If you have one or more people besides yourself using QuickBooks Online, you’ll need to know how to set up their accounts.

Your QuickBooks Online file contains a great deal of very sensitive information, like customers’ credit card numbers and employees’ Social Security numbers – data you don’t want to have fall into the wrong hands. You obviously trust your employees or you wouldn’t have hired them, but when it comes to security, you should implement all the safeguards you can.

QuickBooks Online can help you stay safe by limiting the access that other users have to your company file. Here’s how it works.

To get started, click the gear icon in the upper right and select Manage users. You should be listed there, of course, as the Master Administrator. Click Add user. The screen that opens will ask you what type of user you’re adding. There are four of them:

• Standard user. You can assign full or limited access to standard users, but they won’t have administrator privileges.
• Company admin. At this level, the user can see and do everything.
• Reports only. These individuals have access to all reports except those that contain payroll or contact information.
• Time tracking only. You’d assign this type to employees who only need to enter their own timesheets.

The first step in adding a user in QuickBooks Online is to specify their type.

The first two count toward your user limit, but the second two do not. Make your selection and click Next. We’ll select standard user for this example.

On the screen that opens, you’ll be assigning actual access rights, telling QuickBooks Online what the user’s restrictions are. You can choose All (with or without payroll access), None (allows some activities), or Limited. Select Limited, then click in the box in front of Customer to create a check mark. You’ll see the list of specific actions that that individual can take (like creating invoices, sales receipts, and statements) and the screens that they can see (customer registers and reports, tax rates and agency settings, etc.).

There’s also a list of what they can’t do, including printing checks, viewing bank registers, and preparing a sales tax return.

Click in the box in front of Customer again to uncheck it and select Vendor. You’ll see a similar list here of what your new user can and can’t do, only its activities relate to your accounts payable.

QuickBooks Online provides lists of what standard users can and can’t do and see for both customers and vendors.

Click Next If the user will be entering his own her own timesheets in QuickBooks Online, click the button in front of Yes, then select the correct name from the drop-down list. Click Next. Answer the user settings questions on the next screen and click Next. Enter the user’s name and email address (user ID), then click Save. QuickBooks Online will return you to the Manage Users screen, where you’ll see that your new user has been added to the list. The individual you just invited will receive an email invitation to set up an account, with instructions on how to do so.

Other Security Tips

There are other ways you can keep all of your company’s data safe. Here are some suggestions to consider if your business has returned to its offices.

• Always update your operating system and applications when prompted. These often contain security patches in addition to bug fixes and new features.
• Keep backups out of reach of others. Cloud backups are best, but if you use a local device, don’t leave it out in the open.
• Log out of QuickBooks Online when you’re not at your desk.
• Shred anything you print from QuickBooks Online or store it in a locked drawer.
• Protect your networks. Discourage excessive web browsing by employees. Don’t allow extraneous app downloading on company equipment and ask employees not to use company mobile devices on public networks. Consider network monitoring software if you can’t afford managed IT.

We follow security best practices in our own offices, and we hope you’ll do the same. Applying safeguards proactively will help prevent data theft that can be nearly impossible to recover from.

Intuit employs industry-standard security practices to keep your data safe, too, and it handles all backup and upgrades. Often, those updates include new features, like the recent addition of transaction “tags.” Let us know if you need our help with these or with any other element of QuickBooks Online.

Are you taking on a worker who’s not an employee? QuickBooks Online includes tools for tracking and paying independent contractors.

The COVID-19 pandemic created millions of self-employed individuals and small businesses. Whether they chose to, or circumstances forced them to, these new entrepreneurs had to learn new ways to get paid and to prepare their income taxes.

If you’re thinking about taking on a contract worker, you, too, will have to educate yourself on the paperwork and processes required to comply with the IRS’ rules for his or her compensation. It’s much easier than hiring a full-time employee, but it still takes some knowledge of how QuickBooks Online handles these individuals.

You’ll also need to make certain that the person you’re hiring is indeed an independent contractor and not an employee. The IRS takes this distinction very seriously. If you’re at all unsure of your new hire’s employment status, we can help you sort it out.

Creating Records for Contractors

Once new contractors have accepted your offer, you’ll need to have then fill out an IRS Form W-9. You can download a copy here. Employees complete the more detailed Form W-4 so that the employer can withhold income taxes correctly, but you won’t have to withhold taxes for your contract workers. They will be responsible for calculating and paying quarterly estimated taxes and filing an IRS Form 1040 every year.

You, though, will be responsible for sending them an IRS Form 1099-NEC (Non-Employee Compensation) every January if you paid them more than $600 during the previous year. You do not need to send a 1099-NEC to a corporation or to an LLC that is treated as a C Corp or an S Corp.

You can complete the Vendor Information window for each independent contractor, checking the box in front of Track payments for 1099.

