bank account

How Does QuickBooks Attached Documents Handle Security?

Chief Mechanic · March 19, 2011 ·

QuickBooks Attached Documents Manage Users

QuickBooks Attached Documents addresses the need for security by providing 4 levels of application permissions across 8 areas of QuickBooks functionality under an account overseen by a single user.

Users log into Intuit’s secure servers using an email address and password. While we’re on the subject of security, there’s one small drawback: the password is not case-sensitive and is therefore not considered a strong password.

A QuickBooks Attached Documents subscription is managed by a Company Administrator, the sole pre-defined role supported by the service. A user with the role of Company Administrator can:

Edit the business profile
Add other Attached Documents subscriptions
Update the current subscription

Here’s a screenshot of the screen to add a new user, which shows the range of security settings. After a user is added, security settings can be modified by clicking on the Manage Users button in the upper right of the browser screen, followed by editing a specific user. You can only manage users from a browser-based interface, not from within QuickBooks itself. The Setup and Manage Users menu selection will only open browser access to Attached Documents.

The service supports 4 levels of application permissions:

Administrator: can perform all functions and manage users
Full Access: can perform all functions but cannot manage users
View Only: can view any attachment in any area but cannot add new attachments and cannot modify or delete existing documents
Custom Access: controlled access across 8 functional areas

Necessarily, the user with the role of Company Administrator must have Administrator application permissions, but other users can have Administrator application permissions as well. While those users will have powerful capabilities, they won’t have the powers specific to the role of Company Administrator, such as editing the company profile.

The Custom Access permission is used to control access to documents in functional areas of QuickBooks. Custom Access supports 8 functional areas:

Sales and Accounts Receivable
Purchases and Accounts Payable
Checking and Credit Cards
Time Tracking
Payroll and Employees
Inventory
Sensitive Accounting Activities
Company Documents

Within these 8 areas, there are 4 capabilities:

Add: this is a global permission; if a user can add an attached document, he can add it to any area
View: this permission allows a user to look at but not modify or delete a document
Modify: this permission necessarily includes the View permission
Delete: this permission is only available to a user with Modify permissions in the same area

Users assigned a Custom Access level can make use of their capabilities (i. e., Add, View, Modify, or Delete) on lists and transactions associated with that area of accounting. A user can be assigned to more than one area, a necessity in a small firm that still wants to set some restrictions on document access.

Before examining how Custom Access applies in specific areas, it’s important to understand how access to files in the Document Inbox is controlled. Any user with View permission in any area can see all unattached documents in the Document Inbox. Custom Access can’t take affect until after a document is attached and put into a specific area. Therefore, for documents requiring controlled access, care must be taken to start the upload process by attaching them from within QuickBooks. If you elect to upload a document to the Document Inbox and attach it later, it is viewable by any user with View permissions until it is attached to a list item or transaction.

8 Functional Areas

Let’s review which lists and transactions are associated with specific areas. Note that a list or transaction type can appear in more than 1 area. For example, the Other Names list appears in both the Sales and Accounts Receivable and the Purchases and Accounts Payable areas.

Sales and Accounts Receivable: Customers, Other Names, Fixed Asset Item List, Estimates, Sales Orders, Invoices, Sales Receipts, Credit Memos, and Payments.

Purchases and Accounts Payable: Vendors, Other Names, Fixed Asset Items, Bills, Bill Credits, Bill Payments, Credit Card charges, Credit Card credits, and Purchase Orders. Note that Checks – which represent a different transaction type – cannot be seen unless the user has View permissions in the area of Checking and Credit Cards.

Checking and Credit Cards: Vendors, Other Names, Fixed Asset Items, Checks, Deposits, Credit Card charges, and Credit Card credits. Note that users with View permission can see documents attached to transactions in bank or credit card accounts but cannot see documents attached to the bank or credit card accounts themselves. Note also that Transfers are not included in this area.

Time Tracking: Other Names and Timers.

Payroll and Employees: Employees, Other Names, Paychecks, Payroll Liability Checks, Liability Adjustments, and Year-To-Date Adjustments.

Inventory: Items, Vendors, Other Names, Fixed Asset Items, Bills, Bill Credits, Bill Payments, Purchase Orders, Item Receipts, Inventory Adjustments, and Build Assemblies.

