Navigating through the Intuit website isn’t all that intuitive, so I thought I would make this video showing you exactly how to buy QuickBooks on their website and download it to your computer (and make sure you get the best price too).  You’ll notice that I mention something about a “beginner’s section” in the beginning of the video.  Please just ignore that, I originally was going to structure the site differently and have different sections but I changed my mind after recording this.

Video Length:7:17

ShareThis

Intuit is releasing QuickBooks 2009 tomorrow, September 29.  I should be receiving my ProAdvisor copy tomorrow since it was shipped late last week.  I will have some new videos up soon using the new version.

After reviewing the information available online, here is a brief summary of what’s new in QuickBooks 2009:

Client Data Review
This appears to be a collection of tools that will help you find errors in different accounts. It allows you to clean up A/R and A/P transactions such as when there are unapplied credits sitting in one of those accounts.  It also lets you work in payroll, undeposited funds and bank reconciliations.  This could be a useful feature for accountants who need to review and clean up their client’s QuickBooks files.

Multi-User
A built-in instant messenger is new this year, allowing users to communicate with each other from within the program.  You will be able to perform a back up of the data file while still in multi-user mode, which is a great feature.  In previous versions you had to switch to single-user, back up, then remember to switch back to multi-user mode.

Company Snapshot
This looks like another great new feature.  It gives you one screen packed with information such as an income and expense graph, customer balances and reminders.  Anything that makes it easier for small business owners to get a handle on their finances is a welcome addition.

Miscellaneous
Other improvements have been made in online banking and the downloading of transactions, the ability to handle multiple currencies, time tracker improvements, list management (now you can right-click to delete a list item - yes!), conversion tools to switch from other accounting programs to QuickBooks, better security and more.

All of these new things sound great, but with Intuit I am always a little skeptical about how well these features have been implemented.  Once I finally have QuickBooks 2009 installed and have had a chance to run it through its paces, I will give my honest review of it.

Click here if you want to check out the new features in QuickBooks 2009

ShareThis

http://www.thejinglegenerator.com/

I guess it’s their attempt at being “cool” and are hoping for a viral video kind of thing, but I think it’s just kind of weird. The site has a retro, 80s type music producer guy offering to record a jingle for your business.  You choose the type of business that you have, then you can enter some text that gets converted to speech and inserted into the jingle (using 1980s voice synthesizer technology!).  Then you get to hear your customized jingle and can email it, download it or copy the URL.

As lame as I think this is, it’s still better than anything that Microsoft is doing to convince everyone that Windows Vista is cool!

Here’s the URL for the jingle that I put together (I apologize in advance for what you are about to experience):

http://www.thejinglegenerator.com/index_recip.php?id=http://content.thejinglegenerator.com/userdata/flv/d46a956ec4ad3d78610f73b1e67aedc1e98e47ee_1218330334.flv

ShareThis

PLEASANTON, Calif., Aug. 7, 2008 — The Sleeter Group has announced that a trial version of QuickBooks software will be included with the publisher’s three QuickBooks textbooks. Students taking courses in QuickBooks are often required to pay hundreds of dollars for a fully functional version of the program. But for the first time, a 140-day student trial version of the world’s most popular small business software will be included free to students using textbooks from The Sleeter Group, a respected publisher of QuickBooks resources.

The special trial version will enable students at technical schools, community colleges and other educational centers to have complete access to all of the features of QuickBooks during a quarter or semester-long class. Instructors generally select the course materials, then either pre-purchase them for the students or require students to obtain them separately.

“When instructors and schools can offer students a free version of QuickBooks that lasts as long as their course does, it helps both students and the schools achieve success in their training missions,” said Doug Sleeter, president of The Sleeter Group. “Students don’t have to worry about purchasing the system, but still are able to learn and engage the program with full functionality, instead of using a version with limited features.”

The Sleeter Group offers textbooks and resources for instructors and students, ranging from the beginner-level Fundamentals textbook, to Intermediate and Complete books. The materials, along with in-class guidance by instructors, help students establish essential skills in small business bookkeeping, making them better prepared for the workforce.

The QuickBooks Fundamentals course textbook ($79.95) is designed for users who may be computer novices, providing an introduction to basic program operations, including file setup, reports, sales, AP, AR and reconciliation functions. The QuickBooks Intermediate textbook ($79.95) covers more detailed tasks, including inventory, payroll, budgeting, forecasting, business planning, sales tax and period-end procedures. The Complete course book ($99.95) includes material from both the Fundamentals and Intermediate textbooks. All include hands-on, step-by-step exercises, review questions and a final summary problem. The 140-day student version of QuickBooks is included free in all 2008 QuickBooks textbooks, available at http://www.Sleeter.com.

