Archive for May, 2009

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QuickBooks File Types

May 30, 2009 1 comment

There are many ways you can work with a QuickBooks Expert. You can search for QuickBooks training resources online and of course you can hire us to help you. Once you’ve made that decision (and hopefully you’ve chosen us) we can work with your QuickBooks file in a number of ways.

Most e-mail servers will not allow attachments through if the size exceeds 10MB (megabytes). Some even limit you to 5. Because we are experts in both QuickBooks and Computers in general, we can really help you understand not just your QuickBooks file issues, but also how really work with your QuickBooks file in general. This is especially helpful in the context described here when you have hired a QuickBooks Pro such as myself and you want to be able to work with someone who can help you with QuickBooks and who also understands how to work with the file such that the integrity of your data is protected.

Here are the different QuickBooks File Types:

1) QBW – QuickBooks Working file.

This is the full fledged working copy of your file. This is going to be the largest in size; however as large file transfer services become more prevalent it is more common to send your QuickBooks file without even making a backup. For example on our Home Page there is a link to a virtual drop box in which we encourage people to “drop” their QuickBooks file. Even the QuickBooks backup options described below create large files and so these services become helpful and even necessary. Visit for more info on the service we use.

2) QBM – QuickBooks Portable Company File (I don’t know where the ‘M’ comes from, seems to me it should be QBP)

When you choose to back up your QuickBooks file, the QuickBooks Portable Company File creates the smallest file size. The idea was to give it more transferability. This option takes the longest to create and the longest to restore. Based on what I’ve read from Intuit, it is also supposed to better preserve data integrity during transfer, however I have transferred many files over the years and more recently because of the yousendit service I have been transferring the complete QuickBooks file (QBW) and I have not had any problems yet. Nevertheless the options are there, so I talk about them for your benefit and so that you can decide which option is best for you. If you are very conservative and “worried” – this is the choice for you. My aim is generally at efficiency so in my case, this is not the best choice.

3) QBB – QuickBooks Backup

This is the old fashioned Backup file. I still like to use this one – especially when I transfer QuickBooks files frequently with clients as I often do. This enables me to maintain a history of the client’s QuickBooks file at various stages of my work. Oftentimes the nature of what I am hired to do for example is to completely re-purpose the Chart of Accounts. I will choose the option to append the name of the QuickBooks file with the date and time so that the files stack nicely in a folder that I often name “Old QuickBooks Files.” Usually I find that my frame of reference is in terms of when I did something to the file, so this makes it easy get to the right file.

4) The Accountant’s Copy

This enables you to work on your own file while your accountant works on it and the accountant’s changes can be imported. The way this works is that when you create the file, you have to set a dividing date. Let’s say you choose December 31. This will allow your accountant to change anything prior to Dec 31 while you can still enter and pay bills in your QuickBooks file. In the top title bar of the file you will see the words “Accountant’s Changes Pending.” This can work real well in many instances; however I have found it to be a bit buggy – especially where there are a lot of changes. My suggestion when using this is to import the changes frequently. The working copy can be released from the accountant’s changes in the event you do not need to import them. Also the accountant’s copy may be converted to a permanent QuickBooks working file (QBW). This is helpful if you haven’t made many changes, your accountant has, and if you are having trouble importing the changes.

Finally if you are stuck, you can send both files to Intuit (you have to call them) and they can fix this for you.

What about transferring from QuickBooks for MAC to QuickBooks for PC and vice versa?

Yes you can and have been able to do this since QB for Mac version 7, and QB for PC version 2007 (all editions, perhaps except for QuickBooks Simple Start).
It’s in the file menu under Utilities in QuickBooks for PC. In the MAC, I believe the choice is right there in the File menu so save a copy or save a backup copy for windows. Whichever direction you are converting you wind up with the equivalent of the “QBB” file. This of course has to be restored.

