Figure 1 – Use QuickBooks’ Receive Payments screen when recording a payment made in response to an invoice only.

CRITICAL PROCESS EXCEPTION

Do NOT use the Receive Payments window to record non-earned revenues, such as parts manufacturer rebates, insurance refunds, or vendor discounts. Recording these as customer payments will heavily distort your Accounts Receivable. Non-earned funds must be entered directly on your Deposit Form and mapped to their appropriate expense reduction or other income accounts.

Crucial Note for Integrated Shop Management Systems:

If you use an external management system (like CCCone or Mitchell), this automatic “applying” to an invoice does not always occur during the database sync. Because of API integration limitations, QuickBooks often leaves these as unapplied payments. This results in the customer having a zero balance overall, but your reports will show a messy trail of open invoices and unapplied payment credits.

To prevent this, run an Open Invoice Report at least weekly. Review all active jobs. If a job shows an invoice and an equivalent payment credit listed separately, double-click the transaction and manually check the box to apply the payment to the open invoice. A clean Accounts Receivable report should only display jobs with actual outstanding balances.

Figure 3 – The Enter Sales Receipts window

QuickBooks Loans, Capital Leases & Depreciation

Avoiding Critical Month-End Accounting Mistakes That Distort Your Financial Statements

What is Income/Revenue?

In every business, you have primary products or services that you sell to customers. Revenue is earned when you complete those services or finalize the sale of products. These are categorized as regular operating revenue. Other monies you deposit into your bank that are not directly generated by these core sales are either considered Other Income or are not income at all.

If the incoming funds are Other Income (such as interest earned on bank accounts, rebates, accounting discounts, or late payment charges), they should be entered directly onto the QuickBooks Deposit Form. Record them exactly as they will appear on your bank statements so you can easily reconcile them. They can be bundled with a regular operating deposit using Undeposited Funds.

If they were deposited electronically via EFT or ACH, create a separate deposit transaction matching the exact date and amount of the bank clearance. This keeps your monthly bank reconciliations exceptionally clean.

Figure 1 – Typical Deposit Form adding “Other Income” (Checks Received)

In the example above (Figure 1), two checks were received that are not regular operating revenue. The first line is an NSF check charge to a customer, while the second is a purchase rebate check. These are correctly distributed to the appropriate “Other Income” accounts. Monies deposited from bank loans are also not income—they must be deposited directly into the bank and distributed to the corresponding Liability Account.

Figure 2 – Typical Deposit Form for Loan Deposit (EFT From Bank)

In this second example (Figure 2), a business loan was obtained and the funds were electronically deposited into the bank. When taking out a loan, it must be set up as a Liability. Typically, this will be a Long-Term Liability unless the repayment period is `$12\text{ months}$` or less, in which case it is classified as a Current Liability.

Figure 3 – Typical Long-Term Liability Account Setup

What are Expenses?

On the flip side of operating revenue, you have business expenses. Expenses are considered raw costs to produce or sell your products and services. Direct costs like Cost of Goods Sold (COGS) and indirect costs like rent, utilities, office payroll, and liability insurance are all regular business expenses.

Loan payments are NOT business expenses. Because the original loan principal was not recorded as “income” when received, the repayment of that principal cannot be claimed as a business expense. Only the interest portion and associated processing fees are tax-deductible expenses.

This is one of the most common errors we see in QuickBooks files. To handle this correctly, you must obtain a loan amortization schedule from your lender. Although your total monthly payment amount may remain constant, the principal portion will increase each month, while the interest portion will decrease. Each monthly payment check must be split accordingly in QuickBooks.

Figure 4 – Typical QuickBooks Check Entry – Loan Repayment

In the example above (Figure 4), the payment of `$\$\$1,314.80$` is split cleanly: `$\$\$1,123.54$` goes to reduce the principal balance of the loan, `$\$\$156.26$` is allocated to interest expense, and `$\$\$35.00$` is booked as a late fee expense. Reconcile this liability line item every single month.

Operating Leases vs. Capital Leases

Just because a contract is labeled a “Lease Agreement” does not mean it qualifies as an operating lease under IRS guidelines. How you treat it in QuickBooks has massive financial reporting and tax implications.

If an equipment lease has a nominal end-of-lease buyout (typically `$\$\$100.00$` or a simple `$1\text{ dollar}$` option), it is classified as a Capital Lease. A true Operating Lease allows you to deduct the full rental payment each month. Common examples of operating leases are copier rentals, temporary furniture, and closed-end vehicle leases with no ownership intent.

However, for vehicles and heavy shop equipment that you intend to own after the lease term, the IRS treats the contract as a financed purchase. You must record the asset value on your Balance Sheet, establish a corresponding liability, and depreciate the equipment over its useful life.

Figure 5 – Typical QuickBooks Capital Lease Liability Account

We recommend setting up a dedicated “Capital Leases” parent liability account to separate these agreements from standard bank loans. Remember, any sales tax paid monthly on lease invoices should be capitalized as part of the overall fixed asset cost, rather than written off as a regular operating expense.

Net Ordinary Income vs. Cash Position

In your QuickBooks Profit and Loss, “Net Ordinary Income” represents your core operating profit. While important, it completely excludes “Other Income” and “Other Expenses” that significantly affect your actual cash reserves.

