FY21 QBOA Module 9 End of Period Activities Supplemental Guide

QUICKBOOKS ONLINE ADVANCED CERTIFICATION COURSE
Supplemental Guide
Module 9: End-of-Period Activities
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Module 9: End-of-Period Activities Table of Contents
Table of Contents
About the Author ....................................................................................................................... 3
About the Team ......................................................................................................................... 4
Supplemental Guide Overview ................................................................................................. 6

Purpose of this Guide ...................................................................................................................................... 6
Google Chrome ............................................................................................................................................... 6
Learning Objectives ......................................................................................................................................... 7
Training at a Glance ......................................................................................................................................... 7
QuickBooks Online Accountant Test Drive................................................................................................. 10
Lesson 1: Review Lists ............................................................................................................. 11

Examine the Chart of Accounts List ............................................................................................................. 11
Examine Customer/Vendor Lists .................................................................................................................. 14
Examine Product/Service Items .................................................................................................................... 18
Lesson 2: Issues with Undeposited Funds ............................................................................... 22

Group Multiple Payments ............................................................................................................................. 24
Lesson 3: Write Off Invoices .................................................................................................... 25

Review of Write Off Invoices Tool ................................................................................................................ 25
Write off Invoices for Accrual-based Clients and When Sales Tax is Involved........................................ 29
Lesson 4: Troubleshoot Inventory ........................................................................................... 31

Troubleshoot Inventory Balances................................................................................................................. 31
Troubleshoot Negative Inventory Quantities ............................................................................................. 32
Lesson 5: Troubleshoot Other Account Balances ..................................................................... 34

Correct Overstated Accounts Receivable ................................................................................................... 34
Case Study of Accounts Receivable ............................................................................................................. 35
Correct Overstated Accounts Payable ........................................................................................................ 36
Troubleshoot Clearing Accounts ................................................................................................................. 37
QuickBooks Online Advanced Certification Course 1

Module 9: End-of-Period Activities Table of Contents
Lesson 6: Batch Reclassify Transactions ................................................................................... 41

Advanced Reclassification Options.............................................................................................................. 41
Limits and Limitations .................................................................................................................................... 49
Reclassify Transactions Categorized by Class ............................................................................................ 50
Reclassify Transactions Categorized by Location....................................................................................... 54
Reclassify Accounts for Items ........................................................................................................................ 58
Lesson 7: Prep for Taxes .......................................................................................................... 59

Changes .......................................................................................................................................................... 60
Work with Prep for Taxes .............................................................................................................................. 61
Lesson 8: Prepare Forms 1099 ................................................................................................ 66

FAQ .................................................................................................................................................................. 66
1099 Resources .............................................................................................................................................. 67
Complete Contractor Information................................................................................................................ 68
Lesson 9: Closing Date and Exceptions to the Closing Date Report ........................................ 73
Set a Closing Date.......................................................................................................................................... 74
Exceptions to Closing Date Report .............................................................................................................. 75
Conclusion ............................................................................................................................... 76

Module 9: End-of-Period Activities About the Author
About the Author
MB Raimondi, CPA.CITP
mb@mbraimondicpa.com
Visit MB on Facebook
MB (Mary Beth) Raimondi, CPA, CITP, MS Taxation is an Advanced QuickBooks Certified ProAdvisor
in both QuickBooks Desktop and QuickBooks Online as well as being certified in Enterprise and
Point of Sale.
She has been teaching QuickBooks nationally to both end users and accountants/consultants for
over 20 years. She is a charter member of the Intuit Trainer/Writer Network.
The focus of her practice is mainly QuickBooks consulting and training, specializing in strategizing,
researching and installing third-party add-ons and conversions to QuickBooks from other
accounting software.
She’s part of the QuickBooks Solution Provider program, getting great deals on Intuit products and
services.
MB was named the 2019 ProAdvisor of the Year by Insightful Accountant and has been in the Top
100 ProAdvisors for 2014-2019.

Module 9: End-of-Period Activities About the Team
About the Team

It does take a village to complete a project of this magnitude. My heartfelt thanks go out to the
following team members and fellow ProAdvisors as well as Intuit employees for all their long hours
and dedication.
Esther Friedberg Karp, MBA

President, EFK CompuBooks Inc.
esther@e-compubooks.com
Esther Friedberg Karp is an internationally renowned trainer, writer, business consultant and speaker
who has been repeatedly listed as one of Insightful Accountant’s Top 100 QuickBooks ProAdvisors in
the world. She has also been named to their Top 10 list on two occasions: as Top International
ProAdvisor and Top Trainer/Writer ProAdvisor.
Based in Toronto, Canada, Esther has the unique distinction of holding ProAdvisor certifications in
the United States, Canada and the United Kingdom. She has authored materials and delivered
educational and certification courses for Intuit in all those countries, as well as Australia where she
conducted live QuickBooks Online training. She has spoken at Scaling New Heights, QuickBooks
Connect and other conferences, and has written countless articles for Intuit Global.
Esther’s clients include companies worldwide and accounting professionals who ask her advice on
behalf of their own clients. She is sought out for her expertise in various countries’ editions of
QuickBooks Desktop and Online, and for her talent in customizing QuickBooks usage for different
industries. She also teaches QuickBooks Core and Advanced certification classes to accounting
professionals in Canada.
Esther holds a BSc from the University of Toronto in Actuarial Science and Mathematics, and an MBA
in Marketing and Finance from York University’s Schulich School of Business.
She can be reached at esther@e-compubooks.com or 416-410-0750.

Module 9: End-of-Period Activities About the Authors
Heather D. Satterley, CPA

Owner/Founder, Satterley Training &
Consulting
heather@satterleyconsulting.com
Heather is a CPA and founder of Satterley Training & Consulting, LLC a consulting firm focused on
helping businesses define, design, and automate their processes by employing innovative strategy
and cloud-based technology. Heather is an Advanced Certified ProAdvisor, member of the exclusive
Intuit Trainer/Writer Network, and a Zapier Expert. She holds an undergraduate degree in
Accounting and a master’s degree in Innovation from Northeastern University in Boston, MA.
Heather is the co-host of the QB ‘Appy Hour with Liz and Heather, a webinar series devoted to
building awareness in the accounting community about the latest technology trends and best
practices in a fun, relaxed environment.
Heather was named a categorical Top 10 ProAdvisor in 2017 and 2019 and has been listed as a Top
100 ProAdvisor for the past six years by Insightful Accountant. She was also named to the Top 100
Influential People in Accounting in 2019 by Accounting Today.
Twitter: @hsatterley
LinkedIn: https://www.linkedin.com/in/heathersatterley/
www.satterleyconsulting.com
www.theappyhour.com

Module 9: End-of-Period Activities Overview
Supplemental Guide Overview
PURPOSE OF THIS GUIDE

Many of our small business clients have specialized procedures that require customized workflows to
perform day-to-day activities and provide the business owner with relevant information. Each of the
subjects presented in this guide is intended to help you understand the advanced customizations
and workflows available in QuickBooks Online.
Product update notification — QuickBooks Online and QuickBooks Online Accountant are constantly
being improved:
• When you log in to qbo.intuit.com, it may look different from the screenshots originally taken for
this supplemental guide
• Where to go to learn about the latest product updates:

 https://www.firmofthefuture.com/product-industry-news/product-updates//
 http://quickbooks.intuit.com/blog
GOOGLE CHROME
NOTE: Screenshots and instructions included in this guide use Google Chrome as the browser.

