Jennifer's QuickBooks Corner

QB Q&A: Password Lock-Out While Upgrading

2007-11-25T11:38:00.000-08:00

Majutsu writes:

I am upgrading from QB 6.0 to QB2008. It's in a qbb file. 2008 recognizes the name of the company file, but not the password. I know I am putting in the correct password because it still works on 6.0.

The last time I tried to upgrade was with QB2005. I ran into the same problem then and thought it would have been fixed by now. QB 6.0 was only 7 years old at that time. It cannot be that the file format is outdated. Microsoft could never get away with not reading Office 97 formats.

What am I doing wrong? Is my 6.0 file too old? Thanks.

My reply:

Try changing the password in the old file. In fact, try eliminating the password altogether. Then make a new backup, and restore it to 2008. See if that works.

Majutsu writes back:

Wow, thanks. It worked! A few years back, the official Quickbooks support people told me to buy several older versions of QB and upgrade incrementally!

Readers Write: QB & Vista

2007-11-19T08:19:00.000-08:00

Paul writes:

I was googling to learn more about QB and Vista, and discovered your article:

http://ezinearticles.com/?QuickBooks-and-the-Vista-Operating-System---What-QuickBooks-Users-Need-to-Know&id=331771

I thought you might be interested in a datapoint. I have QB2004 Pro on Vista and, granted, I'm a novice QB user, but the only thing I've found so far that doesn't work is the generation of PDFs. Amyuni (the maker of the imbedded PDF generator) refuses to give any help to fix that problem.

There is a screen that comes up at the start of every QB session, saying that QB is incompatible with Vista, and asks something like 'do I really want to run it,' but if you click thru that, it seems to work fine (other than PDF generation of course).

My reply:

Very interesting Paul. Thanks for sharing this with us!

QB Q&A: How to Clear Undeposited Funds

2007-11-18T15:54:00.000-08:00

Barbara writes:

I recently downloaded all of my customer's information into QB from my online merchant account. This recorded all of the customer payments, and put them into an account called Undeposited Funds. My merchant account automatically deducts the fees, so I end up with a net amount.

Since I've been very good about reconciling my bank accounts in QB, I do not know what to do with this money. How do I clear out Undeposited Funds without changing the reconciled deposits?

My reply:

Although my answer will be long and may seem complex, the idea is simple: we will 'swap' the old information in the Make Deposits screen for the new, correct information. I assume that the Sales information (ie, Sales Receipts or Invoices) is already correct, so I won't address that here. If that information is not correct, it needs to be before proceding.

First, you will need to know which customer payments went into each of the reconciled bank deposits. For example, you may have had several customer payments lumped together, like this:

$27.87 less $3.21 fees, equals a net amount of $24.66
$158.24 less $8.98 fees, equals a net amount of $149.26
$69.45 less $5.64 fees, equals a net amount of $63.81
$241.21 less $11.57 fees, equals a net amount of $229.64

Total of customer payments: $496.77
Total bank deposit based on net amounts above: $467.37

It's important to print this level of detail for each bank deposit, and to have it in front of you while working. The merchant account should have this available online. Also, copies of deposit slips can be used if they show the customer name and amount of payment. Or, your bank may a copy of the deposit slip available online. Somehow, this information needs to be determined in order for these instructions to work correctly.

Once you have the above information, open QB and navigate to the Make Deposits window. If the Payments to Deposit window opens, close it. You should now be at the regular Make Deposits window.

Scroll through the deposits until you find the first one that you wish to fix. I recommend working in chronological order, starting with the least recent deposit and moving forward one by one. Once at the first deposit, make a note of the total. Click the Payments button at the top of the window. The Payments to Deposit window should open. Scroll through this list and select all of the customer payments that make up this particular deposit. Click ok.

QB now places these payments into the Make Deposits window, adding them to the deposit information already there. Delete any of the old information by clicking on each line, and pressing Control-Delete. Do this for all old information. What remains should only be the customer payments you just selected.

Tab to the next empty line. In the Received From field, enter the name of the merchant company. In the Account field, select an expense account called Merchant Fees (if you don't have one, create it now). You can enter a memo if you wish. Tab over to the Amount column. Enter, as a negative amount, the difference between the deposit as it is currently shown in QB in the lower right hand corner, and the deposit as it showed before you altered it. This should be the exact amount of the merchant fees that were deducted from the merchant company. Save the transaction.

As you can see, we fooled QB by only changing the deposit details, not the deposit total.

Caveat #1: if the amount of the 'new' deposit is different at all from the 'old' one, QB will allow you to save the transaction, but will quietly remind you that it's already been reconciled. And QB will consider this deposit as unreconciled and it will appear in the reconciliation screen next time you reconcile the bank statement.

Cavaet #2: I've noticed that in certain versions or years of QB I still get this 'you're altering a reconciled deposit' reminder even when the deposit amount is the same. Unfortunately, I can't remember which versions or years of QB do this.

I also noticed that, when I got this reminder, QB considered the deposit unreconciled. It altered the Opening Balance in the next reconciliation, and the deposit appeared in the reconcilation screen next time I reconciled the bank statement. The good news is that, if this happens to you, ignore the difference in the Opening Balance, and simply click the deposit to re-reconcile it. Reconcile the remaining transactions as you would normally and the rec should go fine.

QB Q&A: Paying Vendor Bills w/Personal $

2007-11-14T14:57:00.001-08:00

Gerlinde writes:

We have purchased inventory that we paid for with our personal money. We've always entered this into A/P in QuickBooks (Enter Bills). I now want to reimburse myself for the inventory purchase. I was trying to record the bill payment, but QB would not allow me to change the name of the payee from the vendor to my own name. How can I pay myself and get these bills off the books?

