New database for New Year?

It's Oct, and time to think about if you're going to want a new database for the new year?

There are many advantages to a new database for the new year, including:

• Faster data retrieval. A huge database can become unbearably slow. One client has a database hit the wall in August. Trust me, you don't want to start a new database midyear if you run payroll or pay taxes by the calendar year.
• The ability to start fresh. A new database gives you the opportunity to clean up your chart of accounts, customer, vendor, and other lists, and especially payroll problems. Only lists transfer; no transactions
• Modify that last one. You can purchase software that I know how to use to transfer transactions. You'll have to keep your lists the same prior to moving data. Once data is moved, you can delete any list item that's not included in one of the transactions. 
• The security of having only a single year in a single database; electronic information can become corrupted over time.
• The convenience of giving your CPA last year's database while continuing to run your day-to-day business without interruption.
• The year, the IRS purchased QuickBooks. If you get audited, having a single year in a single database enables you to provide the IRS with just the information they demand, and nothing more.

While there are many advantages to creating a new database for the new year, there are a few disadvantages.

• You'll need to hire help to setup a new database. 
• You'll either have to buy software to move over data, or some data needs to be entered twice,, such as uncleared checks and unpaid invoices.
• If you're using Enterprise edition will you be able to print out reports cross databases for comparison. Otherwise, you'll have to do that with print-outs, Excel, and Intuit Statement Writer. 

Ultimately, the decision to create a new database for the new year depends on what's best for your business?

Typically we can get you ready for the new database in less than 4 hours, which leaves time to discuss year-end closing or any other business concerns.

You'll want to do this in Dec., so you'll be ready to enter Jan transactions on day one of Jan.

QuickBooks for the Mac

QuickBooks for the Mac is excellent. If someone cannot produce financial reports for your business, "they" are the problem, not the software.  

There are some features in QuickBooks for the PC not available on the Mac version. Intuit is catching up fast on Mac features, so it's worthwhile to keep updating your Mac software. (Not true on the PC). 

Features not in QuickBooks for Mac that are in QuickBooks for Windows:

• Business planning, expert analysis, and business optimization tools.
• Price levels.
• Integration with third-party applications, including Microsoft Word and ACT! - works with Entourage and a few other apps for certain functionality (like sending emails)
• Merchant account services.
• Multiple estimates per job (QuickBooks for Mac supports a single estimate per job).
• Sales order and back order tracking.
• Assembly items will be converted into non-inventory part items.
• Budgets created without an associated account.
• Transaction type “transfer” (will convert as journal entry).
• Transaction type “EFP payroll” (will convert as payroll liability check).
• Workers Comp Items.
• Fixed Asset Items.
• Multiple “ship to” addresses, preferred send method and payment information for Customers:Jobs.
• Custom Fields in lists (Customers, Vendors, Employees).
• Accountant's Copy.
• Bill Payment Stubs.
• Undo Last Reconciliation.
• Multicurrency
•  

Reports not in QuickBooks for Mac that are in QuickBooks for Windows:

The following preset reports are currently not supported by QuickBooks 2009 for Mac. You can, however, create many of these reports using the customization and filtering in QuickBooks for Mac.

• Profit & Loss Unclassified.
• Job Progress Invoices vs. Estimates.
• Open Purchase Orders By Job
• Sales Tax Revenue Summary.
• Pending Builds.
• Income Tax Preparation.
• Profit & Loss Budget Performance.

The Shoemaker's Daughter has no Shoes?

My accounting is perfectly up to date all the time. Accounting is required in business and if done well, becomes a profit center. What a simple way to make more profit!

It's New Year's, and time to roll over your paperwork!

File by year. Put transactional receipts for the past year into archive boxes. Keep the boxes out so you can file remainder paperwork as it comes in, and have access to receipts for product returns.

Have only current year files in the filing cabinet by your desk. After you clear out last year's paperwork, you'll have a place to file the current year's paperwork that is crossing your desk now. This is a huge time-saver. And if you're successful enough in business to last many years, having yearly archives will be a huge time and space-saver as well.

Fixed Assets, such as your vehicle, plus licenses, warranties, credit card legalese, debit card pin numbers, and other paperwork that is current for the business stays in the filing cabinet.

This is a good time to add printed labels. Besides creating a more attractive filing system, printed labels are easier to read, so less paper is misfiled. Toss excess paperwork. Filing is faster if the folders have wiggle room. My filing cabinet is a beauty to behold and it only takes this once a year update to keep it that way.

The last thing I did as I was archiving last years paperwork was to note my income vouchers and say a blessing prayer for all the clients/readers who who gave me money last year. I am unabashedly practicing gratitude as a spiritual practice. May you prosper in future years!

Why QuickBooks Online Edition is Slower than QuickBooks Desktop (All Versions)

Sometimes a business has a compelling reason to use QuickBooks Online. The most compelling reason is remote access. If you have internet access, you have QuickBooks. 

But for most businesses, QuickBooks Desktop is the better choice, because it's much faster for anyone entering data, especially a power user like myself. Plus, it's cheaper, and has a richer feature set. 

