Archive for June, 2010

The Importance of Accountability in a Personal Budget

Many years ago, I was involved in an organization in which I and other volunteers received a weekly allowance to cover various expenses such as transportation and meals.  In one of our meetings, the president of the organization announced that some of the volunteers had come to him and complained that the allowance wasn’t sufficient to cover the expenses (I was not one of them).  He told us that he would consider increasing the amount of the allowance for those who would provide a detailed accounting of their expenses proving a need for a higher allowance.
At our next meeting about a month later, the president said that nobody had presented a list of expenses, so he assumed our allowances must have been sufficient. I could see the embarrassment in the faces of the others in the room.  With the task of keeping track of their expenses, those people probably paid more attention to what they were spending money on and realized that many of those expenses weren’t really necessary. I’ve been to many seminars and seen TV shows about making a personal budget, and while they may offer some good money saving tips and show how to make a fancy budget spreadsheet, I’ve found many of them lacking in the emphasis of accountability.  An ideal spending and saving plan doesn’t provide much of a benefit without the ability to compare actual expenses to budgeted amounts. Without organized financial records in place, people are left wondering, “where did all the money go?”  They might make a guess on how much they spent during the past year on clothing, gasoline, or food; but from personal experience, I know those estimates are usually way off.  By the way, I don’t think having a year-end spending statement from a credit card company counts as being financially organized. The best way to organize personal finances is to use a good computer program (I use QuickBooks, and here’s why) that puts together all of a person’s financial information, including  bank, investment, loan, and credit card accounts.  I began doing this a few years ago, and since then, I’ve been able to solve the riddle of “where all the money goes.”

Customizing the Icon Bar in QuickBooks to Work for You

Do you use the icon bar at the top of your QuickBooks screen?  Do the icons represent the tasks you perform most often in QuickBooks?  If you’re using the default icons, the answer is probably no.

I recently began changing the icons to my most frequently used functions.  It makes a big difference in efficiency when the shortcuts are just a click away rather than three or four clicks away navigating the menus.

Before

Let’s do a quick analysis of a few icons on the icon bar above (in my case, it was the default, though yours may be different).  Let’s say that I don’t use memorized transactions (MemTx) so that icon does me no good.  The register icon (Reg) is a little inconvenient because after I click it a box appears asking me to select which account I want to use the register for.  I don’t really have any use for the add services or payroll buttons (and if you’re worried that you won’t find those options after removing them, don’t worry – you can find them all in the menus).

Take a look at your icon bar.  If you see icons that you have never used or will rarely use, it’s time to give it an extreme makeover.

After

Now here is an icon bar that I can really use!  Let’s say that my business has two cash accounts that are used frequently, so I put two icons on the icon bar that link directly to the register for each cash account.  As an accountant, I look at balance sheets and profit & loss statements daily, so I have those icons there, as well as the general journal to make adjustments.  I think having a backup icon is good just as a reminder because most people don’t backup their QuickBooks files enough. There are a lot of different ways to customize the icon bar:
  1. Right click anywhere on the icon bar and then click on “customize icon bar.”
  2. In the view menu you’ll also see “customize icon bar.”
  3. Make a window appear that you want to have on the icon bar, then go to the view menu and click on “add [window] to icon bar.”
In the “customize icon bar” screen, you can change the icon’s picture to whatever you like.  There’s even a funny picture of a pig (see below) among the icons that I’m trying to figure out a use for … maybe transfers to a savings account?

Do you have any ideas for using the icon bar?  Please leave a comment below.

Why Would a CPA Want to Use Twitter?

I know several people that make fun of Twitter much like they make fun of a teenager that ends up in the news for sending thousands of text messages per month racking up a huge phone bill.  They certainly can make a good argument.  A recent study concluded that more than 40 percent of tweets are “pointless babble.”  If you look at the public timeline or trending topics on the Twitter webpage, you’ll see spam, self-promotion, and mundane tweets like “I’m having a ham sandwich for lunch.” I agree that Twitter has its problems, but I believe that it does have a business application as a powerful educational and collaborative tool.  As with any technology, any benefit you derive from Twitter depends on your use of it. If you’re looking for meaningful information on Twitter, you have to follow the right people.  If you’re a CPA or work in accounting, you could start with the Journal of Accountancy, the AICPA, and your state CPA society.  You can find most accounting software vendors on Twitter sharing good information.  There are hundreds of other CPAs and CPA firms that offer insight in the latest news, and many of them are among the brightest in the profession (I won’t list names here, but they’re not hard to find).  Hey, even the IRS is on Twitter. I’ve learned that there are many benefits to Twitter besides using it as a news feed.  I have asked questions on Twitter and received helpful responses, sometimes within a few minutes.  I’ve been able to get in contact with many of the leaders in the accounting profession who I wouldn’t have been able to meet otherwise.  By joining the conversation, a handful of people have been able to get to know me (sort of – well, at least they know that I’m a tech-savvy accountant that shares good information, and that’s a good start). About a year ago, when I began using Twitter, I asked myself, “why would a CPA want to use Twitter?”  The answer, at least for the first few weeks, was unclear while I tried to figure the whole Twitter thing out, but now I understand why.