YourVirtuoso is a critical tool to help you run your studio business efficiently and effectively. It is not, however, intended to provide the complete set of accounting functions you or your accountant may need to manage your business (e.g. Payroll, Bank Account Management). If you currently use accounting software such as QuickBooks® or Quicken® you will need to decide how to adapt your current procedures to take full advantage of the features of YourVirtuoso, cut down the time you spend updating your accounting software, and still manage your business finances to meet your needs, your accountant’s needs and those of the tax authorities.
Fortunately, YourVirtuoso has been designed to allow you to do this simply and effectively. This “How To” guide is written for users of QuickBooks, the most common small business accounting application, but the principles are the same whatever software you use, and you or your accountant should be able to adapt the instructions for other packages.
YourVirtuoso is designed to complement the sophisticated accounting functions of products such as QuickBooks with web-based services that are customized for your business, allowing web-site creation, online registration etc. It is recommended that you use each of these two products for the things that they excel at, namely:
Use YourVirtuoso to manage customers, sales, receivables, payments and sales tax.
Use Quickbooks to manage expenses, payables, payroll, loans, bank accounts etc.
Use Quickbooks to pull the whole business picture together for P&L, management, accounting and tax purposes.
To achieve this, you need only transfer sales and payment information from YourVirtuoso to QuickBooks. You will not need to track individual customers in Quickbooks; just transfer summary information on a monthly basis.
Specifically, there are three types of entry you will make in QuickBooks:
Monthly Sales: Using an invoice which will also handle sales tax
Payments/Deposits: Entered as you make a deposit (or at least monthly)
- Refunds: Entered as you write a refund check
Setting Up Quickbooks - Create a special "Customer"
Most of your existing setup in QuickBooks will work without change when you use YourVirtuoso. However, you will no longer be making use of any specific customer information, as YourVirtuoso now tracks all the customer details and accounts, but there is no harm in leaving those entries in your customer list.
To simplify tracking of Sales in QuickBooks, you should create a new customer under which you will summarize all the sales and payments that are made through YourVirtuoso. We suggest you name the customer “YourVirtuoso”, but the name is your choice. We will assume the customer is “YourVirtuoso” in the following instructions.
Setting up Quickbooks - Sales Items
You should also ensure you have (or create) Sales Items for the categories of sales which YourVirtuoso tracks. These are Registration, Materials and Tuition. If you create custom categories in YourVirtuoso when you use the Make a Sale feature, you can choose to have corresponding QuickBooks Items, or group them under a “Miscellaneous” item.
Also create an Adjustments item to capture any account adjustments you make to customer accounts in YourVirtuoso.
If you track and pay sales tax, you will already have sales tax items in QuickBooks, but you should ensure that the appropriate items (probably Materials) are set up as taxable in QuickBooks. (Tip: As you create custom categories in YourVirtuoso, keep taxable and non-taxable categories separate so they are easy to distinguish and enter in QuickBooks)
Setting Up Quickbooks - Merchant Fees Account
If you do not have an expense account in Quickbooks that is suitable for recording merchant fees for credit card processing, you need to create one.
- In Quickbooks create a new account. For example, open the Chart of Accounts List, and click the + icon.
- Enter details of the account. You accountant may have preferences on how to do this, but it can be set up as an "Expense" type as shown above
- Click OK to finish
MONTHLY Sales - Create a Finance Report
- In YourVirtuoso admin, select the Reporting/Financial Report.
- You may also need a Sales Tax report if you are collecting taxes.
- Set the filters to All except the Time Period which should be set to the month for which you are transferring sales information. It will usually default to last month.
- Click on Generate Report and review your report on screen. Then click on Print or PDF at the bottom of the window to open a version that you can print for your files from your browser or PDF reader application.
- Repeat for the Sales Tax Report if you track and collect sales tax.
- Now you need to open your QuickBooks application and Create an Invoice where you will enter the following information as shown in the illustration:
MONTHLY Sales - Enter data in Quickbooks
- Open the YourVirtuoso finance report so it is visible, and Create an Invoice in Quickbooks
- Customer:Job is “YourVirtuoso”.
- Date is the last day of the month for which you created the Finance report.
- Tuition, Registration and Materials sales are entered on separate lines using the corresponding items you set up in QuickBooks. Mark the appropriate items as taxable to correspond with your sales tax settings in YourVirtuoso. Custom Categories (e.g. Birthday Parties) should be entered using the appropriate items in Quickbooks. Ensure you mark them as taxable if appropriate.
- Adjustments Total should be entered with the appropriate sign (bracketed numbers are negative) against the Adjustments Item.