Sensitive Accounting Activities: Accounts, Journal entries, and Transfers. Note that users with View permission can see documents attached to general ledger Accounts, but to also see documents attached to transactions in a particular area, View permission for that area is required. For example, to view a document attached to a Check, a user must have View permissions in the Checking and Credit Cards area.

Company Documents: Documents attached to the company file itself via the Company Information window.

This last area is not an accounting function similar to managing A/R or A/P. Instead, it includes more general corporate documents that are connected to accounting and recordkeeping. Documents here include those attached to the Company Information via the Company->Company Information… menu selection. A screenshot of this point of attachment is shown below. Examples of documents that might be attached here include corporate organization documents such as articles of incorporation, bylaws, or meeting minutes.

QuickBooks Attached Documents Company File

A few examples of how applying security in QuickBooks Attached Documents will illustrate the power and flexibility of this security model. First, consider the need to upload bank statements but to restrict access to selected individuals. Bank statements attached to the Account are only viewable by users with access to Sensitive Accounting Activities, so the specific bank account to which the statement applies is the best point of attachment. We don’t recommend bank statements be attached to other list entities, such as Other Names, because documents attached to those lists are accessible to other areas.

Next, consider the need to upload payroll tax forms. If every user requiring access to the payroll tax forms will also have access to the Sensitive Accounting Activities area, one good point of attachment might be the liability account to which the tax form relates. Another approach might be to treat these forms as Company Documents, and attach them to the Company Information. A workable but slightly less desirable method would be to create employees representing the tax agency as placeholders and attach tax forms to the relevant placeholder employee. However, even though a tax form is often accompanied by a payment to a Vendor, we don’t recommend attaching a tax form to a Vendor because documents attached to that list item would be accessible to other areas, such as Purchase and Accounts Payable.

Both of these examples illustrate an important concept in making use of security in Attached Documents. Start by attaching a document to an area with the greatest restrictions and only attach it to other areas as required. If you attach a document to areas that include lists or transaction types that overlap, you may end up making the document available to a wider audience than you originally intended.

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How Can I Close Transactions With a Customer Who Is Also a Vendor Who Only Paid the Net Balance On an Invoice?

Chief Mechanic · September 13, 2010 ·

For some businesses, another firm is both a customer and a vendor. If you’ve invoiced that firm (as a customer) while they have billed your company as a vendor, they may opt to pay the net amount owed for simplicity and to preserve their own cash balance. In that case, you’ll need to find a way to process the net payment and at the same time close both the customer invoice and the vendor bill.

In QuickBooks, there are 2 methods to accomplish this:

Use a clearing Bank account
Use General Journal entries

We favor the second method because it’s more consistent with normal workflow and it more fully documents the transactions recorded. To mirror Intuit’s own discussion of these methods in their knowledge base article on this topic, we’ll follow their example transaction, where your firm has invoiced a customer/vendor for $100, and that customer/vendor has billed your company $75. We’ve given this customer/vendor a name, Newco Llc. QuickBooks doesn’t permit identical names in lists. For that reason and to better distinguish between the customer account and the vendor account, we’ve appended “(customer)” and “(vendor)” to the company’s name.

Method 1 – Use a Clearing Bank Account

This method involves creation of a clearing account (if you don’t already have one set up) and recording the vendor credit through the Make Deposits function. Screen shots that illustrate what takes place in important steps follow the description of the steps.

Create a new Bank type account, which in our example is named Clearing Bank Account
Receive the payment from your customer/vendor to pay the customer/vendor’s outstanding invoice in full, which in our example is a payment of $100, and select Undeposited Funds as the Deposit To account if it’s not already set to that by default
Click on the Banking->Make Deposits menu selection and select the payment you recorded in Step 2 in the Payments to Deposit window and click Ok
In the Make Deposits window, add a new line item and enter the customer/vendor’s vendor account in the Received From field, your Accounts Payable account in the From Account field, and the amount of the vendor bill that the customer/vendor deducted from his payment as a negative number, which in our example is -75
Add a second new line item and enter the customer/vendor’s customer account in the Received From field, the bank account to which you’ll deposit the customer/vendor’s net payment, and the amount of the net payment as a negative number, which in our example is -25
Set the Deposit To account to the clearing account created in Step 1, which in our example is the Clearing Bank Account and click Save & Close or Save & New to record the net deposit
Click the Vendors->Pay Bills menu selection and select the customer/vendor’s bill to be paid
Once the bill is selected, click the Set Credits button, choose the vendor credit that you created in Step 4, and click Done to return to the Pay Bills window
Set the Account from which to issue the payment to the clearing account, which in our example is the Clearing Bank Account, and click the Pay Selected Bills button
QuickBooks will display the Payment Summary window, advising you that the bill was paid by a credit only, so it won’t be associated with a bill payment check; click Done to complete paying the vendor bill

