Setup for Tutoring Business in QuickBooks

Tutoring business how to be able to set it up to invoice, track time, and send statements for clients.

Tutoring business starts by “selling” a package of tutoring hours to a client. They’ll usually pay as they go along. Create monthly statements so customers can see how much they still owe, how many hours they have left in their package, etc. Sell a tutoring package with payment up front, pay as you go, and track time and statements to send them.

Best way to record and monitor Tutoring hours is thru sales order

Create Item- Type Service – Tutoring Hours

Item Creation

Create sales order for the Total Tutoring hours intially contact for

Sales Order

Receive Payment thru Customer Payment as no invoice is listed these payments will appear as Negative in AR.

Payment

Customer Balance

When tutoring is done for some hours then create invoice from sales order.

Create invoice

Quickbooks will give message to choice from, select “create invoice from one or more sales order(s)”.

Then select the respective sales order

Quickbooks will give message to choice from select “create invoice for selected items”.

In the next window in “To invoice” enter the hours you have completed Tutoring. Caution – By default it will have all balance hours so please correct the hours otherwise it will create invoice for the entire balance hours.

This will create invoice for the hours you have completed Tutoring and also reduce Backorder quantity.(which are balance hours out of total tutoring hours). At the same time it will also reduce negative AR.

Create Invoice from Sales order

Create Invoice Select sales order

Create Invoice Select sales order for selected item

Create Invoice selected item

Create Invoice selected item change Hours To Invoice

Created Invoice

Created Invoice Apply to payment received to reduce Negative AR

Created Invoice Apply to payment received to reduce Negative AR credit applied

Customer Balance after invoice and applying credit to it

This report will show all the clients but for sending report to one client you can filter the report

Report on Hours

 

Customized report-> Filter-> Name ——(Then type or select the name of the client)

You export this in excel and send to client.

Report filter option

Follow us on all Accounting, Bookkeeping, Payroll, Business Plan, Quickbooks .

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Ratio Analysis

Ratio Analysis

Ratios act as a useful tool to measure business performance. Ratios are a quotient of two numbers and the relation expressed between the two accounting figure is known as‘Accounting Ratio’. There will be a natural difference between ratios according to the nature of the business, the size of the business, its age and the industry within which it operates.Ration analysis is a very important part of the accounting services, bookkeeping services. Different reports can be prepared and memorized for future use, using QuickBooks Statement writer which is part of QuickBooks Accountants edition. They are generally assessed in relation to a comparator or benchmark such as
• Analyzing the past performance of the Firm
• The budget
• Internal division of department
• A competitor
Ratios are useful in a way that
i. They provide an easy way to estimate the present performance with the past.
ii. They depict the areas in which a particular business is competitively advantaged or disadvantaged through comparing ratios to those of the other businesses of the same size within the same industry.
A few limitations could be
i. Ratios do not provide answers to every question and their interpretation can be subjective.
ii. They are calculated on the basis of historic accounting information which may itself include assumptions and interpretations.
The ratio analysis could be made under a few broad categories.
A. Measuring short term solvency / liquidity
Short term solvency is the ability of the firm to meet its short term debts from its liquid assets. These could include cash in hand cash at bank trade receivables, but not inventories since they can’t be converted quickly into cash.
1) Current Ratio:Current assets are assets that can be converted into cash within a year. Current liabilities and provisions are those that are payable within a year. A current ratio of 2:1 indicates a high solvency of the company. This ratio can be calculated as
Current assets / Current liabilities

B. Measuring Long term solvency through leverage ratios:Long term solvency ratios measure the risk a business faces from its debt burden. It is essentially the proportion of the business financed via debt compared to equity.
1. Debt – equity ratio: It indicates the relationship between the loan funds and the net worth of the company, which is known as the ‘gearing’. If the proportion of debt to equity is low,a company is said to be low geared and the vice- versa. The formula used to impute the debt – equity ratio is
Long term debts / Shareholder’s Fund

2. Net Debt to EBITDA: Although not a traditional measure of long term solvency, the net debt to EBITDA ratio has become popular with banks as a measure of Gearing. Banks will typically lend a business up to five times its earnings. Hence, Cash generated from operations can be substituted for EBITDA. (EBITDA stands for Earnings before Interest, Tax, Depreciation and Amortization.)
Net Debt to EBIDTA (tines) = Interest bearing Debt – Cash/ EBITDA
3. Interest Coverage Ratio
This ratio measures how many times a business can pay its interest charges from its operating profit. Ideally a business should be able to cover its interest at least or more times. The formula used to compute this ratio is

Interest Cover [times] = Operating Profit (i.e. Profit before interest, depreciation, and Tax) / Interest (Finance expenses)

C. Investor Ratios

These ratios are used mostly by existing and potential investors of mostly publically listed companies. They can be obtained or calculated where necessary from publically available information.