LEARNING OBJECTIVES
• Recognize best practice when reviewing and troubleshooting QuickBooks Online lists
• Recognize best practice identifying and troubleshooting issues with Undeposited Funds
• Identify best practice when working with Write Off Invoices functionality in QuickBooks Online
• Recognize the steps to troubleshoot inventory balance issues in QuickBooks Online
• Recognize the steps to identify and troubleshoot over- or understated A/R or A/P
• Recognize the steps to identify and troubleshoot clearing account balances
• Identify how to batch-reclassify transactions in QuickBooks Online Accountant
• Recognize some of the issues or limitations of the Reclassify Transactions tool
• Identify how the Reclassify Transactions tool can be used to change classes and locations
• Recognize that Prep for taxes is a new feature that replaces Trial Balance
• State when Prep for taxes is used
• Describe how to use the Prep for taxes tool to ready a client’s books for the tax preparer
• Identify the processes available and information needed to prepare forms for non-employee
compensation
• State the options and processes available within QuickBooks Online to prepare Forms 1099-NEC
• Identify steps to set a closing date and review exceptions in the Exceptions to Closing Date
report
TRAINING AT A GLANCE
Use the following as a guide to select specific workflows you want to cover.

TOPICS STEP-BY-STEP LEARNING OBJECTIVES

WORKFLOWS
• Merge an account • Recognize best practice when
1. REVIEW LISTS
• Create a report to identify reviewing and troubleshooting
duplicate customers QuickBooks Online lists
• Review account mapping
• Resolve undeposited • Recognize best practice identifying

2. ISSUES WITH and troubleshooting issues with
funds issue
UNDEPOSITED Undeposited Funds
FUNDS
3. WRITE OFF
• Use the Write Off Invoices • Identify best practice when working
tool with Write Off Invoices functionality
INVOICES
• Setup in QuickBooks Online
• Create a credit memo
• Troubleshoot inventory • Recognize the steps to troubleshoot

4. TROUBLESHOOT inventory balance issues in
balance discrepancies
INVENTORY QuickBooks Online
BALANCES
5. TROUBLESHOOT
• Recognize the steps to identify and
troubleshoot over- or understated
OTHER ACCOUNT
A/R or A/P
BALANCES • Recognize the steps to identify and
troubleshoot clearing account
balances
• Reclassify accounts • Identify how to batch-reclassify

6. BATCH-
• Reclassify classes transactions in QuickBooks Online
RECLASSIFY
• Reclassify locations Accountant
TRANSACTIONS • Recognize some of the issues or
limitations of the Reclassify
Transactions tool
• Identify how the Reclassify
Transactions tool can be used to
change classes and locations

TOPICS STEP-BY-STEP LEARNING OBJECTIVES

WORKFLOWS
7. PREP FOR TAXES

• Recognize that Prep for taxes is a
new feature that replaces Trial
Balance
• Describe how to use the Prep for
taxes tool to ready a client’s books
for the tax preparer
• Request W-9 information • Identify the processes available and

8. PREPARE FORMS information needed to prepare
1099 forms for non-employee
compensation
• State the options and processes
available within QuickBooks Online
to prepare forms 1099-NEC
• Set a closing date • Identify the steps to set a closing

9. CLOSING DATE date and review exceptions in the
AND EXCEPTIONS Exceptions to Closing Date report
TO THE CLOSING
DATE REPORT

QUICKBOOKS ONLINE ACCOUNTANT TEST DRIVE

Exercises contained inside this guide can be completed using the QuickBooks Online Sample
Company, Craig’s Design and Landscaping Services. It simulates your client having a QuickBooks
Online Plus subscription.
• Open the Sample Company by logging into your QuickBooks Online Account  Gear icon 
Your Company section  Sample Company
• While you are working in the sample company, your work will be saved
• Upon closing the sample company file, QuickBooks Online automatically restores its settings and
data. If you log out and log in again, the Sample Company will reset (your work is not saved).
• By default, the sample company will sign out if inactive for one hour. You will lose any data and
settings, since this sample company resets each time you log in. Give yourself enough time to
complete the assignment.
• To increase the maximum hours of inactivity allowed before timing out, in the Sample Company
 Gear icon  Your Company section  Account and Settings  Advanced  Other
preferences  Sign me out if inactive for (select two hours or three hours)  Save.
NOTE: The QuickBooks Online Accountant test drive company contains some features that are not
available in QuickBooks Online Simple Start, Essentials, Plus or Advanced. (You may wish to share the
QuickBooks Online test drive file with your clients for them to practice in a QuickBooks Online Plus
environment without seeing Accountant-only features: https://qbo.intuit.com/redir/testdrive.) In
addition, some features (such as in-product Help) are not enabled in this test drive file. This is subject
to change.

Module 9: End-of-Period Activities Lesson 2: Issues with Undeposited Funds
Lesson 1: Review Lists
As part of period-end work, you will want to review the key lists:
• Chart of Accounts
• Customers
• Vendors
• Products and Services
Clients often make errors in setup which could have a substantial effect on their reports. Check the
lists to see:
• Whether the list is too long

• If there are duplicates
• If they were set up correctly, including type and mapping
EXAMINE THE CHART OF ACCOUNTS LIST
Businesses often have many accounts on the Chart of Accounts that need to be cleaned up or
merged. Based on your experience and training, determine whether the Chart of Accounts is too
long or complicated, if there are duplicates or any accounts have been set up as incorrect types. The
account type controls the presentation for financial reports.
Use the Audit Log to filter and search for changes to lists and look for changes to accounts since the
last review. Edit accounts to make changes as needed. Make any unused accounts inactive. In
QuickBooks Online Simple Start, Essentials and Plus, there is a limit of 250 accounts on the Chart of
Accounts. The number is unlimited in QuickBooks Online Advanced. If you make an account
inactive, it doesn’t apply to the usage limits. Accounts can be re-activated; they are never actually
deleted. Merge duplicate accounts to move all financial transactions from one account to the other,
thereby combining activity into one account. The information will remain for the account to which
the name is being changed; the other account will be marked as inactive. Be careful! Merging
accounts is not reversible and you are potentially changing prior year information by moving it to
another account. The account detail types must match to merge.

Step-by-Step: Merge an Account
1. Make sure the account you are merging from and the account you are merging to are both the
same account and detail type.
2. Open the account you don’t want to keep (the one you want to merge from).
3. Rename the account to match the account you want to keep (the one you want to merge to).
4. Click Yes to the message to confirm the merge.
Make Inactive
To make an account inactive, highlight the account you want to make inactive, click the Action drop-
down  Make inactive (reduces usage).
To see your inactive accounts, select the Grid Gear icon at the top right of the Chart of Accounts and
select the Include inactive checkbox.
When you make an account inactive, QuickBooks Online hides the account from lists and menus but
keeps a record of past transactions on reports and tax forms.
If a P&L account with activity is made inactive, the account will show on reports with (deleted)
appended to the end of the name. If you delete an expense account in a current year, when you run
a prior year P&L and that account had transactions posted to it, it will still display this account with
(deleted) in the name.

If a balance sheet account with a balance is deleted, QuickBooks Online will give you an error
message that there is a non-zero balance but still allows you to delete it.
Before QuickBooks deletes the account, it zeroes out the balance and offsets Opening Balance
Equity.
The proper procedure is to reclassify the balance before deleting the account. When a balance
sheet is run for prior periods when the account had a balance, it is shown on the report with
(deleted) appended to the end of the name.
If QuickBooks Online made an entry to zero out the Balance Sheet account and you reactivate the
account, QuickBooks Online does not reverse that journal entry.
When you run reports, you’ll still see inactive accounts and their transactions. QuickBooks Online
includes them to keep everything accurate. You can customize some reports to hide inactive accounts,
but this may affect the accuracy of the report.

