In This Newsletter:

Preparing Purchase Orders Precisely

August 2012

QuickBooks Can Do Much More Than You Think

No, you'll never max out all of its features, but here are some tips on tools that extend QuickBooks' usefulness - and save you time.

Zero In On Key Report Figures

You've undoubtedly created reports that were so lengthy that you got tired of scrolling up and down to find totals for each individual section. QuickBooks lets you collapse and expand reports to see primary totals only, but this command affects the entire report.

If you want to just collapse a section or two, here's how you do it. As an example, go to Reports | Company & Financial | Balance Sheet Standard. In QuickBooks 2012, you'd click the Excel button (your version may say Export). Indicate that you want to create a new worksheet and click Advanced. This window opens:

Figure 1: The Advanced Excel Options window displays the formatting tools you can carry over from QuickBooks and the features in Excel that you want to be active.

Make sure that Auto Outline (allows collapsing/expanding) is checked, then click OK and start the export. When your report opens as an Excel spreadsheet, you'll notice that there is a series of vertical lines to the left of your data, and a group of numbers that corresponds to them running above horizontally.

Figure 2: Excel's Auto Outline feature adds tools to the left of your data that let you collapse and expand subsections.

To collapse a section so that only the totals show, click on the minus (-) sign next to the line that should remain (in this example, it's Total Checking/Savings). Do the same for Total Accounts Receivable and Total Other Current Assets. Then scroll down and do the same thing for the other asset subtotals. Here's what you'll see:

Figure 3: As you can see, the minus (-) signs have turned into plus (+) signs, which allows you to expand the rows back to their original states.

Auto Outline is a very useful feature, but there's more than one way to implement it. And its availability and operation can vary in different versions of both Excel and QuickBooks. We can help you master this, as well as other QuickBooks-to-Excel tools.

Hidden Gems

Here are some other less-commonly-used QuickBooks features that you may want to try:

• Getting ready to send an invoice but want to check a related transaction from the same job a few months ago? You could use the Find tool, which is a seriously underused feature that can often answer a question quickly. But that takes a few clicks. Instead, just hit Ctrl + L, and that Customer/Job screen pops open in the Customer Center. Click Ctrl + E from that screen to see the Edit Job dialog box.
• CTRL+Y on transaction screens opens the Transaction Journal, which shows you the behind-the-scenes debits and credits. If the Account column is truncated, click and drag the little diamond symbol to the right.
• QuickBooks offers numerous helpful payroll reports, but it also transfers your data into Excel for more comprehensive views of your employee compensation information over customizable date ranges. Go to Reports | Employees & Payroll |Summarize Payroll Data in Excel and More Payroll Reports in Excel.

 Figure 4: Summarize Payroll Data in Excel is actually a series of reports, available by clicking this navigational bar at the bottom of the screen.

• Allowing multiple windows in QuickBooks and tired of clicking the little x repeatedly to start with a clean slate? Click Window | Close All. This drop-down menu also displays the list of open windows; click on one to go there.
• There may be no more frustrating task than reconciling your bank accounts. If you're using online banking, consider doing this more than once monthly. Also, don't let QuickBooks do an automatic adjustment for a considerable discrepancy unless it was a mistake made by a financial institution: Click the Undo Last Reconciliation button and try to find the error. And don't forget about the Leave button. You may do better attacking it later.
• If you occasionally need to enter a transaction for an entity that isn't a customer, vendor or employee, go to Banking | Other Names List. You can add, edit and delete these, as well as converting them to customers, vendors or employees.

There's more than one way to do a lot of things in QuickBooks. We can tell you about more, and evaluate your workflow to see how else we can improve your accounting experience.

QuickBooks Reports Help You Maintain Balanced Inventory Levels

Running out of products too frequently? Having to sell cheap because inventory is overloaded? Use QuickBooks' reports.

It seems so simple in theory. Don't overstock goods because you'll tie up too much money and perhaps need a clearance sale to get rid of the excess. On the other hand,

don't let yourself run out of anything and lose orders.

