1.      Facilitate. Your 401k administrator can easily get overwhelmed with a flood of calls from individual employees from the different companies that they administer 401k’s for. To ease their burden and also make it convenient for your employees to get their questions answered, you may want to set up a Q&A session with your administrator in house. Request payroll inserts from your administrator, or create them yourself, that detail out the basics of 401k management.

2.      Don’t give investment advice. It is quite common for employees to go to the HR department or their employer and ask advice about where they should invest their 401k funds. It is very important for employers and their HR people to avoid doing this. There must be no evidence that an employer influenced their employees in any way as to how they should invest those funds. Always direct them towards the plan administrator. They are used to dealing with these types of requests and know how to give general direction without stepping over the bounds.

3.      Discourage daily monitoring. When the market is in a volatile position, it can be tempting for employees to over monitor their 401k funds. Instead of calming their fears, watching the losses on a daily basis can actually increase their sense of panic.

4.      Reassure. This is part of the re-education process, but an important one. In spite of all the documentation otherwise, many employees get the impression that the employer may somehow have access to their 401k funds or have some control over how those funds are invested. This is, of course, not true. Reassure your employees that they are the ones who have ultimate control of those funds and that your only control is related to the depositing of matching funds.

5.      Year-to-date statements. Issuing current year-to-date statements to each employee that show a longer term picture of their account can help calm fears. Inclusion of a reminder of your company’s commitment in matching funds can also be beneficial. It reminds your employees that your contribution will come to them, not based on the overall market, but on the success of your business itself; something they have a part in making happen.

To verify that you have all your settings correcting, you will want to run a 1099 summary report, which can be found under your Vendor & Payables reports. Run one report with All Vendors and one report with Only 1099 vendors. Compare these reports for vendors whom you may not have marked as eligible for 1099′s, that should have been. After making any corrections, run two more reports:  one of Only 1099 vendors with ALL accounts and one with Only 1099 vendors and Only 1099 accounts. Comparing these two reports should help you to see if you missed any accounts in your 1099 preference setup. The total amounts for your 1099 vendors should be the same on both reports.

Making sure that information is setup and recorded correctly now, will save you precious time when it’s time for your year end processes to be done.

Under your company preferences, you will find a section for 1099 setup. The type of payments we are discussing here are referred to as ‘Non-employee Compensation’ on the 1099 form. You will need to enter in the $600.00 in the threshold column for this item. You will also have to select an account or multiple accounts that will be used for recording your 1099 payments.

These account selections are a crucial part of your 1099 setup. For instance, if you record your subcontractor payments under different accounts for your own tracking purposes, you will need to include each of those subcontractor accounts in this setup. If you should add subcontractor accounts during the year, they must be added to your 1099 account setup as well. You may also hire services, such as an office cleaning service which requires a 1099 at the end of the year, but has their payments recorded under your office cleaning expense account. In this case, you would need to have the office cleaning expense account listed in your 1099 account setup also.

To verify that you have all your settings correcting, you will want to run the 1099 Summary report, which can be found under your Vendor & Payables reports. Run one report with all vendors and ALL accounts and one with Only 1099 accounts. Comparing these two reports should help you to see if you missed any accounts in your 1099 preference setup. The total amounts for your 1099 vendors should be the same on both reports. If they are not, you may have missed some accounts that should be included in your 1099 account setup. Without these missing accounts listed under in your 1099 setup, the amounts for 1099 vendors recorded in those accounts, will not be included in their 1099′s. It will be important to run these reports again at the end of the year, prior to printing your 1099′s, to verify once again that you have all the necessary accounts included in your 1099 setup.

In addition to your 1099 preference setup, it is important to follow the correct steps in setting up your 1099 vendors as well. We will address this in our next post.

Select your Quickbooks report, your profit and loss by class would be a good choice. If you need to make any changes to the data, such as setting a filter or customizing the dates, do that first. Then, instead of printing or saving the report, select Export to Excel and send the report to a new Excel workbook.

Excel will open with the Quickbooks report laid out on the first worksheet. Now, all you have to do is use Excel’s formatting tools to add color and borders to your headings. Bolding your fonts will make your header titles stand out and easy to read. Change column widths or insert columns to provide more space between the columns of data.

Select preview, to see if you need to do any fine tuning to your sexy looking profit and loss report, before you print it out in full color. You’ll be amazed at how much more professional those reports can look and how much easier they are to read.

