QuickBooks News
QuickBooks Features
QuickBooks Common Questions
QuickBooks Tips
QuickBooks Product Updates
Articles
Prior Issues

QuickBooks Online Edition Enhancements
On March 13, 2004 Intuit, the makers of QuickBooks, enhanced its QuickBooks Online Edition with the following new features and price and billing changes:

• Customized Home Page & Overview
• More Ways To Learn
• Estimates
• Plus Package Price & Billing Changes

For a detailed explanation of these new features and price and billing changes, see QuickBooks Product Updates.

QuickBooks: Premier 2004 Wins PC Magazine Editors' Choice Award
In its March issue, PC Magazine awarded QuickBooks: Premier 2004 its Editors’ Choice award.

In her March 16, 2004 article, Editor Kathy Yakal states, “As the old saying goes, nobody ever got fired for buying IBM. The same holds true for QuickBooks: It isn't the cheapest program here, but you can't go wrong buying it for your small business. Intuit has earned this distinction, providing a robust, easy-to-use line of applications for a variety of company sizes and needs.”

To read Kathy Yakal’s article, click here.

QuickBooks Merchant Account Service Improvements
Intuit is making some important improvements April 5, 2004 to the Automatic Credit Card Billing (ACCB) feature of their QuickBooks Merchant Account Service. ACCB allows merchants to automatically bill their customer credit cards on a recurring basis.

These ACCB service improvements allow QuickBooks Merchant Account Service customers using QuickBooks 2002, 2003, or 2004 software to have more of the service features they have asked for, including:

More billing interval options - in addition to the current monthly, quarterly, and annual billing options, merchants will be able to automatically bill semi-monthly, semi-annually, and bi-weekly.
New activity reporting features that allow merchants to easily generate billing activity reports.
New search capabilities that help merchants search quickly through their automatically billed transactions.
Simplified payment recording - when an invoice is present in QuickBooks, a corresponding payment will automatically be received against it (Auto-apply invoices feature must be enabled in QuickBooks).

If you are a QuickBooks Merchant Account Service merchant currently using the ACCB feature, you must take certain steps to avoid duplicate billing entries.

For additional information about these improvements, click here.

New QuickBooks 2004 Features

E-Mail QuickBooks Forms And Reports And Save As PDFs
E-mail more forms and reports right from QuickBooks. In addition to invoices, statements, and estimates, you can now e-mail purchase orders, sales orders, sales receipts, credit memos, and reports - all right from QuickBooks. You can save forms and reports as a PDF format, so they'll look professional when your customers, vendors, or accountant views or prints them.

Quickly Import Data From Microsoft Excel
Import Microsoft Excel data into QuickBooks, including customer lists, vendor lists, item lists, and other important information. Just assign each column in your Excel spreadsheet to a corresponding QuickBooks "field," such as inventory item, phone number, or price. You can also save import settings to use again.

Export Reports To Microsoft Excel More Efficiently
Easily export QuickBooks reports to any Microsoft Excel worksheet. Just indicate a specific worksheet, and QuickBooks will export your report to that sheet, replacing any existing data with your updated report data.

Customize Prices With Up To 100 Price Levels
Customize prices for different groups of customers, such as corporate, loyal, or high-volume, with more price levels (up to 100). Plus, you can attach percentage discounts or mark-ups in pricing to each customer group, so you can automatically reduce or raise prices.

Easily Reconcile And "Undo" A Reconcile
Now you can easily reconcile your accounts, plus you can undo a previous reconcile in one click. Easily customize the layout of the reconcile screen, and an improved reconcile discrepancy report shows you changes and deletions made to previously reconciled transactions.

Manage Your Addresses More Easily
Quickly and easily copy and paste entire addresses, rather than having to cut, copy, and paste just one line at a time. Export address lists more easily to Microsoft Excel, since each line of the address exports to a different column.

Manage Your Loans Right In QuickBooks With Loan Manager
Keep all your loan information in one place and manage your loans in QuickBooks. Enter loan payments right from Loan Manager. No need to figure out principal and interest - QuickBooks can calculate amortization and the breakdown of principal and interest for you.

Track Vehicle Mileage And Expenses With The Vehicle Mileage Tracker
Now you can track vehicle mileage and expenses including date, amount, and type of expense for tax purposes. You can easily create reports and invoice customers for billable mileage.

Predict Your Cash Balance With The Cash Flow Projector
Put an end to surprise cash flow crunches. QuickBooks helps you predict your cash flow for the next six weeks, using your QuickBooks data and your answers to simple questions. Easily view your projected "available to spend" weekly cash balance in a printable report.

Set "Per Item" Price Levels To Match The Right Price To The Right Customer
More flexible price levels enable you to set the exact prices you want to charge each customer for each item you sell. Setting price levels per item helps you save time, reduce errors, and increase profits by recognizing loyal customers with specialized service.

