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When this happens you go to record a payment from the customer and if the customer paid (eg) $5,000 you only received $4,855.00 because the payment processor took out 2.9% or $145.00. The problem is [...]]]> A common problem people have when recording payments received from customers in QuickBooks is when fees are taken out prior to the payment funding so that the net amount received is less than what the customer actually owed and paid.

Click here to view the embedded video.

When this happens you go to record a payment from the customer and if the customer paid (eg) $5,000 you only received $4,855.00 because the payment processor took out 2.9% or $145.00. The problem is if you only record $4,855.00 as the payment received then it will look like your customer still owes you $145.00 when they don’t.

The problems:

1. The customer paid the full amount.
2. We only received the amount net of fees.

The trick is that we have to stop taking these forms so literally. The Receive payments screen in QuickBooks in more generic terms is where we give a customer credit for having paid the full amount of their invoice, regardless of what we have received. Now the temptation here is going to be to record a discount in order to account for the fee. This does have to be taken literally. I don’t like doing it that way. It works but it tells the wrong story. We did not give the customer a discount, we were charged for the privilege of getting paid via credit card or some other electronic means. That’s the story we want to tell and the answer is actually really simple.

Here is your answer:

1. Process the payment as though you received the full amount of the customer’s payment, and make sure it goes into the Undeposited Funds account. Problem 1 solved.
2. Record the deposit. Initially you will have the whole $5,000. Add a line item for -145.00 (yes a negative number). Under “From Account” book it to “Credit Card Processing Fees” or whatever equivalent account you use. Problem 2 solved.

This tells the right story. The customer paid me in full but before I received the funds my payment processor took their cut.

Please post your comments and questions below! If your question warrants it, I will record a video reply.

Comment: I was browsing how-to videos on how to use QuickBooks.  Here’s my dilemma:  I have specific software for practice management for patient accounts.  It keeps track of services rendered, products purchased, and payments. I can generate patient bills and claim forms to submit to insurance carriers.  But, I need to track our business bank accounts. Out practice management software does not do this, but I don’t want to [...]]]> This question came in from the contact form here on my website:

The answer is that this not only possible, it is actually fairly simple. Really all you need to do is record your daily deposits right to an income account. You should make it consistent with how the funds actually come into the bank account so if you have some checks in one deposit and credit card payments in another deposit then you should record each of these separately. Keep in mind that different credit card types fund separately so again these should be a separate daily deposit.

What I show you in the video is that I suggest setting up one generic customer in QuickBooks and then run everything through that customer. In fact with companies that sell online who have 1,000’s of customers and don’t want to set up and track each of these customers in QuickBooks we just have them create one customer called “online sales.”

When recording refunds the money will come out of your bank account so in QuickBooks that means recording a check with something other than a check # on the check # line. The payee can be the generic customer that you set up. I would suggest putting the customer name in the memo so that if you are ever trying to track down that refund in QuickBooks you can search the memos for the name.

Everything else works the same as any business. Expenses get recorded and paid, you will create all of your vendors and payroll of course will be processed in the usual manner. You can watch my videos on 2 methods for how to enter payroll properly in QuickBooks.

The quick and simple answer is that QuickBooks does a lot of the work for you. The key is in setting your fiscal year in the company information. Once you set that date, QuickBooks will post a closing entry which takes you net income for the year and closes it out to the Retained Earnings [...]]]> Kenneth wrote in a while back and asked if I could cover how to close out and transition your QuickBooks company file into a new year.

The quick and simple answer is that QuickBooks does a lot of the work for you. The key is in setting your fiscal year in the company information. Once you set that date, QuickBooks will post a closing entry which takes you net income for the year and closes it out to the Retained Earnings account. You can set the fiscal year by clicking Company -> Company Information and then editing the company information.

Click here to view the embedded video.

If you run a balance sheet and P&L for the year you will see the net income from the P&L sitting on a line item in the equity section of the balance sheet called “Net Income.” Next if you push the balance sheet date to Jan 1 of the following year that net income line on the balance sheet will most likely disappear (unless you have income or expenses on the books on Jan 1). You will also see the retained earnings account either increased or decreased based on the net income or loss for the prior year.

It follows naturally that as part of the yearend process you should review your balance sheet and P&L and do any cleanup needed (eg writing off bad receivables) etc.. Other than that the only other thing you may want to do is close out all other equity accounts on the balance sheet as of 12/31 to Retained Earnings. So if you have member or shareholder capital accounts with distributions on the books you will want to close these accounts out to retained earnings. The only one you will never want to do this with is Capital Stock. That account should always remain intact.

