Best Payment Processing Integrations For Accounting Software

Best Payment Processing Integrations for Accounting Software

Are you ready to start accepting credit and debit cards from your customers? Do you want your customers to be able to pay their invoices directly online? You’ve come to the right place.

Here at Merchant Maverick, we know payment processing can be a tricky concept to wrap your mind around. Finding the best option for your business isn’t always easy. The good news is we’ve done the hard work for you. The even better news? Each of these payment processors integrates directly with your accounting software to make your life that much easier.

This post will discuss five of the top payment processors that integrate directly with accounting software. We’ll cover the pros and cons of each to help you decide which is best for your small business. And we’ve even created a handy chart to help you compare all the payment processors that integrate with major accounting programs.

But before we begin, let’s cover a few basics about payment processing.

If you’re already a payment processing pro, feel free to skip this section and continue on to our top picks for best payment processing integrations. Or visit our merchant account reviews to see more payment processing options.

A Brief Intro To Payment Processing

There are two different types of payment processing companies — merchant accounts and payment service providers (or PSPs).

  • Merchant Account: A merchant account is an individual account that connects your business directly to a payment processor so you can accept credit cards and debit cards. When your customer pays with a card and the payment clears their banking institution, the transaction will be deposited directly into your bank account through your merchant account.
  • Payment Service Provider: A payment service provider also allows you to accept credit cards and debit cards. However, instead of creating an individual account, a PSP will lump all of your transactions into a shared account where multiple merchants transactions are stored.

So which one should you use? There are a lot of factors to consider, including your business type, the size of the transactions you’re processing, the number of transactions you process per month, and whether or not you are considered a “high-risk” merchant.

According to our merchant account expert, Tom DeSimone:

If you plan to process large transactions ($300 or more) or a sizeable monthly volume in card payments (about $10K or more, NOT INCLUDING cash and checks), you will want a merchant account to get the best rates.

On the other hand, he says this about PSPs:

While transactions fees might be a little higher than if you had your own merchant account, PSPs usually do not charge a monthly fee or other schedule fees. You just pay for what you use, which is ideal for businesses that only process sporadically.

It’s pretty simple, really. If you plan on processing large transactions or lots of transactions every month, a merchant account will probably be the way to go. If you’re a smaller business that doesn’t process much and needs a pay as you go option, a PSP might be a better choice.

There are other pros and cons to consider with each type of payment processing company, however.

We borrowed this handy chart from our Beginner’s Guide To Payment Processing to help you better understand the differences between merchant accounts and PSPs:

Best Payment Processing Integrations for Accounting Software

There is one more important concept to cover before we move on. In addition to merchant accounts and PSPs, you might encounter payment gateways.

If you’ve ever bought anything online, you’re already familiar with this concept (whether you know it or not):

  • Payment Gateway: A payment gateway allows you to accept credit and debit cards online. Payment gateways use either merchant accounts or PSPs to connect your business and your customer’s banking institution so you get paid.

Payment gateways account for some of the most common accounting integrations (think PayPal and Stripe).

In order to integrate your accounting software to a payment gateway, you will need to establish an account with that gateway provider. Depending on the payment gateway you choose, you may need to set up a merchant account or PSP account. Your payment gateway may require that you use a specific merchant account or PSP of theirs, or they may offer a payment gateway and merchant account or PSP bundle.

I know this is a lot to take in, believe me, but it gets easier from here. Now you can sit back, relax, and learn about our top five favorite payment processing integrations for accounting software.

Fattmerchant

Best Payment Processing Integrations for Accounting Software

Fattmerchant integrates with QuickBooks Online.

Fattmerchant (see our review) is a merchant account provider that was founded in 2014. This company sets itself apart by offering subscription-based pricing, making it competitive and potentially more affordable than other merchant accounts. Fattmerchant also offers 24/7 customer support and receives positive feedback from the majority of its customers.

Products & Services

Fattmerchant supports the following products and services:

  • Merchant account
  • Virtual terminal
  • Countertop terminals (pricing not disclosed)
  • Point of Sale (POS) integrations
  • Mobile payments
  • One mobile card reader ($75 for each additional reader)
  • Shopping cart integration
  • eCheck services ($29/mo + $0.25 per transaction)
  • Data analytics

The company does not have its own payment gateway, but Fattmerchant is compatible with Authorize.Net, Payeezy, or the TSYS Payment Gateway. It will set you up with a free gateway or integrate with your existing one.

Pricing

Fattmerchant offers two pricing plans that are paid monthly. There is no locked-in contract and no early termination fees for either plan.

  • Basic: $99/mo + $0.08 per transaction for retail ($0.15 per transaction for ecommerce)
  • Enterprise: $199/mo + $0.05 per transaction for retail ($0.10 for ecommerce)

If you’re looking for an affordable, honest merchant account, Fattmerchant is one of the best. This option is good for businesses looking for a predictable monthly subscription plan. Fattmerchant does not provide high-risk merchant accounts and may not be a good value for small businesses with low payment processing.

Read our full Fattmerchant review to learn more and see if this affordable merchant account option is right for you.

CDGcommerce

Best Payment Processing Integrations for Accounting Software

CDGcommerce integrates with QuickBooks Online.

CDGcommerce (see our review) is a merchant account provider with over 20 years of payment processing experience. This company is geared toward small to medium-sized business and also operates on a monthly subscription pricing model. A free payment gateway is included with every CDGcommerce merchant account. The company also sets itself apart with an impressive client retention rate and excellent customer support.

Products & Services

CDGcommerce supports the following products and services:

  • Virtual terminal
  • One credit card terminal (with a $79/yr insurance fee)
  • Mobile payments
  • POS systems
  • Optional security service
  • Data analytics and reports

CDGcommerce offers a free payment gateway. Users can choose between Quantum or Authorize.Net.

Pricing

CDGcommerce has two types of pricing: simplified pricing and advanced pricing. Simplified pricing rates depend on your business type and size.

  • Online: Interchange + 0.30% + $0.15 per transaction
  • Retail: Interchange + 0.25% + $0.10 per transaction
  • POS: Interchange + 0.25% + $0.10 per transaction
  • Mobile: Interchange + 0.25% + $0.10 per transaction
  • Non-Profit: Interchange + 0.20% + $0.10 per transaction

Advanced pricing offers discounts for business with a processing volume of $10,000+ each month. There are no long-term contracts or early terminations fees for either pricing structure. Check out our complete CDGcommerce review for more pricing details. To learn more about interchange and interchange-plus pricing, read Trading Ease For Transparency With Interchange Plus.

 

CDGcommerce is a scalable company with an impressive number of products and services. The free credit card terminal is also a huge plus. The only catch with this company is that it is limited to merchants in the US.

If you’d like to learn more about CDGcommerce, read our full CDGcommerce review.

Square

Best Payment Processing Integrations for Accounting Software

Square integrates with QuickBooks Online, Xero, Zoho Books, Kashoo, and Kashflow.

You’re probably familiar with the swipe-based payment processing system known as Square. Square (see our review) is one of the leaders in mobile processing. It offers great features including inventory, invoicing, and customer management features. And to top it off, Square has a ton of integrations.

Products & Services

Square supports the following products and services:

  • Virtual terminal
  • Gift cards ($2 per card)
  • Shopping cart integrations
  • e-Invoicing
  • Inventory management
  • POS app
  • Customer management
  • Customer feedback
  • Advanced reporting
  • Email marketing
  • Appointments ($30-$90/mo)
  • Payroll ($25/mo + $5/mo per employee)
  • Event rentals

Pricing

Square offers standard fees with no interchange-plus pricing. There are no monthly fees, no locked-in contracts, and no early termination fees.

