Recording Daily Sales Best Practices in QuickBooks
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[00:00:00]
Introduction and Casual Conversation
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Dan DeLong: Oh, welcome to another Orchop Wednesdays where it's casual conversations for serious workflows brought to you by schoolbookkeeping. com allowing you to learn QuickBooks your way. Rachel, how are
Rachel D: you? I'm good. How are you?
Dan DeLong: Very good. Very good. Thank you. All right. Yeah, it's a, it's an interesting day here in the RV park that we're staying in.
It's it's called Upheaval Day. Oh, . Which is basically, it's, basically the end of the adult winter, summer Camp , ah, . So they had a parade already and
Rachel D: Wow. They have
Dan DeLong: okay human, horse racing and.
Rachel D: We go come in light of the change of the daylight savings
Dan DeLong: and it's when most of the snowbirds are going to start.
trickling away. And so that's, that's what's happening here. So if you hear some hootin and hollering, it's, [00:01:00] it's, not us, it's, someone else. But we're actually trying to to do do the live stream on Instagram today. If you follow us on, Instagram of school bookkeeping they're on on Instagram, we are going live there as well, because that's exactly where you want to have a convert casual conversation, is on the gram, right?
Yep. Okay.
Daily Sales Summaries: An Overview
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Dan DeLong: Today we're going to be it's. We're gonna, we did a workshop a couple years ago on this topic, and it stands to be updated because we had I had a remote session with a fellow accountant who is having some trouble with daily sales summaries because his, a family member of his owns several Subway franchises, and [00:02:00] he was doing, some accounting for them and getting them set up and in QuickBooks online.
And he's a more comfortable in desktop, one of those individuals, which is totally fine. But we had done a workshop a couple of years ago about doing a daily sales summary and. Based on that interaction, I wanted to talk about some of the updates that we discovered during that session, and I looked at the workshop that we did, and I, would, tend to say I gave some wrong information.
Not necessarily wrong, information, but, there's a, yeah, but to.
Rachel D: Technology changes a lot too. Things. Are different even from six months ago.
Dan DeLong: Yeah. And so you do a lot with point of sale systems, Rachel And, that sort of thing.
Could you, do you use [00:03:00] daily sales summaries? As a, way to enter the, day sales or what? What's your experience with with using daily sales summaries? Let's talk about that.
Real-Time Bookkeeping and Accounting
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Rachel D: Yeah, we do, because I like to do what? A lot of people refer to as real time bookkeeping and accounting.
We do a lot of accounting too, not just the bookkeeping and So at my firm, we, I sell my services as real time. And what that means is maybe not with everything like up to the second, but at least up to the prior day of the daily sales being posted. But what that means is instead of waiting until the end of the month, and then getting all of.
the sales revenue data for the entire month and then posting it behind you. We're posting it every single day as we [00:04:00] go. So that way at the end of the month, which is the reason that I say month is that's usually an accounting period. And it's very, standard for people to have. In their fiscal year, 12 accounting periods.
And so at the end of the month oftentimes you can pull the sales data in a month report and post it for a month, but then during that current month, you don't really have. a complete set of financials up to the prior day until the month is over, and then you can look in the past. And with automation and a lot of the technological innovations that have come with accounting and bookkeeping for all of our clients, we post everything in real time.
So whether that means, Individual sales transactions and we won't do that if there's a high volume [00:05:00] But or if there's high volume or if it just makes sense to do it We'll do a daily sales summary and that could be A couple different ways of doing it in quickbooks online, but I find that to be much more helpful because Then you can compare weeks, you can look at weekends, you can, look at differences that are happening by the day instead of just by the month.
Dan DeLong: Yeah.
Setting Up Daily Sales Summaries in QuickBooks
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Dan DeLong: So let me go ahead and talk about what, the general concept of QuickBooks entering a, daily and talk about some of those.
Am I, frozen?
Rachel D: Yeah, you were frozen a little bit, but you seem to be okay now.
Dan DeLong: Okay. Because I got an alert that said, oops, connected trying to connect. Okay. All right. So let me share my screen, which will probably cause some challenges with, that [00:06:00] as well, or maybe some lag. Okay. I'm instantaneous.
That's nice. All right. So the whole idea here is, when you're in this article Okay. The, essence is that you're not necessarily tracking every single sale. You just want to create a, daily sale for, the day. And, the more common.
Rachel D: Because what if you're, let's say it's a subway franchise and you sold made 479 sales that day, individual sales transactions.
