October QBO Updates: Revenue Share, Cost Allocation & Recurring Payments

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Hector Garcia: Welcome to the unofficial QuickBooks accountants podcast. I am joined by my good friend Alicia Cat Pollock, the original, the one and only Qbo Rockstar CEO and founder of Royal White Solutions.

Alicia Katz Pollock: And I have the privilege of collaborating with Hector Garcia's CPA, the founder of Right Tool for QuickBooks. In this episode of the unofficial QuickBooks Accountants [00:00:30] podcast, I'm going to share with you all of the new announcements in the October 2024, in the no. Webinar from Intuit. So you get just me this time. Hector is out voting and getting ready for Intuit Connect. So let's go ahead and get started. The first thing that they announced is a new QuickBooks payments revenue share. And what Intuit found is that 78% of accountants who have not [00:01:00] already started recommending QuickBooks payments to their clients, they're open to it, but they need it a little bit of extra incentive. So there's already been a revenue share program, which is what allows the Proadvisors to provide their clients with QuickBooks services and get a discounted service rates, as well as get a little slice of the action. And so they've added QuickBooks payments to the revenue share program. What this means is that [00:01:30] when you sign up your clients for QuickBooks payments, you get some benefits. First is you're going to earn 20% of the net revenue share for three years of your clients processing fees. So the fees that are charged, you get 20% of the net revenue on those three years. That's not bad at all. You also get discounted rates when you sign your clients up for QuickBooks payments, and that's already been in place, but now they're just [00:02:00] making it that much easier.

Alicia Katz Pollock: Basically, what that means is that if your clients sign up for QuickBooks payments themselves, they pay the retail rates. If you are the person signing them up, then they get cheaper rates on the keyed rates, the invoiced rates, and the ACH calculation limits. All of those are different. So if you're a ProAdvisor listening to this, be proactive. Use this payments revenue share to sign up your clients and then everybody wins. It's currently in testing [00:02:30] the ability to use the revenue share specifically for payments. So it's available late fall. It'll be rolled out pretty soon. The way that you'll get to it is up under the gear. Not only will you be able to go to subscriptions and billing and do it from the revenue share tab there, but there's going to be a direct link right in the gear called payments revenue share. When you sign up, the approval takes a few days. So give it a week. If you're going to need it in the future, you should probably go in and sign up for it now. [00:03:00] Once you're accepted into the program, you'll see a list of all of your eligible clients that you can invite. It'll show you the pricing structure and the benefits, so that you can see the difference in the rates between the retail and the the sharing rates. And then you'll be able to click the invite button next to each client.

Alicia Katz Pollock: That will send them an email through Qbo. And then they'll be able to accept the terms and turn on QuickBooks payments for their company. [00:03:30] They will have to go through underwriting as usual, but as long as they're not in a high risk industry, most people are accepted. Then when they go to send a pay enabled invoice, they'll be able to accept merchant services. And note now that it's not just credit cards and ACH, but now there's also Apple Pay and PayPal and other ones as well, which are all new benefits of the new invoicing system. Now for you, as a ProAdvisor, you're going [00:04:00] to have something brand new, which is a payments revenue share dashboard, and that will show you all of your payouts so that you have complete transparency. Something that's nice is this does stack on top of the ProAdvisor discounts, so your clients will receive both. Now note that this is only for people who have never signed up for Qbi payments in the past. If your clients are already using QuickBooks payments, they're not eligible, although if they've signed up but they've never actually [00:04:30] sent an invoice. What I gathered from the presentation is that those people may be eligible as well. So I'm a huge fan of QuickBooks payments. I love how seamless it is. The payment rates are completely on par with going through PayPal or square or the other ones, but then you get that added benefit that it's completely integrated into your QuickBooks online.

Alicia Katz Pollock: So when you're using QuickBooks payments, Sometimes [00:05:00] all you have to do is send the invoice and then QuickBooks itself will accept the payment on the invoice, put it in Undeposited funds, batch the payments together and match them to the banking feed and all of that work. Sure saves you a whole lot of time. And that is what makes the merchant service rates worth it. The second announcement is cost allocation in payroll. Now, Hector and I have talked about this, but this is when they're really making the big announcement to the community. And [00:05:30] what is really exciting about this is it means that we are now going to be able to do job costing for payroll. You're going to be able to assign payroll costs to different projects and to different classes. So what this means is that employees who are using QuickBooks time to create their time sheets on their phones can allocate every single entry to a specific class and to a specific project. You can also do this allocation while you're running payroll when you're setting up [00:06:00] your employees, you can set them up with their default classes so that that shows up automatically, but there's still only one default class per employee. Using this option allows you to add variations on a case by case basis.