Figure 6 – Typical QuickBooks Other Income and Other Expense Accounts

Grouping non-operating items under “Other Expenses” (such as corporate income taxes, political contributions, and depreciation) keeps your core operating profit lines clean and makes monthly performance reviews much more actionable.

Net Profit Does Not Equal Cash in Bank

A fatal misconception for many small business owners is that “Net Profit” equals “Cash in the Bank.” This error in understanding financial statements frequently leads to severe operational cash shortages.

Your Profit and Loss statement does not track principal loan repayments, capital lease payouts, owner draws, or employee wage advances. All of these require hard cash outlays that drain your bank balance. A fast-growing business can easily report strong net profits on paper while running completely out of cash to fund daily operations.

To see the complete picture, you must analyze your Statement of Cash Flows alongside your Balance Sheet and Profit and Loss. This report reconciles net income back to actual cash movements, showing you exactly where your money went.

Depreciation & Amortization

Most business owners rely entirely on their CPA to book depreciation entries at year-end. This is a massive mistake for active business management. While principal payments are not expenses, the wear and tear of your capitalized assets is a real operating cost that should be recognized monthly.

For tax filings, CPAs often use accelerated schedules like Section 179 or bonus depreciation to maximize tax deductions. While excellent for reducing tax liability, dumping a massive depreciation expense into QuickBooks distorts your true monthly operating margins. To keep your reports accurate for operational reviews, we strongly recommend using Straight-Line Depreciation on your internal books.

Figure 7 – General Chart for Useful Life to Determine Depreciation Length

Under IRS straight-line rules, an asset is written down over its estimated useful life (typically `$5\text{ years}$` for vehicles and IT hardware, up to `$39\text{ years}$` for commercial real estate). To calculate your monthly expense, subtract the estimated salvage value from the asset’s purchase price to determine its “basis,” then divide by the total useful life in months.

Figure 8 – Typical Memorized Journal Entry – Depreciation and Amortization

To clarify terms: Depreciation is applied to physical assets (machinery, computers, building structures), while Amortization is applied to intangible assets (purchased software, customer lists, corporate Goodwill, trademarks). Both are calculated using the same basic straight-line logic, but must be listed separately on your corporate financial reports.

Next month: preparing and cleaning up your books for year-end!

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Secure Your QuickBooks Data

Protecting Your Operations, Financial Ledgers, and Proprietary Customer Data

Your QuickBooks company file contains some of the most sensitive information on your computer. You may have customers’ credit card numbers and employees’ Social Security numbers, as well as your business’s primary accounting data. An intruder who captured all that data could create tremendous problems for you and a lot of other people.

That’s probably the worst-case scenario. But other situations could also spell disaster for your business, involving the loss of your company data through internal fraud, encryption viruses, external hacking, or simple technical failures.

We can’t overstate the vital importance of protecting your QuickBooks company file—especially your accounting, customer, and payroll information. Whether someone steals it or it becomes inaccessible due to a system crash, once it’s gone, it’s gone. Keeping your business going after such a loss would be very difficult—maybe even impossible.

Here is what we suggest to prevent that from happening.

Internal Safeguards

No business owner wants to believe that his or her employees could use their QuickBooks access to commit fraud. But it happens. Your company file contains credit card and checking account data that could be used for nefarious purposes. As we have advocated in many ways, you can restrict user access to specific areas and actions of QuickBooks.

The example below represents QuickBooks Pro and Premier configurations. While the limitations are basic compared to Enterprise, implementing them is an essential first line of defense.

Figure 1 – You can limit your employees who have QuickBooks access to certain areas and activities.

To get started, open the Company menu and select Set Up Users and Passwords > Set Up Users. The User List window will open. It should have at least one entry there initially: Admin.

We often see clients using the main Admin login for daily transaction processing, but this is a dangerous practice. The Admin user is designed to be used only for specific administrative tasks:

This is one of the main reasons we emphasize the proper structural setup of QuickBooks. Once the company file is active, the Admin profile should only be accessed for high-level maintenance and monthly closing procedures.

Create Your User Accounts

Even if you are currently the only person using QuickBooks, it is still best practice to create a separate user login for daily transaction processing. The Admin password should only be known by the owner of the business or their designated trustee.

To begin, click Add User and enter the employee’s name and password in the next window that opens, then click Next.

On the next page of this wizard, click the button in front of Selected Areas of QuickBooks. The following screens will let you define that employee’s specific access permissions in operational silos like Sales and Accounts Receivable, Inventory, and Payroll and Employees. When you’ve clicked through every screen and reviewed the summary displayed, click Finish. Your user will now be able to sign in and access only the areas you specified.

Stop Relying on Portable Backups

QuickBooks has the ability to back up data to portable drives. While this is useful in some situations, localized manual backups do not protect your business from total system failure, physical building fires, hardware theft, or active encryption viruses.

To ensure true security, your data must be managed by an automated, secure cloud backup utility. We have evaluated numerous market options and found that many are too complicated or place too much responsibility on the user in the event of a data loss. For this reason, we highly recommend Critical Backup Solutions.

Figure 2 – Secure Automated Cloud Storage Integration

This solution not only protects your QuickBooks data, but automatically backs up all of your company’s critical files and documents with up to 10 historical versions for maximum ransomware protection.

Keep Your Operating System & Applications Updated

Software companies release regular updates for more than just adding new features or fixing bugs. These patches often refresh your software to secure it against newly discovered threat vectors. Do not ignore prompts to update your antivirus applications, operating systems, and QuickBooks itself.