1. Earnings per Share:-

The EPS is an important measure of economic performance of a corporate entity. The flow of capital to the companies under present imperfect capital market conditions would be made on the evaluation of EPS. It measures the net profit measured per share. It is one of the major factors that effect’s the dividend policy of the firm and the market prices of the companies. A steady growth in EPS year after year indicates a good track of profitability. Investors who lack inside and detailed information of a company can always look at the EPS, as their best base to take their investment decisions. A higher EPS means better capital productivity.
Its can be measured as
Net profit after tax and preference Dividend / No. of equity shares

2. Dividend Payout Ratio

Dividend payout indicates the extent of net profits distributed to the shareholders as dividend. A high payout signifies a liberal distribution policy and a low payout reflects a conservative dividend policy. It is the dividend per share by earning per share; written as

Dividend per Share / Earnings per share

3. Book Value

This ratio indicates net worth per equity share. The book value is the reflection of the past earnings and the distributed policy of the company. A huge book value indicates that a company has huge reserves whereas a lower book value suggests a liberal distribution policy of bonus and dividends, or alternatively a poor track record of profitability.
Book value is considered to be less significant than the EPS, as it reflects the past records, whereas the market discounts the future prospects. The book value of a company can be derived from

Equity Capital + Reserves – Profit and Loss A/c Debit Balance / Total No. of Equity Shares
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Why QuickBooks

Here’s 10 reasons why you should be using QuickBooks….

  • You save time on bookkeeping and paperwork because many of simple bookkeeping tasks are handled automatically making it easier to run your business.

  • You can easily generate the reports with the information you need, so you always know where your business stands. You instantly know whether you’re making money and whether your business is healthy.

  • You save money because QuickBooks is so affordable. You can use it to run a $5 million or a $25 million business for a few hundred bucks. Accounting software is truly one of the great bargains in business.

  • Your business can grow with QuickBooks. QuickBooks will help you design a business plan to use when trying to secure a small business loan or line of credit or to plan for the future. QuickBooks will create a projected balance sheet, profit and loss statement and statement of cash flows in the format recommended by the U.S. Small Business Administration.

  • You can customize QuickBooks to work the way you want. QuickBooks is specifically designed to be flexible and adaptable to a wide range of small businesses. To broaden its appeal, QuickBooks has recently added customized accounting packages for contractors, retailers, health care professionals, and non-profit organizations.

  • You can rest assured knowing that QuickBooks is a stable, reliable and proven product. Hundreds of thousands of small businesses throughout the world have chosen QuickBooks as their accounting software. You can’t go wrong with a software program with such an extensive installed user base.

  • You save typing time and errors by sharing data between QuickBooks and over 100 business applications. You can even share data with popular programs, such as Microsoft Excel, Word, Outlook and ACT.

  • You will get paid faster with QuickBooks online payments. E-mail an invoice or statement and with QuickBooks Online Billing, your customer can easily pay you with a credit card or bank account transfer. No more waiting for the check in the mail!

  • You can easily accept credit cards. With QuickBooks Merchant Account Service, you can accept credit cards with ease. QuickBooks Merchant Account Service is the only credit card acceptance service integrated with QuickBooks software, which means you don’t have to enter the same data twice. No additional software or hardware is required. Your customers can use Visa, MasterCard, or American Express.

  • You can pay your bills and handle your banking online. Setup your current bank account in QuickBooks, and you’re ready to pay your bills without licking envelopes, sticking stamps, or printing paper checks. Just write checks in QuickBooks as you normally would, then click a button and your participating bank does the rest! Pay anyone in the U.S. from your credit card companies to your pizza service. Online banking also lets you download your monthly statement from your participating bank directly into QuickBooks for easier reconciliation.

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