The Sleeter Group also includes a variety of resources for instructors, including manuals, PowerPoint presentations and test banks that instructors can access online. Quantity discounts are also offered.

The Sleeter Group (http://www.Sleeter.com) is a community of experts who provide consulting services to small business owners in the accounting software and business process design areas. The group provides QuickBooks training resources to users and consultants, including textbooks, reference books, expert-level webinars, an annual Accounting Software Consulting Conference, a consultant membership network, practice management tools, teaching systems, expert-level technical support and a free online newsletter. Through a network of over 650 independent consultants and small- to medium-sized accounting firms, The Sleeter Group currently serves over 250,000 small businesses each year with QuickBooks and other small business accounting consulting services.

Contact:

Sherrill Sleeter
http://www.sleeter.com
888-484-5484

 http://www.Sleeter.com

ShareThis

While assets are what you own, liabilities are what you owe.  Common examples are bank loans, credit card balances, accounts payable (money you owe your vendors), and pretty much any other type of loan or note that you owe to someone else.

Liability accounts are presented on the Balance Sheet and normally have a credit (negative) balance.  A debit to a liability account decreases it while a credit will increase it.

Liabilities are further broken down into current and long-term.  A current liability is one that is expected to be paid off within one year.   Conversely, a long-term liability is expected to not be fully paid off within one year (like a 5 year bank loan, for example).  It is common practice to take the portion of a long-term liability that will be paid off within the next 12 months and include that in the current liabilities section of the Balance Sheet and leave the remainder in the long-term liabilities section.

Now, it’s example time!

Let’s say that your company took out a bank loan on January 1 of $60,000.00 with repayment terms of 60 months (5 years).  To keep our example simple, we’ll assume that the interest rate is 0% (a pretty sweet deal!).

On January 1 you will book the following entry (assuming you deposited the money into your bank account):

Checking Account            $60,000.00
Note Payable                               $60,000.00

Remember, debits go on the left! 

This entry increases the balance of your checking account and also increases the balance of the liability account.  The net result is that you have more money (yay!), but you also owe the bank that same amount of money (boo!)

Each month that you make your required payment of $1,000.00 you will make the following entry:

Note Payable                        $1,000.00
Checking Account                     $1,000.00

This entry decreases the balance of you checking account (remember, you’re making a payment here) and it also decreases the balance of the Note Payable account, since you have now paid some money back and the balance that you still owe is less than it was before.

After 12 monthly payments of $1,000.00 the Note Payable will have a balance of $48,000.00 at the end of the year.  It’s important to realize that nothing we’ve done here has any effect on the net income of the company.  All of our entries have been on the Balance Sheet.  In the real world, some of the monthly payment would be allocated to interest expense, like this:

Interest Expense                 $100.00
Note Payable                       $900.00
Checking Account                     $1,000.00

And remember, you borrowed that $60,000.00 for a reason.  So some of that money was probably spent on items that will be recorded as expenses.  Remember from our discussion on assets, that if you used $50,000.00 to purchase a new piece of equipment that will last for 10 years, that amount will be capitalized on the Balance Sheet as a Fixed Asset.  Then it will be depreciated over a number of years, so the effect on the Net Income will vary, depending on how the money was spent.

One last thing that I want to make everyone aware of is the following equation:

Assets - Liabilities = Equity

Let’s restate the equation:

what you own - what you owe = what you are worth

So you can measure the worth of a company by taking the total Assets and subtracting the total Liabilities to arrive at the Equity (commonly referred to as Shareholder’s Equity or Owner’s Equity).  That is the true value of a business, at least on paper.  There are other “real world” factors to consider such as cash flow, shareholder distributions, payroll, etc.  We’ll cover these topics later, but my next Accounting Basics post will be all about the Equity section of the Balance Sheet.

ShareThis

Bank reconciliations used to be difficult and confusing when we had to do them on paper, but doing them in QuickBooks is super easy.  You’ll see everything in the QuickBooks training video below, but all you have to do is type in the statement ending date, the statement ending balance and then click on each item that you see on the bank statement.  It’s literally that easy!

But there are still people who struggle with it each and every month and they always need help getting their accounts reconciled.  If you’re struggling with your bank reconciliation it usually means that you haven’t done a good job recording transactions in the first place.  You want to do everything you can to make your transactions in QuickBooks mirror how they are going to show up on the bank statement.  If you keep that goal in mind, everything will work out to be much cleaner and more accurate.

