Setting Up Wholesale Billing in QuickBooks Accountant

The #1 bottleneck of the new QBOA trend I have seen over the past couple months is setting up Wholesale Billing. Below are steps/screenshots that you can forward to your accountant who is struggling.

What does the message look like when they log into QBOA as a firm owner and have not yet set up Wholesale billing.

First step is to click Get Started:

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Check off the boxes below and click Continue:

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You don’t even have to enter a credit card yet. It just turns on the option to do wholesale billing. Note: IF YOU SEE NOT MESSSAGE, YOU ARE NOT A FIRM OWNER FOR QBOA, the firm owner set you up as a User. Only Firm Owners can see the wholesale billing options/workflow.

Now, what does the Gear Icon look like for options. Your Billing Profile will show the list and due date of consolidated bill. Add Clients to Consolidated Billis when you want to add existing QBO clients that fit the profile to your consolidated bill. There are some restrictions re what existing clients I can add to my wholesale billing:

  • Essentials or Plus only, not simple start
  • No Payroll
  • QBOA admin is the master admin and the accountant user on the QBO client file. If they are not a Master Admin, they will need to transfer master admin to themselves. This requires logging into the QBO file as the master admin, removing themselves as the accountant user first, inviting themselves as a company admin, transferring the master admin to them, then adding themselves back as the accountant user (They have to first remove themselves as accountant user cause QBO will not let you add the same email address to the user list twice. Here is a video on transferring Master Admin.)
  • Subscription must be active or in a free trial

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Bonus Tip:

When setting up a new QBO client from QBOA, but the client is paying (not wholesale), when is the credit card entered? (For there is no free trial if the QBO sub is created from QBOA)…

You enter nothing at this point:

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Once the client file is on the list, open the file, then you will see option to update billing with credit card:

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Or go to gear icon/ your account, and click on Subscribe Now tab.

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Accounting Essentials for Start Ups, Episode II: To Deduct or Not To Deduct?

Guest Blog by: Kerri L. Kutlenios, CPA

One of the most common questions I am asked by new (and seasoned) entrepreneurs is regarding the definition of a business expense.  The following is an example of a conversation I have had with a client:

Client: “Can I deduct the cost of my office supply purchases during the year?”

Me: “Of course!  Those office supplies provide you with resources necessary to sell your valuable widgets, and should absolutely be deducted.”

Client: “How about the shopping trip to New York with my family last Christmas?  I wear that stuff to the office all the time.”

Me: “How much time would you like to spend with the IRS this year?”

Obviously, this is an extreme example of a business vs. non-business expense.  However, there is a pretty wide range of costs you will be able to deduct for your business, all completely legitimate in the eyes of the IRS. Many costs are pretty self-explanatory business expenses (employee payroll, liability insurance, etc.), but there are a few broad areas that may be baffling to the new business owner.  I’ll try to boil down the common categories of these costs:

 

Business Start-Up Expenses

Before you even open your business, you will most likely incur some expenses to investigate whether your business idea is viable, legal and accounting expenses to draft organization documents and set up your accounting software, and costs to recruit and train your employees before you open your doors.

The good news is, the above expenses are all considered legitimate business start-up expenses and are fully deductible.  The bad news comes into play regarding when you can deduct them.  The IRS allows the first $5,000 of your start-up expenses to be deducted in the first year of your business.   Anything over the $5,000 will be amortized (or spread out) over 180 months.  And, if you incur more than $50,000 of start-up expenses, your allowable deduction phases out dollar for dollar over the $50,000.

The cost of buying equipment and the modifications to your physical space may also occur before you open your business, but these expenses may be capitalized and subject to depreciation, and don’t qualify for the start-up treatment (but keep reading!).

Regardless of when, and if, you can deduct your business start-up expenses, you should keep track of what you spend, and make sure your tax preparer knows about all of them.  You might be pleasantly surprised with the benefit you may receive!

 

Business Travel and Entertainment Expenses

OK people.  This is the area where I’ve seen clients get a little crazy with the deductions.  The IRS has pages of regulations on what is considered a legitimate travel and entertainment expense, but let’s break it down to the overall purpose of this deduction.

A business travel expense is when you are traveling away from home (and cannot reasonably stay home), primarily for the purpose of pursuing or growing your business.  All travel costs from when you leave your home, to when you return, are 100% deductible if the primary purpose of your trip is business.  The cost of meals during travel for business purposes are 50% deductible.  And make sure to keep documentation (receipts) for everything.

So the family trip to Hawaii when you had lunch with a former colleague for an hour to reminisce about the good old days?  Not deductible.  The three-day trip you made for a business-related conference and met up with a friend in the area for dinner?  Deductible (with the exception of the meal expense).  See the difference?

In conclusion, in determining whether your travel and entertainment is business related, if there is any doubt, don’t deduct, or discuss with your tax preparer.  I don’t mean to be the buzzkill accountant, but any benefit you may get from deducting your annual Cabo trip will be eclipsed by the time and headache of a potential IRS audit.