Figure 3 – Don’t ignore critical software security updates.

Keep Your Networks Safe

Just as a cold virus spreads around your office, computer viruses and malware can easily hop between unpatched machines on the same local network. Take active steps ahead of time to isolate your systems and prevent network-wide infections:

Use Common Sense

You can fight data loss and theft by remaining cautious. Be diligent about backups, and if you use a local physical storage device, never leave it unattended in the office. Secure cloud-based systems like Critical Backup Solutions are infinitely safer and completely automated.

Additionally, shred all papers containing sensitive corporate or client information, log out of QuickBooks whenever you leave your desk, and remain aware of who may be standing near you looking over your shoulder.

We take data security very seriously in our own offices, and we strongly encourage you to do the same. If you are concerned about your current data protections, contact us today to build a custom security roadmap together.

Regardless of whether you run a for-profit or non-profit organization—be it a service shop, general contractor, or local church—you must always strive for best-in-class financial practices. Taking the time to “steer your ship” in the right direction relies entirely on obtaining accurate and timely information from QuickBooks.

We frequently see three primary reasons businesses fail to get reliable, timely financial reports from QuickBooks:

Our company, AEII (QuickBooks R Us), is dedicated to helping small businesses achieve their operational goals by providing the structured training, file clean-ups, and security integrations they need to succeed.

Ensure Your QuickBooks Databases & System Files Are Secure

Our team at AEII, QuickBooks R Us, helps small business owners audit their current local servers, identify critical folder paths, and deploy high-speed automated backup protocols. Let us help you safeguard your business assets.

  Book Your Free Backup Audit

Free 30-Min Consultation • No Obligation

We have a large library of helpful QuickBooks Tips & Tricks, you can catch up on past issues by Clicking Here.

We also have a free self-help site with helpful procedures and videos at: QbHelp.us

Thank you, and I look forward to sharing more small business and QuickBooks Tips and Tricks with you in the future…

S-Corp Officer Medical Insurance Setup

One of the Most Common QuickBooks Payroll Mistakes

Many Collision Repair Companies are structured as an S-Corp (Sub S Corporation) for at least tax purposes.

Even if your company is a LLC (Limited Liability Company) you still need to determine how you will be filing taxes. This would be either as a Sole Proprietorship, Partnership, or either a Regular Corporation, or Sub-S Corporation.

There are major advantages to S-Corps, but this is not the focus of this post. This post is designed for those that are S-Corps and the company pays for or at least contributes to the costs for medical/dental/vision insurance and/or life insurance for officers that own `$\ge 2\%$` of the stock.

This scenario requires some special setup of the payroll so that these benefits are properly reported on the Officer’s W-2 at the end of the year.

Setting Up QuickBooks Payroll

If you use QuickBooks Enhanced Payroll, setting this up properly is pretty straightforward once you are shown how.

Step 1: Payroll Items Are Key to the Success

✓

Setup Payroll Item: S-Corp `$2\%$` Medical Contribution

✓

Select Add New > Company Contribution

✓

Do not use the E-Z Method

Step 2: Vendor and GL Account Setup

✓

Enter the Vendor you pay the premium to as well as your account number for the vendor.

✓

Select the Current Liability Account and Expense Account from the Drop Down Menu:

– Payroll Liability Account: can be the same account as for any other medical insurance contribution made by the company for any employees.

– Expense Account: would be Officers Benefits – Medical Insurance.

Step 3: Select the Proper Tax Tracking Type

This is a critical step often not completed correctly…

✓

The Tax Tracking Default will be “None”. This must be changed to “SCorp Pd Med Premium“. This will begin to track this cost properly; otherwise, it will not.

Step 4: Taxes Affected

✓

QuickBooks will automatically select what is normally affected.

✓

If you are sure that the amount of Federal and State Taxes will be sufficient for the year without extra deductions, you can deselect the Federal and State taxes checked.

✓

You should either contact us to discuss this deselection or leave default settings intact.

Step 5: Calculated Based on Quantity

✓

Select “Neither” — This is not applicable for this Payroll Item.

Step 6: Default Rate and Limit

This is the second most critical input for allowing this Payroll Item to work properly.

In this example, the monthly premium paid by the company for this officer’s insurance is `$\$865.00$`, and the company payroll cycle is weekly.

✓

Divide the monthly premium by `$4$` (e.g., `$\$865.00 / 4$`) which equals `$\$216.25$`. (If the amount does not divide evenly, adjust the weekly amount upward by `$\$0.01$`).

✓

Enter the weekly premium (`$\$216.25$`) in the rate box, and the Total Premium (`$\$865.00$`) in the limit box. This allocates `$\$216.25$` to each of the first four weeks of the month, and `$\$0.00$` to the fifth week since the monthly limit has already been met.

✓

Make sure to select “Monthly – Restart Monthly” so the limit resets cleanly.

✓

Click Finish.

Final Step: Set up Officer’s Payroll Information in each record

✓

Go to each Officer’s record (they must own `$\ge 2\%$` of the S-Corp stock).

✓

Under the Payroll Info tab, ensure the newly created S-Corp Medical item is listed in the right-hand section, and that the weekly rate and monthly limit are entered properly.

That is it! QuickBooks will now perfectly calculate the adjustments in the background.

