Now slightly different are states like California where you prepay monthly and settle quarterly.  So using our 3rd quarter example, in August, you would write a check for $25000 for July.  In September, you would write a check for $22000 for August.  In October, you would do your sales tax for July – September and determine you owe the state $74000 in sales tax.  So you would write a check for $27000 ( $74000 – $25000 – $22000 ).

So now that we understand why we have to do this, and how we do it manually – lets see what we do in Lizzy.

First, if we don’t have a PrePaid sales tax account set up, we should do so.

Go to Accounting > Chart Of Accounts > View Accounts, and from there we will add our PrePaid Sales Tax account.  We suggest we make this an ‘Other Current Asset’ type of account, so lets make 140.00.000 or Master account, so it will be grouped on the Balance Sheet properly.  Account Type should be “Other Current Assets”.  Account Number – we suggest 142.00.000  - but choose another if you already have a 142.00.000 or want a different number ( or use a different numbering sequence ).  And as an account name – Prepaid Sales Tax will do ( or name it what you feel you’ll need it to say. ).  Please keep in mind, for the rest of this example, I will be using these accounts, so change them appropriately below.

Now we need to tell Lizzy that we have a prepaid sales tax account, so we head to Settings > General > Tax Rates, and right next to our Save button we have PrePaid Sales Tax Account.  Select your new account ( 142.00.000 ) and click Save.  You will get the following message: “Error: You must enter a name, select an account and select a tax vendor to continue.”  Please ignore this and click Close Window.  The error  is a guardrail so it doesn’t save a tax item without a name, account or vendor.  Since we just wanted to save the Prepaid account, we can ignore the error, and move on.

Now, Lizzy knows our prepaid sales tax account, and will use it on our tax reports.  At this point, we assume you already have a “Generic Tax Report” configured in your Tax Reports.  Handling prepaid sales tax assumes you using Lizzy’s Generic Tax report functionality.

So at this point – business goes on normally until its time to pay your sales tax.  If you do NOT do quarterly tax assessments, then skip to the next paragraph.  If you do quarterly taxes, and have already paid into the quarterly fund, you will need to move the money from whatever account you hit on your sales tax prepayment check to your new Prepaid Sales Tax account.  So do that through a GL Adjustment.  At this point, it should either be the first check in your quarter your about to write, or what you’ve paid so far for the quarter is in your Prepaid Sales Tax account.  Now, for the current assessment, we simply write a check to our Tax Vendor for our prepayment amount, and offset our new Prepaid Sales Tax account.

Now for our quarterly reconciling, or our monthly payment handling, we move to our tax report.  Going to Invoicing > Reports > Sales Tax Report, and setting our date range, and select our report to generate, then click Generate.  On this report you should have all the figures you need to fill out for your state filing report.  When we are ready to generate the check, we click “Pay Sales Tax from This Report” in the middle of the screen.  MONTHLY FILERS:  At this point, you may want to run this report for the current month, to get an idea of how much you need to prepay for this month.  So do that, and get your amount to prepay, and write it down.  Then regenerate your current payment month and click the Pay button.

On our payment form, you’ll see all the taxes you currently owe ( through your end date ) for the various tax vendors you have.  Check the pay button on the right for all the tax municipalities you will be paying right now.  Towards the bottom of the report, you’ll notice 2 lines that say “Estimated/PrePaid Last Month” and “Estimate to Prepay This Month“.  While the descriptions are mainly for the montly filers, these are the fields you quarterly filers will use as well.  By default, both of these lines should have your prepaid sales account in them ( because we told Lizzy what it was earlier ).  And because of that, Lizzy was nice enough to go gather how much we’ve prepaid already in to our sales tax, and filled that in.

QUARTERLY FILERS:  At this point – if you’ve checked all your tax items, the total to pay at the bottom should be what you now owe ( your prepaid amount has already been subtracted from the tax total for your check calculation. )  You may jump down to the paragraph following the Monthly filers.

MONTHLY FILERS: At this point, all you need to do is enter that number we wrote down earlier for the current prepayment and enter it the “Estimate to Prepay This Month” Amount column.  It should increase your check total.

ADJUSTMENTS:  If your paying late, or your state is nice enough that if you pay early or on time, you get to take a small deduction ( lets say .75% ( or 3/4 of 1 % ).  We can go to the Enter Adjustment Info line and enter a ( – ) negative amount to deduct, or a positive number if we owe a late fee, and then select what account we want this to hit.  ( The accounts only allow you to look at other income and other expense accounts ).

