Customers/Clients & A/R

Are There Restrictions On Making General Journal Entries To A/R and A/P Accounts?

Chief Mechanic · September 13, 2010 ·

Yes, there are a few restrictions on making General Journal Entries to Accounts Receivable (A/R) and Accounts Payable (A/P) accounts.

Normally, the preferred way to change the balance in an A/R or A/P account is by recording transactions, such as customer invoices or vendor bills. However, sometimes it’s more convenient to make a General Journal Entry. A common use of General Journal Entries to A/R or A/P accounts is to set up customer or vendor balances in a new QuickBooks company file.

If you opt to make a General Journal Entry to an A/R or A/P account, such entries are subject to these restrictions:

You can’t use more than 1 A/R or A/P account in a single journal entry
You must enter a customer name for a General Journal Entry to an A/R account and a vendor name for a entry to a A/P account

Here are some of the warnings you’ll see if you attempt to violate these restrictions:

QuickBooks Premier 2009 General Ledger Warning 1

QuickBooks Premier 2009 General Ledger Warning 2

QuickBooks Premier 2009 General Ledger Warning 3

Here’s an example of a General Journal Entry to 1 A/P account that meets the restrictions:

QuickBooks Premier 2009 GL Make General Journal Entries Accounts Payable

While not an absolute requirement, QuickBooks prefers that transactions involving A/R or A/P accounts have that account on the first line of the General Journal Entry. The first line of a General Journal Entry is the source of the transaction. Sources and targets are an important concept in QuickBooks. For more information, see our article on sources and targets.

When you record a General Journal Entry to an A/R or A/P account, the General Journal Entry will appear in the transaction list for the customer or vendor specified in either the Customer Center or Vendor Center – provided that the A/R or A/P account is on the first line of the general journal entry and is therefore the transaction source. General Journal Entries that debit (increase) A/R will be similar to a customer invoice and can be paid in a similar fashion. General Journal Entries that credit (increase) A/P will be similar to a vendor bill and likewise can be paid just like other vendor bills. However, some data fields are not filled in when recording transactions for a customer or vendor via a General Journal Entry. For example, the Terms and Due Date fields on a General Journal Entry for a vendor are left blank, as shown below. (Note: The single screenshot below shows a customized Vendor Center with the separate Pay Bills window placed on top of it to illustrate several of the points discussed in this article.)

QuickBooks Premier 2009 Vendor Center Plus Pay Bills

Beyond restrictions on making General Journal Entries to an A/R or A/P account, there are other restrictions that apply to making General Journal Entries, such as currency restrictions in multicurrency environments.

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How Do I Change an Onscreen Form Such As Create Invoices To Show More Line Items?

Chief Mechanic · September 12, 2010 ·

Making changes to the windows of QuickBooks is easy.

Let’s use the Create Invoices window as an example. By default, this window shows just 2 invoice lines. In this article, we’ll change the default look. An important point to keep in mind is that you should not close the Create Invoices window until you’ve completed all the steps in this article. Otherwise, you’ll lose your work and need to start over.

Here’s the Create Invoices window in its smallest form. Pay close attention to the right border. We’ve positioned our mouse pointer directly on the border, and it’s now turned into a left-right arrow. It only provides this functionality when your mouse is positioned directly on the border; if you move it off the border, your pointer shape and function will change.

QuickBooks Premier 2009 Create Invoices Right Border

With your mouse pointer positioned directly on the border, make the Create Invoices window bigger by dragging this border to the right. To drag something in Windows, hold down your primary mouse button while moving it to the desired position. Since we started with the smallest form, we can’t drag it to the left. Next, drag the bottom border down and watch more invoice line items immediately appear. Re-size the window to fit your needs.

Let’s carry our customization 1 step further. Position your mouse directly on the fine line between any 2 columns, such as the one between U/M and Rate. Your mouse pointer will change to another type of left-right arrow.

QuickBooks Premier 2009 Create Invoices Column

To change the width of a column, drag the pointer when it’s positioned directly on the line between 2 columns and is in the shape shown above. Again, it only provides this functionality when your mouse is positioned directly between 2 columns; if you move it away from this position, your pointer shape and function will change. One common need in re-sizing a window such as the Create Invoices window is to increase the width of the description field. With this knowledge, that’s now an easy task. Re-size any column to suit your needs.

Once you’ve completed customizing the look of your Create Invoices window, you need to save your work. To do that, do not close the Create Invoices window. Instead, go to the Edit->Preferences menu, and choose Desktop View from the submenu shown. Since QuickBooks can store different desktop settings for individual users, be sure you’re on the My Preferences tab.

QuickBooks Premier 2009 Preferences Save Current Desktop

Click the radio button Save current desktop and click OK. Your changes to the Create Invoices window are now saved. To confirm that, close the Create Invoices window and re-open it. It should now open to your customized size and layout. Since you’ve just saved your desktop with the Create Invoices window open, that window will open the next time you start QuickBooks. If you want different windows to open by default, simply open them and save the desktop in that state.

This same technique can be applied to most, if not all, data entry screens in QuickBooks.

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What Is a Sales Tax Item and How Should I Use One?

Chief Mechanic · September 12, 2010 ·

A sales tax item is a special type of Item, the list of goods and services that you sell. It is used to specify the sales tax rate and the tax authority collecting it that will be charged on each invoice.

See our article on all of the Item types supported by QuickBooks for more information.