My answer:

Go to the chart of accounts and create a new bank account called "Wash Account." Then go to the Pay Bills screen and select all of these vendor bills you want to be reimbursed for. Select the Wash Account as the Payment Account. Pay them as you would a normal bill.

Go to the Wash Account in the chart of accounts and make a note of the total. Now go to the Write Checks screen, and at the top select the regular checking account that you want use. Make a check payable to yourself from this regular account in the amount in the Wash Account. In the lower half of the screen, in the Expenses tab, select the Wash Account. Save the transaction.

QB has done the following:

1. Recorded these bills as Paid.
2. Recorded the payment to yourself.
3. Zeroed the Wash Account.

Now to back to the chart of accounts and make this Wash Account inactive. You don't want to accidently use it to pay regular bills. If you ever need to use it again, make it active, and be sure it always has a zero balance when you are done using it.

I Laugh at Stolen Content!

2007-11-13T17:41:00.000-08:00

This is funny. It's one of my articles that was stolen from my collection at Ezinearticles.com. It's been butchered so as to avoid a plagerism claim. But it's a good example of what we can expect to happen when we offer free content online. It loads slowly, so be patient:

http://eyeteam.org/2007/11/13/quickbooks-balancing-the-bank-statement/

Here's my original article at Ezinearticles.com:

http://ezinearticles.com/?QuickBooks---Balancing-the-Bank-Statement&id=168912

You can open two windows to compare them side-by-side. It's clear that it's mine - even the format is the same.

I've seen this many times with my articles. I used to get upset, but now I just laugh. The stolen article is funny if you read it, because it's not how we talk or write. If you ever find yourself at a website with a weird sounding article like this one, now you know what probably happened.

I feel sorry for people who need to do this, you know? Whatever drives them to do this can't be a good thing.

QB Never Do #6

2007-09-21T17:27:00.000-07:00

Never use the Write Checks screen to record a Bill Payment.

"Bill Payments" in QB are a very specific function. They occur after bills have been entered. The correct procedure is this:

1. Receive bills from vendors.
2. Record them into QB using the Enter Bills screen.
3. When it is time to pay the bill, record the payment using the Pay Bills screen.

After recording a bill payment using these steps, go to the check register in QB and find it there. You will see it as a unique type: BILLPMT, rather than CHK.

In step 3, if the Write Checks screen is used instead of the Pay Bills screen, the bill will remain outstanding in QB. The check will be recorded as a CHK in the register, not a BILLPMT.

If you find that you have recorded bill payments using the Write Checks screen, talk to your accountant. Fixing the problem depends on how you originally recorded the CHK.

QB Q&A: How to Print to File in QB?

2007-09-19T07:19:00.001-07:00

Gary writes: "How do I print to a file in QB?"

My reply:

1. Select the report you want to print.

2. Click the Print button at the top of the report.

3. Under the Settings tab, QB will automatically have the Printer circle selected. Instead, select the File circle.

4. Open the File drop-down box, and select the type of file you want to create: an ASCII Text File, a Comma Delimited File, or a Tab Delimited File.

5. Click Print.

6. When prompted, be sure to save the file in a location where you can easily find it.

QB Q&A: Help with Owner's Draw

2007-09-16T11:37:00.000-07:00

Michael writes:

I'm a bookkeeper who has a new client. This new client reports owner’s draws of $16,400 through August, but I don’t know from which account. I’m thinking I should debit Owner’s Draw and credit Opening Balance Equity, but I’m not sure. What do you think?

My reply:

First: do not debit owner's draw and credit Open Bal Equity.

Second: I find it unusual that your client has kept such good track of the actual draw. But has she kept track of the other side of the draw transaction?

Credits to the bank account for cash transfered to a personal account
Credits to the bank account for debit card purchases for personal expenses
Credits to the bank account for checks written for personal expenses
Credits to the business credit card account for personal expenses
Other balance sheet credits that are for personal expenses

Owner's draw is computed as the result of one of these types of transactions. It's THOSE transactions that concern me, since they directly effect a bank or credit card reconciliation.

Do you see where I'm going? If the bank and credit card accounts are set up correctly, with the correct detail, then the owner's draw will become apparent.

It would be best to set up the other balance sheet accounts as accurately as you can, with the correct detail. Then owner's draw account will take care of itself.

The short answer is: don't start with owner's draw. End with it.

Daily Bank Rec in QB

2007-09-11T11:59:00.000-07:00

Sometimes people want to reconcile a bank account in QB on a daily basis. This is very easy to do, if you have the correct information. You will need a report showing three things:

1. The opening balance of the account on that day
2. All banking activity for the day
3. The closing balance for the day

With these three pieces of information, you can reconcile any account in QB on a daily basis.

Most banks and credit card companies offer online services. If you need to reconcile an account daily, see if you can go online and print a report showing the above information. If so, then you are all set to do daily reconciliations.

We're all familiar with monthly statements. They have the same information as what I show above: an opening balance as of the first day of the month; all activity for the month; and a closing balance as of the last day of the month. Knowing this, it is possible to do bank recs for other time periods: weekly, bi-weekly, or any other time period. It doesn't even have to be a regular time period. You can reconcile for a week, then for a day, then for three days, then for three weeks. As long as each report/statement from the bank shows the above information, recs can be done on whatever time basis suits you.

Not that I recommend irregular recs, because I don't. I only point it out to show that it's not the time period that is most important, it's the three pieces of information I show above that are important. Irregular recs could be problematic for other reasons, so my suggestion is that that everybody does their recs on a regular basis.