Watch the Video to See it in Action

In Review:

I hope this explained a more streamlined process to follow tracking this for S-Corps. If you need help configuration audits or settings config help, please don’t hesitate to contact us.

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Repair Orders should be closed when the customer leaves the parking lot with their vehicle. The repair order should be closed with the amount you expect to be paid.

If the amount you are paid differs from what it was closed for, do not change it in either the management system or your accounting system.

The management system sales report and the accounting system sales report should match at the end of each month.

Step 1: Receive the deficit balance in the management system with the appropriate payment type

Step 2: Deposit the Short Pay in Adjustment Bank Account

Step 3: Open Adjustment Bank Account Register

The account being used is a COGS Account 5575.00 – Adjustments and Shortages. It can be setup as a Contra Income Account on the financial statements and it will be a negative Income Account. I just prefer the number listed as a positive in COGS.

At this time the Account Balance for the Customer is zero, the Adjustment Account is zero, and the amount of the Short Pay is being tracked in the 5575.00 Account.

This account should be reviewed monthly to determine the extent and costs Short Pays are having in your business.

In addition, the sales report from the management system will match accounting; the Accounts Receivables report of both systems will also match.

Go to: Vendors Menu > Sales Tax > Manage Sales Tax

Here you can access the Sales Tax Liability Report, Pay Sales Tax, and Adjust Sales Tax.

Step 1: Run a Monthly Report on 5575.00 Adjustments and Shortages Account to determine the amount of sales tax credit

This will reflect the total dollars for the month that you were Short Paid. If you also utilize other accounts to track Customer Goodwill, Coupons, Discounts, Warranty, etc., you must total all these accounts. This can easily be done by creating a memorized report that includes all the accounts that you utilize.

In this example the `$\$\$43.00$` represents the total dollar shortage and the State taxes all income accounts. Keep in mind, this report amount includes sales tax.

Step 2: Select Adjust Sales Tax Due (Manage Sales Tax) and complete the Adjustment

This Example Parameters:

This will create a Journal Entry in the 2200.00 Sales Tax Payable Account as well as the 5575.00 Adjustments and Shortages Account indicating the amount of Sales Tax Credit being taken.

Step 3: Pay Sales Tax

The Pay Sales Window will include the original tax amount on the first line and the credit being taken on the second line.

Be sure to check both lines

In this example you should also notice that “EFT” is in the check number field.

This is because most States are now requiring Sales Taxes to be Paid Online. This online form often allows for a credit for paying on time as well (such as Item 5. Collection Allowance).

If your State does offer a credit, you will need to enter the information from our now updated Payroll Liabilities Report to determine your credit, then just add another Sales Tax Adjustment. This type of adjustment is typically distributed to an Other Income Account such as Rebates and Refunds, or Accounting Discounts.

Other Important Considerations

Timing Differences: In this example, we took the Short Pay in the same month as the invoice closed. Most likely in the majority of cases, you will be taking the Short Pay in a later month. In these cases, the credit will be taken in the current month and the Payment Dates should be the current month you are taking the credit.

Automated Adjustments: If the management system is capable of sending adjustments into QuickBooks, the process of Depositing the Short Pay into the Adjustment Account and then distributing the amount to the proper account is not necessary—it is done automatically.

Taxable vs Non-Taxable Splits: If your State does not tax all items, determining how much of the total Short Pay includes Sales Tax is very subjective. Was it all parts? Then it is all taxable. If it was labor, it may not be taxable in your State. As a general rule, Parts + Materials usually represent close to `$50\%$` of the sales invoice, so if your State only actually does tax Parts and Materials, you may decide to use this as a basis to calculate the Sales Tax credit.

Sales Tax Accrual or Cash Basis: In QuickBooks, in the Sales Tax setup, the default setting is to pay sales tax on an accrual basis (meaning you take the sales tax liability as soon as you invoice the job—many States require this). However, there is a setting to pay sales tax on a “cash basis.” With this setting, you take the sales tax liability as you receive payments. The system, on an individual Repair Order basis, determines the ratio of taxable vs. non-taxable dollars for the job, and uses this ratio to determine your sales tax liability as you receive payments. If your State taxes all income accounts, the ratio would be `$100\%$` taxable. Even with this setup, the same Short Pay Process should be used and the credits taken the exact same way.

Preferences > Sales Tax > Company Preferences Tab

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Ransomware Protection & Small Business Data Backup

Protecting Your Operations, Financial Ledgers, and Proprietary Customer Data

Of course, it will never happen to you… right? But small business owners who have experienced a catastrophic system loss know exactly how much it costs in money, time, and sheer frustration when they are caught unprepared.

What am I referring to? I am talking about when your local computer system crashes, an employee accidentally deletes an important accounting directory, your network gets infected with a Ransomware Virus, or local server files are compromised. These events occur daily across the industry, and when they do, the loss of unbacked data can be completely devastating and legally unrecoverable.

This small, often-ignored area of your IT infrastructure can essentially bring your entire operation to a standstill. Yet, most collision shop owners never think about the operational and financial consequences until they are actively locked out of their databases.

While there are hundreds of data storage products available on the market, understanding where to start is critical to building a truly resilient recovery plan.

The Old Way Never Worked

Historically, small businesses relied on tape backup systems, manual external hard drive copies, or thumb drive transfers. Unfortunately, these hardware-based methods are rarely executed with the absolute daily discipline required to protect a growing business.