Jan 1 is a great date to reserve for these closing entries because there is not likely to be any business done on New Years day. In fact what I will do is run a P&L for Jan 1  – Jan 1 and if there is any activity there I will click through to each item and push the date to Jan 2. This leaves Jan 1 as a perfect date for special entries such as closing the equity accounts out to retained earnings.

The video above gives you a great demo of what this looks like so please enjoy the video and post your comments below!

Click here to view the embedded video.

Melissa suggests starting with a piece of legal [...]]]> Are to do lists really useful? Do they help us or hurt us? I suppose the safe answer is that like anything in life if we use them properly they can be useful. Melissa Galt recently put out a blog post in which she offered a tip for how to break up you to do lists into bite sized chunks that you can easily digest and accomplish.

Click here to view the embedded video.

Melissa suggests starting with a piece of legal size notepad paper and then moving items onto index cards. Then each day you can re-write anything that needs to be carried over into the new day. She starts off by acknowledging that she knows about Evernote and that she is not suggesting that people us it. This is strictly a tip for writing the items out.

As an Evernote junkie I really couldn’t help myself after watching Melissa’s video. I had to do my version of the tip on how to do this using Evernote, especially since I have a system along these lines that I have found to be very powerful and effective on a lot of levels;

1. Keep a “Daily Notebook” with a note for every single day of my life. Even days off, holidays and weekends.
2. Start of the day by clearing my head. Writing a narrative on that day’s note.
3. Then break it up into bite sized chunks right there on the note and section it off between what I will do today and what I will do at a later time.
4. Using evernote you can link notes back and forth so that you can easily reference information way after you made notes about it.
5. Never lose or destroy your notes because they’re digital.
6. Easily find information based on context (chronology) and of course using “search” technology which is impossible to employ on a physical piece of paper.
7. Easily make space for new ideas that fit in the middle instead of having to draw lines or worse, re-write everything!
8. Click the check box when a task is completed so you can feel that sense of accomplishment.

I could go on but I think the 8 items listed above give you the picture of why I love Evernote so much for this kind of thing.

YES! I do believe that to do lists are a very powerful tool for getting things done as long as you have a system for completing the tasks and something you can do as you complete them so you can feel good about what you are accomplishing. Don’t minimize the importance of that. It makes a big difference in our productivity when we feel good about what we are doing.

When I recently interviewed Eric Pulaski, CEO and Founder of SmartVault I was blown away by what SmartVault can do.

I have used and still do use several file sharing services including Drop Box, ShareFile, and Google Drive. ShareFile is expensive and I have been looking for an alternative to it for some time. The key to ShareFile for me was that I was able to have a branded login portal through which I could [...]]]> Click here to view the embedded video.

When I recently interviewed Eric Pulaski, CEO and Founder of SmartVault I was blown away by what SmartVault can do.

I have used and still do use several file sharing services including Drop Box, ShareFile, and Google Drive. ShareFile is expensive and I have been looking for an alternative to it for some time. The key to ShareFile for me was that I was able to have a branded login portal through which I could send and receive files and be very specific about where the files I received were going. Drop box does not let me receive files in this manner and Google drive can’t be branded.

Probably the most compelling thing about SmartVault as a file sharing app is that there is no chance of conflicting files. Every other file sharing service has this potential disaster. The reason SmarVault prevents this is that the files STAY in the cloud. There is no sync. What you do is using the desktop tools that are downloaded when you set up your account you can add a “mapped drive.” The mapped drive opens up a portal directly to your files on SmartVault in the cloud. So when you open a file you are accessing the one and only version of the file that exists. For that matter if you have the folder shared with someone else and they attempt to open the file at the same time and in the same manner they will get the same kind of warning they would get if the file were shared on a LAN (Local Area Network). Essentially they would be told that the file is ‘locked for editing’ because you are in it.

The other compelling feature of SmartVault for me was the price. SharFile charges me $70/month for 10GB of space and a 10GB/month bandwidth limit. SmartVault has no bandwidth limit and I get 4X the amount of space for only $30/month more than what I am paying SmartVault and additional storage can be added at a very reasonable rate (my opinion of course).

As always when I fall in love with an app I check into the affiliate program and SmartVault does have one. So if you are inclined to try it out please use this affiliate code: nerd-svib

I have to be honest. I have always hated doing 1099s. There has never been an efficient way to do this and since it only comes up once/year you really don’t get to.practice at it and find newer and better ways to get it done more efficiently. I hate wasting time chasing down mindless details, rerunning reports to make sure everything is showing up and then trying to fjgure out what is wrong when [...]]]> Click here to view the embedded video.