In a typical use of the Make Deposits function where there is 1 entry for the deposit amount from Undeposited Funds as a positive number, QuickBooks credits (reduces) Undeposited Funds and debits (increases) the bank account selected in the Deposit To field. Positive amounts on the Make Deposits window represent credits; negative amounts represent debits. Thus, Accounts Payable is debited (reduced) by the amount of the vendor bill that the customer/vendor deducted from his payment, and the regular bank account is debited (increased) by the amount of the net payment received from the customer/vendor. Intuit incorrectly describes the entry made in Step 5 as a credit; it’s not – it’s a negative amount, so it’s a debit.

After completing Step 6 above, you’ve recorded the net amount of the deposit to your regular bank account. Note that the Deposit Subtotal made to the clearing account is 0.00, reflecting its purpose to serve purely as a clearing account to close transactions. QuickBooks will not allow setting the From Account to your Undeposited Funds account when recording the net amount being deposited in Step 5. If you combine this deposit item with others, you’ll complicate reconciling your regular bank account. That’s why it’s a good idea to make each customer/vendor transaction processed through the clearing account a separate deposit. The need to separate deposits is one limitation of the clearing account method.

QuickBooks Premier 2009 Clearing Bank Account Make Deposit

QuickBooks Premier 2009 Clearing Bank Account Checking

After selecting the vendor bill in Step 7, you’ll be able to apply the credit that you created in Step 4 by clicking the Set Credits button.

QuickBooks Premier 2009 Clearing Bank Account Pay Bills 1

In the Discounts and Credits window, select the credit.

QuickBooks Premier 2009 Clearing Bank Account Discounts

After selecting the credit, there are no other credits available. The total of the bills to be paid is 0.00.

QuickBooks Premier 2009 Clearing Bank Account Pay Bills 2

As described in Step 10, QuickBooks will display the Payment Summary window. However, because the bill was paid entirely by a credit, it won’t be associated with a bill payment check, even one with a zero amount. The vendor’s balance will be reduced by the amount of the payment and the bill will be marked Paid, but there won’t be a transaction recording the payment in the vendor’s transaction list in Vendor Center. The fact that the transaction list in Vendor Center presents an incomplete record of what was recorded is another limitation of the clearing account method.

QuickBooks Premier 2009 Clearing Bank Account Payment Summary

Because there’s no bill payment check to delete or void, if you want to undo this process, you’ll need to start by deleting the deposit from the clearing account. That will leave funds in the Undeposited Funds account and return the vendor bill to an unpaid or open status.

Method 2 – Use General Journal Entries

This method involves making 2 General Journal entries and then processing the customer/vendor’s net payment in your normal workflow. Screen shots that illustrate what takes place in important steps follow the description of the steps.

Click on the Company->Make General Journal Entries… menu selection and record a debit (decrease) to Accounts Payable for the amount of the vendor bill that the vendor/customer deducted from his payment, which in our case is $75; in the Name field for the debit, enter the vendor account name
On the same General Journal entry, enter a credit for an equal amount to another account, such as the expense account used on the vendor bill, and click the Save & New button
Enter a second General Journal entry with a credit for $75 to Accounts Receivable, and in the Name field for the credit, enter the customer account name
On the same General Journal entry, enter a debit for $75 to the same account you used in Step 2 and click the Save & Close button
Click on the Customers->Receive Payments menu selection and enter the customer account name in the Received From field; after doing so, you’ll see the message that this customer has available credits
Click the Discounts & Credits… button to apply these credits
In the Discounts & Credits window that appears, select the credit for $75 that you recorded in Step 3 and click the Done button to return to the Receive Payments window
Select the customer invoice being paid and enter the net amount paid by the customer/vendor, along with other payment information such as the Pmt. Method and Check #
Click Save & Close or Save & New to record the customer payment

