QuickBooks Tips

1. Edit
2. Preferences
3. Desktop View

1. Click on Edit
2. Click on Preference
3. Click the picture of Reminders from the list that appears
4. Make sure a check mark is in the box marked “Show Reminders list when opening a company file”
5. Click the OK button

To password protect your QuickBooks data file click on Company in the menu bar, then Set Up Users. From here, you can assign a password for the main (Administrator) account in QuickBooks. You can also set up user accounts, passwords, and different levels of access if you have multiple people using your QuickBooks file. Make sure you keep your newly created password in a safe place (just in case you forget it!)

To allow the sharing of your QuickBooks file, your best option is to have a computer network in place. This network will provide the foundation for you to then share the file between two or more computers. You can have either a wired or wireless network within your office.

It is also possible to take a backup copy of the QuickBooks file from one computer and restore it to a second computer to allow sharing of the information. However, I don’t recommend this if both computers will be entering QuickBooks data. If you do this, you won’t know who has the most recent copy of the data file, and things can get messed up quite easily. Your best bet is to talk to a local computer consultant about a network for your home or office.

The first thing you must do is tell QuickBooks that you will be issuing 1099s. Click on Edit (from the menu bar), then Preferences. Scroll down until you find the picture that says “Tax:1099” and click on it. On the Company Preferences tab, answer yes to the question about the issuance of 1099 forms, then follow the rest of the instructions on this screen.

Next, you’ll need to identify those vendors who are eligible to receive a 1099. Click on Vendors, then Vendor List. Double-click on the first vendor in the list, then the “Additional Info” tab. In the lower left hand corner, put a check mark in the box that says “vendor eligible for 1099” and enter their tax ID number they have provided. Repeat this process for any vendors that need to receive a 1099.

Finally, to run the 1099’s and related information, click on Reports, then Vendors, then either of the 1099 reports. Verify the data, correct if necessary, and print your 1099’s all within QuickBooks.

It’s important to review this topic with your accountant to ensure you are collecting the proper information and preparing the 1099 forms correctly for your business.

One of the reasons the QuickBooks line of desktop products has been so successful is because of its clean, simple appearance and efficient navigational tools. But there’s room for improvement and personalization. Everyone uses QuickBooks just a little differently. You can create a desktop that meets your specific needs, while maintaining the program’s inherent usability. Every desktop version of QuickBooks (except for Simple Start) offers several tools to accommodate your preferences, so we’ll show you some of the best.

Establish Default Windows for Startup

QuickBooks automatically opens to its default desktop (the Home page), which displays a set of the most commonly used navigational icons, separated by type. You can change this behavior so that every time you launch the program, it opens to the screen(s) you want to see first.

You’ll have to tweak your Preferences to make this happen. Click Edit | Preferences. In the list on the left, click Desktop View. You’ll see a window that looks like Figure 1:

Figure 1:

In the Desktop View section of your Preferences window, you can choose to have one window or multiple windows open, and save a desktop configuration that will open when you launch QuickBooks.

Note: If you want be able to have multiple windows open simultaneously, be sure that option is checked.

There are three options for preserving your desktop layout. If you click Save when closing company, QuickBooks will open with the windows that were open when you last closed the company file. If you don’t want any windows to open, check Don’t save the desktop. And if you have a set of favorite windows that you want to open each time you launch QuickBooks, set up that configuration and click Save current desktop. Of course, you can simply choose to have the Home page display when you load QuickBooks.

There are other desktop-related options in this same window that have to do with QuickBooks’ help features. You may also want to adjust these if you commonly use those services.

Customize Your Icon Bar

This is probably the simplest thing you can do to improve navigation. QuickBooks comes with an icon bar pre-installed, a horizontal strip at the top of the screen whose icons take you to specific parts of the program. The default icon bar may serve your purposes well, but if not, you can easily modify it. Click View | Customize Icon Bar (or right-click directly on the icon bar). The window shown in Figure 2 opens.

Figure 2:

The Customize Icon Bar window contains all the tools you need to modify the navigational icons displayed in the QuickBooks icon bar.

To add, edit, or delete icons, simply click on the appropriate buttons. A new window opens containing self-explanatory tools to help you make your changes. You can also add separators (vertical lines) that can divide related groupings of icons.

Tracking Open Windows

If you’ve chosen to have multiple windows open simultaneously, you can easily keep track of what’s open-and navigate there quickly-by using the Open Windows list. To get there, click View | Open Window List. QuickBooks will open the sidebar shown in Figure 3. This list appears to the left of the main desktop or any open windows. To close it, simply click View, then uncheck Open Window List.

Figure 3:

You can use the Open Window List to keep track of which windows are open. Clicking on one takes you there.

Customizing the Home Page

QuickBooks’ Home page is one of the program’s best feature. It not only serves as a navigational tool-you can click on an icon labeled, for example, Enter Bills, and QuickBooks will take you to that page-but it also illustrates the workflow of some processes.

You have some control over what appears on the Home Page. To make changes, click Edit | Preferences, then Desktop View and then Company Preferences tab to display the window in Figure 4.

Figure 4:

In this window, you can turn on or off some of the icons that appear on the Home page.

Here, you can check or uncheck icons like Sales Receipts. But in order to show or hide icons, you’ll have to make sure that the actual features enabling them are active or inactive.

Your current preferences are displayed at the bottom of the window. You can easily alter them by clicking on one of the hyperlinks. So if Sales Tax is off, for example, click on it, and a window opens that lets you set up a sales tax item.

Finding Favorites

There’s yet another way to isolate the functions you use most often: the Favorites list. Click Favorites | Customize Favorites to access the list of options (like Chart of Accounts and Price Level List). Highlight one, then click Add.When you’re done with your list, click OK. Click the Favorites menu anytime you want to access these.

QuickBooks desktop is a powerful navigational tool, and provides simple maps to all of the program’s functions. Such versatility and customizability contribute to the program’s overall ease of use, and make it a pleasure to use.

Setting up Preferences correctly in QuickBooks-for elements like Items & Inventory and Payments-will make the program work the way you need it to. If you have any questions on how to do this, please call us.

ooks’ most tax-specific tools. QuickBooks supports many business tax forms, including the 1040, 1120, and 1065, and the steps outlined here apply to all small business tax filers using QuickBooks Pro, Premier, and Enterprise.

If you haven’t already (and you should have), order your W-2 and 1099 Kits

These forms must be filed at the beginning of each year; they report employee wages and salaries to Federal, state, and local agencies. Data is printed directly from QuickBooks onto the correct line in the forms. You can purchase these kits (shown in Figure 1) directly from Intuit, and you must have a Standard Payroll or Enhanced Payroll subscription in a supported version to process them.

Figure 1: Intuit sells kits that help you print QuickBooks tax data directly on the correct forms.

Check the Company Information window to make sure it reflects the right tax form

This is crucial no matter who is preparing your taxes. You should have been thinking ahead to tax time when you set up your company in QuickBooks, but you can take this step prior to starting your prep.

Make sure you’ve specified the appropriate tax form for use in QuickBooks. Go to Company|Company Information, as shown in Figure 2. At the bottom of the window, find the Income Tax Form Used line, and make sure it’s set to the correct form.

Figure 2: On the Company Information window, be sure that the Income Tax Form Used line is pointing at the correct form.

In this same window, check the fiscal year dates to make sure they’re correct, and that other tax-related fields are filled out accurately.

Make sure your tax-related accounts are assigned to the correct tax line on the form

If you used the EasyStep interview for setup, QuickBooks automatically assigned some accounts to the correct tax line. You can change these at any time, and add your own accounts. This Tax-Line Mapping will be important down the road if you export data to an Intuit tax product and/or run tax reports.

Warning: Altering the Chart of Accounts is a precise operation, and affects many parts of QuickBooks. You may want to consult with an accounting professional.

Click Lists|Chart of Accounts. Select an account, like Interest Expense, and right-click on it. Click Edit Account, and the window shown in Figure 3 appears.

Figure 3: QuickBooks lets you do Tax-Line Mapping, which specifies the relationship between accounts and tax form lines.

If you want to change the tax line, click the arrow to the right of the current selection and choose the correct one from the drop-down list. To add an account, click Lists|Chart of Accounts. In the bottom left of the screen, click the arrow in the Account button. Click New, and follow the instructions in the wizard that opens.

Run tax-related reports

QuickBooks provides three reports that you’ll need whether you or your accountant is preparing your taxes. To find them, click Reports|Accountant & Taxes.

The first report is the Income Tax Preparation Report. This lays out a list of your accounts and the tax line each is assigned to. If any that need to be assigned are unassigned, double-click on them to get to the Tax-Line Mapping window, as shown in Figure 4.

Figure 4: The Tax Preparation Report illustrates how your accounts have been assigned to tax form line items.

Two other reports are available: Income Tax Summary and Income Tax Detail, which are just what they sound like. They provide detailed and summarized lists of transactions and their totals. You can drill down on these to see the underlying transactions.

Warning: When you run Income Tax Summary, look for a line that says Tax Line Unassigned (income/expense). Double-click on any total there to see accounts that need to be assigned to a tax line, as shown here in Figure 5.

Figure 5: You can quickly check your accounts in the Income Tax Summary.

QuickBooks lets you modify these reports to include additional columns, and memorize them for easy access later. Click the Modify Report and Memorize buttons in the upper left corner to do so.

You can’t avoid taxes, but you can sure take a lot of the pain out of their preparation by using QuickBooks throughout the year to get ready. And you may get a smile out of your accountant when you hand over your carefully created records.

One of the many ways that QuickBooks makes your life easier is its ability to create business forms for all of the financial transactions your company produces. You simply fill in the blanks or choose data from drop-down lists, and QuickBooks generates a document you can e-mail or send. Only problem is, sometimes the pre-formatted default forms don’t include all the fields you need. Further, they look rather, well, plain. This being October, you might want to add a Halloween-centric logo, for example. Fortunately, QuickBooks is flexible. Using simple tools, you can modify the prefab forms that are included with the program to add a logo or other graphics and indicate which fields you would like to have appear.

Made To Order

To get started, click Lists/Templates. (In Simple Start, open a new invoice and click Customize/Manage Templates.) The window shown in Figure 1 opens. As you can see, QuickBooks already provides multiple versions of some forms. Take a look at these before you do any modifying to see if one will meet your needs.

Figure 1: The list of QuickBooks forms templates gives you many pre-formatted options.

Select a template you want to start from, like the Intuit Service Invoice. Click the arrow in the Templates box, and a list of command options drops down. Click on Edit Template. The Basic Customization window opens, as shown inFigure 2.

Figure 2: The Basic Customization window allows you to alter existing form designs.

Customizing Templates

Templates are designed for use with Intuit’s preprinted forms. So if you want to make additional changes, you’ll have to make a copy of the form before doing so (which may or may not work with Intuit’s forms). Click Manage Templates, and then click the Copy button. The program creates a modifiable copy of the template, which you can rename by replacing the text in the Template Name box. Click OK. As you make changes on the left side of the window, you’ll see those modification reflected in the graphical representation of your invoice on the right.

Make It Personal

Probably the easiest thing you can do to jazz up your invoice is to add a logo. This is simple. Click the box next to Use logo. The Select Image window opens. Browse to the image you want and select it, then click Open. The image appears with your contact information at the top of the page.

Add Interest With Color

Next up is your choice of color schemes, should you want to use one. Click the arrow below Select Color Scheme. You’ll see several options here. Select the one you want, and then click Apply Color Scheme. If you don’t like the fonts supplied with the template, you can easily change those, too. Under the Change Font For option, select the field type you want to modify and click Change Font. Select the desired font and any effects you want in the window that opens and click OK.

Further Customization Options

Additional changes can be tricky. To add your phone number, for example, click the box next to Phone Number. You’ll have to use the Layout Designer to make this modification. To do so, click the Layout Designer button. You’ll see a window similar to the one in Figure 3. If you’ve never used a layout design tool, you’ll have to work with this a bit. You’ll need to grab the phone number and position it where it should be. Then click Properties and Font (and/or Color). Make the necessary changes and click OK.

Figure 3: The Layout Designers allows you to make more complex adjustments to your forms.

Click the Add button to insert text boxes, data fields, and images, and Copy and Remove to use those functions. Click OK when you’re happy with your changes. This will take you back out to the Basic Customization window, where you can modify your invoice further. For example, you can click the Print Status Stamp box to have QuickBooks stamp your invoices with words like “PAID.” Click the Additional Customization button to make other changes, as shown in Figure 4. By checking and unchecking default boxes under each tab, you can continue to change the appearance of your invoice.

Figure 4: The Additional Customization window gives your finer control over the format of your forms.

Enhance Your Business With Custom Forms

You may be able to use QuickBooks invoices right out of the box. But even if you can, it’s a good idea to freshen up the boilerplate forms and add your company’s own personal touch to them. In these tight economic times, you should take any actions you can-small as they may be-to present a professional, personalized front to your customers. QuickBooks provides the tools to help you do just that.

To get started, select Company > Planning & Budgeting > Use Business Plan Tool and you’ll see what’s displayed in Figure 1. QuickBooks’ business plan tool uses a convention that other Intuit products use frequently: a lengthy wizard that walks you through the entire process. This tool supplies information and asks questions about what’s needed on each screen. You fill in the answers (or select from options) and the business plan wizard works in the background to place the data in the correct place.

The first topic you’ll be asked about is your company. If you’re a new business, you’ll have to estimate in some areas, like the percentage of your sales that will come through credit. In other cases, you’ll be better able to answer in concrete terms. For example, what will your customer payment terms be? When do you want your business plan and financial projection to start?

Figure 1: QuickBooks walks you through the process of creating a business plan with an easy-to-use interface.

What’s Coming In?

Your income is up next, and this will take some figure-pulling (and maybe some hair-pulling). You can either fill in a spreadsheet manually, adding up to 20 categories, or use the Income Projection Wizard, as pictured in Figure 2. If you’ve already been working with your data in QuickBooks, the latter is certainly recommended. These numbers will be scrutinized very carefully, perhaps put under the microscope more than any other element of your business plan. Make sure you can back them up.

Figure 2: The QuickBooks Income Projection Wizard.

If you’re projecting manually, be prepared to calculate the Cost of Goods Sold (COGS). This number contains three pieces:

• Material: What percentage of each dollar pays for the cost of product(s)? If you’re a service company, enter the associated materials costs.

• Labor: What percentage of each dollar is tied to the employee costs associated with goods production?

• Other: What percentage of each dollar goes into other costs?

Business Expenses and More

You have the same two choices when you’re entering your expenses. You can enter them manually or use the Expenses Projection Wizard. If you do the latter, your projections can be based on either the last 12 months of history or an average from the last 12 months.

In the Interview section, you’ll need to have numbers available, including:

• Beginning account balances

• Assets you own or need to buy

• Cash available to invest (if applicable)

• Amortization and depreciation

As in other areas of the business planning tool, existing data in QuickBooks will be automatically filled, such in Figure 3.

You’ll also answer questions here about inventory (i.e., fixed or variable, minimum balance), vendor financing, lines of credit, and your total credit limit.

Figure 3: The business planning tool pulls in existing data from QuickBooks.

Writing Your Plan

Now it’s time to write, but don’t panic thinking you’ll face a blank screen. The Plan section is divided into three sections, and you can toggle between them. You can view the actual plan outline tree, which is a window that provides tips and examples, as well as a text entry window, as shown in Figure 4.

Though this is primarily a text-based section including information about things like your company background, products and services, and the competition, you’ll supply some numbers, too, and the rationale for arriving at them.

Figure 4: The Plan section is divided into three main sections.

Once you’ve completed all of the sections, you simply preview and print your plan. QuickBooks assembles it with all of the text, tables, graphs, and charts in the right place, and presents you with a professional business plan that you can take to the bank, or simply revisit from time to time to make sure you’re on course.

In these trying economic times it’s more important than ever to keep a close rein on your accounts receivable. Seemingly no one is immune to sudden changes in financial circumstances, so be sure to monitor your outstanding invoices closely. There’s an inverse relationship between the age of an invoice and your ability to collect on it, but fortunately QuickBooks can help you manage your credit risk:

1. Set Reminders

As shown in Figure 1, QuickBooks can display a reminder window when you open your QuickBooks company:

Choose Company, Reminders, and then click the Set Preferences button.

