If you are a QuickBooks user, you would probably have heard of QuickBooks Online Accountant, the new feature that allows users to access and enjoy your ProAdvisor benefits, manage and handle QuickBooks Online clients, and cooperate with other company members.
In this article, we will introduce this feature in detail, from what it is to how it can benefit your business and how to use Quickbooks online accountant. We’ll also share some helpful bonus tips and learning resources to make the most out of this feature.
What is QuickBooks Online Accountant?
QuickBooks Online Accountant is a cloud-based accounting management software. It helps bookkeepers and accountants compile client transactions, review their books, and make adjustments. This program is free for accounting professionals, and when you sign up, you’re eligible to join in the QuickBooks Online ProAdvisor program. QuickBooks Online Accountant features bookkeeping for your company built around QuickBooks Online Advanced and client tools, making it a one-stop software to meet all your bookkeeping needs.
How using QuickBooks Online Accountant benefits your business
QuickBooks Online Accountant provides users with a comprehensive range of benefits, from enjoying ProAdvisor benefits, managing and handling QuickBooks Online clients, and cooperating with other teammates from anywhere. Whether you need to work with clients in the cloud or look for accounting courses and certification, the feature can meet all your business requirements.
How to use QuickBooks Online Accountant
To help you better visualize how to use QuickBooks Online Accountant, we’ve listed some helpful tutorial videos below:
The QuickBooks Intuit Package comes with the ProAdvisor feature, which connects you with a local accountant (depending on your location) to help you get up and run the software if needed. You can also consult them on issues like tax requirements, offset expenses, and business structure.
Reconcile on QuickBooks
One of the essential QuickBooks tips that simplify your work is constant reconciliation. By reconciling your accounts regularly, you always have a broad view of your financial situation. You can simply check that a statement or payment remittance matches your QuickBooks whenever you receive one. This includes all statements, including those for bank accounts, credit cards, and loans.
Secure your data with QuickBooks
Securing your data is as integral as running your business. And QuickBooks can help you with that! With QuickBooks Online, you can set up an automatic schedule to back up your data on the cloud system or have it backed up automatically. Otherwise, you can integrate QuickBooks with your backup solution for extra security.
Customize your QuickBooks layout
The latest version of QuickBooks offers users a customizable interface. If you are more familiar with the previous layout or simply want to create an interface that suits you best, all you need to do is go to Edit>Preferences>Desktop View.
Set up memorized transactions
A simple practice that can make your work much simpler and faster is to set up memorized transactions on QuickBooks. You can utilize these to pay monthly bills or send off monthly invoices to your clients, which can help you save a lot of time and effort and avoid making mistakes. To enable that feature, click on Lists>Memorized Transaction List>Memorized Transaction>New Group and set up the transactions you want to memorize.
QuickBooks Online Accountant learning resources and certification
Besides providing users with a helpful accounting tool, QuickBooks Online Accountant offers professional training for future accountants and bookkeepers. Users can choose to learn from videos, webinars, virtual conferences, and in-person events to improve their knowledge and skills and gain confidence from first-hand experience.
QuickBooks Accountant University is a step-by-step program that offers users flexible courses and concrete results in bookkeeping and accounting. This program provides free access to actionable, live training lessons taught by Advanced Certified ProAdvisors and all the study materials you need in your learning.
Moreover, you can pick your favorite learning method, from webinars to virtual conferences to in-person events, and earn CPE (Continuing Professional Education) credits.
You can check upcoming events and on-demand training here.
QuickBooks Online Accountant offers accounting professionals free training, exams, and certification. Through exams, you can gain valuable skills to provide better services for your clients and earn credentials that keep your practice growing as well.
You can find exams and get your certifications here.
The bottom line
QuickBooks Accountant gives accountants and bookkeepers an amazing opportunity to improve their performance. The feature helps users collaborate with other teammates and clients better, keep the information up to date, and maintain a seamless process for bookkeepers and accountants. It can increase productivity, reduce errors and fraud, and maximize companies’ resources in the long run.