 

In practice - especially if you stocks dozens or hundreds of items - it's impossible to ensure this if you're managing your inventory manually. Guesswork can be costly.

 

It's a complex element of accounting, but QuickBooks comes equipped with a handful of reports that can keep you on track. They don't teach you how to balance your inventory to improve profitability, but we can help with that.

 

 

Figure 1: Be sure to enter a figure in the Reorder Point field so QuickBooks can remind you to reorder.

Building Precise Records

 

There's a critical number in your item records that must be completed: Reorder Point. You'll see it at the bottom of the Edit Item window (click Lists | Item Lists and double-click on the correct entry or click New in the Item drop-down list). Without it, QuickBooks can't alert you when you're running low.

 

QuickBooks also tells you how many items are currently on hand. If you had reached the reorder point and created a purchase order, you'd see a number under On P.O.

Ideally, you would do this when you're first adding item records, but you can go back at any time and add it.

 

Rigorous Reporting

 

Running reports regularly will keep you apprised of your inventory status. To see what QuickBooks offers, click Reports | Inventory or go to the Report Center. Select Inventory Valuation Summary. You can also see this report in detail, but if you carry a lot of inventory, it's difficult to get a birds' eye view. Do run it, though, if you want to see the transactions that affected your inventory's value.

 

Figure 2: The Inventory Valuation Summary does just what the name says.

 

 

In addition to what's pictured here, this report displays columns for Sales Price, Retail Value and % of Total Retail. As always, you can click Customize Report to change the date range.

 

Precise Tracking

 

The Inventory Stock Status by Item report should be consulted frequently. It tells you exactly where all of your items are in the pipeline.

 

 

Figure 3: This report provides a real-time update of the status of every inventory item.

 

Watch for checkmarks in the Order column; they appear when you've hit or exceeded your specified reorder point. Three other important figures populate columns in this report: the number on purchase order, the date the next shipment should arrive and average sales per week.

 

Reminders can come in quite handy here. To set them up, go to Edit | Preferences | Reminders | Company Preferences. And you'll find the most comprehensive view of your items in the Inventory Center. Go to Vendors | Inventory Activities | Inventory Center. This screen also provides quick access to commonly-used reports.

 

Figure 4: The Inventory Center tells you everything you want to know about your items.

 

Automate Your Inventory Reporting

 

Here's a quicker way to grab your reports:

 

• Go to Reports | Memorized Reports | Memorized Report List.
• Click the down arrow next to Memorized Report at the bottom and select New Group. Type in Inventory and click OK.
• Open an inventory report and click Memorize. The Memorize Report window opens. Check Save in Memorized Report Group and select Inventory from the drop-down list. Click OK. Repeat for others you want in this cluster.
• Click Reports | Process Multiple Reports. Select Inventory from the drop-down list and make sure that there's a check mark next to the reports you want. You can click on the dates in the From and To column to change them.
• Click Display or Print.

 

If you operate a product-based business, the success of your company depends in large part on your ability to find the sweet spot: neither too much nor too little inventory. It's an ongoing, daily challenge. Let us know if we can provide guidance on this critical balancing act.

 

May 2012

Cutting Expenses Key To Profitability, But How? Some Tips

It may seem like a no-brainer - cut expenses to make more money - but many small changes can result in significant savings.

It looks like the economy may finally be looking up. Still, this is no time to loosen the purse strings in terms of your business expenses. Rather, why not re-double your efforts to cut costs and boost your profitability?

Excessive expenses cause debt, which in itself can be very costly. So any money-saving actions you take will be doubly rewarding.

More Effective Money Management

To cut expenses significantly, poke into every corner of your company's finances. Inventory is a good place to start. If you sell multiple units of the same item and reorder regularly, you should be using QuickBooks' inventory-tracking tools. Go to Edit | Preferences | Items & Inventory | Company Preferences.

