Setting Up Vendors in QuickBooks 2012

This chapter is from the book

QuickBooks 2012 In Depth

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This chapter is from the book

This chapter is from the book 

QuickBooks 2012 In Depth

Learn More Buy

Preferences That Affect Accounts Payable

Did you know that you can streamline accounts payable processes by setting certain QuickBooks preferences? Setting preferences saves keystrokes, which in turn can save data entry time.

Not every preference that affects accounts payable impacts your financials; some preferences enable specific features. Set preferences in QuickBooks by selecting Edit, Preferences from the menu bar to open the Preferences dialog box.

Preferences in QuickBooks come in two forms:

• My Preferences—Settings that are unique to the current user logged in the data file and are not shared by other users. Click the My Preferences tab to modify the user-specific settings for the logged-in user.
• Company Preferences—Settings that are common for all users. Click the Company Preferences tab to modify settings globally for all users.

The following sections detail the preferences that can affect your use of the accounts payable functionality.

NOTE

To set company preferences, you need to open the file as the Admin or External Accountant user and switch to single-user mode (if you are using the data file in a multi-user environment). The Admin user is the default user created when you begin using QuickBooks for the first time.

Proper data entry security includes limiting which employees have access to logging in as the Admin and setting company preferences that are global for all users.

Accounting

The Accounting preferences are important to review when you first create your data file. These choices affect much of how your accounting information is recorded in accounts payable.

Company Preferences

Company preferences are shared globally by all users. The Accounting preferences include:

• Accounts—These settings are important for proper management of recording revenue and expenses. The following are the preference settings for Accounts:
  • Use Account Numbers—Requires the use of an account number in addition to account name when creating a new chart of account list item. Users can type either the number or the name when referencing an account on a transaction line.
  • Show Lowest Subaccount Only—You can choose this option if account numbering is enabled and all the chart of account items have a number assigned. This setting changes how the account name is displayed. If you see an “other” named account on your financials, users recorded a transaction to the parent account and not to one of the available subaccounts.
  • Require Accounts—Use this option to determine whether or not QuickBooks displays a prompt when you forget to choose an account on a transaction line. If you leave the option turned off, QuickBooks will assign the transaction to Uncategorized Income or Uncategorized Expense. When creating a new data file, this default is automatically selected.
• Use Class Tracking—Classes in QuickBooks provide a secondary means of grouping transactions, such as into profit centers. The optional Prompt to Assign Classes allows you to enforce class tracking in a similar fashion to the aforementioned Require Accounts option. See the QuickBooks Help menu for more information on how you can use class tracking to track multiple profit centers on your income statement and for some balance sheet accounts.
• Automatically Assign General Journal Entry Number—This preference sequentially numbers any general journal entries automatically. Each entry number can be modified at the time of input.
• Warn When Posting a Transaction to Retained Earnings—You can post to the Retained Earnings account but you should not because QuickBooks uses this account at year end to close out the year’s Profit or Loss totals. Note: When creating a new data file, this option is enabled by default.
• Date Warnings—When you create a new data file, the default date range set is from 90 days in the past to 30 days in the future, calculated from your current computer system date. Users can modify these date ranges, and QuickBooks will warn users when they enter or modify a transaction outside these dates.
• Closing Date—The Admin or External Accountant user login can set a date in the past for which transactions cannot be modified, added, or deleted prior to that date without entering the closing date password (if one was created).

My Preferences

My Preferences are unique to the username currently logged in to the data file. These settings are not shared globally.

Autofill memo in general journal entry—when creating a journal entry, each row memo column will autofill with the memo from the row above.

Bills

Review your Bills preferences to determine whether the defaults set by QuickBooks are appropriate for your company’s needs.

Company Preferences

Company preferences are shared globally by all users. The following are the Bills preferences:

• Entering Bills, Bills Are Due—Specifies the default number of days vendor bills should be paid within. You can change this global default on each vendor’s record information or on a specific transaction. By default, QuickBooks sets the default due date for bills (where a vendor record does not have payment terms set) to 10 days. Users can modify this for their company’s specific bill-paying terms.
• Warn About Duplicate Bill Numbers from Same Vendor—Ensures you don’t pay the same bill twice. This safeguard is an important reason for entering bills first, rather than skipping a step and instead using the write checks transaction type when you pay vendors.
• Paying Bills, Automatically Use Discounts and Credits—Enables QuickBooks to apply the discount to your vendor bill payments automatically if your vendor is set up with discount terms and the bill is being paid within the discount date defined. Be sure to select your preferred chart of account for recording these credits.

My Preferences

There are no My Preferences that would affect your workflow for accounts payable.

Checking

The Checking preferences improve the accuracy of your day-to-day data entry. Be sure to review them when setting up a new data file.

Company Preferences

Company preferences are shared globally by all users. The following are the Checking preferences:

• Print Account Names on Voucher—The default is to print the General Ledger account when using the Write Checks transaction. General Ledger accounts do not appear on checks printed via the Pay Bills transaction.
• Change Check Date When a Non-Cleared Check Is Printed—If you use the Pay Bills feature to queue bill payment checks ahead of printing them, this setting will change the check date to the current system date when you print the checks.
• Start with Payee Field on Check—This time-saving option places your curser in the Payee field when you use the write checks transaction type.
• Warn About Duplicate Check Numbers—QuickBooks will warn the user if she is using a check number that the system has already recorded.
• Autofill Payee Account Number in Check Memo—You can assign the account number your vendor has assigned to you and have this number print on the Memo field of the bill payment check. For more information, see “Assigning the Vendor Account Number to the Vendor Record” later in this section.
• Select Default Accounts to Use—You can assign the default bank accounts QuickBooks uses when creating paychecks or payroll liability checks.
• Online Banking—Users can select from two data viewing options when downloading transactions.

