Social media fields in the QuickBooks 2012 Lead Center
I have been experimenting with the new features of QuickBooks 2012 and was pleasantly surprised when I noticed that the new Lead Center contains optional contact information fields for LinkedIn, Facebook, Twitter and Skype. Apparently, Intuit has recognized the value of these social media tools for marketing and added them as a means for QuickBooks users to connect with prospective customers. It is cool to see accounting software become a little more social.Are Bank Import Features Driving Reconciliations to Extinction?
I guess I’m an “old school” guy when it comes to accounting for my personal finances. I enter transactions into QuickBooks in real time. Whenever I write a check or pay a bill online, they immediately go into QuickBooks. I save all of my receipts, put them in a folder, and enter them in batches at least once a week. These are important processes for me because I am always aware of the amount of cash I have available despite the balance that shows when I log into my bank’s online banking website. Once a month, the bank statements come (electronically, of course). I reconcile the transactions I entered manually to the bank statements. Whenever there is either a discrepancy or an transaction on my bank statement that is not in QuickBooks, I investigate it. Usually, it is because a receipt is still at the bottom of a plastic bag from a grocery store. Sometimes, though, I have discovered errors or other things that resulted in me getting a refund during the process of reconciling bank statements. Recently, I have been experimenting with a few SaaS (web-based) accounting software tools (go to fellow CPA blogger Shane Eloe’s blog for some useful reviews). Most of the SaaS accounting systems I have tested do not have the ability to reconcile bank accounts, but they do import and/or sync with bank transactions. So, are we near the time to say goodbye to the bank reconciliation as we know it? I think the bank import and sync features can be big time-savers and eliminate much of the drudgery that goes along with redundant data entry. Data such as the date, payee, and amount are automatically imported, leaving it up to the user to classify the transactions. With some of the SaaS software packages, the program learns from past experience to automatically classify transactions and matches up the data being imported with what the user has already entered to eliminate duplicate entries. Awesome stuff. My concern is that over-reliance on the online banking features and not reconciling bank accounts will lead to problems. A user that imports bank transactions instead of entering them as they happen will not have the same grip on cash flow. That user would probably also be more inclined to just accept what is on the bank statement rather than verifying that the bank activity is correct. For a user that uses one of these SaaS accounting software packages for a business, it raises all sorts of questions for the CPA or accountant who prepares the tax return:- What if the cash balance on the balance sheet is significantly different than the ending balance on the bank statement? Without a bank reconciliation, determining the reason for the difference would be a nightmare.
- How does the tax preparer know that there were outstanding checks or online transactions that occurred and are deductible in a given year, but did not clear the bank (and therefore not imported) until the next year?
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:- Right click anywhere on the icon bar and then click on “customize icon bar.”
- In the view menu you’ll also see “customize icon bar.”
- 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.”
Accounting for Credit Card Transactions in QuickBooks: What May Seem Easier is Harder
I have observed people using two methods of handling credit card accounts in QuickBooks:
- Recording individual credit card charges in a liability account (set up in the chart of accounts as the Credit Card type). Payments decrease the liability balance.
- Recording only the payments for the credit card and allocating the charges among many different expense categories (using splits in the write checks screen as shown below). No liability account exists for the credit card.
Five QuickBooks Preferences That Could Make Your Life Easier
With one click of a mouse button, I’ve been able to help some clients be more efficient in their use of QuickBooks. It’s worth taking the time to look through the preferences in QuickBooks and adjust them to your liking. Below are my top five QuickBooks preferences that you should know about!- Turn off pop-up messages for products and services (under General – My Preferences) – This is new in QuickBooks 2010 R5. If you’re new to QuickBooks and want to know about other products and services you can use with it, you can leave this on. If you’re like me and you know all about the other services QuickBooks offers, check the box to avoid the pop-up windows.
- Automatically recall information (under General – My Preferences) – This can be a big time saver for the information you enter regularly to one vendor for the same purpose like utilities. Type in “power company” and the account Utilities:Electricity comes up automatically. Be careful, though! If you enter bills or write checks to the same vendor for different types of expenses and you’re not paying attention when you enter them in, you could have many misclassified expenses.
- Default date to use for new transactions (under General – My Preferences) – If you’re using QuickBooks in real-time, especially if you’re writing checks from QuickBooks, use today’s date as the default. If you’re entering many transactions after-the-fact, the last entered date as default is generally better.
- Date warnings (under Accounting – Company Preferences) – So, is anybody besides me having trouble writing the year 2010 since we started the new year? Check this box, and QuickBooks will warn you that the transaction you just entered is more than X days in the past. QuickBooks will save you from writing a check dated 1/14/2009 when it should be 1/14/2010. However, if you’re entering several old transactions, such as doing a year’s worth of bookkeeping, you definitely want this turned off.
