill.

From the home page screen

  • Select Create “+” Plus sign (upper-middle)
  • Select “Bill” screen
  • Create new vendor as “Trade In” (preferred name)
  • Under Account Details:
    Select Account = Trade In Inventory Clearing (this is setup as other current assets)
    Amount = -$150 (negative amount)
  • Move to Item details:
    Under Product/Service
    Select “Add New”
  • New Product or Service Information will open.

This is to setup trade-in item as Inventory (in this example Samsung Galaxy, Qty 1, cost $150)

  • Name = Samsung Galaxy Used
  • Track Quantity on Hand (for inventory items)
  • Checkbox: I track quantity on hand for this product. This enables inventory cost accounting.
  • Initial Quantity On Hand – 0 (very important, do not enter qty 1)
  • Inventory Asset Account = Inventory Asset
  • Enter Sales and Purchase Information (preferably same as name)
  • Price/Rate = Selling Price (for example $200)
  • Cost = Actual Cost (in this example $150)
  • Income Account = Sales of Product Income (selection of preferred income account)
  • Expense Account = Cost of Good Sold (default account, no need to change it)
  • Select Taxable box if this item is taxable
  • SAVE
  • See screenshot photo for reference.
Samsung Galaxy Used
Samsung Galaxy Used

Now back to “Bill” screen again.

  • You should see
    Qty = 1
    Rate = 150
    Amount = 150
  • Balance Due as well as Total should show as $0.00.
  • Save and Close
  • Done.
  • See screenshot photo for reference.
Zero Bill to clear clearing add inventory
Zero Bill to clear clearing add inventory

Now, if you back to see your inventory on hand report, you should see quantity as 1 for Samsung Galaxy Used item which is correct. Also, go back to Trade-In Inventory Clearing account, balance should be zero which is correct as well.

Categories
Customer Center Customers Customers Center Print Checks Refund Receipt

How to write a refund check to a customer against already issued credit memo? I do not see any options for applying the credit or printing a refund check.

I am trying to write a refund check to a customer against already issued credit memo, but I do not see any options for applying the credit or printing a refund check.

It involves two steps process to write a check and apply the credit memo against that issued check to a customer.

Step # 1
Write a check (create + sign > select Check under Vendors)

Two critical information to fill out > choose a payee, in this case Customer > Account = Account’s Receivable (A/R)

Write check for customer refund
Write check for customer refund

Step # 2 Receive Payment to clear refund and check in customers’ account

Go back to Customer’s Center > Locate the Customer > You will notice 2 open invoices notice under “Pending Invoices” column > Under Action column, select “Receive Payment” > You will notice both Check and Credit with net zero amount here > Save and Close. Done.

Receive payment to clear customer credit and refund
Receive payment to clear customer credit and refund
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
Class Tracking

How to handle Class Tracking in new QuickBooks Online?

This feature is only available in QuickBooks Online PLUS level subscription.

To Enable Track classes on

Company Categories
Company Categories

From Home page screen

  • Go to the Company Gear (right upper-corner)
  • Select Company Settings under Settings
  • Select Company
  • Select Categories
  • Select “Track Classes” On

To create new “Class”, you can go to “All Lists” (from Company Gear > select All Lists under Lists)

Create Class
Create Class
  • Select “Classes”
  • Select “New” button and proceed
  • You can even create Sub-Class if needed.
Create Class Form
Create Class Form

Now, when you want to enter Vendor Expenses or create Customer Invoices, you will notice separate column for Class.

Expense Form Class
Expense Form Class

Invoice Form Class
Invoice Form Class

You can also run Profit and Loss by Class which is a standard report in new QuickBooks Online. You can also customize this report as needed. There are few other reports you can run related to class tracking. For other standard reports, click here.

Categories
Bank Deposit Bank Register Banking Customer Center Customers QuickBooks Payments

How do I see if a customer/client has paid their invoice by credit card in new QuickBooks Online?

How do I see if a customer/client has paid their invoice by credit card in new QuickBooks Online?