At this point – we should be ready to process our payment.  If we want Lizzy to write our check, she’s already to do it, so we just click “Process Payment(s)” and she’ll write our check.  If we want to pay later, and want a PO instead, we can simply click Create Payables, and Lizzy will go write payables up for our sales tax.

Either way, congratulations!  You’ve handled your Prepaid Sales Tax assessment properly.

When you process a credit card normally, you pay a fee to the credit card company. I know you all know this but I’m sure most of you don’t actually take the time to watch every single fee that gets charged as we just don’t have the time. So lets take customer “Bob” coming in to buy a gadget from us and it costs $100.00. We happily take their card and run it through our machine. We make $10.00 profit on this item so are glad to move it out the door.

However, our credit card processor makes 1.6% on all sales running through their gateway which means they are going to take $1.6 from us when they run the charge and approve it. So now we’re down to $8.40 profit on the sell. Not as happy as before but we’re still happier than we were before the customer came in.

A few days go by and “Bob” decides that he actually doesn’t need the item and he wants his money back. We not so happily take his item and run his credit card for a negative amount in order to give him his credit due. “Bob” leaves and we sit thinking about what we just did.

We sold him an item that we were going to make some money on but then gave him 100% of that money back. The credit card company could care less about our customer so they keep their $1.60, but it gets worse. Unlike actual business owners that care about their customers and give them the money back when they are not happy with a product we sold them, the credit card company actually runs what in mathematics is called an ABS on the total fee returned and charges you again. What is ABS? It’s that old absolute value stuff we learned in high school all those years ago.

So now lets take a look at what that means:
Original Sale: $100 * 1.6% = $1.60
Refund: abs( -$100 ) * 1.6% = $1.60
—————————–
Total Charge: $3.20

On a part we never made a penny on. So I’m sure when you posted that credit card you just assumed that your credit card company was going to politely give you your money back just like you did for “Bob”, but they just don’t work that way. So my advice? NEVER EVER EVER DO CREDIT CARD REFUNDS!!! Write them a check or give them cash back instead. You’ve already lost money on the sale, why double the loss?

For the next release, which is due out in about a month and a half, we are working closely with a number of our customers in order to put the finishing touches on our new rental scheduling system that will provide a calendar driven scheduler to aid in selecting specific models and types of units and then visually seeing how many are open for each day. Selecting on a day will then display more detail as to who has them scheduled and when.

You will also be able to collect customer deposits on the fly with this system and then later apply those rental credits to the actual rental when the customer shows up. It will also feature a one click process to generate the rental ticket, attach the required customer and ready you to enter the actual VIN/Serial number of the item being taken.

Other features will include regular scheduled maintenance reminders and tracking units through service, where Lizzy will take them out of service and bring them back into service automatically as the required maintenance is completed.

We’re very excited about the new areas of operation this module will open up for us and the ability of Lizzy to track yet one more aspect of running your business in total.

Stay tuned for more exciting news as it happens.

–glenn hancock

So it’s a terrible thing for these company executives to ignore Facebook and Linkedin? I tried to join linkedin as I’d never heard of it before I read this article. While I’m still not sure of exactly what Linkedin does for me as a business owner, I can tell you that I’ll most likely never use it due to it not working very well. For the last 5 minutes the site has been sitting here spinning just trying to register my name.

As for Facebook, it’s a great website for catching up with friends and chewing the rug, but it’s real usefulness to a business owner is questionable at best. Can you find customers on it? Do people actually go to Facebook and ask others what they know of Lizzy and Nizex Inc.? Do they spend time researching how to best run their companies? Or heck, how many are actual business owners to begin with? To give merit to these sites as some sort of wonderful untapped sales tool seems weak at best. Before you can tell me I should have a facebook account for my business, you should first explain to me how having a facebook account is going to increase sales or support and by how much.

Again, I’m not against Facebook and I’m not sure what Linkedin even is since it’s still sitting here spinning its wheels just trying to get me registered, but to suggest that my business is in jeopardy just because I don’t have a linkedin account seems to me a survey done by someone that has never herself run a real business. Oh, and the company executives that she suggests she surveyed? Well, it seems she didn’t actually speak with any of them and they run companies so large that I doubt their using Facebook ever enters into their minds.