You don't want to input every single one of those. You just want a total for the day.
Dan DeLong: And, typically the situation will come, up when, they're tracking their daily sales and when, they're actually bringing up sales in something else. And that could be, online.
That could be in a point of sale system that could be [00:07:00] a variety of ways. And the daily sales summary will. Summarize that better way to say it. I hate using the definition and the answer in the same question, but it will summarize that daily sales into whatever as, much detail or, generalization as, they see fit, right.
What do they need to know out of the, out of those sales? And the history of this comes from, An old cash register, right? Like the NCR you're bringing up the sales, chunk, making those noises. But at the end of the day you do typically this process of zeroing out.
The, cash register so
Rachel D: that
Dan DeLong: cash register is ready for tomorrow's
Rachel D: and balancing your till. Oh, I love that. [00:08:00] I'm so weird.
Dan DeLong: Historically that was called a Z out, right? To zero out turn the key in the, cash register to Z out, and then it will spit out. In the register tape, the, day's sales summarized, however you see fit right now with point of sale systems and square and light speed and all of those things, that that zeroing out is not as.
Structured as needed, to be right. But you still want to do something at the end of the day to be ready for the, next day, especially when you have a cash drawer, which making change and all of that stuff which is typically what happens in a retail establishment.
They have to zero out the drawer and count the [00:09:00] money and account for the overages and shortages. If there is some fraud or theft at the, cash register of skimming the, till or dropping the quarters, whatever the case may be you want to account, for that.
And typically a daily sales summary will. We'll suffice for that because in this, gentleman's scenario you don't necessarily want to know how many turkey bacon clubs, were, sold because they're not tracking all of that in their QuickBooks. There are just sandwich sales versus beverage or cookies or however much detail they would have to, or they would want to get out of their daily sales summary.
That's where. QuickBooks comes in, right? Yeah. And I should say
Rachel D: that's very, common now. In kind of the way that the technology has moved in [00:10:00] that we're recording the financial data in QuickBooks. And a lot of times we're doing the other analytical stuff in maybe a different app, the point of sale system where that stuff is recorded at the granular level.
And then you can compare your turkey baking clubs to your tuna,
Dan DeLong: exactly. And, really QuickBooks is, that passing of the baton to, matching the reality of what it is that happened in reality to the next action that, that happens, right? They've collected money from that day sales.
What happens? It's going to go into the bank and that's, what QuickBooks is concerned about. And typically your cash register or your point of sale system doesn't care what happens with that money after that. So this is the [00:11:00] process that allows you to track that inside of your QuickBooks.
So the first thing is you set up some kind of customer to account for counter sales or the point of sale system, then you set up accounts for those daily sales, and this gives you an idea of how to do that sort of thing. And I did put the I tried to put in the article link.
I'll do it again. Another error. Yeah, my side is giving me all sorts of errors in the,
Rachel D: it looks like it did post and I'm checking the link right now.
Dan DeLong: Okay, perfect. And then you, set up some accounts to be able to track those things too. And then you start setting up daily sales items, right?
So you got to go into the products and services list to set up. As much detail or generalization as you want [00:12:00] I had a, client who was like a mailboxes, et cetera type of store and he was using a point of sale system and he wanted to track, facts, sales, and he had a little mailboxes and he wanted to track those.
So he, create, we had to create. multiple items in our sales summary transaction to account for, all of that information, right? So that is where we then create those items to add, to the sales summary to give. that breakdown of how much detail that we actually want to know because they're items or products and services we can force, or we can tell QuickBooks what account to track those things to.
It could be just something as general as. Taxable sales versus non taxable sales. And then you are able to spend [00:13:00] to create a, an item that's taxable on an item that's not taxable. And we'll talk specifically about the taxability and the sales tax implications, because that is the updated information that we need to add about.
All of this with doing this inside of QuickBooks online.
Handling Sales Tax in QuickBooks
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Rachel D: Just really quick before you go any further, can you explain when, because the scenario that you're talking about is because you want to track the financial data, you want to track your revenue and you want to track potentially, Sales tax info and et cetera, et cetera.
But when, you say product service items, you have to create a product service item because that's going to go on the, sales receipt that you're going to create or the journal entry or whatever. Then, a lot of people get confused and they think that they need to turn on inventory, because they're recording things.
