Thursday, March 8, 2012

QuickBooks 2012 Keyboard Shortcuts

Using QuickBooks 2012 keyboard shortcuts will make your day-to-day small-business accounting easier and faster. Whether you're working with invoices, customer job lists, or the QuickBooks Clipboard, you can access them quickly with these keyboard shortcuts:

Press This PC Shortcut

QuickBooks Does This

Displays the Chart of Accounts window
Copies your selection to the Clipboard
Deletes check, invoice, transaction, or item from the list
Edits transaction selected in the register
Displays the Find window
Goes to the other side of a transfer transaction
Displays the Create Invoice window
Displays the Customer:Job List window
Displays QuickBooks Service Keys window
Open list for current drop-down menu
Memorizes a transaction
Creates a new <fill in the blank> where <fill in the blank> is whatever is active at the time
Almost always prints the currently active register, list, or form
Creates and displays a QuickReport on the selected transaction
Displays the Register window
Displays the memorized transaction list
Use List Item
Pastes the contents of the Clipboard
Displays the Write Checks window
Moves your selection to the Clipboard
Open Transaction Journal
Undoes your last action — usually
Displays product information, including statistical information about your QuickBooks company
Inserts a line into a list of items or expenses
Deletes the selected line from a list of items or expenses

Right-Click for Common QuickBooks 2012 Tasks

To perform a common QuickBooks 2012 task related to a window, right-click anywhere within the QuickBooks window to display a shortcut menu. In a register, select and right-click a specific transaction; in a list, right-click an item; in a form, display a transaction and right-click a blank area of the form.
In each case, QuickBooks displays a shortcut menu of common commands for the particular transaction, item, or window. For example, it often displays commands for memorizing or voiding the transaction or for creating a QuickReport on the transaction. The commands differ based on the type of transaction you select.

QuickBooks 2012 Calculation and Editing Tricks

QuickBooks 2012 makes it easy to calculate numbers. If the selection cursor is in an amount field, you can use these symbol keys to make quick calculations:

Press This Key

This Happens

Adds the number you just typed to the next number you type
Subtracts the next number you type from the number you just typed
Multiplies the number you just typed by the next number you type
Divides the number you just typed by the next number you type

If the selection cursor is on a date field, you can use these tricks to edit the date:

Press This Key

This Happens

Adds one day to the date shown
Replaces the date shown with today’s date
Subtracts one day from the date shown
Changes the date to the first day in the year
Changes the date to the last day in the year
Changes the date to the first day in the month
Changes the date to the last day in the month

QuickBooks 2012 User Interface Tricks

Using QuickBooks 2012 with confidence helps you maximize your efficiency with bookkeeping and accounting tasks. Quickly navigating the QuickBooks 2012 software is easy with these tips and techniques:
·       To move quickly to a specific list box entry, press the letter. For example, press S to move to the first list entry that begins with the letter S.
·       To select a list box entry shown within a dialog box and simultaneously choose a suggested command button for the active dialog box (probably the OK button), double-click the entry.
·       To move the insertion point to the beginning of a field, press Home.
·       To move the insertion point to the end of a field, press End.
·       QuickBooks can display a list of open windows in its Open Window list. To display the Open Window list, choose View→Open Window List. To move to a listed window, just click it.
·       To tell QuickBooks to use windows the same way every other program does, choose View→Multiple Windows. Or, to tell QuickBooks to just display the active window, choose View→One Window.

This article was printed from QuickBooks 2012 for Dummies website

Wednesday, March 7, 2012

Move or renaming a company (data) file

So you set up your data file and you realize you spelled something wrong on the company name in the file.  How do you fix this?

You do it outside of the QuickBooks program and directly in windows.  Go to your company file folder.

Quick tip:  If you don't know where you store the company files, do a windows search for .qbw files--these are your company files.  Then remember the path to them.

Once you have found it, right click on the file.

And select rename and rename it.

Here I have made the name correction.

Here I try to go to file, open previous, but it is no longer there.

So I have to re-browse to it to open it.

Another place you may have to correct is within the file under company, company information.

And that is really all you have to do to rename a company file.

Courtesy of our colleague Lynda Artesani, Certified QuickBooks ProAdvisor in SW Florida

Monday, February 27, 2012

Handling Security deposit returns if you are the Landlord

When you receive the payment for a security deposit, you enter it as a deposit to the security deposit liability account.  So what happens when the tenant moves out?  Perhaps they owed for utilities or maybe the tenant damaged the apartment.  You have to deduct some of the security deposit, but also return the balance.

This is how you do it.  You enter a check to the tenant.  Under account, use the security deposit account and enter that amount in full.  Then tab down to the next line and under the security deposit account, enter the utilities expense as a negative amount.  This will refund your expense account the from the funds that were in the security deposit account.  Tab down again and enter repairs and maintenance account and reimburse your expenses for repairing the unit for damages over normal wear and tear.

