Send us your QuickBooks file

March 26, 2010 Leave a comment

Upload your QuickBooks File to us and we will give you a free exclusive video report with our analysis of your books.

Simply click the link on our main site at www.nerdenterprises.com

Oh and hey! If you use QB for mac please save a backup for Windows (we do not have MAC computers in our facilities even though we know QB for Mac very well).

10 Tips to help you work faster in QuickBooks

March 18, 2010 Leave a comment

  1. Learn the keyboard shortcuts – hold ‘ALT’ and note any underscored letters in any menu items.
  2. Use the tab key to move between fields, Shift + Tab to move backwards between fields.
  3. When doing something repetitive, count your keystrokes (eg it takes 5 Tab key strokes to get from the amount of a check to the account.)
  4. When entering dates you can use a “.” to separate the components – this is faster than using the “/”.
  5. All numeric fields provide for you to perform calculations, just enter a number and then enter an operator (+, -, /, *)
  6. When in a date field or a ref# or check # filed hold CTRL and press an up or down arrow to advance the date or number.
  7. CTRL + 1 Gives you your company file location and in QB 2010 you can copy and paste that into windows explorer for quick access to the file.
  8. In a drop down or date field hold ALT then press your down arrow. Then release ALT and use your arrow keys alone to navigate from there.
  9. Try not to have too many window open – especially in a multi-user environment that really seems to slow QB down.
  10. While reconciling, check off the box at the top right that says “Hide transactions after the statement’s ending date”.

If you want a video tutorial showing you tips 10 X more powerful than these add this to your cart:
QuickBooks Tips and Tricks

Categories: QuickBooks Tips

Download The $2 Paper on Social Media – From Action Plan To Strategy

March 16, 2010 Leave a comment

Social Media – From Action Plan To Strategy

What is My strategy / what do I want?

What can I offer people?

What am I looking for from people?

What are my topics of interest?

Then where do I find the people who meet the criteria set forth above (ie the people who want what I am offering, and the people who are offering what I want)?

This is what you will read and even watch some videos about in this $2 Paper on Social Media – From Action Plan To Strategy

Add this to your cart here I can take you on a brief journey with a year’s worth of my learning all for only $2.

Correcting Customer Payments and Deposits

March 14, 2010 Leave a comment

Don’t miss our live webinar on Saturday March 20 where we go over this and much more in a lot greater detail. REGISTER NOW

QuickBooks – how to correct a customer payment when the deposit has already been recorded.

Why?

What if you find that you made a mistake on a customer payment? Simple right? Find the payment and correct it in QuickBooks. But what if QuickBooks tells you that you cannot make that change because the payment is already included in a deposit? Ok sure, then just go to the deposit and delete it so you can fix the payment. But wait! There are othe    r payments included in this deposit, and those payments are ok! Moreover the deposit may be reconciled so I definitely do not want to delete it! What can I do then? This web cast will answer that question for you.

What?

This can actually be handled in a few simple steps.

  1. Delete the line item from the deposit containing the payment that was recorded incorrectly.
  2. Replace it with a temporary line item containing the same amount.
  3. Fix the payment
  4. Bring the payment back into the deposit
  5. Delete the “place holder” created in step ‘2’

So let’s say we just realized we received payments are recorded a deposit but we accidentally recorded a payment from “David Hughes” that was really from another customer, Erika Pretell. We don’t want to delete the deposit because there are other payments recorded there.

We also never want to delete a deposit that has already been reconciled. How could it be wrong if it is already reconciled? Easy – let’s say you’re a bookkeeper and you’ve been hired to clean up the books of Larry’s Landscaping and supply. You find that Larry really doesn’t know bookkeeping too well. What he has been doing is posting invoices and applying payments, but not recording the deposit, leaving the applied payments in “undeposited funds”. Then when he gets his bank statements he sees that none of his deposits are on the books, so he records the lump sum deposits and books them all to an income account. Well besides having a ton of money sitting in undeposited funds that needs to be cleared out, Larry has now duplicated his income. This is going to make Larry unhappy when he has to pay his taxes on twice the income, but doesn’t have twice the amount of money in his account. Also when Larry presents his Profit and Loss Statement to the bank for a Line of Credit and the bank finds out that his income is doubled there, they will not be too happy and will likely not extend credit to Larry. So it is really important to fix this stuff and it is equally important to know how to fix it without creating an even larger mess. You cannot delete a deposit that has been reconciled – it will through your reconciled balance off, so even if your payment is the only one in the deposit, on a reconciled deposit you cannot delete it, you have to use the method described above and demonstrated in the video.

In this video tutorial we will show you how to correct both scenarios.

Interactive Component Click the symbol to watch / download

Video Tutorial:

Practice

Review this video several times until you really understand the material. Then open a sample company file and practice doing this. Do this 3 or 4 times and you will get it for sure!

Now What?