- Desktop (under Desktop View – My Preferences) – Sometimes, when I open QuickBooks files from clients, dozens of windows open up automatically. This happens because you either have the “save when closing company” preference selected, and all of the reports and input windows you had open the last time you used QuickBooks open up again, or you’re using the “save current desktop” preference, and the same windows open up every time from the last time you selected this preference. If you select the “don’t save the desktop” feature, QuickBooks will open faster because it won’t generate any reports or windows when it starts up. (note to accountants – if you get a QuickBooks file with lots of windows open, go to Window on the top menu, and then click on Close All…yeah, I spent a couple of years clicking on dozens of X’s before I figured out that one)
Why I Cringe When I See “Reconciliation Discrepancies” in QuickBooks
You’re near the end of a long and busy day, reconciling your bank account in QuickBooks. You’ve checked off every deposit and check from the bank statement and thought you were done, but the bottom right corner of the reconciliation screen says “Difference: $20.00.” You need to hurry to make it to a dinner appointment, so you click on the “reconcile now” button anyway, and the following box appears: You’ve cleared dozens of transactions totaling several thousand dollars, so a discrepancy of $20 is too small to be worth correcting, right? So you click on the “enter adjustment” button, QuickBooks automatically creates a $20 transaction to Reconciliation Discrepancies expense, and congratulations, you’re done reconciling! Maybe you just missed recording a $20 bank charge in the books. In this case, the adjustment for the discrepancy is inconsequential. However, just because a discrepancy is small, it doesn’t mean it is not worth investigating. Below are a few examples of what could have caused the discrepancy that might make you glad you looked into it further:- You deposited $20 from a customer in your bank account, but forgot to record it in your books and missed it while reconciling. The customer gets upset when he/she is invoiced again and claims that the bill was paid, but you have no record of receiving the payment.
- A bank error takes $80 out of your account, but the original check was for $60. In your haste of reconciling, you didn’t catch the difference in the amounts. If you discover the error, you’ll probably get $20 added back to your account (plus, you’ll score some points with the boss).
- You missed an unrecorded $1,000 deposit from a customer and an unrecorded $980 fixed asset purchase. You might think that missing two large transactions that somehow happen to net out to a small amount would be very unlikely, but I have seen it happen many times!
One Idea for Learning QuickBooks Better
Sometimes, business owners, accountants, and bookkeepers have asked me the simple question, “How can I learn QuickBooks better?” A satisfactory answer to their simple question can be complicated, however. My response is that it depends on how the person best learns. I suggest that attending training seminars might work best for some. For others, reading the manual could be helpful. The follow-up question I am asked is usually, “well, how did you learn it?” My interaction with QuickBooks early in my accounting career (which consists almost entirely of working in accounting firms) was primarily in printing simple reports from client files to use as workpapers for preparing tax returns. When clients started asking “how do you do this and that” in QuickBooks, I realized that I could use more practical experience myself, so a few years ago I purchased QuickBooks Premier Accountant’s Edition to use at home as my own personal finance software. Some might consider this a crazy idea. There are certainly less expensive software packages out there that are better designed for personal finance rather than running a business (Quicken, for example). However, I accomplished my personal objective of learning QuickBooks better. With my frequent use of QuickBooks at home, entering transactions and reconciling accounts became second nature for me. Although I don’t regularly use some business functions like inventory and sales tax with my personal file, I had the opportunity to experiment with them at home. So, that is how I learned to use QuickBooks, and I’m passing the advice along to any newly hired bookkeeper or accountant who also wants to become more comfortable with QuickBooks.Using Excel Macros to Manipulate QuickBooks Reports
Since I began working in accounting, I have observed some fellow accountants exporting data from accounting software programs to Excel and then performing repetitive tasks of reformatting the spreadsheet (moving data to other cells, entering calculated fields, changing fonts, resizing columns, etc). This has provided me with the opportunity to use and share a valuable skill I learned in one of my classes in college so that these tasks can be completed automatically with the push of a button. One of the powerful features of Excel is Visual Basic for Applications (VBA), a programming language for creating macros. A macro is a set of instructions for Excel to complete automatically that would otherwise be performed manually by a person. There are countless ways that you could use macros in Excel. In fact, they can do about anything you would normally do except actually “think” for you. Completing the tasks I described above of reformatting and manipulating data is just one simple example of what macros are capable of. The video below is a demonstration of a macro I wrote that I call “the trial balance formatter.” It is designed to take an Excel export of a trial balance report from QuickBooks and automatically make the following changes:- Combine the amounts from the debit and credit columns, show the amounts from the credit column as negative, and rename the resulting column “unadjusted.”
- Add four columns to the right of the unadjusted column for adjustments. Columns C and E are for the amount of the adjustments and have a width of 12. Columns D and F are for letters identifying the adjustments and have a width of 2.
- Add a column to the right of the adjustments titled “adjusted.” Formulas adding the amounts in the unadjusted and adjustments columns are automatically entered into the cells in this column.
- Change the bolded account names and column headings to regular font.