So we promised a part three on the QuickBooks Online Harmony feature series which will deal with vendors and payments on QBO.
Money going out is never a great feeling. Nevertheless getting your payments in order is absolutely crucial. No one wants a lag in their payment schedules – this could mean strained relationships with suppliers, inventory deficits and the like.
Money owed is a big liability irrespective of the money value associated with it. A major component that affects cash flows, payment management should be accurate. Software like QBO can help maintain this rhythm. Without further ado, we get into the payment features of QBO.
1. The payment interface
The vendor interface and customer interface on QBO is alike. It’s friendly and easily navigable. Again the design is simple enough for a non-accountant to operate. This is perhaps a major winner for QBO – the refreshing display page.
The three tabs on this screen show us how many bills are open (money owing), how many are overdue (past payment date) and how many have been paid in the last 30 days. Any overdue bill is highlighted on the interface against the respective vendor’s name.
2. Vendor information
While entering vendor information, apart from the regular items you complete like name of vendor, company, display name etc, you can enter the credit terms as well as add special notes.
Credit terms mean the date when you pay the vendor after a bill is raised. This can be fixed while you create a vendor account. So you know you have to pay your rent the 5th of every month, you just add in the detail corresponding to it.
In this context – a short explanation of what is a vendor bill may be appropriate.
Say you receive an invoice from your landlord to pay rent; a payment transaction needs to get created for that. Accountants may choose to directly pass an entry for the expense rather than create a bill. But, creating a bill is beneficial to ensure that payment is recorded correctly.
For this, you replicate the landlord’s invoice in the form of a vendor bill – a document which captures the salient features of a payment to be made. This can be done by a non-accountant quite easily. As long as you can ascertain the nature of the expense, you can put it in the right account head. The marvels of modern accounting software!
Coming back to our subject, while entering your vendor’s information, you can add notes that may be helpful in the future. For example, you deal with two courier companies – one local and one international. Both have similar names. Simply put down this detail in the note section. For anyone who is confused between the two, the note would be handy.
3. Creating an expense claim for an employee
Currently QBO does not differentiate between an expense payable to an outside supplier and an employee. Most organisations have transactions relating to employee reimbursements. When an employee spends money for legitimate business expenses, he has to be reimbursed for that spending. For example, an employee goes to meet a client and needs to claim the taxi expenses relating to it.
For this, the option to be used is the same as the one for vendor bills. Under the “Party name” you can select the name of an employee. An employee can be set up using the “+Add new” button under the party dropdown option on your vendor billing screen.
Once you have an employee set up, any payment owing to him can be recorded through the expenses screen under his name.
4. Adding attachments
We like to speak of winning features in a cloud accounting software and here we have one. This is a wonderful feature where you can add attachments to a specific expense. For example, you have a telecom bill – like Singtel for which you have created an expense. Now you have a ready option to attach the scanned copy of this invoice into the specific area for “Attachments” in the expense screen. It is a drag and drop option and the maximum size for each attachment is 25 MB.
This is a handy option to maintain clean documentation. In Singapore, electronic documents are accepted for most purposes. So once you append the document onto the correct transaction, it is saved on the cloud. From here, it is very unlikely that it will get lost, torn, misplaced or fall victim to any sort of unsavoury circumstances that might befall a physical document.
5. Recurring billing
So, what do we do when we have the same expense repeating month after month?
For example, we have rent payments every month for SGD 345 due to be paid by the 5th of each month.
Here QBO offers you “repeat billing option”. When you create an expense, you can see a “Make recurring” option at the bottom middle section of the screen. Click on this and you can quickly set up a repeat bill option for the expense you need.
On the “Recurring expense” tab, QBO lets you fix the interval, dates and other salient features for a repeating expense. Easy and hazzle free, you don’t need to worry about forgetting that payment.
On the bottom right hand corner, you can then click “Save template” to save the recurring template you just created.
6. “More” for you
The expense screen features a “More” tab right at the bottom.
Here is a summary of the items available here for you,
Copy – This allows you to create an exact replica of the bill you just created. This can be used if you have two bills for the same vendor, so the bill description changes, but the vendor information remains intact.
Void – Use “Void” if you do not want to permanently delete an expense bill. What is the difference? Voided bills are still available in the system. Deleted ones are out of your system for good. As good business practice, we usually recommend that users void invoices – for expenses, this is an option available.
Delete – When you want to delete an expense completely from your system, use the “Delete” option. Do note that once the expense is deleted, you would have to create a new one, in case you need it again. The deleted expenses cannot be recalled.
Transaction journal – You might have wondered after creating an expense – what really happens to it. How does an expense find its way into the company’s profit and loss account? Use the “Transaction journal” to find out. Journal entries corresponding to an expense gets passed in the background every time you create an expense bill. You have heard of double entry bookkeeping concept, right? Looking at a Transaction journal will help you understand the double entry passed for the expense.
Audit History – That’s right. If you want to check the actions done on a specific expense, have a look at the audit history. You will get a line by line history of the particular transaction – complete with the name of the person responsible for each action item. Sounds good? Imagine how helpful this is for an audit or checking process – priceless!
That’s the last feature we wanted to bring to you on QBO vendors. Here is hoping that you found something useful from our write up. We will have one last article on “QBO Reporting” coming up soon. Watch this space for more. Happy accounting!
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The post Process your expenses and claims in half the time: QBO Harmony – Part 3 of 4 appeared first on Singapore company incorporation | Cloud bookkeeping with Xero and QBO.