Tag Archives: QBO (QuickBooks Online) Singapore

Shall I be using class or location in QBO (QuickBooks Online)?

Class is a powerful feature available in QuickBooks Online (QBO). Although originated from QuickBooks Desktop accounting system, there is a slight difference in reporting.

How to use class in QuickBooks?

You may use the class as a departmental account. Set up marketing, R&D, production, etc. as a class; then, tag it to each income or expense account when creating an invoice or bill. The profit and loss report shows the income and expense breakdown by class once the transaction saved. QuickBooks class feature is a unique way of analysing the business account and less tedious in setting up compared to the sub-ledger method used by other accounting systems.

There are many other ways of using the class feature in QuickBooks:

  • A Law firm uses the class to allocate income and expense of each lawyer.
  • Use it to track the running cost of the sales team or vehicle.
  • Property management business uses the class feature to analyse the profitability of each property.
  • Or you may use the class to track local and overseas sales.

The class feature is flexible and is up to your imagination to apply it into your business account.

QBO class or location?
Location tag to header, whereas the class tag to detail.

Each transaction consists of a header and a detail section. For payment transaction, the payee and bank are part of the header section, whereas the accounts used at the bottom of the transaction are the detail section. Each of the expense account at the detail tagged to a class, and pick up by the Profit & Loss by Class report once transaction saved. But if you print the Balance Sheet by Class from QuickBooks Online, the amount paid from the bank account will group under the unassigned classification since there is no class field available at the header. 

QuickBooks Profit and Loss by Class report
QuickBooks Profit & Loss by Class

You may consider using a location feature, for branches or retail outlets, in QuickBooks Online instead of a class. The data entered will show in both Profit & Loss and Balance Sheet.

QuickBooks Profit and Loss by Location report
QuickBooks Profit and Loss by Location

The location field is at the transaction header section, which breaks down the accounts used in both the header and detail section. Location is a better choice for businesses that have multiple branches, but you cannot have multiple locations in one transaction (at this moment). You may have to get the supplier to change the way they bill or change the internal workflow if they bill you more than one branch in a single invoice.

QBO Balance Sheet by Location
QuickBooks Balance Sheet by Location

Technology is evolving, QuickBooks introduces new feature from time to time. Who knows? Maybe someday there might be a better way of using or reporting by class and location 🙂

Discuss with your QuickBooks consultant, sign up a demo or trial to test drive before you switch over from QuickBooks Desktop to QuickBooks Online.

Go Digital

If..work from home does work and stay productive.

Coronavirus pandemic has sent a shockwave to small businesses. It changes how we used to work. With web meeting and work from home as part of the equation, desk maybe shared instead of a personalised cubicle with family pictures and certificates hanging around, or full of Post-it notes sticking on the monitor. Cut down travelling. Executives don’t need to waste time at the airport waiting for the transit flight to bring them from one place to another; it just a few clicks of the button away will move from one meeting to another…within second. Virtually.

Things have changed.

The business owner may take this opportunity to downsize, move to a smaller office unit since you do not need to showcase your financial muscle by staying at a luxury office unit in the business district. It may help to prevent excessive rent eating into your financial resources.

Where is my document?

Working from home is challenging. Distraction, proper office equipment, locating documents are the issues we had when working from home.

Most small businesses do not have a digital filing system in place, and the majority are still relying on hard copy filing. The sudden change in the way we work has caught most of the small businesses off guard.

You need the supporting documents to verify when there is a discrepancy in the business accounts. You get frustrated when information is not digitally available. You are supposed to work from home, reduce movement to prevent the spread of COVID-19 virus, but have to get back to the office to complete the task.

Go digital.

MoneyWorks Now and QBO (QuickBooks Online) is cloud-based small business accounting software. Both are low cost and do not need sophisticated computer hardware to power it.

The built-in document feature allows the accountant to attach the related PDF document to the transaction. For example, attaching a supplier quotation to the purchase order, a bill to the purchase invoice, or a bank transfer note to the payment transaction, etc.

You can search the transaction by name, type, references, or drill down from the report. There are lots of advantages to having a document attached to the business account. Try it!

To attach a document in MoneyWorks:
Click the image icon at the top right-hand corner and select import image. Then, select the PDF document from the File Explorer (Windows) or Finder (macOS), and hit the open button to attach the file.

Attached document in MoneyWorks

To attach a document in QBO (QuickBooks Online):
Click the attachment box on the left bottom of the transaction, and select the PDF document from the pop-up windows.

Attached document in QBO (QuickBooks Online)

Simplify the workflow, keep it lean, and change the way you work to survive the coronavirus pandemic.

Stay safe and healthy.

How to record a dividend?

When the company is profitable, part of the earnings may return to the investor as a dividend. A Dividend is not an expense but a shareholder fund (equity), which the declared value will be less off from the Retained Earnings.

The accountant may debit the Retained Earnings and credit the Dividend Payable account, which is a Current Liabilities account type when a dividend has declared.

Instead of directly debiting the Retained Earnings account, the accountant may sometimes debit the Dividend account (Shareholder Fund/Equity account), which is a temporary account, and transfer out from Dividend to the Retained Earnings account later.

Below is a screenshot of the equity section of a Balance Sheet report:

Dividend

Check with your accountant for more information about the dividend.