Comparing FreshBooks and QuickBooks Online

  • QuickBooks Online is a robust accounting software solution for businesses of all sizes.
  • Freelancers and service-based businesses may prefer FreshBooks because of its time-tracking and invoicing tools.
  • Both QuickBooks Online and FreshBooks have pricing tiers to fit business budgets of all sizes.
  • This article is for small business owners who are evaluating accounting software that best meets the needs of their organization.

FreshBooks and QuickBooks Online are two popular Internet-based accounting and bookkeeping tools for small businesses. Both have strong features and different pricing tiers, but depending on the needs of your business, one or the other may be a better option for you. Here's a look at the features and pricing options for FreshBooks and QuickBooks Online to help you choose the best accounting software for your business.

Editor's Note: Looking for the Right Accounting Software for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

TipTip: FreshBooks and QuickBooks Online accommodate all types of accounting methods and offer free 30-day trials. Consider exploring both options before committing to either one.

What is QuickBooks Online?

QuickBooks is an industry leader in accounting software. Developed by Intuit nearly 40 years ago, QuickBooks tailors its accounting software to small and medium-sized businesses, though it also has enterprise-level tools.

The cloud-based QuickBooks Online (QBO) is designed for business owners and accountants. It is intuitive and offers a wide range of accounting features including the following:

  • Invoicing for clients and contractors
  • organization of business expenses
  • Project Time Tracking Time
  • Integration of credit card payments, automatic deposits and bank feeds
  • Simple Financial Reporting and Financial Statement Reporting
  • accounting reports, such as general ledger and bank reconciliation
  • tax deduction maximization
  • Inventory Management (in Plus and Advanced plans)
  • Payroll Management (as an add-on to any plan)

did you know?did you know? There are several versions of QuickBooks, customized to suit the needs and budget of each business owner.

QuickBooks Online Pricing and Features

QuickBooks Online offers four pricing tiers with different features to suit the needs of many business types and sizes. Pricing specials and discounts are often available.

  1. Simple start: The QuickBooks Simple Start plan runs for $25 per month and covers the plethora of accounting functions needed for small business operations. Simple Start can manage income and expenses, generate reports, organize receipts, and perform general tax reporting and transactions. The main drawback is that the plan is limited to a single user.
  2. Mandatory: The QuickBooks Essentials plan is $50 per month and offers additional features and functionality, including time-tracking and bill-payment management. The Essentials plan allows up to three users.
  3. Plus: The most popular option is the QuickBooks Plus plan at $80 per month. It allows access to up to five users, and its features include inventory management and the ability to forecast and track a project's profitability.
  4. Advanced: The QuickBooks Advanced Plan offers all the features of the Plus plan as well as more advanced functionality, including business analytics, premium apps, employee training, and the ability to batch invoice and expenses, which helps eliminate repetitive tasks. Is.

TipTip: If you have employees, add QuickBooks Payroll to any available plan to make QBO a one-stop shop for your accounting essentials. Read our QuickBooks Payroll review for more information.

QuickBooks Online User Ratings

Here's a look at how users rate QBO for its features and pricing. QBO has an overall rating of 4.5 out of 5 stars.

Excellent:

  • accounting method
  • Hardware and software requirements
  • overall features
  • Integrations and Add-ons

Good:

neutral:

  • Pricing
  • Customer Service & Support
  • Review

QuickBooks Online users say these are the product's biggest strengths:

  • advanced invoicing
  • cloud-based access
  • Multiple Features
  • ease of use
  • about 700 integrations
  • mobile apps
  • tax support
  • built-in lending

The same QBO users listed these as vulnerabilities:

  • high price
  • Only proper customer support
  • Sometimes Unknown User Experience

TipTip: Read our QuickBooks Online accounting software review for more in-depth information about this accounting software.

What is FreshBooks?

Created in 2003, FreshBooks is a QuickBooks alternative that provides a seamless platform for small businesses to manage their financial concerns. While FreshBooks is not as big a name as QuickBooks, it has garnered over 24 million subscribers.

Designed for business owners, FreshBooks offers several accounting features:

  • Invoicing for clients and contractors
  • organization of expenses
  • Project Time Tracking
  • time clock for employees
  • Communication function that allows employees to chat from anywhere
  • Integration of credit card payments and automatic deposits
  • Simple Financial Reporting and Financial Statement Reporting
  • accounting reports, such as general ledger and bank reconciliation
  • easy-to-use mobile app

FreshBooks Pricing and Features

FreshBooks offers four pricing tiers, including a custom tier for businesses with more complex needs. Note that you can also add team members to any of these plans for $10 per month per person.

  • Light: The FreshBooks Lite plan is $7.50 per month and has many of the functions a small business owner needs to manage their books. While the Lite plan helps track and organize expenses, receive payments and bank wires, and record revenue while generating reports, it is limited to five billable customers. If you're a freelancer or consultant with five or fewer clients, the Lite plan may be a good fit for your accounting needs.
  • Plus: The FreshBooks Plus plan is the most popular at $12.50 per month. It greatly improves on the Lite plan's features, allowing you to run more advanced financial and accounting reports, giving your accountant greater access to your records, and allowing up to 50 billable customers.
  • Price: The FreshBooks Premium plan is $25 per month. It lets you create invoices for an unlimited number of customers and includes additional advanced functionality, including the accounts payable feature and project profitability forecasting.
  • Choose: The cost of the FreshBooks Select plan is customized based on your usage and the tasks you require. This plan hides all FreshBooks logos from invoicing, email, and other client communication channels. This includes more advanced credit card features, such as the ability to charge your customers' credit cards, receive subscription or recurring payments, and access to lower credit card and automated clearinghouse fees. If you want another user to access your FreshBooks records through their own account, the selection plan is the way to go.

significant achievementsFYI: If you have employees, note that Gusto Payroll integrates with FreshBooks and can be added to any of the above plans. Read our Gusto Payroll review for more information.

FreshBooks Online User Ratings

Here's a look at how users rate FreshBooks for its features and pricing. FreshBooks has an overall rating of 4 out of 5 stars.

Excellent:

  • Customer Service & Support
  • Hardware and software requirements
  • Review
  • ease of use

Good:

  • Integrations and Add-ons
  • the protection

neutral:

  • accounting method
  • overall features

Poor:

FreshBooks users say these are the product's biggest strengths:

  • excellent customer service
  • Well Designed User Interface
  • Attractive, customizable invoice templates
  • ease of use
  • multiple integration
  • mobile apps

The same FreshBooks users listed these vulnerabilities:

  • high price
  • limited number of users
  • limited features

QuickBooks vs FreshBooks: Which is Best for Your Business?

Accounting software is an investment, as is the time it takes to navigate the system, learn to use and hide features, and train employees.

While both QuickBooks and FreshBooks can help your business report, record, track, and analyze its financial functions, ask yourself the following questions when choosing between QuickBooks Online and FreshBooks.

Do you sell a product or provide a service?

If your business sells a tangible product, QuickBooks Online is likely your better option. QBO not only helps retailers manage inventory, but also syncs to popular payment platforms such as PayPal, Shopify, and Square. It even has its own QuickBooks POS feature.

If you provide an intangible service, as many freelancers do, FreshBooks may be your best bet. FreshBooks says many of its clients are self-employed as freelancers or consultants, and it's designed a user-friendly interface that's easy to use for even the least tech-savvy entrepreneurs. FreshBooks is a great option for anyone who needs a secure, convenient way to record, store and report financial transactions.

What is the size and growth potential of your business?

If you have a small business or if your new business has potential for growth, QuickBooks Online will serve you best. As your revenue and workforce grow, QuickBooks Online payroll options and other upgrades help your accounting tools grow along with your organization. Small business owners say that it's easy to upgrade QuickBooks Online's options to include more advanced features.