Intuit QuickBooks Payments Login Screen
Intuit QuickBooks Payments Login Screen

Assuming you have opened merchant services with Intuit QuickBooks payment account, to check and verify the customers credit card payments you’ve received

You can visit

https://merchantcenter.intuit.com

  • Go to Activity
  • Select Reports
  • Select Deposits
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
Vendor Vendor Credit Vendors

How do I record negative (credit) Vendor (Supplier) Bill in new QuickBooks Online?

Vendor Credit Form
Vendor Credit Form

How do I record negative Vendor bill?
If it’s for vendor’s (or supplier’s) credit bill:

  • Click Create “+” sign in the middle (see attached screenshot below for reference)
  • Select “Vendor Credit” under Vendors
  • It will leave credit balance on Accounts Payable under Vendor’s Name.
Vendors Credit
Vendors Credit

New QuickBooks Online Plus – How to enter various expenses in new QBO?

QuickBooks Online (QBO) Tutorial – Customer Invoice, Sales Receipt, Receive Payment, Bank Deposit

Categories
Bank Deposit bank feed bank reconciliation Bank Register Bank Transfer Banking

How to request add new bank in banking feed in new QuickBooks Online?

From the Home page screen

  • Click Transactions  (on the left side of blue navigation bar)
  • Click Banking
  • Click Add Account  (in the upper right corner)
  • Enter your bank’s name, then click Find
  • Click the blue link for Request that we add your bank (in the middle of the page)
  • Enter either the bank name or the URL of your bank’s website, then click Add My Bank button
Request to Add New Bank
Request to Add New Bank
Categories
Company Gear Company Settings

How to email me a copy of Invoice in new QuickBooks Online?

In newer version:

Click the Company Gear (upper-right corner)

Select Sales

Click “Messages” (it’s inside; not visible from outside)

Check box that reads “Email me a copy”

Save

Message Email me a copy
Message Email me a copy
Categories
QBO QuickBooks QuickBooks Online QuickBooks Online QBO

How do I clear the temporary Internet files/cache?

Clearing the browser cache (deleting temporary Internet files) is a good way to start the browser with a clean slate. Please note that the steps are different depending on which browser you’re using.

To empty the cache in Google Chrome:

Click the menu icon (looks like three lines) in the upper-right corner and select Settings.
On the left menu column, click History.
Click Clear all browsing data.
Click to select Empty the cache.
Use the Obliterate the following items from drop-down arrow to select the beginning of time.
Click Clear Browsing Data.
Close all open Chrome windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

To clear history and cache in Firefox:

At the top left click on Firefox, from the drop down menu click the History menu and select Clear Recent History.
A pop up window will open; if a Time range to clear option is present, set it to Everything.
If a list of check boxes is not visible, click the down-arrow button next to Recent to reveal them.
Make sure there are check marks next to Browsing & Download History and Cache.
Click Clear Now.
Close all open Firefox windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

To delete temporary internet files in Internet Explorer:

Click the gear icon at the top right of the browser window.
Select Internet Options.
Under Browsing History, click Settings.
Under Check for newer versions of stored pages, click to select Every time I visit the webpage, then click OK.
Under Browsing History, click the Delete… button
Uncheck Preserve Favorites website data.
Click to mark Temporary Internet Files, then click Delete.
Click OK.
Close all open Internet Explorer windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

To empty the cache in older versions of Safari:

Open your Safari browser.
Choose Safari > Empty Cache.
Click Empty.
Close all open Safari windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

In Safari 5:

Choose Safari > Reset Safari.
In the pop-up window that appears, select Remove all website data.
In the lower right corner, click Reset.
Note: No confirmation will appear after clicking Reset; the window will disappear.
Close all open Safari windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

In Safari 6:

Choose Safari > Preferences.
On the top of the window, click the Advanced tab.
Select Show Develop menu in menu bar.
Choose Develop > Empty Caches.
Close all open Safari windows, restart the browser, go to the sign-in page for QuickBooks Online and try again.

Answer ID: 1038