Friday, March 30, 2012

QuickBooks 2012: New Paths to Better

As it usually does this time of year, Intuit has introduced new versions of its Pro and Premier products. QuickBooks 2012 promises to help you get better organized, save steps, and acquire more in-depth financial insights.

The new Express Start is designed for businesses that want to blast through setup and start entering customers and invoices. You have two other options, though: Advanced Setup is the old EasyStep interview that solicits more details. You can also open an existing file or convert data from Quicken or other accounting software.

Express Start requires minimal input: company name, industry, company type, tax ID, and contact information. After you save your company file, it lets you start adding or importing customers/vendors/employees, products/services, and bank accounts.

Figure 1: Express Start simplifies company setup.

An Activity-Driven Calendar
QuickBooks' Reminders keep you apprised of each day's tasks, but they don't provide any information about the past or future. QuickBooks 2012 solves this problem with its new Calendar. When you enter an appointment, to-do, or key business task (invoices, bills, purchase orders, etc.), it appears in the calendar. You can display a graphical view of the month that tallies activities for each day and lists them below. Daily and weekly views are in list form. And links open the original documents.

Figure 2: The new Calendar displays daily, weekly, and monthly views of your financial transactions.

Save Excel Formatting
Once you've formatted a QuickBooks report in Excel, it's frustrating to have to reformat it each time you run it for different time periods and/or with your ever-changing content. Excel Integration Refresh simplifies this process. You can now export a report to Excel, make formatting changes and save them, and then reapply them later to the same type of report using different date ranges and your updated QuickBooks data. Acceptable alterations include:
  • Row and column header font formatting
  • New formulas
  • Renamed column and row headers, and report titles
  • Resized columns
  • Inserted columns and rows
  • Inserted formula text
You can do this by opening your report in QuickBooks and clicking Update an existing worksheet, or by launching your report in Excel and clicking the QuickBooks tab on the toolbar, then the Update Report button.


Figure 3: This window opens when you click Update Report in Excel.

A New Report Community
There's always room for more report formats. QuickBooks 2012 offers a library of Contributed Reports, variations created either by Intuit or your fellow users. You can select one of these, like Customer Sales By Quantity By Item Detail and instantly populate it with your own data.

You can sort these templates by industry and rating, and view them as a list, in a grid, or in the Report Center's Carousel view.

Centralized Operations
QuickBooks 2012 also saves you time with its new Centers. The Inventory Center works similarly to those available for customers, vendors, and employees. It's a clearinghouse of item records and transactions that can be viewed and sorted. You can also do inventory housekeeping tasks here, like adding items and launching transactions.

The Lead Center helps you carefully track new leads that you either paste in from Excel or enter manually. You can add to-dos and notes to contact records, and convert them into customers.

Upgrading Can Be Tricky
Intuit has included other, smaller time-saving organizational and reporting tools in QuickBooks 2012, like One-Click Transactions, which lets you create related transactions from existing ones (i.e., invoice to credit memo) with one click.

There's nothing especially difficult about using most of QuickBooks 2012's new features. But upgrading and setup are sometimes quirky, and the Excel Integration Refresh tool has a learning curve. We're happy to help you start your company file on the right foot or get acclimated to this latest version.

Friday, March 23, 2012

Getting our office settled in the east bay

We are expanding into Contra Costa County. Setting our location up. Don't miss out on our grand opening discounts!
Visit our website Bookkeeper Girls

Tuesday, March 20, 2012

Friday, March 16, 2012

Small Business Guide

Keep Your Small Business Advantage
While your know-how is certain to make an important difference in your business' success, you're no doubt well aware that producing a winning combination for a smooth-running operation depends on many other factors as well.
High on the list of considerations for your business should be creating the ability to meet criteria imposed by Uncle Sam and the Internal Revenue Service. To help you avoid headaches that can go with trying to meet tax law requirements, this brochure highlights pitfalls to be aware of and provides some tips on how to overcome them.