Choose the My Preferences tab, and then click the Show Reminders List When Opening a Company File on the My Preferences tab.

Click the Company Preferences tab, and choose Show List for Overdue Invoices. As shown in Figure 2, you can enter a negative number to be notified of overdue invoices before they reach their due date. Click OK to save your changes.

Figure 1: QuickBooks can show you a list of overdue invoices whenever you open your company.

Figure 2: Enter -3 in the Days after Due Date field to be notified when invoices are within 3 days of their due date or later.

2. Monitor Customer Balances

In addition to tracking overdue invoices, you should also stay abreast of how much credit you’ve extended to each of your customers. One way to do this is to use the Customer Center whenever you create new invoices:

Choose Customers, and then Customer Center (you can also click the Customer Center toolbar icon or press Ctrl-J).

As shown in Figure 3, the customer center lists the Balance total for each customer. You can use this information to determine whether you want to sell additional products or services. You can quickly create an invoice from the Customer Center: select a customer name, and then press Ctrl-I (as in I for invoice).

As also shown in Figure 3, you can add an Open Balance column to the transaction list. To do so, right-click on the transaction list, and then choose Customize Columns. Choose Open Balance from the Available Columns list, and then click the Add button.

Figure 3: The Customer Center makes it easy to monitor open invoices.

Expert trick: To sort customer open balances in descending order, click twice on the Balance Total column.

3. Create an Overdue Watermark

An attention getting messages, such as “OVERDUE!” or “PLEASE PAY!” can add impact to follow-up copies of invoices that you send out. It’s easy to add a watermark to your invoices:

Choose Customers, and then Create Invoices to display the Create Invoices window.

Click the Customize button on the toobar, and then click the Manage Templates button.

Select an existing invoice, such as Intuit Product Invoice, and then click the Copy button.

Use the Template name field shown in Figure 4 to assign a name like Overdue Intuit Product Invoice, instead of Copy of: Intuit Product Invoice.

Click OK to close the Manage Templates window, and then click the Layout Designer button in the Basic Customization window.

Click the Add button on the toolbar, and then choose Text Box.

Enter the message you want to add in the Text field, such as OVERDUE!

Click the Font button, and then make these changes:

• Set the Font Name to Arial Black
• Set the Font Style to Bold
• Set the Font Size to 60
• Change the Font Color to Silver

Once you’ve set the font settings, click OK to close the Font dialog box, and then click the Border tab. Unclick Top, Left, Right, and Bottom, and then click OK.

Resize and reposition the text box on your invoice, such as in the center of the body section, as shown in Figure 5.

Right-click on the text box and choose Order, and then Send Backward.

Figure 4: Assign a meaningful name to your new template.

Figure 5: You can add an OVERDUE! Watermark to a customized QuickBooks invoice template.

Going forward, you can choose this template from the list anytime you wish to follow-up on an overdue invoice.

4. Send E-mail Follow-ups

A friendly note can sometimes shake a payment loose on an overdue invoice. For instance, you can choose Reports, Customers & Receivables, and then A/R Aging Detail. Double-click on the invoice in question to display it onscreen, and then click the Send button on the toolbar, which looks like an envelope with a green arrow.

As shown in Figure 6, you can change customize the body of the e-mail to your liking. If you typically mail print copies of your original invoices, then consider changing the default text of the e-mail to make your collections easier.

To do so, click the Edit Default Text button and then make any changes that you like. Do note that these changes won’t appear in the Send Invoice window until you close it and click the Send button again. Click the Send Now button to e-mail the invoice copy to your customer.

Figure 6: Customize the default e-mail text to simplify invoice follow-ups.

5. Use Statements

QuickBooks makes it easy to send statements to one or more customers. Choose Customers, and then Create Statements. Set the desired options, including which customer or customers to contact, and then choose Print or Email to generate the statements.

6. Tweak the Collections Report

When calling on an overdue invoice, it’s helpful to make sure that your customer is aware of all pending invoices. You can easily tweak this report so that it lists all open invoices:

Choose Reports, Customers & Receivables, and then Collections Report.

Click the Modify Report button, and then click on the Filters tab.

As shown in Figure 7, click on the Date filter, and then choose Remove Selected Filter. Do the same for the Aging and Due Date filters, and then click OK.

As shown in Figure 8, the Collections Report now displays all open invoices. You can click the Memorize button to save this report for future use.

Figure 7: Modify the Collections Report filters to add helpful information to this report.

Figure 8: The resulting report shows all open invoices, as well as contact names and telephone numbers.

7. Accept Credit Cards

Many business owners avoid accepting credit cards due to the fees involved, which can top 3%. However, 97% of an overdue invoice is far better than 0%, or having to wait even longer to collect.

You can learn about QuickBooks Merchant Services by choosing Add Credit Card Processing on the Customers menu in QuickBooks. Or, consider a payment service like PayPal (www.paypal.com), which offers a free Request Money with QuickBooks wizard. Look under the Merchant Services section of your PayPal business account.

If you’re like most QuickBooks users, you rely on the Profit & Loss Standard report to monitor how your business is doing. However, you may have overlooked an even more valuable report: the Statement of Cash Flows.

The Profit & Loss Standard (P&L) report is important in its own right, but it only provides partial insight into the health of your business. While the P&L shows what you earned and spent, the Statement of Cash Flows shows you where the cash came from and went to, also known as sources and uses.

As you’ll see in this article, you can use the Statement of Cash Flows to determine the how various activities increased or decreased your cash balance during a given report period.

Cash versus Accrual

Unlike some accounting packages, QuickBooks allows you to run most reports on either the cash or accrual basis.

Cash-basis means that transactions don’t appear on your Profit & Loss statement until either your customer pays their invoice or you pay a vendor (or employee). So, if you enter a bill in QuickBooks to be paid later, the expense won’t immediately appear on a cash-basis P&L.

Similarly, invoices that you send to customers won’t immediately appear on a cash-basis P&L. The expense appears when you write a check to the vendor, and the revenue appears when the customer honors their invoice. Accordingly, cash-basis reports don’t necessarily report a company’s true financial performance.

You could have a stellar looking Profit & Loss Report, but a list full of unpaid bills in QuickBooks. Accordingly, many accountants prefer that business owners use accrual-basis reports.

Accrual-basis reports recognize the effect of every transaction on your P&L immediately. Customer invoices appear on accrual-basis P&L reports as soon as you save the transaction, as do unpaid vendor bills. You can easily see the significance of these differences in Figures 1 and 2.

Figure 1: Cash-basis reports only reflect paid transactions.

Figure 2: Accrual-basis reports include all transactions – both paid and unpaid.

Accrual-basis reports provide a much better picture of where the business stands, but can make it harder to understand your current cash position. However, a cash-basis P&L isn’t a panacea for managing cash flow, as your business has many transactions that don’t affect the P&L.

For instance, loan payments, owner distributions, and owner contributions affect your balance sheet, which tracks assets, liabilities, and equity. Fortunately, the Statement of Cash Flows reflects these types of transactions and more, so it’s a great companion to both cash-basis and accrual-basis P&L reports.

Set Your Preference

You can instruct QuickBooks to always display your reports on either cash or accrual basis:

• Choose Edit, and then Preferences.
• Choose Reports & Graphs, and then Company Preferences.

As shown in Figure 3, specify either Cash or Accrual, and then click OK.

Figure 3: You can set either cash or accrual as your default report format.

Of course, at any time you can change a report to the other format. For instance, if your preference is set to accrual, but you may sometimes want to view a cash basis P&L:

• Choose Reports, Company & Financial, and then Profit & Loss Standard.
• Click the Modify Report button, and then choose Cash in the Report Basis section, as shown in Figure 4.

Figure 4: You can change the accounting method for your P&L on the fly.

NOTE: Most, but not all, reports in QuickBooks allow you to change between cash and accrual. When a report is onscreen, choose Modify Report.

If you don’t see the Report Basis section, shown in Figure 5, then you’ll know that you can’t toggle the report basis. Now that you understand the ins-and-outs of running cash and accrual basis reports, let’s explore the Statement of Cash Flows.

The Statement of Cash Flows

Let’s say that your cash balance at the beginning of your fiscal year was $100,000, and today it is $75,000. The net income figure on your P&L won’t give you the full details on why your cash balance decreased, but the Statement of Cash Flows will. To do so, choose Reports, Company & Financial, and then Statement of Cash Flows.

Report periods: As shown in Figure 5, this report automatically defaults to This Fiscal Year-To-Date, but you can choose another time period if you wish. To do so, make a choice from the Dates drop-down list, or modify the From and To dates, and then click the Refresh button.

Figure 5: The Statement of Cash Flows defaults to the current fiscal year.

Your Statement of Cash Flows report will include up to three major sections:

• Operating Activities
• Investing Activities
• Financing Activities

Don’t worry if your report only includes one or two of these sections – sections only appear when you had relevant transactions during the report period. Let’s explore each of these sections individually.

Operating Activities

The Operating Activities section of the Statement of Cash Flows recaps activities related to running your business. This section will always start with Net Income, followed by an adjustments section.

The adjustments reconcile your net income with the net cash provided by the operating activities. For instance, refer to Figure 5. Net income s $112,999 but the Net Cash Provided by Operating Activities is $42,584. Accordingly, the statement of cash flows identifies the $70,415 difference. Let’s investigate a couple of the items:

Accounts Receivable (-$71,759): During the report period we sent invoices to our customers, of which $31,503.08 remain unpaid. These unpaid invoices are reflected in the Net Income figure, so QuickBooks deducts these because we haven’t received this cash yet.

Inventory Asset (-$17,354): Amounts that we spend on inventory don’t become part of Net Income until we’ve sold the items. At that point QuickBooks posts the expense to cost of good sold, and reduces our inventory account accordingly. Purchasing inventory is a use of cash, so it appears as a negative amount on our Statement of Cash Flows.

Remember: The purpose of the Statement of Cash Flows is to reconcile our net income with the actual change in our cash account. Thus non-cash activities, such as unpaid customer invoices or amortized prepaid expenses get subtracted or added from Net Income, so that you can get a clear picture of where cash went during the report period.

Employee Advances (-$62): We paid $62 to an employee as an advance, which has not yet been repaid. This amount isn’t included in Net Income, but is a use of cash, so the amount is deducted. When our employee repays the advance, our Statement of Cash Flows will reflect a positive amount, since at that point we’ll have a $100 source of cash.

Prepaid Insurance ($893): During the report period we amortized, or used up, $893 of prepaid insurance. This expense is included in our Net Income figure, but we didn’t write a check for it during this report period, so QuickBooks adds this expense back.

Accounts Payable ($13,537): We’ve entered bills into QuickBooks totaling $13,537 that we haven’t paid yet. In effect, we’re temporarily borrowing this money from our vendors, so it’s a source of cash. Later, our Statement of Cash Flows will show a use of cash when we pay the vendor bills. This same treatment applies to credit cards and other liabilities.

As you look through the Statement of Cash Flows, you may also see Investing and Financing activities. Investing activities may include owner contributions as a source of cash, or in the case of the report in Figure 5, the purchase of $11,500 in furniture as a use of cash.

Financing activities will show borrowing on a line of credit or other loan as a source of cash, while loan repayments (net of interest) will appear as uses of cash. In the end, you’ll see exactly what caused your cash balance to increase or decrease during the report period.

Research: You can easily investigate why amounts appear on your Statement of Cash Flows. As shown in Figure 6, the QuickZoom icon appears when you hover over an amount. Double-click to display a detailed report, as shown in Figure 7.

Figure 6: The QuickZoom icon indicates that you can drill-down within a QuickBooks report.

Figure 7: A detailed report appears when you double-click on an amount within a QuickBooks report.

Organizing the Statement of Cash Flows

QuickBooks makes an educated guess at what accounts in your chart of accounts should appear on the Statement of Cash Flows. However, you may encounter instances where activities appear in the wrong section, or don’t appear at all on the report. You can easily remedy such situations:

• Choose Edit, and then Preferences.
• Choose Reports & Graphs, and then Company Preferences.
• Click the Classify Cash button, shown in Figure 3.

As shown in Figure 8, place a checkbox in the appropriate column. You cannot remove balance sheet accounts from the statement, but you can optionally include income and expense accounts. However, keep in mind that this is not a typical need, and you should only proceed under the guidance of your accountant or tax advisor.

Figure 8: QuickBooks allows you to classify accounts as operating, financing, or investing activities.

Did You Know?

QuickBooks has a Product Information window that can provide a dizzying array of information. Press Ctrl-1 to display the window shown in Figure 9. Some key elements on this screen include the product number shown at the top.

Each QuickBooks user in your office should have the same release number. The size and location of your QuickBooks file is shown in the File Information section, while you can use the List Information section to determine how many customers and vendors you have in QuickBooks.

Figure 9: Press Ctrl-1 to view the Product Information window.

The price of gasoline is just one of many factors putting pressure on our economy as a whole. Now it’s more important than ever to keep a close eye on your company’s performance. Many business owners compare financial results to an annual budget. If you don’t have your budget in place yet, we’ll show you how to get started. Even if you have, we’ll show you how to use last year’s results as a measuring stick with comparative financial reports. Once you understand these techniques, we’ll explain why you should create a monthly appointment with yourself to ensure that your results continue to measure up-and take action if they don’t.

TIP: Keep in mind that tough financial years do have a silver lining-you’ll likely pay less in income taxes. If revenues are down or expenses are up, don’t forget to trim your withholding or estimated tax payments accordingly. Doing so enables you to boost your cash flow now, rather than waiting around on a tax refund next spring.

Budget Basics

The QuickBooks Planning & Budgeting menu gives you the ability to create budgets and forecasts. In reality, both features work the same way, so we’ll use creating a budget as our example. But which one should you use? You might find it helpful to use the Forecast feature as an alternate budget and as a best-case scenario, while the Budget feature offers a better expectation of reality. Either way, here’s how to create a budget in QuickBooks:

1. Choose Company, Planning & Budgeting, and then Set Up Budgets.

2. When the Set Up Budgets window appears, click the Create New Budget button in the upper right-hand corner.

3. Select the year that you’d like to create a budget for (such as 2010 or 2011), select Profit and Loss, and then click Next.

Balance sheet budgeting: QuickBooks offers the ability to create a budget for balance sheet accounts, such as planning for expected levels of cash, inventory, accounts receivable, liabilities, and so on. However, most small business owners find that just a Profit and Loss budget is sufficient for their needs.

4. Most users will choose No Additional Criteria on the next screen. However, QuickBooks does provide the option for a more granular budget that you break down to the customer, job, or class level. Click Next once you make a selection.

5. The next screen asks if you want to start with a blank budget from scratch or if you want to use last year’s actual data as a starting point. Most users will find it helpful to use the previous year as a starting point. Click Finish after you make a choice.

6. At this point you’re presented with a screen similar to Figure 1. You won’t see any numbers if you chose the From Scratch option in step 5.

Figure 1: Starting with prior-year actual numbers can jumpstart your budget process.

7. Proceed with entering or updating your budget. Click the Save button as needed to preserve your work as you go, and then click the OK button when you’re finished.

Budget Tips: The Copy Across button enables you to copy the same amount across all twelve months. As shown in Figure 2, the Adjust Row Amounts button provides a quick way to adjust existing numbers up or down by either a percentage or dollar amount. You can edit your budget at any time: choose Company, Planning & Budgeting, and then Set Up Budgets. Choose your budget from the Budget list, and then make changes as needed.

Figure 2: The Adjust Row button makes it easy to quickly increase or decrease budget figures by a dollar amount or percentage.

Budget Reports

QuickBooks offers four budget and two forecast reports. You’ll use these steps to run most of these reports:

1. Choose Reports, Budget & Forecasts, and then the report of your choice.

2. A three-screen wizard appears, asking you first which budget or forecast you wish to use. Once you’ve made a selection, click Next.

3. The next screen asks which report layout to use – you may only one choice, Account by Month – click Next after you confirm your choice.