My Current Project

2007-08-07T15:38:00.000-07:00

I'm growing my business! It's very exciting.

No, no, not in the way you may have imagined. I'm not picking up tons and tons of new clients, althought I did pick up two more in the past two weeks.

I'm growing my business from the inside. You see, I'm in the middle of documenting all of my processes, all of what it takes to run this business. One client at a time, I'm writing down every detail, step by step, of what needs to happen for them. A typical list might begin like this:

1. Open QuickBooks.
2. From the Banking menu, select Reconcile. The Begin Reconcilation window opens.
3. Select the correct account to reconcile. Tab to the Date. Enter the ending balance as shown on the statement....

Literally, step by step instructions, for each and every client. I have this idea that once I get everybody documented, life will get a little easier.

Easier? How?

Well, as it is now, I carry a ton of information inside my head, information about what-to-do-when for each client. We're talking about checking accounts, savings accounts, invoices, vendor bills, reconciliations, loan balances, income, expenses, payroll, payroll taxes, payroll tax returns, financial statements.....

Staggering, isn't it? And all this for 26 clients! It's like one of those Vegas shows where the guy is spinning plates, except some of my plates crashed last spring, and this was not good. I decided that plates crashing was not optional. Hence, the documentation.

So I'm trying to spend about 30 minutes each day, working on it. It's not too bad, once I get started.

If you've ever read the E-Myth, then you may remember that self-employed people have three personalities lurking inside them:

1. The Technician
2. The Manager
3. The Entrepreneur

I'm fine as a Technician, and even the Entrepreneur gets some air time occassionally. But up to this point, The Manager has been quite dormant! So now I've awakened The Manager in me, and it's writing these processes.

I can't wait until it's all done, and I can run the business with a step-by-step manual, and even hand off some of the work to others.

Yep, it's an exciting time!

Why Export QB Reports to Excel?

2007-07-24T07:59:00.000-07:00

Sometimes people want to export QB reports into Excel. There are at least three reasons for this:

1. Consolidation Reporting. For example, there may be a parent entity that owns sub entities. The parent entity will want to see a single financial statement for itself along with all it's entities. Use Excel to accomplish this.

2. Computing Totals on a QuickReport. While in the Chart of Accounts, or any of the lists, we can easily run a QuickReport. Just select the appropriate name (Auto Expenses, for example), right click, and select QuickReport. Adjust the date range, as needed. QB shows all entries for this name, both the debit entries and the credit entries.

However, QB does not total the entries, and sometimes it's useful to know the total. You may need to modify the report to show only the entries you want (click the Modify Report button to do this). Then, once it contains the information you need, export the report to Excel, and use the =sum feature to add the column.

3. Improving the Reports' Appearance. There may be a couple reasons for this:

a. The QB reports may need some cosmetic improvements in order to show them to people who have some financial power - if you are approaching a bank for a loan, for example, you may want the balance sheet and P&L to look different. (Not the numbers, of course! Just the layout and appearance.)

b. Sometimes accountants, bookkeepers, managers, or CPAs don't like the appearance of the QB reports, and they want to export them to Excel to improve their look.

Final Thoughts

I see a trend here: exporting because it's useful vs. exporting for strictly cosmetic reasons. My suggestion is that if it's useful, then do it. If it's only cosmetic, then don't - it wastes time, and time is money in the business world.

QB Never Do #5

2007-07-22T22:05:00.000-07:00

Never use the Write Checks function to record a sales tax payment.

QuickBooks is composed of several modules, and sales tax payments/reporting is one of them. If it's used consistently and correctly, it records the correct amount of the sales tax payment. Sales taxes are a cumulative process, and if the sales tax payment function is not used consistently or correctly, QuickBooks won't be able to record the correct payment.

To record a sales tax payment:

First, compute the amount of tax owed on the sales tax return. Then, from the Vendors menu, select Sales Tax, then select Pay Sales Tax. Fill in the correct information, and make an adjustment for rounding differences, if needed.

Once the transaction is saved, go to the check register. You will see a check there with the abbreviation TAXPMT, instead of the usual CHK or BILLPMT.

Can't Clear Print Spooler in Windows XP

2007-07-18T10:46:00.000-07:00

I had an unusual problem: a document got "hung-up" in my print spooler, and it would not print. It also would not allow other documents to print. I tried cancelling the document from the Printers & Faxes window, but it would not delete.

After searching the internet for answers, I found some instructions, but had to modify them. Here's what I did in case you are having the same problem:

Start > Control Panel > Administrative Tools > Services > Print Spooler > Right Click > Stop

Turn off your printer.

Start > Control Panel > Administrative Tools > Services > Print Spooler > Right Click > Start

Start > Printers & Faxes > Double Click on Your Printer > Printer > Cancel All Documents

Turn on your printer. You sould now be able to print a document.

Let me know if this works for you.

Projected Annual Spam Count

2007-06-03T11:16:00.000-07:00

I decided to try to figure out how many pieces of spam I receive into my business email account on an annual basis. Normally, I empty the Spam folder every couple days, but last Monday I decided to let it fill up for a week. So as of today, Sunday, I have 300 spam messages in that folder.

300 per week

times 52 weeks

equals

15,600 pieces of spam received annually

Holy crap! Can you believe that? And that's just w/my business email address - it doesn't include my personal email address. What a waste of time, both for the recipients, and the senders.

QB Never Do #4

2007-05-09T13:46:00.000-07:00

Never post a transaction to a "Parent" account, when "sub" accounts are available. If you do, it creates an extra line on reports that looks something like this:

Auto Expenses - Other

Let's say that you have a "Parent" account called Auto Expenses. Under it, you may have "sub" accounts. The sub accounts might have names like this:

Gasoline
Repair/Maintenance
Registration
Insurance

In this example, you would always use the sub accounts, and would never use the Parent account of Auto Expenses.