FreshBooks is best for sole proprietors, sometimes known as solopreneurs, who manage and operate their business operations on their own. Many solopreneurs are consultants and freelancers, and they lean towards FreshBooks because of its time-tracking and project-tracking features. Additionally, it is relatively easy to invoice for time and projects.

significant achievementsImportant achievements: FreshBooks' invoicing features are intuitive, and the program's overall interface is straightforward. Read our in-depth review of FreshBooks for more details.

Who needs access to your business's accounting records?

With QuickBooks' nearly four-decade long life span and its growing popularity, many tax preparers, accountants and bookkeepers are familiar with QuickBooks. QBO has various plans that range from one to 25 users, making it ideal for businesses that have multiple users accessing or updating account records.

Similarly, if you submit your accounting records to a certified public accountant (CPA) for tax purposes, your CPA probably relies on your QBO records.

Choosing Your Accounting Software

After answering the above questions, examining features and pricing options, and reading ratings and reviews, you should be able to choose the right accounting software for your business.

There is a lot of overlap between FreshBooks and QuickBooks Online, as they perform similar functions. Choosing one or the other can make subtle differences and whether your business is a solo venture or a growing enterprise. Both will help you maintain accounting standards and meticulous accounting records for your business.

How to fill driver’s DOT log book correctly

  • Filling of analog DOT log book is becoming obsolete. ELDs are electronic versions of log books that are more accurate and easier to use.
  • Understanding how log books work can provide insight on how to use ELDs properly.
  • ELD is incorporated into telematics tracking software, providing analytics and other digital benefits for your fleet operations.
  • This article is for small business owners who want to stay in compliance with the DOT log book mandate.

Filling the driver's log book is an essential task for any commercial truck driver. Log books aren't just company policy: filling them out is a federally mandated law. The Federal Motor Carrier Safety Administration (FMCSA) expects all long-distance commercial drivers to fill out this information after every shift.

If you are new to the trucking industry, it is important to understand what a DOT log book is, why it is necessary and how to fill it out correctly. It is also important to understand how electronic logging device (ELD) drivers play a role in logs. Driver scorecards at the top of the log book ensure that your team is following all the rules.

TipTip: The best GPS fleet tracking systems include ELD functionality, which helps your business reduce fleet idle time, comply with DOT after-hours service rules, and monitor hard braking and acceleration.

What is DOT Log Book?

The DOT Log Book is an official federal document used to track when a driver is taking a brake. More specifically, drivers are required to specify when they are driving, on duty but not driving, off duty, and when they are sleeping.

Editor's Note: Looking for the Right GPS Fleet Tracking Service for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

These log books are used to enforce federal regulations regarding driver behavior. For example, long-distance commercial truck drivers are required to sleep within a 24-hour driving period. The FMCSA log book ensures that commercial truck drivers are complying with the laws.

These log books should be filled in daily and are frequently checked by the DoT agent. If the logs are falsified, or a driver fails to fill them out, the driver and trucking company may be vulnerable to federal prosecution. As a result, drivers must have good logging habits to follow fleet health and safety compliance best practices.

Why log books are important

Drivers can delete the DOT log book as unnecessary; Sometimes, the road experience can lead employees to think they know more than the government. However, log books exist for the safety of the drivers. Runner fatigue is a very real threat to long-distance truck drivers, and studies show that fatigued drivers are less alert to distress situations.

Many drivers feel pressured to arrive at their destination early in order to maximize the money they receive. This can create a dangerous, pressure-fueled driving environment for truck drivers and other drivers sharing the road.

ELDs play an important role in filling the DOT log book. The ELDs connect directly to the vehicle's engine and record when the vehicle is on, idling and in motion.

In the past, the DOT log book was an analog affair: drivers used to record their hours on a specified sheet provided by the FMCSA. ELD has digitized this process, so Hours of Service (HOS) recording is simpler and more accurate, allowing drivers to more easily comply with DOT HOS regulations.

did you know?FYI: Under With ELD mandates, companies operating commercial vehicle fleets may be required to implement electronic logging devices. During road inspection, DoT agents will check the log book and other ELD information.

How often should you fill the DOT log book?

Drivers should fill DOT log book daily. Staying up to date on HOS is essential. Keeping an accurate DOT log book is not only a law, but a necessary business practice.

With ELD, log book maintenance is more important than ever. It is important for the log book to match with the ELD record, so it is very important to stay updated with your DOT log book. DOT agents and representatives will check the log book frequently to make sure they are complying. If they are not, both your company and the driver are at risk of federal lawsuits.

Who fills the DOT log book?

Drivers are responsible for filling out the DOT log book, and your company is responsible for keeping the log book in order. When complete, drivers sign their log book, and the FMCSA holds the driver responsible for the information.

Sometimes, companies push drivers to go outside of FMCSA rules and regulations. Because the driver signs each log book, the driver bears the most liability. Drivers whose companies push them beyond the limits of the law are protected under the Surface Transportation Assistance Act (STAA), which helps them stay HOS compliant.

did you know?did you know? Both drivers and businesses can be prosecuted for failing to follow federal guidelines for log book and ELD compliance.

how to fill dot log book

The traditional log book is made up of a chart with four sections divided into 24 boxes. Each box represents one hour. As drivers continue throughout their day, they are required to draw horizontal or vertical lines through each position to indicate how they are spending their time. There are four possible situations:

  • Off duty
  • sleeper
  • driving
  • On-duty (not driving)

Here's an example of what the log book looks like:

Horizontal lines indicate the time spent by the driver during a certain position, while vertical lines indicate a change in position. For example, if your worker drives from 9 a.m. to 1 p.m., they'll draw a horizontal line through those four boxes. If they transitioned to an off-duty position, they would draw a vertical line for that designation on the chart, and then a horizontal line to indicate how much time they spent in that position.

For this example, let's say your employee spent an hour in an off-duty position. Once they're ready to get back on the road at 2 p.m., they'll draw a vertical line back to the driving section and start another horizontal line to track how long they've been in that position.

As the driver changes position, it is important to indicate the current location and what activity they are completing. If your employee is on duty but not driving – for example – loading up – they can include that comment in the comments section.

Here is other important information to include in the DOT log book:

  • today's date
  • driver name
  • driver employment number
  • tractor number
  • shipping number
  • Total hours of last seven days

It is often best to purchase paper logs that contain only the most basic DOT information. Some logs include too many sections to fill in, and when they are left blank, it can get you into trouble with DOT.

A perfect example is the recap section, which is not a requirement of the FMCSA. However, if it is left blank, DOT agents can give you a hard time. If your drivers use a log with several additional sections, you can use the dash to “fill it in” without entering information. This indicates that the section is redundant, which will help you in the event of a road inspection.

TipFYI: Telematics systems provide fleet operators with important insights about their vehicles and drivers, including ELDs.

How do ELDs track DOT logs

While some companies may require drivers to fill out paper logs, they are now technically obsolete. ELDs replace all the analog functions of a paper log, and can help your company keep a record of HOS and Duty Status (RODS) numbers up to date.

Here are some of the requirements that an ELD must meet:

  • Connect to the engine of the truck to indicate when the vehicle is in motion.
  • Select any one of the following depending on the speed of the vehicle: On Duty, Off Duty or Not Driving on Duty.
  • Provide data in a standardized format to be sent to law enforcement via USB, Bluetooth or wireless web services.
  • Meet product specifications as outlined by federal DOT offices.

Many telematics companies offer ELDs as part of their fleet-tracking offering. Telematics companies can provide real-time tracking features that include data analytics software to help you better understand driver safety, reduce fuel costs, collect and analyze shipping data, and know your drivers' general locations. Can you

How to Manage Data for Small Business

  • Data management is vital to better sales and customer relationships, and can save businesses time and money.
  • You must identify your business and sales goals in order to effectively implement data management processes.
  • CRM and automation tools increase efficiency and productivity while organizing customer data.
  • This article is for business owners looking to improve their data management processes.