Alicia Katz Pollock: All of the classes and all of the projects flow into your QuickBooks online reports and into the project center, so that when you run a PNL by class report, you're going to see payroll allocated across your classes. [00:06:30] And if you run a PNL by client report, it's also going to show those same splits. And what's nice about it is it's not just the payroll costs, but it's going to take those same proportions and split out the taxes as well. Even worker's comp this is already been launched for QuickBooks Payroll Premium and Elite, and it works in Qbo Plus and Advanced, which makes sense because those are the two versions [00:07:00] that do indeed have classes and projects. So, you know, obviously you can't do it in essentials because you don't have the necessary tools. So if this sounds exciting to you, this is a really good reason to upgrade. The way that you get set up to use it is to go into your account and settings and into advanced, and go ahead and make sure you turn on your classes and in the payroll settings, which is up under the gear, go into scroll way down to the bottom into accounting and then [00:07:30] go in and you can go and turn on the class Tracking by employee and assign all of those employee defaults. This new feature is fully available now in the United States, and it will be launching soon in Canada.

Alicia Katz Pollock: Now, how do you use it? There's a couple different ways. I already mentioned that you can your employees can allocate their own time as they're putting in their timesheets. If you're doing the admin work, you can either go to the time Entries tab in the Time Center [00:08:00] in your qbo, or when you're running your payroll right from the payroll screen, you can split each payroll type. When you go into the split screen, there's a little plus sign, and you can split each payroll type into as many different classes and customers as you want to do the allocation. And you can do it whether it's regular hours or overtime or bonuses or reimbursements. Literally everything. At the moment, it's just classes. It does not work with locations, [00:08:30] but hey, put in feedback and maybe they can add that if you're working with contractor payments, not through payroll, you know, that's just going through the normal steps of allocating all of your expenses or your bills to your classes and to your different projects. And don't forget that if you're not using either Qbi time or Qbi payroll, you can still do that in the weekly time sheets. They have the ability to make different rows for every different distinction that you have in your payroll. This [00:09:00] feature is one of the things that has been a holdout for some clients who were not able to use QuickBooks payroll because they didn't have this level of detail.

Alicia Katz Pollock: And so if you've been using third party payroll, because you were not able to allocate across projects to clients and to classes, now this is one less barrier to entry. And I know that I have a lot of clients who are going to be really excited to see this. The next topic is one that Hector and I also [00:09:30] talked about because, you know, these topics were in the firm of the future articles. But again, this is all coming from In the Know, which is Intuit's monthly webinar where they talk about all of the features and give demos, and this one is one that I'm really happy to see also, which is the new recurring payments feature. This is replacing your recurring sales receipts, and it also solves the problem of preventing you from sending out invoices and then having to wait for payment, [00:10:00] and sometimes never getting it and having to chase down your clients for their opener. What recurring payments is, is kind of like the lovechild between recurring sales receipts and the invoices, where it's the best of all possible worlds, you can create an invoice that has a recurring a recurring schedule, but instead of sending it and having to wait for payment, you can automatically run the charge as well, so you can automatically charge your [00:10:30] customers on the schedule of your choosing.

Alicia Katz Pollock: Could be daily. Could be weekly. Could be monthly. Could be yearly. Yearly. You even can add a one time fee to the first charge. So maybe you're onboarding them and you have a special onboarding fee or an initial one time charge. You can put it on the first one and then drop it off all the ones to follow. When you send the invoice and the customer accepts the recurring payment request. They're prompted to enter their payment [00:11:00] info, and then they'll be charged automatically according to that frequency that you set on the invoices. The standard invoicing rates apply for ACH and credit cards. Now this is just under limited availability. They are just now rolling it out starting this month October. It's specific to users of QuickBooks payments. It's only an option if you are using the integrated payments. And at first it is just going to be us only. But [00:11:30] I hope that they're going to roll it out to all of the different editions. So it's kind of challenging to wrap your head around this because it really is a brand new form type. It's not an invoice, it's not a sales receipt. It really is the lovechild of both of them. Now, where you're going to find this once it's rolled out to you, is you look for recurring payment and you'll find it on the plus new button. You'll also find it on the left navigation bar [00:12:00] in the sales section, and when you go to your home dashboard, you can even add it as a shortcut if you use it a lot.

