There appears to be no obvious way to achieve the simple task of creating a list of invoices by Number and Amount. Here is a useful method of achieving this:
While most users are familiar with this feature, we sometimes come across those who choose not use it (often because they are not altogether sure how it works or they think it involves extra work).
This feature has been standard from the earliest versions of Quickbooks. MYOB introduced this feature into their software around 2003 and decided to give it the same name, "Undeposited Funds", exactly the same term used in Quickbooks (copying is the sincerest form of flattery!). The feature is now very similar in both products.
This is most likely the purpose for which the feature was designed. When receiving cash or cheques from customers, always receipt it to Undeposited Funds in the customer payment screen. Instead of increasing the bank balance, the value of these payments will accumulate in an Asset account called Undeposited Funds. This serves as a useful record and reminder of unbanked funds. When these cheques are deposited, the total deposit then appears as one amount in the bank account, by recording a Deposit entry. This makes bank reconciliation much easier, and also recognizes that unbanked cheques are a legitimate asset to be recognized on the balance sheet.
Where a sundry receipt of funds contains GST, we cannot use a Deposit type entry. This is because a Deposit entry type in Quickbooks has no GST fields (a weakness in the software). This can lead to the following common mistakes:
- GST does not get accounted for on cash sales (resulting in under-payment of GST).
- The transaction is split over 2 or more lines, the last line being coded to the GST Control account with the GST total. While this will achieve the correct accounting treatment, the GST reports will be inaccurate, because this amount is not recognized as GST in Quickbooks. Only amounts with a GST code get recognized.
- Use a Journal instead of a Deposit to record the receipt (Journal entries have GST code fields).
- Use a Cash Sale instead of a Deposit. Note that a Cash Sale requires items for coding, there are no fields for ledger accounts.
Sometimes we have the situation where a supplier is also a customer. In both Quickbooks and MYOB it is necessary to have a separate record for each. Quickbooks will also not allow a supplier name to be identical to a customer name, so one needs to be slightly different, for example a dot can be added to the end of the supplier name.
When dealing with such situations, it is recommended that the settling of accounts be done as for any other customer or supplier, and that no offsetting of balances be carried out i.e. pay the supplier in full, who in turn, pays their customer balance to us in full. This keeps things simple and is better from an internal control point of view, leaving a clear audit trail.
The easiest way to offset balances in most accounting systems is to create a Bank type account exclusively for this purpose, calling it, say, "Contra Payments". The word Contra, implies that this account should have a zero balance at all times. To offset such balances, simply process payments using the Contra Payments account as the bank account:
- Establish the amount being offset (usually the smaller of the supplier and customer balance).
- Process a payment to the supplier for this amount, paying from the Contra Payments account.
- Process a customer receipt from the customer for this amount, receipting the amount directly to the Contra Payments account.
- Ensure that both the date and amount of each entry above is the same.
- Payment of the larger of the two balances will be a part-payment.
- When complete, check that the balance of the Contra Payments account is NIL.
Many companies need to track performance in more than one division or department. In order to see which areas of the business are performing the company needs to know the profitability of each.
Quickbooks does this very well using the Class feature, where every transaction line can be allocated to a Class as well as an account or item. It operates independently from the job costing feature and has powerful and flexible reporting options.
MYOB does this by way of the Category Tracking feature. The problem with Category Tracking is that a category can only be assigned to a whole transaction, rather than being able to assign a category to individual detail lines within a transaction. This means that one transaction cannot be split over multiple categories. One way around this is to use Jobs instead of Categories to track divisions in MYOB, because transactions can be split over multiple jobs. However, this limits functionality of the MYOB Jobs feature where job costing is used. In both cases the reporting is very limited. There are, however, a number of independent add-on products that enhance MYOB job reporting (for example, Sidekick).
Xero achieves this very well using its Tracking feature. What puts Xero ahead of Quickbooks and MYOB is the option to have 2 tracking categories (or dimensions), not only one. For example: a nationwide company wishes to track profitability of each region, but would also like to track profitability of each of its 3 divisions. For each transaction or transaction line, there will be 2 additional drop-down fields, Region and Division (the names of these fields are specified in the tracking setup area) - for example, a sale transaction takes place in the Marlborough region for the Commercial division (as opposed to Residential).