QuickBooks Online to QuickBooks Desktop Migration

Why are we leaving the cloud?

Some industries are realizing QuickBooks Online (QBO) is not providing the services they need to effectively run their business.  Low bandwidth reducing the efficiency of your bookkeeper, annual price increases with no real upgrades to the product and the inability to do real job costing are leading to a migration back to the desktop.  The marketing push of cloud based apps is so intense that people are stigmatized for proposing the use of desktop apps.  Don’t be embarrassed; you are not a technophobe or clinging to outdated tech.  We business owners need to make the right decision for our business and we will not be swayed by social pressures.  Out of the cloud and down to earth; it’s time to move back to QuickBooks Desktop (QBD).

Weird things to watch out for when migrating

You will need to do strategic planning before you migrate.

The easy answer to how to convert your data to QBD is log into your QBO file using Internet Explorer and use the export data wizard at Gear > Tools > Export Data.

Things that can interfere with the conversion process include:

  • Internet Explorer (IE) settings and add-ons may block QBO pop ups so you cannot complete the export/import process.
  • Your computer is set up to use Microsoft Edge and not IE so the export process cannot be completed.
  • The QBD app does not run in computer administrator mode by default causing issues with import.
  • The current steps in QBO to actually get to the ‘Export to QBD’ options in QBO require you to select Learn More which for most users means read about the process not Continue/OK/Next.
  • The Intuit-provided link to download the export file may fail.
  • The data from QBO may not import correctly into QBD.
  • New releases of QBO may negate step-by-step instructions for the conversion you find online.

Rolling releases from Intuit are changing the landscape of QBO frequently and the moving target of cloud technology means the person doing the conversion needs to be prepared for and understand tech issues and have easy access to Intuit tech support.

When reading articles about tech, it is so vital to look at the date published.  Some tech is changing as fast as we techie folks can write about it.  With that in mind, at the time this article was written on the train from Seattle to Albany on a lovely July 5th day in 2019.

Execute change thoughtfully. If you want to create a company culture that vehemently opposes change, throw a few apps at employees without a good project implementation plan and then abandon the idea a few months later.  After going through that a few times, most employees and contractors will begin opposing your ‘latest and greatest idea’.

 

Tax Reform – Meals & Entertainment

Meals & Entertainment Changes

GO! does not give tax advice but we will share what we learned at QBConnect.

Always check with your CPA for tax advice since there are so many grey zones and your CPA is the person that will need to deal with the IRS if there is an audit.

Entertainment

No longer deductible so those country club dues, golf outings and baseball games can no longer be deducted on your taxes says Intuit’s Jim Buffington, CPA.

The IRS is doing a good job of clarifying this change (link below) but they are not providing a good summary of changes to meal rules.

Coffee, Food, Meals

In a bizarre, turn of events, coffee and related break room food and drink supplies are now only 50% deductible.

While coffee seems like a staple for an office since the dawn of the office, many companies have gone a bit overboard with meals and snacks kept at the office.

What about coffee and tea for clients that come onsite?

Well, it may be difficult to stop employees from using the supplies and since meals with clients are also 50% deductible, even coffee and tea supplies for onsite client meetings are 50% deductible.

Employee meals were the main focus in the discussion of meals at this training.

Convenience is the magic work for employee meals.  If the meeting is at the convenience of the employer, the meals are 50% deductible.  Think of this as mandatory meetings during the work day.  Note the word mandatory.

Employee Celebrations are still 100% deductible per the QBConnect training.  So if you have a celebration, all employees are invited and attendance is not mandatory it means that this not not at the convenience of the employer, it’s the convenience of the employee.

New Accounts for QuickBooks

The trainers at QB Connect suggest that all meal related accounts are noted with 50% or 100% to clarify account usage to your CPA.

Office Food & Bev 50% – Recode of transactions previously coded to office supplies.

All Staff Celebrations 100% – Rename All Staff Meals and recode all company meeting expenses to a new account.

Meals – 50% Deductible – This now includes all company meeting food, travel meals, and business meeting meals which include meetings with clients.  The rule is at least one employee must be present at the meal.  Remember, the names of all who attended meal, their title and reason for meeting must be written on the receipt.

Entertainment – Non-Deductible – Make sure this account is created as an Other Expense type so it is not included in Net Profit.

The IRS is still not providing very good guidance on this topic which means things are left up to interpretation.  Link to IRS page

 

Markup vs. Margin

For those unfamiliar with accounting terms discussions of markup verses margin may feel a bit daunting.

Some people can do math in their head and easily remember numbers.  For those of you new to these terms or if is hard for you to remember what markup is needed to get the margin you need to stay profitable, here are some tools.

These are the formulas:

Markup % = Gross Profit / Cost
Margin % = Gross Profit / Price

Here is a table of examples assuming the cost of an item is $100.