Manage Your Addresses More Easily
Quickly and easily copy and paste entire addresses, rather than having to cut, copy, and paste just one line at a time. Export address lists more easily to Microsoft® Excel, since each line of the address exports to a different column.

Easier Time Tracking
Get an alert when creating an invoice if you have any outstanding time or expenses to help avoid under-billing. Plus, you can easily bring over both item descriptions and notes to invoices, so customers can clearly see what you are billing them for.

Calculate, Allocate, And Track Loans In One Place With Loan Manager
Track all your clients' loans in one place. You'll use fewer spreadsheets with the new Loan Manager. Create and manage loan amortization schedules. You can compute "what if" scenarios to help clients make better financial decisions about which loans and lines of credit are right for them. Allocate the loan payment between principal and interest, and track the allocation over the life of the loan.

Fixed Asset Tracker
Helps you keep track of fixed assets, i.e., equipment and furniture. Track important details like asset name, serial number, acquisition date and disposal date.

Manage Fixed Assets From Acquisition To Disposition With Integrated Fixed Asset Manager (QuickBooks: Premier Accountant Edition Only)
Manage fixed assets with fewer spreadsheets - right from QuickBooks. With the new full-featured Fixed Asset Manager, you can easily enter fixed assets, calculate depreciation, and print reports. Enter asset purchases, or easily import your Fixed Asset List. You can compute depreciation for up to six asset bases including federal, state, book, and AMT. Compute Section 179 expense and luxury auto calculations. Project depreciation for the life of the asset. Automatically create journal entries for depreciation, as well as gains and losses from asset sales. Print 20 different reports, including asset schedules by General Ledger Account, location, and category. You can also print tax worksheets for Forms 4562 and 4797.

How Do I Add a Fixed Asset Item?
What Do I Need Before Adding A Loan To The Loan Manager?
How Do I Track Mileage For A Vehicle?
How Do I Charge My Customers For Mileage?

How Do I Add a Fixed Asset Item?
When you purchase fixed assets that you need for your business, it's important to keep good records so you can track their cost, the cost of repairs and upgrades, and how much they depreciate from year to year. These amounts affect the worth of your business and the size of your tax bill.

Fixed asset items provide a way to keep important information about your assets in one convenient place.

You can create an item to track a fixed asset at several points during the asset's life cycle, but we recommend that you create the item when you buy the asset.

You can create a fixed asset item from the following locations:

1. From the Fixed Asset Item list
2. From a transaction

From the Fixed Asset Item list
The simplest way to create a fixed asset item is while you are entering the transaction used to purchase it, but sometimes you may want to create a fixed asset item directly from the Fixed Asset Item list. For example:

• You intend to purchase or have already purchased several items that you want to track as fixed assets, such as a suite of office machines
• You pay for a fixed asset with cash.
• You transfer a personal asset to your business.
• You pay for a business asset with personal funds.

To create a new fixed asset item

1. From the Lists menu, choose Fixed Asset Item List.
2. Click Item, and then choose New to display the New Item window. Fixed Asset is preselected as the item type.
3. In the Asset Name/Number field enter an identifying name or number for your fixed asset.

   What you enter here appears on fixed asset item reports. Enter a name or number that will help you distinguish this item from all others on the list.

4. Select an asset account from the Asset Account drop-down list or create a new one.
5. Enter purchase information:
   • Purchase Description: Enter a brief description of the purchase of your fixed asset.
   • New/Used: Select whether your asset is new or used.
   • Date: Enter the date you purchased your fixed asset, or select one from the popup calendar. Defaults to today's date.
   • Cost: Enter the cost of your fixed asset.
   • What do I say here about total cost vs down-payment?
   • Vendor/Payee: Enter the name of the vendor from whom you purchased the asset.

   Note: The Vendor/Payee name is not saved to your Vendor list when you save this fixed asset item to your Fixed Asset Item list. You must choose Vendor List from the Lists menu and add the vendor there if desired.

6. (Optional) Enter asset information:
   • Asset Description: Enter a brief description of your fixed asset.
   • Location: Enter a location; for example, if your asset is real estate, enter an address. If your business has more than one location, enter where your asset has been placed into service.
   • PO Number: Enter the number of the purchase order you used to purchase your asset, if applicable.
   • Serial Number: Enter the serial number or VIN of your asset.
   • Warranty Expires: If applicable, enter the date the warranty for your asset expires.
   • Notes: Enter any notes concerning your asset that you want to track.
7. Leave the sales information blank, and click OK.

   Note: When recording any transactions involving your fixed asset, be sure to choose the appropriate fixed asset item from the Items tab or Item column. This enables you to track depreciation and other costs.

From a transaction
You can record information about your asset as you pay for it from any one of the following transactions:

• from the Items tab of the Enter Bills window
• from the Items tab of the Write Checks window
• from the Items tab of the Enter Credit Card Charges window
• from the Item column of the Purchase Order window

  Note: Transactions using fixed assets do not support QTY or Quantity.