You can always tell which accounts are sub accounts, because they are located under the Parent account, and are always indented.

This same rule hold true for any name on any list: Chart of Accounts, Customer List, Vendor List, Item List, Other Names List, etc. Any time you have a Parent/sub relationship between list names, always use the sub.

When you run reports and see the "- Other" after a list name as shown above, you know that a sub account was not used. Double click on the amount until you trace it back to the original transaction. Reclassify it to a correct sub account.

If you are working in a closed period, talk to your accountant before making changes of any kind to your QB file, even simple reclassification changes described here.

QB Never Do #3

2007-04-26T16:14:00.000-07:00

Always use the internal, QB Backup procedure to make backups of your file. Even if you have some other system to make backups of your hard drive, the internal QB Backup procedure must be used periodically. There are certain, internal processes that must be performed regularly, and the only way to do them is to use the QB Backup procedure. If these processes are not performed, your file will begin to run more and more slowly.

Making backups is easy. If you don't know how, open QB, find a QB search box, and do a search for the word backup. The instructions vary slightly, depending on the year of QB you use, otherwise I would put them here.

Ok, so this wasn't exactly a Never-Do. But it still counts, doesn't it? ;-)

1099 Vendors - 7 Tips to Protect Your Clients and Customers

2007-04-20T20:28:00.000-07:00

Do you receive 1099s from clients, customers, or others? Did you know that if your customer is selected for a work comp or payroll tax audit, funds paid to you are at risk of being assessed?

Like me, I'm sure you don't want your customer to pay work comp or payroll taxes on funds paid to you. Here are seven steps you can take to virtually eliminate this risk:

1. Get a Fictitious Business Name. If the checks are made payable to your fictitious business name, this makes it clear to an auditor that checks you received were paid to a business, not to somebody who might actually be an employee.

2. Always Give Invoices. In an audit, the auditor may ask your customer if you provide invoices. If your customer can produce those invoices, this goes a long way to show that you are a true independent contractor.

3. Invoice for Regular Amounts. If you can compute a flat fee for your services, all the better. When your customer pays you by the hour, this is a red flag to the auditor that maybe you are actually an employee.

4. Invoice on a Monthly Basis. If your cash flow allows for it, invoice your customer every month, rather than every week or every two weeks. Again, monthly invoices look like your customer is dealing with a real business. Weekly or bi-weekly payments spell, "Potential Employee."

5. Provide Your Own Equipment. If you are using your own computer, your own software, your own car, etc., all at your own expense, this is another indicator that you are an actual business. If you do not do these things, this looks like you are not in business - you may be an employee.

6. Have More Than One Customer. If you provide services or products for more than one customer, this looks good in the event of an audit. If this customer is your only customer, this looks bad in an audit.

7. Cover Your Own Expenses. A lot of expense reimbursements is a possible indication that you are not in business for yourself.

The more of these you do, the better chance your customer will not have to pay additional money for work comp or payroll taxes in the event of an audit. Keep your customers protected and implement all of these strategies soon!

7 Tax Tips for Schedule C Auto Expenses

2007-04-14T18:07:00.000-07:00

I'm a big fan of the standard mileage rate for sole proprietors using Schedule C. Here's why.

Tip 1 - It's Easier: I always encourage my tax clients to use the standard mileage rate. The rates are very generous, and, unless you use your vehicle 100% for business, it's much easier to figure your deduction using the rates, rather than using actual expenses.

Tip 2 - It's More Flexible: As a general rule, it is usually better to take the standard mileage rate the first year you put a car or truck into service, rather than actual expenses. This allows you some flexibility in subsequent years, because you can choose which to take.

Tip 3 - It's More Flexible, Again! The reverse is not true. If you take actual expenses the first year you put a car or truck into service, you must continue to use actual expenses thereafter. Take this into account when you are tempted to take a hefty Section 179 deduction the first you your vehicle is placed in service. Make sure it will be worth it in the long run.

Tip 4 - You Can Write Off More: For people who drive many business miles each year, taking the standard mileage rate may allow you to write off more than the value of your vehicle over a period of years. How often does this happen in the tax code?

Tip 5 - Keep Good Records: Keep a log book in your car and record the following information each time you drive the car for business reasons:

Date
Business Reason/Place Visited
Beginning Odometer Reading
Ending Odometer Reading

Tip 6 - It's Easily Defended: If you get audited and you've kept a good log book, I can almost guarantee that your mileage deduction will remain intact. I know this from personal experience in an IRS audit!

Tip 7 - Less Paperwork: When using actual expenses, a certain form is needed, called a 4562. If you don't need to depreciate any other property, and you use the standard mileage rate, you don't need a 4562. The mileage deduction will be shown on page 2 of your Schedule C.

QB Never Do #2

2007-03-19T17:19:00.000-07:00

Never use your QB file while your accountant has a backup or portable file he/she is working in.

If you do, when the file is returned from the accountant, the transactions you posted will be wiped out once the backup/portable file is restored. If your accountant needs your file for posting journal entries, send him/her an Accountant's copy. This is a special copy designed so that you can continue working in your QB file, and not have your changes wiped out once the copy from the accountant is returned.

Your accountant may need to make more extensive changes to your QB file than what the Accountant's copy allows. Obviously, you need to send a regular backup or a portable file at these times. If you absolutely must work in the file while your accountant has it the backup or portable copy, keep a good record of what you did, perhaps writing down everything on a piece of paper. This way, when the file is returned and restored, you can re-enter the transactions that got wiped out.

