Archive for Accounting

Software for Law Firms – Time Matters

If you have been following our series in Intuitive Accountant, our latest article has been posted. If you have identified your software needs to include billing and practice management, with QuickBooks for accounting, and you want powerful customization in your practice management, then you should consider Time Matters / Billing Matters from LexisNexis.

You can read this article at: Software for Law Firms – Time Matters

QuickBooks v2014 for Mac

Are you using QuickBooks on a Mac? Intuit has released v2014 with new features to help you.

Highlights of the new version include

  • Redesigned toolbar and home page to make QuickBooks for Mac easier to navigate
  • Income tracker – At one glance, company owners see a summary of Paid, Unpaid and Unbilled revenue streams.
  • Sales Rep list – Vendors can be designated as sales reps. This will assist with 1099 reporting
  • Ability to adjust sales tax
  • Convert estimates into purchase orders
  • Import journal entries
  • Searchable reports

These new features will make QuickBooks for the Mac a more powerful tool for those businesses running Mac computers.

QuickBooks v2014 is Here

QuickBooks v2014 has been released with all its assorted flavors – Enterprise, Accountants Edition, Pro and Premier.  There are new features in all versions as well as enhancements to existing features.  Highlights of the new versions include:

User Interface Changes designed to make it easier to find information and navigate QuickBooks

Income Tracker provides you with a fast way to see the status of your unbilled and unpaid transactions, and provides you with features to improve billing/collections. This feature has been available in QuickBooks Online for some time and we welcome it to the desktop versions. The graphic representation of the data makes it easier for you to find important information. With Income Tracker tracking and collecting Accounts Receivable will be a little less painful.

For those that download transactions from the bank, the Banks Feed area has been significantly improved, especially in the area of rules and in the use of color to identify different features.

Batch enter transactions has been expanded. This Accountant version features now allows faster entry of Bills and Bill Credits and Invoices and Credit Memos

Add/Edit Multiple List Entries now includes Inventory Assemblies.

Email Improvements  include:

  • View history of emails to customers if using webmail.
  • Ability to send customer payment receipts

Improved Job Costing features give user better tracking of jobs by status, customer and sales rep. The Enterprise version also has new reports for Job WIP Summary and Committed Cost by Jobs. These reports will be of special value to contractors.

For Accountants, the new Client Collaborator improves communication on file matters between the user and the accountant. With this new feature you can ask questions of your client regarding specific transactions in a more efficient way with excellent tracking included.

If you would like more information on QuickBooks 2014 please contact us. You can read details of the new version in the QuickBooks and Beyond Blog

(https://www.accountexnetwork.com/blog/2013/09/quickbooks-2014-has-arrived/ and associated articles)

and at the Intuitive Accountant

(http://www.intuitiveaccountant.com/general-ledger/quickbooks-2014—my-favorite-newbies/ and associated articles).

QuickBooks for Law Firms – Part 2 Trust Transactions

Law Firm?

If you have reviewed the options and decided that QuickBooks is the right solution for your law firm billing and/or accounting this series of articles should help in the setup and use of QuickBooks.

In part 1, we looked at how to setup QuickBooks for your law firm. Part 2, looks at Trust transactions, a critical requirement in most firms. Trust accounts are audtied by the bar association and problems in the account are grounds for sanctions and disbarment. This makes it especially important to setup your account properly and use trust transactions approrpriately. This article is designed to help with that.

QuickBooks for Law Firms: Trust Transactions

Future articles will look at reports of trust transactions and accounts.

New 1099 Reporting Requirement

As a business you have to issue 1099-MISC forms to your vendors. Whenever you begin working with a new vendor, it is important to get the correct tax id and address so that you have the information when needed. It is always easier to get the information before you pay the vendor than after the fact.

For 2011 the reporting requirements have changed and it is important that you understand these changes. Traditionally you issue a 1099-MISC to anyone that is not a corporation that is paid over $600 for services. However, in 2011 how you paid the vendor is important in determining the 1099 requirement and amount.

If you pay a 1099 vendor with a credit card or other 3rd party transaction (defined in the regs), the payment is to be EXCLUDED from any 1099-Misc that you give to that vendor. The 3rd party payor (credit card processor, bank, etc.) will file a 1099-K to report those payments.