4. Click Finish to display your report:

• Budget Overview – As shown in Figure 3, this report provides a twelve-month view of your budget.
• Budget vs. Actual – This 52 column report can be tricky to navigate, as the default format shows these columns for each month, as well as a 12-month total.

Figure 3: Budget overview gives you a birds-eye view of your 12-month budget.

Report Taming Tips: There are a couple of ways to bring this report down to size. First, most users can eliminate the % of Budget column. To do so, click the Modify Report button, and then deselect % of Budget in the Add Subcolumns For section. Next, you can shrink the width of the columns. To do so, drag the diamond between the first actual and budget columns to the left, as shown in Figure 4. When you release the left mouse button, choose Yes when asked if you want to resize all of the columns. Alternatively, click the Export button to send the report to Excel.

Figure 4: Narrow column widths can condense particularly wide reports.

• Profit & Loss Budget Performance This report compares your month and year-to-date actuals to the budgeted amounts, and also displays the 12-month budget. Although this report doesn’t display dollar or percentage variances, you can easily add these columns. Click the Modify Report button, and then select $ Difference and/or % Of Budget in the Add Subcolumns For section, as shown in Figure 5.

Figure 5: It’s easy to add or remove columns on any QuickBooks report.

• Budget vs. Actual Graph This report doesn’t enable you to choose a budget – the current year budget is displayed automatically. As shown in Figure 4, this report enables you to get a graphic view of how your results measure up to your budget. You can choose between different budget views:
  • P&L By Accounts This view compares your Profit & Loss accounts, also known as income and expense, to the corresponding budgets. The report automatically sorts variances by difference, and you can view up to six accounts at a time.
  • P&L By Accounts and Jobs This view compares your P&L accounts on a job-by-job basis. Jobs with the largest total variance from budget will be presented first, and as with accounts, you can view six at a time.
  • P&L By Accounts and Classes This view compares your P&L accounts on a class basis. As with the other views, you can view up to six classes at a time. This button appears even if you haven’t set the Enable Class Tracking preference.

Class Tracking: Classes allow you to you track costs by department, project, or other categories. To enable class tracking, choose Edit, Preferences, and then Accounting. On the Company tab, select Enable Class Tracking.

Graph Printing limitation: You cannot print more than one page of the budget graphs at a time, so you’ll have to click Next Group and then click Print to create a hard copy of each report group. QuickBooks doesn’t provide a way to print all of the graphs in one fell swoop. You also can’t modify the graph format, other than to choose a different date range.

Comparative Reports

Regardless of whether you use budgets in QuickBooks or not, it’s always helpful to compare this year’s results to last year. Doing so enables you to see trends in your data, such as how automobile expenses have increased. Such a report is just a couple clicks away:

1. Choose Reports, Company and Financial, and then Profit & Loss Prev Year Comparison.

2. By default you’ll see this year compared to last year. However, you can easily create a multi-year comparison:

a. Click the Modify Report button.

b. In the Columns section, choose Year from the Display Columns By drop-down list, and then click OK.

c. On the report screen, choose a date range, such as 1/1/04 through 12/31/08, and then click the Refresh button. As shown in Figure 6, a multi-year comparison will appear onscreen. If you find this format helpful, click the Memorize button to save this report for later use.

Figure 6: You can convert the Profit & Loss Prev Year Comparison into a multi-year report.

Summary

In this article we discussed how you can use the budget and forecast feature in QuickBooks to plan the future of your business. As each month rolls by, you can compare your plan to actual results. In addition, you can compare this year’s results to last year, or even the last several years.

Did you know?

Did you know that an accountant’s copy of a QuickBooks file can be converted to a normal QuickBooks company, i.e. a .QBW file? There are limited circumstances where you’d want to do so, because it’s not possible to merge two .QBW data files together. However, let’s say that you lose access to your QuickBooks company because your hard drive crashes or someone steals your laptop. These are situations where a converted accountant’s copy would be better than starting from scratch. If you need to do this, ask your accountant to carry out these steps in their version of QuickBooks:

1. Choose File, Utilities, and then Convert Accountant’s Copy to Company File (QBW).

2. Choose the Accountant’s Copy to convert.

3. Click OK on the prompt shown in Figure 7.

4. Assign a name to the new company file, and then click Save.

A final warning prompt will appear to confirm that this copy will overwrite any existing client copy of the books.

Figure 7: Converting an accountant’s copy to a working QuickBooks company can serve as a disaster recovery method.

Of course, the best defense is to make frequent back-ups of your QuickBooks data on removable media, such as the USB flash drives that often cost less than $10. These easily allow you to carry your QuickBooks back-up offsite, such as in your purse or briefcase. But, it’s good to know that your accountant might be able to provide a working QuickBooks company – as long as you recently sent your accountant’s copy along to them.

We know. When you first cracked your copy of QuickBooks, you wanted to dive in and start generating invoices. Fortunately, QuickBooks is intuitive enough that you were able to do just that. And its help system is so robust that you were able to get procedural questions answered quickly and easily.

But there’s a lot to be said for backing up a bit and taking advantage of the myriad educational tools that QuickBooks offers. Even if you’ve been using the program for months, you may want to explore them. You’ll not only save time with the help system, but you may find better ways of performing tasks.

Learn By Watching

The QuickBooks Learning Center, one of the first things you saw when you installed the program, is always available by clicking Help | Learning Center Tutorials. It consists of numerous multimedia tutorials and links to additional help. As shown in Figure 1, the tutorials are worth a look before you take on a thorny topic like Payroll.

Figure 1: QuickBooks’ myriad tutorials help you absorb the basics of processes like Payroll.

Though you can use QuickBooks’ functions entirely from the menus, the program’s home page is built to guide you through core accounting processes. If you’re very new to QuickBooks and/or accounting, you can use the Coach function to better understand the flow. Click on Show Coach Tips in the vertical pane to the right of the main screen.

As shown in Figure 2, you’ll see a small “i” next to some icons. Click on one, like the one next to Purchase Orders. Related icons light up, and numbers representing their logical order appear next to them. Mouse over one of the icons to read a brief description of the function. When you’re done, click Hide Coach Tips to make them disappear.

Figure 2: QuickBooks’ Coach tool lays out the workflow for primary accounting processes.

Other Support Options

No matter how much you study and prepare, you may still run into situations where you need an expert’s hand. We can be a real resource here as we have the expertise to walk you through installation and setup, processes that are critical to your effective ongoing relationship with QuickBooks. And we can also pitch in when you’re facing other daunting accounting hurdles.

Another option for expert help is Intuit. The company offers a support plan that may or may not be in your budget, but it’s certainly something to consider if you anticipate needing to have frequent questions answered. The best value is the Annual Support Plan ($349 for first year; $299 thereafter). You get 24×7 phone support, data backup and recovery services, and learning tools only available with the Support Plan.

Intuit also hosts an in-depth online support presence. Click Help | Support to get to the main page as shown in Figure 3. Installation, troubleshooting (with guides to error messages), company and data file management, general procedures–they’re all covered there. You can search the support database or browse by topic. These and other resources are available within QuickBooks’ embedded browser (you must have Internet access to reach it, as with many other features of the program — click Help | Internet Connection Setup if you’re not already set up).

Figure 3: Intuit’s online support for QuickBooks can help when you’re stumped.

Interactive Help

If you haven’t yet visited QuickBooks’ interactive forum, you should. Click on the Live Community tab at the top of the far right vertical pane if it’s not already displayed (the pane toggles between it and Help). As shown in Figure 4, you can enter questions here and get answers from other users and/or Intuit pros.

Figure 4: Intuit included interaction in its QuickBooks palette of help tools. Live Community features questions from users and accompanying answers from users and Intuit pros.

For the expanded Intuit community, click on the Visit the Intuit Community link at the bottom of the Live Community pane.

Of course, don’t forget the core of QuickBooks’ help scheme: the Help pane. You can get a lot of your questions answered here. This pane constantly changes to display content relative to the current screen. This content provides explanations of concepts as well as step-by-step instructions.

So don’t throw up your hands in defeat when what you’re attempting in QuickBooks isn’t working. Remember how much help is available from Intuit, QuickBooks itself, and experts like us. Some additional schooling may just be in order.

There aren’t that many different types of forms to keep straight in QuickBooks, but you likely don’t use all of them. You probably use invoices and purchase orders frequently, and may fill out the occasional sales receipt, credit memo, or estimate.

But what about sales orders? You may find that they could make your bookkeeping more accurate and easier. There are only a few situations where they’re needed, but they’re the appropriate form to use at those times.

A Happy Problem

If you’re lucky (or a good businessperson), you have customers who place orders frequently. It’s not practical to invoice them every time they order, but you want to make sure everything is recorded. A sales order (which you’ll eventually turn into an invoice) is the correct choice for these customers.

Warning: You must use a sales order from the beginning of the selling process; you can’t switch gears partway through.

To get started, click Customers | Create Sales Orders. A blank form like this one will open:

Figure 1: To create a sales order, you simply fill in the blanks and select from drop-down lists, just as you would with an invoice.

Would you send a sales order out to a customer in a multi-order situation, or wait until you have enough sales to dispatch an invoice? That’s up to you. It’s a good idea if you want them to be aware of the costs that are piling up.

Looking Good

Before you begin entering data on the sales order form, check the fields to make sure they’re all needed, or if you’re missing any. The Template field in the upper right corner should display Custom Sales Order; change it if not. Should you want to add or delete fields, click the arrow next to Customize, then Customize Design and Layout.

If you’ve just been sending out the default forms that QuickBooks offers, you should consider adding some personalization. Click Create new design if you want to upload a logo and select fonts, colors, etc. Once you’ve decided on a theme, QuickBooks can apply it to all of your forms.

To add or delete fields, click Customize data layout. By checking and unchecking boxes, you can alter the content of your sales orders.

Figure 2: Just check or uncheck boxes to have field labels appear (or not) onscreen and in print. You can also change the label text, reorder columns, and designate text for a footer.

Halfway There

Another situation where you might want to send a sales order is when you’re doing partial invoicing; that is, when you don’t have enough items to fulfill the order as it came in.

In a case like this, go ahead and complete a sales order as if you had everything in stock. When you’re done, save the sales order, then find it and open it again. Click the arrow next to Create Invoice, then click Invoice. You’ll see this dialog box.

Figure 3: This dialog box lets you create an invoice for all items on a sales order or just a subset.

Click Create invoice for selected items, then OK. The Specify Invoice Quantities for Items on Sales Order(s) window opens. Items on the sales order you created are listed here, with additional columns for number available and number you ordered, number previously invoiced, and the unit of measured used (if applicable).

There’s a check box next to Show quantity available instead of quantity on hand. Here, you can opt to display the number of each item that’s truly available; that is, the number actually in inventory minus those reserved, either on other sales orders or for building inventory assembly items. Or you can request the number that’s physically in inventory.

Using this information about availability, you’ll enter the number of items you want to invoice from this sales order in the To Invoice column. It would look something like this:

Figure 4: When you convert a sales order into an invoice, you can select which items should be included.

Click OK, and your invoice appears. Do any editing necessary, and dispatch the invoice.

Tip: You can choose whether to have the items with a quantity of zero display on your invoice by going to Edit | Preferences and clicking on the Sales & Customers tab.

Tracking It All

There are several places in QuickBooks where you can view your sales orders. The best way to keep track of those partially filled is through two reports, Open Sales Orders by Customer and Open Sales Orders by Item. You can also see them, of course, in the Customer Center, and in the balance and transaction history found next to transaction forms.

Sales orders can help you better track sales, speed up receivables with partial invoices, and maintain communications with frequent buyers. But partial invoices require extra attention to inventory. Before working with them, it’d be best to schedule a session with us; we can help you keep things straight.

Next to payroll, paying bills is probably your least favorite task in QuickBooks. You don’t have to use this feature you can keep stacking bills on your desk, scrawling the due dates on a paper calendar, and writing checks.

If you’re still operating this way, though, you’re missing out on the numerous tools that QuickBooks offers to track your accounts payable, including the ability to:

• Enter bills as they come in
• Set reminders for bills due
• Pay bills easily
• Locate a bill or payment quickly
• Enter bills as (or after) you receive items
• Link bills to purchase orders
• Have instant access to a bill’s status

Receiving the goods

When an expense bill comes in (from a utility company, for example), click the Enter Bills icon on the home page, or Vendors | Enter Bills. A window like the one displayed above opens. Select the vendor and fill in the blanks. Make sure that the Expenses tab below is selected and the appropriate account number and amount fields are completed. If it’s a bill for an item that already has a related Item Receipt (the shipment preceded the bill), QuickBooks instructs you to use Vendor | Enter Bill for Received Items. Follow the prompts.Note: Dealing with incoming inventory is complex. Consult with us if you plan to use this feature.If the bill came simultaneously with items, click Vendors | Receive Items and Enter Bill. When you select the vendor from the list, this box opens (if you have sent a purchase order):


Figure 2: QuickBooks is telling you that you have open orders with this vendor.

Click Yes. The Open Purchase Orders box opens, containing a list of open POs. Select the one(s) you want and click OK. The bill form opens, containing the details of that purchase order. Change quantities if they don’t match the shipment, and edit other fields as necessary. Save the bill.

Settling your debts

It’s good to set reminders for bills. Go to Edit | Preferences and click Reminders. Make sure that that Show Reminders List…box is checked, then click Company Preferences. Find the Bills to Pay row and enter the advance notice you’d like. Indicate whether you want to see a list or a summary, then click OK.When bills are due, click the Pay Bills icon or select Vendors | Pay Bills. A window opens displaying all outstanding bills. You can pare this down by selecting a date in the Due on or before field and filtering by vendors. �The screen will look something like this:


Figure 3: You can easily select the bills you want to pay.

Enter a check mark next to the bills you’re paying, and change the amount in the Amt. To Pay field at the end of the row if necessary. At the bottom of the screen, you can set the payment date and type, use any discounts or credits, and make sure the correct payment account is selected. When you’re done, click Pay Selected Bills.Tip: You can have credits and discounts automatically applied by going to Edit | Preferences | Bills.

After You’ve Paid Up

There are a number of places where your bills appear in QuickBooks, including:

• The Unpaid Bills Detail report
• The A/P Aging Detail report
• The Vendor Center
• QuickReports
• In the Recent Transactions pane of some forms
• On the bills themselves

Figure 4: QuickBooks displays the Paid status of bills.

QuickBooks also lets you void and delete bills, and copy and memorize them. Check with us before voiding and deleting, as this can make some complicated changes in your accounts.

You can just pay bills by using Banking | Write Checks or Enter Credit Card Charges. But the payoff for tracking bills is instant access to your accounts payable status, better relations with vendors, and a more insightful accounting of your company’s cash flow.

QuickBooks’ standard reports are critical to understanding your company’s past, present, and future. But the program also offers innovative tools that can make them significantly more insightful and comprehensive. QuickBooks offers two simple conventions that let you identify related data: classes and types. Classes are used in transactions. Types are assigned to individual customers, vendors, and jobs. You might use classes to, for example, separate transactions that relate to different departments or locations or types of business. A construction company might want to track classes using New Construction, Remodel, and Overhead. Your customer types might help you isolate groups by characteristics like Industry or Geographical Location.

Creating Classes

First, make sure that QuickBooks is set up to use classes. Go to Edit | Preferences | Accounting | Company Preferences. Make sure that Use class tracking is checked. If you want to be prompted for a class designation in transactions, check that box, too. QuickBooks already contains a Type field in customer, vendor, and job records. It’s easy to build lists of options for both. To define classes, go to Lists | Class List. In the bottom left corner of the screen, click on Class, then select New from the menu. To create a class, just give it a name and click OK. Let’s say that you’re a contractor and you want to separate remodeling jobs into room types, like Bathroom or Kitchen. Go through the above steps again. Enter “Bathroom” in the Class Name field and click the box next to Subclass of. Open the list and choose “Remodel.” Click OK. Tip: If your class list grows lengthy and you want to tidy it up, you can make classes that you’re not currently using inactive by checking the box in this window. It will remain in your QuickBooks records and can be reactivated again.

