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.

We are quickly approaching the end of the year. For the next few months, I will be furnishing you with tips on how to make the end of year run as smoothly as possible. A few minutes spent now can save some frustration in the “crunch time.”

This tip is for the preparation of 1099’s. Form 1099 is an informational return required by the IRS. If you have outside consultants or sub-contractors that you pay, you are required to furnish them with a Form 1099.

There is a two-step process in QuickBooks for setting up your Vendor to receive a Form 1099.

1. First, you must set-up a Vendor and designate that Vendor as a 1099 Vendor. You set up a new Vendor in the Vendor Center and make the Form 1099 designation at the bottom of the Additional Info Tab. You must also enter the Vendor’s tax ID number in the appropriate box. The ID number can be a social security number or a Federal Employer ID number. Then click on the Vendor Eligible for 1099 box.
2. The second step is to specify the expense account that will be used to post payments to 1099 vendors. This is accomplished by selecting Preferences from the Edit menu. Then click on the Tax:1099 item and Company Preferences tab. Answer, “Yes” to “Do you file 1099-Misc forms?” Then select an account that corresponds to the appropriate 1099 Category.

If your Vendor information is set up correctly, you are able to prepare 1099 forms at the end of year without a problem. Select Print 1099’s/1096 from the Vendor menu and follow the on-screen step-by-step instructions for reviewing and printing your forms. Form 1096, a summary total of all 1099’s, must also be printed and sent to the IRS along with the 1099’s.

Lately, taxpayers have been required to provide a Form 1099 to contractors whom they pay at least $600 per year. However, for the latest information on IRS filing requirements, contact the IRS at:

• Telephone Assistance: 800-829-4933
• IRS Web Site: http://www.irs.gov
• EFTPS Web Site: https://www.eftps.com/eftps/
• Local IRS Office Locations: http://www.irs.gov/locations/index.html

Do you need more than one Accounts Receivable account? If you have more than one location or profit-center, you might consider setting up other Accounts Receivable accounts.

The procedure is simple. Just add a new account to your Chart of Accounts. Choose Accounts Receivable for the Type of Account. Give the new account a different name than the original Accounts Receivable account. You might want to change the name of the original Accounts Receivable account. An example would be to have an Accounts Receivable-Downtown Location and an Accounts Receivable-Uptown Location. You now have two Accounts Receivable accounts.

When creating a Sales Invoice, QuickBooks will ask you to specify the Accounts Receivable account to use. You must specify the correct account each time you create an invoice. Each Accounts Receivable account will have its own numbering sequence for invoices. The unique numbering system might be another reason for setting up multiple Accounts Receivable accounts.

When running an Open Invoice report for your Accounts Receivable, QuickBooks will default to showing you all Accounts Receivable amounts. If you want to see only the amounts for a specific location, modify and filter the report by choosing the correct Accounts Receivable account.

By using the Class feature of QuickBooks, you are able to separate income and expenses by locations/profit-centers on the Profit and Loss Report. If you set up multiple Accounts Receivable accounts, you will now be able to see how much is owed to you by the each of the locations/profit-centers on the Balance Sheet Report.

However, if you have been using QuickBooks for over a year and are comfortable in what you are doing, QuickBooks Basics is not for you. Even though you may feel that you are not using QuickBooks to its fullest potential, this class might be too fundamental. QuickBooks Intermediate (coming in September) might be more appropriate for you.

What to Expect in the Quickbooks Basics Class

In the QuickBooks Basics class we assume that students have no formal training in accounting or QuickBooks. The first part of the class is reserved for basic accounting principles. While this is not a comprehensive lesson in accounting, it plays a vital part in laying a foundation for working with QuickBooks. Learning this basic accounting terminology will help you when working with your accountant.

The next section of the class deals with getting to know what QuickBooks can do for you and also, what QuickBooks will not do for you. In this section we take a look at the various QuickBooks products. It is very important to know what QuickBooks offers and decide which product is right for you. Much time and money can be saved by simply purchasing the right product.

Each student is provided with his own computer. Following along with the instructor, the student is then taught how to navigate QuickBooks. QuickBooks makes navigation very easy and has several ways to access the same information. Along with ease of use, QuickBooks provides a “Coach,” tutorials and a help menu. Once the student is at his office, he will know where to look for answers.