Now that you know how to do this you can first be aware of and look for situations like these where income is duplicated, and/or a payment was mis-posted on the books and you will now have mastered the knowledge required to correct these issues. You will know how to do this blind.

How to write off a customer balance in QuickBooks

March 2, 2010 3 comments

Hi! This is something that comes up often enough and someone asked the question on twitter, so I thought it would be helpful to post on the subject of how to write off a customer’s balance in QuickBooks. The process can be accomplished in a few simple and quick steps. But first a word on what not to do.

The temptation might be to post a discount on the customer’s invoice to reduce that invoice’s balance to zero. This works in theory, but here’s the problem with that. Ultimately as you create your set of books you are leaving a trail of crumbs for someone else to pick up on and look at later. It may be the person preparing your taxes and it may be someone looking to buy the company who’s books you are compiling as you do the bookkeeping each day. So it is really important to tell the right story. If I discount a customer’s invoice to zero that suggests that everything was ok and I decided for whatever reason to create some goodwill by giving that customer a discount. This paints a very different picture compare with when I am writing off a customer’s balance as Bad Debt because they chose not to pay.

So the correct way to handle this transaction in proper context is to record a journal entry and write the balance off as Bad debt. In QuickBooks it is simple and the video tutorial will demonstrate how to do this. First here is a screen shot of what it looks like in QuickBooks:

Then you have to apply the credit produced by going into Customer Payments and applying the credit of $13,500 for this customer.

Description:

Video Tutorial:

Click to watch the web cast

Payroll

March 1, 2010 4 comments

Payroll can be tricky and is often posted incorrectly. One very good clue that your payroll is off is that your balance sheet shows Payroll Liabilities in it. Or worse, you have negative payroll liabilities. Every time payroll is posted in its entirety payroll liabilities should zero out. At the same time if you double click your payroll liabilities from your chart of accounts you should see entries going in and zeroing out for each pay period. If there is no activity in the payroll liabilities account then you may be suffering from the classic payroll mistake that many bookkeepers make – they book the net payroll as the payroll expense, and the book the tax payment as the employer tax expense. This is not correct.

This video is not the web cast – it is simply a video on payroll the tutorial is further down in the post:

Here is a sample payroll report (A replica I created based on a well known payroll company here in the US):

Figure 1 Click for a clearer image

Payroll is made up of several things. The first thing that happens is that we pay the employees some gross amount. So let’s say that the total payroll for a pay period is $9,462.79. That gross payroll number may be made up of several things. Regular Hourly Pay, Overtime, Salaries, and let’s say Holiday Pay. When it comes to the bookkeeping, that particular breakdown doesn’t usually matter.

Here is what really does matter. In fact if you are looking at a new payroll report format this is the information you want to find in the report and gather for bookkeeping purposes:

Gross Payroll

  • Withholdings
  • Other Deductions (Health Insurance, Workers Comp)
  • Total Taxes
    • Employer Share
    • Employee Share
  • Payroll Fees

There are 3 Payments to record:

  • Net Pay
  • Taxes
  • Fees

The Net Pay is made up of several things:

Gross Pay 9,462.79
Less Employee Taxes (2,298.90)
Less Medical and Other Deductions (54.50)
Net Pay 7,109.39

Payroll Taxes:

Then the payroll taxes have to be figured. This is made up of 2 parts. The remittance of the payroll taxes ($2,298.90 from above) and the employers share of the taxes ($1,393.63)

Total Payroll Taxes are $3,692.53

So the Payment is recorded as follows:

Net Check $3692.53

Split:

Payroll Taxes (employer expense): 1,393.63

Payroll Taxes Payable (to zero out the liability): 2,298.90

Description:

File Download:

Download the excel template from the webinar here

Video Tutorial:

Click to watch the web cast

The Difference between a Bookkeeper, Controller, and A CFO

February 7, 2010 Leave a comment

When we work with companies on a consulting basis we work essentially at three levels; Bookkeeping, Controller, and CFO services. For most small companies these roles are merged. You have the brand new company started by one individual. He or She has an idea to sell a product or service. At this point already and without even realizing it in most cases this person is already assuming roles within their start-up company. This person is the CEO, COO, CFO, Controller, and Bookkeeper all in one. And for a company at this stage that is probably just fine. As the company grows the company will evolve and these roles will start dividing off. Perhaps the most common and logical evolution is for the bookkeeping function to break off from Controller and CFO. If the business owner recognizes that he or she does not really understand bookkeeping, but they generally understand that they want to see a profit and loss at least to see how they are doing, then the roles have just split off. So he/she goes out and hires a bookkeeper or hires a company like ours to come in and enter and reconcile once per month, then show him his Profit and Loss statement. At this point the business owner is assuming the roles of controller and maybe CFO, but it may be too soon for that. The bookkeeping is now a separate function.

As things evolve these roles become more defined and depending on the size of the company it eventually becomes necessary to break these roles up – at least in terms of definition. Why is it important to define these roles? It is important to define these roles because it is important to understand them so that their functions are implemented within or outside of the company. They are all very important for every company who hopes to succeed.