Don’t forget to subscribe to the Shoeboxed blog for more helpful accounting information, tools, learning resources, and best practices for accountants and small businesses!
Shoeboxed is a receipt management application that turns your receipts and business documents into a digital format in just one click by taking a picture straight from your smartphone or scanning a pdf. It automatically extracts, categorizes, and human-verifies important data from your receipts so that you can go over and check your records anytime with ease. Shoeboxed ensures you will always have your receipts securely stored and ready for tax purposes.
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Due to its illegal status at the federal level and as the business is growing fast with a variety of emerging sub-industries, Cannabis companies are facing ever more complex issues that are unique to the industry and require their operators to be extra careful when it comes to keeping their books accurate and organized. Hence, bookkeeping for Cannabis industry best practices is proven to be necessary for businesses in the field.
Let’s go through everything must-knows and best practices about bookkeeping for Cannabis industry in this article!
Not many federal-regulated financial institutions welcome those who run their business in cannabis as it is still classified as an illegal drug in many states, thus making its risky and problematic reputation. Apparently, the lack of banking options from the beginning subjects cannabis businesses to multiple issues, including internal and external theft, misallocation of funds, payroll, and insurance paid in cash.
It is not totally hopeless to find a bank that can work with your cannabis business though if you are willing to go through complicated application procedures in which regular financial statements must be handed in for reviews. The banks often do this quarterly, but monthly financial records should be ready at any time for submission since it is likely that they will be investigated to support what is reported. The banks will also pay attention to fluctuations in your report, and you don’t want your account to be shut down because you can’t account for such inconsistencies!
Cash flow control
Needless to say, it is challenging to manage cash-only businesses, and those trading in cannabis are no exception. Without a proper tracking system in place, tracking cash transactions by transaction can become a mess. In this case of cannabis – a federally controlled substance, every piece of inventory matters, so any suspected activity may cost the companies their precious licenses or even lead to criminal charges against concerned individuals.
To prevent money laundering, marijuana companies must meet strict requirements regarding accounting and keeping records of every activity and transaction during the course of business, “from seed to sales”, and from suppliers, distributors, retailers to customers. Moreover, for any transaction or a series of transactions that total $10,000 or more in cash, cannabis businesses have to prepare Form 8300 for tax purposes, the filing of which can be confusing with errors resulting in serious fines and audits.
According to Internal Revenue Code Section 280E, “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by federal law or the law of any state in which such trade or business is conducted.” In compliance with this, cannabis-related businesses follow strict limitations when reporting taxable income, with the cost of goods sold being the only deductible expense. Accounting processes, as a result, must implement complete record-keeping to ensure a compliant inventory environment.
Cannabis business and accountants working in the industry do not often talk about seed-to-sale tracking with much enthusiasm. Every state has its own seed-to-sale system to monitor the production and distribution of Cannabis plants, causing a great deal of confusion for growers, distributors, and other stakeholders involved who need to adhere to changing rules of each local government.
Specifically, depending on its preference, each state may require a different software system to trace and monitor the plants and finished products from inventory to the point of sale. The three popular seed-to-sale software, Biotrack, MJ Freeway, and METRC, however, tend to have unreliable reporting and it is also difficult to integrate them with existing accounting systems.
Bookkeeping for Cannabis Industry
Bookkeeping is fundamental to accounting, and with all the federal and state regulations that make accounting for cannabis extremely complex, anyone who deals with keeping the books must do it right.
In particular, bookkeepers should know the ins and outs of Section 280E in the tax code because of its major implications on the business’s actual income and profit. Unlike those working for most small-to-medium-sized businesses, accountants and bookkeepers in Cannabis companies must get used to concepts such as cost accounting, accrual accounting, generally accepted accounting principles (GAAP), and absorption accounting.
Since many of these principles are not required for everyday small business accounting, a generalist accountant may not be familiar with them. Finding a person with the necessary skill set to keep good records for your cannabis business, therefore, is important in several ways.
