Microsoft Office Accounting Part 14- Setting Up Accounts

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is SETTING UP ACCOUNTS.

The accounts section of the company setup wizard enables you to add or edit new financial accounts as well as setting their balance as of the start date of the company.

Click Next to see the list of accounts that exist for you company. These may have been selected earlier, if you chose a specific business type or they may just be a list of the system accounts that have been automatically set up by Office Accounting 2007.

To set up a new account press New. To edit an existing account, select the account on the list and press Edit. To delete an account, select the account on the list and press Delete. You cannot delete accounts with an opening balance, system accounts or accounts referenced by other accounts.

You can see that the list of accounts has a Balance column and an As of column. This enables you to set an opening balance for each account as of a specific date. As default the starting date of the company is provided.

When setting up a new account, you have to select the account type first:

After you have selected the account type, you can edit the account details.

The only mandatory information is the name of the financial account. You can add the rest of the details later. The financial account form is described in detail in the Understanding financial accounts article.

When you have completed editing the list of accounts click Next.

Click Finish to complete the Accounts section.



I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Setting Up Accounts

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sale programs.

Microsoft Office Accounting Part 13- Setting Up Items

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is SETTING UP ITEMS.

Items

Office Accounting 2007 uses items to keep track of goods and services that your company sells. The Items section of the company setup wizard enables you to set up your Items with details and quantity on hand.

Note: Office Accounting Express 2007 does not include inventory functionality and inventory items. The inventory module is only available in the Office Accounting Professional 2007.
Service Items are typically set up work performed (either by a vendor or work performed for customers), but it could also be non-physical items such as shipping or insurance.
Service items are expensed when they are purchased and have no direct cost associated when sold.

Select Yes if your company buys or sells service items and click Next. This will display a list of service items. This list will normally be empty.

To set up a new service item press New. To edit an existing service item, select the item on the list and press Edit. To delete an item, select the item on the list and press Delete. You cannot delete items that have already been referenced on documents.

When setting up a new service item you have to provide the following:

-Item Name The name of the item.

-Sales price (if sold) The price for which the item is sold to customers (can be $0).

-Income account (if sold): The financial account where the income is recognized when the service item is sold.

-Item Tax group (if sold): If the item is taxable or not.

-Purchase price (if purchased) The price at which the item is normally purchased from vendors (can be $0).:

-Expense account (if purchased) The financial account that incurs the expense when the item is purchased.

Notice the two check boxes labeled "I sell this item" and "I purchase this item". These boxes define if the service item is available in sales- and purchase flows.

The standard cost is used for item and job profitability purposes.

When you have completed editing the list of service items click Next to proceed to non-inventory items.

Non-inventory items are typically used for physical items that are sold or purchased but where the business does not want to track the individual items in inventory. These could be items purchased in bulk, but consumed in smaller scale such as piping or wiring.

Non-inventory items are expensed when they are purchased and have no direct cost associated when sold (similar to service items).

Select Yes if your company buys or sells non-inventory items and click Next. This will display a list of non-inventory items. This list will normally be empty.

The non-inventory item list and form are identical to the corresponding service item list and service item form described above.

Inventory items are physical items that are purchased for resale and kept in stock.

Unlike service items and non-inventory items, the cost of the purchase is not incurred until the item is sold.

Select Yes if your company buys or sells inventory items and click Next. This will display a list of inventory items. This list will normally be empty.

To set up a new inventory item press New. To edit an existing inventory item, select the item on the list and press Edit. To delete an item, select the item on the list and press Delete. You cannot delete items that have a quantity or value on hand nor can you delete inventory items that have already been referenced on documents.

Once you have added the inventory items, you can specify the quantity and value on hand as of a specific date (as default your company start date).

When setting up a new inventory item you have to provide the following:

-Item Name: The name of the item.

-Sales price: The price for which the item is sold to customers (can be $0).

-Income account: The financial account where the income is recognized when the inventory item is sold.

-Item Tax group: If the item is taxable or not.

-Purchase price The price at which the item is normally purchased from vendors (can be $0).

-Asset account: The financial account that holds the inventory as an asset on the balance sheet when the item is purchased.

-COGS account: The financial account that bears the Cost Of Goods Sold, when the inventory item is sold.

If you specify a reorder point, the item will appear with a triangle icon on the item list and add a reminder to the dashboard when the quantity on hand falls below the reorder point.

When you have completed editing the list of inventory items click Next.

Click Finish to close the Items section.



I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Setting Up Accounts

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sale programs.

Microsoft Office Accounting Part 12- Setting Up Cutomers

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is SETTING UP CUSTOMERS.

The company setup checklist shows you the sections of the Company Setup Wizard that you have completed, in addition to the sections you still have to complete. At any point in time, you can exit the wizard by pressing Close. If you return to it later (by selecting Company Setup in the File menu) Office Accounting will keep track of your progress.

Customers

The Customers section of the company setup wizard enables you to set up your customers with details and opening balances.

Click Next to see the list of customers that exist for your company. This list will normally be empty, except if you have online integration enabled (in which case a PayPal customer has been created).

