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I used my personal funds to make a purchase for the business. How do I enter this into QuickBooks?

Sometimes it happens that you need to use your personal funds for a business purchase. There’s an easy way to get this entered into your QuickBooks data file whether you’re using the desktop version or QBO.

First, create a new credit card account. This account will be used to capture all purchases made by you using your personal funds (the method of payment doesn’t matter). If I was entering this into my own set of books, I would call it “Marnie’s Expenses” or something similar.

Then, using the Enter Credit Card Charges function found in the Banking menu (desktop) or Expense function found in the quick create menu (QBO), enter the details of the purchase (date, vendor, amount, account, etc.) using the new credit card account you just created. If you want, you can add the payment method in the memo field (i.e. Debit, Cheque No., Cash, Amex, etc). Continue entering all your personal funds purchases this way. The transactions will accumulate in this account.

When you are reimbursing yourself for these purchases, simply write yourself a cheque for the total amount in the account, coding it to the new credit card account. This will zero out the account.

If you want to let these purchases end up in Shareholder Loan (or Owner’s Equity) account, you will need to journal the amount over to that account periodically. You will Debit the Credit Card Account and Credit the Shareholder Loan account. I suggest monthly, but be sure to do it at your fiscal year end so that the balance in the new credit card account is zero.

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Don’t turn on multi-currency in QBO by accident!

Don't turn on Multi-currency by Accident!

QuickBooks Desktop to Online Conversion – Canada

Many Canadian ProAdvisors I talk to are excited about QuickBooks Online (QBO), but a common complaint has been that there is no conversion tool. EXCITING NEWS! It appears that the conversion tool is now available from right inside a desktop file. These are my early observations, as there isn’t much information available on the tool as of the date of this blog post.

HOW TO USE THE CONVERSION TOOL:

1. Open the desktop data file using QuickBooks 2014 R4. IMPORTANT: If you’re using the Accountant edition, you need to toggle to the Pro or Premier edition. 2/25/14 UPDATE: The conversion tool is now available from the Accountant edition of QuickBooks desktop.

2. Under the COMPANY menu, go to the bottom and select EXPORT COMPANY FILE TO QUICKBOOKS ONLINE. If you don’t see this, you need to toggle to the Pro or Premier edition.

3. Click CONTINUE on the next window. The data is checked. NOTE: If you are using multiple currency, this conversion tool will not work. Also unavailable (but I’m not sure if any of these prevent a conversion): custom sales form templates, price levels, progress invoicing, multiple sales tax rates, inventory tracking.

4. You are prompted to sign in to your Intuit account or create a new account. I used my QuickBooks Online Accountant (QBOA) credentials (although please note this doesn’t mean the company will appear in my QBOA dashboard – I still have to invite myself as an accountant user).

5. You are asked if you want to replace an existing QuickBooks Online company file or create a new one. I chose to create a new company (which sets up a 30-day free trial of a QuickBooks Online Plus company).  2/25/14 UPDATE Creating the company in QBO FIRST lets you choose which version.

6. QuickBooks begins the export. This step takes a few minutes. Soon a new window opens saying you will receive an email when your data is ready.

7. Open your email and sign in to your QBO account. Voila! There’s the file!

OBSERVATIONS:

Right now it’s all or none – there’s no option to select a certain period of data.

I tried this with the Pro Hockey School sample file in QuickBooks Pro 2014 R4P (I’m not sure if the tool is available in earlier releases). The data came across beautifully and just as it was entered in the desktop file. I compared the P&L and Balance Sheet from desktop to online and they are an exact match. The GST/HST filing history is correct and the upcoming period is intact. Payroll is correct. Reconciled transactions are marked correctly. 2/25/14 UPDATE: Before converting, make sure you have the latest release by going to Help > Update QuickBooks.

I also tried this with the Pro Hockey School sample file in QuickBooks 2013 R8P+U. However, this opened a US data file and much of the data did not come across correctly. Don’t do this using the 2013 version! 2/25/14 UPDATE: This now works with 2012 and above and converts into a Canadian file.

If you are serious about converting a client, I would probably try this out using your own email address to make sure the tool works. Then, I would call the Intuit Inbound Sales Team to have them set up a proper QBO account for your client, making sure the subscription level is correct (though I’m not sure if you can convert to anything other than the QuickBooks Online Plus version) and to make sure you’re getting the best available discount (ProAdvisors may be able to receive perpetual discounts on behalf of their clients).

2/25/14 UPDATE: Although all payroll DATA comes across nicely, you will have a few tasks to do in the QBO file in order to begin processing payroll: turn on payroll, complete employee profile information, enter YTD information. 

REVIEW:

My early review is that I’m totally impressed! This took all of five minutes and my data appears to have converted seamlessly. Try it out. Just make sure to check your data very carefully after the conversion. Let me know how it works for you in the comments section below.

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