As a small business, you generate a lot of data with each customer. This data ideally informs trends, future prospects and workflow. However, these reports are only as good as your data and data management.

By investing in data management processes and tools, you'll make your data work more efficiently, saving your business time and money. In this article, we will explore the importance of good data management and ways to increase productivity.

Why is data management important?

When customer data and information are messed up, it can be difficult to adequately analyze sales data to find trends, marketing avenues, or workflow remedies. Bad data, or incorrect records, can cost a small business a lot of time and money. Ensuring up-to-date information is important for several reasons.

Editor's Note: Looking for the Right CRM Solution for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

1. Lower cost and better productivity

An IBM study estimates that poor data management costs the US economy $3.1 trillion, due to overall lower employee productivity and costs associated with data maintenance.

More specifically, about 50% of an employee's time is wasted searching for data, fixing errors, or double-checking untrusted data sources. This wasted time gets compounded as employees start fixing their own errors. If you fail to alert data managers and ignore the root causes of such errors, you create redundancies and severely limit productivity.

2. Better Prospect Data for Sales

Data can be a useful tool in predicting leads for sales and marketing trends. When you have bad data, it can be difficult to trust any sales analysis results. This can lead sales teams, analysts or managers to rely on arbitrary benchmarks when finding potential customers.

In a survey conducted by SnapLogic, 77% of decision makers and data managers said they did not trust their business's data, while 82% said they had to revise projects due to insufficient data quality. A clean database can reduce guesswork and inform marketing and sales strategies to reach new customers more efficiently.

3. Better Customer Relations

When a customer is upset because a product was delivered to the wrong address or becomes frustrated by providing sensitive information more than once, it can hurt your business.

Misguided marketing strategies based on insufficient data can lead to irrelevant or miscommunication with customers, negatively impacting your relationships with them and costing your business money.

significant achievementsImportant achievements: Well-managed data can improve your sales prospects and customer relationships, and saves your business significant time and money.

Implementation process for clean database

A database full of issues may seem daunting to overcome, but there are ways to ensure that your data is as clean as possible so that your business can operate more efficiently.

1. Get portfolios on the same page.

Often the biggest drain on productivity is a disconnect between company departments over data usage and goals. One of the easiest ways to improve data management is to make sure all areas of your business understand how certain data sets are used.

Ensuring that data managers know how the sales team intends to use the information can better inform the process from the earliest stages. This minimizes any irrelevant data and facilitates overall confidence in data reports and analysis.

2. Focus on new data creation.

While it can be tempting to go through existing data to fix any errors, that ultimately won't add value to your business, and will only cost you time and money. This approach also fails to address the root causes of data being inaccurate, and will eventually take you back to where you started.

It is much easier to improve data in the long run by implementing processes for new information to be followed by the whole company. By analyzing the root causes of existing bad data, you can find ways to better input information that is relevant to your sales and analytical goals.

3. Adopt CRM software and automation.

You may have content management software (CMS) that organizes customer data into a searchable system; However, it may be more cost-effective and efficient to adopt customer relationship management (CRM) software. CRMs not only keep track of customer data, they also offer versatile business tools that help with areas such as lead management, sales funnels, and CRM workflows.

CRMs also offer artificial intelligence (AI) components that automate areas susceptible to human error. Here are five of the most popular automated tools featured in most CRM software:

device type Description
Robotic Process Automation (RPA) Automates repetitive and routine tasks by mimicking human interaction at high speeds
machine learning Provides patterns and trends by examining customer data holistically
smart workflow Manages the integration of tasks performed by both humans and machines, and provides statistical data on inefficiencies in the process
natural language processing Translates complex data into understandable formats for reporting
cognitive agent Virtual agents who learn from data to provide customer service or employee support

A clear understanding of your business and sales goals, as well as the root causes of insufficient data, will help you find the automation tools that will be most effective for your company.

TipTip: Identify your exact business and sales goals before implementing any data process, including CRM systems and automation tools.

Understanding your CRM options

Of course, CRMs and automation tools aren't the magic remedy for bad data. The best CRM software provides multi-functional tools to aid your business's productivity and profits.

Here are some tips for navigating the world of CRM systems and choosing the right CRM for your business needs:

Bad or insufficient data has a significant impact on your overall business operations. However, by implementing certain processes and tools, including CRM software, you can increase efficiency, productivity, and profits.

Is Merchant Cash Advance Right For Your Business?

  • A merchant cash advance is a funding option for businesses suffering from cash flow issues.
  • You'll receive a one-time, lump-sum payment and then pay the money back with a percentage of your sales over time.
  • MCA is a good option for businesses that are not eligible for small business loans or who need funds immediately.
  • This article is for any business owner dealing with cash flow problems.

If your business is struggling with cash flow issues, you are not alone. In fact, according to a survey by US Bank, 82% of small businesses fail because of cash flow problems. Cash flow issues occur when your monthly expenses exceed the amount of cash you have with you. This could be due to slow sales or lag in customer payments. Poor cash flow affects your ability to invest in your business and affects your daily operations.

If you're dealing with cash flow issues, you might be considering small business financing of some sort. In some cases, a merchant cash advance is a useful option. But beware: MCAs are expensive, and they are not federally regulated.

What is a Merchant Cash Advance?

A merchant cash advance (MCA) allows you to cover temporary cash flow problems with future sales. You'll receive a one-time, lump-sum payment and then pay the money back with a percentage of your sales over time.

An MCA can be a good option for businesses that process large amounts of credit card transactions and need fast access to cash. If your business does not accept credit card transactions, an MCA will not be an option for you.

did you know?did you know? With MCA, you will receive a lump sum payment which you will repay along with a percentage of your sales. Know all the difference between business loan and merchant cash advance.

How does a merchant cash advance work?

Applying for and obtaining an MCA is a relatively quick process. The amount you accept will depend on the volume of your daily credit card transactions.

You can get anywhere from a few thousand dollars to $200,000, and you may be able to access the money in a matter of days. However, repayment terms are usually shorter, often less than 18 months.

The cost depends on the amount you receive and your factor rate, which ranges from 1.1 to 1.5. The financial strength of your business determines your factor rate. A better credit score translates to a lower factor rate.

For example, let's say you receive an MCA for $100,000, and your factor rate is 1.2. This means you will owe a total of $120,000.

Your lender will charge a percentage of your daily credit card transactions until the money is paid off. This percentage is known as the holdback rate, and it usually ranges from 10% to 20%.

Most lenders deduct these funds from your account automatically. Repayment terms are based on a percentage of your daily sales, so you won't find yourself in financial bind if sales at your business suddenly slow down.

When Should You Use a Merchant Cash Advance?

Although MCAs don't have the best reputation, there are times when hiring one could be the right choice for your business. For example, they can be a good option for businesses that need fast access to cash, but don't qualify for a loan from a bank.

Even if you qualify for a loan, you may still need immediate access to funds. MCAs are processed much faster than small business loans and come with minimal paperwork.

Overall, MCAs are a good option for businesses that need money fast to cover short-term expenses. If you run a seasonal business, need to cover temporary cash flow issues, or pay for one-time business expenses, an MCA can help.

TipTip: MCA should be a last resort and not a funding option. For other sources of working capital, consider these best business loans for small businesses.

What do you need to get a merchant cash advance?

Qualifying for an MCA is easy because, unlike a small business loan, you are not required to show years of business history. In many cases, you don't even need an excellent credit history to qualify.

You must be able to show at least six months of credit card transactions. A good sales history can make it easier for small business owners with bad credit to qualify.

Traditional banks usually do not offer MCA, so you will need an alternative lender. Lending Markets is a good place to look because you can fill out a single application and compare offers from multiple lenders.

significant achievementsFYI: Most banks and traditional lenders do not offer merchant cash advances. Consider an alternative lender if you need an MCA for your business.