When you do round trip conversions, what will happen with your bank and credit card reconciliations initially is that it will look like the reconciliations were “undone.” All that has to be done is to go to reconcile the account, then enter the ending balance of the last statement that was reconciled in QuickBooks. You will see all of the previously “cleared” items come in checked off and your difference will be ‘0’. Just click ‘reconcile now’ and you’re done. When you are doing this, it is important to save your reconciliation reports as a PDF each time you reconcile (on the initial reconciliation, not on the round trip conversions). Please don’t waste paper – just save the PDF – you can print it only if/when you need it. Create a folder on your computer called “Bank of xxx reconciliation reports” and save them there. It’s easy and efficient.

More on this here: The Accountant’s Copy

Please feel free to reply to this post with any questions.

Seth David
Nerd Enterprises, Inc.

Why “The QBW?”

Well it may be obvious and then it may not. I came up with the name for this blog because every QuickBooks working file ends with the file extension “.QBW”. I thought it was pretty clever and was actually a bit surprised that it wasn’t already taken. The purpose of this blog is to have one place to provide an exchange of information about QuickBooks. I will post articles with helpful information on how to do things in QuickBooks and I will answer your questions. I may also use your questions as the basis for a web cast or even a full length QuickBooks class that I will make available for download in the Learning Center on our Main Site. I also will post information here about upcoming QuickBooks webinars. These are live online seminars that you can register for and get live help with me. I will have content prepared and I will also allow time for Questions and answers. I also may call an open forum where the entire session will be based on your questions, which you can either submit here or ask during the live webinar.

Please feel free to offer your suggestions for what you might like to see more of here. You’ll be helping me out and in turn I will be very happy to help you by doing everything I can to provide you with the answers you are looking for.


Thanks for visiting “The QBW”

Seth David

The Revenue Cycle – Overview

May 30, 2009 2 comments

For a full length video tutorial on QuickBooks – Invoicing and Accounts Receivable visit our Learning Center Today.

Recording a Sale

Every business needs Revenue to survive. Accordingly the accounting software that we use whether it is QuickBooks or something else, will always have to have ample resources providing us with the ability to record and track our Revenue. The most common of course is the invoice, but that is not all. There are many ways a sale can be made across every type of business and the invoice may not always be the best device to use in recording our sales or revenues. The intention of an invoice is to capture the sale of a product or service that will be paid for at some time in the future. Of course there are sales that happen in your store and paid for immediately and those are captured with a “Sales Receipt”:

Figure 1 – Enter Sales Receipts

When we start a business one of two things happens. Either it starts with our first customer and the initial revenue, or we invest money into the business and use that in some way shape or form to get the word out that we are offering a product, or service, or both. At some point the first revenue dollar comes in. One way or another this has to be recorded in QuickBooks. It will usually be handled with an invoice or a sales receipt. Possibly before the invoice we may have issued a Sales Order to that customer when they placed their order with us. The sales order works exactly like an invoice does, except it is a “non-posting” item. In other words no income is recognized yet. Try this by posting a sales order in QuickBooks and the running a profit and loss. You will of course see that the sales order is not included in income. Of course there is a direct relationship between the sales order and the customer to whom that sales order is issued. In other words I cannot have a sales order without a customer associated with it. QuickBooks will not allow me to save the transaction unless a customer is chosen.

Once a sales order is posted, the next time I go to invoice that customer, the second I select the customer and then hit ‘TAB’ to move on to the next thing QuickBooks will deliver a pop-up message listing any and all outstanding Sales orders for this customer:

Figure 2 – Sales Orders

You can check off this sales order and QuickBooks will pull all of the information from the sales order and drop it into your invoice or you. If you go in and change the quantities on the invoice to something less that what was on the Sales order originally, then the sales order will remain open with the difference available to be used. Otherwise you will want to close the sales order without using it:

Any time the transactions get any more complicated than simple applying the entire sales order to the invoice you will want to use the Sales Order Fulfillment worksheet:

Figure 3 – Sales Order Fulfillment

The best way to learn how to use this stuff is to go in and play around to see what you can do with it. Back up your file first or use a sample company file so you don’t ruin the integrity of your actual QuickBooks company data.