Using the information the contractors provide, you can create records for them in QuickBooks Online. If you don’t have a QuickBooks Payroll subscription, you can set them up as 1099 vendors. Click the Expenses tab in the toolbar and then on the Vendors tab. Click New vendor in the upper right to open the Vendor Information window. Complete the fields for the worker and be sure to check the box in front of Track payments for 1099, as shown in the partial image above.

The vendor records you create will appear in QuickBooks Online’s Vendors list (again, Expenses | Vendors). Click on one to open it. You can toggle between two tabs here. The first, Transaction List, will eventually display all your financial dealings with that contractor. Vendor Details opens the record you just created, which you can edit from this screen.

Paying Contractors

When independent contractors send you invoices, you’ll return to this same screen. There are three ways you can pay them. Click the down arrow next to New Transaction in the upper right corner to see your options (or look down at the end of the row while you’re in list view). You can record the debt as a Bill if you want to pay it later (or if that’s the way you structure your recordkeeping). If you’re paying it right away, you can create an Expense or write a Check.

You can choose an option from this vendor action menu to pay your independent contractors.

When you click one of these, QuickBooks Online opens a form with many of the contractors’ details already filled in. You’ll need to complete any additional fields at the top of the screen, and then either record the payment or debt under Category details or Item details, depending on how you do your bookkeeping. Either way, you’ll be able to enter the quantity and rate and/or amount and mark it billable (with a markup percentage, if you’d like) to a customer or project.

You’re probably going to want our help here, since there’s more than one way to pay independent contractors. If you subscribe to QuickBooks Payroll, you can use the service’s contractor features, which include the ability to invite your contractors to fill out their own records in QuickBooks Online. You may also want to add an account to your Chart of Accounts, and we’d want to offer guidance there. And you need to ensure that you’re classifying payments correctly, so they’ll appear in 1099 reports and 1099s themselves.

Creating records for independent contractors and paying these individuals seem like they should be simple operations. But anytime you’re dealing with payroll issues, you’re dealing with peoples’ livelihoods – and the IRS. We strongly encourage you to let us help you get this right. Contact us, and we’ll make sure you’re handling your worker payments with absolute accuracy.

With gas prices so high, you need to track your travel costs as closely as possible. Consider getting a tax deduction for your business mileage.

If you drive even a little for business, it’s easy to let mileage costs slide. After all, it’s a pain to keep track of your tax-deductible mileage in a little notebook and do all the calculations required. If you do rack up a lot of business miles, you probably forget to track some trips and end up losing money.

QuickBooks Online offers a much better way. Its Mileage tools include simple fill-in-the-blank records that allow you to document individual trips. You can either enter the starting point and destination and let the site calculate your mileage and deduction or enter the number of miles yourself.

If you use QuickBooks Online’s mobile app, it can track your miles automatically as you drive (as long as you have the correct settings turned on). Here’s a look at how all of this works.

Setting Up

To get started, click the Mileage link in QuickBooks Online’s toolbar. The screen that opens will eventually display a table that contains information about your trips, but you need to do a little setup first. Click the down arrow next to Add Trip in the upper right corner and select Manage vehicles. A panel will slide out from the right. Click Add vehicle.

You’ll need to supply information about your vehicles before you can start entering trips.

You’ll need to supply the vehicle’s year, make, and model. Do you own or lease it, and on what date was the vehicle purchased or leased and put into service? Do you want to have your annual mileage calculated by entering odometer readings or have QuickBooks Online track your business miles driven automatically? When you’re done making your selections and entering data, click Save.

Entering Trip Data

You can download trips as CSV files or import them from Mile IQ, but you’re probably more likely to enter them manually. Click Add Trip in the upper right corner. In the pane that opens, you’ll enter the date of the trip and either the total miles or start and end point. You’ll select the business purpose and vehicle and indicate whether it was a round trip. When you’re done, click Save. The trip will appear in the table on the opening screen, and your current possible total deduction will be in the upper left corner, along with your total business miles and total miles.

If you want to designate a trip as personal, click the box in front of the trip in that table. In the black horizontal box that appears, click the icon that looks like a little person, then click Apply. Now, the trip will appear in the Personal column and will not count toward your business tax-deductible mileage.

When you select a trip in the Mileage table, you can mark it as personal so it’s not included in your business tax-deductible miles.

Personal Trips Can Count, Too

If you use your vehicle(s) for personal as well as business purposes, tracking some of those miles can also mean a tax deduction. For tax year 2022, you can deduct 18 cents per mile for your travel to and from medical appointments. Note: Medical mileage is only deductible if medical exceeds a certain percent of AGI. Be sure to check with the IRS yearly tax code, as they update the mileage amounts annually.