QB Never Do #1

2007-03-16T16:01:00.000-07:00

Never post to a Cost of Goods Sold (COGS) account from the Expenses tab in the Write Checks screen or the Enter Bills screen, while also assigning a Customer:Job to the transaction. If you do, it creates unbillable "Unbilled Costs."

If you've been doing this and would like to see what I mean, run an Unbilled Costs report. From the Reports menu:

Reports > Jobs, Time & Mileage > Unbilled Costs by Job

Normally you would be able to drop these into a customer's invoice by clicking the Time/Costs button at the top of the invoice screen. However, for a reason unknown to me, these unbilled costs do not show when you click the Time/Costs button.

If you have ever posted to an Expense account from the Expenses tab, while also assigning a Customer:Job, you know that the invoice column at the far right is functional (also known as the Billable column in newer editions of QB). In other words, you can either place a red X there, or not, to indicate that you want to be reimbursed for the cost by your customer. But here was your only clue that posting to a COGS account from the Expenses tab was a bad idea - the column at the far right side of the screen was not functional.

Ideally, Intuit would have programmed a small warning when posting transactions in this manner, but they didn't. Oh well - they're only human and can't know everything.

How to Fix It - What To Do From Now On

Fixing it is a drag and I don't recommend it, especially if you are working in a closed period and there are a lot of transactions. However, if you are absolutely determined, the instructions for moving forward apply for fixing past mistakes.

Set up a Other Charge, Service, or Non-Inventory Part Item that points to the COGS account and also points to a revenue account. Do this by clicking the box that says something like, "This is for assembly items," "This is a reimbursable charge," "This service is performed by an owner," etc. Set up the other fields as necessary. Use this Item from now on when you need to post to a COGS account and assign a Customer:Job to the transaction.

Use this item when fixing old transactions, but make sure of two very important things:

1. The amount of the transaction does not change
2. The Item posts to the same COGS account that the transaction posted to before!

If you are not careful about these two things, you will probably alter the closed period. Your accountant will not be happy with you if this happens! :-)

QB Never Do's

2007-03-14T17:37:00.000-07:00

Did you know that there are some things we should never do in our QuickBooks' files? Yes, there are things we should, literally, never do. Because I see people doing these things in their QuickBooks files, I'm going to start writing about them in the next day or two. Everybody who uses QB should know what these things are. The series will be titled like this:

QB Never Do #1
QB Never Do #2
QB Never Do #3
Etc.

I have no idea how long the list will get, but I already have a few ideas to get it going.

Some of the Never Do's will have a caveat, meaning that you can do it, but there will be other things you need to do after to compensate.

My Accountant Changed My QuickBooks File & I Feel Lost - Now What?

2007-03-13T12:11:00.000-07:00

The Problem

At one of the accounting forums I visit, somebody wrote to explain a problem she was having in her QuickBooks file. After some posts back and forth with her, I saw that it boiled down to some changes her accountant made to the file - procedural changes which seemed unnecessary to me, and which happened without the file owner's permission or understanding. I told her:

"Send the file back and explain that her changes don't work for your way of doing things. Tell her to put things back the way you had them. Also tell her not to change your procedures without first explaining the new way she wants it, and also getting your permission for the change. Am I being unreasonable? Aren't you the one paying her bill?"

I understand that sometimes a change needs to be made in a QuickBooks file. I also understand that sometimes a change does not need to be made. Some times it's simply a preference issue. This means that one person likes it one way, one person likes it another way. Neither is wrong.

Who's File Is It, Anyway?

It seems that sometimes we, as accountants and bookkeepers, forget who owns the file. Clearly, the person who posted the question was just as unclear as her accountant. Had she been clear that it was her file, not the accountant's, she would have known what to do without asking.

My Advice for Bookkeepers & Accountants

Be careful about implementing changes - people often have habits developed, and it's tough to change them. Don't do it unless it's absolutely necessary, make sure you get their consent, and train them so they understand the new procedure.

Can I Show a Past Due Amount on a Current Invoice in QuickBooks?

2007-03-11T12:07:00.000-07:00

Yes, you can. There is a rather complex work-around I developed, that transfers the balance from an old invoice to a new one. It does so by zeroing out the amount from the older invoice. However, this is not a good practice. Because it's not a good practice, I'm not going to show you how to do it.

Here are two reasons why it's not a good practice:

1. You have already sent your customer the old invoice. On their books, they show that invoice for the amount due. That invoice also has the detail of the sale.If you send a new invoice, with the amount from the new invoice, plus the amount from the old invoice, it will double the amount due from the old invoice in your customer's records. Plus, it won't show the detail from the old invoice.

2. Since it zeros out the amount from the older invoice, the work-around is not accurate. There really is an amount due from the older invoice, and zeroing it out changes that. My very first accounting teacher taught me:

Always record what actually happened. Don’t record what should have happened, what you wish had happened, or what would have happened if somebody else had done something differently. Record what actually happened, even if it was the wrong thing that happened.

Since zeroing out the amount from the older invoice does not represent what actually happened, it’s not a good idea to do so.

What to do Instead: Instead of showing a past due amount from an old invoice on a current invoice, generate a statement. This will show all invoices, with their individual amounts due, and will total them at the bottom. It's more accurate, plus it's easier than the work-around.

What are Items in QB?

2007-03-10T09:02:00.000-08:00

Confused about Items? I was too! When I first started using QB, I was very confused about Items, and didn't really get what they did. Even though I'd been in the accounting profession for several years, I just didn't grasp them. I understood the concept of Inventory Items, but the other types of Items made little sense. The QuickBooks Help screens were no help to me! Their definitions never resonated.