One way or another we get the sale recorded. Of course you could just post journal entries, but that would defeat the purpose of using a program like QuickBooks which takes that technical accounting out of it and gives you these easy to use modules like an invoice form that allow you to enter transactions.

Getting Paid is good

If you record a sale with a sales receipt then the next phase in the revenue cycle happens simultaneously with the recording of that sale. With an invoice as I mentioned earlier it happens some time later, but hopefully sooner than later J. Of course I am talking about payment. With the sales receipt you record the payment right there in the form. There is a drop down in the form where you either choose to deposit the payment directly into a bank account or you choose to deposit the payment into “Undeposited Funds”. This is a special account used in QuickBooks to help capture payments that need to be grouped into the same deposit. I will explain more about this in a minute and I also go into great detail on how this works in our QuickBooks Invoicing & Accounts Receivable video tutorial. When you are working from an Invoice, you are receiving a payment as a separate transaction and QuickBooks gives you a dialogue very specific to this:

Figure 4.1 – Receive Payments

Then you will see this dialogue:

Figure 5 – Receive Payments Dialogue

Here what needs to be done is pretty straight-forward. You select the customer who paid and enter the amount, the payment method and so on. Notice the dialogue has a hyperlink that says “where does this payment go?”. This is the default setup and I recommend keeping it this way. The payment by default goes to undeposited funds.

The Undeposited Funds Account

This account is setup for the purpose of capturing multiple payments, which will be deposited together. Otherwise each individual payment goes separately into the QuickBooks Bank account register. This will not match up with the bank unless you deposit each check separately. As for credit cards QuickBooks simply will not match up with the batch totals that get deposited into your account. This way all of the payments are initially grouped in this “Bucket” called Undeposited Funds. This also properly breaks the cycle up into its proper segments, because receiving the payment is one thing, depositing it is another event. I could receive a check and hold it for 3 weeks or longer before I deposit it. I can accept American Express and they may not fund my money for as much as a week from the transaction date. So I can leave the money sitting in “Undeposited funds” until they actually get deposited. As long as there are payments sitting in Undeposited Funds any time I go to make a deposit the “Payments To Deposit” dialogue shows up. Any checks that are being deposited together should be checked off, then you click ‘ok’ and you are taken into the make deposits dialogue. Either you can add to the deposit if for example you were depositing your own check into the bank along with these customer payments, or you can simply click ok. As far as credit cards are concerned you should check off any Visa & Mastercard from the same day and deposit them together. Then go back and enter a separate deposit for any Amex transactions from the same day. There will likely be cases where two or more days are batched together even though you batch out every day. I suspect that the way the merchant services process this will almost always be a complete mystery – probably even to them. At the end of the day I just care about being able to match the transactions in QuickBooks with the bank account so I can reconcile the bank statement 100% accurately. This way I know for sure nothing was missed. The classic argument is that it isn’t worth worrying about a $2 difference. The flaw in that thinking is that a $2 difference could actually mean $1,000 deposit and a $998 check. And believe me I’ve seen this kind of thing many times.

For an approx 10 minute YouTube video on how to document your deposits click here.

Here is a sample of the Payments to Deposit screen:

Figure 6 – Make Deposits

Figure 7 – Payments To Deposit

Then when you click ‘ok’ you can complete the deposit the same as any other:

Figure 8 – Make The Deposit

Once the money is in the bank, the revenue cycle has been completed.

This is just an overview. Please comment with questions or actual comments.

Remember that we have a full length video tutorial in our Learning Center on our Main Site.

Welcome to the new QuickBooks Blog from Nerd Enterprises, Inc.

May 30, 2009 1 comment

Got QuickBooks questions? This is the place to ask them.

I plan on posting lots of articles about QuickBooks, how to use it better, and how to use it to make your business more profitable

Of course there will also be plenty of links to video tutorials as well and as always when you are ready for a full length tutorial, simply visit our learning center and download our classes there.