"Desktop" QuickBooks includes all other versions: QuickBooks Pro, QuickBooks Premier, QuickBooks Accountant, QuickBooks Enterprise, QuickBooks Mac, and all special Editions like contractor's edition, manufacturing edition, retail edition, non-profit edition, etc.

Here are some specific examples of differences in speed.

Function: Add a New Account

o). In online edition, you have to select what account type you want to add, such as Expense Account, and then a secondary type of expense account, for example General & Administrative Expense. Sub accounts must match this secondary level type. Why bother? It's a useless designation. So for ease-of-use, chose one secondary type of expense account, and make them all the same.

d). In desktop edition, you can just add a new account with account type, such as Expense.

Function: Delete an Account

o). In online edition, you can delete accounts with balances in them. Before you delete an account you have to check and make sure it doesn't contain any transactions. The Quick Report comes up with "this month", so you have to select "all" to see if there are any transactions from the past.

d). In desktop edition, you can just say delete, and QB will protect you from deleting an account with a transaction.

Function: Select an Account to post the transaction to:

o). Online edition shows you EVERY account in the chart of accounts, with it's parent account. It's a long list so it's very time consuming to find the exact account you want. Usually you want an expense account, which is at the bottom of the list.

d). Desktop version shows you just the expense accounts, so you're looking at a much shorter list of accounts. And you can set Preferences to select, "see the lower account".

Function: Accept a Transactions

o). Online Edition makes you find the "okay" button to save a transaction.

d). Desktop version saves automatically.

Function: Editing a List

o). Online edition you have to find the "edit" or "new" button. Type ahead does work but not very well.

d). Desktop editions let you use keyboard shortcuts, like “ctrl-E” for "edit" or “ctrl-N” for "new". I can edit a list lightening fast with two hands. Type ahead works perfectly.





Function: Salestax

This isn't a speed issue, it's a feature issue. You can only have one salestax rate in Online Edition. Desktop allows unlimited salestax rates.

Other differences? What do you think?

Success Stories

At some point along my path, I realized I had a gift for helping people make their dreams come true. Here are a couple of my more unusual success stories with friends and clients:

• A plumber with hurt knees remembers he was attracted to computers in the army but never had a chance to pursue it. He follows my recommendations for what computer to buy first, and then continually asks advice about what to do next so he doesn't waste his time. A few years later he is earning a high hourly rate and being flown all over the country for his expertise.

• A welfare mother cries on my shoulder that she can't get off welfare because she has no time to work at a job. I look around her apartment and suggest she start off just focusing on clearing out her place so she'll become more efficient time-wise. This ignites her spirit. She sells off clothes, books, movies, as well as eliminating junk and clearing out projects. As her place starts looking cleaner, her ex-husband pitches in by buying new bookshelves. Finally her life is efficient enough whereby she finds time to work at a part-time job. This eventually pays well enough to get the family off of welfare.

• A successful older blue-collar business owner hires me to help him with current bookkeeping and to prepare financial reports so that he can pay back taxes. Since he was functionally illiterate, everyone else had frauded him which is how he got into this mess. I help him get his accounting into perfect order. With that, over the next couple of years, he became financially secure. Once a system is in place, it takes no time at all to maintain, so I asked him what he wanted to do next? He decided to retire and pursue a hobby. I helped him collect money owed, and created a list of assets he could liquidate and their current appraisal value. A year later he dies suddenly. He received the precious gift of a year of freedom. 

The broader picture is that we don’t always need more; sometimes we need to manage what we already have in a way that helps us to accomplish our true goals in life.

How to leverage a loan

A woman walks into a bank in New York City and asks for the loan officer. She tells the loan officer that she is going to China on business for two weeks and needs to borrow $5,000.

The bank officer tells her that the bank will need some form of security for the loan, so the woman hands over the keys to a new Lamborghini-spyder parked on the street in front of the bank. She produces the title and everything checks out.

The Loan officer agrees to accept the car as collateral for the loan. The bank's president and its officers all enjoy a good laugh at the woman for using a $250,000 Lamborghini as collateral against a $5,000 loan. An employee of the bank then drives the car into the bank's underground garage and parks it there.

Two weeks later, the woman returns, repays the $5,000 and the interest, which comes to $15.41.

The loan officer says, 'Madame, we are very happy to have had your business, but we are a little puzzled. You are a multi-millionaire. Why you would bother to borrow $5,000?

The woman replies: 'Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there safely when I return?

This was submitted by Lawrence Gu, a hardware tech.

Personal & Business Expenses

Sandra asks: I've read your book, and am trying to move from Quicken for my personal finances to QuickBooks. I read understand using Other Income and Other Expenses for personal accounts but I am confused about where to put my personal checking and credit card, home mortgage, car loan. I tried using a business class and a personal class, but could not assign “personal” to the bank account types.

Sounds like you've done a great job of separating out your personal finances from business finances (which the IRS loves), so the ideal solution is to have two databases, one for business and one for personal. That way you won't have to concern yourself with a). Other Income and Other Expenses, which is just a strategy for people who are commingling funds, or b). Classes, which is never the way to separate business from personal finances. You'll have to flip back and forth between databases, but that's simple in QuickBooks.

You may want to re-read the chapter on Business Structures to clarify if this is he right solution for you.