Figure 1; Make sure that these settings are correct. If you need advanced features like FIFO costing, serial number and lot-tracking or inventory management at multiple locations, contact us about upgrading to Enterprise Solutions.

You should be stocking your inventory to match the pace of sales. You don't want to be caught short, nor do you want to be sitting on too much and tying up money unnecessarily. QuickBooks can help, but you'll need to calculate the sweet spot for each item. Several built-in reports can help, including:

• Inventory Valuation Summary. Displays the current asset and retail value of each item and inventory as a whole
• Inventory Valuation Detail. Shows how individual transactions have affected the value of your inventory
• Inventory Stock Status By Item. Helps you set up smart reordering procedures
• Open Purchase Orders
• Outlines each purchase order and its expected delivery date

Figure 2: To maintain profitable inventory levels and minimize expenses, you'll need to study QuickBooks' related reports regularly. When you're making buying decisions, consider factors like reorder turnaround time and seasonal sales upticks.

Ratio reports, like profit over sales, can also be very telling. QuickBooks does not supply these, but we can help you create them in Excel.

Using Available Tools

The efforts you make toward reducing expenses in other ways can result in more savings than you might think. Here are some actions you can take that will accelerate your cash flow:

Use QuickBooks' budgeting tools

. This doesn't need to be as onerous as you might expect - you can start by pulling in your real data from the previous year as a base. Build in line items for ongoing accounting support like QuickBooks maintenance. Click on Company | Planning & Budgeting | Set Up Budgets

Figure 3: Selecting this option simplifies your task.

Minimize your April 15 obligation with year-round tax planning. Work with us throughout the year on the next year's taxes to, for example, make smarter quarterly payments, and we'll help you reduce your tax bill by making better decisions every day.

Get discounts by paying invoices early. Set up a custom field in vendor records to track this.

Figure 4: Get to know which vendors offer early discounts - and take advantage of them.

Analyze the cost-effectiveness of your transportation. Can you replace some in-person sales calls with web-based communication? Make sure that your delivery routes and sales call paths are efficient.

Change product/service prices to build in your own cost increases. Do it across the board, in small increments. It may not even be that noticeable to customers.

Talk to us about establishing a line of credit. We'll help you determine if this is a viable option for emergencies. It's cheaper than using credit cards.

Cross-train employees. Have employees train each other on their tasks where it makes sense. You can avoid costly temp help and relieve overworked departments.

Don't try to change everything at once. Establishing these new procedures will require some extra work. And you may not notice a reduction in expenses immediately. But over time, you will see a positive change - one that will give you extra dollars and hours to invest in making your company flourish.

April 2012

Billing for Time and Expenses: How It Works

QuickBooks handles billable expenses capably, but it's critical that you understand the process thoroughly before proceeding.

Billing for inventory parts is easy. Pick the items from a list and specify a quantity. Poof. Done.

Billing for costs, time or mileage is a little more complex. QuickBooks has built-in tools to help you do this, but it's a bit of a process.

To simplify your workflow, do this groundwork first:

• Go to Edit | Preferences | Time & Expenses | Company Preferences. Click the Yes button under Time tracking and indicate your choices under Invoicing options. If you plan to mark up some costs and want a default number, enter a percentage and account (these can be changed on individual invoices).

Figure 1: As you do with other QuickBooks processes, make sure that your Preferences are set correctly.

• Add any billing items necessary by clicking Lists | Item List and then Item | New in the lower left corner.
• If you plan to bill for mileage, go to Lists | Customer & Vendor Profile List | Vehicle List and enter information about every business vehicle.

Invoicing for Services

If you're a service-oriented company, you bill for time frequently. This is easy. You're probably already familiar with the Enter Time entry in the Employees menu. Whether you make individual time entries or complete a timesheet, it's critical that you make the correct selections for each Customer: Job, Service Item and Payroll Item field, and check the Billable box.

When you create invoices, this box will open after you select a customer: 

Figure 2: QuickBooks lets you know when there are time and costs to be billed for each customer.