  • Standard Swipe Transactions: 2.75% per transaction
  • Square Register Swipe Transactions: 2.5% + $0.10 per transaction
  • Virtual Terminal Transactions: 3.5% + $0.15 per transaction
  • eCommerce & Invoice Transactions: 2.9% + $0.30 per transaction

Square offers several add-ons and additional monthly services. Be sure to read our complete Square review for more pricing details.

If you’re looking for a mobile payment processor, this is one of the most well-known and developed options. Square is good for small businesses with low processing volumes and can be an affordable choice. However, Square is not meant for high-risk merchants or companies with a large processing volume as the company is known to hold funds and suddenly terminate accounts.

To learn if Square is the right payment processing option for your business, check out our full Square review or read our post: Is Square Right For Your Business?.

Authorize.Net

Best Payment Processing Integrations for Accounting Software

Authorize.Net integrates with QuickBooks Online, Xero, Zoho Books, FreshBooks (classic), and Microsoft Dynamics.

Authorize.Net (see our review) is a payment gateway that was founded in 1996; it has since supported over 400,000 merchants. Not only does Authorize.Net allow you to accept online payments from customers, it also has a checkout feature, recurring billing, contact management, and fraud protection. In addition, the company offers good customer support and key accounting integrations.

Products & Services

Authorize.Net supports the following products and services:

  • Virtual terminal
  • Mobile payments app
  • Supports mobile card reader ($42-$98 per reader)
  • Simple checkout
  • Apple pay support
  • Fraud detection
  • Recurring billing
  • Customer information management
  • eChecks (additional cost)

If you have a merchant account, Authorize.net is designed to be compatible with your existing merchant account.

If you don’t have a merchant account, you can have Authorize.Net set you up with one. Or, you can choose a merchant account provider that partners directly with Authorize.Net. If you want to go this route, we recommend Dharma Merchant Services, one of our all-time favorite payment processing providers.

Pricing

Authorize.Net offers two pricing plans: a gateway-only plan and a gateway + merchant account plan. There are no-long terms contracts or cancellations fees (but this may vary depending on your merchant account provider).

  • Payment-Only: $25/mo + $0.10 per transaction
  • Payment Gateway + Merchant Account: $25/mo + 2.9% + $0.30 per transaction

Note: If you are using a merchant account provider that partners with Authorize.Net, your merchant account may lower or even waive certain fees. Read our complete Authorize.Net review for more pricing details so you can make sure you get the best deal.

If you’re looking for a payment gateway, Authorize.Net is a great option. It boasts excellent customer service and tons of features to cover most business needs. One important thing to remember is that Authorize.Net is not good for data exporting. Pricing can also be expensive if you sign up with Authorize.Net directly, so make sure you explore all of your options before deciding.

Read our full Auhorize.Net review for more information.

Braintree

Best Payment Processing Integrations for Accounting Software

Braintree integrates with QuickBooks Online, Xero, Sage One, FreshBooks (classic), and Saasu.

Braintree (see our review) offers both merchant accounts and payment gateways. This processing company was established in 2007 and offers impressive features, multiple currency options, and excellent customer support. Flat-rate pricing and ample integrations are also a huge plus.

Products & Services

Braintree supports the following products and services:

  • eCommerce integration
  • Mobile payments
  • Recurring billing
  • Fraud detection
  • Tax support
  • Developer tools
  • PayPal integration

Braintree comes paired with its own payment processing, but merchants can choose to use a different merchant account with the Braintree gateway for an added fee.

Pricing

Braintree has a simple pricing plan. There are no monthly fees, setup fees, gateway fees, or early termination fees. Instead, you’ll pay a competitive, standard rate:

  • 2.9% + $0.30 per transaction

If you only want to use the Braintree gateway and not its payment processing, then you’ll have to pay a flat fee of $49 per month plus $0.10 per transaction instead.

We like Braintree so much that it even outranks PayPal and Stripe in our books. However, Braintree is not suited for high-risk merchants and certain types of businesses are prohibited from using Braintree.

Read our complete Braintree review for more details and to see if this merchant account and payment gateway provider is a good fit for your business.

Which Is Right For Me?

If you’ve learned anything from this post, it’s that when it comes to payment processing there are lots of options to choose from. The right payment processing provider for your business will depend on whether you’re looking for a merchant account or a payment gateway (or a combo of both), plus the number of transactions you process and the extra features your company requires.

One of the main things you should consider is which providers integrate with your accounting software. This will narrow down your decision quite a bit.

While we named some of our favorite companies above, there are several other common payment processing accounting integrations, including PayPal, Stripe, forte, and GoCardless. To make your search for the perfect payment processor easier, we’ve created a chart of the most common accounting programs and the payment processing providers they integrate with.

Software Payment Processing Integrations
QuickBooks Pro BluePay, Durango Merchant Services, QuickBooks Desktop Payments
QuickBooks Online Authorize.Net, BluePay, CDGcommerce, Fattmerchant, Forte, Partial.ly, Payline, PayPal, WorldPay, QuickBooks Payments,    Square, Stripe, WePay, WorldPay
Xero Authorize.Net, Bill&Pay, Braintree, Forte, GoCardless, PayPal, Square, Stripe, WorldPay
Zoho Books Authorize.Net, Braintree, Forte, PayPal, RazorPay, Square, Stripe, WePay
Wave PayPal, Stripe, Wave Payments
FreshBooks (new)  Partial.ly, Payments by FreshBooks, PayPal, Stripe
FreshBooks (classic) Authorize.Net, Braintree, Forte, PayPal, Stripe
Sage One Braintree, PayPal, Sage Payment Solutions,
Stripe, WayPay, WorldPay
Sage 50c GoCardless, Sage Payment Solutions
FreeAgent GoCardless, PayPal, Payal Here, Square, Stripe
Saasu Braintree, eWay, PayPal, PayWay, PinPayments, Stripe
Kashflow GoCardless, Global Payments, PayPal, Square,
Stripe, WorldPay,
Kashoo BluePay, PayPal, Stripe
ClearBooks GoCardless, PayPal,  PayPoint
AND CO PayPal, Stripe

Note: The above integrations are always changing and may vary by country. Check with your accounting software directly for the most up-to-date information.

Remember that when you are choosing the perfect payment processor to integrate with your accounting solution, you can never do enough research. Be sure to check out our merchant account reviews to learn how each software stacks up in terms of features, value for your money, and reliability. If you’re interested in learning more about payment processing, you can also download our free Beginner’s Guide To Payment Processing to learn to evaluate your options, negotiate a good merchant account contract, and more.

Best of luck, and stay tuned for more payment processing tips and tricks from the Merchant Maverick team. If you’d like to do more reading on the subject, the following articles will point you in the right direction:

The Complete Guide to Online Credit Card Processing With a Payment Gateway

Are You A High-Risk Merchant?

The 5 Best Small Business Credit Card Processing Companies

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The Best Accounting Software For 2018

Best Accounting Software for 2018

What’s better than a table full of New Year’s appetizers? Better than a good glass of champagne? Even better than a midnight kiss to ring in the new year?

Accounting software.

Okay, that’s a stretch. But you can’t blame a girl for trying.