And [00:14:00] explain that in this situation that you're talking about, it has nothing to do with inventory and a non inventory item would be the item that you're creating because I find myself cleaning up a lot of that and I think that's a turn, a fork in the road where a lot of people go wrong.
Dan DeLong: Yeah, And we're going to have a topic where you know, to, to your point, how do you turn off inventory after you've turned it on? Maybe mistakenly, or maybe I didn't know any better.
We'll definitely dive pretty deep into that. But yes, these items I'm
Rachel D: seeing a lot of people are very confused about that. We do a lot of error correction.
Dan DeLong: Yeah. And they don't even mention here what kind of items to actually, so
Rachel D: that's why I thought, you know what, let's. Take that opportunity
Dan DeLong: and this is, one of the nuances of QuickBooks online [00:15:00] doing these daily sales summaries when it comes to sales tax as well as we'll unpack that as well.
But yes, you would set up these items as either non inventory items or service items. There's no difference in. How QuickBooks handles these items other than calling them service items or non inventory,
As long as you don't. Call them inventory items. You're in the clear, right?
But you only have three choices when it comes to what type of item bundle, but that's not really an item type. It's just
Rachel D: Because when we're talking about this daily sales summary, it's really just to record the financial information. We're not recording how many widgets were sold. That's a whole different thing.
Dan DeLong: And in, in, in this article, it talks about creating these items ahead of time. Daily sales income, you point it to your daily [00:16:00] sales income account, and description would be daily sales income. And then you've got other items of overage and shortages, and what accounts that they, point to because what you're ultimately creating here is a sales transaction that amounts to nothing.
Because what you're doing is you're putting the, sales revenue items at the top. And then just like your Z out store clothes tape will do, it will itemize out how much money was collected by credit card, check cash, gift card, whatever the tender type is for those sales. And ultimately it will net out.
To nothing because your account handling the accounting of that through these items on the transaction itself. And they give an example down here at the bottom of this article which is, nice because it, it gives this example of they had 1, 177 [00:17:00] and 20 cents in total reported sales.
That was 1, 080 sales income plus 97 20 in. Sales tax, right? And then your cash register count was 327. There was 316 collected by and 10 cents by check. Who takes checks anymore? I don't know.
Rachel D: This Subway does. This,
Dan DeLong: yeah this, this, company in this article Visa MasterCard and again, if you have those separated out, you can certainly do Visa sales versus MasterCard sales if you want it to but they combine them in 343.
35. Amex was 87. 20. There was a cash shortage of 16. 35 and another discover of the exact same dollar amount of. I make it, duplicate, but okay, but discover and American express were 87 and 20 cents. [00:18:00] So you can see here in this example, make it bigger. Oh, trying to, there we go. Trying to center it.
The amount of the sales receipt is nothing, right? But all of these individual items. Come in. So there's the 10 80 for daily sales and then the cash, the check visa, MasterCard, American Express, Discover. They are all negatives on this on this sales summary to account for, all right, this is the income, the revenue.
And notice the, tax. Check mark here and then the daily sales zeros that out Z out. There's our Z out of zeroing it out to, to, to nothing. And the accounting is handled by these items on the, transaction themselves. So what this allows you to do is to point cash check, Visa, MasterCard, American Express, those [00:19:00] items as going into undeposited funds, right?
Most, most companies most retail companies don't go running down to the, bank with 327 and, you
intro: know
Dan DeLong: Exactly their, cash till of three 3, 000, 327 down to the bank that day. Or the next day they might wait several days to then take all of the cash that they, want, whatever they're leaving behind in the cash drawer, and then making one lump cash deposit maybe every other day or two days, or this will allow them then to create a, deposit, for whatever that.
Is, and because they're choosing the memo we'll have cash check Visa MasterCard in the item, they'll be able to know which ones are cash and which ones are [00:20:00] check to make the appropriate deposit and make and put it into take that pass that baton that QuickBooks and their point of sale system are now doing that, right?
And if that's all that you're doing in QuickBooks, that's totally fine. Now, the caveat of all of this is. Sales tax, right? Because, and this is where this where this story, came up why this topic became such a we need to, do this because he came to me because he's trying to do sales tax filing.
And so I've got a transaction here in in my demo here of a, I did it. Where was it? Oh, darn it. I'm going to open it. So I was using an item on a [00:21:00] daily sales transaction. There's a three musketeers bar might, it's a thousand dollars, but it's taxable.
Rachel D: It must be Dubai chocolate.
Yes.
Dan DeLong: Yes.