These legacy systems rely entirely on human intervention. More importantly, they require someone to physically take the backup media off-site every evening. If your backup drive is plugged into your office server during a local electrical fire, water leak, or break-in, your primary data and your backup data will perish together.

Let’s face it — relying on manual processes to protect your most valuable business assets is a recipe for disaster. It simply doesn’t happen consistently.

Cheap is Not the Best Option

If you search online for cloud backup options, you will find thousands of generic products offering basic storage space.

Some solutions utilize localized “backup appliances.” These units act like hardware servers, copying data locally in near-real-time before syncing to the cloud. While robust, these systems are exceptionally expensive and are designed for massive IT data centers rather than typical independent service operations.

In recent years, many business owners have attempted to use raw consumer cloud sync folders like Google Drive, Dropbox, or Microsoft OneDrive. Unfortunately, these are “real-time synchronization directories”—not secure, isolated backups. Because they continually sync in real-time, they consume massive local internet bandwidth and can severely degrade software performance. More dangerously, if a Ransomware virus encrypts your local files, the sync folder will immediately upload the encrypted files, instantly destroying your cloud copies as well.

Low-cost, consumer-grade online backup utilities also suffer from slow evening sync speeds and lack professional configurations. Worst of all, when your system crashes and you lose years of critical accounting data, these budget providers leave you completely on your own to figure out the restoration process.

Protect Your Business Assets Today

The risk of losing, corrupting, or accidentally deleting your historical accounting records, customer files, job photographs, and system databases is simply not worth the gamble.

Explore Critical Backup Solutions

Ensure Your QuickBooks Databases & System Files Are Secure

Our team at AEII, QuickBooks R Us, helps small business owners audit their current local servers, identify critical folder paths, and deploy high-speed automated backup protocols. Let us help you safeguard your business assets.

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We have a large library of helpful QuickBooks Tips & Tricks, you can catch up on past issues by Clicking Here.

We also have a free self-help site with helpful procedures and videos at: QbHelp.us

Thank you, and I look forward to sharing more small business and QuickBooks Tips and Tricks with you in the future…

QuickBooks Memorized Transactions

Saving Time, Improving Ledger Accuracy, and Automating Repetitive Tasks

You know that QuickBooks saves a lot of time. But have you explored how it does so by memorizing transactions?

Your day-to-day accounting work involves a massive amount of repetition. You send invoices. Pay bills. Create purchase orders. Generate payroll checks and submit payroll taxes. Some of the time, you only fill out those transaction forms once—such as a one-time purchase for new office furniture. Other times, though, you find yourself paying or charging the same companies on a regular basis.

QuickBooks contains a powerful, built-in shortcut to handle these recurring tasks, called Memorized Transactions. You can save the details that remain the same every time, and use that template whenever the bill or invoice is due. This simple habit saves a tremendous amount of administrative time and dramatically improves your ledger accuracy.

Here is a practical look at how this process works in your daily workflow.

Making Transaction Templates

To memorize a transaction, you first need to create a model for it. Let’s say you have a monthly bill for $450 that is paid to Bruce’s Office Machines. To begin, click Enter Bills on your QuickBooks home page (or navigate to Vendors > Enter Bills in the main menu).

Fill in the blank fields, select your vendor details from the dropdown menu, and distribute the expense. Once the template is filled out, click Memorize in the horizontal toolbar at the top of the form. This action will open the Memorize Transaction window.

Figure 1 – Before you can memorize a transaction, you must first enter the details to create a template.

The vendor’s name will already be pre-populated on this screen. Directly below that field, you must choose one of three distinct ways QuickBooks can handle this transaction when a due date is approaching:

Once you select your reminder option, click the dropdown menu next to How Often and specify the correct interval. You can then use the calendar icon to select the date of the next occurrence. If you choose Automate Transaction Entry, you can also specify the Number Remaining (useful for leases with defined end-dates) and Days in Advance to Enter.

Customizing Your Warning Windows

To ensure your cash flow remains stable, you will want advanced warning of upcoming bills and automatic payments. QuickBooks allows you to customize exactly how much warning you receive for every type of reminder.

Navigate to Edit > Preferences in the top menu. Click on Reminders in the left vertical pane, and select the Company Preferences tab. From this window, you can choose whether to display a summary or an itemized list for each reminder category, and enter the exact number of days’ warning you want.

Figure 2 – QuickBooks allows you to define the notice and timing of your reminders.

Managing Your Saved Templates

As your vendor contracts change, you will need to audit and update your saved templates. QuickBooks organizes all your recurring profiles in a single, easily accessible register.

Navigate to Lists > Memorized Transaction List in the main menu to display your active directory. Right-clicking on any entry inside this window will open an interactive action menu.

Figure 3 – Right-clicking on your Memorized Transaction List provides easy editing controls.

From this list, you can search for specific files, delete outdated templates, or instantly generate an immediate transaction. If you have several related items (such as a group of monthly utility bills), you can organize them together as a New Group to process them simultaneously.

Whenever you automate accounting processes, it is essential to set up the underlying accounts correctly. If you would like to audit your recurring transactions or build a structured template list, we are here to help.

Regardless of whether you run a for-profit or non-profit organization—be it a service shop, general contractor, or local church—you must always strive for best-in-class financial practices. Taking the time to “steer your ship” in the right direction relies entirely on obtaining accurate and timely information from QuickBooks.