Account Troubleshooting
Some account types require extra steps before you delete them.
• If products or services are linked to an account you want to delete, you need to change the
account to which they’re linked. You can alternatively make the products and services that use
the account inactive.
• If an income account you want to delete has pending charges, invoice your customers for the
billable expenses, time or charges. Once you’re done, you can make the account inactive.
• If the account has sub-accounts attached, move them somewhere else on your Chart of Accounts
• If you inactivate an account that has active sub-accounts, you will inactivate all the sub-accounts.
If the account is a balance sheet account and it (by itself or one of its sub-accounts) has a non-
zero balance, you will see a warning to that effect before you are allowed to inactivate it. No such
warning exists before inactivating a profit and loss account with active sub-accounts. Reactivating
an account with sub-accounts will only reactivate the parent account; the sub-accounts would
have to be reactivated individually.
EXAMINE CUSTOMER/VENDOR LISTS

You’ll also want to review the Customer and Vendor lists to make sure they are free of duplicates and
names that are no longer needed.
Identify Duplicates
Duplicate customers and vendors may appear due to incorrect spelling or punctuation or by using
different choices for display name as. If you have a first, last and company name, you can choose the
Display name as to be either the company name or the individual name (with your choice of last
name first or first name first). It may be hard to identify these duplicates because they typically won’t
be adjacent to one another. One way to help identify duplicates is to run a Customer/Vendor
Contact List report grouped by billing ZIP (or Shipping ZIP if applicable) and add a column for
phone numbers.

Step-by-Step: Create a Report to Identify Duplicate Customers
1. Open the Customer Contact List report.
2. Click Customize.
3. Select Rows/Columns.
4. Group by Billing ZIP.
5. Select Change Columns.
6. De-select any unwanted columns; make sure the Phone Numbers column is included.
7. Run report.
You might want to go over the list with your client as they are more likely to spot duplicates. (You can
do the same thing with the Vendor Contact list, grouping by ZIP.) You can use the same method to
merge duplicate customers or vendors as you did with the Chart of Accounts. The name field you
want to make the same is the Display name as field. Because QuickBooks Online never deletes list
entries, the old name is still there and is inactive.

Customers No Longer Needed
There may be long lists of completed jobs that are no longer needed in the Customer list. Make the
customers or sub-customers inactive by editing the customer’s information and clicking Make
inactive. Keep in mind that if you inactivate a customer or vendor who has an open balance,
QuickBooks will record an entry to zero the open balance and post the offsetting debit or credit to
Opening Balance Equity.
You should write off customer invoices by either creating a credit memo or using the Write Off
Invoices tool (addressed in Lesson 3 of this module), and create the appropriate transaction (bill,
vendor credit, or journal entry) to zero the balance on a vendor account before you deactivate the
name.

Sub-customer Errors
Other issues you may encounter are the way the client records customer/sub-customer transactions.
Recall from the Core Certification that you have the option to bill a sub-customer at the parent level
or directly to the sub-customer. If the client bills the sub-customer and isn’t careful, you can end up
with payments posted to the wrong sub-customer. To fix this error, click on the open payment and
change the name to the correct sub-customer. Before you correct the sub-customer name, make
sure you write down the amount received first as QuickBooks will zero out the amount when you
select a different sub-customer. Then re-enter the amount received on the screen for the correct
sub-customer.
To find unapplied payments for a customer easily, open the transaction list page and filter for money
received then add the Status column. The Status column will show any unapplied payments.

This would be a great opportunity to review the Bill to settings with your client to make sure they are
using the correct one for each customer. You can also turn off the Advanced (Automation) setting to
Automatically apply credits to help with this type of error.
EXAMINE PRODUCT/SERVICE ITEMS

Like the Chart of Accounts, the Products and Services list should also be reviewed to determine
whether the list is too long, if there are duplicates and if they are set up properly. Products and
services are linked to general ledger accounts. It is recommended that you review the list and the
associated accounts at least annually to help you uncover financial reporting errors.
A double-sided item (QuickBooks Online Plus and Advanced only) is linked to both an income and
an expense account. When used on a sales form, it typically posts to an income account. When used
on a purchase transaction, it typically posts to an expense or COGS account. A common error in the
Products and Services list is that an item has not been set up as a double-sided item. When the
expense side is not set up on a double-sided item, users cannot select it on a purchase transaction
form in the Item details grid.

Whether a non-inventory or service item is set up as double-sided or your client is tracking inventory,
you want to make sure the items are mapped to the correct accounts. If, for example, a service item
is set up as a double-sided item and both sides post to an income account, your reports are not
going to be correct.
Step-by-Step: Review Account Mapping
1. Open the Products and Services list.
2. Click the Grid Gear icon and make sure Income, Expense and Inventory accounts are selected
to display.
3. With all accounts displayed, check all items are properly coded to the correct accounts and edit
the items as necessary.

If you change the income or expense account associated with a non-inventory or service type item, a
checkbox (under the newly-linked account) will appear to check if you also want to update this
account on historical transactions. (You will see this checkbox in the Sales information and the
Purchasing information sections if you are changing both the income and the expense account.)
When you click Save and Close, if any of the historical transactions are dated up to and including
the current closing date, you will be prompted to click Save again to make this change to
transactions up to and including the closing date.
If you don’t check the box, QuickBooks Online will use the newly linked account from this time
forward. It does not change postings of prior transactions.

If the item is an inventory item, QuickBooks Online will allow you to change the Inventory Asset,
Income or Expense account, but it will not give you the checkbox option to affect historical
transactions; rather, it will affect all historical transactions automatically. It will prompt you to click
Save again to make this change if involving transactions dated up to the closing date. If the item is
used in a prior period, it will affect prior period numbers.
IMPORTANT: If you make an inventory item inactive that has a quantity on hand, QuickBooks zeroes out
the quantity on hand and posts it to an Inventory Shrinkage cost of goods sold account as of today’s
date. Best practice is to do an inventory quantity adjustment to zero it out before you make it inactive.

Lesson 2: Issues with Undeposited Funds
The Undeposited Funds account is a holding account for payments received until they are taken to
the bank and deposited. When a customer payment is received, the Deposit to account typically
should be Undeposited Funds. Then a deposit is recorded to group, customer payments together
and move them from Undeposited Funds to the bank account as of the actual date it goes into the
bank. The setting for Deposit to on the sales receipt and receive payment forms is “sticky.” Once
saved, the next time you open the screen for that form, it will default to the last Deposit to account
used.
Some businesses do not understand the Undeposited Funds workflow and make mistakes using this
account. The most common error is that businesses will record a payment against a customer invoice
and post it to Undeposited Funds — so far, so good. However, they will then record a deposit into the
bank and post it to income. Now income has been recorded twice — once by the invoice and once
by the deposit. This can be easy to do on the Banking screen if the deposit is for a group of amounts
that QuickBooks Online can’t recognize, and the user doesn’t click Find match to group them but
instead adds them as income. This mistake causes both Undeposited Funds and income to be
overstated and leads to a growing balance in the Undeposited Funds account. When the
Undeposited Funds account has a balance at the end of a period, you must determine which
payments have not yet been recorded as deposited in order to confirm whether or not they are
current, and the deposit is actually pending.
Before you start troubleshooting, it helps to make sure the bank account is reconciled so you can
delete any duplicate deposits that may be recorded. There are several ways to identify which
payments need to be grouped and recorded on a deposit transaction.

Step-by-Step: Resolve Undeposited Funds Issue
1. Open a new deposit transaction and view the undeposited payments received at the top of the
screen waiting to be incorporated into a deposit.
2. Once you find the payments that need to be deposited, close the new transaction and find the
deposits that should have included these payments. Search the Banking screen’s Categorized
tab to find the downloaded bank transaction for this deposit, then click the link to open the
transaction and find out how it was recorded. This should open a Deposit screen, likely posted to
an income account. You should see the outstanding customer payment received at the top of the
screen.
3. Check the box next to the customer payment and delete the lines below recording the duplicate
income.
4. Save and close. This will not affect the deposit’s reconciled status.