 

Costs of Purchasing Business Equipment or Modifying Your Physical Space

Even if you are starting a service-based company out of your garage, you most likely will need to purchase some new equipment to use in your business.  An asset used in your trade or business is deductible, but again, when the deduction takes place comes into question.

The question of whether to expense or capitalize (record the item as an asset and depreciate) will depend on your internal policy.  Most companies set a policy to capitalize assets that cost more than either $500 or $1,000, depending on what you will be buying.  For instance, if you anticipate that you will be buying computer equipment on a regular basis to keep up with technology, you may want to set your threshold at $1,000, to avoid constantly adding and scrapping assets.  To illustrate, if your policy is to capitalize any asset over $1,000, a $700 laptop computer would be expensed immediately, but your $2,000 computer server would be classified as a business asset and depreciated (spread out) over the estimated useful life of 5 years (the IRS guidance for computer hardware).  Whatever policy you decide, you must follow it consistently – in other words, you shouldn’t change the policy to increase or decrease expenses from year to year.

If you need to modify a physical location to accommodate your business, the cost of the improvements will most likely be capitalized and the cost amortized over the appropriate useful life of the improvement.  A general rule of thumb regarding if an improvement is considered equipment or part of the structure of the space would be if you could easily remove the improvement if you were to vacate.  For instance, new built-in desks and cabinetry would be equipment and depreciated faster (higher deduction), but replacing your HVAC system would be a building improvement and amortized over a longer period (lower deduction).

Consultation with your accountant or tax preparer is highly recommended to ensure proper classification and deduction of business assets you are purchasing.  Also, Federal legislation may change from time to time that may accelerate depreciation (and deductions) for business assets, to stimulate investment.  Your accountant should be on top of these changes to ensure you are maximizing your annual deductions.

So, you’re all set!  Clear as mud, right?  If you’re still confused, you’re not alone.  Your accountant should be an ally to help navigate through the deductibility of your business costs.  Proper documentation and accounting application of all costs from Day One will ensure helpful and accurate financial reporting as your new venture continues to grow and flourish.  Hint: this is also a mini-preview of Episode III, stay tuned!

 

KLKWho is Kerri? Just one of Stacy’s bestest friends EVAR. They’ve known each other since kindergarten (and yes, she probably knows more about her than Stacy would like to admit) but here’s some more interesting stuff about her: she’s also CPA licensed in Arizona, spent 17 years as both an auditor and accounting consultant in public accounting, and as a controller for an international franchise company, before venturing out with Liaison Accounting and Consulting, LLC, to assist start-ups and sophisticated small businesses with outsourced controller and financial consulting.  Kerri believes that, although some businesses may not have the resources for a full-time financial professional, they shouldn’t be deprived of the benefit that is provided to more established businesses.  A graduate of Michigan State University, she bleeds green and white, and takes pride in being told she “doesn’t seem like a typical accountant” – just what you’d expect from a BFF of the chick with the hot pink hair, right??.  You can contact Kerri at kerri@liaisonaccounting.com.

 

Are You a Trusted Advisor or a Trusted Servant?

by: Jennifer Hetherington, TSheets.com

TSheets gives back to ProAdvisors (a.k.a Trusted Advisors) in the 10k Challenge

As a ProAdvisor, do you find yourself working for your clients as a trusted advisor or a trusted servant?

One of the questions we ask in our humorous “Are you a Trusted Advisor” self-help guide, is if you are constantly fixing the same client problems month after month (a.k.a babysitting them) or recommending products to meet those needs and help their business grow more efficient, profitable, etc. As a trusted advisor, the Intuit resource center, apps.com is THE best way to find the highest rated and reviewed QuickBooks add-on’s for your clients.
As a time (and money) saving tool for small and medium businesses, we hear from ProAdvisors often, who have referred their clients to try TSheets Time Tracking and thank us for helping them solve one their clients’ biggest payroll problems (note: acting as trusted advisors, versus trusted servants). To show our appreciation for their referrals, we began offering the TSheets PRO program, with benefits such as a free TSheets account, discounted client pricing, dedicated support and training and more.

Due to the abundance of referrals in 2014 to TSheets, we decided to host a 10k Referral challenge, giving away $10,000 to ProAdvisors, a.k.a trusted advisors, who are interested in solving the biggest payroll challenge of their clients this year. No. Joke. Simply sign up to become a TSheets PRO (comes with a free TSheets account, and discounted client pricing) and refer your clients to simply try TSheets for a free 14-day trial.

Find out why ProAdvisors, Accountants, Bookkeepers, business owners and employees all love TSheets, and be a part of the TSheets ProAdvisor 10k Challenge

How to Track Products and Services in QuickBooks Online (QBO)

by: Woody Adams

This 7 minute video details how to track items and services you sell in QBO.

You will learn what QBO skus support two sided items and inventory, as well as how to purchase, receive and sell products and services in QBO.

Accounting Essentials for Start Ups – Episode I: What Type of Business Entity Should You Choose?

