6 things you didn’t know about Quickbooks Online

6 things about quickbooks

We’re big fans of QuickBooks Online at gHawk Accounting – because by making our lives simpler, QuickBooks makes our clients lives simpler. Organising your business finances has never been easier. With online platforms, like QuickBooks, you can access your accounts from anywhere, at any time.

But that’s not all. Whether you’re a novice user, or a long time convert – here are 5 things you may not know you could do with QuickBooks Online.

1. Manage project costs {coming soon!}

Using the Projects feature on QuickBooks, you can easily track a project’s income, expenses and profitability.

  • Head to the Projects menu and create a project.
  • Assign a name and a customer or client to the project.
  • You can now add transactions to projects as they appear in your feed – you can also go back and assign historic expenses to the project (if you created the project file after you’d started working on the project itself).
  • After inputting financial information into the project, you’ll be able to view ‘cost and profitability info’ or ‘job costing’ reports and graphs.

2. Link your bank account for direct feeds

Don’t want to manually enter your accounts data? You can very easily sync your bank feed with QuickBooks Online, allowing you to swiftly reconcile payments and expenses whenever you have time.

  • On the homepage, navigate to ‘Connect an account’.
  • Fill out the relevant information and approve the feed via your online banking log-in.
  • QuickBooks online will now download your transactions for you to categorise.
  • Once you’re all set up, you’ll have a rolling feed that informs the Profit/Loss and Expenses dashboard – allowing you to see how you’re doing, live!

3. Set up bank rules

Once you’ve downloaded your transactions, you can go a step further. ‘Rules’ save you time by grouping similar transactions, or assigning regular purchases or direct debits to a particular client, code or expense. From then on, those recognisable transactions will be automatically categorised.

  • Under ‘Banking’, select ‘Rules’.
  • Here, you can create a new rule from either money-in or money-out transactions.
  • Set your rule conditions, specifying the conditions under which a transaction will be categorised.
  • You may remove or add conditions to your rules at any time – plus, create as many rules as you need.

4. Record your business mileage on the QuickBooks app

Keeping track of your business mileage is important when it comes to claiming expenses. With the QuickBooks app, you can easily track your miles and input them directly into your QuickBooks account.

  • Use the automatic GPS tracking service to log your miles within the smartphone app.
  • Categorise the mileage as either personal, or business.
  • The app will calculate your potential tax deductions and create easy to view mileage expenses reports.

5. Run reports and email them to yourself automatically

Part of healthy financial practises is knowing exactly what’s going on in your business. By creating automatic reports, monthly reports and client reports, you’ll save time and be consistently in the know.

  • Create new reports under ‘Chart of Accounts’ by selecting ‘Run report’ and entering the variables you wish to look at.
  • Email reports to yourself, your accountant or your clients by creating a report and selecting the ‘Email’ icon. QuickBooks online will send the fully formatted report to the inputted email addresses, once it has been collated.

6. Liaise with your accountant via the ‘My Accountant’ section

QuickBooks is designed to make accounting easier – for you and your accountant. The software is ready to help you liaise with your accountant by integrating the My Accountant tool.

  • Under the My Accountant tab, you can review requests from your accountant – such as specific information requests, account details or report requests.
  • Communicate with your accountant using the Shared Documents area. You can download, upload and replace documents for you and your accountant to view at any time.

QuickBooks online has the benefit of being a cloud-based software – meaning it’s updated in real time and is consistently being improved. As an accountant, this kind of software makes it very easy to connect with clients, without lengthy email chains or constant phone calls.

If you’d like to know more about how gHawk utilises cloud software, check out our article on Making Tax Digital – or get in touch.

Benefits of Investing in property using a limited company

Investing in Property

According to brokers, up to 80% of new mortgage applications are now for limited companies. As of April 2020, mortgage interest will no longer be an allowable expense for property investors as individuals. However, as a limited company, it will remain allowable. Essentially, this means that your tax bill could be higher if you own property in your own name, rather than a company name.