Rachel D: It's a TikTok.
Dan DeLong: Fantasy chocolates.
Rachel D: That's a teen TikTok reference.
Dan DeLong: All right. And then I put thing about tips I put a tips in here. And then it's just a visa payment. In the grand scheme of things, this was taxable. And, it showed down here at the bottom that 70 was collected in tax because it was sold in florida.
And this particular item was taxable, right? So there's my sales, which goes to the right place. It's, calculating taxes. But when I go and look at my Florida department of revenue tax report, my gross sales is negative 70. My non taxable [00:22:00] sales is negative 1, 070. And my taxable amount is $1,000, which now this is very confusing.
Like how do I tell the state that I have nega negative 70 $70 in, in, in sales, in gross sales and negative $1,070 in non-taxable sales, because that's not true. And that's where the daily sales summary in QuickBooks Online gets a Yeah, but if you are using. QuickBooks online to help you file and remit and pay your sales tax.
Don't do it this way, right? Because these items on here for anything that's a negative, which is the the tender types or gift cards or what have you. There's [00:23:00] sales items. To QuickBooks because there is no such thing in QuickBooks as a QuickBooks online as a payment item, right? But QuickBooks desktop, allows you to set up items as payment items and put them as items like this onto the sales receipt.
And they're treated differently in QuickBooks desktop than they are in QuickBooks online. QuickBooks online. It doesn't, because it's your only choice is service, non, non inventory or inventory items as, items. The accounting is fine. It's the sales tax that's wrong. So Jamie's Oh, question though.
Rachel D: So what if you didn't do the negative item to throw off your sales and you deposited to A different clearing account.
Dan DeLong: Yeah, you'd have [00:24:00] to do it that way. The other option is instead of doing it as a sales receipt, do it as an invoice for daily sales. Yeah, that way it's
Rachel D: obviously going to go into positive funds.
Dan DeLong: Yeah.
Rachel D: Yeah.
Dan DeLong: Jamie's moral of the story. If you're using sales tags, don't do sales summary this way. But
Rachel D: I know that a lot of people did and a lot of people do. And in, in a lot of kind of when I first started in QBO and a lot of the tutorials and trainings and stuff that I did, this is very, standard.
And I developed different ways of doing it, and I use a clearing accounts, and so we don't really do it this way. But a lot of people do. And so it's really helpful to learn the hack for this. Yeah,
Dan DeLong: yeah. And even here, right in the, QuickBooks are they talk about, they talk nothing about sales tax other than the fact that.
On their sales [00:25:00] receipt. It is taxable. So that means that transaction is calculating sales tax.
Rachel D: Yeah, and people are going to automatically try and use it unknowingly for sales tax, and they will see that their reports are off.
Dan DeLong: And the challenge is, there's going to be a rounding issue when this all becomes settled, because it's going to summarize, all of your taxable sales.
into a taxable subtotal, which is not going to be likely your your daily sales, there's going to be a rounding of cents as those smaller transactions, right? Like you have a subway sandwich of, I don't know, what is it used to be 5 for a foot long, but not anymore. Maybe a 5, six inch, But anyway, those smaller sales at the [00:26:00] at the sales tax percentage, whatever that is in the, state that you're in is going to have typically a rounding issue when it comes to, summarizing all of those sales.
So if I had 40 sales at 20 a sale, that's going to be You know, it's going to calculate the sales tax on 20 or whatever. The amount is rather than 1, 000 times the global. addition of that. So that's another thing to to that will be in consideration when you have that, because you have, you're going to have a discrepancy between the amount of sales that was collected and the amount of sales that QuickBooks is going to calculate, and in, in, In this guy's situation he the subway franchise had a connector to send daily sales summaries to QuickBooks. [00:27:00] And what it will typically do is it will put the sales tax that was collected as a line item, an additional line item so that. It's explicitly said what was actually collected.
So then if you're using sales tax, then that's it, that's going to make it even more complicated, right?
Rachel D: Cause it's not going to tally it up in the sales tax center. It's going to collect it like a regular GL account.
Dan DeLong: To add another caveat to all of this, the amount that's actually collected versus the amount that's actually, calculated, When it comes time to file and remit your sales tax, you may find that there's some since discrepancies to account for as, as well on top of that.
So if you're using sales tax and you're using, anyone wanting to, to summarize the daily sales, [00:28:00] the best option is not to use sales receipts to do that because those payment items are going to, screw up. your your, sales tax. That's the sales tax reports, right? So by having this, this guy, whoops, yeah, this report here will show horribly wrong, right?