My Preferences

My Preferences are unique to the username logged in to the data file. These settings are not shared globally:

• Select Default Accounts to Use—Assign what account you want to use for:
  • Opening the Write Checks
  • Opening the Pay Bills
  • Opening the Pay Sales Tax
  • Opening the Make Deposits

Assigning the Vendor Account Number to the Vendor Record

To assign the vendor account number to the vendor record, follow these steps:

1. On the Home page, click the Vendors button.
2. On the left side of the page, select the vendor to which you want to assign the account number.
3. Click the Edit Vendor button.
4. If necessary, close the New Feature message by clicking OK. The Edit Vendor dialog box opens.
5. Click the Additional Info tab.
6. Type the account number the vendor has assigned to your account (see Figure 7.2). Click OK.
   

   Figure 7.2. QuickBooks can optionally print the account number vendors assign to your business on the memo line of checks created via write checks or pay bills.

7. Press the Esc key on your keyboard to close the Vendor Center.

General

Everyone using QuickBooks should review the settings in General Preferences. Although I have named a couple here, many are worth selecting and customizing for your company’s specific needs.

Company Preferences

Company preferences are shared globally by all users. The following are the General preferences that might affect your use of Accounts Payable functions:

• Time Format—If you track your vendors’ time with QuickBooks time sheets, you can default how portions of an hour display.
• Never Update Name Information When Saving Transactions—When not selected and you change the payee name or address, QuickBooks will prompt you if you want to update the payee’s information. By default this preference is not selected in a newly created QuickBooks file.
• Save Transactions Before Printing—By default this preference is selected in a newly created QuickBooks file.

My Preferences

My Preferences are unique to the username currently logged in to the data file. These settings are not shared globally:

• Pressing Enter Moves Between Fields—When this option is not selected, using the Tab key will advance through fields in a transaction; using the Enter key will save a completed transaction. If the option is selected, both the Tab and Enter key can be used to advance through fields on a transaction. The keyboard combination of Ctrl+Enter will save a completed transaction.
• Automatically Open Drop-Down Lists When Typing—Time-saving feature that is selected by default. Useful if the chart of accounts has subaccounts.
• Warn When Editing a Transaction—By default this option is selected. Helps to avoid unintentional changes to a transaction being reviewed.
• Warn When Deleting A Transaction Or Unused List Item—By default this option is selected. Helps to avoid unintentional deletion of a transaction being reviewed.
• Automatically Recall Information—Select this option to recall both the previously assigned account and the amount or just the account when creating a new vendor transaction.
• Default Date to Use for New Transactions—Exercise caution to ensure that the appropriate choice is selected. If you are entering transactions from the past, you might want to choose the last entered date. Otherwise, I recommend setting the default to use today’s date.

Reminders

When setting the Company Preferences for reminders, do not forget to also set the My Preferences for this section.

The Company Snapshot is a digital dashboard that includes a view of your reminders. Defining these preferences specific for your company affects the information users see on the Company Snapshot, reminding them of important tasks.

Company Preferences

On the Reminders preference page, you default QuickBooks reminders to show a summary, or list, or to not remind users of all checks to print, bills to pay, or purchase orders to print.

My Preferences

If you would like reminders to display when you open the QuickBooks data file, select the My Preferences tab of the Reminders preference and choose to Show Reminders List when opening a Company file.

Reports and Graphs

The person responsible for how QuickBooks reports your Accounts Payable aging will want to review these preferences choices.

Company Preferences

Company preferences are shared globally by all users. The Reports and Graphs preferences include:

• Summary Reports Basis—This feature is important because it tells QuickBooks what basis you want to view your Balance Sheet and Profit & Loss report in by default. You can always override the default when you prepare the report. More details about the differences between Accrual and Cash report basis is included in Chapter 3, “Accounting 101.”
• Aging Reports—You can choose to age your reports from the due date or from the transaction date.

The remaining preferences affect the appearance of your reports.

My Preferences

My Preferences are unique to the username logged in to the data file. These settings are not shared globally:

• Prompt Me to Modify Report Options Before Opening a Report—By default this preference is not selected. If it is selected, each time you open a report the Modify Report dialog will display.
• Report and Graphs—These settings determine how a report is refreshed when the data used in the report changes. The default in a newly created QuickBooks file is the Prompt Me to Refresh. I recommend selecting the Refresh Automatically option. You can make this decision for yourself depending on the size of your QuickBooks data file and the speed of your computer’s processor.

Tax:1099

Setting up your vendors for proper 1099 status is important. However, be assured that if after reviewing this information you determine the original setup was incorrect, any changes made to this preference will correct prior- and future-dated reports and forms.

The Internal Revenue Service requires that a business provide a Form 1099-MISC at the end of the tax year to any person or unincorporated business paid $600 or more for services in a given calendar year. Most incorporated businesses are not required to get a Form 1099-MISC. You should contact your accountant for more information.

Company Preferences

You can select the Do You File 1099-MISC Forms? option to let QuickBooks know that you will be providing 1099 forms to your vendors at the end of the year.

The dialog box shown in Figure 7.3 is the first step in getting ready to track your Form 1099-MISC payments.

Figure 7.3. Choose Yes if you are required to submit 1099-MISC forms to the Internal Revenue Service.

• For more information, see “Tracking and Reporting Vendor 1099-MISC Payments,” p. 226.

My Preferences

There are no My Preferences in the Tax:1099 that you can set.