And on many of the accounting forums I post to, I see that others are confused about Items as well. Take this question, recently posted on one of the forums:

I am trying to find out what the fundamental difference is between "expenses" and "items".

Expenses Tab vs. Items Tab. As you probably already know, on some forms in QB you have a choice of which to use: the Expenses tab, or the Items tab. The Expenses tab allows you to post directly to the chart of accounts. The Items tab does not. So what happens when you use the Items tab?

Items Defined - It's Way Easier Than You Thought! I finally figured it out. Here it is, my quick and easy definition of Items in QB:

Items are simply a way to post transactions to the chart of accounts!

This is not the definition you see in QuickBooks Help screens. I've never seen it defined this simply on any search I've done for Items. Yet it's absolutely true. If you understand what happens when you use the Expenses Tab, you can now understand what happens when you use the Items Tab too.

Items are an intermediary step between you and the chart of accounts. But their function is simple:

Items take your transaction, and post it to the chart of accounts based on how you set them up initially.

If you are using Items and are unsure of which accounts they post to, go to the Items list, select which Item you want to examine, and press Control-E. You will be able to see which account (or accounts) it posts to.

Although my definition applies to all types of items, for new users of QuickBooks I think it makes the most sense for these types:

Other Charge
Non-Inventory Part
Service
Payment

Once you understand these types of items, other types will make more sense.

Gotomypc.com - Love It!

2007-02-11T06:04:00.001-08:00

I love this service! It's called gotomypc.com, and it enables me to login to my computer remotely. This means that, from any other computer with an Internet connection, I can access my own computer. It's as if I'm sitting right there in front of it. Here's how to sign up for a free trial:

1. Visit www.gotomypc.com/s/referral
2. Create an account
3. Follow the instructions. You will need to set up the remote computer first. Then, you can access it from the local computer (see below for definitions).

It works like this: when accessing the remote computer, a small file is installed in the local computer. Then, enter your password, and a green browser opens. You now can see your computer desktop, as if you were right there in front of it. When the session ends, the small file installed on the local computer is erased.

Since I'm a gotomypc.com customer, the link above is for a 45 day free trial. This is longer than the standard 30 day free trial you see on other sites.

Helpful terms when using gotomypc.com:

Remote computer: the computer you will access via the gotomypc.com service; usually, your own computer at home or work. Also known as host computer.
Remote printer: the printer attached to the remote computer. Also known as host printer.
Local computer: any computer used to access the remote computer. Can be your own laptop, or a public computer, such as a computer at a library.
Local printer: a printer attached to the local computer.

If you travel frequently, or if you operate a service business like I do, you will love gotomypc.com! Give it a try today!

Buy QuickBooks 2007 for Less Than Retail

2006-12-13T08:41:00.000-08:00

QuickBooks Pro 2007 normally retails for $199, plus tax. Quite often I see it on sale for $179 at places like Office Depot or Staples. The lowest price I've seen is $159, but that isn't too often.

If you are ready to upgrade QuickBooks, or if you are purchasing it for the first time, here are my suggestions to get it for less than the suggested retail price:

1. Get a Sunday paper and look through the office supply ads to see if QuickBooks is on sale. Factor in sales tax and the time to go and buy it. Sometimes rebates are offered; I'm not a big fan of rebates because they are a hassle. But if you like them, factor it in to your final price.

2. Click the link below to buy it directly from Intuit for $169.99, plus tax, with no shipping charges if you download it, plus no driving time to go and get it:

Help for Microsoft Office Accounting Express

2006-11-28T06:36:00.000-08:00

Do you need help with Microsoft Office Accounting Express? I now offer paid-support for users of this program. Contact me and let's talk about your situation. After that, if you would like me to actually see and work in the file, send it to me as an email attachment. Follow these steps:

From the File menu, select Accountant Transfer, then select Send Books. The "Accountant Transfer:Send" window opens.

Select the circle that says, "Send books manually." Click Next.
Select a cutoff date. This date is important - you will not be able to edit or add transactions on or before this date. If you are unsure, contact me first and we can figure it out together. After the date is selected, click Next.
Select "I will run payroll." Click Next.
Use the default file name given in the top box. In the location box, be sure to select a location that will be easy to find. If you are not sure, click the Browse button, navigate to your desktop, and save the file there. Click Next.
Select a password if you feel the file needs one. Click Next.
Simultaneously, the program will make a backup file. For now, use the default location of the backup file. In the future, we may need to know where this location is, but for now we don't. Click Export. The program will take a few minutes to perform the tasks. Click Finish when it is done.
After it is finished, go to your email program and generate an email to me (see Contact Info near my photo). In your email program, there should be an option somewhere to attach a file. Select this option. Navigate to the place on your desktop, or where ever you saved the file, and select the file you just created.
Send the email.

I'll contact you asap with updates.

Free Tax Help at Local IRS Offices

2006-11-27T07:46:00.000-08:00

Free tax return help is available at your local IRS office for people who qualify for the EIC or who earn less than $38,000. You can also get answers to questions regarding your federal income tax return at these local offices.

Search for an IRS office near you by clicking the link below. It has two choices when searching for a local IRS office: either click on your state, or search by zip code:

http://www.irs.gov/localcontacts/index.html

Having an IRS office nearby is also useful because they often stock forms and publications that you may need. You can find W-2s, 1099s, 941s, and lots of other business-related forms. It's quicker to go the local office to get them, than it is to order them online. Plus they are free.

If you don't qualify for free help, give me a call. I'm a registered tax preparer and can prepare federal returns, and returns for every state except Oregon. Here's my contact information.