Each new year brings fresh, exciting opportunities. In the accounting world, this translates to shiny new features. This year, in particular, has seen some very impressive feature developments. In fact, a few key advances in functionality have already set three accounting software companies apart from the rest. These changes have generated press attention and positive user feedback, and earned Wave, Quickbooks Online, and Zoho Books a place in this article about the best accounting software for 2018.

Wave

Best Accounting Software 2017

Wave (see our review) is a free, cloud-based software with a beautiful user interface (no wonder we like it right?). The company was founded in 2010 by Kirk Simpson and James Lochrie and is now used by 3 million small business owners.

Wave was built with small business owners in mind. The ability to separate business expenses from personal expenses makes the software a great choice for freelancers and the self-employed as well.

Some of the most notable features in Wave include beautiful invoicing, contact management, accounts payable, expense tracking, basic inventory, and the ability to capture pictures of receipts and convert them into expenses.



But the reason we really love Wave is that these features are always getting better. The software constantly updates to fit the needs of business owners. Last year, Wave became the first accounting software company to offer a fully-integrated lending feature. This lending feature allows users to request loans between $5,000 and $500,000. Loan applications are approved through Wave, and once approved, funds are received as quickly as 24 hours.

This year, Wave continues to roll out the updates. The software offers two new reports, better navigation, and a company file export (which is usually only found with QuickBooks). Wave also plans to add:

  • Multi-currency support
  • A product report
  • An FX report
  • Duplicate transaction detection

Wave’s robust and varied features rival those of even some paid software options, especially considering some of these new updates. This is why Wave is Merchant Maverick’s pick for Best Free Accounting Software for Small Businesses and one of my favorite choices for small business owners.

Although Wave is free and intends to stay that way, there are a few extra costs you should be aware of if you’re considering this software:

  • Payroll – $15/mo +$4/mo per employee
  • Credit Card Processing – 2.9% + $0.30/per transaction
  • Chat support – $9/mo
  • Chat and Phone support – $19/mo

To learn more about Wave, read our full review and be sure to keep your eye open for the next big wave of updates.

QuickBooks Online

QuickBooks Online (see our review) is an easy-to-use, cloud-based accounting solution with a healthy feature set and a strong reputation. QuickBooks has basically been around since the dawn of time (in terms of accounting software), but the newer, online version has been particularly well-received by users since it is easier to use and more mobile than QuickBooks Desktop Pro.

QuickBooks Online is ideal for all types of business. Scalable pricing plans and diverse functionality make the software fit numerous business needs. Some key features include a clean interface, accounts payable (essentials and plus plan only), budgeting (plus plan only), contact management, beautiful recurring invoices, ample accounting reports, class and location tracking, inventory (plus plan only), and a strong chart of accounts.



For a long time, the most common complaint about QuickBooks Online was that, while it was good, it was not as good as QuickBooks Pro. One of the reasons QuickBooks Online is on the rise in 2018 is that the software is now being updated multiple times every month; in fact, it is finally starting to catch up to QuickBooks Pro.

Last year, QuickBooks underwent a huge design overall and added a key project management feature, as well as inventory reorder points, mileage deductions, invoice and payment trackers, and more.

One of the biggest reasons QuickBooks Online won a spot on this list is its brand-new, built-in lending feature — Get Capital. According to Techcrunch:

QuickBooks users can now get access to small business loans up to about $35,000 for up to six months from inside their bookkeeping software.

QuickBooks Online has won our Best Accounting Software for Small Businesses title. We did recently drop its rating from 5/5 stars to 4.5/5 stars for some usability and navigation difficulties, but with multiple updates coming out each month, we’re hopeful that QuickBooks Online will be back to 5/5 stars in no time. In short, this software really worth keeping an eye on in 2018.

If you are interested in QuickBooks Online, here are the available pricing plans (QuickBooks Online often has sales promotions, so be sure to check these before purchasing):

  • Simple Plan –$15/mo
  • Essentials Plan – $35/mo
  • Plus Plan – $50/mo
  • Payroll – Pricing starts at $39/mo + $2/mo per employee

To learn more, read our full QuickBooks Online review and use the free trial to take advantage of the new features.

Zoho Books

Best Accounting Mobile Apps

Zoho Books (see our review) is an easy-to-use accounting program with unbelievable invoicing features. The Zoho Corporation has been around since 1996. It launched its accounting program, Zoho Books, in 2011.

Zoho Books is ideal for small businesses that want strong accounting and attractive invoice templates at an affordable price. The software is also ideal for international businesses that require multi-currency support and the ability to send invoices in multiple languages.

Zoho Books Review
Zoho Books Review
Zoho Books Review

For a long while, Zoho Books was known to have some of the best invoicing around, but a few key issues were holding the software back. Lately, though, the software has crept up like a dark horse. Recent updates have put Zoho Books almost completely on par with QuickBooks Online in terms of features, which is why we’ve named this software one of the best of 2018.

While Zoho is not incredibly forthcoming about future updates, the company updates their software multiple times each month. In the most recent updates, the company has increased usability, created customizable purchase orders, and added a brand new retail invoices feature.

The software is unbeatable in terms of invoice features and customizations and offers incredibly affordable prices, which makes it worth watching this year.

If you are interested in Zoho Books, here are the three pricing plans available:

  • Basic — $9/mo
  • Standard — $19/mo
  • Professional — $29/mo

There is no payroll available at this time. To learn more or check out this software’s competitive features and recent updates, read our full Zoho Books review and take the free trial for a spin.

How To Choose Accounting Software

Wave, QuickBooks Online, and Zoho Books are all powerful accounting programs with innovative updates and abundant features. And they seem to be getting better and better with time.

But with three great options to choose from, it is difficult to know which is the best choice for your company — especially if you don’t have an existing accounting software. Our Complete Guide to Choosing Online Accounting Software is a helpful tool and a good place to start your search.

If you have an existing accounting solution that doesn’t quite measure up to the programs discussed above, it might be a good time to change allegiance. Your business is your livelihood, and software that fully meets — and exceeds — your business needs is important for success and growth.

If you are already a Wave, QuickBooks Online, or Zoho Books user, congratulations! You’ve made a good decision, and we hope the features rolled out this year serve you well.

Best wishes to all this new year. May 2018 be a season of joy, dreams, and, most importantly, smooth accounting.

Wave QuickBooks Online Zoho Books
Wave Accounting for small business review QuickBooks review Best Accounting Mobile Apps
 
Read Review Read Review Read Review
Visit Site Visit Site Visit Site
Price  $0 $15 – $40/mo $9 – $29/mo
Accounting Method  Accrual  Both accrual and cash-basis Both accrual and cash-basis
Web-based or Installed Web-based Web-based Web-based
Highlights Free
Numerous features
Good customer support
Easy to use
Attractive invoice templates
Impressive features
Advanced inventory features
Numerous integrations
Good tax support
God mobile apps
Competitive pricing plans
Easy to use
Good mobile apps
International invoicing
Excellent customer support

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Small Business Taxes: What Information Does My Accountant Need?

What Information to Bring Accountant for Small Business Taxes

Preparing small business taxes by yourself can be daunting, so hiring an accountant or tax expert is a great way to save time and create peace of mind this tax season. However, you don’t want to show up to your tax appoinment empty handed. Accountants expect you to bring certain documents and be prepared with the information that is needed to complete your tax return.

In this post, we’ll talk about the specific information an accountant needs in order to file your small business taxes. We’ll also provide expert tips and tricks along the way to help make this the easiest tax season yet.

Personal Information

First things first. You will need to furnish your accountant with basic personal information including your legal name, current address, and social security number. The easiest way to provide this information is to bring your social security card to your tax appointment.