Cost Markup Gross Profit Price Margin
100 20% 20 120 17%
100 25% 25 125 20%
100 30% 30 130 23%
100 35% 35 135 26%
100 40% 40 140 29%
100 45% 45 145 31%
100 50% 50 150 33%
100 55% 55 155 35%
100 60% 60 160 38%

Here is a link with examples and definitions.

iWire Directions for 2018

Oregon changed the iWire website and the rule about when you have to submit 1099s

W-2 iWire Filing with QuickBooks

“2013 was the first tax year where the Oregon Department of Revenue had the authority to assess

penalties for non-filing via the iWire system.  The Department is not assessing penalties for 2013 data, because they want to make sure that all businesses are aware of the requirement going forward. For tax year 2014, the Department will begin assessing penalties for non-filers and late filers.” – Oregon Dept of Rev Rep

QuickBooks E-file your State W-2s from QuickBooks article

What you will need:

Any documents needed to check the W-2 information

Third party preparers: Your EIN and contact information

Employers contact information

In QuickBooks:

Employees > Payroll Tax Forms & W-2s > create State W-2 E-file

Continue > Continue >ChooseState(if necessary) > Get QuickBooks Data > OK

Review Data as needed.

In Excel:

Choose Start Interview from QuickBooks Payroll State W-2 toolbar > Check the box > Next > Choose File location > Save > Next > Review Company Information > Next > Enter Submitter Type information (contract bookkeepers – you are a 3rd party) > Enter submitter and Employer contact information > Next > Create W-2 file.

Print directions as needed > OK > Save workbook now? Yes > Choose location and save.

Go to Oregon iWire

Take me to iWire (big blue button on right side) > File W2s and 1099s using iWire > Properly Formatted Text File > Enter Submitter’s contact information.  Do not enter EIN dash > Follow prmpts to upload and EFW2 file > Browse to text (txt) file > Submit.

Print page with confirmation number.

Archive confirmation page, Excel file and txt file.

You will receive an email confirmation as well.

1099 –Wire Filing

Companies that generated ANY TYPE of 1099 must submit information to iWire.  There is no longer a minimum threshold before you have to submit 1099s to iWire.  QuickBooks does not support E-Filing of 1099s to States.  You can add all your 1099 information into a pre-formatted spreadsheet located here.  On the right side bar you will find:

What you will need:

Completed 1099 forms

Third party preparers: Your EIN and contact information

Payer’s BIN, EIN, and contact information

Go to Oregon iWire

Take me to iWire (big blue button on right side) > File W2s and 1099s using iWire > Choose Manual Entry (or Spreadsheet from DOR Template) > Enter submitter’s contact information > Follow prompts to add all 1099 information manually or upload the excel document.

When you have entered all 1099 information, choose Review and Send your submission to the Oregon Department of Revenue > Review information – Compare Summary information with 1096 > Submit.

Print page with confirmation number.

Archive confirmation page.

You will receive an email confirmation as well.

4 Reasons to Review Your Tax Return

Do you or someone from your accounting team review the tax return each year?

Set of nine different vector check marks or ticks in circles conceptual of confirmation acceptance positive passed voting agreement true or completion of tasks on a list

Your tax return preparer expects you to and with good reason.  In the flurry of tax season, numbers get inverted.  Sometimes an extra zero or two gets added.  And beyond being a second set of eyes for errors, you and your staff know your business much more intimately than your tax preparer.  Did they misunderstand some data you provided?

Top 4 Reasons to Review Your Tax Return

1.  Compare your accounting data to the tax return to locate process changes:

What was reported differently on the return?

Are there things about your accounting system that you could change to save time for your preparer?

Are the numbers different?  If so, why?

2. Helps remind you to enter Journal Entries and Depreciation:

What journal entries did the tax preparer provide?  If none, ask for them.

If there are more than a couple journal entries, what needs to change so adjustments do not need to be made at tax time?

Ensure the depreciation expense is entered in your accounting system

Ask for the current year projected depreciation so you can write off 1/12 each month.

3. A great time to do a Fixed Assets Review:

Ask for the detailed depreciation schedule.

Review it for accuracy.  Are there assets on the books that you disposed of or sold years ago?

Keep a copy of the schedule on hand to note assets that are disposed of or sold in the current year.

4. Save time during next tax season by Locking the Period:

Did you lock the period after providing information to your preparer?

If not, users may have added or removed transactions from the prior year.

Are the numbers on the tax return different than what you have in your accounting system now?

If so, locate what has been changed, change it back as of 12/31 and then make the necessary change as of 1/1.

Then ensure you lock the books so changes cannot be made.

QuickBooks 2015 for Spring Term

QuickBooks 2015 for Spring Term

Classes are at the LBCC Albany campus.

Sign Up Here

QuickBooks Guided Tour

This course is great for people that need to brush up on computer skills before Level 1.

