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Use QuickBooks-Compatible Apps to Reduce Data Entry

As a small business entrepreneur there is a lot of demand on your time from competing forces, not the least of which are accounting and administrative tasks. For most business owners and their support staff, these tasks are the necessary evil of doing business, often put off until the last possible moment in favor of revenue generating activities.

Technology innovations have made it possible to reduce time and effort expended on bookkeeping keystrokes. For those using QuickBooks (the number one small business accounting software in the U.S.), it’s easy to expand the capabilities of the basic software with apps from the Intuit app store. The website features web-based and mobile apps that link with QuickBooks desktop or QuickBooks Online, allowing businesses to capture specialized data once and import it directly and automatically into QuickBooks accounting software.

Some of the top-rated apps available for legal and professional service providers are:

  • Concur, Expensify , Tallie – These apps for travel and expense reporting allow employees to create reports from mobile apps that scan receipts, track mileage, etc., and automatically link to your QuickBooks accounts, vendor names, classes and location info.
  • BigTime, TSheets, Chrometa – These mobile time tracking apps will sync to QuickBooks for payroll or invoicing. Users can enter time through the web from computer or smart phone. Chrometa may be the most automated – its “passive timekeeping” feature logs every activity that takes place on your computer and the amount of time on each task.
  • Fundbox, BlueVine – Accounts receivable financing apps link directly to your QuickBooks invoice information to process cash advance requests. Total financing and fee structures vary for each of these products.

QuickBooks has been recognized by a broad range of technology developers for its top spot in the field of small business accounting products. These app developers are eager to capture new clients through integration of their product with QuickBooks, and users can benefit through administrative economies when the software integration meets their needs. This may be an opportunity for your accounting staff to benefit, too.

For general information or to discuss your particular situation, please call your Aronson advisor at 301.231.6200. Our Certified QuickBooks ProAdvisors are CPAs who can provide assistance with any QuickBooks issue.

Tips & Tricks: Avoiding Common QuickBooks Mistakes

For more than 20 years, QuickBooks has been helping businesses manage bookkeeping tasks such as sales, bill payment, payroll and even inventory. The strength of the software is that it’s easy to set up and user friendly. CPAs and their clients also have an easy way to collaborate through transfer and review of financial data.

There are some common mistakes and traps that QuickBooks users should be aware of in order to get the most from their bookkeeping efforts and QuickBooks reporting capabilities. Here are a few  that can create a headache for both users and accountants.

  1. Using an Outdated Version – QuickBooks desktop versions are supported by Intuit for three years only. Older software is not supported by Intuit and your CPA is likely using the newest software version. The most important benefit of the newer software versions is access to product enhancements such as easier collaboration between businesses and CPAs.
  2. Not Reconciling Accounts – This is a common error that can mask serious problems with the accuracy of accounting records. Monthly reconciliation should be performed for checking and savings accounts. Reconciliation reports should be reviewed every month with special attention to “uncleared” checks and deposits – too many with very old dates may be a sign of duplicate transactions.
  3. Too Many Accounts – The chart of accounts should be organized into income and expense categories that will reflect general type of income or expense but not be too complicated. If your monthly QuickBooks Profit and Loss report is more than two pages long, consider revising the chart of accounts.
  4. Not Reading Financial Reports – The QuickBooks “Profit and Loss” and “Balance Sheet” financial reports provide valuable information about the fiscal health of the business and accuracy of accounting activity. These reports can help to identify errors in bookkeeping or financial trends that require action by management. We recommend they be reviewed on a monthly basis.
  5. Not Backing Up Data – Your financial data is some of the most important information owned by the business and, potentially, the most difficult to restore in the case of hardware failure or data corruption. We recommend backing up data to a secure, off-site location on a daily basis.

Keeping QuickBooks up-to-date and using its reporting features on a regular basis will help both management and your accountant get the most from the data. While this is critical at year-end for collecting tax compliance data, it is also crucial throughout the year in order for management to understand the results of business activity.

For general information or to discuss your particular situation, please call your Aronson advisor at 301.231.6200. We have CPAs on staff who are Certified QuickBooks ProAdvisors who can provide assistance with any QuickBooks issue.

Managing the Chart of Accounts in QuickBooks

Getting the most from QuickBooks financial reports relies heavily on the structure from which the reports are built.  The chart of accounts provides the framework for the basic financial reports (Profit and Loss, Balance Sheet and Statement of Cash Flows).  In order for the reports to be meaningful to the reader, it must be well organized and easily understood.

Concise and to the point is the key feature to strive for when designing the chart of accounts. QuickBooks software has several ready-to-use charts (industry-based) to choose from during file setup that include most of the basic income and expense accounts that a small business will need for recording financial transactions and generating well-organized financial reports.

Unfortunately, the ease of use that QuickBooks offers can lead to situations where the chart of accounts is revised and augmented to the extreme.  The resulting financial reports can be disorganized, cumbersome and difficult to understand.

Here are some tips to reduce the need for additional accounts and to help maintain the chart of accounts if it has become unwieldy:

  • Design the chart of accounts to capture broad categories of data
    • Income accounts should represent revenue from the lines of business (sales of products or services) that the firm provides.
    • Use the Cost of Goods Sold account type for expenses that are directly related to sales (i.e., cost of inventory or products sold, direct labor and materials).
    • Expense accounts should represent the categories of natural costs that the business incurs (i.e., wages and benefits, rent and facility costs, office expenses, taxes).
    • Resist the urge to create catchall accounts, such as miscellaneous or other. Come tax time, your CPA will need to go thru these accounts to reclassify postings to these accounts.
  • Use account numbers
    • Set up the chart of accounts using a standard numbering system (your accountant can provide help with numbering).
    • Reduces inadvertent “on the fly” account additions due to spelling or naming errors
    • Activate the option in QuickBooks by selecting Edit > Preferences > Accounting > Company Preferences and clicking the checkbox for Use Account Numbers.
  • Combine accounts that are duplicates (merging accounts)
    • Type Ctrl-A to open the Chart of Accounts list; click to select the account you don’t want to use.
    • Right click, then select Edit Account.
    • Change the account name to match the account you want to merge it with.
    • Click Save & Close.
  • Generate detail reports by using the Columns tool in QuickBooks
    • In any financial report, click on the Columns dropdown menu to select level of detail.
    • The report will stratify the total data into columns as you specify (i.e., sales item, customer, class, sales rep, week, month, quarter).
  • Drill down to provide detail of specific account totals
    • To drill down to the details, move the indicator arrow over the account total. When the magnifying glass icon appears, double click and a new window will open with the details for the specified report period.
    • Double-clicking on any transaction within that list will open the register in which that transaction was posted, allowing for easy changes.

Finally, be sure to generate financial reports from your QuickBooks file on a regular basis in order to establish a good understanding of summary data and underlying details.  If the reports are unmanageable or not meeting your management needs, ask your accountant to help you streamline or reorganize your chart of accounts.  Additional training for those in your organization who work with QuickBooks may also be warranted to help ensure that transactions are being posted to the correct accounts.

For general information or to discuss your particular situation, please call your Aronson advisor at 301.231.6200. Aronson has CPAs on staff who are Certified QuickBooks ProAdvisors, who can provide assistance with any QuickBooks issue.

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Image Courtesy of Intuit QuickBooks

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