If you have an Employer Identification Number (EIN), you will need to provide it, along with your legal business name.

Previous Year’s Tax Return

Make sure to come with your previous year’s tax return. This 1) helps them get a better understanding of your business and 2) gives quick information about the deductions your company has (or hasn’t) been taking.

Financial Business Reports

Your accountant will need copies of your basic financial reports. These include:

  • Profit and Loss Report (or the Income Statement)
  • Balance Sheet
  • Statement of Cash flows

The profit and loss report shows your business’s overall profit ( or loss) for the year, while the balance sheet displays your company’s assets and liabilities. The statement of cash flows shows all transactions affecting your business’s cash account.

Jessica Kent, of the Houston Chronicle, suggests bringing copies of your general ledger and trial balance report as well.

You should be able to print these basic financial reports from nearly any accounting software program, though report availability varies from software to software. Contact your accountant or tax preparer to see if there are any additional reports they might require or find helpful.

Tax Forms

The tax forms your business is required to fill out depends entirely on your business type. These are the forms that may be required for your business:

  • Freelancers and Sole Proprietors: 1040, Schedule C, Schedule C-EZ, 1040-SE
  • Partnerships: 1065, 940, 941, 943
  • S Corporations: 1120-S, Schedule K-1, 940, 941, 943
  • Limited Liability Corporations (LLCs): 1065, 1120-S, Schedule K
  • Single Member Limited Liability Corporations (LLCs): 1040, Schedule C, Schedule E, Schedule F

To be certain about which forms your company is required to file, visit the IRS’s Forms and Instructions for Filing and Paying Business Taxes page. Here you will find specific forms and instructions for each business type. Bring the necessary forms to your accountant in order to file your tax return.

Note that your tax filing date may be affected by your business type. Read Entrepreneur’s First Time Business Owners: A Brief Guide to Tax Filings to learn more about when your business’s taxes are due.

Asset Infomation

Your accountant will need to know about any assets you’ve bought, sold, or depreciated during the last year. Bring any receipts, documents, or reports related to your assets and fixed assets.

Tip: Some accounting programs have fixed asset reports or fixed asset listing that you can run.

Loan Information

You’ll also need information on your business’s loans. If you’ve acquired a new loan in the last year, bring the loan agreement with you. Also, bring records of any loan payments and/or accrued interest. This will ensure that your accountant is up to date on your company’s total assets and liabilities.

Income Records

To verify the income amount on your profit and loss statement, you will need to provide your accountant with income records. According to Kent:

An accountant may request copies of bank statements, deposit slips or sales invoices.

Be sure to have these records available.

Expense Records

In order for your accountant to verify your company’s expenses and find you the correct deductions, you’ll need to bring several types of expense records as well, including:

  • Receipts
  • Bills
  • Bank statements
  • Credit card statements
  • 1098 Mortgage Interest and Property Taxes form

Be sure to keep these expense record, especially your companies business receipts, well-organized. Not only will your accountant thank you for not handing them a shoebox of receipts, your wallet will thank you too.

What Information to Bring Accountant for Small Business TaxesThe more time your accountant has to spend on your tax return, the more money you pay, so make everything as seamless and easy for them as possible.

Deductible Expense Information

Some business expenses require more than just receipts. So if you’re planning on claiming any of the following deductions, make sure you bring the proper information to your accountant:

  • Home Office Deduction: If you have a separate home office that is used exclusively for business, you may be eligible for the home office deduction. The home office deduction is heavily scrutinized by the IRS. For this reason, make sure you have the proper documentation. The popular credit card processing company Square suggests:

If you have a home office, be sure to take along information related to it. This includes the square footage of your home and the office. In addition, give your accountant the amounts you paid for your mortgage or rent, insurance and utilities, and any repairs you made to your home office.

  • Mileage Log: If you use your vehicle for business purchases, you also may be eligible for a vehicle deduction. Be sure to track all of your mileage throughout the year and bring this log to your accountant or tax professional, along with any receipts related to car expenses. Learn more about how the vehicle deduction is calculated.
  • Travel: Businesses can write off meals, travel, and entertainment expenses. This deduction also can be a red flag for an IRS audit depending whether expenses appear “lavish or extravagant.” For this reason, be sure to bring all receipts and any travel tickets or itineraries to your tax appointment.
  • Donations: If your company makes charitable donations, be sure to bring all documents related to your donations, including receipts and any statements you may receive.

Payroll Data

Your accountant or tax professional will also need your payroll data from the year. Bring copies of your employees W-2s, W-3s, and 1099-MISCs. Also gather health insurance records (as these can count as a business deduction) and any information regarding bonuses.

Inventory Total

Several tax forms require a COGS (Cost of Goods Sold) closing balance for the year. You should already have taken an opening balance of your inventory at the beginning of 2017. Now do another inventory count and bring the results to your accountant so they can properly fill out your tax return.

Other

Bring information related to all stocks and bonds your business has attained or sold during the year. You’ll also need a record of any owner’s investments made into or withdrawn from the company during the year. Square says:

As the owner of a sole proprietorship or LLC, you probably pay yourself by making withdrawals from the business. Your accountant will want to know about these withdrawals made to you personally, plus any information on any investments made by you.

Contact your accountant directly before your tax appointment to see if there is any other information they require.

Final Tax Tips

In addition to having all of your documents ready to go, there are a few other things you can do to be prepared for tax season.

Communicate With Your Accountant

On their blog, Square suggests that talking to your accountant is the key to a successful tax appointment:

…accountants may have a checklist of what they need. When you call to make your appointment, be sure to ask for this checklist.

Start Early

Geoff Williams, in the article 7 Things Tax Preparers Wish We Would Do, says being timely is imperative:

Get your paperwork to your tax preparer early…February is fantastic. March, especially the first half, is fine. But…if you give your material to your tax preparer on April 1, don’t be upset if you end up having to file an extension.

Be Prepared

The popular invoicing software FreshBooks recommends staying on top of your accounting processes:

Keeping proper accounting records throughout the year can make it a lot easier to prepare your return at tax time.

In her article How To Prepare Records for Your Accountant, Susan Ward reminds businesses that being unprepared can cost you, literally:

Accountants are paid by the hour, so the harder you make their job, the more it will cost you.

Stay Organized

One of the biggest ways you can save your business money is by being organized. Having all of your tax information together only goes so far. You accountant or tax preparer needs to be able to find and understand your records with ease. Organizing your business information can make or break a tax appointment.

Final Thoughts

Taking the extra time to gather and organize the proper tax information will help make the tax return process a breeze. If you want to learn how your accounting software can make this process even easier, read How Your Business Accounting Software Can Help You File 2018 Taxes or download our free 2018 Tax Prep Checklist. As always, good luck and happy filing!

The post Small Business Taxes: What Information Does My Accountant Need? appeared first on Merchant Maverick.

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12 Tips For Preventing A Business Tax Audit

Tips To Preventing a Tax Audit

As a small business owner during tax season, it can sometimes feel that you’re sitting on a ticking time bomb. Will you be audited this year? When? How? WHY?!

But, while the IRS does review some tax returns at random, most audits are in response to an error or discrepancy — and believe it or not, the percentage of tax returns that get audited is surprisingly small. Still, we don’t want you to be numbered among the few. Stop the audit clock by filing your taxes carefully and avoiding red flags.