Once you have found a lender, you will fill out the application and provide the following information:

  • proof of identity
  • contact information
  • the amount you wish to borrow
  • Company Information
  • Bank and credit card processing details
  • business tax return

Pros and Cons of Merchant Cash Advances

Alternative lenders have different advantages and disadvantages that you should be aware of before accepting a loan.

professionals

  • They have a fast application and approval process. Applying for MCA is easy, and the approval process is quick. Unlike small business loans, MCA paperwork is minimal, and you can get the money within a few days.
  • They are a viable alternative to a small business loan. Some businesses do not have the credit history or business experience to qualify for a small business loan. MCA is a good option, provided you can show a large amount of credit card transactions.
  • They can be used for anything. When you withdraw MCA, there is no requirement as to how you can spend the cash. You can use the funds however you think they will be most useful.
  • They do not require collateral. There's no collateral required, other than committing to a percentage of your future credit card payments.

Shortcoming

  • they are very expensive. Merchant cash advances can be incredibly expensive, especially if you get the high rate factor. But even with a low rate factor, you can get up to 35% with an APR.
  • They are not federally regulated. MCAs are regulated by the Uniform Commercial Code in your state. Since they are not federally regulated, they are not subject to laws such as the Truth in Lending Act, which protects consumers from unfair lending practices. As a result, many business owners find MCAs overly complex and difficult to understand.
  • They won't help you build business credit. Your lender will not report payments on time to the major credit bureaus, so an MCA will not build your business credit. The advantage is that it may not harm your credit either.
  • They can create problems of excess cash flow. While MCA provides short-term relief, it can create problems of excess cash flow over time. Mandatory daily payments can become a burden and trap your business in a cycle of debt.

significant achievementsImportant achievements: The application and approval process for MCA is quick and easy, and the money can be used for anything. But they can be very expensive and won't help you build credit.

Merchant Cash Advance FAQs

How is a merchant cash advance repaid?

When you take out the MCA, your lender will automatically deduct a percentage of your daily credit card sales from your bank account. These payments will continue till the cash advance is paid in full.

The repayment period usually lasts for 18 months. The higher your sales, the faster you'll pay in advance.

What happens if you default on a merchant cash advance?

The consequences of a lapse in MCA depend on the exact terms of your contract. MCAs are not considered loans, so they are not governed by usury laws. Instead, the MCA is considered a purchase contract between you and the lender.

If you default, your lender can sue you for the amount owed, and you could put your personal and business assets at risk. If you are concerned about the possibility of default, your best bet is to try to renegotiate the terms of your agreement with your lender.

Do Merchants Report Cash Advances to Credit Bureaus?

No, MCA is not considered a loan, and your lender will not report the payment on time to the credit bureaus. This means that an MCA will not help you build your business credit score. But it also means that if you fall behind on your payments, it will not hurt your score.

What are some alternatives to merchant cash advance?

If you are looking for an alternative to an MCA, here are some options to consider.

  • Small Business Loan: If you have an excellent credit score, consider a small business loan. Online lenders offer a much simpler application process than banks, and you can get money much faster. The rates and repayment terms will be far more favorable than the amount you can get from MCA.
  • Invoice Factoring: If you have a lot of outstanding invoices, invoice factoring may be an option for you. With factoring, you sell your accounts receivable at a discount in exchange for cash. This allows you to have access to funds without having to wait for your customers to pay you.
  • Business Cash Advance: The repayment terms of a business cash advance will depend on your current cash flow, and you will receive a lower interest rate than an MCA.

The Bottom Line on Merchant Cash Advances

If you are considering MCA, proceed with caution. This can help address temporary cash flow issues, but you'll pay incredibly high rates for the convenience.

If you are not careful, MCA can create problem of excess cash flow in the long run. Some borrowers find that after getting an MCA, they will need another cash advance soon. This fast cash can entangle you in an ongoing cycle of debt.

Here are some things to consider before applying for MCA:

  • Find a lender you trust. Finding a reputable lender makes a huge difference when it comes to your MCA experience. Consider several lenders, and when you find something you like, check out their Better Business Bureau ratings to see what other customers experience.
  • Calculate exactly how much you will owe. Once you know your factor rate, calculate the total cost you owe. The holdback rate can help you determine how much you can expect to pay per day. Knowing these statistics can help you determine whether an MCA is worthwhile.
  • Ask for early repayment incentives. If you pay off your merchant cash advance early, you'll increase your APR. Ask your lender whether they will reduce the flat fee if you pay off your cash advance early.

difference between balance sheet and income statement

  • Balance sheets and income statements are invaluable tools for business owners to measure their company's performance and prospects, but they differ in important ways.
  • A balance sheet provides a snapshot of a firm's financial position at a specific point in time, while an income statement — also known as a profit and loss statement — measures performance over a period of time.
  • Accounting software helps to manage both these financial statements.
  • This article is for small business owners who want to understand how to use the balance sheet and income statement.

The balance sheet and income statement are important tools to help you understand the health and prospects of your business, but the two differ in important ways. This guide will give you a comprehensive overview of both the financial statements.

Balance sheets and income statements represent important information about the financial performance and health of a business. An income statement measures the profit or loss of a business over a period of time, whereas a balance sheet shows the financial position of the business at a specific point in time.

Editor's Note: Looking for the Right Accounting Software for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

Balance sheet and income statement complement each other in providing a complete picture of a company's financial position and future prospects. Both are important to decision makers, investors and financial institutions.

These terms may seem daunting at first if you don't have an accounting or finance background, but reading and analyzing financial statements is an essential skill for business owners and executives.

What is Balance Sheet?

The balance sheet is the cornerstone of a company's financial statements, providing a snapshot of its financial position at a given point in time.

This includes what the company owns (its assets), what it owes (its liabilities), and owner's equity, which includes money initially invested in the company, as well as any retained dues due to owners or shareholders. with earnings.

This statement is divided into two columns based on the following equation:

Liabilities + Shareholder's Equity = Assets

This equation forms the foundation of a balance sheet, with assets in one column, liabilities equal and owner's equity in the other.

The balance sheet shows the company's performance since its inception, showing each transaction, amount raised, accumulated debt, assets acquired and their current valuation, all presented in a single statement.

It provides insight into a company's operations, finances and future prospects using financial ratios such as debt-to-equity, which reflects a company's ability to pay off its debts using equity or the current ratio, which Divides current assets by current liabilities. Determination of the company's ability to meet its obligations over the next 12 months.

did you know?did you know? The acid-test ratio adds further clarity to the current ratio by considering only easy-to-liquid assets, providing a more accurate picture of a company's ability to meet its obligations.

What is included in the balance sheet?

The balance sheet includes assets, liabilities and owner's equity at the end of the accounting period.

properties

  1. Cash and cash equivalents: Listed under current assets, this figure represents the value of cash held by the company with other cash equivalents at the end of an accounting period, which may include marketable securities and short-term deposits.
  2. Accounts Receivable: It is the amount owed to a company for goods and services delivered but not yet paid. It can be used as collateral to borrow money and is listed under current assets on the balance sheet.
  3. List, It refers to raw materials for the production of goods or services as well as finished goods ready for sale. Inventory is also classified under current assets.
  4. Plant, property, intellectual property and more: These are long-term investments that cannot be turned into cash quickly, are not used directly in the production process, and have a life of more than one year. Such assets may include trademarks, copyrights and goodwill. They are depreciated or amortized based on use or value. On the balance sheet, they are listed under non-current assets.

liabilities

  1. Debt: A loan is an amount owed to lenders, banks or suppliers. They can be classified as either current liabilities or non-current liabilities, depending on whether they are long-term or short-term debt. Even for long-term loans, future payments are included under the current portion of long-term debt.
  2. Accounts Payable: It is the payment owed by the company to the suppliers or vendors for the goods and services delivered. Given the short-term nature of these obligations, they are classified under current liabilities, which are often payable within 90 days.
  3. Underfund Pension Scheme: Company-sponsored retirement plans with more liabilities than assets are considered under-funded plans for those unable to meet their current or future obligations. They are often classified as a non-current liability, and the company is obligated to make payments and fill in the gaps when required.
  4. deferred tax liability: It represents taxes that have been earned but have not yet been paid. Deferred tax liability often arises from the difference between the time when tax is due and when payment is due, in the circumstances of installment sales, or to make up for the accrual/cash time difference.

owner's or shareholder's equity

In simple words, owner's or shareholder's equity equals the total assets attributable to the owners or shareholders in the event of the company's liquidation, after all debts or liabilities have been paid.