I’ve been writing and speaking a lot lately about working backwards. We see the end and work our way back from there to today so that we can see what our goals are and how we can reach them. The way I saw this article and video coming together was by doing just that. I see the CFO’s function as the one who sees the end in terms of the financial and then develops the plan for how to get there. In real world terms we call the CFO’s plan a financial model. The controller comes right before the CFO. That person’s role is to provide financial oversight. Make sure that the systems are in place to ensure that the accounting and bookkeeping information supports the following:

  • Existence or Occurrence
    • If the Balance Sheet says we have a piece of equipment, does it really exist? Did the transaction underlying that asset really occur?
    • If the profit and loss shows that we made $100,000 are there really sales to support that?
  • Completeness
    • Is everything that should be included in the financial information in fact included?
  • Valuation or Allocation
    • Have we recorded everything at true fair market value and is the information allocated in the right category (e.g. principal vs. interest)?
  • Rights and Obligations
    • Do we have the rights to collect what we say is owed to us and are we in fact obligated to pay our Liabilities?
    • Going back to completeness are all the liabilities that should be recorded in fact recorded on the books?
  • Presentation and Disclosure
    • Is the information presented in proper form and have we given our readers all of the information they need to evaluate the financial statements?

The Controller needs to review and audit the financial information in order to be sure that the above outline is taken into account. Based on the foregoing, the controller is the one who really has to set up the chart of accounts for a company. I had this argument with a client once. He wanted to work with his bookkeeper on his chart of accounts instead of me. I tried to explain that this was a mistake – that the chart of accounts is the thing that will ultimately describe “Presentation”, and “Allocation”. This is not an area I would ever feel comfortable having a bookkeeper work on unless that bookkeeper really had a lot of experience preparing financial statements so that they can visualize what the end result must look like. In the end the client has to do what they feel comfortable with. I can only advise and guide as well as the client will let me.

Finally we have the bookkeeper! The poor bookkeeper J. He or she has to enter all of the data and it has to be entered correctly otherwise when the controller reviews the financial output they will have many corrections for the bookkeeper. This is why it is so important to have a bookkeeper who really understands the financial statements because after all, they are the ones who are really putting those financial statements together every time they hit “Save and Close” or “Save and New”. The minute those buttons are clicked the information posts to the balance sheet and/or the Profit and loss statement. Unfortunately I have encountered many bookkeepers who really do not understand this. They think that once they’ve entered and paid a bill they are finished, little realizing that what they have just done is provided information to the controller and then the CFO about what is happening with the company financially. Each individual transaction may in fact not be significant but all of the transactions collectively will be very significant. So you have to treat the pieces the same way as you treat the whole pie in order to be sure the pie comes together correctly.

Now let’s work forward again. Assuming the bookkeeper has done their job well, then all bank accounts are reconciled and so are all credit card accounts. This helps to ensure completeness and accuracy, and to some extent ensures Valuation. Next assuming that the controller has reviewed or audited and generally satisfied themselves as to the financial information and whether or not it fairly states the financial position of the company, now the CFO can do their job.

The CFO sets yard sticks out. Goals for the company to reach with really one basic thing in mind – how do I increase the net worth of my company? We set up the financial model which is management’s best guess as to how the company will perform in the future. The standard model is 5 years out. Personally I have always felt it was a waste to go beyond one year because so much can change during that year that even if it does turn out to be accurate 5 years out I think that can only be chalked up to coincidence or luck! These forecasts are reviewed regularly and compared with actual results of operations to be sure everything is moving along as expected and to determine if changes are needed to get/keep the company on course.

So let’s summarize by outlining each function and their roles in bullet point fashion:

  • CFO: Financial Management of the company – looking forward, planning, projecting, measuring and tracking progress. How do I increase the net worth of my company?
    • Analyze monthly statements – Balance Sheet, Profit and Loss, and MOST importantly the Statement of Cash Flows.
    • Set up review and update financial projections
    • Secure financing with the right banks if/when needed to reach the goal of increasing net worth.
  • Controller: provide internal assurance that the financial information is presented in a manner that fairly states the financial position of the company. Set up the systems (ie documentation and flow of the same) to be sure that information is captured completely and accurately. Review information to ensure valuation, allocation, presentation, and disclosure.
    • Audit, review, and present the financial information for the CFO, and CEO to manage their functions.
  • Bookkeeper: Enter all transactions into the set of books with an eye towards proper classification and presentation on the Balance Sheet and Profit and Loss Statements.
    • Enter, Reconcile, and review bookkeeping data entry to be sure that the controller has what she needs.

At Nerd Enterprises, Inc. we can provide services at any or all of these levels. If you would like more information call us at (866) 945-8070 for a free ½ hour review of your balance sheet or business model. We can review your books, make sure that everything is entered properly and accurately then we can work with you to put the plan in place for increasing your businesses net worth.