We frequently see three primary reasons businesses fail to get reliable, timely financial reports from QuickBooks:

Our company, AEII (QuickBooks R Us), is dedicated to helping small businesses achieve their operational goals by providing the structured training, file clean-ups, and security integrations they need to succeed.

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SBA Relief Loans & Employee Tax Deferrals

Navigating Retrospective Audits, FFCRA Credits, and Long-Term SBA Compliance

FFCRA Paid Leave & Credit Audits

The Families First Coronavirus Response Act (FFCRA) required employers to provide employees with paid sick leave or expanded family and medical leave for specified health and family care issues. While this program provided robust tax credits to offset the costs of paid leave, it has also become a major source of accounting errors.

Because many payroll programs were not updated quickly enough when the FFCRA was passed, many businesses experienced calculation errors on their quarterly Federal Form 941 filings.

Retrospective audits of FFCRA tax credits are highly active. If your business claimed these credits, ensuring that your QuickBooks entries precisely match your payroll records is critical to passing an IRS review. You can review the underlying federal FFCRA guidelines below to confirm your historical compliance:

Explore FFCRA Federal Rules

Retrospective PPP Loan Compliance

If your business received a Paycheck Protection Program (PPP) loan, it is critical to realize that receiving forgiveness from your lender is not the final step. Under federal guidelines, the SBA retains the legal authority to audit and verify PPP loan records for up to `$6\text{ years}$` after the date the loan is forgiven or fully repaid.

This means that for many small businesses, active audit windows remain open. During a retrospective audit, the SBA can review your original payroll data, full-time equivalent (FTE) employee calculations, and use of funds over the `$8\text{-week}$` or `$24\text{-week}$` covered periods.

To review the exact documentation requirements and calculation standards used for loan forgiveness, click below:

Learn How To Calculate PPP Forgiveness

Review IRS Deduction Guidelines

EIDL Repayment & Compliance

Another unprecedented program rolled out by the Small Business Administration is the Economic Injury Disaster Loan (EIDL). Unlike the PPP, the EIDL is a true low-interest loan that is not designed to be forgiven.

Because EIDL terms feature a `$30\text{-year}$` amortization schedule, maintaining long-term financial records of your loan compliance is essential. The SBA restricts how EIDL funds can be used (specifically prohibiting owner distributions, refinancing other debts, or business expansion), and they require borrowers to maintain detailed receipts and financial records of all EIDL expenditures.

As EIDL repayments remain active, verifying your business remains in compliance with these strict SBA covenants is critical to avoiding loan default or federal penalties. Review the official SBA criteria below:

View EIDL SBA Program Criteria

Video Guide: SBA EIDL Loan Processes Explained

Need Help Preparing for a Retrospective SBA or IRS Audit?

Our team at AEII, QuickBooks R Us, specializes in helping collision repair shops and small businesses organize their general ledgers, reconstruct payroll records, and secure audit-proof financial files. Let us help you align your systems and protect your business.

  Book Your Session Now

Free 30-Min Consultation • No Obligation

We have a large library of helpful QuickBooks Tips & Tricks, you can catch up on past issues by Clicking Here.

We also have a free self-help site with helpful procedures and videos at: QbHelp.us

Thank you, and I look forward to sharing more small business and QuickBooks Tips and Tricks with you in the future…

Industry Fraud Insights & Statistics

According to reports from the Association of Certified Fraud Examiners (ACFE), the typical US business loses $3\%$ of its annual revenues to employee fraud, with small businesses suffering the highest frequency of cases and deepest relative financial damage.

Data from the Hiscox Embezzlement Study shows that “Funds Theft” is the most common embezzlement scheme, used in more than $\frac{1}{3}$ of all cases, followed closely by “Check Fraud” at $22\%$. “Funds Theft” is most commonly perpetrated by women at $56\%$, while $70\%$ of check fraud cases occur at entities with fewer than $100\text{ employees}$. bookkeeping represents the single highest risk job category, accounting for $37\%$ of all internal fraud cases.

In many companies, proprietary management systems handle daily operations and then interface directly with QuickBooks. Both systems must be kept in perfect balance. Each has built-in security controls that, when configured properly, prevent financial transactions from being compromised.

Critical Due Date Alert

For all payments processed during the 2025 calendar year, the official deadline to file Form 1099-NEC with the IRS and deliver copies to recipients is February 2, 2026 (since January 31 falls on a Saturday, the deadline rolls over to the next business day).

QuickBooks has the capability to compile and print 1099-NEC forms, but you must order the correct scannable stock to print them successfully. Our team can assist you in auditing contractor ledgers, verifying Form W-9 records, and filing complete electronic returns to keep your business fully compliant.

Why Integrate with ADPrun?

Get Your Custom ADPrun Quote

Free 30-Min Consultation • No Obligation

We maintain a large, searchable archive of practical QuickBooks Tips & Tricks. You can browse past editions by Clicking Here.

We also host a free self-help training portal with step-by-step procedures and video walkthroughs: QbHelp.us

Thank you, and I look forward to supporting your business growth and security…

Additional October 15 Deadlines

In addition to being the final deadline to file your individual returns on extension in a timely manner, October 15 is also the deadline for the following actions:

Potential Automatic Forgiveness & Audit Scope

Standard regulatory data shows that more than $86% of all PPP loans under 150,000$ received simplified forgiveness structures. However, simplified applications do not exempt your business from mandatory audit-retention compliance checks.