And if you do volunteer work for a qualified charitable organization, the miles you drive in service of it can be deducted at the rate of 14 cents per mile. You can also claim the cost of parking and tolls, as long as you weren’t reimbursed for any of these expenses. Obviously, the IRS wants you to keep careful records of your charitable mileage, and QuickBooks Online can provide them.

QuickBooks Online doesn’t track these deductions, but you’ll at least have a record of the miles driven.

Auto-Track Your Miles

The easiest way to track your mileage in QuickBooks Online is by using its mobile app. You can launch this and have it record your mileage automatically as you’re driving. Versions are available for both Android and iOS, and they’re different from each other. They also have more features than the browser-based version of QuickBooks Online, like maps, rules, and easier designation of trips as business or personal.

The iOS version of Mileage in the QuickBooks Online app

In both versions, you’ll need to click the menu in the lower right corner after you’ve opened the QuickBooks Online app and select Mileage. Make sure Auto-Tracking is turned on. Your phone’s location services tool must be turned on, too. There are other settings that vary between the two operating systems. You can search the help system of either app to make sure you get your settings correct if the onscreen instructions aren’t clear enough.

Of course, you won’t see the fruits of your mileage deductions until you file your 2022 taxes. But you can factor these savings in as you’re doing your tax planning during the year. Please let us help if you’re having any trouble with QuickBooks Online’s Mileage tools, or if you have questions with other elements of the site.

Your customers are your company’s lifeblood. Make sure their records are thorough and up-to-date.

When companies buy other companies, what’s often considered the most critical asset? The customer list. When a business is damaged and data possibly lost, which set of records do they most hope to recover? The customer list.

You probably spend most of your time in QuickBooks Online working with transactions and reports, but your customer records deserve equal time. If they’re incomplete or otherwise not maintained well, you lose time filling in the blanks when you’re trying to complete a task that requires complete customer profiles. Your searches and reports may not tell the whole picture. Your relationships can suffer, and you may miss out on sales opportunities.

QuickBooks Online provides excellent tools for creating and maintaining comprehensive customer and sub-customer records. Here’s a look at how it all works.

Moving Your Customer Data In

There are two ways to create customer records in QuickBooks Online. If you have an existing database in Outlook, Excel, Gmail, or Google Sheets, you can import it. This will save you an enormous amount of time, but it’s a challenging process. You select the file you want to import, and then you have to “map” it by matching the fields in your database to fields in QuickBooks Online. You’ll likely need our help with this.

To import a customer file into QuickBooks Online, you’ll have to “map” its fields. We can help you with this.

Your other option is to enter records manually. This is time-consuming, but the more information you can include about your customers from the start, the better. You can always edit your records to add, delete, or modify what you originally entered.

To get started, hover over Sales in the toolbar and click on Customers. Then click on New Customer in the upper right corner to open the Customer information window. The only field you’re required to complete is Display name as. You may want to do this if you have a new customer on the phone and you want to concentrate on the conversation. You can take notes about their contact information and fill in the record later, when you’re off the phone.

But wherever possible, as we’ve already said, complete as many fields as you can. You’ll enter name and billing and shipping address and phone number(s) on the opening screen. You can also supply contact details like fax number and website.

Creating Sub-customers

You’ll notice a checkbox that says Is sub-customer. QuickBooks Online lets you “nest” related records under the “parent” record. This can be an actual customer, but many people use it to document jobs they’re doing for the customer. So if you’re a contractor, for example, you might have sub-customers like Sun deck and Spa.

If you want to set up such a record, enter the job name and click in the box next to Is sub-customer. Two fields will open below that allow you to select the parent customer and to indicate the sub-customer’s billing status. The remainder of the fields will automatically fill in with the parent customer’s contact information.

You can set up jobs as sub-customers in QuickBooks Online.

Supplying Details

When you’re setting up individual customers, you should add as much detail as you possibly can to each record, beyond basic contact information. QuickBooks Online’s record templates display a number of tabs running horizontally across the window. The most important of these are:

• Tax info. Are the customers taxable or exempt? If taxable, what is his or her Default tax code? (If you haven’t set up sales taxes yet and need to, please let us help. It’s complicated.)
• Payment and billing. Do they have preferred payment and/or delivery methods? Will you be assigning default payment terms, like Net 30 or Due on receipt? What is their Opening balance? If they’re brand-new customers who have never ordered from you, this will be $0.00. If they’re existing, active customers, enter any outstanding balance they have with you as of the date that you enter. This must be correct, to avoid any problems with the customers’ ongoing balances. Questions? Ask us.

Other tabs here are self-explanatory. When you’ve entered everything you can, click Save. The new record will now appear in the Customers list and will be available to select from the drop-down list in transactions.

There will be times when you have to refer back to these forms to answer questions. By maintaining detailed, accurate customer records, you’ll be ready to respond. If you have questions about any of the information requested, or about other elements of QuickBooks Online that are puzzling you, please contact us so we can set up a consultation.