Keeping your supplies coming in may be difficult right now. Be sure you know your vendors and track their records carefully.
Your company counts on its supply chains to keep operations running smoothly. When it falters, you can have trouble creating and shipping products. Problems may even crop up that have a negative effect on your internal business needs.
We don’t have to tell you that COVID-19 has interrupted supply chains. The pandemic has been catastrophic for many small businesses because of this, and because income has been suddenly and sharply reduced. Some financial help is available, and we hope you’re able to take advantage of it during these extraordinarily difficult times.
It’s perhaps more important than ever to carefully track your income and expenses, and we hope you’re using QuickBooks to do so. Among the software’s financial management tools is the ability to maintain thorough records of those vendors that make up your supply chain. Let’s take a look at how this works.
Creating Vendor Records
We’ll go through the steps for creating vendor records, though you may have at least started on these already. Hover your mouse over Expenses in the toolbar and select Vendors. If you’ve already added some, you’ll see them in a list. To create a new one, click New Vendor in the upper right. Most of the form is easy to complete; it’s primarily contact information.
There are a few fields, though, that need special attention. These are:
- Cost rate/hr and Billing rate/hr. These help you track time costs for your projects. Don’t enter anything here if you pay vendors via bills or expenses.
- Terms. Due on receipt? 15 days? 30 days?
- Account no. and Business ID No. You should have these on file.
- Track payments for 1099. Put a check in this box for any 1099 contractors.
When you’re done, click Save. This vendor will now appear in your list.
You can take a number of actions from QuickBooks’ Vendors screen.
You can do a lot of your work directly from QuickBooks’ Vendors page. This screen displays a list of all of your vendors, along with columns for their Phone, Email, and Open Balance. At the end of each row is an Action column. The link there reads either Create bill or Make payment, depending on whether there is an outstanding balance.
Click on the down arrow in that column to open a list of additional options. If there is a zero balance, you can Create expense, Write check, Create purchase order, or Make inactive. If money is due, your options are to Create bill or Create expense. Icons in the upper right allow you to print the list, export it to Excel, or change the column settings.
Collecting Your Billables
Before we look at vendor records in QuickBooks, we’d like you to check a couple of settings to make sure you’re billing your customers for every expense they incur with you. Click the gear icon in the upper right corner and select Your Company | Account and Settings, then click on Expense. Among others, you’ll see these options:
If you incur expenses on behalf of customers, be sure you will be reimbursed for them by adding a Billable column on expense and purchase forms.
To add a Customer column to expense and purchase forms, click in the first box pictured in the image above. To Make expenses and items billable, click in the second box and add a default markup rate if you want. Do you want to Track billable expenses and items as income? If you’re not sure, ask us. And if you’ve set up sales tax in QuickBooks and want to add that to billable items, check that box, too. When you’ve finished with these and the other questions under Bills and expenses, click Save.
Now is the time to focus on the importance of cash flow and vendor relationships by maintaining good vendor payable records. You want to keep your relationships with your suppliers in good status. If you’re having trouble tracking cash flow or dealing with any other element of your accounting (or QuickBooks itself), please do contact us. We want to support you through this difficult period as much as we can.
SOCIAL MEDIA POSTS
COVID-19 is affecting the supply chains. Do whatever you can to ensure that your vendor relationships maintain a good standing. QuickBooks can help. Find out how here.
You should be using QuickBooks to track your accounts payable status these days. Communicating with vendors about any potential payment problems is essential to maintaining your relationship. Here is how QuickBooks can help manage it.
Is the pandemic affecting your company’s cash flow? We can help you use QuickBooks to better manage it.
The Vendors page in QuickBooks can show you quickly where you have open balances. Be sure you’re tracking those carefully these days. Find out how here.
Our Meridian, ID accounting firm provides accounting services and bookkeeping for all types of small businesses. Call us at 208-615-1491 now and tell us about your business or request a free consultation online.