Some of the things that often lead to troublesome bank reconciliations are:

• improper use of undeposited funds (or not using it at all)
• data entry errors (recording transactions for the wrong amount or entering the wrong date)
• merchant account fees being deducted from each sale
• bounced checks
• messing with (or even deleting!) transactions that have already been reconciled in the past

Each of these topics will eventually be covered in their own QuickBooks training video, since there’s a lot to say about each one.

Damn! I switched to a different Wordpress theme and it doesn’t have the same column widths as the one I was using, so the videos don’t fit neatly into the left column. Not the worst thing in the world, but it’s something I need to fix. Looks like I get to play around with some more CSS! At least I got the volume at a decent level this time!

edit (7/24/08): I decided to have the videos open in a new window so I can have them be a larger size.  I think in the future they will be 800×600 so you can really see what I’m doing with even more clarity.  I have changed this video so it will open in a new window.

Video Length:14:42

ShareThis

I really wish these small business owners would realize the value of proper bookkeeping and reporting.  Most of them are so busy working in the business that they can’t put in any time to work on the business.  It’s a common problem, especially among small companies where the owner is also the main employee.  If the owner would step out of the “employee” role and spend some time in the “manager” role, they could make good business decisions that would benefit everyone in the company.  Of course, they would then need a set of accurate, up to date financial reports which their current bookkeepers probably aren’t capable of giving them.

In an effort to help educate bookkeepers and anyone else who is interested (and who isn’t interested in this stuff?), I am starting a series of posts under the title “Accounting Basics”.  Each post will tackle one specific topic or accounting concept.  I will be approaching each topic from a small business bookkeeping point of view, with some necessary accounting theory thrown in.

The first topic is “What are assets?”:

Assets are commonly defined as “what the company owns”.  Some examples of assets are cash, checking and savings accounts, accounts receivable, inventory, prepaid expenses and fixed assets.  Asset accounts are presented on the Balance Sheet, not on the Income Statement.  On the Balance Sheet, assets are typically presented first (at the top of the Balance Sheet).

Assets are broken down into several categories:

Current Assets:  Assets that are expected to be sold or used up within one year such as cash and cash equivalents, accounts receivable and inventory

Fixed Assets:  Assets that are expected to be used for more than one year such as equipment, furniture, fixtures, motor vehicles and buildings

Intangible Assets:  Assets that are non-physical such as patents, copyrights, goodwill and covenants not to compete

Other Assets:  Any assets that don’t fit into any of the other categories.  These will be long-term (last more than one year).  Examples are prepaid insurance or deposits with utility companies.

Assets normally have a debit (positive) balance.  For instance, your checking account usually has a balance above zero.  This positive balance is presented as a debit balance on the books.  Asset accounts are increased by debits and decreased by credits.

Let’s run through some examples which will demonstrate the proper treatments of asset accounts:

Fixed Assets

A company has written a check for $2,500 to purchase a new piece of equipment.  We know that this equipment will last a few years and it is a pretty large purchase for the company.

A lot of untrained bookkeepers will record this check as a debit to an expense account such as “Equipment Expense”.  This would not be the proper treatment for this transaction since we know that the piece of equipment is expected to be in use for more than one year.  It should be capitalized (meaning it should be added to a fixed asset account), not expensed.

So the proper accounting entry in it’s most basic form would look like this:

Equipment                   2,500.00
Checking Account                    2,500.00

This shows a debit (an increase) to the Equipment account, which is on the Balance Sheet and a credit (decrease) to the Checking Account, which is also on the Balance Sheet.  That’s right, this transaction has no effect on the Profit & Loss report at all!  This makes sense if you consider that the company is simply trading one asset (money) for another (equipment).

Many Profit & Loss reports are grossly inaccurate because of this type of improper recording of fixed asset purchases.  It’s one of the most common mistakes that I see and it’s easily avoidable once you understand the concept of fixed assets.

You can pretty much treat intangible assets the same as fixed assets.  The only real difference is that fixed assets are depreciated over time and intangibles are amortized.  These topics will be covered at some point in the future.

Prepaid Expenses

Now let’s consider a check written on September 30, 2007 for $1,200 to pay for a full 12 months of insurance coverage, from October 1, 2007 through September 30, 2008.  If we are looking at December 31 financial statements, we should see a balance in Prepaid Insurance of $900.  Since the $1,200 applies to 12 months of coverage, we should only expense $100 per month, leaving the remainder in an asset account on the Balance Sheet.