There are many other interesting benefits and intricacies to owning a property through a limited company, these include:

Tax on profits:

If you own a company in your own name and you rent it out, you’ll pay income tax on the earnings as if it were a salaried job. However, as a limited company, those earnings are subject to Corporation Tax – which is around half the rate of income tax (if your income tax is at the higher rate). If taking the dividends from the company, additional tax is payable. To avoid the tax on dividends that you’d pay when you withdraw money from your company account, you can simply allow the profits to build up and later use them to purchase another property through the company.

Expenses:

As mentioned earlier, once the new rules come into effect in April 2020, you’ll be able to claim the entirety of your mortgage interest as expenses – if you bought the property through your limited company. Naturally, you cannot do this if you bought the property as an individual.

Portfolios:

If you’re building up a Buy To Let portfolio, being a limited company could be advantageous. You are not required to pay income tax when reinvesting profits into further properties. You will still have to pay Corporation Tax on trading profits (reducing to 18% by 2020) however, this is vastly lower than the higher income tax rate of 40% or additional rate of tax of 45% .

Despite the benefits, there are some things to note if you’re considering investing in property through a limited company…

Dividends:

If you choose to withdraw dividends from your company, you’ll be charged tax on withdrawals over £2000. Therefore, if you need to access the profits made by your property investment, you need to be aware that you’ll have to pay tax. As mentioned before, you can leave the money in the company account and continue to purchase property instead.

Company costs:

Running a limited company has got higher costs e.g. Preparing statutory accounts, Company tax returns, filing with Companies House and many other expenses mean that establishing a company for the sole purposes of buying property may not be immediately profitable.

Mortgage rates:

It’s also worth remembering that many lenders will charge higher interest rates to limited companies. You can claim these as expenses, but be aware that you may get lower rates as an individual. You may also have to be selective when choosing your mortgage provider as not all lenders will lend to limited companies.

Transferring:

The final thing to bear in mind is that transferring a property from an individual to a limited company is almost the same as selling a house. View it as buying the property from yourself and paying all of the tax costs associated with selling or buying a house.

If you are already a limited company or wish to build a property portfolio, it’s worth discussing the tax and expenses advantages with your accountant or financial advisor. In some cases, this could save you a lot of money. In other cases, it may not be the most efficient way to buy.

If in doubt, it’s always best to discuss your individual circumstances with an accountant.

How to pay your taxes: Income tax, VAT and Corporation tax

How to pay your taxes

Taxes don’t have to be difficult or confusing. If you’re a freelancer or sole trader, it can be much easier to keep on top of your tax contributions than you might think.

For many sole traders, software and spreadsheets allow them to manage their day-to-day finances. When it comes to a tax return, using an accountant can be helpful in terms of ensuring that you’re not making any mistakes on your return, you’re maximising on all available benefits and you’re certain that you’re paying the correct amount of tax.

How do I know how much tax to pay?

Throughout the year, it’s advisable to keep 10-20% of your earnings to one side, in preparation for your tax bill.

At the end of your tax year, or when HMRC ask for it, you need to submit a tax return. Once that has been submitted, HMRC will inform you of how much tax you owe. You can pay this calculation (known as an SA302 form) online or by cheque, within a designated deadline.

How do I submit my earnings to get a tax calculation?

To submit your income and expenses, you need to register for Self Assessment on Gov.UK. Here, you’ll be able to fill out all of your information when it comes to submitting a tax return. If you are confused or concerned about submitting your tax return, an accountant can do it for you.

What if I make a mistake on my tax return?

If you make a mistake on your tax return, you must tell HMRC as soon as possible. You can amend the return within 12 months of submitting it – the additional tax will be due. If you choose not to tell HMRC and you are found to have made mistakes on your tax return, the consequences can be quite financially severe. Read more about Self-Assessment penalties to watch out for.

What are payments on account?

You might be asked to make payments on account if your income has increased. Essentially, payment on account is the process of paying some of your tax bill in advance. You only make payments on account if your previous year’s tax and National Insurance bill was above £1,000 and only then if less than 80% of your tax liability was collected by being deducted at source.