To set up a new customer press New. To edit an existing customer, select the customer on the list and press Edit. To delete a customer, select the customer on the list and press Delete. You cannot delete customers with an opening balance or customers referenced by a job.

You can see that the list of customers has a Balance column and an As of column. This enables you to set an opening balance for each customer as of a specific date. As a default the starting date of the company is provided.

When setting up a new customer, you only have to provide the customer name in order to save the customer (See note below about specifying the tax group). All the other details may be provided later.

A customer may have up to 8 addresses (business, bill to, ship to, warehouse, home legal, postal and, other) and as many contacts as desired.

The five-tab pages of the customer form (General, Details, Financial Summary, Financial History and User-Defined Fields) will be described in more detail in the Using the customer form article.

Note: Office Accounting 2007 also requires the user to specify the tax group (placed on the Details tab) for each customer; however this will automatically be set to None unless a tax group is specified. Setting the tax group to None means that all sales to this customers will be non-taxable until a proper tax group is defined. Please refer to the Sales Taxes module for information on how to set up sales taxes.

When you have completed editing the list of customers, click Next.

Click Finish to complete the Customers section.





I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Setting Up Items

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sale programs.

Microsoft Office Accounting Part 11- Recording Vendor Bills

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants and business owners. Today's topic in our series of tips for MS Office accounting users is RECORDING VENDOR PAYMENTS.

The vendor bill is simply an invoice from the vendor to your company. It can contain products (inventory or non-inventory items), but it can also be a bill for services, such as utilities.
The Vendor Bill is similar to the invoice; however it only contains one address – the address where you want to send the payment for the bill.
You should note the following about a vendor bill:

- A vendor bill can be created either from a blank template or from a purchase order or item receipt.

-Bills can contains item or expense lines (as well as comments lines).

-If a vendor bill is created from an item receipt (in Office Accounting Professional), the item receipt will be voided and replaced by the bill.

-The vendor bill is a financial posting document and will post to accounts payable (and inventory if applicable).

-The vendor bill cannot be printed and sent – it is received from the vendor.

-Similar to the invoice the payment terms on the vendor bill defines the due date and the cash discount of the bill.

-Bills are paid suing the Pay Bills worksheet.


Vendor Bill Postings

The vendor bill updates the accounts payable and inventory (when applicable) the moment it is saved.

The vendor bill will:

-Debit the expense account with the amounts on the lines.

-Credit the accounts payable account with the total on the vendor bill.

If the vendor bill contains inventory items (Office Accounting Professional only) the vendor bill will:

-Debit the inventory asset account with the quantity and cost of the items.

-Credit the accounts payable account with the total on the vendor bill.

-Void the item receipt (including the postings to pending item receipts) if the bill was created from an item receipt.

The vendor bill thus creates postings with the actual amounts billed, as these could differ from the amounts on the item receipt. This will trigger a recalculation of cost of goods sold if the item has been resold on an invoice.




I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Setting Up Accounts

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.

Microsoft Office Accounting Part 10- Receiving Customer Payments

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is RECEIVING CUSTOMER PAYMENTS.

The customer payment form allows you to record payments received from customers and settle them against invoices as well as recording cash discount, write-off invoices fully or in part and settle credit memos against one or more invoices.

It is important to settle the individual invoices with payments, so you know which invoices have been paid and when. When an invoice is fully settled with a payment, it changes status to Paid. If an invoice is only partially settled, its status is Partially paid.

You should note the following:

-The most common practice is to pay the oldest invoice first to avoid finance charges for your customers, but Office Accounting allows you to allocate a payment to any invoice if you like.

-If the invoice has been set up with cash discounts (also known as early payment discounts (see below), and the invoice is paid in full (considering the discount) before the discount date, the cash discount will appear. The amount and the account may be edited (by clicking the link in the Cash Discount column).

-If the customer sent a check for part of the amount (e.g. pays $66.37 instead of $66.57), you can write off the remaining amount to fully settle the invoice (by clicking the link in the Write Off column).

-You can apply one or more credits (from customer credit memos, previous write-offs or journal entries) by clicking the link in the Applied Credits column.
If the customer payment isn’t settled with any invoices, it remains unapplied. A customer payment can also be partially applied or applied.

Cash Discounts

As mentioned above, you give cash discounts by setting a payment term on the invoice that allows a cash discount for early payment. Payment terms can be set up to be due after a certain number of days or at the end of the month/quarter/half year/year plus a number of days (e.g. if your invoices are due on the 15th of the following month).

The cash discount is set as part of the payment term, as the date where you will get a cash discount of a specified percentage (typically 1-2%) for paying your invoice early. Giving cash discount reduces the risk of customers not paying or paying late and it improves the cash flow of the business. However it does come at a cost. The effective APR of improving your cash flow this way could be quite high but it may be preferred over poor cash flow due to late customer payments.

Customer Payment Postings

-The customer payment will post to the underlying financial accounts. The customer payment will:

-Credit the customer on the accounts receivable account with the payment amount, the cash discounts and the write off amounts.

-Debit the deposit account with the paid amount.

-Debit the cash discounts given account with the cash discount amounts.

