If a customer pays you to do some work, their money should be reflected in the month you actually deliver the product or service. This sounds basic but it’s often ignored. Here’s why it’s important:

Let’s say you sell a product for $25 but it costs you $15 to make it.

Last month, you made and sold 3 products. So your production costs were $45 and your revenue was $75.

This month and next month are forecasted to be about the same. However, a customer from next month pays in advance.

• If you incorrectly assign that prepaid revenue to this month then you’ll have earned $100 and only paid $45 in production costs. It will look like a really profitable month! But next month you’ll only earn $50 with production costs of $45 and that won’t make anyone happy.

• If you correctly assign that prepaid revenue to next month then you’ll have earned $75 from $45 in production costs this month and $75 from $45 production costs next month.

When I spell it out like that, it makes sense, doesn’t it? By assigning revenue to the month it is earned, you get a clearer picture of your business. There aren’t any wild swings. It makes your accounting easier, clearer, and truer, and it helps you to forecast more accurately when you are planning for the year to come.

Okay, knowing it is one thing. But how do you actually do it in an accounting system? Stay tuned to an upcoming blog and I’ll show you how.

No, this isn’t a pre-St. Patrick’s Day prank. Green files are far better for your business in a number of ways.

When I say “green” files, I don’t mean that they are green in color. I mean that they are ecologically-friendly. When I say “green” files I’m referring to scanning your files and paperwork and storing it online instead of in those giant filing cabinets that seem to multiply like rabbits in a busy office.

Online file storage companies offer a variety of services relating to storing and sharing your files. Now, I should make a clarifying point here: Some sites tend to have a greater emphasis on sharing. Sites like Box.net and YouSendIt.com are sometimes lumped into the online file storage industry but these sites are primarily there to help you ship big files from one place to another.

Instead, I’m referring to sites where you sign up and you get what really is a giant electronic filing cabinet where you can store all of your files safely. There is some form of sharing that can do with each one but the emphasis is on secure storage and convenient access. There are several reasons to use this type of service:

• It’s secure and disaster proof; far more so than the filing cabinet you keep in your office
• It’s a better use of space; you don’t need big, ugly filing cabinets taking over your office
• It can be a cheaper alternative; less time is spent on searching for files (and files never go missing)
• Most importantly, it’s an eco-friendly solution that helps to minimize the amount of paper that is not recycled. Rather than storing paper that was once a mighty tree, and only referring to that piece of paper once every year or two, you can shred the paper, recycle it, return that paper to the earth or reuse it again to save a tree, and instead store an electronic copy in a far more environmentally friendly way. No electronic trees will ever be killed to start your paperwork online!

I’ve reviewed four online document storage companies below:

HyperOffice (http://www.hyperoffice.com/online-document-storage/) offers a number of services including online document storage, and is really an ideal company to use when you have a distributed work team or you do a lot of file sharing and might need other types of services as well. Their pricing is based on users and comes as part of a package of other services. Prices start at $44.99 per month for 5 users and businesses  get about 1.25 GB of storage space.

Net Documents (http://www.netdocuments.com/) offers 3 tiers of online storage service. They give subscribers one filing cabinet for basic users and unlimited filing cabinets for the upper 2 tiers. Documents can be tagged for easier searching, they can be reviewed online, there is mobile access, documents are fully searchable, there are check-in and check-out controls so you know who has the latest version, and there are several security features to manage who can see what. Their basic level costs $20 per user per month (and a minimum of 3 users is required) and their professional level costs $30 per user per month. Their third tier is a custom pricing solution. They offer an initial 3 GB of storage, but if you add additional users you get additional 1/2 GB of storage. This is a very feature-rich solution and ideal for businesses that want to manage and control documents.

FilesAnywhere (http://www.filesanywhere.com/) offers a free plan, a basic plan, and an advanced plan with a very user-friendly, customizable price estimating system that allows you to choose how much space you need. The free plan offers 1 user 1 GB of space. I would recommend one of the paid options since one of the advantages of storage is the ability to share the document with others without the eco-unfriendliness of having the document delivered to their office. With the basic and advanced plans, prices start at $2.95 per month for 1 GB and $7.95 per month for 5 GB respectively, and users and gigabytes can be increased as necessary (with a rate adjustment). There are other features that the basic and advanced plans have, too, like higher security and version control.

DocLanding (http://www.doclanding.com) offers 3 tiers of services – free, standard, and premium. The free plan offers 256 MB of storage, the standard plan offers 1.25 GB of storage for $9/month and the premium plan offers 1.25 GB storage for $20/month. DocLanding doesn’t seem to limit the number of users who can access the files, which makes this the most cost-efficient system of the ones I’ve reviewed, although there might be some concerns around who has access to what documents. One of the key differences between the standard plan and the premium plan is the level of support. The standard plan gives users access to online support only while the premium plan gives users access to 2 hours of telephone support.

So, which online document storage service is right for you? Each one offers a different combination of services and prices for your needs – some with a greater focus on enabling web teams and others with a greater focus on managed access and searchability.

Although one of these might be right for you, any one of these services is right for the environment if you replace your current paper storage with an online document storage solution.

It’s time to turn all of your files green!



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.

What better time to re-start a blog than with a whole new logo and design?

Stay tuned for application reviews, bookkeeping tips, and the whole nine yards.