What if I don’t have enough money to pay my tax bill?

Technically, HMRC prefer you to pay your tax bill all at once. However, if you are having financial issues, then you should contact HMRC to set up a ‘time to pay’ arrangement. Be aware that they will expect you to have tried other means to pay your tax bill before you contact them. For example, borrowing from friends and family or taking out a loan.

Does ‘Making Tax Digital’ affect me?

From 2020, sole traders will be expected to be compliant with the Making Tax Digital scheme. This scheme is already in place for VAT registered companies and means that tax returns must be submitted online every quarter. Speak to your accountant about becoming digital ready, or check out our post on what you need to do now!

Once you are used to the process of submitting a yearly tax return, it isn’t as complicated as it may seem. The easiest and most efficient ways to prepare for a tax return is to keep on top of your bookkeeping all year round, put regular chunks of income aside in preparation and always have an accountant that you can contact with queries or concerns.

Don’t go it alone – we’re here to help.

gHawk Accounting at the Banbury Chamber of Commerce 16th Annual Golf Event

gHawk at Banbury Chamber of Commerce

Banbury Chamber of Commerce are renowned for their exceptional support of local businesses. Throughout the year they host many events to support, network and showcase the community. For this years’ Banbury Chamber of Commerce 16th Annual Golf Day, gHawk Accounting teamed up with our friends at Signs Engraving entered the golf tournament and even bought home the Ladies Prize.

The Day

The event was held at the beautiful Cherwell Edge Golf Club in Chacombe, Banbury. The players arrived at 8.30am in the clubhouse for a hot drink, bacon sandwiches and a run-down of the rules before teeing off at 9am. The format was Texas scramble with each player required to Tee off at least 3 times. The weather sadly did not make the game any easier as the morning was full of strong winds and the occasional shower.

Hole number 16 was the charity hole. Proceeds from the day were kindly donated to Banbury Chamber of Commerce charities

The Winners

Of course, the taking part is what counts – but the proud winners were:

Bloxham Hill – providers of serviced offices, virtual offices, meeting rooms and a state-of-the-art data centre, complete with a café and gym.

Wellers accountants – who work with entrepreneurs, SME’s and individuals to deliver quality advice and solutions that help them realise their financial aspirations.

And the ladies prize went to Lenah Oduor of gHawk Accounting – and Liz Duncan of Feldon Valley Golf Club.

(Picture Left to Right: Lenah Oduor (gHawk Accounting) Andy Davies (Vice Chair  Banbury Chamber), Simon Smith (Wellers Accountants) and Liz Duncan (Feldon Valley Golf Club)

The Chamber of Commerce

The UK’s chambers of commerce are vital institutions that support their communities and help local businesses to thrive. Banbury’s Chamber of Commerce are particularly active, taking an active role in:

  • Instigating the BID (Business Improvement District)
  • Pedestrianising the High Street
  • Facilitating of Industrial Estates Forums
  • Consulting on local development
  • Raising the profile of local transport issues
  • Responding to planning applications
  • Lobbying for free car parking
  • Supporting business awards – including the Banbury Women in Business Awards

In addition to these vital local services, they also support a number of member charities, including: Citizen’s Advice, Dogs for Good, Banbury Young Homelessness Project, Horton Hospital, Katherine House Hospice, Royal Voluntary Service and The Mill Arts Centre.  

Being part of the community

Events such as this annual golf day, and other organised events, are incredibly important when it comes to running a small business.

Not only are they opportunities for networking and forging new partnerships, but they encourage local commerce which directly impacts the immediate community. By keeping businesses in your local area afloat, you’ll help to support a thriving micro-economy of shop owners, sustainably owned businesses and historic family enterprises – keeping the high street alive and families fed.

On a personal level, running a business can be a challenging and lonely affair. By using the services of your fellow business owners and talking about your experiences, it can make the journey a lot more enjoyable.

If you’d like to know more about your local chamber of commerce, check out their website for news, the latest campaigns and even Brexit support and advice.