I have to be honest. I have always hated doing 1099s. There has never been an efficient way to do this and since it only comes up once/year you really don’t get to.practice at it and find newer and better ways to get it done more efficiently. I hate wasting time chasing down mindless details, rerunning reports to make sure everything is showing up and then trying to fjgure out what is wrong when it doesn’t work.

Then there are those awful forms you have to print in triplicate. At my rates it costs the client a fortune to have their 1099s filed and I hate sending them that bill because what are they really getting for it? The satisfaction of knowing there is one less thing now that the government will come looking for.

OY!

Enter Track 1099! Thanks Doug Sleeter for introducing me to this product. There are still a few things that need to be handled in getting this setup, but once you have it set up the filing is easy and the best part? No forms to buy, nothing to print and nothing to mail out! I love that.

Reality is that even with setup assuming your 1099 info is all set in QuickBooks you should be able to get this done in about 25 minutes and spend less money in the process. When you sign up for Track 1099 you will find an option to import your data. As you’ll see in the video I was thrown off for a minute because the instructions say to go down the list in order but import is the last one and that process overrides several options in between. So the instructions could be a little better for a first time user. Nonetheless you will be asked to make sure you have the sync manager set up properly in order to do this.

Setting up the sync manager is easy. Well maybe not that easy. You may already have it set up. Click Edit > Preferences > Integrated Applications then go to the company tab and check the list. If you do see it there, select it and click “Properties.” Make sure you have the box checked off that says “Allow this application to access Social Security Numbers..” As long as this information in in place then you will be able to sync your data to Track 1099. In the video above you will see me stumble through this a bit because I was setting it up myself for the very first time. If you do not already have it set up, watch my video so you will learn from my mistakes You are syncing to “QuickBooks Online” but that is not a reference to the QuickBooks Online “edition” of QuickBooks. It just means you are syncing to their online servers so that 3rd party apps like Track 1099 can access the information.

Once you do have everything setup properly and then assuming the vendor information is all set up in QuickBooks Track 1099 will pull in the data. You will still get an opportunity to correct any errors and you need to have an e-mail address for the 1099 Vendors so the 1099s can be e-delivered to them.

Even with my fumbling around to figure out how to e-file 1099s at the last minute you will see that if you follow along you should be able to have the process completed start to finish in about 25 minutes. Please post your comments and questions below!

-David Byrne, Talking Heads

What do you think? Please post your comments below.

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Ever since I was a kid, I have loved to listen to music. When I was in high school, I was known for walking around with my Walkman and headset. Every opportunity I got, I was listening to something—even when I went to sleep. Thinking [...]]]> “Singing is a trick to get people to listen to music for longer than they would ordinarily.”

-David Byrne, Talking Heads

What do you think? Please post your comments below.

Click here to view the embedded video.

Ever since I was a kid, I have loved to listen to music. When I was in high school, I was known for walking around with my Walkman and headset. Every opportunity I got, I was listening to something—even when I went to sleep. Thinking back, I can remember many songs and how they were associated with specific times and events in my life because that was what I was listening to a lot at the time.

This theme carries through into today. I love to listen when I work, and now with my brand new Beats By Dre headset, I am enjoying it even more.

Music Apps You Can Use At Work

There are many applications for listening to music at work (or anywhere) but there are a few that stand out.

• Windows Media Player
• iTunes
• Pandora
• Spotify
• MySpace

iTunes and Windows Media player are still apps that run directly on your desktop. In both cases you can only play music you’ve purchased and downloaded.

The first web-based application that I remember really gaining traction is Pandora.  I still use it and I still love it. With Pandora it is simple. You choose a song or artist and ask Pandora to start playing music based on that. You can add as you go, and you can “thumbs-up” songs to let Pandora know that you want more like this, or “thumbs-down” a song to say that you don’t like that. Ultimately, Pandora picks the songs for you based on what their algorithms figure you will like—and they are surprisingly accurate. It isn’t very often that I hear a song I do not like when I am listening to Pandora.

Spotify came along and I started using that because it offered a lot of what Pandora offered but also allowed me to choose my music. I like setting up playlists so I can choose exactly what I want to listen to—but it can also be time consuming. So I have been going back and forth between Spotify and Pandora. What I really like about Spotify is the mobile app. It’s especially great for the gym, when I want to be listening to a workout mix. Spotify has a radio option but I have found that it is not quite as good at finding songs I will like. Pandora still seems to be the master at this.