-Debit the write off account with the write off amounts.

Initially it may seem a bit odd that a customer payment of $490 can pay an invoice of $500 if 2% cash discount is given, but that is the way cash discounts works. You want to be able to compare the payment amount to what is deposited into the bank.

I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Recording Vendor Bills

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.

Micosoft Office Accounting Part Nine- Paying Bills

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is PAYING BILLS.

The idea is that you can get an overview of all your bills at once and pick the ones you want to pay based on your available funds, the due date and the cash discounts.

This is how you use the pay bills worksheet:

- Select an account to Pay from and a Payment method (these will be remembered the next time you use the pay bills worksheet).

- Use the Filter section of the worksheet to only see bills before a certain date, for a certain vendor or using a certain preferred payment method.

- Sort the bills by clicking any column in the grid – most people sort on either due date, discount data or cash discount.

- Select the bills you want to pay by checking the checkbox next to the bills or select all bills by clicking the checkbox in the top of the grid.

- You can edit the cash discount amount for each bill by clicking on the link in the Cash Discount column (for penny differences).

-You can apply vendor credit memos to a bill by clicking the link in the Credits column and selecting the vendor credit memos you want to apply.

-When you have selected the bills to pay, click the Save and Close button to create the vendor payments. This will bring up a dialog box to add a memo and a check number:


- If the checks are marked for printing, you will have to go to the Issue Payments form to print the checks.

- Office Accounting supports paying bills by cash, check online or credit card.

- You can go directly to issuing the vendor payments by clicking the Issue payment button on the pay bills worksheet.




I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Receiving Customer Payments

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.

Microsoft Office Accounting Part Eight- Making Deposits

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is MAKING DEPOSITS.

To optimize the cash flow of your business, you should make daily deposits of customer payments and cash sales proceeds to your bank accounts. This way you can make the funds available to pay vendors and employees.

This is how it works:

-The deposit form will list all transactions deposited into the undeposited funds account.

-Select the account you want to deposit the money into (typically a checking or savings account).

-Select the transactions you want to deposit by checking the checkbox next to each transaction.

-If you are making a deposit with cash back, you can use the Cash-back account and Cash back amount fields to specify the cash taken out.

-You can add additional lines with expenses or deposits by clicking below the last line on the deposit and selecting Financial account in the Type column and specifying the amount (where a deposit is positive and an expense is negative).

-You can purchase pre-printed deposit tickets at www.microsoftchecksandforms.com

Deposit Postings

As mentioned above the purpose of the deposit is to clear out the undeposited funds account.

The deposit will:

-Credit the undeposited account with the full amount of the deposits.

-Debit the bank account with the full amount of the deposits.

-Credit the bank account with any cash back amount.

-Debit the cash back account with the cash back amount.

-Credit the bank account for any additional expenses (debit additional deposits).

-Debit the expense accounts for the additional expenses (credit deposit account).

Notice that any additional transaction you add, whether it is a cash-back transaction or additional expenses, become transactions against the bank account, not the undeposited funds account. This way you can always reconcile your undeposited funds against your deposits made into your bank accounts and reconcile your deposits and expenses against the bank account statement.




I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next Time: Paying Bills

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.

Microsoft Office Accounting Part Seven- Creating a Check

MicroPodCast – Podcasts for Microsoft Office Accounting Users. Useful bookkeeping, software, and business tips for MS Office Accounting users, consultants, and business owners. Today's topic in our series of tips for MS Office accounting users is CREATING A CHECK.

Make sure that the starting checks number is the same number as on the check in the printer.

The check form provides a similar look and feel as a manual check and it is typically used to write checks for payments that do not arise from the purchase flow. For example, you could issue a customer refund, give an employee an advance, reimburse a petty cash fund, or send a deposit payment to a vendor. You can also use the check form to enter manually written checks into Office Accounting 2007.

This is how it works:

-A check has to be written from a bank account of any type.

-The balance field will show the balance of the checking account before the check is written.

-The payee can be a customer, vendor or employee.

-If the "To be printed" checkbox is checked, the check number will be assigned when the check is printed.

-Checks cannot be deleted, they can only be voided.

-If a check is edited, the original check is voided and reversed and a new check with all the edits is created (similar to other financial transactions).

-If a check contains items or expenses, it is identical to a cash purchase with check as the payment method.

-The posting made by the checks are identical to those of the cash purchase.

-If a check does not contain any items or expenses, it is considered a payment against the balance of the selected vendor (or customer).

-You can purchase pre-printed checks for Office Accounting at www.microsoftchecksandforms.com.

Printing a check is similar to issuing payments to vendors. Click the Print Checks button in the Banking home page and select the bank account and the checks you want to print.

I hope these Microsoft Office Accounting tips are helpful. If you are using QuickBooks, check out our new QuickBooks series or visit The QuickBooks Gal podcasts.

Next time: Making Deposits

If you have questions, drop me a line at info@custmbiz.com. I look forward to your comments and questions. Custom Business Solutions supports many software accounting packages such as QuickBooks and Peachtree as well as a variety of Point of Sales programs.