Whether outsourcing professional bookkeeping services or hiring an internal bookkeeper, cannabis businesses benefit greatly from having their books handled by people who have experience in the industry. It will be too late to get your accounting system set up and begin organizing your expenses months after the business starts operations. Money is spent on a daily basis, and without proper tracking of day-to-day expenditure and transactions, catch-ups of bookkeeping will turn into a nightmare with a higher tendency of errors. Even for pre-revenue companies, having a comprehensive bookkeeping system in place is essential at the beginning of their journey, when they need to know how much is spent on what before making the first profits.
The key to keep a cash-intensive business like Cannabis companies up and running is said to lie in fundraising. Not to mention the difficulty of finding investors who understand the possible pitfalls of the industry, there are a host of components that accountants and bookkeepers can’t overlook if they would like to attract investors to their business. However, it all comes down to the basics such as providing organized books and accurate financial reports that show effective internal controls and accounting policies. There is no one who wants to entrust their money in incompetent hands, and for marijuana businesses that wish to access capital, it is expected that they can express their efficiency in financial management through good bookkeeping practices.
Taxes and deductibles
As mentioned above, under the regulation of IRC 280E, Cannabis companies cannot take deductions from business expenses such as rent, vehicle, and marketing like other companies because their business is related to a controlled substance. Despite this tax limitation, professional accountants can help to legally reduce taxable income by allocating costs to inventory and the cost of goods sold, which is mandated by IRC 471.
Besides the reputable IRC 280E, there are other tax requirements that accurate bookkeeping can help cannabis businesses fulfill, thus maintaining their license while staying out of trouble with the IRS.
GST/HST and Provincial Sales Tax
Once a proper accounting system is set up with organized bookkeeping practices guaranteed, Cannabis companies can be at ease that they are paying the correct amount of sales tax they are supposed to. What’s more, based on the tax collected it will be easier for them to plan ahead, using the expected tax refunds for business operations.
Exercise duties, applied at the time the cannabis product is delivered to a buyer, are compulsory for any cannabis licensee. Duties of each transaction must be kept track of, and the higher duty payable must also be reported. Those who own a business in the industry had better have a good grasp of what rules and regulations that the excise duty framework entails to know how to calculate duties or have a reliable accounting team to do this meticulous task for them. Plus, they should do it from early on too before all the transaction receipts pile up or go missing!
Bookkeeping for cannabis industry best practices
Knowing the rules
Whether it is for medical use or adult purchases, businesses associated with marijuana are restricted by countless written and unwritten rules, the sheer number of which may shun anyone wishing to be engaged in this space. Those who overcome the hurdles to take on the role of bookkeepers in Cannabis companies must be well aware that there is no room for ignorance here. Before things can be done “by the book”, first and foremost, bookkeepers must find out what “book” to read. Both federal and state laws have their own specifications regarding cannabis businesses, and it goes without saying that bookkeepers need to know them like the back of their hands to stay compliant. Legality, undoubtedly, is a top concern when it comes to the future growth of the cannabis industry.
As the foundation of good accounting and financial management, bookkeeping is all about being organized. You may have heard about digitized receipt services such as Shoeboxed that help to keep your documents safe, both online and offline, but there are more advantages of applying technology in bookkeeping than you would imagine.
With brilliant features including verified data that is audit-ready and easily located, customized expense reports, and integrations with a variety of accounting systems, Shoeboxed offers an actionable data tool. Just like any other business, accurate records and transparent accounting procedures are what a cannabis business needs to track its finance and enhance its credibility with the bank and other financial institutions, as well as potential investors.
A cannabis company is a complicated entity that involves several sub-industries (farming, chemical manufacturing, food production, and retail), and each requires all kinds of reporting pursuant to the many legislations at the state and federal levels. Another big headache for cannabis bookkeepers and accountants is the buggy seed-to-sale software requested by local regulations. Unfortunately, software that are specifically designed to assist this complicated process are still lacking and don’t work well with widely used accounting systems.