GROUP MULTIPLE PAYMENTS

Applying each payment to its proper deposit is time-consuming, but it is the most accurate method.
If you don’t change the deposit date or deposit total amount, this will not disrupt bank
reconciliations that include the deposit. Before you begin, make sure it is acceptable to adjust the
numbers for the periods when the deposit to income was originally recorded. When you apply the
received payment to be deposited and delete the corresponding erroneous income line, the income
for that period will be reduced.
If there is an overwhelming number of payments in the Undeposited Funds account, too many to fix
individually, the decision may be made to group them together for adjustment and reduce income
for the total amount. You can group them by month or group all of them in one adjustment.
Grouping the open payment by month means that monthly reports will reflect the correct
Undeposited Funds and revenue amounts for the period.
Create a new deposit, select each undeposited payment in the upper section of the screen, enter
the appropriate income account(s), descriptions, and amounts in the Add funds to this deposit grid
as negative numbers to offset the total, then confirm the total deposit is $0. This will have no effect
on the bank account and will reclassify the Undeposited Funds amount against the incorrectly
recorded revenue.
NOTE: It is important to explore and confirm you are using the same income accounts that were used
on the incorrectly recorded deposits you are correcting. An alternative is to use an income adjustment
account for the negative part of the adjustment.
TIP: Undeposited Funds should have a debit account balance when holding customer
payments that have not yet been taken to the bank. If you have a credit, this may indicate
the deposit was dated before the received payments, in which case you should investigate
to correct the dates.

Supplemental Guide Lesson 3: Write Off Invoices
Lesson 3: Write Off Invoices

As part of your period-end activities, you should review open accounts receivable to see if any
invoices need to be written off. It could be they are bad debts or maybe small amounts that need to
be written off.
There are several options in QuickBooks Online for resolving bad debt. One is using the Write Off
Invoices tool accessed from Accountant Tools. Alternately, you might want to create a credit memo
to write off outstanding invoices.
You learned about the Write Off Invoices tool in Core Certification. In this lesson, we’ll cover some of
the key considerations of when to use the tool versus other options.
REVIEW OF WRITE OFF INVOICES TOOL

This tool works best for writing off invoices in the current year where there is no sales tax involved.
You can also use this tool if the client is operating on a cash basis and no sales tax is involved
because it will not change prior years’ cash-basis reports.
Step-by-Step: Use the Write Off Invoices Tool
1. Open Accountant Tools.
2. Select Write Off Invoices.
3. Use the Invoice Age drop-down at the top of the list to specify invoices for the appropriate
period.
4. Fill in the To date field to specify as of when the invoice aging is to be calculated.
5. Optionally, enter a dollar amount in the Balance less than field to see only invoices with a
balance due less than a certain amount.
6. Click Find invoices.
7. Select the invoices you want to write off by checking the box to the left of each invoice.
8. Click Write off.
9. Select the Account where you want the write off to be posted (i.e., bad debt expense).

10. Select Apply.
This tool will zero out the invoices by creating a discount item on the original invoice and posting it
against the account used in step 8. This means the write-off occurs as of the invoice date and may
change prior period numbers. Again, if the client is cash basis and does not charge sales tax, this
method can be used because it will not affect prior period numbers on a cash basis.

The transaction journal shows the write off.

However, if sales tax is involved, you will get an error message if this tool is used.
The following screen shot shows the invoice listed above. You can see there is sales tax on the
invoice and the message when you hover over the ! says that you can’t write off more than the
subtotal, in this case, $384.00.

WRITE OFF INVOICES FOR ACCRUAL-BASED CLIENTS AND

WHEN SALES TAX IS INVOLVED
If you need to write off an invoice dated in a closed period for an accrual-based client, create a credit
memo dated in the current period. You always want to use this method if sales tax is involved so you
can apply the appropriate tax treatment and reduce the Sales Tax Payable account.
Step-by-Step: Setup
1. Create a new account for Bad Debt on the Chart of Accounts. Select Expenses as the account
type and Bad Debts as the detail type.
2. Set up a service type item for the Bad Debt and select the newly set up Bad Debt expense
account from the Income Account drop-down list.
You may want to set up two items, one for taxable bad debts and one for non-taxable bad debts,
though you can always change the taxable status on the credit memo.
Step-by-Step: Create a Credit Memo
1. Select the +New and select Credit Memo.
2. Enter the customer name.
3. Enter an appropriate date. If you are writing off an invoice dated in a closed period, use a date in
the current period so you don’t change prior period numbers.
4. Use the Bad Debt item and enter the amount you are writing off as a positive number.
5. If appropriate, check the box in the Tax column. The tax treatment should reverse that on the
original invoice.
6. In the Memo field enter Bad Debt.
7. Select Save.
The final step is to apply the credit memo to the outstanding invoice. This can be done from the
Receive Payment screen.
Alternately, you could turn on the setting to Automatically apply credits in the Advanced settings
of Account and Settings. You would not have to complete the extra step to receive payment.

However, beware, because QuickBooks applies the credit to the oldest invoice first. It does not look
for an exact match. If you have multiple outstanding invoices and you want to specify which invoice
the credit applies to, use the method above.
If, when you open the Receive Payment screen and enter the customer name, you don’t see any
transactions, it is an indication the Automatically apply credits setting is checked.

Module 9: End-of-Period Activities Lesson 4: Troubleshoot Inventory
Lesson 4: Troubleshoot Inventory
TROUBLESHOOT INVENTORY BALANCES

You learned about tracking inventory in Module 5, but what if the balance on the inventory reports in
QuickBooks doesn’t match the amount on the balance sheet? The first thing to look for are
transaction lines that are coded to the Inventory Asset account without utilizing an Inventory item.
Let’s create a report to identify this:
Step by Step: Troubleshoot Inventory Balance Discrepancies
1. From the balance sheet, click on the total for the Inventory Asset account.
2. Click Customize, Filter  Product and Service  Not Specified.
3. Click Run Report.
4. Review transactions to determine if they should be reclassified to another account, or if the

transaction should have included inventory parts on them.
5. Edit transactions or make an inventory quantity adjustment as necessary.
Review the transactions on the report to determine whether a new transaction should be entered to
record the purchase of inventory, if a transaction needs to be edited to include inventory items
instead of accounts, or if an inventory quantity adjustment is the appropriate method to adjust the
error.

If the number of transaction errors is too large to correct one by one, you might determine that an
inventory quantity adjustment is the appropriate method to adjust the error. Due to the FIFO layers'
COGS effect (as covered on Module 5), you will have to determine for what period (e.g., monthly)
you will have to create the adjustment that will result in an accurate cost of goods sold.
TROUBLESHOOT NEGATIVE INVENTORY QUANTITIES

QuickBooks Online allows you to sell inventory products on sales forms even when there is not
sufficient quantity on hand. There is no setting to prevent this. When you record an invoice for sales
of product with negative inventory, QuickBooks Online guesses at the cost based on historical
activity and records that as a decrease to Inventory Asset and an increase to Cost of Goods Sold.
When the purchase is made to replenish the quantity on hand, whether the purchase is dated before
or after the invoice that recorded the sale of negative inventory, QuickBooks Online will
automatically adjust the inventory cost for that invoice, appropriately based on the new purchase
cost. The problem occurs if the quantity on hand is never replenished properly. Then the inventory
asset value and costs are not reliable, because they are based on QuickBooks Online's guess at the
time the sale and cost are recorded.
Review the Products and Services list or the Inventory Valuation Summary report and look for total
inventory counts in the quantity column.

If you find negative total inventory, run an Inventory Valuation Detail report for that product.
• The QTY column represents the count of product bought or sold on that transaction
• The QTY ON HAND column represents the running count of product on hand
Review the transaction detail for negative inventory products to find how far back the negative
inventory quantity goes.
Work with your client to determine whether this is a current issue easily resolved with a vendor bill or
check, or whether this involves adjustments to prior periods. Train your clients to verify sufficient
quantity on hand before recording sales.