You can let QuickBooks enter the time totals now, or add them later by clicking the Add Time/Costs button. Either way, the Choose Billable Time and Costs window opens. Add a checkmark next to each entry that should be billed, and click Options... to indicate whether you want one line for each time entry or would rather combine all similar service item types.  

Figure 3: QuickBooks wants to know which entries should be invoiced.

More Complexity

If you're done with billable expenses for this invoice, click OK. If there are other costs that you covered, click the Expenses tab to see all transactions that you earmarked for this client on a bill, check or credit card. You have the option here to mark up the cost by a percentage or amount (even if you established this in Preferences), and to specify an account.

Do the same for Mileage, which you would have entered previously - when it was incurred -- at Company | Enter Vehicle Mileage. Then select any Items that you purchased for the customer. Your records should be correct - assuming that you were conscientious about assigning expenses to customers and jobs.

Figure 4: It's easy to pull billable expenses into invoices if they're documented carefully.

Turning expenses into invoices and then into income can be complicated. Let us know if we can help. We are your partner in building a successful business.

Starting a Business
Starting a business can be exciting. If you're considering starting a business, start here. This section provides information, from the IRS, on everything from a checklist for a new business, to selecting a business structure, and more.

Operating a Business
This section contains information you need to operate your business. Learn about operating a business with employees, business expenses and tax credits, filing and paying taxes, recordkeeping, and choosing an accounting method.

Closing a Business
There is more involved in closing your business than just locking the doors. This section provides procedures for getting out of business, including what forms to file and how to handle additional revenue received or expenses you may incur.

The information above is from the IRS website and is linked to the IRS website.

April 2012

Billing for Time and Expenses: How It Works

QuickBooks handles billable expenses capably, but it's critical that you understand the process thoroughly before proceeding.

Billing for inventory parts is easy. Pick the items from a list and specify a quantity. Poof. Done.

Billing for costs, time or mileage is a little more complex. QuickBooks has built-in tools to help you do this, but it's a bit of a process.

To simplify your workflow, do this groundwork first:

• Go to Edit | Preferences | Time & Expenses | Company Preferences. Click the Yes button under Time tracking and indicate your choices under Invoicing options. If you plan to mark up some costs and want a default number, enter a percentage and account (these can be changed on individual invoices).

Figure 1: As you do with other QuickBooks processes, make sure that your Preferences are set correctly.

• Add any billing items necessary by clicking Lists | Item List and then Item | New in the lower left corner.
• If you plan to bill for mileage, go to Lists | Customer & Vendor Profile List | Vehicle List and enter information about every business vehicle.

Invoicing for Services

If you're a service-oriented company, you bill for time frequently. This is easy. You're probably already familiar with the Enter Time entry in the Employees menu. Whether you make individual time entries or complete a timesheet, it's critical that you make the correct selections for each Customer: Job, Service Item and Payroll Item field, and check the Billable box.

When you create invoices, this box will open after you select a customer: 

Figure 2: QuickBooks lets you know when there are time and costs to be billed for each customer.

You can let QuickBooks enter the time totals now, or add them later by clicking the Add Time/Costs button. Either way, the Choose Billable Time and Costs window opens. Add a checkmark next to each entry that should be billed, and click Options... to indicate whether you want one line for each time entry or would rather combine all similar service item types.  

Figure 3: QuickBooks wants to know which entries should be invoiced.

More Complexity

If you're done with billable expenses for this invoice, click OK. If there are other costs that you covered, click the Expenses tab to see all transactions that you earmarked for this client on a bill, check or credit card. You have the option here to mark up the cost by a percentage or amount (even if you established this in Preferences), and to specify an account.

Do the same for Mileage, which you would have entered previously - when it was incurred -- at Company | Enter Vehicle Mileage. Then select any Items that you purchased for the customer. Your records should be correct - assuming that you were conscientious about assigning expenses to customers and jobs.

Figure 4: It's easy to pull billable expenses into invoices if they're documented carefully.