Here is a screenshot to show you how the check would look in QuickBooks:

I like to enter notes in the memo line for future reference.  Of course, I always send a cover letter with the check explaining the charges.  When there are repairs or damages to the unit, I also send pictures of the damages so there is no chance that the tenant can complain that they did not know of or cause these damages.  Pictures speak "one thousand" words.   These are also beneficial if you end up in court defending the charges to the security deposit.

(On a side note:  We always fill out a "condition of apartment" form when the new tenant initially  moves into the apartment.  We note any "damages" that occurred prior to the tenant's moving in.  We will also note when there is new carpet, etc.  This paperwork is extremely beneficial if you charge any damages to the security deposit.)

I hope everyone up north stays safe with Hurricane Irene coming up the coast.  We are very happy down here in Southwest Florida that a Hurricane has passed us by.  Hurricanes are not to be messed with.  Stay inside and stay safe.

Courtesy of our colleague Lynda Artesani, Certified QuickBooks ProAdvisor in SW Florida

Reconciliation shows zero in QuickBooks

I entered my entire new bank account's transactions for the month and when I went to do the bank reconciliation, the beginning balance is zero.  It had a beginning balance when I entered the original journal entry to start my new company in QuickBooks.  What did I do wrong?

Nothing, actually.  You just have to reconcile the beginning balance entry to get started:

Enter the beginning balance of the new account as your ending balance

Clear the opening balance transaction (usually on the deposit side).

Once the initial deposit entry is reconciled, you are now all set to do the month's bank reconciliation.

That is really all there is to clearing that initial transaction for your new or newly entered checking account.

Courtesy of our colleague Lynda Artesani, Certified QuickBooks ProAdvisor in SW Florida

Wednesday, August 17, 2011

Becoming a Professional QuickBooks Consultant

1. The first step is become a QuickBooks ProAdvisor.

The ProAdvisor program is adding new benefits. Join before 9/12 and get $100 off on the new enhanced program. To learn more visit

2. Get trained and certified.

3. Go out and get experience.  (Work for an established Accounting or QuickBooks Practice)

Thursday, August 4, 2011

Use Accounting Ratios to Stave Off Financial Problems

Does the mere mention of accounting ratios put your teeth on edge, and bring back bad memories of Accounting 101?  It shouldn’t, as ratios can help you quickly determine how your business compares against others. Banks often use ratios to analyze your financial statements as part of the loan approval process, so it’s helpful to know in advance how you’ll be measured. Even better, ratios allow you to compare your business against your peers since many trade groups publish lists of average ratios within an industry. Although ratios may have made you drowsy during accounting class, they can be a fascinating way to measure your company’s financial performance.

Gross Profit Margin
Simply put, gross profit margin—sometimes referred to as gross margin—is your revenues less your cost of sales. For some industries, this is a very meaningful metric, while it won’t mean as much to others. For instance, manufacturers, restaurants, and retailers often treat gross profit as a key performance indicator.  In such environments, one typically purchases inventory at one price, and ideally sells it to someone else at a higher price. The spread between these two numbers is the gross profit margin. Let’s say that you buy $40 of pine straw (we’re trying to avoid the accounting class term widget) and sell it for $60. In this case, $20 of gross margin divided by $60 of sales yields a gross margin percentage of 33%. Thus, one-third of your sales are available to put toward overhead items, such as office supplies, payroll, rent, taxes, and so on. Ideally, your gross margin is high enough to cover your overhead and leave you with a profit. With that example in mind, let’s see how you can calculate your own gross profit margin.

Caveat: Gross profit margin isn’t meaningful to everyone. For instance, if you’re a self-employed service provider, you may not have any cost of sales. Your salary is arguably all or most of your profit. You can certainly count your salary as cost of sales and compute a gross profit margin, but you might not find much value in the result.

To begin, choose Reports, Company and Financial, and then Profit & Loss Standard. As shown in Figure 1, look for the Gross Profit amount, and then divide this by Total Income.

Figure 1: The Profit and Loss Standard report provides the figures you need to calculate gross profit.

In this case, $30,953.20/$51,241.16 shows a gross profit margin of 60.4%. Is that good? Is it bad? Very often the answer is “it depends”, which is why you should try to compare yourself to similar companies in your industry. However, let’s consider the restaurant industry. Many owners strive to keep their gross margin at around 63%, which means a cost of goods sold percentage of 37%.  The gross profit ratio enables you to track this key measurement, but you must ensure that your transactions are being recorded in the proper accounts. The percentages can skew if, let’s say a telephone bill, is miscoded to Food Costs, instead of Telephone. Similarly, your cost of goods sold might look great only because someone miscoded food costs into an overhead account, such as Supplies.