"Material Participation" in Your Business:

"Material participation" has become a major issue for business people since Congress passed rules regarding "passive activities" in the late '80s. To show material participation, you as the owner must demonstrate that your activity in your business is continuous and substantial. The IRS has established several "tests" for measuring material participation. An owner who can't pass any one of the tests will most likely be considered just a passive investor in a company. Since deductible losses from passive activities can be limited to the amount of income from such activities, showing material participation in your business becomes doubly important.

If you work full-time in your business, you will have no trouble showing you materially participate. However, if you're an employee at another job and operate your business on a part-time basis, you need to make sure you pass one of the material participation tests. One way you can do this is to show that you spend 500 or more hours during the year running your business.

You can establish material participation in other ways too-e.g., based on your past years' involvement or how your work time compares with others working in the business (including employees).


Your Profit Motive:


The IRS sometimes questions profit motive of a business owner if an activity consistently shows tax losses. This is common with activities that lend themselves to personal enjoyment or hobby such as horse/dog breeding, arts and crafts, etc. You should be prepared to show that you entered your business with the intent to make a profit and that you are taking measures to realize that intent. How do you show profit motive? At least in part by establishing that you have experties in your field and you are using businesslike practices in carrying on operations.

Your Recordkeeping Routine

The Recordkeeping System:
Give priority to establishing good recordkeeping practices for your business. Recordkeeping goes much farther than actual check writing, depositing income, keeping receipts, etc. Also involved are the choices you must make about accounting methods, dealing with inventory (if any) and other assets, complying with regulatory and tax requirements, and computerization. You will probably find taking care of all these details time-consuming and frustrating to say the least; many of the choices you have to make may require help from a financial or accounting professional.


When keeping your business records, though, try to follow a few basic "rules":


Don't Co-Mingle Business and Personal Bank Transactions.


From the very outset have a separate bank account for your business in which you deposit only business gross receipts and from which you write checks for business expenses.


Keep Backup For Your Bank Deposits And Expenses.


Keep bank statements and supporting documents so you can trace your bank deposits, including those that aren't income (e.g., loan documents for loan proceeds deposited, insurance reimbursement, etc.)
If possible, pay all expenses by check. They should be supported with sales slips, invoices and any other available documents of explanation. The income and expenses should be recorded in an orderly manner (either by hand or on computer) so that the backup can be readily available if and when needed.
Sometimes you can log your expenses in a timely manner so you don't have to keep receipts. Before you adopt a logging system though, it's best to check with your tax advisor because the rules for logs are quite strict.


Be Sure To Keep All Reports Filed With Government Agencies.


This includes personal income tax returns, sales tax returns, payroll returns, W-2s and 1099s filed for employees and other hired labor, etc.


Length of Time to Keep Records:

From a federal tax standpoint (some states may be different), you should retain books and records of your business for three years after the due date of your income tax return. There are some sections of the tax law where the statute of limitations is longer than three years, however. Because of these, it's wise to keep records at least six years. When it comes to the records that support cost basis of property, equipment or any item that you are depreciating, keep records for at least three years beyond the life shown on the depreciation schedule in your tax return.


Capital Expenses vs. Other Costs:

Costs of assets that will be used in your business for more than a year and the costs of improvements that add to the value of assets are "capital" expenditures. For tax purposes, these expenses are usually deducted over a number of years. Operating expenses, i.e., advertising, office supplies, etc., are currently deductible, as are the costs of getting started in your business (within limits). Try to keep records for capital expenses separate from those for the general operating expenses.