This section of the balance sheet includes the return of equity (ROE) calculated by dividing net income by shareholder's equity. ROE measures management's effectiveness in planning and driving returns based on equity.

Shareholder's equity also includes retained earnings—the portion of net income that is not distributed to shareholders as dividends—that will be used to finance the further growth and expansion of the business.

significant achievementsFYI: Management typically aims to maximize return on equity, and return money to shareholders in the form of dividends or share repurchases when it is unable to generate sufficient returns with these retained earnings.

What is an Income Statement?

Also known as a profit and loss (P&L) statement, the income statement summarizes a business's financial performance during a specific period, reporting revenue, cost of goods sold, overheads, and net attributable to shareholders. the gain.

The P&L statement is one of three major financial statements issued by a business, either quarterly, annually, or both if it is a public company. It keeps track of profitability, income sources, expenses and budgets, allowing the company to take action against variances from estimates. Investors and lenders pay attention to the P&L statement, especially when comparing different periods to determine a company's long-term trajectory.

For a skilled analyst, the data presented in the profit and loss statement can provide deeper insights with the use of ratios. These include gross and operating margin ratios, which highlight a company's profitability in relation to sales and expenses incurred; cost-earnings and return-equity ratios to assess efficiency in capital allocation; and the time-interest-earned (TIE) ratio for a company to meet its debt payments to measure the margin of safety.

What is included in the income statement?

The income statement focuses on four major items: sales revenue, expenses, profit and loss. It is not related to cash or non-cash sales, or anything with respect to cash flows.

  1. Revenue: This includes money generated from normal business operations. This is the company's top line, and represents the total income generated during a specific period. It is further divided into operating revenue, or revenue generated from the core activities of a business, and non-operating revenue, which includes non-core sources such as interest income and rental earnings.
  2. Actual Profit and Loss: Also known as “other income,” these are lump-sum, non-recurring gains that result from the sale or disposal of assets. These may include the sale of real estate, a minority stake in other firms, or even a subsidiary. On the other hand, the sale or disposal of loss-making assets is listed under “other expenses” and is often the result of selling assets at prices lower than their valuation on the balance sheet during a specified period.
  3. Expense: This includes all costs arising from the normal course of business, such as cost of goods sold (COGS), which is the direct cost of materials and labor incurred during the production of goods and services. Expenses also include general administrative costs., Those that are not directly linked to the production process but are essential to the organization, and depreciation or amortization of assets based on use or fixed schedules.
  4. Net income (loss: The income statement ends in a net profit or loss during the period, also known as the bottom line. Net profit or loss is what remains after adding up the actual profit and subtracting the expenses and the actual loss. This figure is due to shareholders.

What are the differences between balance sheet and income statement?

Here is a quick reference to the main difference between balance sheet and income statement, which we have discussed above.

Balance sheet income details
time The balance sheet summarizes a company's financial position at a specific point in time. The income statement provides an overview of a company's financial performance over a given period.
key items This includes assets, liabilities and shareholder's equity, which are further classified to provide accurate information. This includes revenue, expenses, and profits and losses derived from the sale or disposal of assets.
financial analysis It helps in assessing financial health by using ratios such as current ratio, debt-to-equity ratio and return on shareholder's equity. Ratios such as gross margin, operating margin, price-to-earnings and interest coverage paint a picture of financial performance.
Experiment Investors and lenders use it to determine the creditworthiness and availability of assets for collateral. Management, investors, shareholders and others use it to assess the performance and future prospects of a business.

What are the Similarities Between Income Statement and Balance Sheet?

Balance sheet and income statement complement each other in painting a clear picture of a company's financial position and prospects, hence they have similarities.

Along with the cash flow statement, they form the core of financial reporting. Error or omission in any one of them produces wrong result in all of them.

The income statement and balance sheet follow the same accounting cycle, in which the balance sheet is created immediately after the income statement.

If the company reports a profit of $10,000 during a period, and there are no drawings or dividends, that amount is added to the shareholder's equity on the balance sheet.

These and other similarities make them interdependent and necessitate both in providing a clear and complete picture of the accounts.

Can Accounting Software Help You Manage Income Statements and Balance Sheets?

Given the importance of the income statement and balance sheet in financial reporting, accounting software is invaluable. This can reduce mistakes or omissions that would result in erroneous or incorrect financial statements.

There are many accounting tools and solutions that you can read about in our QuickBooks accounting software review or our FreshBooks accounting software review. There are accounting tools that cater to organizations of all types and sizes. Here are some of the best accounting software solutions with budget pricing and intuitive user interfaces that can make accounting less difficult.

Set Up QuickBooks to Track Billable Hours

  • QuickBooks provides intuitive tools and solutions for tracking billable hours, timesheets, and more.
  • Whether you're using QuickBooks Online or QuickBooks Pro on desktop, there are several ways to track billable hours.
  • QuickBooks can also monitor paid overtime, track overtime submissions and approvals, and provide accurate workforce insight.
  • This article is for business owners and company accountants who wish to charge customers on a billable hourly basis.

QuickBooks makes it easy to track employee hours across different products, services, and customers to generate accurate bills. You can use these time-tracking functions to accurately compensate employees while monitoring the overall productivity of the organization.

In addition to the built-in time-tracking tool QuickBooks supplies, third-party tracking apps integrate seamlessly with QuickBooks for more sophisticated timesheet, time tracking, and billable functionality.

Editor's Note: Looking for the Right Accounting Software for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

Here's a look at the different ways to track billable hours with QuickBooks, no matter what version of QuickBooks you use.

TipTip: If you're looking for other accounting software with time-tracking features, a number of QuickBooks alternatives like Zoho Books may work for you. Read our Zoho Books review for more details.

What is Time Tracking in QuickBooks?

Like many of the best accounting software packages, QuickBooks provides an easy way to set up employee timesheets and track hours worked to make sure you're paying your team properly. With this functionality, you always have access to the most accurate details about the efficiency and productivity of your business.

Time tracking gives you reliable information, including employee start times and the description and scope of a project. With QuickBooks, employees can log time spent on a task from anywhere with Internet access. You're able to provide login-only, so they only see the information they need. You can also select clients for billable tasks and add users as needed.

Here are some highlights of QuickBooks' time-tracking features:

  • Employee time tracking, submission and approval
  • Paid time off and overtime monitoring
  • accurate workforce insight
  • Updates on who is working on which work at which location
  • Employee schedules through shifts and categories
  • Streamlined payroll functionality

TipTip: Read our article to understand what overtime pay means for your company, and learn how to calculate overtime accurately and comply with federal and state laws.

How to Track Billable Hours in QuickBooks Pro on Desktop

Here's what you need to know about tracking billable hours using the desktop version of QuickBooks, called QuickBooks Pro. To create a record to track billable time and hours spent, you must first enable this function.