Putting Classes to Work

Now you can use classes in transactions. Open a blank invoice and select a customer. The Class field will be next to the customer name. If the entire invoice will be assigned to the same class, click the drop-down list and select it. You can also assign separate classes to individual line items: You can assign different classes to individual line items in transactions. Not all invoice templates include a column for classes. You can add this by selecting the invoice form you want to modify and clicking Customize in the toolbar. QuickBooks comes with two reports specially designed for tracking class-based transactions: Profit & Loss by Class and Balance Sheet by Class (both can be found in the Reports menu, under Company & Financial). Of course, you can filter other reports to include a class column. You can also create a QuickReport for individual classes. Go to Lists | Class List and select a report or graph. You can filter by class in QuickBooks reports. Warning! The Balance Sheet by Class report is complicated and may produce unexpected results. Let your ProAdvisor help you work with this one. They can also help you set up a solid class structure.

A Simpler Assignment

Customer, vendor, and job types are a bit less complicated. Job types are especially useful; you can track, for example, profitability and time spent on individual projects. Customer and vendor types can produce output for things like targeted mailings and reports. Creating types is very similar to creating classes. Go to Lists | Customer & Vendor Profile Lists, and select the type you want to work with. You’ll follow the same instructions here as you did for classes. Types do not appear on transactions; they’re designed for your own internal use, and they’re stored in records. Figure 4: Customer, vendor, and job types are specified in their records. Classes and types can be used very effectively in your bookkeeping, but they require a good deal of thought and planning upfront to get accurate, meaningful reports. Let your ProAdvisor know if he/she can assist as you attempt to use these powerful forms of classification.

End of the year. QuickBooks has been hard at work for the past 11+ months, recording and tracking and storing all of that financial data that you’ve entered so faithfully.

But when you turn the calendar page and make a new start January 1, your accounting software could use some closure on the year that’s just passed. Here are some actions you can take to ring out the old and ring in the new. There’s more you can do (we can help you with the advanced activities) but we’ll just hit the highlights here.

• Reconcile, reconcile, reconcile. Yes, we know it’s not one of your favorite chores, but we really like to see all bank and credit card accounts reconciled by the end of the year if at all possible. Void all checks necessary and enter missing transactions.

Figure 1: You can make yourself crazy looking for a nickel when you’re reconciling, but it’s a critical function.

• Make accrual adjustments. This is complicated, and it only applies if you accrue payroll and liabilities or prepay expenses that are then carried as assets. We’ll need to create journal entries for you.
• Close your books. This is totally optional. It depends on whether you want to lock 2012 data to everyone except those who have the password and permissions. If you don’t close them, you’ll have easier access to last year’s transaction details. Regardless of what you choose, QuickBooks will automatically make some year-end adjustments.
• Do a physical inventory. Then compare this with what QuickBooks says. Reports | Inventory | Physical Inventory Worksheet.

Figure 2: It’s good to match up your physical inventory count with QuickBooks occasionally, and the end of the year is as good a time as any.

• Run income tax reports. As you know, QuickBooks lets you assign tax lines to tax-related transactions. Use the Income Tax Preparation Report and the Income Tax Summary Report. Let us know about any errors or omissions.
• Check W-2 and 1099 data. You can’t create these forms, of course, until after your final 2012 payroll, but you can get a head start. Ask employees to verify their names, addresses and Social Security numbers for accuracy. Also, make sure that your EIN and SEIN are correct, as well as the company address.
• Clean up, back up. We can monitor the health of your QuickBooks data file anytime. But year-end is a good time to scrutinize your software’s performance. Has it slowed down, started crashing or returning error messages? We can troubleshoot to find the problem and clean it up. We’re sure you’ve been backing up your file faithfully, but archive all of 2012 and store it in a very safe offsite location — or use Intuit Data Protect for online storage.

Figure 3: Frequent backups are critical, but you should be sure to have a copy of your entire 2012 data file stored somewhere safe.

• Double-check tax liabilities. If you’re handling your own payroll, look back to see whether all of your payments and filings have been completed.

Again, these are suggestions. QuickBooks does not require you to do any of them. There’s more you can do, and you will need assistance with some of these. So let’s set up a December or early January meeting to get you started right in 2013.

We want to take this opportunity to thank you for letting us serve your company in 2012. We certainly appreciate your business, and we’re happy to do what we can to help your business prosper in the coming year.

Part of the reason for QuickBooks’ success is its exceptional flexibility. By allowing users to turn features and preferences on and off, the same software can be used by a wide variety of business types and sizes.

In some cases, the default settings that QuickBooks supplies will work fine for your company. This is not necessarily true in the case of purchase orders, since the whole inventory procurement process is so complex, and users can have such a diverse range of needs.

Figure 1: QuickBooks 2013’s default Create Purchase Orders screen. You can see that formatting options are available when you click the Formatting tab.

So before you order your first widget, make sure that your purchase order form is designed to accommodate all of the information you want to record and track, with no unnecessary data fields to confuse staff.

Working with Templates

There aren’t many program preferences to check. If you can open a purchase order, you’re set. If not, go to Edit | Preferences | Items & Inventory and be sure that the box next to Inventory and purchase orders are active is checked.

What you want to find first is the Additional Customization screen for the Custom Purchase Order Template. This is easily accessed from the Create Purchase Order screen itself in QuickBooks 2013, but if you’re using an earlier edition, go to Lists | Templates | Custom Purchase Order Template. Double-click on it to open the Basic Customization page. Here, you can add a logo, change fonts and colors, etc. But go ahead and click on the Additional Customization button at the bottom of the screen. This window opens:

Figure 2: The left pane of the Additional Customization window contains additional fields that you might want on your purchase orders, like Ship Via and Terms.

(Tip: If you want to design multiple purchase order templates, click Manage Templates on the Basic Customization screen, then Copy on the Manage Templates page. Rename the form and make your modifications. This version will always be available as an option when you create purchase orders.)

Making It Yours

Each of this window’s four tabs opens a new screen that gives you customization control over a different element of the purchase order form: the top, bottom and midsection, and printing options. You simply check the boxes next to the fields that you want to add to the current form (be sure to check both columns if you want the fields to appear both onscreen and in your printed versions; sometimes, one is not an option) and uncheck any you want to delete.

In the right pane of this window, a dynamic preview changes to reflect each addition or deletion. And when you’ve finished altering the set of fields, you can see an actual print preview. Close that and keep clicking OK until you get back to the Templates window.

This simplicity and ease carries over into the more cosmetic elements of your purchase order. Make sure the template you want to redesign is highlighted and click Templates | Create Form Design. QuickBooks walks you through the process of adding a logo and background, colors and fonts, and a grid style, and it lets you apply this same theme automatically to all of your forms. (You can modify your design similarly on the Basic Customization page, minus the wizard-like approach and the background options.)

Simple but Complicated

One more comment about the QuickBooks 2013 purchase order screen. Beyond making your formatting options available in the ribbon,� it also moves you through purchasing to the receiving process. With the appropriate purchase order open, click ,b>Create Item Receipts in the ribbon. This window opens, with the correct vendor name selected. When you click in the Item field, this small window appears:

Figure 3: Click Yes here and select the correct PO, and QuickBooks fills in the data. If you check the Bill Received box, the Enter Bills window opens.

QuickBooks’ purchasing and receiving tools makes your inventory-tracking job easier, but you still need to understand the workflow. We encourage you to let us work with you as you begin managing inventory ‘ or to contact us if you’re tangled up in what can be a very challenging element of QuickBooks.

The U.S. economy may be picking up, but your customers are probably still being very careful with expenditures. If your company’s finances will allow it, you can help them out on sizable jobs by using progress invoicing, also known as partial billing or progress billing.

You could, of course, simply create invoices for smaller chunks of the job as they come. A smarter way is to build estimates for the entire job or sequential phases so your customer can see the big picture. You can still use progress invoicing to start collecting funds one segment at a time.

How to Proceed

First, be sure you have progress invoicing turned on. Go to Edit | Preferences | Jobs & Estimates | Company Preferences and make sure the Yes button is filled in next to the questions about estimates and progress invoicing.

Now create your estimate (these instructions are for QuickBooks Premier 2013; your steps may vary slightly). Go to Customers | Create Estimates. When you’ve entered all of the items you want to include in this phase of your project, click the ,b>Create Invoice button. This window will open:

Figure 1: You can decide how many of your estimate items will be included on your progress invoice.

By clicking one of these buttons, you can bill the customer 100 percent of what’s due on the invoice or just a percentage. But let’s say you and your customer have agreed that payment will be due in pre-defined stages, so click the third button and select one or more of the line items. Click OK. QuickBooks will display a new window that lets you select items and/or percentages of amounts due.

In our example here, we’re going to invoice the customer for two items, the blueprints and floor plans. So we selected the button next to Show Quantity and Rate and entered the full estimated quantity for each item in the QTY columns (if you chose Show Percentage, new columns would appear). It would look like this:

Figure 2: You can select specific items or percentages for your progress invoice.

Click OK. QuickBooks will return to your progress invoice, which you can save and print or email to your customer. Your original estimate will remain unchanged.

Tip: If you don’t want any of the zero amounts to appear on the progress invoice, go to Edit | Preferences | Jobs & Estimates | Company Preferences and make sure there’s a check mark in the box next to Don’t print items that have zero amount.

Following Up

When you want to bill for another set of items on this estimate, simply repeat these steps.

Here’s an easy way to determine how much (if any) of the estimate has been invoiced. Go to the Customer Center and select the customer. Click the arrow next to the Show field and select Estimates. Any estimate that has a zero in the OPEN BALANCE column has been completely billed.

QuickBooks provides a report that tells you where you are with all of your progress invoices. Go to Reports | Jobs, Time & Mileage | Job Progress Invoices vs. Estimates. Your report will include the progress invoice you just created:

Figure 3: You can see what percentage of each estimate has been included on a progress invoice in this report.

More Options

What if you determine that you won’t have one or more of the items on the estimate? QuickBooks lets you quickly generate a purchase order. With your estimate open, click Create Purchase Order to select the item(s) needed and generate the form. You can also click Create Sales Order if one is necessary.

Estimates provide a useful way to fine-tune your bookkeeping and inform your customers about impending costs. They can also be confusing if you don’t keep up with them. We can help you determine when they’re a good idea and how to keep them organized. QuickBooks provides good tools here, but they do require some administrative control.

You’re probably happy to see couriers delivering inventory items you’ve ordered since it means you can ship to customers, but recording the new stock means yet

QuickBooks’ tools can help with this, but you need to be sure you’re using the right forms. There are two different ones that you’ll use, depending on whether or not you’ve received a bill.

Bill in Hand

Either way, you’ll get started by opening the Vendors menu (or clicking the arrow next to Receive Inventory on the home page). If you do have a bill, select Receive Items and Enter Bill (Receive Inventory with Bill on the home page). The Enter Bills screen opens; select your vendor from the drop-down list. If you had entered a purchase order, you’ll see something like this:

Figure 1: If any purchase orders exist for that vendor in QuickBooks, you’ll see this message.

Click Yes. The Open Purchase Orders window will open displaying a list. Select the PO(s) for the items received by placing a check mark in front of it/them and click OK.

Tip: If you accidentally click No, the vendor’s information will be filled in on the Enter Bills screen, and you can click the Select PO icon in the toolbar.

Now the PO item information has been entered in the window. Check the form for accuracy, then save it.

Of course, if there was no purchase order, you’ll enter the information about the items you received (descriptions, prices, etc.) in the Enter Bills screen.

Delayed Billing

If you receive items without a bill, you still need to document the shipment. Open the Vendors menu and select Receive Items (or click the arrow next to the Receive Inventory icon on the home page and select Receive Inventory without Bill).

The Create Item Receipts window opens. Select the vendor by clicking the down arrow next to that field. If a message about existing purchase orders for that vendor appears, click Yes or No, and either select the appropriate POs or enter the information about what you received.

If the items were already earmarked for a specific customer on the purchase order, the Customer column will have an entry in it, and there will be a check mark in the Billable column. If there was no purchase order and you’re entering the information, you can complete those two fields manually.

Figure 2: If a purchase order was already assigned to a customer and is billable, that information should appear in this window.

Enter a reference number if you’d like. The Memo field should already be filled in with Received items (bill to follow), and the Bill Received box should not be checked.

Warning: Be sure that the Items tab is highlighted when you’re recording physical inventory. If there are related costs like freight charges or sales tax, click the Expenses tab and enter them there.

Paying Up

When the bill comes in for merchandise that you’ve already recorded on an Item Receipt, you’ll use this procedure to pay it:

• • Click Vendors | Enter Bill for Received Items, which opens the Select Item Receipt window.
  • Select the vendor, then the correct Item Receipt.

Note: If the bill corresponds to more than one Item Receipt, you’ll need to convert each into a bill separately. You can create a new bill if some items received were not accounted for on Item Receipts.

• • Click the box next to Use the item receipt date for the bill date if you want to match it to the inventory availability date.

Figure 3: You’ll select purchase orders that you want to create bills for in this window.

• Click OK. The Enter Bill screen opens, which can be processed like you’d handle any bill.

Though it may seem like extra work, this last procedure is important, since it prevents you from recording the same inventory items twice.

It’s easy to get tangled up on these procedures. We hope you’ll consult us when you begin implementing inventory management in QuickBooks, or when you’re taking on a new task there. It’s a lot easier to prevent errors than to go back and fix them.

The beauty of QuickBooks is that it can be used for so many different kinds of businesses. Its smart design lets realtors and retail shops, plumbers and plastic surgeons use it to track income and expenses, pay bills and invoice customers, and to run those all-important reports.

But Intuit knows that QuickBooks can’t — and shouldn’t — tailor itself to individual business types (except in the industry-specific versions). So its structure and tools are somewhat generic and as universal as possible.

That’s where custom fields come in. You can simply use them for your own informational purposes, but QuickBooks also lets you create and add fields to your existing customer, vendor, employee and item records and forms, and use them as filters in reports.

A Common Application

Let’s say you want to search for your best customers to create a targeted marketing mailing.

Start by opening the Customer Center and opening any customer’s record there. Click on the Additional Info tab. In the lower right corner of this dialog box, click on Define Fields. This box (with some fields already defined in this example) opens:

Figure 1: You can create custom fields for your lists of names in this dialog box.

You want to send mailings to customers who order frequently, or who regularly purchase big-ticket items. You can call them your High-Value Customers.� Click in the first field that’s available in the Label column and type that phrase, then tab over to the Cust column and click in it to enter a checkmark. Click OK. The Edit Customer dialog box opens with the new custom field included.

This field will now appear in all of your existing customer records as well as any new ones you create. You’ll need to open the record for each High-Value Customer, click on the

Additional Info

tab and enter Yes� on the corresponding line.
Figure 2: Custom fields appear in this box in your customer records.

Using Custom Fields in Items

If you sell physical inventory, custom fields will probably be needed in your item records. You might want to use them for t-shirt colors or sizes, for example, or to store serial or model numbers. They can be employed for all items types except subtotals, sales tax items and sales tax group items.

The process is similar to the one you used to define custom fields in your contact records. Open the Lists menu and select Item List (or Fixed Asset Item List where appropriate). Click Custom Fields in the dialog box that opens.

Tip: The Custom Fields tool is also available in the New Item dialog box. So you can move directly to that step as you create an item record if you’d like.

Click Define Fields and add your field(s). Be sure to put a checkmark in the Use column, and click OK.

Figure 3: QuickBooks also lets you define and use custom fields in your item records.

Reports and Forms

Custom fields can be invaluable when it comes to using them in forms and reports. Your fields will automatically appear at the bottom of the Filter list within your reports’ customization tools, but you’ll have to add them manually to any forms where they should appear.

Warning: You should probably enlist our help before you customize forms. QuickBooks provides tools to help you through this process, but you will encounter some potentially confusing messages as you add fields to forms, and you may have to use the Layout Designer, which can present quite a challenge.

Let’s say you wanted to find out how many blue coffee mugs Suzanne Jenkins sold in November. You’d proceed like you normally do when you’re customizing a report, but you’d have to scroll down to the end of the Filter list to find the Color custom field that you created. You’d enter the word Blue� in the field supplied. Your Sales by Item Summary report setup would look something like this:

Figure 4: Filtering a report using a custom field.