To create a fixed asset item from a transaction

1. If available, select the Items tab.
2. Select in the Item column and select Fixed Asset as the item type.
3. In the Asset Name/Number field enter an identifying name or number for your fixed asset.
   What you enter here appears on fixed asset item reports. Enter a name or number that will help you distinguish this item from all others on the list.
4. Select an asset account from the Asset Account drop-down list or create a new one.
5. Enter purchase information:
   • Purchase Description: Enter a brief description of the purchase of your fixed asset.
   • New/Used: Select whether your asset is new or used.
   • Date: Enter the date you purchased your fixed asset, or select one from the popup calendar. Defaults to today's date.
   • Cost: Enter the cost of your fixed asset.
   • What do I say here about total cost vs down-payment?
   • Vendor/Payee: Enter a brief description of your fixed asset.
   • The Vendor/Payee name is not saved to your Vendor list when you save this transaction. You must choose Vendor List from the Lists menu and add the vendor there if desired.
6. (Optional) Enter asset information
   • Asset Description: Enter a brief description of your fixed asset.
   • Location: Enter a location; for example, if your asset is real estate, enter an address. If your business has more than one location, enter where your asset has been placed into service.
   • PO Number: Enter the number of the purchase order you used to purchase your asset, if applicable.
   • Serial Number: Enter the serial number of your asset.
   • Warranty Expires: Enter the date the warranty for your asset expires.
   • Notes: Enter any notes concerning your asset that you want to track.
7. Leave the sales information blank, and click OK.

What Do I Need Before Adding A Loan To The Loan Manager?
Before adding loans to the Loan Manager, you'll need to gather your loan information.

For a new loan:

• Set up a liability account for the loan in QuickBooks. When you add the account and lender details, include any information you want the Loan Manager to use for tracking, such as the account number and lender contact information. This information can be found on your loan documents. Be sure that you enter the correct opening balance for the account. Otherwise, you will not be able to set up payments from the loan manager.
• Set up an expense account for tracking the loan interest.
• If you need to make escrow payments to the loan, set up an escrow account for them.
• Make sure all transactions for the loan liability and interest accounts are up to date.

For an existing loan:

• Make sure all transactions for the loan liability and interest accounts are up to date.
• Check to see that you have entered the loan details you want the Loan Manager to use for tracking, such as the account number and lender contact information. This information can be found on your loan documents.

When you're ready to add a loan to the Loan Manager, have your loan documents in hand. You'll need them for the origination date, payment amount, term, escrow amount (if any), interest rate, and other information.

Adding a loan to the Loan Manager

1. From the Banking menu, choose Loan Manager.
2. In the Loan Manager window, click Add a Loan.
3. In the Add a Loan window, complete each section as follows:
   1. Enter account information for this loan.
   2. Enter payment information for this loan.
   3. Enter interest information for this loan.
4. Click Finish.

How Do I Track Mileage For A Vehicle?
QuickBooks can track mileage for your business vehicles. You can use the mileage information for tax deductions for your vehicles, and to bill customers for mileage expenses. You cannot use vehicle mileage tracking to reimburse your employees for mileage.

To track vehicle mileage

1. Enter the current mileage rates for vehicle mileage.
2. Add a vehicle to the Vehicle List.
3. Enter mileage for a vehicle.
4. Run vehicle mileage reports.

Enter the current mileage rates for vehicle mileage
Keep your mileage rates up-to-date so you can always take advantage of the latest IRS deduction rates for your business vehicles. QuickBooks calculates the appropriate mileage expense based on the dates and rates you enter in the Mileage Rates window. Check regularly with the IRS for the latest rates and enter each date and rate change as it becomes effective.

1. From the Company menu, choose Enter Vehicle Mileage.
2. On the toolbar in the Enter Vehicle Mileage window, click Mileage Rates.
3. In the Mileage Rates window, select a date from the calendar for the Effective Date, then press Tab.
4. Enter the IRS rate for that date, then click Close.

Add a vehicle to the Vehicle List
To track mileage for a vehicle, you must add it to the Vehicle list. If you already have the Enter Vehicle Mileage window open, you can QuickAdd a vehicle by clicking "Add New" on the Vehicle dropdown list.

To add a vehicle to the Vehicle list

1. From the Company menu, choose Enter Vehicle Mileage.
2. In the Enter Vehicle Mileage window, click Vehicle List (on the toolbar).
3. From the Vehicle menu, choose New.
4. In the New Vehicle window, enter a name for the vehicle and an optional description.The vehicle name might be the model and year of the car, the license number, or a specific number that you've given to a vehicle.
5. Click OK.