Turning expenses into invoices and then into income can be complicated. Let us know if we can help. We are your partner in building a successful business.

QuickBooks Tip

Here's a cool little keyboard shortcut. Hit F2 while you're in QuickBooks, and you'll get the Product Information screen. It'll tell you everything you want to know about your specific copy of QuickBooks, like your release and license number, the file size, number of users logged in, audit trail status and the total number of accounts, customers, employees, etc.

QuickBooks News

As of May 31, 2012, Intuit is discontinuing support for QuickBooks Pro, Premier and Simple Start 2009, QuickBooks for Mac 2009 and QuickBooks Enterprise Solutions 9. You can continue to use these solutions, of course, but live technical support and add-on services like payroll, credit card processing, online banking and bill-pay will not be accessible. Talk to us about upgrading if you're using any of these products or services.

QuickBooks Income Tax Reports And Filtering Options: Target The Right Output 

April 15 is getting uncomfortably close. 

QuickBooks, of course, can't do your taxes for you. But it helps you lay some of the groundwork. Following up on last month's column on customizing reports, we'll look at the program's tax-related reports and its powerful report-filtering options. 

But first, you'll need to make sure that this output will be accurate. 

Describe your company accurately

Your tax entity setting should have been established when you first set up QuickBooks, but verify that you've specified the correct one. Go to Company | Company Information. Your Report Information is in the lower left corner. Click the arrow next to Income Tax Form Used to see what's active.

Figure 1: Make sure that QuickBooks is set up for the correct tax entity.

QuickBooks automatically assigns some of your accounts to their matching lines on the 1040 and assorted forms and schedules; this is called tax line mapping. So when you create tax reports, related transactions will be grouped by these designations. 

This can be a real time-saver - as long as you've specified the correct entity. If: 

• <Other/None> was selected
• This setting is incorrect
• You're starting a business and don't know which to choose...

... please contact us. If you switch entities, your existing tax line mappingwill disappear and will have to be reassigned. 

Dedicated tax reports

Many of QuickBooks' general financial reports provide tax-related information. But there are some that specifically relate to the numbers that will go on your return. Go to Reports | Accounting & Taxes | Income Tax Preparation. Here's an excerpt of what you'll see:

Figure 2: QuickBooks automatically assigns many accounts to the appropriate tax form lines, based on your specified tax entity.

Here, QuickBooks shows you which tax lines have been pre-assigned to your accounts.  You can specify a tax form line for unassigned accounts, but this is something you should not attempt on your own. This report, though, will give you an idea of how useful your report output will be and where you'll need our assistance. 

Other reports provide tax-related data. You can access them by going again to Reports | Accountant & Taxes and clicking: 

• Income Tax Summary. This displays totals for each tax line that's relevant to your particular tax entity. Double-click on any number, and the Tax Line By Account report appears, detailing every transaction related to every tax-related account (you could add a column for Tax Line in Display options and make this quite a useful report).
• Income Tax Detail. This lists all individual transactions by tax form/schedule line assignment.

Paring it down

Some tax reports can be very lengthy; you may want to filter them to look at various "slices."

Click Customize Report | Filters:

 Figure 3: This window displays a powerful set of filtering options.

The options listed under Choose Filter are available on other reports; they help you set up incredibly complex searches using multiple filters. 

Let's say you want a report that displays your installation labor costs on new residential construction from the last year (you could also throw other variables in). You'd simply choose the filters from the left pane and then select related options in the next pane (usually a list). You'd want to also click on the Display tab to make sure that the appropriate columns appear.

Figure 4: You can apply multiple filters to your reports.

QuickBooks reports can shave time off of tax preparation, and filtered views help you scrutinize your data in quite creative - and very useful - ways. The program's boilerplate reports have their place in simple examinations of your financial status, but filters are potent tools. They can facilitate the kind of deep analysis that helps you make critical business decisions. 

If you have questions on this or any other QuickBooks feature, call or email us. We're your partner and we're here to make your business better.