Enter New MySpace. Remember that first social network—the one we all belonged to for so long and never thought we would leave? Well, it’s back but without the noisy graffiti-like pages that look like the bad coloring-book art of a thirteen-year-old kid.

The New MySpace has all the features of the other music sites—and it’s completely free! It also has the social features so you can “connect” with your friends, the artists, and even the songs. I have already found the radio feature to be very good in terms of being able to choose only songs I like, and this one has the best social features so far. I can see what my friends are listening to, check out their music, and easily add music to my own playlists.

I LOVE it for listening while I am at work. I can set it up and let it go, playing for hours while I get things done. For those times at work when I don’t need to interact with people directly, I can just press play and go. I know that some people cannot concentrate with music playing, but for me, it is the opposite. Listening to music that gets me pumped enhances my ability to put my head down, get super focused, and really bang out some high quality work.

The New MySpace was available by invite only, but now everyone can join. If you still have your old MySpace account, you will easily be able to convert your old profile over.  When all is said and done, the only thing the New MySpace has in common with the old MySpace is the name (URL). Everything else is gone. There are no blogs or other “noise.” This one is ALL about the music!

I believe the New MySpace will be a powerful competitor in the music-app world, especially if they wind up with a mobile app!

What do you think? Please post your comments below.

Please post your comments, questions, and suggestions below!

Click here to view the embedded video.

Try The Brain Here:

Think Faster Work Smarter

It’s that time again when everybody is thinking. We’re thinking about how to wrap up last year and we’re thinking about the year to come. If only you could create a map of your mind to keep track of all of your ideas! With so many [...]]]> The best way to learn and retain information is based on the way YOU think!

Please post your comments, questions, and suggestions below!

Click here to view the embedded video.

Try The Brain Here:

Think Faster Work Smarter

It’s that time again when everybody is thinking. We’re thinking about how to wrap up last year and we’re thinking about the year to come. If only you could create a map of your mind to keep track of all of your ideas! With so many goals in so many areas, you may be asking yourself how to organize it all so you can prioritize and reference the ideas in an intelligent manner. We want to find a way to organize our thoughts according to how we think. Making a list of ideas or the proverbial “white board” may not always work. Or it may be a good first step before you realize your thought process will be much better served with a mind map.

What is mind mapping?

A mind map is a tool for organizing your thoughts and ideas. It often takes on the look or form of a flow chart. Ideas usually start with a single thought. Those thoughts give rise to still more thoughts. Mapping the mind will give you an outline of your thoughts and ideas in a manner that is consistent with how YOUR brain works.

You start with a thought and then draw branches (or lines) to other related thoughts. Then you can begin linking ideas. This should give you a clear enough blueprint of your thoughts that when you go back to it, it will make perfect sense to you. Even if it doesn’t make perfect sense, you should be able to wrap your head back around what you were thinking without too much time or effort because you are looking at a map of your own mind.

Business Software for Mind Mapping

There are many products out there for creating mind maps. There was a time when this concept was executed right on paper but you can imagine how quickly that will become unwieldy, especially as you need to add and edit your thoughts.

There are many software applications out there that can be used for mind mapping. A quick Google search for “mind mapping software” yielded 4,730,000 results. So, I am sure you can find lots of information to keep you busy learning about mind mapping software on the internet. There are also plenty of articles that give you an overview of several mind mapping programs. For my purposes here, I want to focus on one particular program that I have grown to love.

It’s called “The Brain” (affiliate link). Note: First I fell in love with this program, THEN I asked about and became an affiliate!

I like this one because it goes way beyond just mind mapping. I think you will agree that the UI (user interface) is very engaging. It makes this whole process a lot of fun.

Each thought that you create in The Brain has its own folder associated with it so you can store documents specifically in that thought. Any kind of document can be stored and then opened directly from that thought. This makes it a great project management tool for any small business (and for the big boys, they have an enterprise edition).

Each thought has a notepad so you can write up notes. Of course you can also attach a word doc with your notes, but sometimes it is easier to have the notes right there.

You can share your brain with the web brain product. As with many applications these days, your “Brain” can be synced to the Cloud so you can access it from anywhere. You can also share your brain with others either publicly or “unlisted” which means only those with the link can see it. You can also embed your brain on a web page. When I discovered this, my brain was flooded with ideas. I started browsing other public brains to see how people were using them.

Here is a brain I’ve shared on my personal blog called “What Is Seth Thinking?”