If everything is in order, the total on the invoice should match the report line Sales Total with Tax plus (or minus) Adjustments Total. The sales tax calculated by QuickBooks should match that on the report. There may be a rounding error in sales tax as the YourVirtuoso number is a total of all the individual sales tax charges, whereas QuickBooks has calculated tax based on the total of all taxable sales. The YourVirtuoso number is the most accurate, but you should consult your Tax Accountant to establish if you need to adjust any numbers to meet your local tax authority regulations. If there is a major discrepancy, verify that the sales items in YourVirtuoso and their line items in QuickBooks have been treated consistently for sales tax purposes.
Tip: If you memorize this invoice in QuickBooks the first time you create it, you will save time the following months.
Advanced Topic: Multiple Sales Tax Authorities If you have several locations, with different taxing authorities, you will need to use the Sales Tax Report to break up the taxable sales and enter them against multiple Item codes that have been assigned to the appropriate Sales tax items in QuickBooks.
Advanced Topic: Tracking Sales by Curriculum, Location or Teacher YourVirtuoso can provide reports that achieve this for you, but if you want to maintain this level of granularity in QuickBooks, you can use the filters on the Finance Report to generate separate reports for each location (for example) and enter a separate invoice for each using classes, jobs or sub-accounts in QuickBooks to differentiate them according to your tracking method.
Recording Payments & Deposits
YourVirtuoso tracks individual payments for you, so you only need to provide QuickBooks with summary information. This can be done when payments are deposited to your account. Note: To keep good monthly totals in QuickBooks you should make a point of recording and depositing payments at least monthly.
Find Credit Card Payments/Deposit Detail
YourVirtuoso automatically deposits credit card payments to your bank on a regular basis. To show these in QuickBooks, proceed as follows:
- Go to your list of credit card settlements (deposits) by selecting the My info/My Deposits & Payments menu
- For any Settlements that you have not already recorded in Quickbooks, click the details link.
Create a Quickbooks Customer Payment
- Create a new payment in Quickbooks
- Select the dummy customer (YourVirtuoso) as the Customer:Job
- Enter the date of the deposit as the payment date
- Enter the amount from the total in theYourVirtuoso details pop up window
- Select the payment method of "Card" or whatever method you have set up in Quickbooks for recording credit card payments.
- Show the payment as being deposited to the bank account where YourVirtuoso sends your payments
- Use the Discount Info button to record the merchant fees (see next step)
Record the merchant fees deducted
- Click the Discount Info button on the Quickbooks Payment window
- Enter the amount of Total Deductions from the YourVirtuoso settlement pop up as the discount amount
- Ensure the merchant fee account you set up is used as the discount account
- Click OK
- In the payment window click Save
Payment Check Deposits
You will choose when to deposit checks you have received into your bank account. To keep the records simple, make sure you deposit customer payment checks separately from other checks you receive. When you do so, you should enter the deposit in QuickBooks as follows:
- (Optional) Run a Payments report in YourVirtuoso (Reporting/Payment Detail) and use the filters to select Checks and a Time Period that matches the checks you have in hand to deposit. Use this report as a record of your deposit for your files and for the bank.
- Create a payment in QuickBooks using the “YourVirtuoso” customer, the date and amount of the total deposit, and “Check” as the payment method.
- Deposit To your bank account.
Cash Payment Deposits
There are several different ways you may be handling cash for your business. Dealing with two of the most common methods is described below:
I deposit Cash to my bank regularly:
Proceed exactly as for check deposits, but if you create a report, don’t forget to select Cash in the report filter, and select Cash as the Payment Method in QuickBooks.
I manage cash using a “Cash” account in Quickbooks:
When you enter your monthly sales invoice, note the amount of cash payments for the month from the report, and create a payment in QuickBooks using
- YourVirtuoso customer,
- The last day of the month
- The cash payments amount from the report
- Use Cash as the payment method
- Deposit To your Cash account.
Refunds processed by YourVirtuoso using credit cards are already included in the YourVirtuoso Settlement Details and do not need to be recorded separately in Quickbooks.
If you have to refund by check (or cash) use the following settings/options when entering it in Quickbooks:
- Write a check using QuickBooks as you would any other check, using the customer’s actual name in the “Pay to the Order of” area. If you happen to have this customer in QuickBooks, their address will auto-fill. Normally the customer will not be in QuickBooks, and you will be asked to add them as you put in their name. Go ahead and do this, entering their address too if you want to use QuickBooks to print the check ready for mailing
- In the Account area, use your Accounts Receivable account name
- For “Customer:Job” you must select the dummy customer YourVirtuoso, NOT the actual customer’s name.