Automating Daily Sales Summaries with Lightspeed
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Dan DeLong: So One of the, one of the point of sale systems that I've been working with is Lightspeed. And they send sales summaries over to QuickBooks. It's really cool because they will send sales summaries over to QuickBooks as soon as you close the register in Lightspeed. You don't have to tell it to go over, right?
They just show up. Now those sales summaries Autosync. Yes. I love that. Those sales summaries come over to QuickBooks based off of [00:29:00] how you this is an example of what those sales summaries look like. You'll notice, None of that you don't see any payment methods on, these things. So it actually will send these sales summaries over as invoices and the payment methods that are utilized will automatically get applied to this invoice.
And lower, lower the balance. So you'll see on the invoice itself inside of QuickBooks, the payments that are there, and then they go to undeposited funds for, depositing. So that's really really cool thing that you can do. And it sounds like my headset is going to die in something. Somebody's talking to me.
But you're able to specify that in the, in the day, In the [00:30:00] preferences inside of, Lightspeed. So that's one of the really cool things that that Lightspeed will do is take care of these daily sales summaries, for, you by create, by using QuickBooks online, the way it's designed to be used.
By, doing these as invoices as opposed to sales receipts.
Rachel D: Yeah. And a lot of other, connectors will do that too. And the great thing is like you're explaining and then they'll mark it paid. And then that way, the actual payment that's coming through the bank feeds will find that payment and it'll match, which is really great.
So, that way you're the, work is really in the setup, in the mapping, you're setting it all up, but then. The, what you're doing the rest of the time is just match, which is really, great. And then I'm guessing light speed is like everybody else in that they're posting the [00:31:00] sale based on how the payout is coming.
So what I mean by that is if it's paying out a day's worth of sales, that's the sales posting that's going to post ahead of time. And it like, say for example, the total sales. that you sold is going to be 572. That's the total credit card amount or whatever. That'll come through the bank feed.
And so it'll know that's the amount on the correct side supposed to, be expected. That's a really bad way of explaining that. But anyway, all that to say, it's going to post what, it knows that. Like the money coming through will be expecting, which is really, nice. And on a daily basis, if you've told that system, I want daily payouts, that's how it will post it.
Dan DeLong: Yes, the and another cool thing about light speed. I'm going to put a little QR code [00:32:00] here because they're actually having a promo for free get light speed for free for three months, but it expires the end of the month So you can if you know anyone or if you are someone that might want to check out light speed Why not check it out for free another cool thing.
They really they do is they have included five sessions, to make sure you understand how to use light speed. So their, implementation is really cool. I sat in on with, a client. They really answered a lot of their questions. They're not clear on the QuickBooks integration.
And that's why I wanted to sit in with them to make sure that those things, how they show up in inside of QuickBooks. But the problem with any new software is if you don't know how to use it, you don't use it, and then you never use it. And then you don't. You get frustrated and they charge for the implementation, but they [00:33:00] credit it back.
So it's, a really cool, option that they have and they, give away their time to make sure that you're able to understand how to get the most out of it. And they, have their light speed payments for credit card processing. And because of their integration, they account for the fees.
As well for the lights, So you
Rachel D: can't not have that.
Dan DeLong: Yeah. Everything is, most everything is, then handled for you, by using, the lightspeak connector. They have their own e commerce, platform. Shopify. And those, that information can then be sent over into your, in your QuickBooks as well.
Some really cool things that, that Lightspeed does, to be able to set up and not even have to [00:34:00] use daily or create these daily sales summaries from scratch.
Conclusion and Upcoming Topics
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Dan DeLong: So that's that's our, updated daily sales summary workshop. Appreciate you joining us here today. Rachel, any Any final thoughts on daily sales summaries?
Rachel D: No, other than I know a lot of people still use them, and I know that they're important, and, we use a lot of them with automation, and If anybody needs help, call me,
Dan DeLong: Yeah. So next week we're speaking of daily sales and summaries. We're going to be talking a little bit about the Shopify and Amazon connections inside of inside of QuickBooks in the, commerce and unpacking that as well, which we use
Rachel D: that too.
Dan DeLong: Yup. So hopefully you're [00:35:00] going to have a great day. I'm going to see about what kind of shenanigans the people in the RV park are up to. And we will see you next week on the workshop Wednesday and hope you all have a great day.