Here's how to set up QuickBooks Pro to track time:

  1. From Edit menu, select Like choose more time and expense,
  2. under company preferencesNext to do you track time?Choose Yes,
  1. Near first day of the work week, use the drop-down arrows to select the appropriate day. Once you find it, check the box next to it Mark all time entries as billableand then click Ok,
  2. In Like window, navigate sales and customers , my preference, enable option Indication of time/cost to add, Now, whenever you generate an invoice with unbilled time for a customer, you will see a window listing all billable services. Alternatively, select ask what to do To be asked about whether you want to include the item.

How to Enter Billable Hours in QuickBooks Pro on Desktop

After you enable time tracking, you will be able to enter billable hours in a number of ways. Use Timesheets, Invoicing and Time Reports to start this process.

logging timesheet

With QuickBooks Timesheets, it's easy to log details like week, time, and customer. Then, view billable hours whenever you want to bill customers. It works like this:

  1. go to employees Menu.
  2. Click enter time choose more User Weekly Timesheet, You will see a screen which looks like a paper timesheet where you can enter the details.
  3. Near NameUse the drop-down menu to select the appropriate employee or employees.
  4. In Week Select the field, Week.
  5. Near CustomerUse the drop-down menu to create a new record in the timesheet.
  6. press Client: Job field and select Service drop down menu.
  7. verify and select payroll item code, Add optional description to notes area if you wish.
  8. In Date In the field, add the number of hours the employee worked for the customer.
  9. put a check next to billable,
  10. The total of each column will be displayed at the end.
  11. Choose save,

Repeat the same process for other employees if necessary. Once you finish, you'll see billable hours whenever you run payroll or bill customers.

significant achievementsFYI: If you have a remote workforce, keeping track of time is even more important. Read our review of QuickBooks Time, a specialized time and attendance system, to see if it's right for your organization.

View invoices and reports

With QuickBooks Pro, you can view time data entered as a report. These accounting reports are helpful to managers and serve as a key data source to support decisions.

It works like this:

  1. From reports menu, select report center,
  2. Choose Jobs, Timings & Mileage from the left panel.
  3. scroll down and click time to view reports, including job Summary, Job Description, Item And Name,
    1. job Summary Tells you how much time the company spent on each task.
    2. Job Description Shows similar details but includes employee and bill status.
    3. Item Shows the time spent on the service.
    4. Name Lists the number of employees and hours they spend on each task.

TipTip: After opening the report, view the details of the record by double-clicking on it Duration column. QuickBooks tells you whether a job or customer has outstanding billable time and lets you select the time and add it to the invoice.

billing for expenses

Alternatively, you can use QuickBooks to create invoices and bills for expenses. Here's how it works:

  1. From customersChoose invoicing for time and expense,
  2. give details data range in the window that opens.
  3. Make sure the template you want to use is visible.
  4. select column for Client: Job,
  5. under review billableVerify the details.
  6. Choose edit optionThen create invoice,
  7. Make sure that Preferred Send Method Correct each customer before creating an invoice.

How to Enter Billable Hours in QuickBooks Online

If you use QuickBooks Online for accounting, it's easy to track time and enter billable hours. Track hours in timesheets or use the built-in time-tracking functionality. Here's how both processes work.

TipTip: Read our QuickBooks Online review to learn more about the robust features of this accounting tool.

Using the Time-Tracking Feature

With the QuickBooks time-tracking feature, it's easy to track customer hours. You must first enable this feature in your QuickBooks account and set your preferences.

Here are the steps to take:

  1. Choose Adjustment (gear icon) from the top right.
  2. under your companyChoose Accounts and Settings,

  1. Click advanced,
  2. Choose Edit (pencil icon) to the right time care,

  1. Check the box to enable the following options: Add Service Field to Timesheet And Make a one-time activity billable for customers,
  2. under first day of the work weekChoose Monday,
  3. Choose save,

You have activated the time-tracking feature of QuickBooks. As soon as you allow the account to track customer hours, it starts tracking time based on your chosen preferences.

use timesheets

QuickBooks also allows you to enter billable customer hours through a timesheet. Here's how to do it.

  1. Choose add (plus sign) at the top right of the QuickBooks homepage.
  2. In employees column, select weekly timesheet,
  3. Select the name of the employee or supplier via the drop-down menu, or add a new employee or supplier.

  1. in the drop-down menu next to NameSelect the week for which you want to record activities.
  2. Make entries in the timesheet. Select the name of the customer from the drop-down list, and then add a description and select the relevant service.
  3. To calculate the total billable amount, enter an hourly rate along with the total number of hours worked for a customer on weekdays.

  1. After entering all the information, select save,

Bottom-line

Tracking billable hours for QuickBooks is easy, whether you have QuickBooks Online or on QuickBooks Pro desktop. Comprehensive QuickBooks time-tracking features enable you to track billable hours for your customers and ensure accurate billing.

QuickBooks Can Help Your Business Manage Merchant Fees

  • Recording and tracking of merchant fees is essential for computing gross income.
  • Merchant fees can be managed as a cost of sales or as an expense.
  • Accurate reporting of merchant charges can help support decisions about choosing the right merchant accounts and sales channels.
  • This article is for small business owners and bookkeepers who want to make the most of what QuickBooks has to offer.

If you accept payment from customers through a credit card payment processor, you will be required to pay a merchant (or transaction) fee based on the value or volume of the transaction. These charges can make up a substantial portion of your business's cost of goods sold, making them necessary to record and keep track of to calculate tax deductions and gross margin. QuickBooks provides a straightforward solution for dealing with merchant fees and maintaining consistent records. In this guide, we will see how to use these features effectively on QuickBooks Online and Pro.

accounting for merchant fees

Merchant fees, also called seller or transaction fees, are charged by merchant service providers to allow you to make sales on their platforms. Payment of fees for hosting, advertising, shipping, maintenance, setup and anything involved in the sales process. When you make a sale, the merchant account credits your sales proceeds to your bank account, deducting the fee from the merchant's total sales.

TipTip: Looking for Payment Processor? Compare merchant fees in our Square review and Payment Depot review.

For example, if you sell $100 worth of products on Amazon and it charges a $20 merchant fee, you'll see that only $80 is deposited into your bank account. You should record merchant charges and gross sales in your bookkeeping software for accurate reporting. Another reason to keep track of merchant fees is that they are tax deductible.

Editor's Note: Looking for the Right Accounting Software for Your Business? Fill out the questionnaire below to have our vendor partners contact you about your needs.

There are two ways you can apply for merchant fee or credit card processing fee.

cost of sales method

Accounting for merchant fees as cost of sales would place them at the top of the income statement. This means that the fee is deducted to get the gross margin. This is the formula:

Income – Cost of Goods Sold – Merchant Fee = Gross Profit

Since you don't incur these fees when sales don't happen, it's a good idea to treat them as cost of sales and include them in your gross margin. This is a fairly simple method that explicitly adds merchant fees to the cost of doing business, allowing you to compare service providers.

expenditure method

With the expense method, merchant fees are grouped under operating expenses such as rent, electricity and communications. With this method, however, you may lose sight of these costs among all the data in the income statement.

How to Manage Merchant Fees with QuickBooks Online

Each merchant service company or payment processor has different rates and terms. For example, PayPal charges 2.9% plus 30 cents for each transaction, while Payoneer transactions are free when made by another Payoneer user.

significant achievementsImportant achievements: You may be unaware of how much you are being charged for the transaction, as each payment processor has different rates and terms. This is why you need a consistent system to handle merchant fees.

Using a hypothetical 2.9% PayPal processing fee as an example, here's how you handle merchant fees using QuickBooks Online.

1. Generate sales receipts.

under New, Choose Sales receipt or cash memo. Then, Create a receipt for your customer.

As you can see in this screenshot, we've created a $50 sales receipt for a PayPal customer. Under the Deposit to option, make sure to select Undeposited funds, which is an account that we will use to hold funds temporarily.

