Business "Housework"

It's the week-end and for me, like most employed adults, that means housework - cooking, cleaning, washing.  It's an automatic function in our personal lives.  But what about our business?

Huh?  What does housework have to do with your business?  Well, have you clean out the Chart of Accounts lately?  Have you reviewed your Accounts Receivable to determine if some of it should just be written off to bad debt?  Is your inventory in order?  Have you done a physical count of your inventory this year to make sure it matches your accounting records?  Do you know what your clients/customers are buying from you?  Is it the same as they were buying a year ago?

There is all kinds of housework to do when you are a business owner, but frequently owners get too busy to do any of it.  Make it a habit to set aside time on a regular basis to perform your "housework" chores - quarterly will probably work for most business owners.  Doing so just may save you money or help you to identify a new revenue source.

Recording Payments by Credit Card

I have clients who send me their credit card statement whereby I make a single entry in QuickBooks, allocating each charge to the correct expense account.  Other clients give me their charge receipts each week for me to enter.  Which method you use is personal choice with the same end result.

If you are going to record the charges as they are incurred, then you will need to create a Credit Card account.  I usually name the account by the type of card (Visa, MC, AmEx, etc.) and the last four digits of the card account.  This is especially helpful if there is more than one credit card account.

To enter the charge, you can either enter the bill and then pay it by the Credit Card account or “write a check” on the Credit Card account.

When the statement arrives, compare it to the balance in the Credit Card account.  If all of the charges have been entered, then you can write a check for the total, thereby relieving the balance in the Credit Card account.

Consistent entries

The key to mining information from any database is consistency in entries.  Any column in a database can be searchable - the value of the search lies in making "free form" entries look the same.  Huh???

In QuickBooks, many fields are defined - name, address, account.  Fields such as Memo are "free form", meaning you can write whatever you want.  If you will need to search that field for information, then you will need to decide on a format for the Memo field.

For example, my real estate clients collect earnest money from their buyer clients.  Rather that create an invoice and then receive payment, I just use the Make Deposit from Banking to enter these checks.  A client may buy multiple properties over a period of time so to identify the property I enter the address in the memo field.  By using the same format every time, I can perform a search function of the memo field and find every transaction related to a particular property.  This is especially helpful in reconciling the liability account to ensure that the liability was relieved after closing.  It is also an easy way to verify that an earnest deposit was made and when.

Fall cleanup

Labor Day is here already, so fall is just around the corner.  Are you ready to do some fall cleaning on your business records?  Too small to spend money on an accounting software program?  Are you tracking your revenue and expenses on a spreadsheet?  This will make your taxes much easier.  Set up a sheet for each month, showing revenues and expenses by category.  What categories?  Well, how about Automobile for gas, oil changes, tires and other repair work; Cost of Goods sold for any items you buy to resell directly to your customers or using to build/repair something for your customers; Supplies - office, janitorial, maintenance; Computer - track you expenses not only for computers but also monthly fees for programs/apps you use; Utilities; Rent (office or storage space); Labor (1099 contractors, not employees); Insurance (health, life, general liability, errors and omissions).  Get in the habit of entering this information every month (or even better, every week) to make tax time a little less trying.

Have a great day and enjoy the upcoming cooler weather (and for those of in the Southeast, hopefully dryer weather).

Continuing Eduaction

I do accounting and budgeting for an Adult Education program where we are pushing students to take classes and take the GED test before the new, harder version comes out in January 2014.  In my personal life, I began studying for the QuickBooks Advanced Certification late fall/early winter.  If I don't complete the test before mid-September, I will have to first pass the current year test and then begin studying for the new version of the advanced test.  Guess you know what I am doing this week-end?

Learning new facts/programs/skills should be an ongoing process until the day you die.  It keeps the mind active, helps you to understand at least some of the things going on in the world (politics not among them), and provides topics of conversation that are less argumentative than the aforementioned politics.

I am also learning a new software program called Buildium.  My property management client has doubled in size over the past year and needed a more pro-active method of tracking information on properties, tenants and owners.  The new program is web based, so the Property Manager can actually have some time off and other staff members will be able to access information to engage vendors to take care of problems tenants have called in.  While it has taken quite a bit of time to front load all of the information in the new system (thanks goodness for technology which let me copy and paste from one program to another), it will make my life easier as well.

Isn't that another reason to learn new things?

Items – Part II

Today I will discuss the other items types that are not used as often but could be very helpful to you in your business.  Remember, one of the main functions of Items is to make it easy for you to invoice your clients/customers for the items or services they buy from you.

Do you offer delivery services at a fee?  Perhaps the fee is dependent on where the customer lives in relation to where your business is located.  For this circumstance, you will create an Other Charge.  You can also use this item type to charge a flat service charge – for example, a plumber charges $60 to go to a customer’s home to assess the situation.

As a building contractor, you may not stock supplies but purchase them as needed.  To show a charge on the customer’s invoice, you will create a Non-Inventory Item for each item you supply.

Want to total the cost of inventory or non-inventory parts separate from service or hourly labor charges?  Then set up a Subtotal in between the two types of charges.  This will also be helpful for your customers to check taxes if you are only required to charge tax on parts but not labor.

Contractors often require a down payment prior to beginning work.  Use the Payment Item to create a separate line item showing the amount the customer will be paying upon acceptance of the contract/estimate.

Customize Reports - Desktop Part II

One of my clients has been so successful in growing one of their business lines that they are looking at new management software to keep everything organized.  There was immediate panic by employees, dreading the thought of having to hand enter all the customer and vendor information in the new system.

I was able to put them at ease by assuring them that all the information could be pulled from their QuickBooks files.  The first step was to add Custom Fields to both the customer and vendor files, providing a unique identity to the needed files.  Adding this field ID to specific customers and vendors did take a little time, but not near as much as hand entering the data.

Next, I opened the Vendor Contact List Report.   By clicking on the Customize Report button, then the Filters tab you can select the Vendor Type and from the drop down box, you can select the custom field name you chose.  A review of the new software program gave me the data fields required for specific tasks.  I went to the Display tab on Customize Reports to eliminate the fields I didn’t need and add the ones I would need.  The next step was to run the report to see what information was missing from my QuickBooks data.  I memorized the report, entered the missing data, then reran the report and created an Excel worksheet.  I choose to export through Excel as that was an option provided by the new program.

Not only was this a much simpler method of transferring data from one software program to another, it highlighted the information which was missing from the QuickBooks records.