The deadline for sending 1099s to recipients has past. The due date was January 31st. However, some people have problems obtaining a taxpayer’s tax I.D. number (social security number or EIN). Did you know that a person who fails to provide his/her tax I.D. could be subject to a $50 fine? On the instructions section of form W-9, it states “If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.” Other penalties could apply such as civil penalties for giving false information with respect to withholding, criminal penalties for providing false information, and civil and criminal penalties for misuing a TIN.

Are you interested in giving unique holiday gifts this season? If so, consider the following:

Pampering – indulge yourself, your co-workers, your employees or clients with men and women skincare products. Marcella Stewart of Mary Kay will come to your office and let you sample products before making a purchase. Individual purchases or gift baskets are available. Contact Marcella at marcellastewart@marykay.com or 919-401-2064 for more information.

Save a Memory – take a picture of your baby, child, parent, friend, other loved one, or pet and solidify their image in a charcoal drawing. Edie Cohn is a local artist who creates charcoal drawings to preserve memories to last a lifetime. She also paints in colors if you want to remember a nice vacation spot. Contact Edie at edie.cohn@gmail.com or 919-451-1122 for more information.

Embroidery – purchase a jacket or uniform shirt and have your company name and logo embroidered on the garment. Spend $40 or more on jacket and get a free blanket while they last. Contact Jennifer Cranford of Xpress Image Promotional Products at Jennifer@expressimage.com or 1-877-855-4969 for more information.

Monetary Gifts for Future Use – consider giving the gift of money in the form of a trust fund to a grandchild or child to be used for college expenses. The time is now before the end of the year to do gift tax planning. Contact Andy Esser of Edward Jones at andy.esser@edwardjones.com or 919-361-0360 for more information.

Peace of Mind – a clean house free of clutter and dirt can create a calm atmosphere. Treat yourself to a clean house or to get ready for a holiday party. Seize a clean day by contacting Ruthy Jones of Carpe Diem Cleaning at ruthy@carpediemcleaning.com or 919-682-5326 for more information.

Opening balance equity account – there are different types of QuickBooks transactions that can be recorded into an account called opening balance equity even if the client does not know this “behind the scenes” accounting.

One of the most common cause of having a balance in opening balance equity is an incorrect bank reconciliation. Some clients will have a difference in the bank reconciliation between what is in QuickBooks and what cleared the bank statement. Instead of looking for the difference, some clients are too eager to press the Reconcile Now button and let QuickBooks magically make the reconciliation work. What they do not know is that QuickBooks makes an entry to opening balance equity which really does not “fix” the error. The real error could be that the client did not check off one check and it will appear outstanding from now on as if it never cleared the bank. Or sometimes a check clears for a different amount than what was written so a journal entry needs to be created to correct the difference.

An additional common cause of having a balance in the opening balance equity account is from entering the beginning balance of inventory. A client will enter in the quantity on hand and the dollar value when setting up a new inventory item. The client thinks that the inventory is now accurate. However, the actual transaction is a debit to inventory and a credit to opening balance equity. The real transaction should be debit to inventory and a credit to accounts payable if you enter a bill or a debit to inventory and credit to checking if writing a check. When the client enters the bill or check to record the inventory that was ordered, s/he is entering inventory a second time without realizing it. Then, when it’s too late at the end of the year inventory seems way out of whack and the client has no idea how it got that way or how to fix it. So when entering a new inventory item, make sure to keep the opening on hand quantity and value blank. Inventory will properly be recorded as soon as you enter your bill or write a check for the goods purchased.

Another mysterious account that QuickBooks creates is called uncategorized income. This is created when a client creates a new customer and enters an amount in the Opening Balance field. Behind the scenes QuickBooks enters an invoice which debits accounts receivable and credits uncategorized income. Then, the client enters in the old invoice not realizing QuickBooks entered one too. This causes the invoice to not only be entered twice, but the revenue account is inaccurate on the QuickBooks created invoice. A client should not use the opening balance field when creating new customers.

A third account that QuickBooks creates is called uncategorized expenses. Similar to customers, when a client enters an opening balance amount for the vendor QuickBooks enters a bill into the system. Behind the scenes the accounting software program is debiting uncategorized expenses and crediting accounts payable. Now, the client may not use the bill feature in QuickBooks and instead writes a check for the amount of the bill owed. This records the bill two times, but the client is unaware of the QuickBooks created bill because s/he does not generate an A/P aging report. For clients who normally enter bills in before paying them, they will see two bills for the same vendor. A client should not use the opening balance field when creating new vendors.

If you are having trouble collecting from a customer, why not try the “Notes” feature in QuickBooks to log your conversations to try and speed up the process?

Click on the Customer Center icon or click Customers => Customer Center from the main menu bar.

Highlight the customer for which you want to make notes on and double-click your mouse to open the customer. Click on the Notes button in the upper right-hand area of the screen. Click on the Date Stamp button in the right-hand side of the screen. This will add in today’s date in the notes field. Type your note for your customer. For example, “Spoke with John today who said check #414 for $812 will be cut on the 15th of the month.” Click the OK button to save the note. You can go back to this notes screen over and over again to add more comments to keep track of your collection process!

In addition, you can set-up reminders for yourself. For example, if you want to be reminded to call John if you have not received the check by the 19th, click on the New To Do button in the Notes screen. Type in your note, such as “Call John if we have not received the check”. In the Remind me on date field, enter in the 19th of the month. Click the OK button to save the reminder. Now, on the 19th, there will be a reminder for you to call John!