2. Match the sales receipt with the deposit.

The next step is to match the sales receipt with the bank deposit. You can click on New again, but this time under the other column select Bank Deposit.

You can select the account where the deposit will be made and then check the corresponding payment, which in our case is $50 from a PayPal customer, as shown below.

As far as QuickBooks is concerned, it still accepts $50 deposits. After this, under Add money to this deposit, Add a New Line with PayPal Customer receive from.

The amount will include the total transaction fee, which is 2.9% plus 30 cents, or $1.75, which has to be entered as -$1.75 and can be added to an expense account such as Merchant Account Fees.

The total for this deposit should now reflect the correct amount, which is $48.25 and matches the amount received.

TipTip: Check that the total deposit amount matches the bank deposit feed. You should see a green match when you return to the Bank Feed page.

How to Manage Merchant Fees with QuickBooks Pro

Recording merchant fees in QuickBooks is essential if you're working with a payment processor, and QuickBooks Pro, the desktop version, makes the process just as simple as QuickBooks Online.

You can enter this information into the software in two ways, depending on whether the payment processor charges per transaction or a flat fee.

did you know?did you know? Payment processors may charge per transaction or a flat fee.

Entering Merchant Fee Per Transaction

Processors such as Square and PayPal charge a percentage of the transaction amount as a merchant fee.

For example, PayPal charges 2.9% plus 30 cents for each transaction. However, entering this information into QuickBooks Pro is fairly easy. Before doing so, you must have a dedicated account for merchant fees.

Start by navigating to the Receive Payment option on the Home screen or under Customers, and then follow these steps:

1. Select the customer.

Using the dropdown menu, select the customer for whom you are entering payment.

QuickBooks automatically retrieves information on outstanding invoices related to the customer and autofills the details.

2. Enter the payment amount.

In addition to the Payment Amount field, enter the exact amount to be paid by the customer.

3. Select the payment option.

Specify how the customer pays you. You will see some options on the screen. Clicking on More will bring up other payment methods like Stripe and PayPal.

If you are recording merchant charges for the first time in the software, you can click Add New to specify the processor being used for the business.

4. Correct the date.

Make sure you have selected the correct date using the dropdown calendar.

5. Enter additional details.

Now you can add other details as per your choice, such as reference number, memorandum, principal amount and amount due.

6. Record submission.

Go back to home screen. There, you will get a red color notification on the icon for record submission. Click it.

7. Select Transactions.

You will see a list of payments with options to filter and sort them. Check the payment you recorded, and then click OK to proceed.

8. Select Merchant Fee Account.

Under the payment you just entered, there should be a list of accounts. Select the appropriate expense account to record all merchant fees.

9. Enter Merchant Fee.

Use a negative number when entering merchant charges. The software will automatically deduct this fee from the total payment.

10. Record the entry.

Verify that the screen shows the correct information with the exact total in the bottom right corner. Next, click save close. Repeat the steps for all merchant charges.

Entering Merchant Fees as an Amount

Although not common, some payment processors, such as Fattmerchant, charge merchant fees on a monthly basis. If you work with such processors, you can navigate check register Go to home screen or use register, under banking, And select the account from which you want to pay the merchant fee.

1. Edit the date.

Make sure the date is correct. Use a calendar if necessary.

2. Select the seller.

in the dropdown list below recipient, Select the seller to whom you are paying the merchant fee.

3. Select Account.

Under Cause Select the Merchant Fees tab in the Account for Entry.

4. Add a memo.

You can add a memo to the payment if you wish.

5. Enter the merchant fee.

Enter merchant fee amount where you see payment. Finally, click Record To enter merchant charges.

Flexibility to Handle Merchant Fees with QuickBooks

QuickBooks lets you handle merchant fees in a number of ways so you can stay on top of your reports and taxes. As minor as merchant fees may seem, they can be a large part of your cost of goods sold, so keeping a careful record of them is essential.

As always, QuickBooks provides a powerful set of features to help you achieve your accounting goals seamlessly. This simple solution to what was once a complicated process for bookkeepers and business owners is proof of that.

TipFYI: Even if you're using one of the many QuickBooks alternatives, the general process is the same.

We hope this guide helps you understand how you can effectively manage credit card charges and merchant charges in QuickBooks Pro and Online.

How Small Businesses Can Affect Large Companies

  • Small businesses are the lifeblood of the US economy and account for 99.7% of all employers.
  • Small businesses work with larger enterprises as vendors, customers, competitors or partners.
  • Large businesses can learn from small business ingenuity, innovation, agile management, customer service, workplace culture and diversity.

Small businesses are often viewed as small people, but they actually make up the majority of the US economy. As a small business owner, you must know the value of your business and how you impact the people around you – including large companies.

According to the US Small Business Administration (SBA), small businesses account for 99.7% of companies with paid employees, and more than a third have known US export values. What's more, from 2000 to 2017, small businesses accounted for more than 65% of net job creation.

With such a large footprint in the US economy, it is clear that small businesses are the backbone of America.

Why are small businesses important?

Small businesses are important for many reasons – job creation, exports, innovation – but perhaps their biggest impact is on their local communities. Leslie Hasler, a small business scaling strategist, explains how successful small businesses leverage their resources within their communities.

“As small businesses continue to grow, their impact on the economy is strengthened as they hire more people and form more relationships with other small businesses and nonprofits, creating an ecosystem of personal connections. Weave the tantra,” Hasler told Business News Daily. “Today's small business owner is concerned not only about their individual success, but the success of their team and their communities.”

In fact, the AMEX 2018 Small Business Economic Impact Study found that approximately 67% of every dollar spent on a small business lives in the local community. This cycle accelerates the economy.

Why is the presence of small businesses important to large businesses?

Although it may seem like large companies have the power, small businesses are an important element in their success. Loomly CEO Thibaud Clement lists five ways that small businesses can represent significant opportunities for larger businesses.

  • Vendors: Small businesses can provide solutions to specific needs or edge cases that larger vendors do not yet provide. For example, this is often true when an emerging tech startup closes a deal with a Fortune 500 company.
  • Customer: There were more than 30 million small businesses in the US in 2015, so it's no surprise that small businesses represent a significant portion of the total addressable market or significant growth potential of many large businesses.
  • Competitors: Small businesses can indicate emerging trends and needs for larger businesses.
  • Partners: Small businesses can provide synergy to large businesses by mixing their respective offerings and providing unparalleled value to customers.
  • Acquisition: In some cases, a smaller business complements a larger business's existing offering so well that it makes business sense for the latter to acquire the former.

Without small businesses, large companies would not have been able to thrive in their own way. Small businesses provide many much-needed opportunities that cannot be overlooked.

How do small businesses affect large businesses?

Small businesses affect large enterprises in many ways. For example, Hustler said that many large businesses learn from the ingenuity, innovation and agile management of a small business. Since large businesses are often blocked by red tape, they watch small business trends in real time to see how the market is operating efficiently. They then use those pivots to make data-driven decisions.

“Since small businesses are more agile than larger businesses, the decision-making process is much faster,” Hasler said. “This means that small businesses can test new technologies, processes, systems, and marketing methods much more quickly than larger businesses.”

In addition to leading innovation, Boldhaus CEO Angelique Rivers said small businesses act as competition for larger businesses in the war for talent, which is affecting workplace culture and standards of diversity.

“Small companies are able to easily create the workplace cultures and work-life integration programs that employees are looking for today,” Revers said. “But I would argue that it is good for large businesses, because it is pushing them to do better on diversity, leadership programs, wellness and more.”

What are the advantages of small businesses over large businesses?

Because of the strength and resources, large corporations have many advantages over small businesses; However, the opposite statement can also be made. For example, small businesses benefit from higher limits for risk tolerance and speed. They can freely innovate and change as needed, as they are not blocked by the many protocols, guidelines, office politics and management that hinder large businesses.