QuickBooks Help - 3 Ways to Get It

2006-11-26T10:45:00.000-08:00

Did you know there are several ways your QuickBooks support person can perform work in your QuickBooks file?

1. Make a QuickBooks Backup File - Email the Backup as an Attachment to QuickBooks Support Person
2. Remote Access - QuickBooks support person uses his/her own computer to access your QuickBooks file over the Internet
3. QuickBooks Support Person Works at Your Business

Having the QuickBooks support person come to your office seems easy, but the other options give you a greater range of QuickBooks support people to choose from, are quite viable, and may be less expensive in the long run.

My full article describes each of these alternative in greater detail. To read it, click here.

Now Certified in QuickBooks 2007

2006-11-24T13:02:00.000-08:00

I'm now certified in QuickBooks 2007. Click here to check it out.

Using Tax Prep Software Can’t Shield You from Penalties, Tax Court Rules

2006-11-15T14:30:00.000-08:00

The United States Tax Court recently ruled that incorrect use of tax prep software does not alleviate the user from filing a correct return.

In a summary opinion dated November 9, 2006, the sole stockholder of an S-Corp was found negligent when he filed an incorrect return. The stockholder claimed that his incorrect return was the fault of the tax prep software he used; the court did not agree:

[The taxpayer] blames defects in his income tax return on software that he claims to have used in preparing the form 1040 return. Such a program is only an aid for preparation of a return and depends on careful entry of accurate information, which petitioner manifestly failed to do.

This taxpayer claimed to fully capable of preparing a correct return:

Petitioner admits that he has the education to prepare and review his income tax return, and that he had an opportunity to review his return prior to filing it. Accordingly, petitioner’s use of software in preparing his return does not constitute reasonable cause for the errors in his return or for the deficiency in this case.

Maybe he would have been better off not claiming to be so well educated! However, most people who use tax prep software assume they have the skills to use it correctly. It just makes sense, doesn't it? Usually, we don't try to do things that seem too complex to do. Ever try to do brain surgery on yourself? Probably not.

Be careful about preparing your own return. If you are a business owner, I don’t recommend it, unless tax preparation is your business. The rules are too complex and crazy, especially for corporations. Let a trained professional take care of it for you. It’s just not worth the headache, and your time is better spent earning income for the business.

Free Merchant Credit Card Processing From Google

2006-11-11T07:22:00.000-08:00

Well, guess where else Google is trying to get your business? Through merchant services, aka, credit card processing. I used to be a huge Google fan, but quite honestly I'm getting tired of hearing about them grabbing more and more of the pie. I guess that's another blog.

Anyway. . .

Until Dec. 31, 2006, you can get free credit card processing through them. And even after that the rates are extremely low.

Google's merchant services are for web-based sales. It is designed so that your buyers click a small icon on your page, and buy your product or service that way. If you need to process credit card transactions some other way, such as over the phone or in person, then Google's service is not for you.

Here's the link so you can read more about this limited time offer:

http://checkout.google.com/seller/why.html

Six States Get An Extra Day to File Their Taxes in 2007-Is Yours One of Them?

2006-11-08T16:37:00.000-08:00

We all know that the day to file your personal income taxes is April 15, right? Yea.

Well, except if April 15 falls on a weekend or legal holiday, then its April 16. Ok, yea.

But what if Sunday is April 15, and Monday is a state (not Federal) holiday? Then what?

The IRS said, in Notice 2006-103, that six states and Washington D.C, get to file their 2006 personal income tax returns on April 17, 2007, since Monday, April 16 is Patriot’s Day, a state holiday. Those states are:

Maine
Maryland
Massachusetts
New Hampshire
New York
Vermont
District of Columbia

This applies to federal individual income tax returns, both paper returns and those filed electronically. It also applies to form 4868 (six month extension request), balance due payments for 2006, estimated tax payments for individuals for Jan.-Mar. 2007, and claims for individual tax refunds for tax year 2003.
Everybody else in the country: you’re stuck with the Monday, April 16 deadline.

JoeyEA - Online Accounting Guru

2006-11-04T15:30:00.000-08:00

I was so sad and shocked to hear of the passing of Joey Carstenson, aka JoeyEA. She died on Oct. 26.

I read quite a few online accounting forums, and I post occassionally, answering questions if I know the answer off the top of my head. This is how I came to know JoeyEA - well, I didn't know her personally, but knew of her through the accounting forums. Her name was everywhere, and sometimes we would reply to the same questions.

She was a prolific writer. I discovered that she posted close to 8,900 posts on two accounting forums alone! Imagine the thousands and thousands of people she impacted through those posts. She was always kind and patient too. As news spread of her passing, many others were shocked and saddened as well. As people expressed their sympathy, several common remarks about her arose: her incredible knowledge of accounting and taxation, her kindness, and her sense of humor. As I researched more about her, one fact I personally found very interesting is that she served as tech editor for the famous QuickBooks for Dummies books.

Joey was a backbone for the forums she wrote in. The online accounting community certainly suffered a loss when she passed. She will be missed very much. If you knew of her, won't you consider signing the online guest book her family has established? I think they need to know of the impact she had on the online accounting community. Here's the link:

http://www.legacy.com/PalmBeachPost/GB/GuestbookView.aspx?PersonId=19792171

I'm sure a few heartfelt sentences would be most appreciated.

Does Your Minimum Payment Calculation Look Too Low?