Module 9: End-of-Period Activities Lesson 5: Troubleshoot Other Account Balances
Lesson 5: Troubleshoot Other Account Balances

Typically, at period-end, you will review other balance sheet account balances to make sure they’re
correct. It’s pretty easy with accounts such as loans because you’ll have source documents against
which to compare the balances.
However, there could be issues with accounts receivable and accounts payable and other accounts,
such as the clearing account. There are two issues when analyzing the accounts receivable and
accounts payable control accounts. One is to make sure the balances are correct. The other is to
determine the correct workflow for the client. Should they be recording income using sales forms or
is it fine to use deposits coded directly to a revenue account? You want to make sure they are
getting the reports they need, yet not overburden them with a complex workflow.
CORRECT OVERSTATED ACCOUNTS RECEIVABLE

There are three methods to correct overstated accounts receivable balances.
The simplest method is to complete the revenue cycle so that the workflows are correct.
• Record the payment(s) (posting to Undeposited Funds) against the invoice(s)

• Go back to the incorrectly recorded deposit and check off the customer payment(s)
• Delete the incorrect distribution line posted to the income account
This corrects the accounts receivable balance and the revenue. It is the most accurate strategy
because it preserves the integrity of the traditional revenue cycle and the accounts receivable
workflow. However, if you have a lot of transactions, it could be time-consuming.
You can also use a journal entry to correct the mistake. A single journal entry in QuickBooks Online
can have multiple lines posting to accounts receivable. Therefore, you could create an entry for each
period that includes a line to credit each customer’s balance and a single line to debit the revenue
account. This option corrects the accounts receivable and revenue balances, but you will lose the
integrity of the workflow because the single journal entry won’t match any of the deposits in the bank
account. In addition, you’ll need to make sure the journal entry is applied to the correct invoices.
Alternately, you could go back to the original deposit, change the distribution line to post to
accounts receivable and assign the correct customer. You might do this if the payment was never
received (and sitting in Undeposited Funds.) Then use the Receive Payment transaction to apply the
deposit to the open invoice.

CASE STUDY OF ACCOUNTS RECEIVABLE

A new client has just started a small tutoring business. She needs to keep track of the income and
expenses related to the business, but she doesn’t have many transactions and she has only a few
students. During your data review, you discover that while she created invoices for each session,
instead of receiving a payment against each invoice and selecting the payments on a deposit, she
used the bank feed to record deposits using a revenue account. This resulted in her accounts
receivable and revenue being overstated.
After speaking to the client, you discover she always receives payments from her students at the end
of a session, and takes her deposits to the bank daily. At the end of each day, she records the
invoices in QuickBooks to keep track of the sessions she taught, and, at the end of the week, she
records her deposits from the bank feed.
To decide the best way to correct the error, you must determine if she needs reports that show sales
details by product/service item or sales by customer. During the interview, she states she only offers
one type of service and comments that she assigns the customer name to the deposit when she
records the bank feed deposit.
It is clear from the examination that the client doesn’t need to use accounts receivable. She receives
payments at the time she renders the service. To keep this type of error from happening in the
future, it’s recommended to teach her a workflow that doesn’t involve accounts receivable. This
business is very simple, so it makes sense for her to record her revenue in the simplest way possible.
Discussion
The client could use a sales receipt posted to Undeposited Funds to record the sales and the
payment on the same form each day and match the sales receipts to the deposits in the Banking
Center each week. This doesn’t change her current process at all; it just changes the type of form she
uses. She can be trained to match the sales receipts to the deposit in the Banking Center instead of
coding the transactions to an income account.
Another option could be to eliminate the use of a sales form and record the revenue using just the
deposit in the bank feed. This reduces a step in her current workflow and is the simplest solution, but
it also removes an important internal control. By entering the sales receipt and matching it to the
deposit in the bank feed, she will know whether money she collected makes it to the bank or if the
bank made an error. It also helps her keep track of the number of sessions she provides her
customers and how much she has earned from them.

Solution
The benefits of using a sales receipt as an internal control outweighs the convenience of eliminating
a step from our client’s workflow. This is a good solution for this client because it only requires a
small change in the way things are done and it reduces the likelihood of future errors.
Once the future workflow is decided, a remedy for the immediate problem can be prescribed. The
sales receipt method will retain the sales detail that has been recorded for each customer, so the
client will be able to run period-to-period comparisons that show information about sessions and
amounts earned from each customer.
CORRECT OVERSTATED ACCOUNTS P AYABLE

One method to correct overstated accounts payable is to edit the incorrectly recorded check or
expense. If the amount is equal to the bill, add the bill from the drawer on the right and enter the
amount of the payment (whether full or partial). The bill will overwrite the existing transaction and
change the transaction type to a bill payment.

You can also use a journal entry to correct the mistake. A single journal entry in QuickBooks Online
can have multiple lines posting to accounts payable. Therefore, you could create an entry for each
period that includes a line to debit each vendor’s balance then add the appropriate lines to credit
the expense accounts. This option corrects the accounts payable and expense balances, but you will
lose the integrity of the workflow because the single journal entry won’t match any of the purchase
transactions in the bank account. In addition, you’ll need to make sure the journal entry is applied to
the correct bills.
Tip: If the journal entries are to compensate for multiple errors, then the balance sheet or
P&L on any given date may be incorrect. Although by the time the correcting is done and
all the journal entries are entered, everything is fine. In a perfect world, we would love to
correct each entry. But if there are thousands of incorrect entries, doing so would result in
huge fees to our clients. Therefore, summary adjusting journal entries, although not the
perfect world solution, would be the most efficient and economical solution for all.
TROUBLESHOOT CLEARING ACCOUNTS

Clearing accounts are effective when you need to make adjustments to control accounts which affect
cash, but you want to stop them from cluttering up bank account registers. In other words, you may
want to create a zero-dollar transaction or multiple transactions that wash each other out that require
the use of a bank account. Instead of cluttering up a real bank account, set up a clearing account as a
bank type of account.

You might ask why you wouldn’t use a journal entry. QuickBooks is forms-based, and using a form
gives you the most flexibility. For example, you can’t use items on a journal entry or mark a journal
entry billable.
Here are examples of transactions using the Clearing account (some of which are included in these
Advanced Certification training modules):
• Clean up the Undeposited Funds account

• Adjust for donated inventory and changes in value
• Tax-only transactions and adjustments
• Daily sales summary
• Allocation entries
• Clean up accounts receivable and accounts payable balances that need to be moved and
applied to other customer or vendor balances (barter transactions)
TIP: If you are using account numbers, consider using a prefix such as a letter, “Z,” or using
“1999” to make sure the clearing account appears at the bottom of drop-down lists.

Reconcile Balance Sheet Accounts
• Any balance sheet account, except for Accounts Receivable, Accounts Payable, Undeposited
Funds, and Retained Earnings, can be reconciled using the Reconcile tool in QuickBooks Online
• Reconciling control and other adjustment accounts, like clearing accounts, helps keep the books
tidy and can help catch errors when they occur
• Other accounts you might want to reconcile are employee advances, vendor prepayments,
customer retainers, etc.
• When reconciling these accounts, the beginning and ending balance are always zero
• You can sort by the column headers to group similar transactions together in the list or the filter
when troubleshooting balances
• You can also use the Google Chrome find feature (Ctrl+f) if you are reviewing a long list, or if the
sorting doesn’t group the transactions together the way you like
• Check off any zero transactions as well as any transactions with the same name and same dollar
amount

• Once all closed transactions are checked off and the difference is 0.00, select Finish now

Module 9: End-of-Period Activities Lesson 6: Batch Reclassify Transactions
Lesson 6: Batch Reclassify Transactions
Incorrectly classified transactions can happen for several reasons. Often, it can be just a
misunderstanding of how categories, classes and/or locations work, and the workflow that needs to
be followed.
No matter what the cause, it can mean a lot of transactions need to be reclassified when the problem
is finally identified — often at period-end.
In this lesson, we'll take a deeper dive and look at how filtering and sorting can make the tool more
efficient. We'll also cover some troubleshooting using this tool and what to do if you need to
reclassify product and service items.
ADVANCED RECLASSIFICATION OPTIONS

Let's review the filters for reclassifying using the Reclassify Transactions tool.
Dates
The dates that appear in the Reclassify Transactions tool are dictated by the date options in Reports
options in the Accountant Tools.

If you want other dates, click the From and To dates, and choose the appropriate range.

Accounts Panel
The Accounts types panel on the left shows all the available accounts (for the account types chosen)
for the defined period, along with the sub-accounts.
Choose from the Account types and select the reporting Basis (cash or accrual), then click the
Account to be reviewed. Notice that you can search for the account rather than scrolling down the
list of accounts.