April 5, April 7 –  2 -4pm, $79

QuickBooks Level 1

We will cover lots of topics and processes in QuickBooks.  Students are encouraged to bring questions from their own experiences to class.

5 Clases – Tuesdays & Thursdays

April 14 – May 12 –  2-4pm, $219

Now is a great time to do a W-9 audit!

Most people know they have to give independent contractors a 1099. Here are some other expenses eligible for a 1099: Interest paid on loans, rent, and household employees. A W-9 should be collected before paying these expenses.

More information on Household Employees

Without a W-9 on file, you are obligated to retain 28% of payments to vendors and send the withholding to the Feds.

W-9 Audit

1.  Review all expense accounts that are likely to have 1099 eligible vendors.

2.  Ensure all eligible vendors are flagged for 1099s:  Go to Vendor Center > Edit vendor > See checkbox Eligible for 1099.

3.  Run a 1099 summary report for the current year.  Ignore thresholds.  If you do not have accounts mapped to 1099 boxes yet, choose show all accounts.  This report will show you which vendors are missing a tax ID number.  Request W-9s from these vendors.

4.  When you receive the W-9s back, follow the directions for 1099s for eligibility.  If a vendor is not eligible for a 1099 (corporations and non-profits for instance) uncheck the ‘eligible for 1099’ box in the vendor set up.  Create a vendor type called ‘Corp – No 1099’ or similar.

You can create a custom report in QuickBooks for Corp – No 1099 vendors.  This will help remind you why some vendors are not on the 1099 summary list.

You need the W-9 data on hand to create 1099s. If you have not collected W-9s before payment was made, make sure you collect them before year end.

Requesting W-9s

Send out requests for a completed W-9 to all vendors who are subject to 1099 rules. Remember to include a deadline in your request, such as 1 week from date of request, to ensure you collect all your W-9s before 1099s are due.

If you send requests via paper mail, you may want to include a self addressed stamped envelope to encourage quick replies.

If you send requests via email, ensure you provide vendors with the option to send forms back via paper mail.  Include your address in the email in an easy to cut & paste format.

Form W-9

Create Good Practices

Create an on-boarding process for vendors.  Ensure you do not have to work hard at the end of the year and/or in January.  Create a process to collect W-9s as soon as you start a relationship with a new vendor.  Do not pay until you have a W-9 in hand.

Work with your lawyer to create solid contractor agreements for your subcontractors.  Do they need liability insurance?  Certifications?  Confidentiality and non-disclosure agreements?  All of these things along with the W-9 should be part of your vendor on-boarding process.

QuickBooks Class – Fall Term

QuickBooks 2015 for Fall Term

Classes are at the LBCC Albany campus.

Sign Up Here

QuickBooks Guided Tour

This course is great for people that need to brush up on computer skills before Level 1.

September 29th, October 1st, 2 -4pm, $79

QuickBooks Level 1

We will cover lots of topics and processes in QuickBooks.  Students are encouraged to bring questions from their own experiences to class.

5 Clases – Tuesdays & Thursdays

October 6th – 20th, 2-4pm, $219

A Vendor by a Different Name

I cover for clients time to time. Birth, death, injuries and illnesses necessitate a contingency plan for the

accounting department. I am that contingency for some clients.

It is at these times that I see if good database housekeeping is occurring. Namely, names.

Did your customer change their company name and the change was not noted?

Does a vendor bill show a different name than their website?

Did you enter an employee by a name that is not their legal name or worse yet they got married in the last year and their legal last name does not match payroll records?

When GO! covers the data entry will the names we expect to be in the QuickBooks database?

Here are some GO! suggestions for list management.

Name Changes

Note the old name, the new name and the date you receive the notice of change in the notes area of the Vendor, Employee or Customer center.  Next change the name as it is listed on the notice.  Do not delay doing this task. Ensure it is completed as soon as you receive the notice.  Have a form that employee can fill out for name and address changes.  The employees legal name should be entered in QuickBooks.

Multiple Names

List both names as the active name in your list divided with a slash.  List the name not used by your company in the list as well with the words “do not use” included in the name.

 Example

Vendor names for monthly e-meeting subscription.  Join.Me is the name on the website and downloaded  software.  Log Me In appears on the credit card statements.

Active Name: Join.Me/Log Me In

Also include: Log Me In (do not use)

The goal is to ensure 1.  You have easily audited books which means not having to explain why names on documents do not match QuickBooks and 2. Make it easy for new employees or temp staff to do data entry while maintaining historical consistency.

Example:  When viewing financial details I should not see join.me paid 7 months out of the year and LogMeIn pay the other 5.  This will cause confusion or at least a need for explanation when someone is reviewing the details.

And someone should be reviewing the details a few times a year. It’s called “Having your bookkeeper’s back”.