Guest Blog by: Kerri L. Kutlenios, CPA

So you’ve got a great idea for a new business, discussed your new venture with friends and family, and are ready to take the leap into entrepreneurship!  One of the first decisions you will make to set up your new business is unfortunately, kind of legal and boring.  But, can cause headaches down the road if not handled correctly.  So what type of entity should your new business be?  The answer will depend on a few questions:

How much do you want to pay in taxes every year?

 Trick question!  As little as possible, right?  I’ll try to keep this as brief as possible, because even though I’m an accountant, I know that for many, taxes=snooze fest, and this is really important:

A C-Corporation is taxed at the entity level, meaning you will file a tax return, and may owe taxes, for your business, and you will also file your 1040, and may owe taxes, personally.  If you are earning a paycheck from your C-Corporation, you are paying tax on the wages on your 1040, along with employer payroll taxes through the Corp.  If you pay a dividend to yourself from the Corporation, you will be taxed on the income on your 1040.  This is the concept of “double taxation” you may hear thrown around by us accountant-types.  Unless you’re a fan of donating to the dysfunctional machine we call our Federal government, this scenario is not very pleasant.

Profit or loss from an S-Corporation or an LLC “passes through” to your 1040, and all tax is paid on your individual tax return.  In many cases, if you pay yourself a distribution from your S-Corporation or LLC, that distribution is not taxable when paid to you, however it will reduce your ownership value, or basis, in the company (the basis discussion can fill up another post, so I won’t go into detail here).

How much liability are you willing to assume personally?

This is a very important issue to consider with your entity selection.  If you are leaning toward a sole proprietorship based on ease of setup and tax filing requirement, keep in mind this entity will not provide you any protection of your personal assets in the event of a lawsuit.  For instance, if a suit is brought against your business, your home and other personal assets may be attached to the business assets.  For this reason alone, a single member LLC would be the better option, as this will limit the liability against you personally.

How much time and money do you want to spend to set up your business?

Let’s be honest, the majority of new businesses will not have an unlimited budget, and the seed money you will have may need to be spent on inventory and the build-out of your operating location, not on attorney fees for your business set up.  A corporation (C or S) is typically the easiest to set up, and requires usually a minor filing fee, depending on the state where you are registering your business.  However, an LLC will require drafting an operating agreement, which outlines the overall allocation of business profit, loss, and risk to each member.  This document is drafted by an attorney, and will require a higher initial investment to set up.

How many owners do you have, or will plan to have in the future?

If you are the only owner, and plan to be the only owner for the life of the business, a sole proprietorship or single member LLC may work for you.  If you are planning to have several investors, an LLC or C-Corporation does not restrict the number of owners you may have.  However, S-Corporations limit the number of owners you may have to 100 (which is still a heck of a lot, so may not be a deal breaker).

What type of owners will you have (individual, partnership, etc.)?  This is important if you plan to work with venture capital investors.

S-Corporations restrict the type of owners you may have, for instance, the IRS does not allow for entities other than individuals and certain trusts and estates to be a shareholder of an S-Corporation.  In addition, non-U.S. entities cannot own an S-Corporation.  So, if you have a VC interested in buying in, an S-Corporation may not be an option.

How many tax returns do you want to file?

If you only have one owner, the annual profit and loss of a single member LLC or sole proprietorship can be filed on Schedule C of your individual tax return, which may reduce your tax preparation fees.  However, Corporations and LLCs with multiple members will be required to file a separate tax return.

Hopefully you’ve read through this, have it all figured out, and you’re convinced I’m an accounting genius.  However, if you’re still struggling with this decision, first of all, I’m glad you’re struggling a bit!   This is a big decision and shouldn’t be taken lightly.  I can advise you that, if you have one or a few individual owners, the LLC, single member LLC, or S-Corporation is the way to go, with the S-Corporation being slightly easier to set up.  And, if you decide to make a change down the road, you can switch entities, but you may have some tax issues to navigate in that process (again, another blog post entirely).

Congratulations on your new venture, good luck, and stay tuned for Episode II!

 

 

KLKWho is Kerri? Just one of Stacy’s bestest friends EVAR. They’ve known each other since kindergarten (and yes, she probably knows more about her than Stacy would like to admit) but here’s some more interesting stuff about her: she’s also CPA licensed in Arizona, spent 17 years as both an auditor and accounting consultant in public accounting, and as a controller for an international franchise company, before venturing out with Liaison Accounting and Consulting, LLC, to assist start-ups and sophisticated small businesses with outsourced controller and financial consulting.  Kerri believes that, although some businesses may not have the resources for a full-time financial professional, they shouldn’t be deprived of the benefit that is provided to more established businesses.  A graduate of Michigan State University, she bleeds green and white, and takes pride in being told she “doesn’t seem like a typical accountant” – just what you’d expect from a BFF of the chick with the hot pink hair, right??.  You can contact Kerri at kerri@liaisonaccounting.com.