How To Create A Mind Map

This is probably best demonstrated using a product, and of course, you can see this done in my video above. The basic idea is that you start with a “home” thought. That should be something very general like “My Brain” or “My Business.” Then you create the second level of thoughts. So, if you really want your whole life in this one mind map, you might start with yourself. Then underneath that, you would have personal and business. Then you branch out from those. In a “linear” format, it might look something like this:

• My Brain
  • Personal
    • Health & Fitness
    • Hobbies
    • Family
    • Friends
  • Business
    • Accounting
    • Marketing
    • Social Media
      • Facebook
      • Twitter
      • Google Plus

Of course, using this format style of outline works, but it’s a pain to keep going back and adding levels. Moreover, where are you going to attach files and link ideas and thoughts together? This is where you can start to see the power of a good mind mapping software package very quickly.

Mind Maps Look Pretty but How Can I use One?

Presentations

For one thing, if you want to stand out among all the people making presentations with PowerPoint, you could give a presentation using The Brain. I guarantee you, if you use The Brain, people will not be asking you about what you presented—they will be asking you about the program you were using! It has happened to me!

Project Management

There are many features of this program I have not even touched which will help you see how powerful a mind mapping program like The Brain can be for your business. If you want to manage projects, The Brain is a great way to do this! You start with the project. Then create the thoughts based on areas. You can also create a thought for each person involved and link them to the tasks they’re responsible for.

Organizing and Planning Your business

How about planning? Did I mention that The Brain has a calendar that syncs with Google Calendar? So how about adding a section of your brain that reflects the different areas of your business;

• Operations
• Marketing
• Accounting

Within Marketing you might have “Social Media,” and within that, each social site you are on or want to be on, as well as a thought in which you outline all of your social media campaigns.

Organizing Documents

Another very simple use for mind mapping software (particularly The Brain) is organizing your documents. As I mentioned above, each thought has its own folder, and you can store documents in there. So set up a thought for your clients, and keep important documents there. You can create thoughts within a client for different projects or areas that you need to keep segregated. You could even keep QuickBooks backups in there, but DO NOT keep a live QuickBooks file in there. Even the backups might start to add up in terms of storage space, so Drop Box or ShareFile might be a better place. But, you can link a thought directly to that folder, so now you are using the brain to browse your files much more easily.

Bookmarks

Keep track of websites that you want to come back to, whether for research or personal use. This way, you can write up notes about that website, why you bookmarked it, and so on. This comes from personal experience where I have bookmarked sites using my browser’s bookmark feature and then come back months later to discover I couldn’t for the life of me remember why I’d bookmarked a site, or what I hoped to do with it.

If I could, I might be inclined to spend an entire day just “mind mapping!” Oh, wait! I’ve done that! Okay, so I am a nerd and a techno geek and I love this kind of stuff. All the better! I can save you time and show you what I love and why.

I think that’s enough for now! Please post your comments, questions, and suggestions below!

Many people tell me that getting focused on the accounting in their small business is about as exciting as dental surgery. My response is that what they are really saying is that succeeding in your business is as exciting as dental surgery and if that’s the case then you should close the doors to your business and get a 9-5 job before you do a lot of financial damage to yourself and your family. [...]]]> Click here to view the embedded video.

Many people tell me that getting focused on the accounting in their small business is about as exciting as dental surgery. My response is that what they are really saying is that succeeding in your business is as exciting as dental surgery and if that’s the case then you should close the doors to your business and get a 9-5 job before you do a lot of financial damage to yourself and your family. I am not saying that every small business owner has to have a degree in accounting. I am saying that every small business owner should have a good working knowledge so that they can read a P&L and Balance sheet, know if it looks right and understand what these statements say about their business. Since Payroll and related costs like health insurance are a substantial piece of this I do place a lot of emphasis there, especially when it comes to financial modeling.

Modeling your health insurance costs is a matter of asking the financial model to determine how many ‘eligible’ employees there are on the payroll for a given period and multiplying that by the rate per employee. Most of this is simple. Determining whether or not an employee is “eligible” is the one complicated part and to that end is outside the scope of this post. I will show you this in the live webinar. Everything else you need to model the health insurance costs for your employees is covered in substantial detail here. You will learn the following:

• How to create the assumptions
• How to define a name to make it easier to write the formulas
• The “Countif” formula where the criteria is negative (ie not equal to..)

If you haven’t already please watch the video and then post your comments and questions below, even if just to tell me that this was helpful. It helps me to know!