Once the student is taught how to navigate QuickBooks, he is lead through the process of setting up his own company. Together, the class records “live-like” transactions. This process is used to emulate a real live situation. The first day of class is dedicated to transactions that affect the Balance Sheet. As transactions are recorded, they are followed step-by-step through a process. Each transaction is analyzed and discussed in relation to where it appears on the Balance Sheet and how it affects each account. This step-by-step “hands-on” approach helps give the student confidence that he can return to his office and start working immediately. In fact, students have often commented that they cannot wait to return to their offices to start applying what they have learned in class.

On the second day of class, transactions that affect the Profit & Loss report are recorded. Each transaction is analyzed just like the first day. The relationship between the Profit & Loss report and the Balance Sheet is studied. By the afternoon of the second day, the student has a good working knowledge of how to record transactions in QuickBooks and how they affect the financial statements. In addition, other topics are discussed in depth, including the setting up of payroll, making payroll liability payments and preparing payroll reports.

While the QuickBooks Basics class is not for everyone, it is an invigorating two day class that will take a student with no prior experience and send him home with a good working knowledge of QuickBooks. More importantly, the student will go home filled with confidence to do much more.

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.

First, you must remove the payment from your bank account because your bank will reduce your account by the amount of the check. Do this by recording a check. For the check number, enter NSF Check. Date the check the same date that the bank debits your account. Make the check payable to the Customer. Make the amount the same amount as the bounced check. Enter the account for the transaction as Accounts Receivable. This brings your Customer’s balance back to what he owed before the bounced check.

Usually, the bank will charge you a fee for the bounced check. You need to record this in your books. Do this by recording another check. For the check number, enter NSF Fee. Date the check the same date that the bank debits your account. Make the check payable to your Bank and for the amount of the Bank Fee. Enter the account for the transaction as Bank Service Charge. These two steps will cause your records to match your bank records for reconciliation purposes. Both the NSF Check and the NSF Fee are now deducted from your bank account in QuickBooks.

If you want to charge your Customer for the Bank Fee, set up an “Other Charge” Item called NSF Check Fee. Set up an Income Type Account named Returned Check Fees. Create a Statement Charge for the NSF Fee to the Customer. The Customer’s balance now includes the amount of the NSF Check and the NSF Check Fee.

Prepare and send a Statement to the Customer. The Statement will show all of the transactions. The Customer will see the Original Invoice, the Original Payment, the Bounced Check, the NSF Check Fee and the new balance.

Whether you are needing QuickBooks 101 or a more advanced class, QuickInside has a class that’s right for you. Compare the following descriptions of material covered in order to

The Basic Training Class takes place over two days. You can expect to cover the following material:

Day 1:

Basic

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.

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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© 2004 Intuit Inc. All rights reserved. Intuit, the Intuit logo, and QuickBooks, among others, are registered trademarks and/or service marks of Intuit Inc. Other parties’ trademarks or service marks are the property of their respective owners.

I highly recommend AscendWorks for branding, systems, and selling. You can contact them by clicking here. Please mention that you were introduced to them by QuickInside.

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.

There is a way to take care of this problem. The first step is to change the name of the Retained Earnings Account to “Prior Period Adjustments”. You might also want to change the description of the account to “QuickBooks Default Retained Earnings Account.”

Next, create a new Retained Earnings Account. For the description type “User Created Retained Earnings Account.”

When calculating Retained Earnings, QuickBooks will now post the amount to the Prior Period Adjustments account. Make a General Journal Entry on the first day of the next fiscal year to manually close out the Prior Period Adjustment balance to the “new” Retained Earnings account. (Ignore the warning about making entries to the Retained Earnings account.) This adjustment will be made every year.

A benefit of this work-around is that you will now be able to see the detailed transactions in the new Retained Earnings account.

QuickInside offers seminars that suit your needs:

QuickBooks Basics for Accountants

QuickBooks Intermediate for Accountants

QuickBooks Financial Reporting for Accountants

QuickBooks Basics for Accountants:

This is a two-day class is for new users who want to get away from recording transactions manually or on spreadsheets.

• Start out by learning some bookkeeping basics.
• Determine which version of QuickBooks is right for you.
• Learn how to install QuickBooks correctly.
• Setup your company.
• Navigate in QuickBooks.
• Setup your chart of accounts.
• Write checks.
• Void/Delete checks.
• Enter and pay bills.
• Prepare invoices and receive payments.
• Reconcile your bank accounts.
• Work with lists.
• Create and modify summary reports.
• Prepare detailed transaction reports.