This report will only run properly if you’ve added your Color field to your sales forms. Again, we’d be happy to help you with this, and to explore other uses for QuickBooks custom fields.

If QuickBooks were just one product, its appeal would be more limited than it is. Because there’s an entire family of Windows desktop software applications (as well as five online versions and a Mac edition), the QuickBooks family has found a home in millions of small businesses, and it remains the market leader.

Though QuickBooks versions themselves are not scalable (able to expand as your business grows), you can move up to a more sophisticated edition when you outgrow your current version.

But how do you know whether it’s time to upgrade or whether you’re just not stretching your current version to its fullest capabilities? We can help you determine that, and we’ll help you move into a more appropriate edition when/if that occurs.

Desktop Differences

There are three Windows-based versions of QuickBooks: Pro, Premier and Enterprise Solutions. They all let you:

• Import and export data

Figure 1: All desktop versions of QuickBooks let you import and export data.

• Track income and expenses
• Build and maintain records for customers, vendors, employees and items
• Create and send transaction forms like invoices, estimates and purchase orders
• Download bank and credit card transactions, and pay bills online
• Customize and run dozens of reports
• Keep track of your inventory of items, and
• Add a payroll-processing service.

All three versions share a similar user interface and navigational scheme, so when you move up to the next level, you only need to learn the new features. The 2013 offerings make it even easier to learn and use QuickBooks, since Intuit completely revamped the look and feel for those most current editions.

QuickBooks Pro is the base desktop product, offering everything in the above list and more. But would you rather have access to 150+ reports instead of 100, including some that are industry-specific? QuickBooks Premier can provide that, in addition to charts of accounts, sample files and menus tailored to your company’s industry. It also offers a business plan builder and the ability to forecast sales and expenses.

Figure 2: QuickBooks Premier helps you create a business plan.

The biggest jump in functionality, though, occurs when you move up to QuickBooks Enterprise Solutions. You may want to consider this upgrade when you find that, for example:

• Your system keeps slowing down and experiencing errors because your customer, vendor, item and employee databases have grown too large
• You need to have more than five people accessing QuickBooks simultaneously
• You’ve launched a second company, and/or
• Your item catalog has grown to the point where you’re having trouble managing your multi-location inventory.

Robust Accounting

QuickBooks Enterprise Solutions is well-suited to complex small businesses, and sometimes even larger companies, depending on their structure and needs. It solves the data management problems that Pro and Premier users can experience, thanks to its 100,000+ record and account capacity.

Up to 30 individuals can use the software at the same time, and they have more flexibility than is offered in Pro and Premier. Multiple users can be on the system and still complete tasks like adjusting inventory and changing sales tax rates.

You can manage more than one business using QuickBooks Enterprise Solutions, even working in two company files at the same time and combining reports. Reporting capabilities themselves are much more sophisticated: The Intuit Statement Writer helps you create professional financial statements, and you have much more control over customization of your output.

Figure 3: QuickBooks Enterprise Solutions offers more sophisticated inventory management tools than Pro or Premier.

Inventory management goes many steps further in this sophisticated software. It supports management of multiple warehouse and trucks, and allows transfers among them. Finding specific items is much easier because you can track down to the bin level. FIFO costing is offered as an alternative to average costing, and you can scan items and serial numbers directly into QuickBooks Enterprise Solutions, which tracks both serial and lot numbers.

More Power, More Support

There are many smaller features that make this application far more powerful than QuickBooks Pro and Premier ‘ and also a little more difficult to master. When you think the time is right, we can help you move your current data file into QuickBooks Enterprise Solutions and provide training.

It’s important that you have the right fit when it comes to your accounting software. So consider your current setup carefully before you decide to move up.

We know that you’re in some stage of preparation for your 2013 income taxes. It may seem odd to start thinking about 2014 taxes just now, but actually, this is the ideal time to start planning and making business decisions with their tax implications always in the back of your mind.

As you look at the data that will be entered in your 2013 tax forms, you’re likely to come across some expenses that you might have handled differently, or some income that should have been deferred. If you begin your planning process for 2014 while 2013 is still in the works, you can start making smarter, more tax-advantageous business decisions now, instead of late in the year when everyone is rushing to take actions necessary to lower their tax obligation.

Here’s how QuickBooks can help you with this new approach.

Overhaul your Chart of Accounts. The mechanics of doing this in QuickBooks are fairly uncomplicated, but changing this critical list–the backbone of your company file–requires solid knowledge of which accounts should be added, deleted or changed. You also need to know which accounts and subaccounts will have impact on your income taxes. They must be structured accordingly.

Figure 1: QuickBooks’ default Chart of Accounts can be easily modified to meet your company’s unique needs. But let us help you with this task.

For these reasons, we ask that you consult with us if you think your Chart of Accounts could use an overhaul. Our early involvement will be much more economical for you than if we have to come in down the road when your accounts have become dangerously tangled.

Devise an effective system for estimated taxes. As you well know, there’s no magical formula for estimating how much income tax you’ll owe when all of your income and expenses have been tallied. We can make this an ongoing task by creating monthly or quarterly financial reports for your business and working from those.

If you’re self-employed, you might want to open a low-fee checking account that will serve solely as your tax fund. Because you have no employer to pay a portion of your Social Security and Medicare obligations, it’s critical that you’re putting enough away. Consider putting one-third of your taxable income into that account and see how it goes. You may get a pleasant surprise at tax prep time, or you may have to dip into other savings to be compliant.

Figure 2: You may want to set up a separate bank account to park estimated tax funds, so you know they’re committed. Ask us about numbering new accounts.

You can submit federal payments online on the Electronic Federal Tax Payment System site. Check with us to see if your state has an electronic system. Of course, the IRS will accept a check.

Run reports on everything. And keep running them. We’ve already mentioned that we’re happy to create and analyze your most critical financial reports on a regular basis. You may have tried to understand the Trial Balance, Statement of Cash Flows, etc. in QuickBooks and been puzzled. Don’t feel incompetent because of that: It often takes an accountant-level individual to understand what they mean for your business.

You can define and build your own reports using QuickBooks’ customization tools. If you have employees who travel, consider bringing in an automated expense report application (we can help you find one and implement it). Stress the importance of adhering to IRS rules about travel. Same goes for your local salesforce, off-site technicians and other service providers, etc.

Figure 3: Help your staff help you by involving them in budgeting and expense management.

For employees who come into the office every day or are telecommuting, you can give them some ownership of their contribution to expenses by bringing them into the budget process and/or requesting that they submit their own monthly mini-reports on any company funds they spend. The more employees are aware of and accountable for expenses, the easier it will be for you to work toward minimizing your tax obligation. And having some information about the considerable sum you pay in taxes may help staff understand your tightening of the purse strings.

Consider retraining accounting staff if necessary. You may be paying a portion of your taxes unnecessarily, simply because your company’s bookkeeping is less than precise. Nip that in the bud.

The more you micro-manage your reporting, stay aware of the consequences of every expenditure and bring employees into the process, the more prepared you’ll be for 2014 taxes.

After this ridiculously long winter, you’ll probably hear few complaints about things like puddles in the street, summer heat and spring cleaning. Most people are eager to throw open the doors and windows, and attack the dirt that the season left behind, both inside and outside of the house.

It’s not hard to see when your home is dirty. QuickBooks company file errors are harder to detect, but they’re there, including:

• Performance problems
• Inability to execute specific processes, like upgrading
• Occasional program crashes
• Missing data (accounts, names, etc.)
• Refusal to complete transactions, and
• Mistakes in reports.

Figure 1: If some transactions won’t go through when you click one of the Save buttons – or worse, QuickBooks shuts down — you may have a corrupted company file.

Call for Help

The best thing you can do if you notice problems like this cropping up in QuickBooks – especially if you’re experiencing multiple ones – is to contact us. We understand the file structure of QuickBooks company data, and we have access to tools that you don’t. We can analyze your file and take steps to correct the problem(s).

One of the reasons QuickBooks files get corrupt is simply because they grow too big. That’s either a sign of your company’s success or of a lack of periodic maintenance that you can do yourself. QuickBooks contains some built-in tools that you can run occasionally to minimize your file size.

One thing you can do on your own is to rid QuickBooks of old, unneeded data. The software contains a Condense Data utility that can do this automatically. But just because QuickBooks offers a tool doesn’t mean that you should use it on your own.

Figure 2: Yes, QuickBooks allows you to use this tool on your own. But if you really want to preserve the integrity of your data, let us help.

A Risky Utility

The program’s documentation for this utility contains a list of warnings and preparation steps a mile long.

We recommend that you don’t use this tool. Same goes for Verify Data and Rebuild DataUtilities menu. If you lose a significant amount of company data, you can also lose your company. It’s happened to numerous businesses.

Be Proactive

Instead, start practicing good preventive medicine to keep your QuickBooks company file healthy. Once a month or so, perhaps at the same time you reconcile your bank accounts, do a manual check of your major Lists.

Run the Account Listing report (Lists | Chart of Accounts | Reports | Account Listing). Are all of your bank accounts still active? Do you see accounts that you no longer used or which duplicate each other? Don’t try to “fix” the Chart of Accounts on your own. Let us help.

Figure 3: You might run this report periodically to see if it can be abbreviated.

Be very careful here, but if there are Customers and Vendors that have been off your radar for a long time, consider removing them – once you’re sure your interaction with them is history. Same goes for Items and Jobs. Go through the other lists in this menu with a critical but conservative eye. If there’s any doubt, leave them there.

A Few Alternatives

There are other options. Your copy of QuickBooks may be misbehaving because it’s unable to handle the depth and complexity of your company. It may be time to upgrade. If you’re using QuickBooks Pro, move up to Premier. And if Premier isn’t cutting it anymore, consider QuickBooks Enterprise Solutions.

There’s cost involved, of course, but you may already be losing money by losing time because of your version’s limitations. All editions of QuickBooks look and work similarly, so that your learning curve will be minimal.

Also, try to minimize the number of open windows that are active in QuickBooks. That will improve your performance. And what about your hardware? Is it getting a little long in the tooth? At least consider adding memory, but PCs are cheap these days. If you’re having problems with many of your applications, it may be time for an upgrade.

A Stitch in Time…

We’ve suggested many times here that you contact us for help with your spring cleanup. While that may seem self-serving, remember that it takes us a lot less time and money to take preventive steps with your QuickBooks company file than to troubleshoot a broken one.

Do you remember why you started using QuickBooks? You may have simply wanted to produce sales forms and record payments electronically. Gradually, you expanded your use of the software, perhaps paying and tracking bills through it and keeping an eagle eye on your inventory levels. Certainly, you’ve run at least some of the pre-built report templates offered by all versions of QuickBooks since their inception.

QuickBooks’ automation of your daily bookkeeping tasks has undoubtedly served you well. But that’s merely limited use; now it’s time to take advantage of QuickBooks’ greatest strength: customizable reports.

One of the rewards for diligently entering all of your accounting information is a better grasp of your company’s financial performance to date. That insight ultimately leads to better business decisions that can contribute to your future growth and success.

Figure 1: QuickBooks’ Report Center can help you learn about what each report is designed to tell you. But smart customization requires deeper insight.

Making Reports Meaningful

Like many other tasks in QuickBooks, report customization tools aren’t that difficult to master. What’s challenging is:

• Understanding what each report is designed to tell you
• Determining which reports are most relevant to your business information needs, and
• Designing each to produce the critical insight you need in order to move forward.

The first of these is fairly clear. You can understand what many reports do by their titles, their content, and the descriptions QuickBooks offers. We recommend that you spend some time looking at the Report Center in QuickBooks to familiarize yourself with your options.

The second two challenges are a bit more formidable. It’s our job to assist you in establishing a workflow in QuickBooks to keep accurate records and produce necessary transactions. But we want you to do more than just maintain the status quo. When you analyze and interpret what your reports are telling you, you can make smart business decisions.

So if we haven’t gone over this with you already, we encourage you to schedule some time with us so you can get the maximum benefit from your QuickBooks reports.

Figure 2: You can’t miss QuickBooks’ customization link when you open a report. But the trick is knowing how to best use its options for your business.

A Simple Set of Steps

Let’s take a look at a report you may already be generate: Sales by Customer Detail (Reports | Sales | Sales by Customer Detail). QuickBooks comes with a commonly-used set of default columns in its reports. This particular report contains column labels like Type (invoice, sales receipt, etc.), Item and Quantity, and Sales Price. You can easily change the date range that’s offered as a default up below the toolbar. But to get to QuickBooks’ powerful customization tools, click Customize Report. A window with four tabs opens. They are: Display. Options in this window help you specify the columns you want to appear in your report. In the lower left corner, there’s a list titled Columns that contains every possible column label for that report. If you scroll down, you’ll see a check mark in front of the default columns. Click on any of those to uncheck them, and click in front of any that you’d like to add. Other options here include how your data should be totaled and sorted. Some reports let you choose between cash and accrual basis. Filters. This is the difficult one–and the tool that will provide the most insight. Filters determine which subsets of related data you’ll see (accounts, items, customer types, zip codes, etc.) by including only those that meet certain conditions. Here’s where we can really help you answer critical business questions that will lead you to smart decisions.
Figure 3: In this example, you’ve created a filter that will find all commercial drywall jobs that have been invoiced in the current fiscal quarter. You could narrow this report further by, for example, class, state, and paid status.

Header/Footer and Fonts & Numbers. You can tailor the design and layout of your reports here.

Well-formulated reports can help you spot cash flow problems, maintain the right inventory levels, see which jobs are the most profitable, and compare your estimates to actual costs. You’ll also be able to identify your best customers, your most sought-after items, and your most successful sales reps. Careful customization of your reports–and thorough analysis of their data–will make the answers to your constant questions about your company’s future direction much clearer. We can help you take full advantage of these powerful tools.

Sending invoices to your customers to bill for products and/or services is probably one of the more enjoyable parts of your job – second only to recording payments received. And thanks to the company file you’ve built in QuickBooks, creating invoices is generally a very simple process that requires no duplicate data entry.

Figure 1: You probably use QuickBooks’ invoice forms frequently, so you know how much easier it is to fill them out than to create paper bills.

QuickBooks also includes easy-to-use templates for another kind of customer form: the statement. These forms are generally not used nearly as frequently as invoices. However, you may find them more appropriate if you:

• Want to create a form that lists all of a customer’s open charges
• Have a customer who accrues multiple charges before being billed
• Receive advance – or regular — payments, or
• Need a historical accounting of a customer’s activity, including charges, payments, and balance.

Limitations of Statements

QuickBooks places some restrictions on statements. For example if you have a number of related charges for which you want to create a subtotal for, you’ll have to use an invoice. Statements also cannot include sales tax, percentage discounts, or payment items. Products or services requiring descriptions that run more than a paragraph can’t go on a statement. Customization options, too, are limited: you can’t add custom fields to the statement form, nor can you include a message to your customers, like, “We appreciate your business.”

The “Reminder Statement”

There may be occasions when you want to create a form that lists invoices received, payments made, and any credits given for one or more customers. This may be necessary when, for example, a customer disputes a charge. You may also want to send out these statements to remind customers of delinquent payments.

You do not have to enter any new data for these statements. Instead QuickBooks will pull the existing activity that you ask for in the Create Statements window, shown below. To get there, either click on the Statements icon on the home page, or open the Customers menu and select Create Statements.

Figure 2: The Create Statements window in QuickBooks offers multiple options for defining the statements you want to send to customers.

