General Expenses Questions

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Herman C. Baptist
http://community.intuit.com/me...
http://www.therylangroup.com
 

 Thank you Herman.  I'm going through and cleaning up my records, and am having a bit of trouble.  Specifically, I thought I had linked up expenses to the right invoice (through Time/Costs) but when the invoice was paid, there was an expense that still shows up as unpaid.  I must have tinkered around too much with it?  What should I do now?  The invoice was paid along with that particular expense.  So, should I simply delete the Bill?  Problem solved?

THANKS!

Your step 2 is wrong.

In step 2, you incurred the expense, and you marked it billable to the customer. When you invoice your customer, YOU are paid. Now, you still have to pay your supplier. You enter the data for the purchase transaction the same way using a Check as when using Enter Bill and when using Enter Credit Card Charges (these are three ways of processing that you owed someone and designating how they got paid).

Use Enter Bill when you want to capture the data now, but you intend to pay the bill at a later date. Use Write Check when you have a purchase and you paid for it, too.

Your Step 3 is bad.

You do not set up employees as vendors or any other name. Use Write Check, enter the reimbursement here. Look at the Employee Center, click on the Transactions Tab, click on Nonpayroll Transactions. This is where you will see the list of reimbursements to staff.

Your Step 4 is bad.

You run the risk of overlooking expenses. When you have a mix of types of expenses, such as split phone line expenses all on one phone bill, you enter the data on the check you write using Splits. This means, one line of the expense is the office expense share posted to the office expense account. The next line is the personal share, so post it to Owner Draw. Anything personal should be posted to an equity account on behalf of the owner, with no details or tracking done in the business' expense or income accounts.

When you accidentally use the business card for personal, that is Owner Draw, too.

So, deposits of your own funds to the company bank account, or purchases you paid for, for business expenses, out of personal funds, these get posted into the Owner Contribution equity account.

For your data cleanup, look at the details of the bill or check. If there is a little square icon, this is the data that you billed to your client, and this is linked to the client for your financial reports. If you delete it, you break that link. If you entered a bill but paid your vendor (supplier) by using Write Check, then delete that check and completely recreate it using the Pay Bills function.

It seems you likely have no reason to use Enter Bills - Pay Bills and could directly use Write Check. Sometimes, though, we like to enter the bill in advance of paying it. Now you invoice your customer, get their payment, and their funds are on hand to use for paying the bill. This keeps your cash flow in order.

Thank you, qbteachmt!  Your response is so thorough and helpful.  

For Step 2, just so I understand, it sounds like you don't think I need to use Enter Bills.  But I think I want to get the expenses on my invoices as soon as possible vs waiting for it to come on the credit card bill before I invoice.  But if I did, then I would simply assign the account from the enter credit card charges and I could still do the Time/Costs thing, right?

Any time I use Enter Bills, I need to use Pay Bills to zero it out?  Or, I can use the payment methods to zero it out?  So, in the example, I incur an expense.  I enter it into Enter Bills.  I use time/costs for invoice.  I get paid.  Then I use Pay Bills and enter Owner's Draw?  Most of these expenses are on the credit card - so the vendor gets paid immediately, but the client is reimbursing me.  But then, you need to reconcile the credit card for it to go away?

I fear I'm making it worse.

Thanks for your help.

For Step 2:

You do not use BOTH Enter Bill and Enter Credit Card Charges. What we are discussing here are the various ways to enter transactions that are the purchases you made, the items you bought and/or the expenses yu incur.

QB is a set of tools, you don't have to use them all and some are used in lieu of another.

Enter Bill: when you want to document you have incurred costs but intend to pay later. This is a great way to enter something billable to customers, since you can invoice it and get their payment before you need to pay your supplier's bill. If you use Enter Bill you must use Pay Bill, to generate a bill payment check that is linked to the Bill. This is the Accounts Payable workflow.

Write Check: when you have made the purchase and it is paid. Also, for historic data entry, just use Write check to document historic completed transactions; after all, these are paid.

Enter Credit Card Charge: when you are tracking these charges (purchases made by money you don't have at the moment and will need to repay to the credit card provider), you create an account on the chart of accounts that is a type of account Credit Card. This allows you to enter the charges by actual charge date. This account is reconciled, similar to a bank account, when you get the credit card statement.

All of these data entry methods provide the same data entry tools: expenses and/or items tab, payee (or purchased from name), date, amount, etc. Use one for each transaction. Don't use more than one for the same transaction. NED2: Never Enter Data 2wice.

So, if you use a credit card: Enter the charge, selecting that it is billable to a client. Invoice the client, select the directly-billable charges (time, mileage, etc).

When you get the credit card statement, reconcile to the statement (checking for fraudulent charges, confirming your data entry is accurate) and end with a payment to the credit card company. This is your Vendor for credit card transactions. Who you purchased from is moot.

Here's when to use Enter Bill: I have a FedEx charge account. I ship with them using my account number. They send me a weekly invoice of shipments. I use Enter Bill to enter this bill. I note if the shipment is billable to a customer or just office expense. On the 15th and the end of the month I Pay Bills; I select all bills I am paying that day, and generate checks to mail. This pays my vendors.

Here's when to use Write Checks: I stop at Staples and buy supplies on behalf of three customers. I enter the check and split the data, so I can allocate which amount to which customer and mark if it is billable to them.

Separately, once my data entry is complete, I can invoice my customers, pick up their charges, and mail or email invoices to the customers. Now I wait to get their checks. Then, for Invoices, I use Receive Payment to process the payment to the invoice. This is the Accounts Receivable process.

For customers I work with and they pay me right then, I come back to the office and email them a Sales Receipt.

 qbteachmt, nice...!

Thanks again for your very thorough responses.  It's becoming much clearer to me what I'm supposed to do - I've been given some questionable advice before.  

One thing that I'm starting to see is that I should not use the import feature of the credit card statement, right?  I'm entering the charges as I make them, and use my statement only to reconcile rather than having the import feature enter the charges.

Last question.  For historical data fixing, I can just Write Check, even though there's really no check written?  I would just leave the number blank?

Thanks so much!  

qbteachmt, you are simply awesome!  Thank you for taking so much time.  I'm feeling very bad about having this back and forth and wasting your time.  I'm marking it as solved!  So so so helpful!