Enter mileage for a vehicle

1. From the Company menu, choose Enter Vehicle Mileage.
2. In the Enter Vehicle Mileage window, choose the vehicle (or add a new vehicle) for which you want to enter a mileage record.
3. Enter the start and end dates for the trip.
4. Enter the mileage from the odometer start and end readings. QuickBooks will calculate the total mileage for you, based on these numbers.
5. (Optional) If you plan to bill a customer, select the "Billable" checkbox.
6. If you selected to bill a customer for the mileage, choose the appropriate items from the Customer:Job, Item, and Class (if class tracking is turned on and it is applicable to this record) drop-down lists.
7. Save your mileage record.

Run vehicle mileage reports
There are four reports you can use to review your vehicle and mileage records:

• Mileage by Vehicle Summary
• Mileage by Vehicle Detail
• Mileage by Job Summary
• Mileage by Job Detail

How Do I Charge My Customers For Mileage?

1. Enter the vehicle mileage, being sure to mark it Billable and assign it to a customer:job.
2. Open the sales form where you want to enter the cost, and click Time/Costs on the toolbar.
3. In the Choose Billable Time and Costs window, select the Mileage tab.
4. Select the "Use" column to the left of the mileage item.
5. (Optional) Click Options to determine how you want the mileage expenses to appear on the invoice.
   You can combine several mileage items, include descriptions, etc. These options allow you to view the detail in QuickBooks, even if you print the sales form showing only single line items.
   • Combining mileage from several trips
   • Charging a customer more than the amount of the mileage expense
6. (Optional) If you want the mileage expenses you select to appear as a single line item when you print the invoice or sales receipt, select the "Print selected time and costs as one invoice item" checkbox. If you select this checkbox, it overrides the options for transferring billable mileage settings.
   Note: Do this only if you are certain you want the printed invoice to show only the total of the costs (and not a line-by-line listing of each cost). Once you record the invoice or sales receipt, it is difficult to print the costs separately. To go back, you will need to delete the original expense transaction and then select the invoice column (to the right of the Customer:Job column) on the Expenses or Items tab.
   When you print the invoice or sales receipt, it shows one amount (the sum of all the expenses). The Description column lists the amount as "Total reimbursable expenses." If you want, you can change this description by editing the onscreen version of the invoice or the sales receipt.
7. Click OK.
   

Allocating Job Costs
Estimating
Construction Contracts
Progress Billing for Lump-sum Contracts
Billing Cost-plus and Time and Material Contracts
Change Orders
Retainages (Retention)
Over/Under Billings
Unbilled Time that Will Not Be Invoiced

Allocating Job Costs
QuickBooks allows users to assign job costs to a project and indicate whether the expenses are billable to the customer/owner. To do that, enter the customer/owner or a project to be charged in the "Customer:Job" column as you record the bill, check, or credit card. An icon will appear next to the "Customer:Job" column indicating the expense is billable to the customer/owner. If the expense is not billable, click the icon to change it to an "X" indicating the expense is not billable. For example, cost-plus and time and material contracts are billable, but lump-sum contracts should be marked as not billable. If job costs should be tracked as an asset (e.g., a homebuilder with a spec home), record those costs to an asset account such as "Spec Home."

Estimating
Most construction contractors compete for projects through bidding. Even smaller contractors often provide customers with an estimate of the project. Accurately estimating a project is critical to the contractor's business. When preparing a bid or an estimate, contractors must make sure that all costs are included in their estimates. Direct costs, such as materials, labor, and subcontract costs, can, in most cases, be accurately estimated and included. Other costs such as overhead and interest are less obvious but still must be considered. To create an estimate in QuickBooks, select "Create Estimates" from the "Customers" menu and fill in the information requested by the form.

Note: Group items may be set up in QuickBooks to summarize a group of items or services identified as one unit for the estimate. To set up a group item, select "Item List" from the "Lists" menu. Select "New" from the "Item" menu button and choose "Group" from the "Type" drop-down list. Then, enter the name of the item group and select the items to be included in the group.

Construction Contracts
The type of construction contract determines the method for billing the customer/owner in QuickBooks. Contractors use the following types of contracts:

1. Lump-sum/Fixed Price. These contracts generally provide that the contractor guarantees to complete the project for an agreed-upon price. Owners often prefer a lump-sum contract because they feel it limits their exposure to cost overruns, though the contract price may be increased by change orders for various reasons.
2. Cost-plus. These contracts provide for reimbursement of allowable or defined costs incurred plus a fee that represents profit. The fee may be a fixed amount, a percentage of reimbursable costs, or an amount based on performance criteria.
3. Time and Materials. These are contracts that generally provide for payments to the contractor on the basis of direct labor hours at fixed hourly rates (that cover the cost of direct labor, indirect expenses, and profit) and the cost of materials. Total contract price is determined similarly to the manner used for cost-plus contracts, and modifications to the total contract price should be made whenever changing circumstances can be reasonably predicted and measured.