As you can see, QuickBooks offers a lot of flexibility in the creation of statements. You can specify:

• The active date range. Under SELECT STATEMENT OPTIONS, you can either enter a date range or request a statement for every customer who has open transactions as of the Statement Date (be sure that this date is correct before proceeding). You can also ask to include only transactions that are past due by a specified number of days.
• The customers to include. Do you want to use the conditions you just outlined to apply to All Customers? If so, click on the button in front of that options. If you choose Multiple Customers, a small button labeled Choose… will appear. Click on it, and a window displaying your customer list opens. One Customer also opens your list of customers. If you’ve assigned types to your customers and want to include only those in one category (like Residential or Commercial), click Customers of Type. And Preferred Send Method lets you limit your statement output to customers who receive either emailed or printed forms.
• The template to use. Click the down arrow to see the statement templates available. If you have not customized QuickBooks’ standard form and want to do so, let us help.
• Whether QuickBooks prepares one statement per customer or per job. This is a very important distinction, so choose carefully.
• Miscellaneous attributes of your statement run. Click on the box in front of any that should apply.

If you assess finance charges, you can do so here. This is an advanced activity in QuickBooks, and we’d be happy to provide guidance in this area.

When you’re done, you can Preview your statements, Print, or E-Mail them by clicking those buttons.

Entering Individual Charges

If you need to enter individual charges, you’ll have to work with QuickBooks’ customer registers. You’ll find these by either opening the Customers menu and selecting Enter Statement Charges or highlighting a customer in the Customer Center, then clicking the down arrow next to New Transactions and selecting Statement Charges.

Figure 3: A Statement Charge in the customer register.

We highly recommend that you let us help you get started if individual charges are necessary. Like many of QuickBooks’ functions, this isn’t a difficult activity once you understand it. But it’s much easier and economical for you to get upfront guidance than for us to come in and untangle your company file.

Whether you’re selling one-of-a-kind items or stocking dozens of the same kinds of products, you need to create records for each. When it comes time to create invoices or sales receipts, your careful work defining each type of item will:

• Ensure that your customers receive correct descriptions and pricing,
• Provide the information you must know about your inventory levels, and,
• Help you make smart decisions about reordering.

You’ll start this process by making sure that your QuickBooks file is set up to track inventory. Open the Edit menu and select Preferences, then Items & Inventory. Click the Company Preferences tab and click in the box in front of Inventory and purchase orders are activated if there isn’t a check in the box already. Here, too, you can ask that QuickBooks warn you when there isn’t enough inventory to sell. Click OK when you’re finished.

Figure 1: You need to be sure that QuickBooks knows you’ll be tracking inventory before you start making sales.

To create your first item, open the Lists menu and select Item List. Click the down arrow next to Item in the lower left corner of the window that opens and select New. The New Item window opens.

Warning: You must be very precise when you’re creating item records in order to avoid confusing your customers and creating problems with your accounting down the road. Please call us if you want us to walk you through the first few items.

QuickBooks should display the list of options below TYPE. Since you’re going to be tracking inventory that you buy and sell, select Inventory Part. Enter a name and/or item number in the next field. This is not the text that will appear on transactions; it’s simply for you to be able to recognize each item in your own bookkeeping.

Figure 2: Let us work with you if you have any doubts about the data that needs to be entered in the New Item window. It must be 100 percent accurate.

In the example above, the box next to Subitem of has a check mark in it because “Light Pine” is only one of the cabinet types you sell (you can check this box and select if you want to create a new “parent” item on the fly). Leave the next field blank if your item doesn’t have a Part Number, and disregard UNIT OF MEASURE unless you’re using QuickBooks Premier or above.

Fill in the PURCHASE INFORMATION and SALES INFORMATION fields (or select from the lists of options). Keep in mind that the descriptive text you enter here will appear on transaction forms, though customers will never see what you’ve actually paid for items, of course (your Cost, as opposed to the Sales Price).

QuickBooks should have automatically selected the COGS Account (Cost of Goods Sold), but you’ll need to specify an Income Account. Please ask us if you’re not sure, as this is a critical designation. The Preferred Vendor and Tax Code fields will display lists if you’ve already set these up.

QuickBooks should have pre-selected your Asset Account. If you want to be alerted when your inventory level for this item has fallen to a specific number (Min) so you can reorder up to the point you specify in the Max field, enter those numbers there (the Inventory to Reorder option must be turned on in Edit | Preferences | Reminders).

If you already have this item in stock, enter the number under On Hand. QuickBooks will automatically calculate Average Cost and On P.O. (Purchase Order).

Click OK when you’ve completed all of the fields. This item will now appear in your Item List, and will be available to use in transactions. When you want to create, edit, delete, etc. any of your items, simply open the same menu you opened in the first step here (Lists | Item List | Item).

Figure 3: The Item menu, found in the lower left corner of the Item List.

Precisely created Inventory Part records are critical to accurate sales and purchase transactions. So use exceptional care in building them.

One of the reasons you started using accounting software, among many others, was to save time. And QuickBooks has complied. Once you create a record for a customer, vendor, item, etc., you rarely – if ever – have to enter that information again; you simply choose it from a list.

You no longer waste time searching through endless piles of papers to find the one you need; you just do a search. And when you need a report on your monthly sales or inventory purchases or your payroll liabilities, you don’t have to wrestle with Excel or locate the right paper records; you just click a few times.

Memorized transactions can be another major time saver. You might use them when you, for example:

• Provide the same service for a customer on a regular basis,
• Charge a monthly fee for rentals, maintenance, membership, etc.,
• Pay a bill to the same company regularly or
• Have a standing order with a vendor for a similar set of items.

It’s easy to create memorized transactions. QuickBooks provides an icon for them in the toolbar of every transaction form that’s supported, like invoices, bills, and purchase orders.

Figure 1: When you see the Memorize icon in the toolbar of a transaction form, you know that you can create a template to use over and over.

To get started, create a transaction that you know will be repeated – even if the amount will be different every time (you’ll still save time because you won’t have to fill in or select absolutely every detail). Let’s say you’re doing some social media consulting for a customer, and you’ve contracted for eight hours every month. Create the invoice for that billing. Then click the Memorize icon. This window opens:

Figure 2: In the Memorize Transaction window, you’ll tell QuickBooks how often the transaction will be created, in addition to providing other information.

Your customer will already appear in the Name field. You’ll have to choose from among three options so that QuickBooks knows how to handle this recurring form:

Add to my Reminders List. If you choose this by clicking on the button in front of the option, QuickBooks will add this transaction to your existing Reminders List.

Note: Confused about how you get QuickBooks to remind you about actions you have to take? Help is just a phone call away.

Do Not Remind Me. We don’t recommend this option unless you have an exceptionally good memory, few memorized transactions, or a tickler file in another application. Even then, reminders are a good idea.

Automatic Transaction Entry. This absolutely saves the most time. It’s also the riskiest option. If you select this, QuickBooks will send the transaction through at the intervals you’ve defined. You’ll have to enter a number that indicates how many times you want the form sent and how many days in advance it should be entered.

Next, you’ll tell QuickBooks how often this transaction needs to be created by clicking on the down arrow to the right of How Often. Click on the calendar icon in the Next Date field to select the exact day this should occur next (you’ll have an opportunity when you work with the Reminders List to specify how much advance warning you want).

When you’re done, click OK.

Once you start memorizing transactions, QuickBooks will store them in a list. When you get a reminder that one is due soon, open the Lists menu and select Memorized Transaction List. You’ll see this screen, populated with your own work:

Figure 3: You’ll open the Memorized Transaction List to enter one or to work with one you’ve already created.

Highlight a transaction in the list and click the down arrow next to Memorized Transaction in the lower left corner to see your options here. You can also click Enter Transaction, and your original form will appear. If you’ve saved it with a permanent amount, you can just save and dispatch it. Otherwise, enter the correct amount before you proceed.

If you’re fairly new to QuickBooks and don’t feel like you’re well acquainted with its time-saving features, please call to set up a time for some training. Better to do that up front than to have to untangle a jumbled company file.

Thanks to the internet, privacy has been on the wane over the last few years. We assume that our addresses and phone numbers are public information, thanks to sites like Switchboard and 411.com. We hope that our dates of birth are private (though the number of birthday wishes on Facebook makes that doubtful), and we assume that our Social Security numbers are hard to get.

Your customers trust you enough to provide you with additional private information, like credit card numbers. And you’ve seen what an uproar occurs when major corporate entities like Target and Home Depot get hacked.

Your small business may not have hundreds of thousands of customer information files, but you can still be targeted by external hackers and even your own employees. Are you taking measures to ensure the security of that data stored on your hard drive and/or in the cloud?

Your Inner Circle

The last thing you want to imagine is that one of your own employees has been tampering with your QuickBooks company data. It happens, though, and you need to protect yourself from potential internal attacks.

One of your internal controls, then, should include the establishment of boundaries for every employee who has access to QuickBooks. You can restrict each staff member to specific areas of the program instead of sharing a master password and giving everyone free rein. Go to Company | Set Up Users and Passwords | Set Up Users to do this.

Figure 1: If you click on Selective Access in this window, you can restrict your employees’ activities to specific areas and actions.

The User List window opens, which will display all users who have been set up already, including you as the Admin. Click Add User and enter a name and password. Click the box in front of Add this user to my QuickBooks license, then click Next. Click on the button in front of Selected areas of QuickBooks. Click Next.

The next 10 screens break QuickBooks down into separate activities and activity areas, like Sales and Accounts Receivable, Checking and Credit Cards, and Sensitive Accounting Activities. On each screen, click on the button in front of the correct option:

• • No Access

• Full Access
• Selective Access (lets you specify what areas and actions will be allowed for that employee)

Other Internal Controls

QuickBooks’ Audit Trail is your friend. It records everything that is entered or changed in the software, by whom, and precisely when. To view it, open the Reports menu, then click on Accountant & Taxes, then Audit Trail. Like all QuickBooks reports, it can be customized to display the entries you need to see.

Figure 2: QuickBooks’ Audit Trail provides a detailed history of all activity in the software.

There are other reports that you should review frequently, and some that we should create and analyze for you at least every quarter, if not monthly. We can suggest reports that would help you look for fraud, and tell you what to look for.

Common Sense Practices

• It goes without saying that protecting your entire hardware/software/cloud configuration will help keep your QuickBooks company file safe from external marauders. You must employ state-of-the-art antivirus and anti-malware applications and keep them updated. Talk to us if you need recommendations and/or help implementing them. • If you’re a sole proprietor or you work from your home, restrict the computer where QuickBooks resides to business software and websites only. Never let anyone install applications, play interactive games, etc. on it. • Change your own QuickBooks password at least every 90 days, and do backups to secure drives or websites. • When you run into problems with QuickBooks’ functioning, please let us help. Even a computer troubleshooting specialist will not understand the program well enough to solve problems, and he or she may compromise your data file further.

As security software and systems get smarter, so do the hackers. Don’t let your company and its customers be victims of data theft.

In days gone by, running a company was a 40-hour per week proposition. You might have taken work home some evenings or gone into the office on weekends.

Those days are over, thanks to the internet and mobile technology. This fundamental change in the way we do business means that it’s now hard to get away from work. Your smartphone and tablet are usually within easy reach, and they’re always tempting you to check in.

On the flip side, that kind of 24/7/365 accessibility has numerous benefits. There are, for example, apps that can be integrated with your desktop QuickBooks company file, which enable you to:

• Make sales wherever you are,
• Document expenses as they’re incurred, and
• Monitor employee time for payroll purposes.

Let’s take a look at these in more detail.

Mobile Sales

Figure 1: One of the oldest apps that integrates with QuickBooks is GoPayment. You can process transactions on your smartphone or tablet from anywhere.

Payment-processing on smartphones has become commonplace these days. You’ve probably seen merchants accepting credit cards on mobile phones in one of two ways: by swiping the card on a small card reader that attach to their device or by entering bank cards numbers directly.

Intuit’s GoPayment lets you do either. You can download the free app and process a customer’s payment on your smartphone. However, you still have to download it into QuickBooks and either create a sales receipt or match it to an open invoice. This isn’t a difficult process once you understand it, but you must be sure to do it correctly from the start. We can do some practice runs with you.

Benefit: Improved sales that aren’t dependent on location.

Travel Expenses On-the-Go

One of the smartest, most useful apps that has ever been created is the expense reporter – particularly when used by your road warriors for on-the-go expenses. There are a handful of these. Travelers can record expenses in two ways: they can either enter the information directly or snap a picture of a receipt with a smartphone. When your employees get back to the office, they’re able to prepare complete expense reports, whose approved data can be transferred into QuickBooks.

Concur is one of these apps. When you set it up, it imports Account Codes, Customers, Jobs and Classes, and Vendor and Employee Records from QuickBooks so that these can be assigned for each expense entry. Credit card transactions can be imported directly. When an expense report is completed, it can be sent to a manager for approval, and reimbursement is then deposited in the employee’s bank account.

Figure 2: Intuit’s App Center is home to hundreds of add-on applications for QuickBooks.

Tallie works similarly. It can automatically categorize expenses and alert approvers to expense policy violations. Used in conjunction with Bill.com and SmartVault, it can accommodate a sophisticated, seamless accounting workflow. We’ll see more multi-app integration as cloud-based financial solutions mature, but if you’re going to attempt such a setup, let us help you with the initial mechanics.

Benefit: More accurate, policy-compliant expense reports.

Time-Tracking and Timesheets

If all of your employees walk through the office door every morning and stay there, you don’t need a mobile app for time-tracking. But for businesses whose cash flow depends on recovering and recording every minute of billable time, a smartphone time-tracker is ideal.

TSheets Time Tracker can help improve your bottom line in numerous ways. This particular app:

• Accommodates real-time mobile data entry,
• Tracks employee locations using GPS, and
• Creates timesheets that can be synchronized with QuickBooks, tracking billable time by customer, job, employee, etc.

Benefits: Employee accountability; recovery and correct classification of all billable hours; and less time required to create timesheets.

Moving Toward Integration

Given the size limitations of smartphones, some mobile apps contain only a subset of the features found in their desktop counterparts. But that subset is chosen based on the needs of mobile users.

Fewer features mean that your learning time for the mobile apps that integrate with QuickBooks will be minimal. But the steps to sync with QuickBooks must be followed to the letter, and you may not be familiar with such a process. We want you to experience the benefits that these smartphone solutions can offer without compromising the integrity of your QuickBooks company file. Let us introduce you to these forward-looking, beneficial tools.

You probably don’t get as many paper forms in the U.S. Mail as you used to. But when you do, do you draw conclusions about the business that sent them based on what their forms look like?

Whether or not you think you do, most people make judgements on businesses based on collateral materials. You might notice that there’s no company logo, or that there are unnecessary blank fields. Maybe the print is very light or blurry, and there’s no message at the bottom thanking you for your business and your payment.

How you present yourself on paper does matter. There’s a lot of competition out there, and you need to use all of the tools available to you to stand out. QuickBooks provides one way to do so with its simple forms customization features.

Getting Started

To see what forms are available for customization, open the Lists menu and select Templates to open this window:

Figure 1: QuickBooks’ Templates window shows you what forms can be customized and provides tools for working with them.

Before you try your hand at customizing a form, make a copy to work with first. Highlight Intuit Product Invoice. Click the down arrow next to Templates in the lower left, and select Duplicate. A small window will open, displaying your options. Select Invoice and click OK.

QuickBooks will then take you back to the Templates window, and you’ll see a new entry labeled Copy of: Intuit Product Invoice. Right-click on it and select Edit Template from the menu that opens. This will open the Basic Customization window.

There are two parts to this screen. The editing options for the template you selected will appear on the left, and a preview of your invoice will display on the right. As you make modifications to the template, the preview will change to reflect them.

The best, most noticeable thing you can do to customize your invoice is to add a logo. Click the box in front of Use logo, and locate the file in the computer directory that opens. Double-click it. You logo will appear to the left of your company name and address in the upper left corner of the preview.

Figure 2: The Basic Customization window displays options for modifying your copy of the Intuit Product Invoice template.

You can make numerous changes to your template in this window, like:

• Selecting a new color scheme,
• Changing fonts,
• Deciding how much of your contact information should appear, and
• Indicating whether the Print Status Stamp (PAID, PENDING, etc.) should appear where appropriate on your invoices.

Note: You can choose to use the same modified design on multiple types of forms. This is a little complicated; let us help you.

More Customizing Options

The changes you just made were fairly superficial. However, QuickBooks offers tools that let you go much further, modifying the actual content of the invoice itself, its columns, and its fields. To get started on this, click the Additional Customization button at the bottom of the screen. The window that opens displays a preview of your invoice on the right side, just like in the previous window.