So when the check is written we would debit the entire $1,200 to an asset account such as “Prepaid Insurance”.  Then at the end of each month we would make a journal entry to credit (decrease) that prepaid account and debit (increase) Insurance Expense.  This allows us to properly match the expense with the time period that it is incurred.  Each month 1/12 of the total is expensed, instead of expensing the entire amount on the day the check is written.

In a lot of companies the books aren’t maintained at this level of detail, which is fine, but I think it helps to understand the concept anyway.

Summary

That’s pretty much all there is to it!  Assets really aren’t all that complicated, if you can just keep these 3 basic rules in mind, you’ll do OK:

Assets are things that the company owns

Assets are increased by debits and decreased by credits

Assets are presented on the Balance Sheet and are not part of the Profit & Loss report

I have over-simplified some things here, but this post has already gone on far too long!  Future posts will expand on these accounting basics and we’ll go more in-depth.

ShareThis

These are products and services that I use and highly recommend to others.  I have no paid advertising on the site and I will always give you my honest opinion about any product or service that I use.  In fact, you’ll hear me complain about QuickBooks quite often, but I still think it’s the best small business accounting software available for a lot of people.  I do have Google ads on the site, but other than that I only have links to products and services that I believe in.  I want you guys to know that integrity is very important to me and that’s why I wanted to let you all know exactly what’s going on here.

That being said, if you were planning on buying RoboForm anyway, I would really appreciate it if you would purchase it through my link! 

ShareThis

Let’s forget about QuickBooks, accounting and bookkeeping for one day and celebrate the freedom that we all enjoy here in the United States of America!  This country may have problems, but I wouldn’t want to live anywhere else (well maybe Sweden would be OK, they have the fastest internet in the world!)

I hope you have a happy, healthy July 4th!

ShareThis

I found a long discussion about an old accounting joke that I heard while attending my very first accounting class at Clinton Community College.  The members of this forum were trying to figure out how old this joke was and what the original version of it was since there were several variations of it.

Here is the joke as I heard it back in 1991: (I say that as if it was a really long time ago!)

This story is set in the days before computers, when accountants had to do everything manually on paper.  A man who worked in the accounting department of a large company was famous for never, ever making a mistake.  His ledgers always balanced to the penny and he never had to make any adjusting entries to correct anything.  All of his co-workers noticed that he had a peculiar routine to start his day.  Every day he would come into work, sit down and open the drawer to his desk.  He would look inside for a few seconds, nod his head and then get to work.  He was the perfect accountant for over 40 years until the day finally came when he retired from the company.  They gave him a gold watch, patted him on the back and walked him out the door.  As soon as the door slammed shut behind him the other accountants raced over to his desk to see what was inside.  They found a note taped to the bottom of the drawer that read “Remember, debits go on the left”.

It’s amazing what passes for humor in the accounting world, huh?  But I did find something interesting in the discussion about this joke.  They were discussing a variation on the story.  It involves something about people needing to walk past the window to get their debits approved so “debits go by the window, and the window is on the left.”

According to one person, there is some basis to this joke.  In the old days the windows in an accounting room (or any writing room) were always on the left so as to not cast a shadow from the writing hand.  So remembering “The debits go by the window” put the debits properly on the left.  Of course the joke then goes on to say that the accountant changed jobs and all of his entries were backwards because the window was on the other side of the room.

What’s the point of this whole thing, you might be asking yourself?  It is simply that “debits go on the left”.  It really does help to think about the very basics of accounting when you are doing any type of bookkeeping.  If you think in terms of the “T account”, debits go on the left of the T and credits are on the right.  Entries on the left will increase assets and expenses and decrease everything else.

Sometimes my colleagues will start talking about how a particular transaction will affect certain accounts, but they talk in broad, general terms which I find confusing.  I always bring it back down to the basics of debits and credits.  Sure, it’s great to know that if the business owner sells that piece of equipment they will have a big gain to pay taxes on, but that doesn’t help me get his books in order.  That particular transaction will require a credit to the fixed asset account, a debit to accumulated depreciation, a debit to the checking account and a credit to the gain on disposal account.  And some people love to generalize with round numbers and they often screw up the math and come up with a bottom line that is way off.  I always like to take two minutes and jot down the debits and credits on paper with the actual numbers.  That way I know what I’m talking about and there won’t be any surprises later on.

I’ve wanted to write about this topic for a few days now, but I couldn’t figure out how to word everything so that it would flow nicely.  Now that I’ve finally written it I can see that I still haven’t figured out how to make it flow but I’m not going to re-work it too much.  I really just wanted to get the info about this old joke out there and I’ve accomplished that, so I’m happy.

If you have any accounting-related humor, please leave a comment.  I would love to learn some more ways to ridicule other accountants!

ShareThis