In this post, we’ll cover 12 tips that should help you prevent a tax audit and file your taxes with confidence. We’ll also talk about which accounting reports you’ll want on hand if you do happen to get audited so you can survive the ordeal with ease.

1. File On Time

A no-brainer, right? But if you fail to file your taxes on time, you automatically put an audit target on your back. Filing on time also ensures that you don’t have to pay the IRS late filing penalty.

2. Don’t Forget To Sign

This also seems like a no-brainer, but according to Investopedia’s Glenn Curtis, a large number of people forget to actually sign their tax returns. In the article Avoid an Audit: 6 “Red Flags” You Should Know, Curtis says:

Failure to sign the return will almost guarantee that it will receive additional scrutiny. The IRS will wonder what else you might have forgotten to include in the return.

3. Double-Check The Math

When it comes to the totals on your tax forms, it’s imperative to double-check (or even triple-check) your math. The IRS often audits tax returns that contain math errors and discrepancies between forms.

Remember (and this is important): Even if you hire a professional accountant or tax expert, you’ll want to double-check their work. Ensure that all the numbers are correct and consistent before you send off your tax return.

4. Record All Income

When it comes to taxes, honesty really is the best policy. Don’t omit any income in your tax report, no matter how piddling the amount. Report all of the income you’ve earned during the tax year, including any assets you sold.

If your business grosses a large amount of money each year, you automatically incur a higher risk of audit. The BBB (Better Business Bureau) suggests:

If you fall under this category, be mindful of your increased audit potential and take extra time when preparing and reviewing your taxes. Stay organized and keep meticulous records, in case you are audited.

The BBB adds that small business owners need to be extra careful when editing transactions as these can affect the income total reflected on your taxes.

Small businesses should be wary of modifying invoices and payments within their accountings system from prior periods because the adjustments can potentially generate discrepancies in gross sales and the sales tax liabilities for that period.

A great way to avoid this problem is to close out your accounting periods and protect them with security codes. That way, only users with the code (preferably your admin and accountant) can make changes to old invoices and expenses. Software programs like Xero and QuickBooks Pro make closing your accounting periods easy. These programs also allow you to set user permissions to control each user’s access.

5. Don’t Overestimate Expenses

In the same way, don’t overestimate the amount you spent on expenses in an attempt to lower the amount of taxes you owe. Be precise and honest about all business expenses. Keep solid records of your receipts and be sure the expenses you claim truly are business expenses, not personal expenses.

If you use a personal bank account for your business, be sure to carefully separate your personal and business expenses. Some accounting software programs, like Wave and Xero TaxTouch, allow you to easily separate these expenses.

6. Don’t Round Numbers

This goes hand-in-hand with not overestimating expenses. Don’t round numbers on your tax forms, either up or down. If you spent have $792.84 in office supplies expense for the year, put $792.84, not $793.00 (and definitely not $800).

Round numbers can be an indication of laziness, lack of precision, and even dishonesty — not exactly characteristics you want to display to the IRS.

7. Be Careful With Deductions

Tax deductions are great. However, certain often-abused tax deductions can draw the attention the IRS. Here are some of the most scrutinized deductions:

  • Home Office Deduction: If you claim the home office deduction, be sure to deduct the exact amount you qualify for. If you claim too much, or your home office deduction changes year after year, you may risk a tax audit.
  • Meals, Travel & Entertainment: The IRS allows you to write off 50% of your meals, travel, and entertainment business expenses. However, if this deduction seems too excessive for your business type and income bracket, you may risk a task audit.
  • Charitable Donations: While charitable deductions are commendable, incredibly large charitable donations can raise red flags for the IRS.

Now, this doesn’t mean you shouldn’t take the deductions you are owed (and it especially doesn’t mean you shouldn’t make charitable donations).

Take all of the deductions you qualify for, but be completely honest and especially careful with these  deductions. If you qualify for a deduction that is abnormal for your business size or type, be sure to have clear, precise records to show the IRS in case of a tax audit.

In his article The Top 10 Ways To Avoid An IRS or State Audit, attorney and CPA Mark J. Kohler suggests:

When necessary, include additional information with your return, to substantiate expenses and oddities that might catch the IRS’ attention. If your file gets handed off to an agent for further review, a real human can sometimes choose to bypass your return for an audit because you already provided the support the revenue agent was looking for.

Read What Can I Write Off As A Small Business Tax Deduction? for more details about the deductions you may qualify for.

8. Use Schedule Cs With Caution

If you are a self-employed taxpayer, you are probably very familiar with the Schedule C. Unfortunately, Schedule Cs are heavily scrutinized by the IRS. This means you should take extra care when preparing your Schedule C. Follow the IRS’s Schedule C instructions to the letter and seriously consider hiring an accountant or tax professional to ensure this form is prepared correctly.

If you want to avoid this potential red flag altogether, you could consider incorporating your business instead.

9. Stay On Top Of 1099-MISCs & W-9s

Make sure you meet the 1099-MISC filing deadline on January 31. You’ll need to request W-9s, the Request for Taxpayer Identification Number or Certificate, from each of your contractors in order to complete your 1099-MISCs.

Once completed, you must send a copy of the 1099-MISC form both to your contractor and the IRS. Follow the IRS’s 1099 instructions carefully to properly file all the necessary forms.

10. Consider Using Payroll Software

According to the BBB:

Discrepancies between payroll tax withholdings and payments are common triggers for correspondence audits, meaning one minor error can result in hefty penalties and interest.

The best way to avoid this issue altogether is to use payroll software. The IRS even suggest doing so, saying:

Many employers outsource some of their payroll and related tax duties to third-party payroll service providers. They can help assure filing deadlines and deposit requirements are met and greatly streamline business operations.

Contact your accounting software provider to see what payroll support plans or payroll integrations they offer.

11. Hire An Accountant

This is my biggest suggestion to small business owners — hire an accountant or tax professional to file your taxes. Not only will this increase the chances that your tax return is correct, you stand a better chance of maximizing your tax deductions. When it comes to taxes, the peace of mind is worth the cost.

12. Keep Solid Records

Our last bit of advice is to keep meticulous, well-organized records. There’s no guaranteed way to prevent a tax audit. In the case that you do get audited, the process will be much smoother and faster if all of your records are accessible and well-organized.

If you do get audited, here are the forms the IRS may request (according to the IRS’s audit guide):

  • Bills
  • Receipts
  • Canceled checks
  • Tax preparation or advice papers
  • Property acquisition papers
  • Loan agreements
  • Travel tickets
  • Employment documents

Accounting software can be a huge help in this regard. Most programs allow you to run reports, record bills, and attach copies of receipts to expenses. Some programs also have an audit trail report which shows all of the activity on your company account.

Read our How Your Business Accounting Software Can Help You File 2018 Taxes post to learn which accounting reports you should run and how long to save your accounting records.

The bottom line is this: If you are organized and keep strong records, you should be able to easily defend yourself to the IRS in an audit situation. But hopefully, the 12 tips above will safeguard you from ever having to be in that scenario. We hope you found these tips helpful and will be able to use them to successfully file your 2018 taxes.

As always, contact your accountant or tax professional for specific tax advice. Happy filing!

The post 12 Tips For Preventing A Business Tax Audit appeared first on Merchant Maverick.

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How To Create A Journal Entry In QuickBooks Pro

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How To Create A Journal Entry In QuickBooks Pro

Journal entries, as an accounting concept, can take a while to grasp. The good news? QuickBooks creates almost all of your journal entries for you automatically. The other good news? If you do have to create a journal entry, it only takes five steps.