Your customization options appear on the left side, divided into five different sections. You’ll work primarily with three of them for your invoice:

Header. This includes all of the information that appears on about the top third of the form, like Bill To, Terms, Due Date, and Project/Job.

Columns. What are you billing the customer for? Item, Description, Quantity, Rate, etc.

Footer. What information will you want to enter after you’ve completed the invoice’s product or service content? You’ll likely want fields like Total, Balance Due, and Payments/Credits, perhaps a Message.

Figure 3: QuickBooks gives you tremendous control over the content in your forms.

As you can see in the above image, QuickBooks lets you choose whether specific fields and columns will appear on your invoices onscreen and/or in print. You can also change field labels if you’d like. And if you have overlapping fields or want to further modify the appearance of the invoice, you can use the Layout Designer. It’s a simple tool, but it requires some design skills.

Of course, you may not be printing many invoices at all if you’re set up to email them and accept payments online. But your customers, of course, will still see how carefully you’ve crafted your forms, which will feed into their overall perception of you. Let this impression be a good one.

e look forward to achieving even more in the next 12.

But sometimes we have a nagging feeling that we forgot something. And it often has to do with our finances, both personal and professional.

You can take steps now to make the new year less worrisome. Doing some extra work in QuickBooks now will ensure that you start the new year ready to move ahead, rather than scrambling to see what you missed on come January.

Thinking Ahead

Where to start? Depending on how conscientiously you entered transactions and ran reports, you might need to set some extra time aside in the midst of your other year-end and holiday-related commitments.

For example, did you instruct QuickBooks to “close your books” at the end of the year? QuickBooks will automatically make year-end adjustments if you entered December 31 as a closing date in Preferences. However, it is not required, and there are both advantages and disadvantages to doing so. We can help you decide if this is the best decision for your company.

Figure 1: If you set a closing date of December 31 in QuickBooks’ Preferences, you need to prepare your company file for this deadline in advance.

Prior to this, though, there’s another important task you should complete before the end of the year. It is common sense, but not everyone thinks of it during the December rush: Make sure you have entered all transactions and payments that should be included in your QuickBooks file for 2015

If anyone else on your staff works in QuickBooks, make sure they know that you are trying to wrap up the year. If they are holding anything back because of questions and comments, now is the time to confer with you.

Taxes and Accounts

You may already be working with us on tax planning, but if you are not, then it is never too early to project your incoming and outgoing funds for the new year.

Figure 2: Use QuickBooks to make decisions about income and/or expenses to reduce your tax obligation next year.

Talk to us about your tax situation if you think this may be necessary. We may not be able to prepare your taxes just yet, but we can create financial reports and projections that help you prepare for filing.

Odds and Ends

How do you back up your QuickBooks company file? Is it on a local drive or in the cloud? How often do you do this? Archiving your data is critical. Think about what would happen if you lost your customer records or a month’s worth of transactions or multiple payments. This is an area where we can provide guidance. Is there a better, safer way to ensure data security? Are there special backup activities you should do at year’s end?

Some companies wait until the end of January to do a physical inventory count. Rather than being surprised, you may want to consider doing this now if it is feasible.

And when you think you have entered everything but payments or transactions that may come in at the end of the year, all accounts should be reconciled

.
Figure 3: By late December or early January, you should do a final reconciliation of all accounts for the previous year.

QuickBooks makes it easy to do this regularly, but if you need assistance, we can help you ring in the New Year on a more confident note.

If you’re using QuickBooks, you probably know that you’re complying with the rules of double-entry accounting. The software is designed such that you can be compliant with these requirements without even being aware of it. You’re dealing with invoices and purchase orders, bank account reconciliation and bill-paying and payroll, not debits and credits and journal entries. QuickBooks does the double-entry part in the background.

While every business that uses QuickBooks is following those same rules, each has its own unique structure and its own need to modify some elements of the program to do certain tasks. For example:

• Store more specific information about customers, vendors, and employees in their records,
• Differentiate between variations of similar inventory items, and
• Create more targeted reports.

This is where custom fields come in.

Defining Custom Fields

Figure 1: QuickBooks comes with pre-designed form and record templates.

One of the ways that QuickBooks simplifies your life as your company’s accounting manager is by providing pre-designed record and form templates. Need to create an invoice? There’s a form that already contains the most commonly-used data fields; you just fill in the blanks or select from drop-down lists. Want to store information about your customers and about the items you sell? Ditto.

However, if you need more fields than QuickBooks offers on a record or form, you can easily add your own. The software lets you add 15 fields total to customers and jobs, vendors, and employees, and you’re limited to seven for any one record type (if you want to use the same field in two of these, it will only count as one). And you’re allowed to define up to five fields for your item records.

This type of modification is easy to do, but it’s critical that you think carefully about what fields you should add. You don’t want to learn three or six months down the road that one isn’t really necessary and two more are needed, for example. This is especially important when you’re creating records for inventory items.

You may want to schedule some time with us to go over this (and to explore QuickBooks’ item-tracking features if you’re new to managing inventory). You can change custom field names, but you need to understand how this will affect your data if you do this.

Figure 2: It’s easy to add custom fields to records, but be sure you give a lot of thought to what will be needed.

Let’s say you want to add some custom fields to your customer records. Open the Customer Center by clicking the tab in the left vertical pane or opening the Customers menu and clicking on Customer Center. Double-click on a customer or click on the small pencil icon in the upper right. The Edit Customer window opens.

Click on the Additional Info tab on the left and then on the Define Fields button in the lower right. The Set up Custom Fields for Names window opens, as pictured above.

Click in the first column, under Label. Enter the name of the field as you would like it to appear in records and reports. Then click in the box or boxes below Cust, Vend, or Empl. If you want to use the same field in more than one record type, enter a check mark in both. Continue to enter field names until you’re done, then click OK.

Now when you create a customer record, you can fill in the blanks. And your new fields will appear as filters in some reports.

Figure 3: Custom fields can sometimes be used in reports.

You’ll follow a similar set of steps when you create custom fields for items in QuickBooks. Open the Lists menu and select Item List. Double-click on any item to open the Edit Item window. Click the Custom Fields bar on the right, then Custom Fields and Define Fields. If your company sells a lot of products with multiple variations, call the office before you attempt this.

Personalizing your copy of QuickBooks by adding custom fields has a lot of benefits. But this major structural change requires a lot of thought and planning up front to make sure that this feature is a plus for your business.

If you’re using QuickBooks, you probably know that you’re complying with the rules of double-entry accounting. The software is designed such that you can be compliant with these requirements without even being aware of it. You’re dealing with invoices and purchase orders, bank account reconciliation and bill-paying and payroll, not debits and credits and journal entries. QuickBooks does the double-entry part in the background.

While every business that uses QuickBooks is following those same rules, each has its own unique structure and its own need to modify some elements of the program to do certain tasks. For example:

• Store more specific information about customers, vendors, and employees in their records,
• Differentiate between variations of similar inventory items, and
• Create more targeted reports.

This is where custom fields come in.

Defining Custom Fields

Figure 1: QuickBooks comes with pre-designed form and record templates.

One of the ways that QuickBooks simplifies your life as your company’s accounting manager is by providing pre-designed record and form templates. Need to create an invoice? There’s a form that already contains the most commonly-used data fields; you just fill in the blanks or select from drop-down lists. Want to store information about your customers and about the items you sell? Ditto.

However, if you need more fields than QuickBooks offers on a record or form, you can easily add your own. The software lets you add 15 fields total to customers and jobs, vendors, and employees, and you’re limited to seven for any one record type (if you want to use the same field in two of these, it will only count as one). And you’re allowed to define up to five fields for your item records.

This type of modification is easy to do, but it’s critical that you think carefully about what fields you should add. You don’t want to learn three or six months down the road that one isn’t really necessary and two more are needed, for example. This is especially important when you’re creating records for inventory items.

You may want to schedule some time with us to go over this (and to explore QuickBooks’ item-tracking features if you’re new to managing inventory). You can change custom field names, but you need to understand how this will affect your data if you do this.

Figure 2: It’s easy to add custom fields to records, but be sure you give a lot of thought to what will be needed.

Let’s say you want to add some custom fields to your customer records. Open the Customer Center by clicking the tab in the left vertical pane or opening the Customers menu and clicking on Customer Center. Double-click on a customer or click on the small pencil icon in the upper right. The Edit Customer window opens.

Click on the Additional Info tab on the left and then on the Define Fields button in the lower right. The Set up Custom Fields for Names window opens, as pictured above.

Click in the first column, under Label. Enter the name of the field as you would like it to appear in records and reports. Then click in the box or boxes below Cust, Vend, or Empl. If you want to use the same field in more than one record type, enter a check mark in both. Continue to enter field names until you’re done, then click OK.

Now when you create a customer record, you can fill in the blanks. And your new fields will appear as filters in some reports.

Figure 3: Custom fields can sometimes be used in reports.

You’ll follow a similar set of steps when you create custom fields for items in QuickBooks. Open the Lists menu and select Item List. Double-click on any item to open the Edit Item window. Click the Custom Fields bar on the right, then Custom Fields and Define Fields. If your company sells a lot of products with multiple variations, call the office before you attempt this.

Personalizing your copy of QuickBooks by adding custom fields has a lot of benefits. But this major structural change requires a lot of thought and planning up front to make sure that this feature is a plus for your business.

If you ever did your bookkeeping manually, you probably didn’t allow every employee to see every sales form and account register and payroll stub. Most likely, you established a system that allowed staff to work only with information that related to their jobs. Even so, there may have been times when, for example, someone pulled the wrong file folder or was sent a report that he or she shouldn’t have seen.

QuickBooks helps prevent this by setting virtual boundaries. You can specify which features of the software can be accessed by employees who work with your accounting data. Each employee receives a unique username and password that unlocks only the areas he or she should be visiting.

Figure 1: To help minimize errors, maintain data integrity, and preserve confidentiality, QuickBooks lets you restrict users to designated areas in the software.

Here’s how you as the Administrator can define these roles. Open the Company menu and select Set Up Users and Passwords | Set Up Users. The User List window opens. You should see yourself signed up as the Admin. Click Add User and enter a User Name and Password for the employee you’re adding. Confirm the Password and check the box in front of Add this user to my QuickBooks license. Click Next.

Note: You can have as many as five people working in your QuickBooks company file at the same time, depending on how many user licenses you’ve purchased. Not sure? Press F2 and look in the upper left corner. If you need more than five user licenses, please call the office to find out about upgrading to QuickBooks Enterprise Solutions.

In the next window that opens (see above screen), you’ll be given three options. Probably you’ll most often select the second option, which lets you specify the screens this user can see and what he or she can do there. The first–All areas of QuickBooks–would seldom be granted. And the third allows us to come in and do whatever tasks have been outlined in our work relationship (troubleshooting, monitoring, creating and analyzing reports, etc.).

Click the button in front of Selected areas of QuickBooks and then Next. You’ll see the first in a series of screens that deal with the software’s functional areas: Sales and Accounts Receivable, Purchases and Accounts Payable, Checking and Credit Cards, Inventory, Time Tracking, Payroll and Employees, Sensitive Accounting Activities (funds transfers, online banking, etc.), Sensitive Financial Reporting, and Changing or Deleting Transactions.

Figure 2: When you give employees Selective Access in a particular area, you can further define their roles there.

The Sales and Accounts Receivable screen is a good example. You can see the options offered in the above image. By clicking on the buttons pictured, you’re giving this employee permission to both create and print transactions. Below these options, you’ll be able to keep him or her from seeing customers’ credit card numbers in their entirety by clicking in the small box. When you’re finished, click Next.

Keep clicking Next and proceed through the rest of the screens. Your choices will be similar on each. But be sure to read all of the descriptive text very carefully. Keep in mind the importance of confidentiality issues and security as you go along.

The ninth screen, Changing or Deleting Transactions, deserves special attention. First, should this employee be able to change or delete transactions in his or her assigned area(s)? Even though you trusted these employees to work with finances when you hired them, consider this question carefully. Depending on the volume of transactions processed every day, you may want to reserve this ability for yourself.

We may or may not have established and password-protected a Closing Date for your company file. This is the date when the books for a specific time frame have been “closed,” meaning that transactions should not be entered, added, or deleted prior to it. We can talk with you about the pros and cons of such an action.

Figure 3: A summary of user access rights

Here and on every other screen in this multi-step wizard, you can always click the Back button if you want to return to a previous window. When you’re finished, you’ll see a screen like the one in the above image that summarizes the choices you have just made.

If you’re feeling any uncertainty or confusion about the whole issue of access rights, please call to discuss your options. These are important decisions. You’ll want to stress to your employees that restricting their permissions does not signal a lack of your trust in them. Rather, QuickBooks provides these tools to protect everyone who uses the software as well as any external individuals and companies that might be affected.

QuickBooks was designed to be used by millions of businesses. In fact, it’s possible to install it, answer a few questions about your company and start working right away.

However, we strongly suggest you take the time to specify your Preferences. QuickBooks devotes a whole screen to this customization process. You can find it by opening the Edit menu and selecting Preferences.

This is the screen you’ll see when you go to Edit | Preferences in QuickBooks. You can turn features off and on, and customize the software in numerous other ways.

Let’s look at some examples of what you can do on this page. In the image above, Accounting is highlighted. You can see that QuickBooks makes it easy for you to specify your preferences. You simply click in boxes to check or uncheck them. Sometimes, you’ll click on the desired button in front of a list item. Other times, you’ll be asked to enter numbers and text.

Tip: When you click on a tab in the left navigation pane of the Preferences window, you’ll notice that there are two tabs in the larger pane on the right. If My Preferences is highlighted and there are no options on that screen, click on Company Preferences.

Some of the screens here, like Accounting, contain complex concepts. Do you know, for example, why you would or wouldn’t want to Use account numbers? What Retained Earnings are?

Warning: While the mechanics of this process are simple, there may be times when you don’t understand what’s being asked because you’re either not familiar with the terms or you don’t know which option you should choose. Rather than guessing, please connect with us to set up a time to go over all of the content in the Preferences window.

Some preferences are easier to define. Let’s look at one of these.

The Time & Expenses window in QuickBooks’ Preferences

The image above is a partial snapshot of the screen that opens when you select Time & Expenses from the left vertical tab in the Preferences window.

Tip: If you start making changes and decide you’d like to return to the options selected before you started, click the Default tab in the upper right.

Your options here are very simple:

• Do you want to use the time-tracking features in QuickBooks?
• On what day does your work week start?
• Does all of the employee time worked and recorded get billed back to the appropriate customer? (You can change this manually on each time entry by checking or unchecking the box in front of Billable.)
• When you create an invoice for a customer who has outstanding time charges, do you want to be able to select those from a list?

If you check the box in front of Create invoices from a list of time and expenses, this box will appear when you open the Create Invoices window and select a customer who needs to be billed for time:

If you are creating an invoice for a customer who has received services but who has not been billed for them yet, you can opt to have those charges added to the invoice.

You’ll notice that there’s a box in the lower left corner labeled Save this as a preference. While QuickBooks allows you to specify preferences in countless areas in the Preferences window, you will often have the opportunity to make an exception for a particular action as you’re working on transactions. Also, as shown here, you can sometimes turn on specific preferences once you’ve already started a task.

You’re not required to go through all of the entries in the Preferences window before you start working. You can always go there to see if there’s a setting you can change if an element of QuickBooks isn’t performing the way you expected.

It’s a good idea to learn about all of your options in the QuickBooks software before you get started–and we can help. If you let us go through this process with you, you’ll not only learn about the customization allowed, but you’ll also get a good introduction to all of the things that QuickBooks can do, and learn more about your business and its needs.

Need help? Don’t hesitate to call!

Reports are your reward for all that hard work you put in entering records and transactions in QuickBooks. Sure, you can always find individual invoices, sales receipts, and customers by using the software’s search tools, but in order to make smart business decisions, you need to be able to see related subsets of the information you so carefully entered in neat rows and columns.