The account you enter in Steps 2 and 4 doesn’t matter as long as it’s the same account, because the debits and credits reverse each other. In fact, if you already have a clearing account set up, you can simply use that clearing account in these steps. These 2 General Journal entries are an effort to post a debit to Accounts Payable and a credit to Accounts Receivable. Because QuickBooks imposes a restriction that only 1 Accounts Payable or Accounts Receivable account can appear on a General Journal entry, it’s necessary to make 2 entries.

Here are the 2 General Journal entries:

QuickBooks Premier 2009 Vendor Customer 1

QuickBooks Premier 2009 Vendor Customer 2

Here’s the process at Step 5:

QuickBooks Premier 2009 Vendor Customer 3

QuickBooks Premier 2009 Vendor Customer 4

And finally, here’s our completed Receive Payments screen just before saving the transaction:

QuickBooks Premier 2009 Vendor Customer 5

We favor the second method – using General Journal entries – for 2 reasons. First, after completing these steps, you can process the customer/vendor’s check with other checks in your Undeposited Funds account as you normally would. You won’t need to make a separate deposit for each payment from a customer/vendor in order to maintain your bank reconciliation process as you would if you used the clearing account method. Second, because General Journal entries appear on the transaction list in both the Customer Center and Vendor Center, you’ll have a well-documented trail of what took place. On the vendor account, you’ll see a bill for $75 and a General Journal debit for $75 that pays the bill; on the customer account, you’ll see the $100 invoice, the $75 General Journal credit that reduced the amount owed, and the $25 payment. In contrast, in the clearing account method, you’ll only see the vendor bill marked Paid. You won’t see the transaction that actually paid the vendor bill, which can lead to confusion after the details of how the transaction was recorded are forgotten.

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How Do I Add a New Loan To Loan Manager?

Chief Mechanic · September 12, 2010 ·

To add a new loan to Loan Manager, there are some preliminary steps to make before running Loan Manager:

Evaluate if this is a loan that Loan Manager can track. Loan Manager doesn’t track interest-only loans, so if your loan requires you to make regular payments of interest over time and the entire principal in a single payment at the end of the term, Loan Manager isn’t the right tool
Verify the liability account for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
Verify the payment account (normally a bank account) which will be used to make payments on the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
Verify the expense account which will be used to record interest expense for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
Verify the expense account which will be used to record other fees (such as bank fees) for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
If your loan has escrow payments associated with it, verify that the asset account which will be used to record prepaid expenses (such as property taxes or insurance) for the new loan exists in your QuickBooks chart of accounts and that its active; if not, add it or change its status
Verify the vendor or other name to which payments will be made exists; if not, add the vendor or other name
Enter the journal entries in QuickBooks so the current balance of the liability account associated with your new loan equals the original amount of the loan
Have in front of you the following information about the new loan: the origination date, the term, the interest rate, whether your lender uses daily compounding (and if so, whether it’s on a 360 or 365 day basis), the payment amount, the sequential payment number, the due date of next payment, and the escrow amount (if any)

Since Loan Manager reads information from your QuickBooks chart of accounts when it first loads, if the accounts required to set up the loan do not exist when Loan Manager starts, you won’t be able to set up the loan properly – even if you open a window within QuickBooks to add the accounts while Loan Manager is running.

Here’s the main window of Loan Manager:

To add a new loan, click the Add a Loan… button. The Add Loan window, the first step in the process, appears. Since we’ve already followed the steps in our checklist, our accounts already exist and the balance of our liability account equals the Original Amount of the new loan. In this example, that amount is $200,000.00. Choose your liability account and Lender (a vendor or other name) from the pull down menus. Enter the Origination Date for the loan, the Original Amount (which in our example is $200,000.00), the Term and the type of number the entered Term represents (weeks, months, or years).