Alicia Katz Pollock: You also have the option of converting a regular invoice, so if you open up an invoice in the new layout and you click on manage to open up the pane on the right hand side, you'll click on scheduling and then turn on Recurring Payment. And that will convert the invoice to a recurring invoice type. So again, it's a brand new [00:12:30] form which is completely different from what we've had before. Okay. So you've gone to manage. You've clicked on scheduling. Once you've turned on the recurring payment, the options that you're presented with will look completely familiar because they're the exact same cadence and scheduling settings from recurring transactions. So the first thing that you'll do is select when to run the charge. Are you going to charge it immediately when you send the invoice? Or is it going to start [00:13:00] on a future defined date? So you'll set that start date. You also have the option to set the end date if you want to. You don't have to. You can let it run indefinitely, but maybe you want this rate to only be good for a year. You know, maybe it's an annual contract and this is your rate. And then next year you're going to change that rate. Once you've set the start date and the option of the end date, then you'll set your repeat cadence.

Alicia Katz Pollock: So again, just like all recurring transactions, [00:13:30] you get to choose whether it's daily, weekly or monthly or annually. And you can get creative with it so that you can also have it skip. So, for example, let's say you wanted the charge to run quarterly. You would set the repeat to monthly, but then have it run every three months. Then you can also set when it's actually going to run. So it could be on the first day of the month. It could be the last day of the month, it could be the 15th [00:14:00] of the month. And, you know, I'm really happy that there is an option for last day of the month because 30 days have September, April, June and November, so it doesn't do any good to set something on the 31st. So if you want it on the last day, that's your option. Last day of the month. Now, once you've made all your settings and you send the invoice, what it's going to do is email the customer and they're going to get a message that says, get your recurring payment to your [00:14:30] company name. So get your recurring payment to Royal wise up and running. And then it gives them all of the instructions that they need. Now, I also noticed at the bottom of the email that if the customer needs to cancel it or make a change, the email does tell them to either reach out to you or there is.

Alicia Katz Pollock: They can click the link and they will be able to do self-service updates like change their payment method. So they've got this email and it says get your recurring [00:15:00] payment up and running. So they click the button and that takes them into the same payment screen that we're already familiar with. The payment screen offers them the options of all of the payment methods that you have turned on. So if you have ACH on but no credit cards, that's all they'll see. Or maybe you have all of the options, including PayPal and Apple Pay. They will have those choices. They'll be able to enter in their payment method. And as always, they [00:15:30] also have the option to log in using their own Intuit account and save their payment information on file. And I don't know if you've actually checked into that, but it's kind of nice because even if they are not QuickBooks users themselves, they still can create an Intuit account specifically for this purpose. Or of course, they can just enter in manually whenever they're presented in this situation. Okay, so let's talk about the whys. Why is this so helpful? [00:16:00] What is the reason here? And the very, very biggest one is PCI compliance. And we've just recently went through a panic phase of getting those emails asking if we are PCI compliant because Qbo is PCI compliant, but your methods may not be.

Alicia Katz Pollock: For example, in order to use recurring sales receipts, which is what I've been using myself for 15 years, you have to enter in their payment information yourself. So you set up the sales receipt. It says, what's [00:16:30] their credit card number? What's their bank information for ACH and I've had to enter it in. That means that I've had to gather that information. And in the olden days, they actually used to give you a PDF to give the client to fill out. And that is completely insecure. And that violates PCI compliance. Or, you know, maybe it's on the on the phone, which is PCI compliant, but it still requires you to actually take your time to get that information from the client. [00:17:00] So that's one of the benefits right here is it takes you out of the loop. It's much more secure because the client is entering the information themselves and you never see it. Also, it's cheaper. Recurring sales receipts use the keyed rate in the merchant services rates, which is the highest level rate? It's over 3%, but the invoiced rate is down under 3%. I don't have it in front of me, but [00:17:30] it's somewhere between 2.75 and 2.9, depending if you sign them up as a ProAdvisor or they're signed up at the retail rate, but anyway under 3%.