Transactions Panel
There are several options for filtering to find the transactions that need to be reclassed.
• Type – This drop-down allows you to filter by transaction type. You might use this if you know
only a specific type of transaction needs to be reclassified as the rest were recorded correctly.
• Class – You can filter by a specific class, or filter for transactions that have no class assigned to
them. This is available only if the company has class tracking turned on, as is the case in the
figure below.

• Location – You can filter by a specific location, or filter for transactions that have no location
assigned to them. This is available only if the company has location tracking turned on, as is the
case in the figure below.
• Customer/Vendor name – You can filter for a specific customer or vendor

• Modify – This is an important new feature in the redesigned Reclassify Transactions tool,
because it allows you to filter out any transactions you cannot modify
If class tracking is turned on, your choices are All, Class or Accounts. If you choose All or Class, you
can change or assign a class and/or location. You will be given the option to change the account.
However, if there is an item-based transaction in which you are trying to change the account, you will
get an error message when you save. If you choose Accounts, item-based transactions will not be
included. You will be able to reclassify accounts and/or classes and/or locations on these
transactions.
NOTE: Even if location tracking is turned on, you do not see an option to modify by locations in the
Modify drop-down menu.
If class tracking is not turned on, your choices are All or Accounts.
After the filters are set, make sure to click Find transactions to apply the filters.

Step-by-Step: Reclassify Accounts
In our example, the client said they set up sub-accounts for Automobile expense, and they want all
transactions from last year that were posted to Automobile expense reclassified to the sub-accounts.
When they entered the transactions, they filled in the memo as to the nature of the expense.
1. Choose Profit and Loss as the account type and Accrual as the basis, click Automobile
expense and check the dates as taught above. No additional filters are needed.
2. To make it easy to find the transactions for gas vs. repair, click the column header
Memo/Description. This will sort the transactions in the list by memo. The default view is to sort
by date. You can sort by any of the columns in the grid.

3. Select the transactions to be reclassified (those with gas listed in the Memo/Description column)
and click Reclassify.
4. Select Fuel (a sub-account of Automobile) from the Change account to drop-down menu.
5. Click Apply and the selected transactions will be reclassified as a batch. Then reclassify the rest
of the transactions (those with repairs in the Memo/Description column) to the Repair account.

LIMITS AND LIMITATIONS

Not all transactions can be reclassified. The following transactions cannot be reclassified:
• Sales tax transactions – Tax payments and tax adjustments are controlled by tax settings
• Inventory adjustments – Inventory adjustments always affect a cost of goods sold account and
an inventory asset account
• Billable expense transactions income account – That account is identified in Account and
Settings
• Payroll transactions – Payroll settings control payroll postings

• Item-based transactions – These include invoices, credit memos, sales receipts and checks, bills
and expenses using the Item details grid
• Header/payment (bank or credit card) account for expenses – cannot be changed

• Transactions that do not contain a customer name cannot be reclassified to accounts receivable
and you cannot assign that name in the Reclassify Transactions tool
• Transactions that do not contain a vendor name cannot be reclassified to accounts payable and
you cannot assign that name in the Reclassify Transactions tool
• Only the target (distribution) lines on a transaction can be reclassified

• The source of the transaction cannot have its account or class changed

RECLASSIFY TRANSACTIONS CATEGORIZED BY CLASS

You can easily use the Reclassify Transactions tool to change or assign a class in batch. This is
particularly useful if you determine your client should be using class tracking and you want to assign
classes from the beginning of the accounting period.
Step-by-Step: Reclassify Classes
1. Select Design Income as the account. Make sure the account type is set to Profit and Loss, the
basis is Accrual, and you have designated the correct date range.

2. Because Design Income is an income account, you would expect to see transactions using
invoices and sales receipts. If you want to see just account-based transactions, click Modify 
Accounts  Find transactions. In this case, there is one deposit transaction that posts to this
account which posts directly to the account and does not (because it cannot) use an item. The
rest are item-based transactions.
3. When class tracking is turned on, All and Class filters show the same list of transactions eligible to
be reclassed. Change the Modify filter back to All and click Find transactions.

4. You've been told that all Design Services transactions should be assigned to the Design class.
Select the checkbox in the header section to select all the transactions.
5. Select Reclassify.
6. Select Design from the Change class to drop-down list.

7. Select Apply and all the transactions listed will have the Design class assigned to them.
TIP: If you need to change both the account and the class, it might be better to filter the
transaction list for Accounts and change the accounts first, then change the filter to Class
and assign/change the class.

RECLASSIFY TRANSACTIONS CATEGORIZED BY LOCATION

There is no setting you can turn on to remind your clients to assign a location to a transaction, so
clients who use this advanced categorization method can easily forget to add a location and end up
with many unspecified transactions on the Profit and Loss by Location report.
QuickBooks has added a feature in the Reclassify Transactions tool that allows you to batch
reclassify/assign locations to transactions. You might think the location would be changed/assigned
on the source of the transaction because locations affect both sources and targets and are assigned
in the header (source) of the transaction. However, this tool does not allow you to change/assign
locations on the source line (even though it will affect the source line). It only allows you to make the
change on the target lines.
Step-by-Step: Reclassify Locations
1. Select Fountains and Garden Lighting as the account. Make sure the account type is set to
Profit and Loss, the basis is Accrual and the date range is correct. You can see some
transactions were assigned a location, but many were not.

2. To see just the transactions without an assigned location, select None from the Location drop-
down list.
3. Click Find transactions and the only transactions that show up are those not assigned a location.
Note, you could have also done that for class tracking in the last Step-by-Step exercise.

You've been told by the client that transactions dated before September 1 should be assigned to
New York, and those dated on or after September 1 should be assigned to Louisiana.
4. Make sure the grid is sorted by the date column and select the transactions dated before
September 1, then click Reclassify.
5. Select New York from the Location drop-down list and select Apply.

6. Select the remaining transactions and assign them to the location Louisiana. If you change the
Location filter back to All, you can see all transactions have been assigned a location.
NOTE: If there are multiple target lines on one transaction, they will all be changed, even if they post
to different accounts. This is because you can only have one location per transaction.
Tip: Use the Reclassify Transactions tool to assign classes for the current period when you
first turn on class tracking.
Tip: You can also use the Reclassify Transactions tool to review transactions at period end,
even if you’re not reclassifying. Then, if you must reclassify, the tool is already open.

RECLASSIFY ACCOUNTS FOR ITEMS

As you learned earlier, you cannot change an account on an item-based transaction using the
Reclassify Transactions tool. In order to change the account, you need to edit the item and change
the posting account there (if the item was mapped incorrectly). For service and non-inventory items,
there is a checkbox to update historical transactions. Be aware that it updates all historical
transactions, so you may be changing prior period numbers. When you change an account on an
inventory item, it automatically updates all historical transactions.
If the incorrect item was used, each transaction would have to be edited and the item changed.
WHEN ACCOUNT IS CHANGED ON A SERVICE OR NON-INVENTORY ITEM, A NEW CHECKBOX APPEARS

Module 9: End-of-Period Activities Lesson 7: Prep for Taxes
Lesson 7: Prep for Taxes
Prep for taxes simplifies the task of preparing your clients’ books for tax filing.
It replaces the Trial Balance feature and has been updated with two new tabs: Documents and
Grouping & statements.
Here’s a list of some of the key features and improvements
• The Documents tab provides folders for every account, plus you can create your own folders to
store account-specific documents
• The Review & adjust tab displays accounts in the balance sheet and profit and loss formats. Both
formats are shown in one view
• The new Grouping & statements tab allows you to drag and drop accounts into groups, ready for
financial statements that can be exported into Microsoft Excel®
• The Tax mapping tab has sections organized by form number and name, so forms are easier to
find
• You can carry over tax mappings from the previous year
• You can toggle the accounting method between cash and accrual without affecting your client’s
books
• Setting up tax mapping is easier; you can type a keyword to see a filtered list of where that word
is included in a form
• The Mappings screen has a larger scrollable area so you can see more line items

CHANGES
The chart below outlines the new and improved features as compared to the Trial Balance tool.
PROADVISOR TIP: While Prep for taxes replaces Trial Balance in Accountant Tools, you can
still access the Trial Balance report and the Adjusted Trial Balance report. Select
Reports from the left navigation bar, then scroll down to the For my accountant section.