In this post, we’ll explain when you need to create a journal entry in QuickBooks and walk you through the journal entry process.

Table of Contents

When To Create A Journal Entry In QuickBooks Pro

In double-entry accounting, a journal entry is used to log which debit and credit accounts are affected by a given transaction. QuickBooks takes care of all the double-entry accounting behind the scenes.

Whenever you enter a transaction (like an invoice or bill) in QuickBooks, the software automatically creates a journal entry for you. Take this bill for example:

How To Create A Journal Entry In QuickBooks Pro

If we use the command shortcut Ctrl + Y, we can see the journal entry that QuickBooks automatically created for this transaction…

How To Create A Journal Entry In QuickBooks Pro

The entry tells us that Accounts Payable was credited $49.95 and the Other Business Expenses Account was debited $49.95. The debits and credits balance.

Again, QuickBooks creates an automatic journal entry for every transaction entered in QuickBooks. Additionally, the software will adjust the journal entries if you edit or change the transaction. So, most often, you won’t need to worry about it.

However, there are a few cases where you may need to manually create a journal entry. For example, you’ll need to create an entry for depreciation. QuickBooks provides a list of all the instances where you may need a journal entry. In such instances, follow these five steps:

Create A Journal Entry

To begin, go to Company>Make General Journal Entries…

You may see a notification letting you know that QuickBooks automatically numbers journal entries. You can eventually turn off auto-sequencing or change the beginning number, but for now, just click “OK” to get started.

How To Create A Journal Entry In QuickBooks Pro

Step 1: Enter Date

Use the drop-down calendar to enter a date for your journal entry. For our company, we’re going to create a depreciation journal entry for the end of 2017.

How To Create A Journal Entry In QuickBooks Pro

Step 2: Adjust Entry Number (Optional)

At this point, you can adjust the beginning sequencing number of your journal entry. QuickBooks will automatically number your journal entries from here on out.

How To Create A Journal Entry In QuickBooks Pro

Step 3: Add Debited Account

In journal entries, you list the debited accounts first and then the credited accounts. If you need a refresher on debits and credits, read our Quick Guide To Accounting Terms and Concepts.

Select the account being debited. Then enter the amount under “debit.” If desired, you can also add a memo, name, and mark the amount as billable.

How To Create A Journal Entry In QuickBooks Pro

Step 4: Add Credited Account

Select the credited account from the drop-down menu. QuickBooks automatically enters the credited amount under “credit” because the debits and credits must always match. If desired, you can you can also add a memo, a name, and mark the amount as billable.

How To Create A Journal Entry In QuickBooks Pro

Step 5: Save

Check that all of the information looks correct and that the debits and credits match. Then click “Save & Close” or “Save & New” if you’re planning on creating another journal entry.

How To Create A Journal Entry In QuickBooks Pro

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Export Files From QuickBooks Pro

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How To Export Files From QuickBooks Pro

After putting so much effort into learning and using QuickBooks, the last thing you want is to lose all of your company data. That’s why exporting data regularly to back up company files is so important.

There are several different ways to export information in QuickBooks. In this post, we’ll cover how to export items, addresses, time entries, reports, invoices, estimates, and sales orders. We’ll also teach you how to create a backup company file of all your QuickBooks information.

Table of Contents

Exports Lists

You can export the information found under the “Lists” tab of QuickBooks into a .IIF file.

To export lists, go to File>Utilities>Export>Export Lists to IIF.

Step 1: Select The Lists You Want To Export

Tell the software which lists you want to export. You can choose from:

  • Chart of accounts
  • Customer list
  • Vendor list
  • Employee list
  • Other names list
  • Customer type list
  • Vendor type list
  • Class list
  • Job type list
  • Item list
  • Payment terms list
  • Payment method list
  • Shipping method list
  • Customer message list
  • Budgets
  • To do notes
  • Sales rep list
  • Price level list
  • Sales tax code list

How To Export Data From QuickBooks Pro

Once you’ve selected the lists you wish to export, click the blue “OK” button in the top right-hand corner.

Step 2: Save The File

Rename your .IIF file and choose where you’d like to save it. Then click “Save.”

How To Export Data From QuickBooks Pro

When your file has successfully been exported, you’ll receive this notification:

How To Export Data From QuickBooks Pro

To view your file, open it in Excel. Your exported lists will look something like this:

How To Export Data From QuickBooks Pro

Export Addresses

QuickBooks also give you the option to export any addresses your company has stored in the software.

Go to File>Utilities>Export>Addresses to Text File.

Step 1: Select The Addresses You Want To Export

Tell the software with addresses you want to export. You can export individual addresses or choose to export:

  • All customer/jobs
  • All vendors
  • All employees
  • All other names

How To Export Data From QuickBooks Pro

You can also click the “include jobs” option to export addresses associated with specific jobs. Once you’ve selected the addresses you wish to export, click the blue “OK” button.

Step 2: Save The File

Rename your .TXT file and choose where you’d like to save it. Then click “Save.”

How To Export Data From QuickBooks Pro

You will receive a warning box like the one below. This warning is just letting you know that if you see a blank field in your text field, it’s because a field was left blank in your customer, vendor, or employee information.

How To Export Data From QuickBooks Pro

When your file has successfully been exported, you’ll receive this notification:

How To Export Data From QuickBooks Pro

To view your file, open it in a program like Notepad or Wordpad. Your exported addresses will look something like this:

Export Time Entries

You can export time entries made by your employees as well.

Go to File>Utilities>Export>Timer Lists.

Step 1: Verify the Time Entry Export

When you click on timer lists, this graph will pop up. Click “OK.”How To Export Data From QuickBooks Pro

Step 2: Save The File

Rename your .IIF file and choose where you’d like to save it. Then click “Save.”

How To Export Data From QuickBooks Pro

When your file has successfully been exported, you’ll receive this notification:

How To Export Data From QuickBooks Pro

To view your file, open it in Excel. Your exported timer lists will look something like this — your time entries will be at the top of the screen, and the rest of your company lists will be at the bottom of the screen:

How To Export Data From QuickBooks Pro

Export Invoices, Estimates, Sales Orders, and Reports

If you go to File>Utilities>Export, you’ll see that we’ve already gone through all of the “export” options in QuickBooks. However, there is a way to still download and save some key transactions like reports, invoices, estimates, and sales orders.

This method can be a bit tedious as you have to save each report, invoice, estimate, and/or sales order individually, but having the option to save this information is a must.

Step 1: Select The File You Want To Export

First, select the file you wish to save. The process is the exact same for reports, invoices, estimates, and sales orders. For this example, we’re going to select the Profit & Loss report from November of 2017.

How To Export Data From QuickBooks Pro

Step 2: Click Print

Go to the top bar and click “Print.” Then select the “Save As PDF” option.

How To Export Data From QuickBooks Pro

Step 3: Save The File

Rename your .PDF file and choose where you’d like to save it. Then click “Save.”

How To Export Data From QuickBooks Pro

To view your file, open it using the internet or a PDF reader. Your report will look something like this:

How To Export Data From QuickBooks Pro

Export All Company Data

Of all exporting options in QuickBooks, this is the one you really need to know.

You can — and should — export a complete company back up file of your QuickBooks Pro software on a regular basis. This can be a huge lifesaver if some unforeseen problem occurs, like a software crash.

To create a company backup file, go to File>Back Up Comany> Create Local Backup.

Step 1: Choose Back Up Location

To start, choose whether you want to store your backup online or on your computer.