While looking for more plausible solutions, specialists in the field suggest we make use of current software, combining their functions to serve our needs. For accounting, Quickbooks and Xero are popular choices although some attempts must be called for to create charts of accounts for each business stage. The good old Excel is also a basic tool for cost accounting, reconciliations, consolidations, and so on. If one realizes its versatility and puts decent effort into utilizing its functions, preparing monthly reports or creating accounting templates can become much easier. Finally, the unsolved issues of seed-to-sale software must be acknowledged so that predicted errors can be avoided. Making do with what we have seems to be the right strategy, at least for now.
Checks and balances
Problems with bookkeeping in cannabis businesses are mostly due to the huge amount of cash being collected, which may lead to undesirable consequences ranging from careless mistakes to fraud. There are so many things that can go wrong and result in inaccuracies found in the books when a lot of business activities occur every day. Many of them, however, can be prevented by implementing checks and balances consistently during operations.
For example, cash counts on a daily and weekly basis can help to identify discrepancies between actual cash on hand and the records in the books. Likewise, sale receipts must be kept carefully and compared to the receipts listed regularly. It is also a good idea to have two people do the cash collection and reconciliation separately to lower the chance of a financial thief. In this way, professional bookkeepers and accountants make a perfect couple who compliments a reliable internal control system.
We have yet to know when the federal legalization of cannabis is coming and how it will change the bookkeeping practices in Cannabis companies. Whatever may happen, there is truth in keeping accurate and organized books for business smooth operations.
What do you think about the future of the cannabis industry from now on? Do you have more tips on good bookkeeping for cannabis industry to add?
Don’t hesitate to share with us your opinions in the comment section below!
Accounting and inventory management are essential components to all businesses, big and small. Here are our top 10 QuickBooks best practices based on a variety of customer service issues we’ve helped alleviate along the way.
This post is brought to you by Lettuce, a simple inventory management tool made for e-commerce and wholesale.
Accounting and inventory management are essential components to all businesses, big and small. Unfortunately, small businesses have it tough considering that most enterprise software is just that: enterprise software.
We’ve been looking out for small product-based businesses for awhile now, helping our customers navigate the treacherous waters of the wholesale and eCommerce world. Here are our top 10 QuickBooks tips and best practices based on a variety of customer service issues we’ve helped alleviate along the way:
1. Create SKU’s for All Products and Product Variants
As your business grows, so will your customers. When you start working with bigger buyers, you’ll discover that they all require unique SKU numbers for every product you sell them. And yes, that includes variations. For example, a dress available in three different sizes should have three different SKU numbers (e.g. DRE-BL-S, DRE-BL-M, DRE-BL-L).
Not only are SKU’s important for your business relationships in the long term, but they’re extremely important to you in the back end. Organizing your inventory with SKU’s for products and its variants gives you the opportunity to have a true inventory count of your entire stock.
2. Accurately Track Your Inventory
Keep a proper, accurate tally of your inventory. We mentioned that establishing unique SKUs can provide you with a true inventory count – you can see exactly what you’ve got in the warehouse with a quick glance.
In addition to this, regular inventory audits are a must. Go through and physically count all of your products once per quarter. Never find yourself understocked and unable to fill an order.
3. Use Sales Orders for Faster Order Processing
Time and time again we come across businesses that jump straight from receiving an order to filling out an invoice. What this does is it deducts the required inventory from your books before you’ve physically moved the product leading to confusion and miscalculations later on in the ordering process.
Instead, before creating an invoice, you should create a sales order. It won’t deduct inventory from your books, eliminating the possibility of inventory discrepancies.
A sales order will just let you know that you need to fulfill a certain amount of inventory. Once you’ve made sure you have the stock and are ready to fulfill the order, you can create an invoice. After that, all that’s left to do is ship the order.