Alicia Katz Pollock: So by using this method, you are also paying less merchant service fees, saving you a little bit of money. After the payment runs every single month, the payment receipt is going to be mailed to the client. They're not going to see the invoice itself. Every single month. Just get the payment receipt. So I'm really happy [00:18:00] to see this new rate. It's going to take me myself a little bit to get used to, because I do have so many clients on recurring sales receipts, and I'm used to taking that information myself, but it's nice to take myself out of the loop. I think the only drawback is that now you send the email and they still have to actually answer the email, but if you stay in good communication with your clients and tell them what to expect, or maybe even during your onboarding, you walk them through the process, then you are completely [00:18:30] good to go. I'm really glad that Intuit has found a way to help us stay PCI compliant and give us the ability to send invoices with automatic payments and take us out of the loop on accounts receivable altogether. It's nice when it all happens automatically. The last topic in October's In the Know was just a little bit of teaser about Accountant University. Intuit is right now completely reimagining [00:19:00] the training and certification, and they're in the process of rolling out some new options.

Alicia Katz Pollock: Special thanks to Jacqueline Anku for spearheading this effort. It does mean that they are also using new software, not just for the learning management system or the LMS itself, but they're also using new software for delivering the webinars called Gold Cast. So if you're used to their existing platform, it's a little bit different now. I definitely like it. It's totally gets the job done [00:19:30] and it's pretty too. Now the ProAdvisor trainings are now being rebranded as ProAdvisor Academy. So for all of you who have been worried that they're taking ProAdvisor out of the name, that is not happening. It is still ProAdvisor training and ProAdvisor certification. What happens is that many of you got an email last week with new ProAdvisor badges that they admitted they were not ready to send [00:20:00] out. They did not mean to send those messages. So of course we got stuff without any prior knowledge and announcement. So what's happening is that they are now using Credly. It's credly for new badges, and this is a website that I have a lot of certification badges on. Lots of organizations use it as a badge delivery system. That way you can collect all of your certification badges and awards all in one place. You can download [00:20:30] them. You can even create your own public page out of them with all of your designations and rewards. So they're turning to Credly to manage the new badges.

Alicia Katz Pollock: When they first went out, they just said certification level one, certification level two. They have added the word ProAdvisor back into those badges so you don't panic anymore. It's all fine. We are still ProAdvisor. They are modernizing the training and I am looking [00:21:00] forward to seeing what's next. This will definitely be a future episode where I'm going to go into the training center in detail and explain how it works, and explaining how the new certification program works. So stay tuned for that. All right, so that was the In the Know webinar. If you want to see the presentation itself the link is in the show notes. Now Hector and I always end the segment with what's going on in your world. And Hector and [00:21:30] I are about to head out to Intuit Connect this week, so we will give you a recap in a future episode. I myself have mentioned a couple times that I'm starting a brand new course November 4th through December 30th. That is a hands on qbo training. And so if you're hearing this, it is not too late to sign up. It's going. We start on Monday and it's a 32 CPE course, 3016 meetings twice [00:22:00] a week for the next eight weeks, where it's all based on a textbook that I wrote for Steve and consultants. And actually the link to both this class and the book itself are in the in the notes.

Alicia Katz Pollock: So if you are interested in learning how to use QuickBooks online by actually doing hands on guided training, where I literally step you through every single transaction that is needed in running a company, [00:22:30] everything from setting up the file to accounts payable, accounts receivable, bank feeds, reconciling running reports, the new modern reports, inventory, project center, and payroll. This is a great course for you. So it's designed for people who are self-taught in qbo who have been figuring out QuickBooks online themselves, or they've been hunting around on YouTube to find the trainings. No offense. Hector. Your your trainings are absolutely [00:23:00] spectacular. I'm going to take it a level deeper and actually go into it on the transaction level. It's also great if you are part of an accounting firm and you have staff that you need to train, you may want to either send your staff to this training or take it yourself so that you now have a training model that you can implement, because anybody can actually buy these books and use them in their firms. So I would love to see you in that in my course. So [00:23:30] again, it's called the QuickBooks Online Complete Hands on training. And the links to the training or just the book itself are in the show notes. And I would love to see you in class. So this is Alicia Katz Pollack, and I will see you in the next one.