Contact us for additional information and support regarding Retrospective SBA Audits.

Our company AEII, QuickBooks R Us, is always here to assist any small business with a full range of services, and provide the training and support needed to achieve excellent results. We have assisted businesses worldwide … And we specialize in the collision repair and service industry.

Schedule a free session to discuss any QuickBooks or small business needs you may have below:

  Book Your Session Now

Free 30-Min Consultation • No Obligation

We maintain an extensive archive of professional QuickBooks Tips & Tricks. You can catch up on past issues by Clicking Here.

We also host a free educational portal with practical walkthrough procedures and video guides: QbHelp.us

Thank you, and I look forward to sharing small business and QuickBooks Tips and Tricks with you in the future…

Collision Industry Financial Guide

Transform Your Collision Shop’s Messy Books Into Crystal-Clear Growth Metrics

Please take the time to review this new resource, as well as the other free tools we have developed to protect your bottom line. We have packed this guide with actionable strategies to safeguard your margins and improve overall operational cash flow.

Our firm, AEII (QuickBooks R Us), has specialized in assisting collision repair yards and automotive service companies worldwide for years. We provide targeted training, bookkeeping support, and clean accounting setups to ensure your numbers match your operational realities.

Schedule a free session to discuss your QuickBooks or small business needs below:

If you missed any of our earlier issues of QuickBooks Tips & Tricks, you can catch up on past releases by Clicking Here.

Thank you, and I look forward to sharing more QuickBooks Tips and Tricks with you next month…

  Book Your Session Now

Free 30-Min Consultation • No Obligation

Small Business Information For Your Review

Aligning Your Business Goals & Maximizing Deductions for 2026

Changing Your Business Outlook for 2026

There is no question 2025 has been not only hard on a lot of us small business owners, it has rolled through like no other year that I can ever remember or even have imagined. To many business owners it has opened many cracks in the business’s armor, while exposing many glaring weaknesses.

When business is running normal, or in an upswing, it seems that “Sales Can Cure Everything”. Well known Multi-Millionaire, Mark Cuban, is one of the strongest advocates of this philosophy.

However, this concept may be true for businesses that sell a product, or provide software on the internet; it has limited value in a small service businesses. Of course it is true, that sales will bring in more revenue, but it is not like just cranking up the manufacturing levels to meet the demand will help getting the employees to get the jobs done faster, or supplies needed to the job quicker.

In fact at times the increase of Sales Revenue may just temporarily cover up the flaws that your business is having. Operating a service business is much more complex, and if there are factors in place limiting the revenue such as fewer accidents due to lock downs, the effect can be devastating to the cash flow of the business.

The richest man in the world currently is Jeff Bezos, founder and CEO of Amazon. He has made it very clear what is critical in keeping your business successful. So what does this mean?

What details of your business do you need to understand that you are not currently well versed with?

Hint: It has nothing to do with fixing a vehicle, providing good service to your customers, or how much additional sales you can get into your door … it is about understanding your financials, and how they relate to volume changes and your ongoing expenses.

Most small business owners are good at the service they perform, but they simply often do not understand their financial statements, or take the time to really digest them to a level that allows them to navigate in both the good times as well as the not so good times.

This can be from just not taking the time to learn about how their financials work, but also is often because they do not have systems setup to provide them with timely, accurate information in a format that focuses on how the business is performing, rather than just for tax purposes.

In `$99$` out of `$100$` clients we have, and do work for, if the CPA or accountant has set up their “books”, it will have almost zero value in analyzing your business performance, or provide the level of detail to determine where your business is doing well, or not. This is simply because their focus is on taxes, and they do not know your business key indicators.

In many industries there are third party management systems which assist in operating the business and they can also be setup to provide valuable financial insights in the Gross Profit areas of your business. Gross Profit Dollars for any small service related business is the key number to set companywide expectations for. Without enough Gross Profit Dollars, the business cannot survive.

Profit First is Critical

To get this type of real value with your financials, you must have them setup correctly in your management system as well as your accounting system. This is where we find many clients have missed the mark. The accounting setup does not provide the detail needed to see your business performance. This is where we have specialized for many years now.

Once this is done correctly, it is a matter of practice to perform the processes correctly to give you the detail and information necessary to run your business in a timely manner. Your financial reporting should be finalized by the first few days, no later than the 5th of the following month. Remember financial reports are history, so being able to get this information as close to the time it occurred is extremely important. Stale information is not what good business decisions are made with.

So to improve your business outlook for 2026 and beyond, get to know the details of your business better in a timely manner … make a commitment to put Profit First and plan to make good business decisions on timely and solid information about your business.

Let us know if we can help you in any way to get this a priority for 2026…

Deducting Medical Insurance

Article Highlights:

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Itemized Deductions

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AGI Limitations ($7.5\%$)

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What Insurance is Deductible

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Above-the-Line Deductions

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Self-Employed & S-Corp Rules

Health insurance premiums, especially in the wake of the Affordable Care Act, have risen dramatically and are one of the greatest expenses that most individuals pay.

Although the cost of health insurance is allowed as part of an individual’s medical deductions when itemizing deductions, only the amount of total medical expenses that exceeds `$7.5\%$` of the taxpayer’s adjusted gross income (AGI) is deductible.