If you use QuickBooks v2012 this requirement is addressed with Release 5. You can determine what QuicKBooks Release you are on by clicking F2 within the program and looking at the top of the box. For QuickBooks v2010 and 2011, Intuit is working on an application that you will be able to purchase to address the requirement. The application is expected to be inexpensive (Less than $5) and should be available shortly.

If you would like step by step instructions on using QuicKBooks 2012 to prepare 1099s please take a look at the blog post by Laura Madeira at http://www.quick-training.com/2011/12/21/quickbooks-2012-new-1099-tax-form-wizard-2/. While you are at Laura’s website you can sign up for her newsletter and get a free copy of “What’s New and Improved for QuickBooks 2012”

If you use other accounting packages you may need to find another way to address this requirement. If you need help, please contact us so that we can help you issue correct 1099s.

Are Your Financial Statements Wrong? Seven Easy-to-Spot Clues

A post by Guest Columnist Ruth King

As owners and managers, your responsibility is to review accurate financial statements on a timely basis. This allows you to make good business decisions and spot minor issues before they become major crises. Here are seven, easy-to-spot things to look for when analyzing your financial statements.

1. Negative cash on your balance sheet.
You cannot have negative cash in the bank. Your banker will return any check to its sender without payment if there is not enough money in your account to cover the amount of the check. Normally when I see negative cash, it means that your bookkeeper is lazy. She printed all the checks that have to be paid for the time period and is holding them until there is enough cash in your checking account to cover the checks. You don’t have an accurate picture of cash or accounts payable so you can’t make good business decisions.

2. For those businesses with inventory – An even inventory number.
There is less than a one in one million chance that your inventory is exactly $20,000 or $3,500. When I see this I know that inventory is not being properly tracked and that material cost is usually not accurate either. Inventory is a bet. You’ve bet your hard earned dollars that when you buy a part or piece of equipment that you can sell it at a later date. Make sure you make good bets. Look at your warehouses and your trucks. How much inventory has been sitting on the shelves for more than a year? Those are bad bets.

3. Balance sheet that doesn’t balance.
The definition of a balance sheet is that assets equal, or balance, liabilities plus net worth. If your balance sheet doesn’t balance, then someone has incorrectly entered information to your computer system. You cannot make any good decisions about your business when the balance sheet doesn’t balance.

4. Negative loan balances.
A negative loan balance means that the bank owes you money for a loan. You owe the bank the loan amount; the bank doesn’t owe you. Generally when I see this, a bookkeeper has entered the entire monthly loan payment against the loan. Part of the monthly loan payment is principal reduction of the loan amount and part is interest the bank is charging you. The interest is an expense to your business and is shown on your profit and loss statement. The loan principal reduction is shown on your balance sheet.

5. Negative payroll taxes payable.
Like negative loan balances, it is unlikely that the Internal Revenue service or your state revenue department owes your company money. Normally this is an incorrect entry from payroll.

6. No rent, utility bill, etc. or extremely high rent, utility bill, etc.
These are seen in the overhead segment of your profit and loss statement. You pay rent every month. You pay your electric bill every month. If you see a month with no rent or extremely high rent, the likelihood is that the bookkeeper didn’t put the expense in one month and doubled the expense in another month. Both give you inaccurate profit and loss statements.

7. Inconsistent gross margins.
If you are pricing your services and products the same every time, then the gross margins should be the same. Different departments and different classifications of work can have different margins. For example, the margin on replacing a fan motor (ie a part of an air conditioning system) is probably different than the margin on replacing a whole air conditioning system. However, the fan motor repair margin should be the same each time (with rare exceptions). Differing gross margins is your first clue that labor productivity is up or down. Or, the accounting is wrong – you have revenue in one month and the expenses against that revenue in a different month. Either way, you cannot make good financial decisions when your gross margins are inconsistent.

Spotting these financial statement mistakes gives you a good idea that you must get additional information to ensure that your financial statements are accurate. Accurate financial statements are critical to ensure that your business is profitable or to give you the information you need to take steps to make it profitable.

About our Guest: Small business expert Ruth King is my colleague and Chief Evangelist for www.TurnOnMyFinancialLightbulb.com, a program to help you understand basic accounting and your firms financials. She has reviewed tens of thousands of financial statements in her 25-year career helping contractors grow profitably. When you enroll in her course, use EV42578, to receive $100 off the tuition as Ruth’s and my gift to you.