Additionally, Clement said that small businesses typically benefit from fewer legal regulations. “While all businesses must comply with the law, some specific laws apply differently depending on the size of the business, usually with additional requirements for larger businesses than for smaller businesses. This is especially true. When it comes to human resources, when specific responsibilities apply, a company grows to more than 20, 50 or 500 employees.”

Since small businesses usually work closely within their local communities, they have the ability to better understand the needs of their customers.

“The biggest advantage — and the one we're often cited by corporate clients — is that small businesses tend to be hyper-responsive to their needs,” Revers said. “They can turn a dime, and in today's world, agility is everything.”

In addition to keeping a finger on the pulse of what consumers want and adjusting their strategies accordingly, small businesses provide a more personalized experience for their existing and potential customers. This is important, as consumers are increasingly demanding personalized products and services.

How can small businesses work successfully with large businesses?

Small business owners should not fear large corporations, and vice versa. Both can work together; However, small business owners need to be aware of a few things when dealing with large enterprises.

Clement said larger businesses tend to have more internal processes and policies, which come with deadlines to honor, rules to follow, and requirements to be met. To counter this, he listed three strengths that small businesses need to be successful when working with corporate clients.

  • Adaptability: Small businesses need to be able to make changes to products and services to meet the specifications required of their customers.
  • Legal Expertise: To limit liability and protect their interests, small business owners need to consult with legal experts before signing contracts.
  • Runway: To account for the longer sales cycles and payment schedules that larger businesses have, smaller businesses may need access to additional working capital to keep them afloat while they wait for payment. [Read related article: Small Business Financing Options Without a Traditional Bank]

Small companies have the potential to thrive in today's market, as long as they remain vigilant. They are the lifeblood of the US economy and must use their resources and size to their advantage.

“There are more opportunities for businesses, both small and large, to flourish cooperatively in a competitive manner as well,” Hasler said. “It will be the continuing intent of both sides to see that the symbiotic relationship of today continues to flourish.”

Creating a Payroll Report in QuickBooks

  • The QuickBooks Online Payroll Report gives you a snapshot of your business's employees and payment data.
  • QuickBooks Online offers 17 unique payroll reports.
  • Exporting payroll reports to Excel is easy, which is a plus for small businesses.
  • This article is for small business owners and accountants who want to create payroll reports in QuickBooks Online.

Creating and running QuickBooks Online payroll reports is simple and easy. The software is capable of generating 17 different types of payroll reports and allows you to customize the type of report you want to run. This flexible reporting is part of the reason we chose QuickBooks Online as the best payroll software for small businesses.

If you are a small business owner or accountant, you may want to prepare a payroll report for the following reasons:

  • tracking total labor cost
  • verification of tax liabilities
  • reconciliation of financial data
  • Calculation of employer tax contribution
  • Recording pay rate, hours worked, overtime and taxes withheld
  • Maintaining accrued time off and other benefits balance

What are Payroll Reports?

A payroll report is a document of payroll information data that is created using your company's details and records. Many payroll reports are limited to a specific time period, such as the first pay period of the month, quarterly pay, or total pay for the entire accounting year.

Sometimes these reports contain too much information, so you or your accountant may want to customize or limit the information reported. QuickBooks Online gives you this capability, allowing you to generate reports with just the data you want to report. Read our review of QuickBooks Payroll for more information on this payroll solution.

Report Type

The following 17 reports can be created, exported, saved, and printed in QuickBooks Online:

  • employee detail report Include information such as wages and wages, deductions and tax withholding.
  • employee contact list report Include your employees' contact information, such as addresses, emails and phone numbers.
  • FFCRA Cares Act Report Include information about credits linked to COVID-19 pay.
  • multiple workplace reports Depends on the state in which you do business, but they also include information related to completing a number of work sites.
  • paycheck history report Allows you to view past paychecks, previous payment methods and previous paycheck status.
  • Payroll Billing Summary Give your business a history of all payroll charges billed.
  • Payroll Deduction/Contribution Report Total all employee deductions and contributions.
  • payroll detail report Provide details such as past paycheck amounts, taxes and deductions.
  • payroll summary Payroll details are similar to reports, but also include wages and salaries.
  • payroll tax liability report Show how much payroll tax you paid for past payrolls, as well as how much payroll tax you'll need to pay for future payrolls.
  • payroll tax payment report Show how much payroll tax you paid.
  • Payroll Tax and Salary Summary Outline taxable wages, both federal and state (if applicable).
  • retirement planning report Include information about employee and company retirement plan contributions.
  • total salary report Summarize an individual employee's total salary and type of salary, such as hourly wage, salary or commission.
  • total payroll cost report Summary of total expenses associated with payroll.
  • Leave and sick leave reports Track accumulated and used leave and sick leave, as well as other customizable benefit package items.
  • workers compensation report Show payroll classification and premiums.

did you know?FYI: Many of these reports can be customized to fit your data reporting.

How to Create a QuickBooks Online Report

Creating and running the above 17 reports in QuickBooks Online is just as easy as many other tasks. As long as you've processed payroll in QuickBooks at least once, you'll be able to create and run payroll reports. Below, we'll break down the step-by-step process of accessing and running the Employee Contact List report.

did you know?did you know? QuickBooks is the #1 online payroll provider for small businesses. Learn how its software and offerings like on-demand payroll are helping small businesses.

To run the Employee Contact List Payroll Report in QuickBooks Online, complete the following steps.

1. On the QuickBooks Online Dashboard, click Reports and select the Employee Contact List report. Once you click on Reports, scroll down to the Payroll section.

You'll see any report QuickBooks Online can generate for your business. For example, if your business doesn't have multiple workplaces, you won't see the Multiple Workplaces report. QuickBooks Online screens and automates the information for your business, so it doesn't give you any unnecessary reports.

If you've run payroll in the past, all payroll-type reports should be populated here as well as employee-type reports.

If you've created custom reports in the past, you'll be able to access them next to standard reports. If there is a report that you plan to run frequently, you can favorite the report by clicking the star to the right of the listed report.

Choose employee contact list To continue in this section.

2. Select the report you want to create and run. Once you've selected the Employee Contact List report, it's time to get it up and running. QuickBooks Online produces the information as a detailed report.

Below that will be filtered to show your employee contact list. The employee's name, phone number, email and address will appear in the report below.

You can modify the above report as you add more employee information to QuickBooks Online. When you initially signed in to your employee, you probably included some of the following information:

  • Name
  • phone number
  • email address
  • Home Address
  • date of hire
  • Social Security Number
  • Date of birth
  • Employee ID
  • gender
  • created by
  • date making
  • Notes in respect of employee, if applicable

To modify your report, click on the Settings tool and check the features you want to include when running the Employee Contact List report. After selecting the features you want, click save customization,

Here are some of your options for filtering your reporting:

Almost every payroll report you run will ask you to filter by date range. You can use calendar dates, months, quarters, years, or specific payroll schedules. For Employee Contact List report, you can filter by date of creation of employee, date of hire, date of last modification etc. in QBO.

These are some other filters to limit the data in your specific report.

  • Employees: Some reports allow you to filter by certain employees, whether they are active or inactive.
  • Work Location: If you have employees in more than one location, some reports allow you to provide information about specific locations.

3. Click Run Report, then Export Report. Most business owners prefer to export QuickBooks Online reports. The 17 reports typically found under the Payroll section of QuickBooks Online will be exported as an XLS file, which means it's synced with Microsoft Excel.

Below is shown the employee contact list exported to Microsoft Excel. From there, you can format and organize your reports.

4. Save the report. It's easy to save and print your report if you want.

QuickBooks Online allows you to generate many standard and custom payroll reports. The ability to trim reported total payroll data and consolidate it in a way that makes sense for your business is another reason why QuickBooks is the preferred accounting software for small business owners and accountants.