The purpose of this article is twofold: first, to remind you what insurance can be included as a medical deduction; and second, to inform you of an alternate means of deducting health insurance for certain self-employed individuals—a means that avoids the AGI limitation and allows for deduction without itemizing.

Let’s start by looking at what is treated as deductible health insurance. It includes the premiums you pay for coverage for yourself, your dependents, and your spouse, if applicable, for the following types of plans:

Most workers, and any government employees who pay Medicare tax, have a portion of their wages deducted for contributions to Medicare A. This payroll tax isn’t a deductible medical expense. However, those not covered under Social Security, and government employees who didn’t pay Medicare tax, can voluntarily enroll in Medicare A. In that case, the Medicare A premiums are a medical expense.

Premiums paid on your or your family’s behalf by your employer aren’t deductible because their cost is not included in your wage income. Or, if you pay premiums for coverage under your employer’s insurance plan through a “cafeteria” plan, those premiums aren’t deductible either because they are paid with pre-tax dollars.

Special Rules – Self-Employed, Partnerships, and S-Corp Stockholders

If you are a self-employed individual, you can deduct `$100\%$` (no AGI reduction) of the premiums paid on behalf of yourself, your spouse, your dependents, and your children who were under age `$27$` at the end of the year without itemizing your deductions.

No above-the-line deduction is permitted for any month when the self-employed individual is eligible to participate in a subsidized health plan maintained by an employer of the taxpayer, the taxpayer’s spouse, any dependent, or any child of the taxpayer who has not attained age `$27$` as of the end of the tax year. The plan is considered to be subsidized when `$50\%$` or more of the premium is paid by the employer. This rule is applied separately to plans that provide coverage for long-term care services. Thus, if you are a self-employed individual eligible for employer subsidized health insurance, you may still be able to deduct long-term care insurance premiums as long as you aren’t eligible for employer-subsidized long-term care insurance.

Partnerships: If you are a partner who performs services in the capacity of a partner and the partnership pays health insurance premiums on your behalf, those premiums are treated as guaranteed payments that are deductible by the partnership and are includible in your gross income. In turn, you may deduct the cost of the premiums as an above-the-line deduction under the rules discussed in this article.

S-Corp Stockholders: This above-the-line deduction is also available to more-than-`$2\%$` S corporation shareholders. For purposes of income limitation, the shareholder’s wages from the S corporation are treated as his or her earned income. This requires the medical insurance and other listed insurances included on the stockholder’s W-2 forms. This is commonly done incorrectly by many of our clients, but can be setup automatically in QuickBooks Payroll as well as 3rd party payroll programs. If you have any questions related to setting this up properly or deducting health insurance premiums, whether as an itemized deduction or an above-the-line deduction for the listed other entities, please give this office a call.

Business Value Spotlight

We talk about efficiency in business, but often we forget about technology updates and upgrades that can save us thousands of dollars in a year. Outdated hardware causes nothing but frustration when trying to do your daily jobs. But it doesn’t need to cost premium dollars to get your systems upgraded to make a huge difference in efficiency.

We are almost at the end of the year, and the accelerated depreciation after this year may be a thing of the past … so now would be a good time to look at what there is available to upgrade your systems.

The first big mistake many business owners make is to go with laptops instead of desktop computers for their normal daily operations. Yes, there are some situations to be mobile which may consider being a laptop, but this still is often a mistake.

Laptops are inherently more expensive than desktops, and natively they have slower speeds, smaller memory, and small screens. Even with an additional monitor and/or docking station (more money) they are not as quick.

Another mistake made is the usage of wireless internet over wired ethernet. Wired ethernet can be `$10$` to `$20$` times faster than wireless, especially in an office environment. Some programs used on wireless can actually corrupt your data to the point it cannot be used. Again yes, there is a place for wireless, but not if wired is available.

Workstations Don’t Have to Break the Bank

We have been putting together a fantastic deal on super compact, fast Dell Workstations. These units boot to login in less that `$20$` seconds, and are super fast quad core Intel processors with extra memory.

Dell USFF 9020 Workstation

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Ultra Small Form Factor Size

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8gig High Speed RAM Memory

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i5 3.0 Ghz Quad Core Processor

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500 Gig Super Fast Solid State HD

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Windows 10 Professional

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1 Gig Ethernet Connection

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One Year Parts Warranty

Under `$\$500$`!

Dell Dual Monitor Stands

Better Viewing = Better Work Environment = Better Efficiency. Great for multitasking.

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Monitors securely on one stand

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Uses 19″ – 28″ Dell Monitors

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Cord Routing for Clean Management

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Exceptional value

Don’t Risk a Catastrophic Loss of Your Data

Today your data is almost priceless … and many cloud based programs help with this by maintaining good backup protections. However, you also probably have a combination of local software such as QuickBooks, images, and important documents that if they are not protected, they could be lost forever in the advent of a system crash, or worse … be held for ransom by some security breach and the Ransomware Virus Attack.

For a number of years now, we have provided a Critical Backup Service that automatically backs up your critical data, images, and documents for protection and security. We use encrypted transfer to a highly secure Google Cloud Server, and store `$7$` days of file copies to stop Ransomware attacks in their tracks.

What is unique about this backup is that it is a full service. In other words, if you have an issue or need a file you have accidentally lost, you just notify us and we will do the restoration for you at no additional charge.

Ready to optimize your business for 2026?

Book Your Free Session Now

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