Expensing Normally Depreciable Costs:

Under some circumstances, the costs of depreciable business assets can be deducted all in one year on your tax return (up to a yearly maximum). While this can be a real advantage, taxwise, it also has a negative side - if you dispose of the assets before the end of their normal depreciable life, you may have to "recapture" (i.e., report additional income for) some of the costs you expensed. Be sure to check with your tax advisor before you dispose of assets you previously expensed.
Automobile Expenses:

Many business people are uncertain about what car expenses they can deduct. Those expenses you have for traveling between business locations are deductible. However, COMMUTING expenses, i.e., the car costs of going between your home and your office each day, aren't deductible. But when you travel to TEMPORARY locations away from your regular business location, you can deduct the costs of those trips regardless of the distance. Be sure to keep good records of your business driving by logging for each trip: where you went, your business purpose for going there, who you met with, and the number of business miles you traveled.
You will only be able to deduct expenses for the business portion of your car expense. However, you can choose one of two ways to do this: (1) You can deduct your expenses using actual cost of gas, oil, insurance, repairs, depreciation, etc., or (2) You can multiply your business miles by a standard mileage rate to figure your expense (this rate varies from year-to-year).


"Ordinary and Necessary Expenses":

The tax law only allows you to deduct expenses that are "ordinary" and "necessary" for your business. Taxpayers and IRS auditors often dispute over the meaning of these two terms. The IRS' definitions are somewhat general:
An "ordinary" expense is one which is common and accepted in your type of business. On the other hand, a "necessary" expense is one that is helpful and appropriate in your business; it does not have to be indispensable.


A Pension Plan:

Maintaining a pension plan offers you an excellent way to defer income from your business and plan for your retirement. One good option is a Keogh plan. Different plans have different rules about contributions, reporting, coverage, etc. Be sure to consult with your plan administrator so that you meet the specific requirements and limitations.


Estimated Tax Payments:

If your business is unincorporated, the income you earn from it is reported on your individual tax return and is subject to income and self-employment tax. Since no withholding is usually taken from self-employed income, you may need to pay estimated taxes to avoid getting hit with a penalty. Your tax advisor should be able to help you compute the amount you need to pay to ensure that no penalty is assessed. The usual due dates for estimates are April 15, June 15, September 15, and January 15.  However, if a due date falls on a Saturday, Sunday or holiday, the due date will be the next business day.

Sunday, March 11, 2012

QuickBooks and Double-Entry Accounting: Where’s the Other Side?


Bookkeeping is a little like physics – there are unbreakable rules. So to paraphrase one of them, “For every debit, there is an equal and opposite credit.” But in QuickBooks, that is not always obvious. The “implied side” of a transaction is not staring you in the face most of the time.
The balancing side of every transaction is there nonetheless, so that your general ledger zeroes out and your financial statements work as they are supposed to.
Where do you find the implied side of the transactions? Sometimes you want to know (or confirm) what the offsetting entry is behind the scenes. That’s where the Transaction Journal comes into play.
You can simply run the Reports / Accountant and Taxes / Journal report. It will show every transaction within the reporting date range (which you can change) and it will break out the debits and credits of every transaction into columns for the accounts that are affected.
In this example (which I split into different lines for viewability), Mr. Teschner made a payment against his customer account. You see the split in the Journal report: Checking account 10100 was debited (increased) by $5,000 and Accounts Receivable account 11000 was credited (decreased) by $5,000.


You can change the dates on this report to focus on a particular date or date range, or you can click Customize Report / Filters to limit the Journal report’s output to particular accounts you wish to see.
A faster way to pinpoint one particular transaction is to pull up the customer, vendor, employee, etc. in its respective Center.
Let’s say you want to see the implied side of an invoice that posted to a particular customer.
Go the Customer Center and click on the customer you want. You’ll see the customer’s transaction in the right-hand pane.
In this example, let’s say you want to see all the debits and credits associated with invoice 1024, the last transaction in the listing.
You just right-click on that transaction, and select “View Transaction Journal”, like this:


A new window will pop up with the debits and credits for that specific transaction. Here’s the rightmost columns of information in the window:


Nice! This is faster and easier than running the big Journal report and filtering down to this level. You see that the implied side of the transaction is listed first: accounts receivable. That’s the implied side of the invoice transaction.

This is a pretty obvious example. But in cases where you’re not sure what the offsetting debit or credit was, you have ways to find out.

Sourced from 









Search