Profit Margin

Profit margin is another commonly used ratio that you can derive from the Profit & Loss Standard report by dividing Net Income by Total Income. In essence, this is the percentage of sales that the owner of a business gets to keep—before Uncle Sam gets his share. Profit margins vary widely by industry. For example, a grocery store chain may have profits of $2 billion, but a profit margin of just 2.6%. An oil company may have staggering profits in dollars, but their profit margin is often just 10%. Conversely, some software companies have a profit margin of 28% or more. As with gross profit, the best way to determine whether a profit margin is reasonable is by comparing the result to one’s peers. The construction company shown in Figure 1 has Net Income for the period of $13,123.48, which when divided by Total Income of $51,241.16 returns a profit margin of 25.6%.

Inventory Turnover Ratio

This ratio illustrates how many times a year you’re selling your entire inventory. This can help you gauge whether you may be holding too much inventory, or not enough. This ratio is based on cost of goods sold divided by average inventory. As you’ve seen, cost of goods sold appears on the Profit and Loss Standard report—look for Total COGS—but you’ll have to perform a quick calculation to determine average inventory. To do so, divide the sum of your beginning inventory plus ending inventory by 2. Although you can use several different reports in QuickBooks to determine the beginning and ending balance of your inventory, try this first: choose Reports, Company and Financial, and then Balance Sheet Prev Year Comparison. Change the report date to This Fiscal Year, and then look for the inventory account balance, as shown in Figure 2. The ending balance for last year is also the beginning balance for this year.

If you need beginning and ending balances for a shorter period, such as a quarter, choose Reports, Accountant and Taxes, and then General Ledger. Set the report dates to the period of your choice, and then use the beginning and ending balances for your inventory account.

Figure 2: The Balance Sheet Prev Year Comparison can provide beginning and ending inventory balances.

Average Collection Period
This ratio helps you determine how long it takes your customers to pay their invoices. The formula is a little more complex than some of the other ratios: number of days multiplied by average accounts receivable balance, divided by credit sales. For instance, let’s say that your average accounts receivable balance is $30,000, and you had total sales of $400,000 for the year.  365 multiplied by 30,000 is 10,950,000. This amount divided by our total sales of $400,000 is 27.38, meaning that on average your customers pay their invoice in just under 30 days. Be sure to monitor your average collection period, as your cash flow can tighten quickly if that ratio increases. If you typically invoice your customers, then you can use the Total Income figure from your Profit & Loss Standard report.

Keep in mind: Average collection period won’t be of interest if your customers pay on the spot, such as in a retail store or restaurant.

Although QuickBooks doesn’t directly provide a figure for average accounts receivable, you can quickly customize a report to aid in this calculation:

1. Choose Reports, Company and Financial, and then Balance Sheet Standard.

2. Click the Modify report button, and then set the From and To dates to match the period shown on your Profit & Loss report. As shown in Figure 3, change the Display Columns By to Months, and then click OK.

Figure 3: Change Display Columns By to Months when you want a month-by-month report.

When QuickBooks displays the 12-month report, as shown in Figure 4, click the Export button, and then click OK to send the report to Microsoft Excel.

Figure 4: You can convert the Balance Sheet Standard report into a twelve-month format.

As shown in Figure 5, row 9 contains the Accounts Receivable figures. In cell R9, enter this formula to calculate your average accounts receivable balance:  =AVERAGE(F9:R9).

Figure 5: Use the Accounts Receivable figures to calculate your average accounts receivable balance.
As you can see, the average collection period ratio enables you to determine how long it takes your customers to honor your invoices, which, in turn, has a direct impact on your cash flow.

Other Common Ratios
Current Ratio: Divide current assets by current liabilities to determine a firm’s liquidity.

Quick Ratio: Subtract inventory from current assets, and then divide by current liabilities to apply a more severe liquidity measurement.

Debt Ratio: Divide total debt by total assets to determine how much of the company is financed by debt.

Return On Assets: Banks often add net income plus interest expense together, and then divide this by total assets to determine the firm’s return on assets. This figure typically needs to exceed the interest rate of a loan that you may be contemplating.

Compare Yourself to Others

Now that you understand how to calculate ratios based on your financial results, the next step is to compare yourself to your peers. You may belong to a trade group that makes benchmarks available to its members. If not, a good first step is the BizStats web site, at Your line of business may be included in their free offerings, but even more information is available on a subscription basis. You can find even more resources by searching the Internet search for the term “industry benchmarks”.

Did You Know?
You can send your thoughts about QuickBooks to Intuit directly from within QuickBooks. To do so, choose Help, Send Feedback Online, and then one of these choices:

• Product Suggestion, as shown in Figure 6

• Bug Report

• Help System Suggestion

Any of these links will display an online form in your web browser so that you can submit your thoughts directly to the QuickBooks development team. QuickBooks frequently updates its’ products, so before you send a bug report, choose Help, and then Update QuickBooks. Click the Update Now button to ensure that you have the latest patches and fixes for your version of QuickBooks.

Figure 6: Submit your wish-list items directly to the development team from within QuickBooks.

QuickBooks Helps You Navigate Tricky Waters

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 2008 or 2009), 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:

o 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.

o 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.

o 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.
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.