If you choose online, extra fees do apply, so be sure to click on the “Try now or learn more” link for pricing details.

How To Export Data From QuickBooks Pro

If you want to edit your backup preferences at this time, click “Options” and proceed to step 2. Otherwise, click “Next” and proceed to step 3.

Step 2: Edit Backup Preferences (Optional)

You can edit backup preferences by clicking the “Options” button. Using these preferences, you can add the date and time to backups, opt for backup reminders, and set a designated backup location.

How To Export Data From QuickBooks Pro

Once you’re finished editing your backup preferences, click the blue “OK” button at the bottom of the screen.

Step 3: Choose When To Save The Backup

QuickBooks gives you a few scheduling choices:

  • Save your backup now
  • Save your backup now and schedule future backups
  • Only schedule future backups

Click which one you want.

How To Export Data From QuickBooks Pro

Step 4: Save The File

Choose where you’d like to store your company file. Then click “Save.”

How To Export Data From QuickBooks Pro

When your company data has successfully been exported, you’ll receive this notification:

How To Export Data From QuickBooks Pro

This file can now be opened by going into your QuickBooks account and clicking File>Open or Restore Company.

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Enter A Bill In QuickBooks Pro

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How To Enter A Bill In QuickBooks Pro

In this post, we’ll walk you through nine simple steps to entering a bill into QuickBooks. You’ll have this must-have accounting skill mastered in no time.

Table of Contents

Enter A Bill

To begin, go to Vendor>Enter Bills.

Step 1: Select A Vendor

Select the vendor who sent you the bill from the drop-down menu. If you haven’t added this vendor to QuickBooks yet, click “How To Add Vendors In QuickBooks Pro.

How To Enter A Bill In QuickBooks Pro

If you’ve already inputted the vendor’s address, QuickBooks will automatically add it in. Take a minute to verify the address or enter it in manually if necessary.

How To Enter A Bill In QuickBooks Pro

Step 2: Enter Payment Terms

Select the proper payments terms and add a discount date if applicable. You can choose from:

  • 1% 10 Net 30
  • 2% 10 Net 30
  • Consignment
  • Due on Receipt
  • Net 15
  • Net 30
  • Net 60

How To Enter A Bill In QuickBooks Pro

Step 3: Add Memo (Optional)

Add a memo describing the bill if desired.

How To Enter A Bill In QuickBooks Pro

Step 4: Select Date

Select the date that the bill was issued using the drop-down calendar.

How To Enter A Bill In QuickBooks Pro

Step 5: Add Reference Number (If Applicable)

You can add a reference number at this point if you want.

How To Enter A Bill In QuickBooks Pro

Step 6: Enter Amount

Enter the total amount due on this bill.

How To Enter A Bill In QuickBooks Pro

Step 7: Select Due Date

Select the date that the bill payment is due using the drop-down calendar.

How To Enter A Bill In QuickBooks Pro

Step 8: Enter Expenses Or Bill Items

Under the “Expenses” tab, you can enter the expense amount and select the corresponding account. If you want to enter the specific product or items on your bill, click the “Items” tab and enter them there.

How To Enter A Bill In QuickBooks Pro

Step 9: Save The Bill

Finally, click “Save & Close” or “Save & New” if you’re planning on creating another bill.

How To Enter A Bill In QuickBooks Pro

Now you can view your bills in the Bill Tracker or make payments by clicking “Home” and selecting “Pay Bills.”

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Create A Budget In QuickBooks Pro

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How To Create A Budget In QuickBooks Pro

One of the best ways to stay on top of business finances is to budget. QuickBooks allows you to create a yearly budget for your business.

While deciding on a budget can be a bit time-consuming, actually creating a budget in QuickBooks Pro only takes six steps.

In this post, we’ll walk you through how to set up your budget, choose the proper budgeting options, and run budgeting reports.

Table of Contents

Create A Budget

To begin, go to Company > Planning & Budgeting > Set Up Budgets.

Step 1: Select Budget Year

Use the arrows to select the year for which you want to create this budget.

How To Create A Budget In QuickBooks Pro

Step 2: Choose Budget Type

Choose the budget type. You can create a Profit and Loss budget or a Balance Sheet budget.

The Profit and Loss budget offers a more complete view of your yearly activity, whereas the Balance Sheet budget deals predominantly with your ending balances. For our sample company, we’re going to choose the Profit and Loss option.

How To Create A Budget In QuickBooks Pro

Once you select Profit and Loss, click the blue “Next” button at the bottom of the screen. If you select Balance Sheet, click the blue “Finish” button and proceed to step 5.

Step 3: Add Additional Criteria (Optional)

If you want, you can create budgets for specific customers and jobs by clicking the “Customer:Job” option. Or, you can click “No additional criteria” to make a general yearly budget.

How To Create A Budget In QuickBooks Pro

Once you’ve decided, click the blue “Next” bottom at the bottom of the screen.

Step 4: Choose Budget Creation Preferences

Choose between “create budget from scratch” or “create budget from previous year’s data.”

How To Create A Budget In QuickBooks Pro

Using previous years’ data can be helpful and provide insight when creating a budget. However, our sample company is brand new, so we’re going to select the first option.

Step 5: Enter Your Budget

Now enter your budget goals for each month and each account. This part takes some time and thought.

I recommend using QuickBooks reports to help give you some insight into your sales and expense patterns. Learn how to take advantage of reports by reading How To Run Reports In QuickBooks Pro.

Tip: Make your budget practical. If you want to have $5,000 in sales each month, don’t just put the number in QuickBooks. Break that goal down into actionable, manageable steps. Think of practical marketing and advertising practices that could help you reach this goal.

Step 6: Save

Once your budget starts to look something like this, it’s time to save your masterpiece.

How To Create A Budget In QuickBooks Pro

To save your budget, click “Save.”

At any time, you can run reports to view the status of your budget. QuickBooks Pro offers the following budget reports:

  • Budget Overview
  • Budget vs. Actual
  • Profit & Loss Budget Performance
  • Budget vs. Actual Graph

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

How To Reconcile A Bank Account In QuickBooks Pro

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How To Reconcile A Bank Account in QuickBooks Pro

One of the most important processes in accounting is bank reconciliation: ensuring that the transactions you record in QuickBooks match the activity in your bank.

Reconciling a bank account may sound intimidating, but we’ve broken the process up into 12 manageable steps.

Let’s get started.

Table of Contents

Reconcile A Bank Account

Before you reconcile your bank account, make sure your QuickBooks account is up to date. If you have any last minute payments to enter or deposits to record, be sure to do so.

Once all of the transactions in QuickBooks are up to date, grab your bank statement and keep it in front of you — you’re going to need it. Then go to your home screen and click on the “Reconcile” option.

How To Reconcile A Bank Account in QuickBooks Pro

You’ll be taken to a screen that looks like this:

How To Reconcile A Bank Account in QuickBooks Pro

Step 1: Choose Account

To start, select the account you are reconciling. For our sample company, we are reconciling our checking account.

How To Reconcile A Bank Account in QuickBooks Pro

Step 2: Modify Statement Date

Find the statement date on your bank statement (it’s usually the last day of the month and can most often be found on the top of the statement). Then use the drop-down calendar to enter this date into QuickBooks.

How To Reconcile A Bank Account in QuickBooks Pro

Step 3: Verify Beginning Balance

You’ll want to double check that the beginning balance in QuickBooks matches the beginning balance on your bank statement.