2006-11-03T20:35:00.000-08:00

Did you recently receive a credit card statement with a minimum payment calculation that looked too low? One of my clients did. While working at her office, I entered the credit card charges into QuickBooks, as usual. But as I looked more carefully at the statement, I noticed that the minimum payment calculation was only $10! And her balance is over $20,000! She always pays well more than the minimum payment, but still. The credit card company obviously got the minimum payment calculation wrong - or did they?

Since she always pays more than the minimum, she didn't want to take the time to call the credit card company to see if their minimum payment calculation was incorrect. Later, I did a little online research, to see if her credit card company had lowered the minimum payment, but my research yielded nothing.

But I wondered - how many other people:

received bills like this
where the minimum payment calculation was incorrect (or worse, intentionally lowered!)
and who have high balances
but who will mistakenly make that minimum payment?

Warning: making that minimum payment is a bad idea! If you find yourself wondering if the minimum payment calculation is too low, call your credit card company to see if they made a mistake. Remember, the minimum payment calculation should always be more than the finance charges. If it isn't, call the credit card company and ask them to recalculate the minimum payment.

Better still, try to get rid of credit card debt altogether. Credit card debt is not your friend!

Free Local Business Listings in Google

2006-11-03T19:27:00.000-08:00

Is your business listed in Google's Local search? It should be. It's free! You don't even need a website.

When somebody is looking for your type of business in your local area, they can do local searches. Local searches are not that much different from regular searches, the only difference being that the name of the city and state are included in the search box. So, as an example, somebody wanting local searches for accounting services in my city, might type this into the regular Google search box:

Accounting Services in Vista, CA

Open another window, go to Google, and try it now, to see how it looks. As of this writing, Solid Rock Accounting Services, my business, comes up as the second result for local searches for my city. Way cool! Anybody looking for accounting services in my city will easily find Solid Rock Accounting Services. If you clicked on my listing, did you notice how it did not take you to my website (www.jenniferthieme.com)? The results for local searches don't take you to the business' website, just to the small listing. So, having a local business listing is separate from having a website, and having a website is not needed to have a local business listing.

As more and more people turn away from traditional, printed, directories, such as the Yellow Pages, having your business available for local searches is more and more important. Just the other day, I wanted to call my optometrist, but couldn't find his number in my Rolodex. So I got on Google, and searched for optometrists in my city. He wasn't listed in the results, and you know what? I almost called somebody else! First of all, I was annoyed that he wasn't listed, and second, his credibility took a hit in my mind, since he has no web presence.

Don't let this happen to your business. If you want to get listed, go to the Google Local Business Center:

https://www.google.com/local/add/login?hl=en-US&gl=US

Enter your Google account to signin. If you don't have one, get one. Once signed in, complete the registration information. It will take a couple weeks or more to get listed, but it's worth it. You want people to be able to find you when they conduct local searches, because local searches are becoming more and more common. Get listed!

Microsoft Office Accounting Express 2007 - Free Download

2006-11-02T22:52:00.000-08:00

On October 30, 2006, Microsoft announced the free download of it's new accounting program, Microsoft Office Accounting Express 2007. Marketed to small businesses who still use paper ledgers or Excel, MOAE2007 appears to be going head-to-head with QuickBook's Simple Start program.

One reviewer was not happy with how MS Accounting Express kept forcing him to cold boot. It seems that you get what you pay for.

What this means for you: although it's not officially a beta, a free download from Microsoft smacks of beta to me. I think business finances are too important to take a change on a brand new, unproven, program, don't you? If you were a business advisor, would you advise people to try a new financial program, especially when there is a proven, inexpensive program available?

If you want to convert your business finances from Excel or paper, instead of saving a few bucks with this free download, go with the program that's been around - QuickBooks Pro or Simple Start. By clicking the link you can get Simple Start for $79.96, plus free shipping. I say: Let other people be the Guinea pigs. Get the software that is reliable, stable, and easy to use. Here are some other great reasons to choose QuickBooks:

30 days of free technical support
60 day money back guarantee
QuickBooks Advisors who can help you with questions, fees may apply
Several online accounting forums devoted specifically to QuickBooks

If you really want MS Accounting Express 2007, here it is. But don't waste too much time with it. If it proves to be a headache, get QuickBooks instead.

IE7 Starts!

2006-11-02T13:20:00.000-08:00

Just last night I clicked the yellow balloon for Microsoft Updates. Guess what I saw? Internet Explorer 7, ready to be downloaded. I knew this day was coming, but I didn't think it would be so soon!

What does the IE7 update mean for QuickBooks users? Well, it depends on which version of QuickBooks they run. Here's a quick guide:

QuickBooks 2007 - download and install IE7
QuickBooks 2006 & 2005 - download, but wait to install IE7. Intuit needs to update your software, and will soon. As soon as your software is updated, install IE7.
QuickBooks 2004 and prior - download, but do NOT install IE7.

If you would like more information about QuickBooks and IE7, click here to read my article about it at EzineArticles.com.

IRS Announces 2007 Mileage Rates

2006-11-02T12:28:00.000-08:00

Here they are folks, the standard mileage rates for 2007. These go into effect on January 1, 2007:

Miles driven for business: 48.5 cents per mile
Miles driven for medical or moving reasons: 20 cents per mile
Miles driven for qualified charity reasons: 14 cents per mile

What this means for you: If your you drive 10K miles for your business, you can deduct $4850 from business income. Think of it this way: for every business mile you drive, you can deduct almost half a dollar. Those business miles really add up quickly!

For tax reasons, it's very important to keep good records of the miles driven. You don't want them disallowed if you get audited. Get a small spiral notebook, keep it in your car, and record the beginning and ending odometer readings each time you travel for one of the above reasons. Your pocketbook will thank you.

For more information on the announcement, visit IRS News.