Sales tax items can be grouped into another special type of item, a sales tax group, to combine multiple sales tax items on a single invoice.

You should create 1 sales tax item for each tax authority for which you collect tax.

Sales tax items are maintained on the Lists->Items menu. There is a secondary method to maintain sales tax items by visiting the Edit->Preferences menu and choosing the Add sales tax item… button on the Company Preferences tab of the Sales Tax submenu.

Primary Method to Maintain Sales Tax Items

Secondary Method to Maintain Sales Tax Items

QuickBooks Premier 2009 Preferences Sales Tax Items

You can specify the default sales tax item for new customers in the Preferences window. To do so, use the pull down on the Your most common sales tax item selection.

When you add or edit a customer, you can use a sales tax item to specify that customer’s default tax rate. The sales tax item is on the Additional Info tab in the New and Edit Customer windows.

QuickBooks Premier 2009 New Customer Sales Tax Item

When an invoice is created in the Create Invoices window, the sales tax item can be entered for the overall invoice. This value defaults to the sales tax item for that customer, but it can be changed for this invoice only. For example, this capability could be used to apply a different tax rate on a single invoice for a shipment to a location different from the normal location of a taxable customer.

QuickBooks Premier 2009 Create Invoices Sales Tax Item

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What Is a Sales Tax Group and How Do I Create One?

Chief Mechanic · September 12, 2010 ·

A Sales Tax Group is a type of Item that is maintained on the Item List. It’s used to combine multiple Sales Tax Items (which are themselves another type of Item) into a single sales tax charge on a customer invoice.

See our article on all of the Item types supported by QuickBooks for more information.

Since QuickBooks only supports 1 sales tax code (item or group) on an invoice, a Sales Tax Group is a way to reduce the number of codes needed to invoice a customer. In turn, that reduces the chance of data entry error while at the same time calculating all required sales taxes.

Before you can set up a Sales Tax Group, make sure that you have:

Set the preference to collect and track sales taxes
Already created all of the individual Sales Tax Items that will be combined into a Sales Tax Group

With those steps completed, you can create a Sales Tax Group by completing these steps:

Open the Item List from the Lists->Item List menu selection
Click the Item button in the lower left corner of the Item List window
Select New from the menu or press the keyboard shortcut Ctrl + N
When the New Item window appears, choose Sales Tax Group from the pull down menu
Enter the Group Name and Description
Add all the single Sales Tax Items that make up the Sales Tax Group
As you add the Sales Tax Items, QuickBooks will update the Group Rate, the total tax rate for this Sales Tax Group
Click Ok to save your work

Note:

You may observe a minor display bug in early releases of QuickBooks 2009. Here’s a screenshot from QuickBooks 2009 Premier Accountant Edition R3P. Instead of displaying the Sales Tax Group as a percentage similar to a Sales Tax Item, the Sales Tax Group is displayed as a rounded decimal. In this example, the Sales Tax Group is shown as 0.08 even though it is a combination of East Bayshore and San Domingo, for a total of 0.078, or 7.8%. However, although the Sales Tax Group is displayed incorrectly, QuickBooks calculates the tax total for the Sales Tax Group correctly.

QuickBooks Premier 2009 Sales Tax Group Display Bug

Here’s a similar display from QuickBooks Premier Accountant 2008 R6P, where the Sales Tax Group is shown as a percentage accurate to 2 decimal places:

QuickBooks Premier 2008 Sales Tax Group No Display Bug

This display bug was fixed in later releases of QuickBooks 2009 and doesn’t affect QuickBooks 2010. If you’re running an old release of QuickBooks 2009, update your QuickBooks to the latest release.

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What Is a Sales Tax Code and How Should I Use One?

Chief Mechanic · September 12, 2010 ·

A sales tax code is a list item that is used to set the overall taxable or non-taxable status of both customers and items (goods or services).

You should use sales tax codes to identify a customer, such as a reseller, from which you don’t collect sales taxes, or to identify goods and services that aren’t taxable even to customers who are otherwise taxable.

Sales tax codes are maintained on the Lists->Sales Tax Codes menu. There is a secondary method to maintain sales tax codes by visiting the the Edit->Preferences menu and choosing the Company Preferences tab on the Sales Tax submenu.

Primary Method to Maintain Sales Tax Codes

QuickBooks Premier 2009 Sales Tax Code List

Secondary Method to Maintain Sales Tax Codes

QuickBooks Premier 2009 Preferences Sales Tax Codes

There are only 2 types of sales tax codes: taxable and non-taxable.

If a customer is marked with a non-taxable code, all invoices for that customer are non-taxable. If an item is marked as non-taxable, no sales taxes will be charged for that item even for a customer who otherwise pays sales taxes.

When you add or edit a customer, you can use a sales tax code to specify that customer’s overall taxable status. The sales tax code is on the Additional Info tab in the New and Edit Customer windows.

QuickBooks Premier 2009 New Customer Sales Tax Code

When an invoice is created in the Create Invoices window, the sales tax code can be entered for each line item on the invoice and for the overall invoice. These values default to the sales tax codes for the item and customer, but they can be changed for this invoice only. For example, this capability could be used to eliminate sales taxes on a single invoice for an out-of-state shipment to an otherwise taxable customer.

QuickBooks Premier 2009 Create Invoices Sales Tax Code

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Customers/Clients & A/R

Accounting

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