How To Reconcile A Bank Account In QuickBooks Pro

If your beginning balance doesn’t match, click on the blue “What if my beginning balance doesn’t match my statement link?” or watch this QuickBooks Pro reconciliation video.

Step 4: Enter Ending Balance

Enter the closing balance on your bank statement into QuickBooks Pro.

How To Reconcile A Bank Account In QuickBooks Pro

Step 5: Add Any Service Charges

If you see any service charges on your bank statement, add the total at this time. Make sure to adjust the date and tell QuickBooks which expense account you want bank service fees to be recorded in.

How To Reconcile A Bank Account In QuickBooks Pro

Step 6: Add Any Interest Earned

If you received any interest payments from your bank on your statement, add the total at this time. Adjust the date and tell QuickBooks which income account you want to record earned interest in.

How To Reconcile A Bank Account In QuickBooks Pro

Step 7: Click Continue

Once all the information on the screen is correct, click the blue “Continue” button.

How To Reconcile A Bank Account In QuickBooks Pro

You’ll be taken to the bank reconciliation screen, which looks like this:

How To Reconcile A Bank Statement In QuickBooks Pro

The Reconciliation Screen Explained:

Let me break down this screen a little bit.

At the top of the screen, you’ll see the period date. You’ll also see an option to “Hide transactions after the statement’s end date.” Clicking this means that only the transactions from this statement period and earlier will be shown. (I recommend checking this box if you have a lot of transactions that come after your statement date.)

The screen is then divided into withdrawals and deposits, just like your bank statement. On the left side of the screen, you’ll see “Checks and Payments,” or withdrawals. On the right side, you’ll see “Deposits and Other Credits.”

On the bottom of the screen, you’ll see the beginning balance, the number of items cleared (which is currently zero), and a few other totals. The main total you want to pay attention to is the “Difference” total. Currently, our difference total reads 5,171.07. By the end of the bank reconciliation process, this number should read 0.00.

Step 8: Match Transactions

Now, to actually reconcile your account, you are going to match the transactions from your bank account with the transaction in QuickBooks. Don’t worry — it’s simpler than it sounds.

Here’s our sample bank statement:

How To Reconcile A Bank Statement In QuickBooks Pro

We’re going to go straight down the list to make things easy. On our sample bank statement, the first transaction is a withdrawal of $1,400 paid to Shire Views Property Management. Now we have to go back to QuickBooks and find this transaction.

We go the Checks and Payments section for withdrawals and look for a matching transaction. In this case, it’s the top transaction (see picture below). Once you find the transaction, make sure the amount in QuickBooks matches the exact amount on your bank statement. Then click the checkbox next to the proper transaction.

How To Reconcile A Bank Account In QuickBooks Pro

Tip: Printing your bank statement and marking the transactions on it as well can help you verify transactions and not get lost.

Let’s do another example.

You’ll see that the second transaction is for a withdrawal. (We ordered $655 worth of inventory from Gimli at Moria Mining on 11/1.) The first step is to go to our QuickBooks screen — on the Checks and Payments side — and look for the matching transaction.

On 11/1/2017 a check for $655 was written to Gimli. The two amounts match, so we check the box.

How To Reconcile A Bank Statement In QuickBooks Pro

Continue matching transactions until you’ve matched every transaction in your bank statement.

Tip: While the amounts must always match, the dates on your bank statement may differ from the dates in your QuickBooks account. For example, you may write a check on the 5th that doesn’t get cashed and processed by the bank until the 10th. The same transaction will be dated 11/5 on QuickBooks and 11/10 on your bank statement — that’s totally fine.

Step 9: Double Check Information

When all of your transactions are added, your screen should look something like this:

How To Reconcile A Bank Account In QuickBooks Pro

Double check that all of the information looks correct.

If you look at the picture closely, you’ll see that there are three unchecked transactions in the picture above. Not every transaction will be checked. In this instance, we wrote three checks on the last day of the month. None of these checks have been cashed yet, so they don’t appear on our bank statement. We will reconcile these three transactions next month once the checks have been cashed and processed by our bank.

Only check the transactions that appear on your bank statement.

Step 10: Make Sure The Difference Is 0.00

If you did everything correctly, the “Difference” on the bottom of the screen should say 0.00.

If the difference is off (even by a couple of cents), check your QuickBooks transactions and bank statement again to see if there are any discrepancies, If you really can’t figure it out, refer to QuickBooks’ bank reconciliation troubleshooting page to learn about some common reasons why the bank reconciliation process may not be balancing properly

At this point, also check that the withdrawal and deposit total on the bottom left-hand side of the screen matches the totals on your bank statement

How To Reconcile A Bank Account In QuickBooks Pro

Step 11: Reconcile

Once the “Difference” reads 0.00, click the “Reconcile Now” button. Now your account is officially balanced!

How To Reconcile A Bank Account In QuickBooks Pro

After clicking “Reconcile Now,” you may receive a notification from QuickBooks advertising online banking. Click “OK.”

How To Reconcile A Bank Account In QuickBooks Pro

Step 12: Print Reconciliation Records

At this point, you can print the complete bank reconciliation report for your records. You can choose a basic summary report, detailed report, or both. Use the “Display” button to preview these reports before printing.

How To Reconcile A Bank Account In QuickBooks Pro

Repeat steps 1-12 for all bank and credit cards accounts. Most CPAs recommend reconciling your statements each month so you don’t miss any crucial discrepancies.

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

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How To Enable Live Bank Feeds In QuickBooks Pro

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How To Enable Live Bank Feeds In QuickBooks Pro

One of the most time-saving automations QuickBooks offers is live bank feeds. Live bank feeds pull all of your bank transactions into your account automatically, so you don’t have to.

We’ll teach you how to connect your bank account directly to your QuickBooks account in these five simple steps.

Table of Contents

Enable Live Bank Feeds

Before you get started, make sure you have already created an account in QuickBooks for each bank account you’re adding. To learn how to add an account to your chart of accounts, read How to Add A Bank Account To QuickBooks Pro.

To begin, go to Banking>Bank Feeds>Set Up Bank Feed for Account.

You may see the notification below. Save and close any information you currently have open, and then click “Yes.”

How To Enable Live Bank Feeds In QuickBooks Pro

Step 1: Find Your Bank

Search for your banking institution.

How To Enable Live Bank Feeds In QuickBooks Pro

Select the proper bank from the search results.

How To Enable Live Bank Feeds In QuickBooks Pro

Step 2: Adjust Bank Settings

Once you select your bank account, you’ll be taken to a screen that says “Direct Connect.” At this point, you’ll want to go to your banking institution and enroll in “Direct Connect.”

Each banking institution handles integrations differently, so contact your bank directly for instructions on allowing a QuickBooks connection.

Once you’ve enabled QuickBooks to connect to your account, click the blue “Continue” button in the bottom right-hand corner.

How To Enable Live Bank Feeds In QuickBooks Pro

Step 3: Log In To Your Bank Account

Now that you’ve connected to your account, you’ll be asked to log in. Some banks ask for your login credentials, while others ask for your bank number and pin. Follow the instructions on the screen, then click “Connect.”

How To Enable Live Bank Feeds In QuickBooks Pro

Step 4: Choose Accounts

QuickBooks will now pull up all accounts associated with your bank login. Select the accounts you wish to include in QuickBooks Pro. Use the drop-down menus to select which account (from your chart of accounts) to connect to your bank account.

Step 5: Connect

Click “Connect” to complete the bank connection. Go to your Bank Feeds Center to see the transactions that QuickBooks automatically pulls in from your bank.

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”