Need Help Projecting Cash Flow?

Making a profit in business is great. However, how many times have you heard, “If I am making a profit, where is my money?” As a business owner or manager, it is important to know how to understand your financial statements. However, just as important as understanding your financial statements, is knowing your cash position at all times. QuickBooks provides an easy way to prepare a six week cash flow projection for important decision making.

To begin, select Cash Flow Projector from the Company: Planning & Budgeting menu.

Step 1: Welcome Page

The five-step process starts with a Welcome page. The Welcome page provides general information and a Sample Cash Flow Projection. You are also directed to the Help menu that explains the Cash Flow Projection and lets you know what you need to get started.

Step 2: Designate the Bank accounts to include in the projection.

You will need to start out with your available cash balances. QuickBooks will retrieve your actual cash balance from the accounts; however, you may adjust these beginning cash balances if you wish.

Step 3: Enter Cash Receipts into the Cash Flow Projector.

You may choose to base your Cash Receipts on prior history or enter your projections manually. If you decide to enter projections manually, you are given the opportunity to enter the dates, descriptions and amounts of the receipts.

Step 4: Enter Expenses.

These are expenses that you do not track as Bills in QuickBooks. In this section, you may enter amounts by category, such as payroll or utilities. Enter the amount that you spend, the next date you will making a payment on this expense, and designate the frequency in which this expense becomes due. For example, if Payroll is $5,000, the next payroll is on 11/15/08, and you pay twice a month, QuickBooks will record the amount for 11/15/08 and then automatically project future payrolls. Include in this section any loan payments that will be due. Once you enter these expense projections, QuickBooks will retain this information for future cash flow projections.

Step 5: Record payments on your Accounts Payable.

QuickBooks will list all bills that are outstanding along with their Due Dates. You are able to adjust the Due Date to meet your needs. In addition, there is an Adjustment row in the Accounts Payable Summary section for you to make any appropriate changes for specific dates.

That’s it! Click on the Finish Projection button and QuickBooks will display a Weekly Cash Flow Projection report. The report begins with the Beginning Cash and adds Projected Receipts. This represents the total available cash before expenses and accounts payable. Once you subtract the expenses and accounts payable, you are able to see your projected ending cash balance. This projected ending cash balance lets you know if you are projecting a favorable or unfavorable cash balance each week. Also, the projected ending cash balance becomes the beginning cash balance for the following week.

How Do I Record an NSF Check From a Customer?

It would be great if every transaction was quick, simple and easy. However, we live in an imperfect world. There is a chance that once in a while, a customer’s payment will bounce. Before the bounced check, your QuickBooks records showed that the Customer’s balance was zero. Now his balance has changed. Next time this happens to you, try this four step process. Read more

Welcome

Welcome to the first issue of QuickInside’s monthly newsletter. Allow me to introduce myself and our company.

For the past 34 years, I have served in the capacity of Comptroller, Finance Officer, Staff Accountant, owner, and QuickBooks Advanced ProAdvisor. Although I am not a CPA, through the years I have seen the evolution of financial record keeping, from the multi-column journals and huge storage binders to user-friendly, web-based software.

Even though accounting software programs like QuickBooks were introduced many years ago, widespread use of this program has increased dramatically in recent years. Small and medium sized businesses are now able to record day-to-day activities with ease and maintain accurate account balances. With these records available to them on-site, they are able to make business decisions quickly and keep up with market demands.

QuickInside was founded for the purpose of getting businesses started on the right track when it comes to setting up their financial records. Our desire is that all businesses strive for excellence in the area of financial record keeping on-site. With a better understanding of accounting principles and terminology, business owners are able to communicate with their accountants. With excellent financial records, the business and the accountant are in a more advantageous position to make sound financial decisions.

Installing and setting up a chart of accounts is a snap with QuickBooks. A business can be writing checks and invoices within minutes of setting up. However, in order to maximize the full potential of the program, I have found that it is very helpful and necessary to have some basic knowledge of accounting principles. Since many users do not have time to “read the book,” an investment into some instruction now on how to best use the program can save much valuable time later.

We offer two-day seminars that include an introduction to accounting principles and a hands-on experience in each area of QuickBooks. The final portion of the class is spent on how businesses and accountants can work together and communicate better.

Please contact me if you or your clients would benefit from my services. I am a Certified QuickBooks Advanced ProAdvisor teaching in a classroom-type setting. Participants are provided with computers for a hands-on learning experience. I am also available to make on-site visits. I thank you and look forward to keeping in touch with you in the future.

10 Mistakes Every New Business Should Avoid

Not creating a written business plan.

Ignoring the internet.

Inconsistent branding of your new business.

Insufficient funding or lack of credit options to get funding.

Picking the wrong business structure (LLC, INC., LLP).

No financial reporting.

Giving credit to customers without proper credit checks.

Poor pricing and cost estimating.

Insufficient financial management skills.

Poor hiring practices.

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QuickBooks deals with Retained Earnings in a very unique way. In QuickBooks, Retained Earnings is calculated on prior year profit and loss transactions. It is recalculated any time you run financial statements. If you look at the Chart of Accounts, you will not see a balance in Retained Earnings. If you double click on Retained Earnings in the Chart of Accounts, you get an Account Quick Report, not an Account Register as you do on any other account. The only transactions displayed in the Quick Report will be the end of year closing entries.

If your client makes an entry in a prior period, it will change the balance in Retained Earnings. Since Retained Earnings does not produce an Account Register, you are not able to see what changed the balance. Read more