Once this information is correct, press the Next button to bring up the second screen in the process of adding a loan. On this screen, enter the Due Date of Next Payment, the Principal Amount, and the Next Payment Number. For a new loan, the Next Payment Number will normally be 1 provided that you’re setting up the loan before your first payment is due. Choose the Payment Period (one of weekly, bi-weekly, semi-monthly, monthly, bi-monthly, quarterly, semi-annually, or annually) from the pull down menu. Specify whether the loan has an escrow payment associated with it, and if so, enter the Escrow Payment Amount and the Escrow Payment Account. The Escrow Payment Account is normally an asset account because escrow payments are being made in advance of the expense being incurred. If you want QuickBooks to remind you before a payment is due, make sure the checkbox is checked.

Once this information is correct, press the Next button to bring up the third screen in the process. Enter the Interest Rate for your loan as a percent. Choose the Compounding Period for you loan, which will default to the Payment Period you entered on the previous screen. You’ll also have the option of setting the Compounding Period to Exact Days to specify that your lender is using either a 360 or 365 day year to calculate interest. If you choose this setting, you’ll have the additional option of specifying the Compute Period as either 365/365 or 365/360. This information would normally be found in your original loan documents. Choose your Payment Account, Interest Expense Account, and Fees/Charges Expense Account from the pull down menus. Normally, the Payment Account is a bank account, such as a checking account.

When this information is correct, press Finish. You’ll see a screen similar to the one below. In our example, we added a new loan with a principal of $200,000 at a 10% interest rate, a 60 month term with monthly payments, and a $2,000.00 monthly payment. Since this loan is not is not fully amortizing with those provisions, there is a balloon payment at the end of the term. Clicking on the Payment Schedule tab will display the payment information for the loan; the Contact Info tab will display the relevant information for the vendor or other name we specified as the Lender. This information is maintained in QuickBooks itself, not Loan Manager.

It’s important to understand that Loan Manager is primarily a tool to calculate payment schedules and to simplify the process of distributing interest and principal payments to the appropriate GL accounts. When you create a new loan in Loan Manager, the outstanding balance for that loan will start as $0 – until you record a transaction in the liability account in QuickBooks itself. Once the liability account is increased to reflect the loan’s principal, Loan Manager can assist you to record the regular payments. Likewise, when you remove a loan from Loan Manager, you are not making changes to the liability account balance. Since we completed our checklist steps before running Loan Manager, which included recording the loan balance in the liability account, the balance was displayed correctly once we added the loan. Had we not completed that step, the Balance column for our new loan would show the balance of our liability account, or $0.

For more information on using Loan Manager, see our related articles on deleting a loan and recording a debt re-financing.

(+1 rating, 1 votes)

What General Ledger Account Types Does QuickBooks Support?

Chief Mechanic · September 7, 2010 ·

QuickBooks supports 16 total general ledger account types in its Chart of Accounts. Each account is assigned a single account type, which can be changed, subject to certain restrictions.

5 Income/Expense Account Types for the Profit & Loss (P & L) Statement

Income
Expense
Cost of Goods Sold
Other Income
Other Expense

11 Asset/Liability/Equity Account Types for the Balance Sheet

Fixed Asset
Bank
Loan
Credit Card
Equity
Accounts Receivable
Other Current Asset
Other Asset
Accounts Payable
Other Current Liability
Long Term Liability

QuickBooks Premier 2009 GL Account Types

The Chart of Accounts can be accessed by one of several menu selections, Company->Chart of Accounts and Lists->Chart of Accounts, or by clicking Ctrl + A.

If account numbers are used, the numbers should follow certain broad account types. See our article on assigning general ledger account numbers based on the account type.

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What Should I Do If My Accrual Basis Balance Sheet Is Out Of Balance?

Chief Mechanic · September 5, 2010 ·

A balance sheet in QuickBooks can be produced on either a cash or accrual basis. A balance sheet that’s in balance is one where total assets are equal to the sum of total liabilities plus total equity. Sometimes, if your company file (.qbw) has become damaged, this fundamental accounting relationship can be broken because of data damage to individual transactions.

Intuit has several troubleshooting steps to attempt to resolve problems with a balance sheet that’s out of balance. These steps depend on which reporting basis balance sheet is out of balance. In this article, we’ll summarize the steps to address an accrual basis balance sheet that’s out of balance. See our related article on resolving problems with a cash basis balance sheet. There are also other ways to use reports to assist rebuilding a damaged company file.