You’ve probably created at least some basic reports in QuickBooks. You may have, for example, wanted to see who’s late paying you, or whether you have unpaid bills. You might need to know your stock levels, or which purchase orders are still unfilled. You certainly want to keep a close eye on whether you’re making or losing money.

Figure 1: The QuickBooks Report Center displays examples of reports you can create using your company’s own data.

QuickBooks makes it easy to get those answers in only a few seconds. But to get really meaningful, targeted views of your accounting information, you’ll want to shape your reports so that they reveal precisely what you need to know. You can do some of this on your own, but you might want to enlist our help to drill down even further–and to create and analyze the more complex output that some reports can provide.

Configure Preliminary Settings

As often happens when starting a tutorial on a specific QuickBooks feature, the first step is to send you to the Preferences window. Open the Edit menu and select Preferences, then Reports & Graphs. With the My Preferences section open, you can instruct QuickBooks on some of the ways reports should be handled. You can choose to:

• Have the Modify Report window open every time you create a report (to remind you to make any necessary changes first).
• Set your Refresh options. If you always want to have the most current data displayed when you generate a report, you can tell QuickBooks to Prompt me to refresh or Refresh automatically by clicking on the button in front of the appropriate response. Choose Don’t refresh–the fastest method–if you don’t want to be interrupted when you’re working with a report. You can refresh when you’re done.
• Draw graphs in 2D to make them run faster, and Use [black and white] patterns instead of colors to better differentiate between segments.

Each person who has access to QuickBooks can set these Preferences any way he or she wishes.

Setting Up Company Preferences

Figure 2: You must be the QuickBooks Administrator to set Company Preferences.

You can decide on your own whether Aging Report should start the aging process from the due date or the transaction date. Decide how you want Items and Accounts to appear in reports. And if you click the Format button located directly below Default formatting for reports, you can alter their appearance, for example, by changing fonts and indicating what information should appear in the header and footer.

For other preferences, you may need help. For example, do you understand the difference between running Summary Reports as Accrual or Cash? And have you worked with a Statement of Cash Flows before so you can assign accounts to various sections? This is a report the office should be generating and analyzing periodically for you, so don’t worry about dealing with it on your own.

Note: QuickBooks was designed for small business people, not accountants. But if you really want to get the most out of it to make the best business decisions possible, call the office for assistance with any concepts you don’t understand.

Navigating the Report Center

Figure 3: The QuickBooks Reports menu.

Unless you’re working with a very old version of QuickBooks, you have two options for accessing the software’s reporting functions. You can simply click on Reports in the left vertical pane to open the Report Center. Or you can get there by opening the Reports menu (which includes links to other areas, like the Transaction Journal, in addition to lists of QuickBooks’ reports divided by category).

Next month’s QuickBooks will cover several reports and their customization options. In the meantime, as always, don’t hesitate to call if you need help with QuickBooks reports and setup.

QuickBooks is a faster, safer, and more accurate method of doing your bookkeeping than using a manual system is. Still, you may occasionally tire of your daily tasks and wonder what all of these forms and records mean in terms of your overall financial health–and how to create the reports that go along with them.

The actual mechanics of creating reports in QuickBooks are fairly straightforward. You can go to the Report Center, make a selection, maybe change the date range, and voila! Your company’s related data appears in neat rows and columns.

Figure 1: You may be able to get some of the information you need by simply changing the date range on a QuickBooks report.

But perhaps you to see different columns than what QuickBooks’ report templates include. Furthermore, you might want to filter your output for more meaningful, targeted analysis. Some of QuickBooks’ reports–particularly those included in the categories Company & Financial and Accountant & Taxes—can be a little advanced for the average small businessperson with little bookkeeping experience. Yes, they’re easy to run, but they are also difficult to understand so you may need the assistance of a professonal.

We strongly encourage you to let us run these more complex reports, such as the Balance Sheet, for you on a regular (monthly or quarterly) basis. Balance sheets provide valuable insight when making critical business decisions.

But we don’t want to discourage you from working with QuickBooks’ reports on your own either. Some of the easier reports are A/R Aging Detail (to keep an eye on past-due payments) and Unpaid Bills Detail (to see where you stand with your own financial obligations).

Make Reports Yours

Sometimes, QuickBooks’ own report output is a bit too broad for your needs. So the program provides sophisticated customization options. You can work with these to narrow down and shape the data that appears in your reports.

First, columns. Building reports from scratch would be too time-consuming and frustrating for you to do all of the time. And it’s unnecessary, since QuickBooks provides templates for its reports, sets of columns and data filters that would serve some businesses well, but which can be modified by each user.

Try this. Open the Profit & Loss Detail report and click on the Customize Report button in the upper left corner. You will see that the Modify Report window opens.

Figure 2: QuickBooks lets you modify the columns that appear in reports.

The Display tab should be highlighted. Change the Report Date Range if necessary by clicking on the down arrow to the right of the Dates field. You can also create your own custom date range by deleting the dates in the From and To fields and entering new ones, or by clicking on the small calendar icons and clicking on the desired dates.

Warning: Do you understand the difference between running reports as either Accrual or Cash? This is important. If you don’t, let’s get together to go over some basic report concepts.

It’s easy to change the default columns that appear in reports. You can either enter a column label in the Search Columns box or scroll down the list of all possible labels. Click in the space in front of the ones you want to include, and click on existing check marks if you want to remove those labels. You can also designate a sort order, either Ascending or Descending.

If you want to work with the Advanced options, or if you come across a Display screen that puzzles you (depending on the report, you may have some complex choices), let us know.

Figure 3: QuickBooks report Filters screen

When you’re done here, click on the Filters tab. This is a powerful element of QuickBooks report customization. You can limit your report output to data that meet certain criteria. In the image above, for example, you can tell QuickBooks which subset of Accounts should be included. Click on the Billing Status filter, and you can limit the results to Any, Not Billable, Unbilled, or Billed. You get the idea.

You can apply multiple filters to a report. Every one you select will appear in the list under Current Filter Choices.

The Header/Footer and Fonts & Numbers tabs are primarily cosmetic options you can explore on your own, but as you can see from this brief overview there are many ways to use QuickBooks reports as is or customized for your particular situation. We recommend that you work with reports regularly, both on your own and with us. The insight they provide can help your company grow and flourish instead of just getting by.

When you started your business, maybe you were able to keep track of your inventory by peering in the closet or your garage. As it grew, that simply took too long. But you became tired of running out of stock because you didn’t have time to constantly check its levels, and you forgot about items that did not sell and were tucked away in a corner.

You need inventory–tracking. QuickBooks can help you create thorough records for each product you sell. It keeps track of how much you have on hand and warns you when your stock is running low. And its reports tell you what is selling and what is not, so you can make better, smarter purchasing decisions.

Activating Inventory-Tracking

Before you get started creating item records and including them in transactions, you need to make sure that QuickBooks is set up to start tracking. Open the Edit menu and click Preferences. Click Items & Inventory in the left vertical pane and then select the Company Preferences tab. This window will open:

QuickBooks needs to know what your intentions are when it comes to inventory-tracking.

First, of course, click in the box to the left of Inventory and purchase orders are active if it is not already checked. Click the next box down if applicable. The rest of this window deals with two concepts you need to understand. Quantity on Hand refers to the number of items that you actually have. Quantity Available subtracts items currently on Sales Orders. QuickBooks will warn you if you do not have enough of a specific item to commit to a customer. You just have to decide which definition of Quantity you want to use.

When you are done here, click OK.

Accuracy Matters

Now you can start entering records for the products you sell. Accuracy is absolutely essential here. You will see why as you explore QuickBooks’ tracking capabilities.

There are a few ways to open an item record window. You can click Items & Services in the upper right corner of the Home Page, or open the Lists menu and select Item List. Both will open a window displaying any item records that have been entered in a register-type view. Right-click anywhere and select New, or click the arrow next to Item in the lower left corner and select New.

Double- and triple-check your work as you enter information in the QuickBooks item record window.

QuickBooks lets you create records for numerous types of items, including Service, Discount, and Inventory Assembly. To see how inventory-tracking works, select Inventory Part from the drop-down menu under TYPE. Next, enter an Item Name/Number in that field.

If you have already named a main category (like Hardware, in the example above) and want to place your product in a subcategory of it, click the Subitem of box and choose from the drop-down list. Manufacturer’s Part Number is optional. You can ignore UNIT OF MEASURE, if this is not an option in your version of QuickBooks.

Purchase Information

If you buy this item from a vendor, fill in this side of the window. Write the description that should appear on purchase transactions when you place an order. Enter the cost you pay for it, and select the COGS (Cost of Goods Sold) account if the default is not correct. Do you buy this product exclusively from one supplier? Select the name in the drop-down menu under Preferred Vendor.

Sales Information

Enter the description you would like customers to see on invoices and the price you’ll charge. If you are at all unsure of what to select for Tax Code or Income Account or need assistance understanding your Chart of Accounts and how these accounts are used in records and transactions, please call the office.

Inventory Information

Here is where the software’s tracking capabilities come in. QuickBooks will probably default to your Inventory Asset account, which is fine. Enter the minimum number of items that should be in stock when you get a reminder to reorder, and the maximum you want to have at any one time. Fill in the On Hand field with the number you currently have. QuickBooks will automatically calculate the Total Value.

In the screen shot above, you see an example of what that last line looks like once you start using that item in transactions. You will see its Average Cost and the number that are currently on purchase orders and sales orders.

Creating records for every product you sell can be tedious, time-consuming work. But the payoff comes in the real-time knowledge you will have of your inventory that will lead to better, smarter purchasing decisions. As always, help is just a phone call away.

When you started your business, maybe you were able to keep track of your inventory by peering in the closet or your garage. As it grew, that simply took too long. But you became tired of running out of stock because you didn’t have time to constantly check its levels, and you forgot about items that did not sell and were tucked away in a corner.

You need inventory-tracking. QuickBooks can help you create thorough records for each product you sell. It keeps track of how much you have on hand and warns you when your stock is running low. And its reports tell you what is selling and what is not, so you can make better, smarter purchasing decisions.

Activating Inventory-Tracking

Before you get started creating item records and including them in transactions, you need to make sure that QuickBooks is set up to start tracking. Open the Edit menu and click Preferences. Click Items & Inventory in the left vertical pane and then select the Company Preferences tab. This window will open:

Figure 1: QuickBooks needs to know what your intentions are when it comes to inventory-tracking.

First, of course, click in the box to the left of Inventory and purchase orders are active if it is not already checked. Click the next box down if applicable. The rest of this window deals with two concepts you need to understand. Quantity on Hand refers to the number of items that you actually have. Quantity Available subtracts items currently on Sales Orders. QuickBooks will warn you if you do not have enough of a specific item to commit to a customer. You just have to decide which definition of Quantity you want to use.

When you are done here, click OK.

Accuracy Matters

Now you can start entering records for the products you sell. Accuracy is absolutely essential here. You will see why as you explore QuickBooks’ tracking capabilities.

There are a few ways to open an item record window. You can click Items & Services in the upper right corner of the Home Page, or open the Lists menu and select Item List. Both will open a window displaying any item records that have been entered in a register-type view. Right-click anywhere and select New, or click the arrow next to Item in the lower left corner and select New.

Figure 2: Double-and triple-check your work as you enter information in the QuickBooks item record window.

QuickBooks lets you create records for numerous types of items, including Service, Discount, and Inventory Assembly. To see how inventory-tracking works, select Inventory Part from the drop-down menu under TYPE. Next, enter an Item Name/Number in that field.

If you have already named a main category (like Hardware, in the example above) and want to place your product in a subcategory of it, click the Subitem of box and choose from the drop-down list. Manufacturer’s Part Number is optional. You can ignore UNIT OF MEASURE, if this is not an option in your version of QuickBooks.

Purchase Information

If you buy this item from a vendor, fill in this side of the window. Write the description that should appear on purchase transactions when you place an order. Enter the cost you pay for it, and select the COGS (Cost of Goods Sold) account if the default is not correct. Do you buy this product exclusively from one supplier? Select the name in the drop-down menu under Preferred Vendor.

Sales Information

Enter the description you would like customers to see on invoices and the price you’ll charge. If you are at all unsure of what to select for Tax Code or Income Account or need assistance understanding your Chart of Accounts and how these accounts are used in records and transactions, please call the office.

Inventory Information

Here is where the software’s tracking capabilities come in. QuickBooks will probably default to your Inventory Asset account, which is fine. Enter the minimum number of items that should be in stock when you get a reminder to reorder, and the maximum you want to have at any one time. Fill in the On Hand field with the number you currently have. QuickBooks will automatically calculate the Total Value.

In the screen shot above, you see an example of what that last line looks like once you start using that item in transactions. You will see its Average Cost and the number that are currently on purchase orders and sales orders.

Creating records for every product you sell can be tedious, time-consuming work. But the payoff comes in the real-time knowledge you will have of your inventory that will lead to better, smarter purchasing decisions. As always, help is just a phone call away.

Your accounting work involves a lot of repetition. You send invoices. Pay bills. Create purchase orders. Generate payroll checks and submit payroll taxes.

Some of the time, you only fill out those transaction forms once. You might be doing a one-time purchase, like paying for some new office furniture. Other times, though, you’re paying or charging the same companies or individuals on a regular basis.

QuickBooks contains a shortcut to those recurring tasks, called Memorized Transactions. You can save the details that remain the same every time, and use that template every time the bill or invoice is due, which can save a lot of time and improve accuracy. Here’s how it works.

Making Copies

To memorize a transaction, you first need to create a model for it. Let’s say you have a monthly bill for $450 that’s paid to Bruce’s Office Machines. You’d click Enter Bills on the home page or open the Vendors menu and select Enter Bills. Fill in the blanks and select from drop-down lists to create the bill. Then click Memorize in the horizontal toolbar at the top of the form. This window will open.

Figure 1: Before you can Memorize a transaction, you first have to create a model (template) for it.

The vendor’s name will already be filled in on the Memorize Transaction screen. Look directly below that. There are three ways that QuickBooks can handle these Memorized Transactions when one of their due dates is approaching:

• Add to my Reminders List. If you click the button in front of this option, the current transaction will appear on your Reminders List every time it’s due. You might request this for transactions that will change some every time they’re processed, like a utility bill that’s always expected on the same day, but which has a different amount every month.
• Do Not Remind Me. Obviously, QuickBooks will not post a reminder if you click this button. This is best used for transactions that don’t recur on a regular basis. Maybe you have a snow-shoveling service that you pay only when there’s a storm. So the date is always different, but everything else is the same.
• Automate Transaction Entry. Be very careful with this one. It’s reserved for transactions that are identical except for the issue date. They don’t need your approval–they’re just created and dispatched.

Click the down arrow in the field to the right of How Often and select the correct interval. Then click the calendar icon to pick a date for the next occurrence. If you have selected Automate Transaction Entry, the grayed-out lines below Next Date not shown here) contain fields for Number Remaining and Days in Advance to Enter.

How Does QuickBooks Know?

Obviously, you’ll want advance warning of transactions that will require processing. QuickBooks lets you specify how many days’ notice you want for each type. Open the Edit menu and select Preferences. Click Reminders in the left vertical pane, then the Company Preferences tab. You can tell QuickBooks whether you want to see a summary in each category or a list, or no Reminder. Then you can enter the number of days’ warning you want.

Figure 2: QuickBooks lets you specify the content and timing of your Reminders.

Working with Memorized Transactions

Once you’ve created some Memorized Transactions, you will undoubtedly need to review them at some point. QuickBooks makes this happen. Open the Lists menu and select Memorized Transaction List to see all the templates for recurring bills, invoices, etc., that you’ve defined. Right-click on one you want to work with and this menu appears:

Figure 3: The Memorized Transaction List with the right-click window open.

You have several options here. If your list is so long that it fills multiple screens, you can Find the transaction you’re looking for. If you’ve created multiple related transactions, you can save them as a New Group. You can also Edit, Delete, and Enter Memorized Transactions.

Anytime you’re letting QuickBooks do something on its own, it’s critical that you thoroughly understand the mechanics of setting the process up. We’d be happy to go over the whole topic of Memorized Transactions with you, or any other aspect of QuickBooks operations.