Progress Billing for Lump-sum Contracts
Most construction projects take several months or even longer to complete, and interim billings are prepared as the work progresses. Progress billings can sometimes identify budget overruns and other problems early enough to allow the contractor to remedy the problem and avoid large write-offs. If the "Jobs & Estimates" company preferences were set up, QuickBooks Pro, Premier, Premier-Accountant, or Premier-Contractor may be used to process invoices from estimates as the project progresses. The user has the choice of invoicing either for a fixed percentage of the estimate or for different percentages of each line item on the estimate. The preferential method of the percentage to bill is the percentage-of-completion method. Previous amounts billed on the estimate also can be shown on the invoice. To prepare a progress billing using QuickBooks Pro, Premier, Premier-Accountant, or Premier-Contractor, first create an estimate. Then, create an invoice for that project by selecting "Customers," "Create Invoices" from the menu bar. (When an invoice is created for an owner or a project for which an estimate has been created, a window will appear with estimates available to create an invoice. Select the estimate to create the invoice and enter the percentage of the estimate to be billed.) Job costs will be allocated to the project and marked as not billable.

Note: In versions prior to QuickBooks Pro, Premier, and Premier-Accountant 2002, when an invoice is created for a customer/owner or job for which an estimate has been created, a prompt will appear asking whether you want to create the invoice based on the estimate. Answer yes, and enter the percentage of the estimate to be billed.

Billing Cost-plus and Time and Material Contracts
Cost-plus and time and material contracts are billed based on reimbursable time and expenses on the invoice or the billing statement, select "Time/Costs" on the toolbar that appears at the top of the window when preparing the invoice or billing statement. Select the items to bill in each tab (i.e., items, expenses, and time) of the "Choose Billable Time and Costs" window and select "OK." Expenses may be marked up with an amount or a percentage in this window.

If the contractor requires a review process prior to billing customers/owners or inputs partial invoices to bill later, the user can create pending invoices. Pending invoices will not post to the register until marked final, but they can be printed for review. To create a pending invoice, create an invoice and choose "Mark Invoice As Pending" from the "Edit" menu. Once the invoice is approved, display the invoice and choose "Mark Invoice As Final" from the "Edit" menu.

Change Orders
Change orders modify provisions of the original contract but do not add new provisions. Some change orders generate no additional revenues or expenses, but more often they do. To record an approved change order under the percentage-of-completion method in QuickBooks, first set up a subjob identified as a change order. To do that, select the job from the "Customer:Job List," select "Add Job" from the "Customer:Job" menu button, and enter the job name and any other job details. Next, edit the original estimate to include the change order to bill the owner on one invoice or record a separate estimate for the subjob to bill the owner separately for the change order. Total estimated contract revenues and total estimated contract costs should include the change order for the percentage-of-completion calculation.

Retainages (Retention)
Retainages (also called retention) are amounts withheld from progress billings until final and satisfactory project completion. The owner typically withholds or retains a percentage of the progress payments due the contractor until project completion. The contractor, in turn, retains a portion of the payments due subcontractors. The purpose of retainage is to provide the owner security for costs incurred to repair defective work, to settle claims from parties not paid by the contractor, and to ensure that work is completed in accordance with the contract. Retainage due from the owner is recorded as a contract receivable and retainage payable to the subcontractor is recorded as a liability. To account for retainage receivable and retainage payable due within one operating cycle in QuickBooks, the user must:

1. Add an "Other Current Asset" type account called "Retainage Receivable" to the chart of accounts list and add a subaccount for each customer/owner. "Retainage Receivable" generally is reported as a part of "Contract Receivables" on the financial statements; therefore, the practitioner may wish to reclassify the amount when reporting. (Items cannot be associated with accounts receivable type accounts in QuickBooks, as discussed in step c.)
2. Add an "Other Current Liability" type account called "Retainage Payable" to the chart of accounts list and add a subaccount for each vendor/subcontractor. "Retainage Payable" generally is reported as a part of "Accounts Payable" on the financial statements; therefore, the practitioner may wish to reclassify the amount when reporting. (Items cannot be associated with accounts payable type accounts in QuickBooks, as discussed in step c.)
3. Add "Other Charge" items for the various retainage receivable percentages. Enter the percent as a negative and link the items to the asset account created in step a. Add an "Other Charge" item for retainage payable, leave the amount blank, and link the item to the liability account created in step a. (QuickBooks will not allow an item with a percentage to be entered on an accounts payable bill.)
4. After creating the invoice for an owner, add a subtotal item on the line after the last item being billed and then enter the retainage receivable item created in step c.
5. After creating the accounts payable bill for a subcontractor, add a subtotal item on the line after the last item being billed and then enter the retainage payable item created in step c. and the amount withheld.
6. When billing an owner or paying a subcontractor for the final retainage amounts, record the invoice or bill with the appropriate item created in step c. and enter the amount. A separate item may be set up for final retainage receivable, if desired, or the description can be typed over on the invoice/bill.