The most likely cause of an out-of-balance accrual basis balance sheet is an income or expense account with an account balance but without transactions that add up to that balance. To fix this problem, Intuit recommends a multi-step process that involves:

calculating the amount by which the balance sheet is out of balance
identifying the problem account
testing your account identification
recording a check for $.01 to that account
running the Rebuild Data utility
deleting the check for $.01 previously recorded and testing the outcome

Step 1 – Calculate the Amount Your Balance Sheet is Out of Balance

Produce a standard balance sheet (Reports->Company & Financial->Balance Sheet Standard) and calculate the amount your balance sheet is out of balance. Be sure to click the Modify Report… button and set the Dates to All and the Report Basis to Accrual.

QuickBooks Premier 2009 Modify Report Balance Sheet All Dates Accrual Basis

Step 2 – Identify the Problem Account

First, export your chart of accounts. From the File->Utilities->Export->Lists to IIF Files… menu selection, choose Chart of Accounts in the Export window and click Ok.

QB_Premier 2009 Export Chart of Accounts

This export procedure will produce a delimited IIF file. Open this file in Microsoft Excel. Intuit recommends deleting the first 2 lines of this file, but we’ve kept them in the file in the screenshot below so you can see how the file will appear when you first open it in Excel. Note that Name is in Column B and OBAMOUNT is in Column F. Find the out-of-balance amount you calculated in the previous step in Column F, OBAMOUNT. There are 2 ways to do this: a) use Excel’s Find capability or b) sort all rows below the first 3 rows in the original Excel file (below the first 1 row if you choose to delete the first 2) and scroll through the sorted list of numbers to locate the out-of-balance amount you previously calculated.

Write down the account name from Column B that matches the OBAMOUNT you locate.

Step 3 – Test To See If the Account You Identified Is the Problem Account

Return to QuickBooks and open your chart of accounts (Company->Chart of Accounts or the keyboard shortcut Ctrl + a). Locate the account you identified in the previous step and double click on it to produce a QuickReport. Be sure to set the Dates setting to All dates. If there are no transactions in this account, then the identification process in Step 2 was successful. You’ve located an account with a balance in the chart of accounts but without transactions that add up to that balance.

Step 4 – Record a Check For $.01 To The Problem Account

Record a check to the problem account for $.01 from the Banking->Write Checks menu selection or the keyboard shortcut Ctrl + w. On the Expenses tab of the Write Checks window, enter the problem account previously identified.

Step 5 – Run the Rebuild Data Utility

From the Files->Utilities->Rebuild Data menu selection, run the Rebuild Data utility. This utility will attempt to match the transactions in an account with the account’s balance, thereby resolving the out-of-balance problem on the balance sheet.

Step 6 – Delete the Check Previously Recorded and Test the Results

Delete the check you recorded in Step 4. Open your chart of accounts (Company->Chart of Accounts or the keyboard shortcut Ctrl + a) and locate the problem account.

If the account you identified was a balance sheet account (accounts payable, accounts receivable, bank, credit card, equity, fixed asset, loan, long-term liability, other asset, other current asset, or other current liability), double click on the account to QuickZoom into that account’s register. Locate the check for $.01 and delete it by clicking the Edit->Delete menu selection or using the keyboard shortcut Ctrl + d.

If the account you identified was an income statement account (income, expense, other income, other expense, or cost of goods sold), double click on the account to produce a QuickReport. Be sure to change the Dates setting to All. Locate the check for $.01 and double click on that entry on the QuickReport. Delete the check by clicking the Edit->Delete menu selection or using the keyboard shortcut Ctrl + d.

Repeat the steps in Step 1 to produce a standard balance sheet and verify that the balance sheet is in balance. Be sure to confirm your Dates setting is set to All and your Report Basis is set to Accrual.

Sometimes, if you have several problem accounts, repeating this entire series of steps can restore balance to your balance sheet. For more serious data problems, send us an email.

To follow Intuit’s discussion of these steps, consult this Intuit knowledge base article.

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bank account

8 Functional Areas

Accounting

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