Color coded headings can be a great way to distinguish reports for different departments, different financial periods (months or quarters) or to distinguish the monthly P&L from the year to date P&L for the same period.

Color, bolding, increasing font size, all these formatting options can be used multiple ways to highlight totals or any other aspect of a report that you want to stand out.

Once you have your formatting scheme setup for each report, you can easily apply it the new report for the following month by using Excel’s format painter to copy last month’s formatting onto the new month’s exported report. It’s quick and easy.

In addition to the formatting, exporting a report to Excel will also allow you to add notes to a report. This can be especially useful on budget reports to note reasons for over budget items or highlight budgets that may need to be adjusted.

Why stick with boring black and white, when you could dress up your financial reports sexy reds, blues and greens?

QuickBooks is an accounting application and FreshBooks is an invoicing application. They are two different things, but in the end to have your data matching in both, there could be a ton of double entry resulting in valuable time consumed and strenuous effort.

You can have your data accurate in both, while not matching in both. Matching and accuracy are two different things. For all of the numbers to match up, it is a matter of accuracy. To have all of the details such as sales items etc. it would be a matter of matching.

In this blog post, I will begin to show you ways to get accurate data from FreshBooks into QuickBooks.

This blog post is Part 3, if you have not read the previous posts, I suggest that you do:

Part 1: Methods 1 & 2 to getting FreshBooks Income into QuickBooks

Part 2: Method 3 to getting FreshBooks Income into QuickBooks

Also useful, is my post: Handling Credit Card and PayPal Processing Fees in QuickBooks, which has a short segment relating to FreshBooks as well.

On to the good stuff!

So, you have your income or receivables in QuickBooks, you may have even taken out your PayPal or Merchant Processing Fees. However, you don’t have your sales tax anywhere, as a matter of fact, it is showing as an Income and we all know your Sales Tax is NOT an income.

Well let’s correct that, shall we?

Just to recap… if you charge sales tax, your sales tax is included in the numbers that you entered from FreshBooks, so it is very important that you remove your sales tax from your revenue/income accounts and allocate it to your sales tax payable account.

1. Go into your FreshBooks Account

2. Click on the Reports Tab

3. Click on the Tax Summary Report in the first column

4. Select the month in Question that you want to enter.

5. In the Revenue section, you have to pick either Billed (Accrual) or Collected (Cash Based) – the choice you pick will be determined by the income entering method you have elected to use (based on previous posts). If you selected Methods 1 or 2 where you are accounting for your receivables you will select the Billed (Accrual) method. If you selected Method 3 where you are only accounting for your payments received you will select the Collected (Cash Based) method.

6. Once you have the amount/totals from your report (sorry I can’t give you a screen shot, I don’t have sales tax inside of my company) go into QuickBooks, select Company from the file menu and Make Journal Entries.

7. Enter the end date of the month you have pulled your sales tax details for.

8. In the first row from the account drop down box, pick your Income Account (mine is IAC Professionals Service Revenue), tab over to the debit column and enter the total of your sales tax from your sales tax report.

9. In the second row from the account drop down box, pick your Sales Tax Payable account (this should always be Sales Tax Payable) and in the credit column enter the total of your sales tax from your sales tax report. In this row you will also need to enter the name of your Taxing Agency in the Name Column. If it is not yet in your Vendor List, click Add New and create it. For example, mine would be State of Florida Sales Tax Department.

10. Press Save and Close

This has removed the actual sales tax portion of your revenue, out of your revenue and into your sales tax liability account, enabling you to use the ‘Pay Sales Tax’ feature inside of QuickBooks.

Do you have any questions or specific circumstances that I did not help you with? Feel free to comment on the post with your question(s) and I will respond personally!

QuickBooks is an accounting application and FreshBooks is an invoicing application. They are two different things, but in the end to have your data matching in both, there could be a ton of double entry resulting in valuable time consumed and strenuous effort.

You can have your data accurate in both, while not matching in both. Matching and accuracy are two different things. For all of the numbers to match up, it is a matter of accuracy. To have all of the details such as sales items etc. it would be a matter of matching.

In this blog post, I will begin to show you ways to get accurate data from FreshBooks into QuickBooks.

This blog post is Part 2, if you have not read Part 1, I suggest you do so, as it covers Methods 1 & 2.