Over/Under Billings
Over/under billings are unique to the construction industry. The accounts are aggregates for each of the two categories, and the accounts should not be offset or presented as a net amount. Underbillings are reported as a current asset to reflect revenues recognized in excess of amounts billed, and overbillings are reported as a current liability to reflect billings in excess of revenues recognized. QuickBooks will not automatically add the over/under billing accounts to the chart of accounts list, nor will it automatically calculate the amounts. Construction contractors who want to track over/under billings in QuickBooks may calculate the amounts and record them as a journal entry at the end of each period. If the calculation is extensive, QuickBooks may not be appropriate. The accounts to set up in QuickBooks are as follows:

1. Costs (and estimated earnings) in excess of billings on uncompleted contracts (underbillings)- other current asset account.
2. Billings in excess of costs (and estimated earnings) on uncompleted contracts (overbillings)-other current liability account.

Unbilled Time that Will Not Be Invoiced
Many construction contractors keep track of time by customer/owner, but do not bill the customer/owner based on that time. For example, the contractor may decide to bill the customer/owner based on a method other than a time-based fee (e.g., lump-sum/fixed price). As a result, the contractor bills the customer/owner, but the time remains "unbilled" on the time reports.

To change the "unbilled" time status to "billed" on the time reports, the user should:

1. Create an Invoice for the Time. Select "Customer," "Create Invoices" from the menu bar to enter the invoice. Select the Customer:Job to which the time was charged. Enter an invoice number. The user may want to use a different invoice numbering system to keep the invoices separate from the invoices that will be sent to customers. To invoice for the time, select "Time/Costs" on the toolbar that appears at the top of the window.
2. Issue a Credit Memo for the Invoice Created in Step a. Select "Customers," "Create Credit Memo/Refunds" from the menu bar to enter the credit memo. Select the Customer:Job for which the original invoice was created. Enter a credit number. The user may want to use a different credit memo numbering system to keep the credit memos separate from the credit memos that will be sent to customers. Enter the time information. The credit memo should look exactly like the original invoice.
3. Receive Payments from Customer and Apply the Credit. Select "Customers," "Receive Payments" from the menu bar to apply the credit memo created in step b. to the invoice created in step a.
4. File the Original Invoice and the Credit Memo Together in the Customer's File.

To obtain the billing status of time, generate the "Time by Job Detail" report by selecting "Reports," "Jobs & Time" from the menu.

Customized Home Page & Overviews
The Home page now has flexible sections that you can move, add, collapse, or remove. A new "Money In/Out" flow diagram helps guide you to the tasks you want to perform. It even changes
to match your preferences. For example, if you don't turn on the "Estimates" preference, the Estimates icon is not included on the "Money In/Out" diagram. All overviews are now dynamic in this way.

More Ways To Learn
New Online Edition users will benefit from a new onscreen tutorial with seven interactive lessons. Also included is a two-page "Getting Started Guide". Both of these learning tools are accessible by clicking "Start Here!" from the Home page, or by looking up "welcome" in the Help Index.

Estimates
You can now easily prepare quotes or bids for your customers. Once work has been performed, it's simple for you to move the estimated charges onto an invoice for billing. Estimates share the same professional look of other customer sales forms in the Online Edition. To start using estimates, simply turn on the "Estimates" preference.

Plus Package Price & Billing Changes
There are changes to the price and billing configuration of the QuickBooks Online Edition Plus Package. Now there are two Plus Packages in the Online Edition, the "Sales" package and the
"Business Management" package.

The Sales Plus Package costs $9.95 per month and contains the following features:

• Charges
• Custom Invoice Styles
• Expense Tracking by Customer
• Time Tracking

The Business Management Plus Package costs $7.95 per month and includes the following:

• Budgets
• Class Tracking

The Time Tracking feature works for an unlimited number of “time tracking-only” users.

You can receive both Plus Packages for a reduced total of $15.00 per month - a 16% savings, equivalent to the existing Plus Package price. Online Edition users who have subscribed to the existing Plus Package can move to one of the new, lower-cost Plus Packages.

To learn more about QuickBooks Online Edition, click here.

QuickBooks Setup for Construction Companies
QuickBooks is designed to be used by businesses and entities of all types. Accounting needs can vary from user to user, however, depending on the industry in which the entities operate. For example, companies that sell services may need to track time spent by employees and bill clients for that time. Nonprofit organizations may want to track employee and volunteer time, and contributions by donor. In many cases, customizing QuickBooks to work efficiently for a particular entity involves no more than creating a customized chart of accounts. In other cases, certain preferences must be enabled to make desired QuickBooks features available to users.

This article provides guidance on company setup for construction contractors.

