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IRS Raises Standard Mileage Rate Again
The IRS raised the standard mileage rate, already the highest ever, by 8 cents for the final 6 months of 2008. Effective July 1, 2008, the standard mileage rates are as follows:
Small Business Tax Calendar for July 2008
Accountants, bookkeepers and small business owners should be aware of the following dates in July:
Entering Historical Transactions in QuickBooks
Historical transactions should be entered into QuickBooks in chronological order. For example, you can't pay a bill in QuickBooks until you have entered the bill, and you can't receive payment against an invoice until you have created the invoice. Follow the instructions below when entering historical transactions:
1) Start with bills and accounts payable transactions
QuickBooks Tutorials: Purchase Orders and Paying Bills
We recently added QuickBooks tutorials dealing with purchase orders and paying bills in QuickBooks. Just like previous QuickBooks tutorials we have written, these QuickBooks tutorials include specific, easy to follow instructions, screen shots and some discussion of things you should think about. The QuickBooks tutorials we have added recently are:
Entering Bills vs. Writing Checks in QuickBooks
There are two ways to manage your bill payments in QuickBooks. The simplest way is to simply enter the payment (whether by check, credit card or cash) into QuickBooks. However, the best way for most companies to manage bill payments in QuickBooks is to enter the bills and then pay them. This takes a little more time, but it is still very simple and there are some significant advantages:
Enter and then Pay Bills in QuickBooks
There are two methods for paying bills in QuickBooks. The first and simplest is to enter the bill as a check, just like you do in your personal checkbook. The second and generally best method breaks the process into two parts: entering the bill and then later paying the bill. This blog deals with the latter. For a comparison of the different methods, see Entering Bills vs. Writing Checks.
The first step in this two step process is to enter a bill. You can enter the bills when you receive them, though I recommend putting them in a pile and then processing them on a regular basis, such as weekly, rather than right when you receive them. Regardless, to enter bills open the Enter Bills window from the Vendor menu.
Recordkeeping for Small Businesses
For the most part, the IRS does not dictate exactly what types of records businesses must keep. However, in the event you are audited you may be asked to show documents supporting your numbers. To keep it simple, I usually recommend companies keep four sets of files:
The One-Step process for Paying Bills in QuickBooks
There are two commonly used methods for paying bills in QuickBooks. One is to simply enter the bill as a check, just as you would with your manual checkbook. The other is to enter the bill and then separately pay the bill when it comes due. This blog deals with the former. For a comparison of the two methods, see Entering Bills vs. Writing Checks.
To enter payments made via check or cash directly into QuickBooks, open the Write Checks window from the Banking menu.
Receiving Items Against Purchase Orders
When you receive items for which you have an open purchase order, you need to mark them received in QuickBooks and enter a bill to pay for them. From the Vendors menu, select Receive Items and Enter Bill.
In the Enter Bills window, select the appropriate vendor. A window stating that open purchase orders exist for this vendor will appear. Click Yes to receive against one of the open POs.
Creating Purchase Orders
Before you can use purchase orders in QuickBooks, you must turn on the Inventory and Purchase Orders preference. To do so, open the QuickBooks Preferences window (from the Edit menu, select Preferences), select Items & Inventory, select Company Preferences, and check "Inventory and purchase orders are active."