WORK WITH PREP FOR TAXES

Prep for taxes can be used at the end of each tax year to review and adjust the books to get ready to
prepare the tax return. The tool was designed as a workspace to store documents, review each
account, and attach workpapers and notes that can be viewed by all team members with access to a
given client.
The Documents tab and the Review & adjust tab in Prep for taxes can and should be used by all
accounting professionals who use QuickBooks Online Accountant to keep the year-end workpapers
organized and in one place, even if they are not the tax preparer.
If you are preparing financial statements or management reports, you can use the Grouping &
statements tab to organize the accounts into appropriate groupings.
If you are preparing the tax return for the client, use the Tax mapping tab to map each account on
the Chart of Accounts to the appropriate tax line of the tax return. Then, export balances to
ProConnect Tax Online to automatically populate the tax return or download in CSV format and
import into another tax software.
Documents
The first tab is the Documents tab. Before any editing, the Documents screen has two sections,
General and Accounts. Accounts has a folder for every account in your client’s Chart of Accounts.
• Here you can add any relevant documents, notes or statements to the existing folders. For
example, you can add bank and loan statements into folders for those accounts.
• You can add folders and sub-folders to both sections as needed to customize the document
management system to suit your needs

Review and Adjust
The Review & adjust screen shows balance sheet and profit and loss summaries by account and by
year, in one view.
• You can check the accounting method in use and even change it if you need to; it won’t affect
the accounting method set in Account and Settings
• There’s a column to add adjusting journal entries such as depreciation. When you make the
entry, it doesn’t show up automatically in the grid. Instead it appears in the header section,
waiting to be reviewed and accepted. All changes are tracked and can be accepted and viewed
to prevent errors.
• The Make adjustment drop-down allows you to add a note or an attachment. You might note
who did the work on that account and when. You might want to add supporting statements to
accounts such as bank accounts or loans.
When everything is correct, you can choose to update an existing return, create a new return or
export the CSV file.

Grouping & Statements
Here, you can group your accounts into whatever structure works best for you and your client. You
can create groups, rename current ones, and drag and drop accounts into current or newly created
groupings. You might use this to create management reports or financial statements.

Tax Mapping
After you’ve reviewed and adjusted the books, the next step is to complete the tax mapping. This
step is required if you want to export balances to ProConnect Tax Online, but it also makes a great
workpaper for those who use another tax software like ProSeries or Lacerte.
When you first select the Tax mapping tab, any unmapped accounts will be displayed at the top,
along with their total value. Not every account will need to be mapped to a tax line. Common
accounts not typically mapped to a tax line include retained earnings and other equity accounts.
Notice the tax form is displayed just under this section. You can change the tax form by selecting the
pencil icon next to its name.

Export to ProConnect Tax Online
After all accounts have been mapped to tax lines, you’re ready to export the balances to ProConnect
Tax Online.
Select the green Choose tax option drop-down and select an option.
Your options are:
• Update existing return – This option will allow you to choose an existing tax return in
ProConnect Tax Online to which to post the balances. Only mapped account values will be
updated if this option is selected and any other modifications made to the existing return will be
retained.
• Create new return – This option will create a new return in ProConnect Tax Online. ProConnect
Tax Online will open a new tab in your browser automatically.
• Export CSV file – This option will create a download of the tax mappings in CSV format. You may
be able to import this file into other tax software.
You can also print or export the Tax mapping dashboard to Excel format by selecting the icons at the
top of the Tax mapping grid. These make great workpaper backups to save with the tax return
records!

Module 9: End-of-Period Activities Lesson 8: Prepare Forms 1099
Lesson 8: Prepare Forms 1099
If a client hires an unincorporated business to provide a service for them and pays them $600 or
more in a calendar year, they will have to issue them a Form 1099.
Beginning with Tax Year 2020, you must use Form 1099-NEC, Nonemployee Compensation, to
report payments of nonemployee compensation previously reported in box 7 on Form 1099-MISC.
If your client needs to issue a Form 1099 for rents paid, that will still be reported on Form 1099-
MISC. If you or your client is unsure who should receive which form, select the links to the IRS
website at the end of this lesson.
All levels of QuickBooks Online allow you to create and print or e-file (for an additional fee) forms
1099 from within the program.
FAQ
How to indicate that a vendor should receive a 1099
There are two ways to indicate the vendor should receive a 1099. If you add the name from the
Contractor Center, the vendor will automatically be marked eligible for a 1099.
Alternately, you can edit the vendor in the Vendor Center and on the Vendor Details page check the
box Track payments for 1099.
How QuickBooks knows which payments to include
QuickBooks Online will need you to identify which accounts to pull information from to fill in the
Form 1099-NEC.
Therefore, you’ll want to review the posted transactions related to the Form 1099-NEC vendors
before preparing the Form 1099-NEC, to make sure the transactions are posting to the correct
accounts.

Which payments for the selected accounts are included on the 1099
Beware, because not all payments should be included on the Form 1099-NEC.
Some payments (i.e., credit card, PayPal and debit-card payments) are included on a 1099-K, so
shouldn’t be reported on your client’s 1099. QuickBooks Online needs to know how to differentiate
payments made by EFT (which are included) versus payments made by debit card (which are
excluded). Check the following link to determine the terms that can be used in the reference or
check the number field to exclude the payments.
Vendor payments to exclude on form 1099
Basically, the 1099 issued by your client should include cash, check and EFT payments.
NOTE: When recording expense transactions (or check transactions where you are not physically
writing a check), you will need to be careful how you fill in the reference/check number field. Only
expenses paid by cash, check or EFT should be included on your 1099s. Payments you made via
credit card, debit card or a third-party system such as PayPal should include any one of the following
words/abbreviations in the Ref no./Check no. field to be excluded.
Debit Debitcar Dbt Dbt card Dcard
Debit cd Visa Masterc Mb Mcard
Chase Discover Diners Paypal
This will make QuickBooks online consider it a debit (or credit card) transaction and exclude it from
the 1099-Misc form. If you don’t want the payment to be excluded from 1099s, use EFT in the Ref
no./Check no. field and the payment will be included in the form 1099-MISC. Any payments made
using a credit card type of account will be excluded.
1099 RESOURCES
For more information about 1099s, see the IRS website.
Instructions for Forms 1099-MISC and 1099-NEC (2020)
About Form 1099-NEC, Nonemployee Compensation

COMPLETE CONTRACTOR INFORMATION

Many clients face the challenge of getting their contractors to fill out a Form W-9. The Form W-9 is a
Request for Taxpayer Identification Number and Certification.

It’s best to train your clients to get a completed Form W-9 from their contractors before they pay
them, even if the first payment doesn’t meet the threshold for issuing a 1099. QuickBooks has
simplified the process by allowing you to send an email directly from QuickBooks to the contractor,
asking them to fill in their W-9 information.
Step-by-Step: Request W-9 Information
1. Add the contractor either from the Contractors tab in the Workers Center or from the Vendors
tab in the Expenses Center.
2. Check the box next to Track payments for 1099.

If you have all the information for the contractor, fill it in now and you’re all set. However, if you
save the vendor and are missing the address or business ID number., QuickBooks allows you to
send an email requesting that information.
3. Go to the Contractors tab and click on the name of the contractor.
4. Because the 1099 information is not complete, you will see Send email, to the right of the
contractor name.
5. QuickBooks will ask you for the email address (if it is not already in the vendor record). Once it’s
filled in, click Send.
The vendor will receive an email with this heading (our company name seems to be “default”):

The email looks like this:
When they click on the link, they will be asked to sign in to their Intuit account. If they don’t have an
Intuit account, they need to sign up for one, which will create a QuickBooks Self-Employed account.
They are not charged for this account.
Once they fill in their W-9 information and click Finish, the information is saved and submitted to
your QuickBooks Online company file.