Construction contractors generally bid for contracts and successfully manage awarded contracts by having timely and accurate financial information about all contracts in progress at a given time. QuickBooks Pro or higher is best suited to those tasks since it has an estimating feature and allows users to bill customers/owners and pay employees based on accumulated time and expenses. Additionally, reports can be generated on billable and unbilled time. (Estimating and time tracking features are available in the Pro, Premier, Premier-Accountant, and Premier-Contractor versions of QuickBooks.)

Company Setup
The "EasyStep Interview" will guide users through the process of creating a company in QuickBooks and offer setup hints for the type of business selected. In addition, to tailor QuickBooks to specifically handle a construction contractor, consider enabling the following preferences:

• Classes. Construction contractors frequently wish to view reports of income and expenses by construction division, type of construction, project manager, size of contract, or other meaningful grouping. Classes should be used for only one purpose. To accomplish that, be sure to enable the QuickBooks preference during the "EasyStep Interview" by answering "Yes" to the question "Do you want to use classes?" Classes can also be enabled by selecting "Edit," "Preferences" from the menu, then choosing the "Accounting" icon from the list of icons that appears on the left side of the "Preferences" window, and checking "Use class tracking" in the "Company Preferences" tab.
• Inventory. Construction contractors may need to track inventory if they keep a stock of products like doors, sinks, and cabinets. To turn on inventory preferences, answer "Yes" during the "EasyStep Interview" to the question "Does your company maintain inventory?" Inventory also can be enabled by choosing the "Purchases & Vendors" icon from the list of icons that appears on the left side of the "Preferences" window and checking the "Inventory and purchase orders are active" checkbox in the "Company Preferences" tab. Other products may be set up as noninventory parts.
• Sales Tax. Construction contractors may need to collect sales tax if products are sold. Sales tax preferences are enabled in QuickBooks during the "EasyStep Interview" by answering "Yes" to the question "Do you collect sales tax from your customers?" Users then must choose whether they collect a single tax rate paid to a single tax agency or whether they collect multiple tax rates or pay multiple tax agencies. Sales tax preferences can also be enabled by choosing the "Sales Tax" icon from the list of icons that appears on the left side of the "Preferences" window. On the "Company Preferences" tab, answer "Yes" to the question "Do You Charge Sales Tax?" Even if the sales tax feature is turned on in the "EasyStep Interview," additional information should still be entered in the "Preferences" window (for example, when sales tax is paid, when sales tax is owed, most common sales tax, and whether to mark taxable amounts with "T" when printing).
• Tax: 1099. Construction contractors must send Form 1099-MISC to unincorporated subcontractors for amounts above the IRS threshold. To enable Form 1099 tracking, select "Preferences" from the "Edit" menu. Then select "Tax: 1099" from the "Preferences" scroll box and answer "Yes" to the question, "Do you file 1099-MISC forms?" on the "Company Preferences" tab.
• Time Tracking (QuickBooks Pro, Premier, Premier-Accountant, and Premier-Contractor). Construction contractors may need to track time by employee or subcontractor for specific jobs. To use time tracking, enable the QuickBooks preference during the "EasyStep Interview" by answering "Yes" to the question "Would you like to track the time that you or your employees spend on each job or project?" Time tracking also can be enabled by choosing the "Time Tracking" icon from the list of icons that appears on the left side of the "Preferences" window and, on the "Company Preferences" tab, answering "Yes" to the question "Do You Track Time?" The user also should enter the first day of the work week in this screen.
• Jobs and Estimates (QuickBooks Pro, Premier, Premier-Accountant, and Premier-Contractor). Construction contractors may wish to use estimates and progress bill their customers/owners. If the contractor will use estimates and progress billings in QuickBooks Pro, enable the preferences during the "EasyStep Interview" by answering "Yes" to the questions "Do you prepare written or verbal estimates for your customers?" and "Do you ever issue more than one invoice for one estimate?" Estimates and progress billings also can be enabled by choosing the "Jobs & Estimates" icon from the list of icons that appears on the left side of the "Preferences" window and, on the "Company Preferences" tab, answering "Yes" to the questions "Do You Create Estimates?" and "Do You Do Progress Invoicing?" If the contractor bills from an estimate in stages rather than the full estimate, mark "Yes" to the question "Do You Do Progress Invoicing?"
• Use Audit Trail. When a user activates this option, QuickBooks keeps a record of all changes made to transactions, an important internal control to help detect fraud.
• Require Accounts. This option prevents a transaction from being recorded without assigning it to an account. If the user does not select this preference, unassigned transactions will post to the "Uncategorized Expenses" or "Uncategorized Income" accounts.
• Cash Versus Accrual. Reports and graphs can display on an accrual or cash basis. The construction contractor should select the appropriate one.
• Setting a "Closing Date." QuickBooks does not require users to close their books at the end of a fiscal year. Consequently, users can continue posting transactions to a fiscal year even after all adjustments for the year have been recorded and financial statements have been prepared. If a closing date is set, users cannot post or adjust transactions occurring before the closing date without providing a password.