In methods 1 and 2 we spoke of various ways to get your data into QuickBooks assuring that you have your Accounts Receivable accounted for. Now, we understand those two methods may not be ideal, and not everyone wants (or needs) to track their Accounts Receivable in QuickBooks – after all they track it in FreshBooks. We also understand that Cash Basis companies only have to worry about income after it is received.

So, let’s talk about Method 3, shall we. Method 3 is all about getting your paid income into QuickBooks from FreshBooks.

Method 3: Getting Money Received (Cash Revenue) as a whole into QuickBooks

This method is ideal if:

• You do not need to track accounts receivable in QuickBooks.
• You only want income data in QuickBooks after it is received (when it becomes cash revenue).
• You file taxes on a cash reporting basis (not accrual)

Step by Step Instructions:

1. Log Into your FreshBooks Account

2. Click on the Reports Tab

3. In the second column, click on the Revenue by Client report.

4. Select the year that you want to report on, highlight all clients, select total collected, and then click View Report.

5. Open QuickBooks

6. Set up a generic or general client in your Customer Center. My general client is called ‘FreshBooks Receivables’ (If you don’t know how to do this, visit my blog post on setting up a customer in QuickBooks)

7. Click on Company in the main menu bar and then Make Journal Entries

8. Select the end date of the month you are going to be recording sales, for this example we will be doing January 2010. So I would enter the date of January 31, 2010.

9. From the account drop down pick your Income account (mine is Accounting Services Income).

10. Tab over (or move with your mouse) to the credit column and enter your payments collected total for the month you are entering. You will get this information from the Revenue Report that you previously generated from FreshBooks, it is your total at the bottom for the month in question.

11. Go to the second row and from the account drop down box select your bank account that the funds went into and in the debit column enter the same amount (in most cases QuickBooks will automatically fill in that amount for you).

12. Tab over to the Name column and enter your general client name that you set up in Step 6.

13. Check to make sure that your entry looks similar to this:

14. Press Save and Close

What has happened now is you have your entire month income inside of QuickBooks. The income is sitting in your bank account.

Now, there are some rules about this:

• You must wait until the end of the month.
• If you want to track revenue by ‘client’ rather than just the general revenue, you would do the same thing as above but change Steps 6, 10 and 12.
  1. Step 6 would no longer be necessary.
  2. Step 10 would become: Tab over (or move with your mouse) to the credit column and enter your payments collected by client for the month you are entering. You will get this information from the Revenue Report that you previously generated from FreshBooks, it is next to your clients name, in the month column you are entering.
  3. Step 12 would become: Tab over to the Name column and enter your client name that you set up in Step 6.

Problems you may be thinking:

1. Not all of my income goes into the same bank account.

Answer: That is fine in Step 13 you can have multiple rows, not just two. So let’s assume that my $8,337.40 deposit was split between three bank accounts. I would still have the Row 1 be the credit column, but then Rows 2, 3 and 4 would each have the bank account that the monies went into and the specific amount. See here for an example:

2. Not 100% of my invoice payments go into my bank account, because I accept credit cards or Paypal and they take a percentage of the revenue.

Answer: If you accept credit cards or Paypal you have to understand that your money goes into a ‘different’ bank account before it hits your real bank account. Think of your merchant account as being a bank account or your Paypal account as being a bank account. In the next blog post I will explain how to deal with this in detail.

3. What about sales tax? All of your methods are recording sales tax as general revenue or income and I know it is not.

Answer: You are correct. We must make an entry to appropriately allocate your sales tax. I will cover this in detail in a follow up blog post as well.

Stay tuned, in the next week I will be writing two more blog posts:

• How to handle accounting for credit card processing or Paypal fees in QuickBooks (with a special segment on relating it to the suggested FreshBooks entries)
• How to handle allocating your sales tax in QuickBooks from FreshBooks.

Step by Step:

1. Open QuickBooks

2. On your Menu bar click Customer Center

3. Click New Customer & Job and then New Customer

4. At a bare minimum enter your customer name up top in the Customer Name field

5. Enter any other additional information that may be pertinent or that you will need. I always say the more the merrier, but some companies may have an external CRM system or outside Invoicing application and may not need all of the full details of every customer inside of QuickBooks.

6. Press Okay and Voila! You have a new customer.

Note: Instructions and Screen-shots in this blog post are based on QuickBooks Premier 2009, visuals or steps may vary by edition.