4. Do Not Create Separate Items for Wholesale & Retail
Having a single item listed twice (one for wholesale and another for retail) creates two completely different inventory stacks. We know what you’re thinking – that’s what you meant to do! But frankly, it isn’t in your best interest, especially when it comes to quickly and efficiently keeping track of your inventory.
The best thing to do in this scenario is to have one item listing with multiple wholesale and retail price levels. Then specify if those items are taxable or nontaxable at the order level.
5. Create Different Price Levels to Ease Inventory Management
Create and implement multiple price levels if you sell across different sales channels or to a variety of customer types.
For example, if you sell directly to consumers at retail pricing, and you also sell to brick-and-mortar shops at wholesale rates, you’ll want different price levels for each. Similarly, if you’ve got a single-site retail store that buys from you as well as a multi-site retailer to whom you’re offering better pricing, you will also want to establish different price levels.
It’s in your best interest to not create multiple SKUs with different prices. You’ll only make inventory management more complicated for your business.
6. Use Classes to Organize your Transactions
QuickBooks comes equipped with two simple categorizations to help you identify similar data – classes and types.
Classes are used to distinguish different kinds of transactions, whereas types are assigned to individual jobs, customers and vendors. You’ll want to use classes to organize transactions related to different places, departments or types of business. It will make it much easier to sort through your books later on.
7. Create Purchase Orders to Safeguard Business Deals
Purchase orders allow you to keep track of all of your orders with a specific vendor. We recommend always creating a purchase order (better known as a PO) each time you place an order with a supplier or a vendor. You should also create an additional document outlining your terms and conditions, as well as any other requirements (i.e. guidelines for defects).
The more information you provide on a PO, the safer you are from getting caught in a sticky situation with your vendor should anything go wrong. Your POs are essentially the prenups to your vendor and supplier relationships.
Remember to always include a start and end ship date and to state that you have the right to cancel the order if not delivered within the specified time frame.
8. Utilize Bills for Inventory Tracking & Terms
After you receive inventory from your supplier or vendor, you should account for it in your system.
The best way to do that is to create a bill that adjusts your inventory for you (unless if you have Enhanced Inventory Receiving turned on).
A bill also allows you to keep track of what you owe your vendors and suppliers. You can reference your bills to see which of your terms are up and then you’re ready to pay, send a payment to your vendor by creatinga payment entry in your system. Utilizing this process will ensure your books stay up to date and enable you to keep track of your terms and payment due dates.
9. Differentiate your Customers
Too often, we encounter small business who don’t input different names for all of their customers, they’re simply labeled “customer.” This is a terrible practice because it completely handicaps you from being able to drill down into your customers to figure out who’s actually moving the needle for your business.
The ability to run detailed and granular reports only becomes more important as your business and sales grow. Differentiating all of your customers and categorizing their orders appropriately is the way to go.
10. Utilize Payments
Create a payment entry in your system whenever you send or receive a payment and apply it to the appropriate invoice or bill. Accounting is all about balance, so when using QuickBooks it’s key to maintain an equilibrium within the system by “accounting” for everything that happens from a transactional standpoint. Once you apply a payment to an invoice or bill, you can close them and complete that transaction.
The Bottom Line
Our QuickBooks recommendations come from the most common customer service issues we run into with our new customers. QuickBooks offers a wide range of features, so as a small businesses it’s hard to fully get a grasp of every functionality and how it’s actually beneficial to your business now and down the road.
Still, the best way to enhance and simplify the order process involves more than QuickBooks best practices. Order and inventory management apps like Lettuce make it unbelievably simple to manage your orders and save time processing them. You can easily sync with QuickBooks and conduct all of your important business functions in one simple, beautiful online application.
Nima Patel is a Growth Marketer at Lettuce, a simple inventory management tool made for e-commerce and wholesale. Her team writes about e-commerce, inventory management, and small business on the Lettuce blog. Say “hi” @nimapt.
P.S. Don’t forget to check out the integration between Shoeboxed and QuickBooks for an easy and painless way to enter your receipts into QuickBooks!