Customer Setup
Each of the contractor's customers/owners should be entered in the "Customer:Job List" so that information about contracts can be tracked. To set up customers/owners, select "Customer:Job List" from the "Lists" menu. Select "New" from the "Customer:Job" menu button and enter the customer/owner data. Notes can be kept on each customer/owner and are entered on the "Edit Customer" window. (Click the button on the right side labeled "Notes." If a note is added for a customer/owner, the "Customer:Job List" will display an icon indicating notes are available.) Custom fields may be added in the "Additional Information" tab to track birthday, spouse, administrative assistant, fiscal year end, or any other meaningful data. Keep in mind, however, that an individual list is limited to seven custom fields with a maximum of 15 custom fields for all lists. The same field (e.g., birthday) that applies to customers/owners, vendors, and employees counts as one field.

Job Setup
QuickBooks supports up to five levels of jobs or projects for each customer/owner on the "Customer:Job List." Jobs may be added to customers/owners by displaying the "Customer:Job List," selecting the customer/owner, and choosing "Add Job" from the "Customer:Job" menu item. Each contract should be set up as a job rather than as another customer/owner to prevent inputting customer/owner information twice. Regardless, each contract should be set up as a separate job. For example, if a contractor has one contract to remodel a kitchen and make bathroom repairs, the contract could be set up as a job with subjobs for the remodel and repair. If two separate contracts exist for the remodel and the repair, each project should be set up as a separate job. (Users can drag jobs and subjobs between sublevels and customers/owners if they are incorrectly set up.) Custom fields may be used by job to track contract number, contract amount, or any other meaningful data. Furthermore, notes may be kept on each job and are entered from the "Edit Job" window. (Click the button on the right side labeled "Notes." If a note has been added, the "Customer:Job List" will display an icon indicating notes are available.)

Setting up Customers/Owners by Type
Construction contractors may find it useful to track and report customers/owners by type. Some useful customer types for a contractor might be type of customer/owner (e.g., commercial, industrial, or residential) or customer referrals (e.g., customer name, yellow pages, or other referral). Customer types should be used for only one purpose and may have up to five levels of subtypes. Subtypes further define customers/owners. For example, a residential customer/owner could be further divided by single home and apartment building. Reports, labels, and summary statements may print by customer type.

To group customers/owners by type, first create the customer type by selecting "Lists/Customer & Vendor Profile Lists/Customer Type List" from the menu bar, clicking the "Customer Type" menu button on the screen that appears, and selecting "New." Once customer types have been created, assign customers/owners to the types by double-clicking each customer/owner name on the "Customer:Job List," selecting the "Additional Info" tab, and choosing the appropriate type from the drop-down list under "Type."

Note: Customer types can be added "on the fly" as customer/owner information is entered. Simply choose "" from the drop-down list of customer types on the "Additional Info" tab.

Grouping Projects by Type (QuickBooks Pro, Premier, Premier-Accountant, and Premier-Contractor)
Construction contractors may find it useful to view reports by job type. For example, construction contractors may want to view P&L for remodeling, repairs, or other types of projects. Up to five levels of subtypes may be used to further detail job types. For example, kitchen and bathroom could further define remodeling projects, or if decks were a job type, wood and stone could further define decks as subtypes. A contractor may use job types to track types of contracts (e.g., fixed price, cost-plus, or time and materials).

To group projects by type, first create the job types by selecting "Lists/Customer & Vendor Profile Lists/Job Type List" from the menu bar, clicking the "Job Type" menu button on the screen that appears, and selecting "New." Once job types have been created, assign projects to the types by double-clicking each project on the "Customer:Job List," selecting the "Job Info" tab, and choosing the appropriate type from the drop-down list under "Job Type."

Note: Job types can be added "on the fly" as project information is being entered. Simply choose "" from the drop-down list of job types on the "Job Info" tab.

Tracking Owners by Project Manager
Construction contractors may find it useful to track customers/owners by a project manager. (Users should note that the customer representative field cannot track individual jobs.) To do that as an alternative to using classes:

1. Set up Each Project Manager for Which Customers/Owners Will Be Tracked as a Customer Representative. Customer representatives are entered by selecting "Lists/Customer & Vendor Profile Lists/Sales Rep List" from the menu bar, clicking the "Sales Rep" button on the screen that appears, and selecting "New." Note that new customer representatives may be selected from the employee, vendor, or other names lists.
2. Assign a Representative to Each Customer/Owner. Customer representatives are assigned to customers/owners by selecting each customer/owner on the "Customer:Job List," selecting the "Additional Info" tab, and choosing the appropriate representative from the drop-down list under "Rep."

Note: Project managers can be added "on the fly" as customer/owner information is entered. Simply choose "" from the drop-down list under "Rep" on the "Additional Info" tab.