If they don’t respond to the email, you will have the option to resend the invite if the
contractor’s personal details aren’t complete.
If they need to change their information, such as their address, they can sign in to their Intuit account
and update the information.
Give Contractors Online Access to 1099s
You can give contractors online access to their 1099s for no additional charge when you are e-filing
through QuickBooks.
When e-filing the forms, you will get a prompt to Give my contractors online access to their
1099s. Select Yes and Continue. Make sure all contractors are listed with their correct email
addresses.
NOTE: If you need to fix a contractor’s email address, you need to make the change in QuickBooks
Online before you file.
As soon as you submit your final forms to the IRS, your contractors will receive an email inviting them
to view their 1099s using a free account (contractors will be prompted to create an account if they
don't have one). Your contractors will only be charged if they decided to upgrade their account to a
full version of QuickBooks Online.
NOTE: This does not constitute tax advice. Consult your tax professional if you have any questions
about issuing forms 1099-MISC.

Module 9: End-of-Period Activities Lesson 9: Closing Date and Exceptions to the Closing Date Report
Lesson 9: Closing Date and Exceptions to the

Closing Date Report
The final step after reviewing, troubleshooting and correcting at period-end is to set the closing
date. By setting a closing date, you are trying to lock transactions, up to and including a certain date,
to maintain data integrity. You can also add a password so that by controlling who has the password,
you prevent other users from making changes. Closing the books isn’t just a year-end process of
course. Books are closed at a frequency that works for you and your client, often monthly after
reconciliations are complete.
Whether or not you set a password, by setting a closing date, if someone makes a change to a
closed period, this change populates the Exceptions to Closing Date report.
IMPORTANT: If a user within the client's company file has admin access, they can change company
information, including the closing date and password. Anybody with access to the company file via
QuickBooks Online Accountant can change the closing date and password.

SET A CLOSING DATE
Step-by-Step: Set a Closing Date
1. Open the Accountant Tools and select Close Books (Alternately, you can go to the Gear icon 
Account and Settings  Advanced  Accounting  Close books.)
2. Enter a closing date.
NOTE: Transactions dated on or before the closing date cannot be deleted or changed without
warning.
3. Decide what you want users to see if they try to save a transaction dated prior to the closing date:
 Choose Allow changes after viewing a warning to make a warning message appear
 Choose Allow changes after viewing a warning and entering a password to make the
user also enter a password. Enter the password in the fields below.
4. Select Save then Done.

EXCEPTIONS TO CLOSING DATE REPORT

If someone with client file access does change something dated on or before the closing date, but
after the closing date was set, you can identify those transactions using the Exceptions to Closing
Date report. The Exceptions to Closing Date report is an audit history of all changes to
transactions dated up to the closing date and made after the books were closed.
If you don't see anything on the report, no transactions were changed by any of the users since the
closing date was set.
The report can be accessed once a closing date has been set via the For my accountant section of
the Reports Center. If you don’t see the report, the closing date has not been set.
Tip: Print a copy of the Exceptions to Closing Date report before you set a new closing date
to save this information. Although you cannot save it as a pdf, you could download a pdf
print driver so you won’t have to print the report on paper. Once you set a new closing date,
your previous list of exceptions will be lost; you will only be able to track changes that occur
after the new closing date.

Module 9: End-of-Period Activities Conclusion
Conclusion
Having completed this module, you have been informed on many advanced tasks in end of period
activities including:
• Recognize best practice when reviewing and troubleshooting QuickBooks Online lists
• Recognize best practice identifying and troubleshooting issues with Undeposited Funds
• Identify best practice when working with Write Off Invoices functionality in QuickBooks Online
• Recognize the steps to troubleshoot inventory balance issues in QuickBooks Online
• Recognize the steps to identify and troubleshoot over- or understated A/R or A/P
• Recognize the steps to identify and troubleshoot clearing account balances
• Identify how to batch-reclassify transactions in QuickBooks Online Accountant
• Recognize some of the issues or limitations of the Reclassify Transactions tool
• Identify how the Reclassify Transactions tool can be used to change classes and locations
• Recognize that Prep for taxes is a new feature that replaces Trial Balance
• Describe how to use the Prep for taxes tool to ready a client’s books for the tax preparer
• Identify the processes available and information needed to prepare forms for non-employee
compensation
• State the options and processes available within QuickBooks Online to prepare Forms 1099-NEC
• Identify steps to set a closing date and review exceptions in the Exceptions to Closing Date
report

FY21 QBOA Module 9 End of Period Activities Supplemental Guide

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QUICKBOOKS ONLINE ADVANCED CERTIFICATION COURSE

Copyright 2021 Intuit, Inc. Intuit, Inc.

The publications distributed by Intuit, Inc. are intended to assist accounting

About the Author ....................................................................................................................... 3

About the Team ......................................................................................................................... 4

Supplemental Guide Overview ................................................................................................. 6

Lesson 1: Review Lists ............................................................................................................. 11

Lesson 2: Issues with Undeposited Funds ............................................................................... 22

Lesson 3: Write Off Invoices .................................................................................................... 25

Lesson 4: Troubleshoot Inventory ........................................................................................... 31

Lesson 5: Troubleshoot Other Account Balances ..................................................................... 34

QuickBooks Online Advanced Certification Course 1

Lesson 6: Batch Reclassify Transactions ................................................................................... 41

Lesson 7: Prep for Taxes .......................................................................................................... 59

Lesson 8: Prepare Forms 1099 ................................................................................................ 66

QuickBooks Online Advanced Certification Course 2

About the Author

QuickBooks Online Advanced Certification Course 3

About the Team

Esther Friedberg Karp, MBA

She can be reached at esther@e-compubooks.com or 416-410-0750.

QuickBooks Online Advanced Certification Course 4

Heather D. Satterley, CPA

QuickBooks Online Advanced Certification Course 5

Supplemental Guide Overview

PURPOSE OF THIS GUIDE

• Where to go to learn about the latest product updates:

QuickBooks Online Advanced Certification Course 6

QuickBooks Online Advanced Certification Course 7

TOPICS STEP-BY-STEP LEARNING OBJECTIVES

• Resolve undeposited • Recognize best practice identifying

• Troubleshoot inventory • Recognize the steps to troubleshoot

• Reclassify accounts • Identify how to batch-reclassify

QuickBooks Online Advanced Certification Course 8

TOPICS STEP-BY-STEP LEARNING OBJECTIVES

7. PREP FOR TAXES

• Request W-9 information • Identify the processes available and

• Set a closing date • Identify the steps to set a closing

QuickBooks Online Advanced Certification Course 9

QUICKBOOKS ONLINE ACCOUNTANT TEST DRIVE

QuickBooks Online Advanced Certification Course 10

Lesson 1: Review Lists

• Whether the list is too long

QuickBooks Online Advanced Certification Course 11

Step-by-Step: Merge an Account

4. Click Yes to the message to confirm the merge.

QuickBooks Online Advanced Certification Course 12

QuickBooks Online Advanced Certification Course 13

EXAMINE CUSTOMER/VENDOR LISTS

QuickBooks Online Advanced Certification Course 14

Step-by-Step: Create a Report to Identify Duplicate Customers

1. Open the Customer Contact List report.

4. Group by Billing ZIP.

5. Select Change Columns.

QuickBooks Online Advanced Certification Course 15

Customers No Longer Needed

QuickBooks Online Advanced Certification Course 16

QuickBooks Online Advanced Certification Course 17

EXAMINE PRODUCT/SERVICE ITEMS

QuickBooks Online Advanced Certification Course 18

Step-by-Step: Review Account Mapping

1. Open the Products and Services list.

QuickBooks Online Advanced Certification Course 19