Accounting, Bookkeeping, and QuickBooks Tips for Small Businesses

Posts tagged QuickBooks

Month End Bookkeeping Tasks

November 9 20 Comments Written by Michelle Edwards, CPA

Shoebox Accounting Month End BookkeepingClosing your books every month is an important bookkeeping task that should be part of your monthly bookkeeping routine. By closing your books on a monthly basis will help you have cleaner books, be more organized, and you will have an easier time preparing your books to give to your tax preparer at the end of the year. Here is a 12 Step process to follow when you close your monthly accounting records.

  1. Accounts Receivable
      Verify all clients have been invoiced for work completed during the month.
      Double check your deposits and monies received have been posted to QuickBooks.
      Reconcile your Aging Accounts Receivables report against your Balance Sheet and against your General Ledger. Make any changes or adjustments to ensure all records match.
  2. Accounts Payable
      Make sure all bills have been paid.
      Double check all automatic bill payments and any recurring payments have been posted to QuickBooks (example – loan payments, monthly car insurance payments, etc).
      Post any outstanding bills to Accounts Payable so you can track what needs to be paid next month.
      Reconcile your outstanding vendor bills and vendor statements against your Accounts Payable Reports and your Balance Sheet. Make sure your records match those of your vendors. Make any adjustments or changes.
  3. Monthly Reconciliations
      Reconcile Bank Accounts – Reconcile all bank accounts using your monthly bank statements and monthly credit card merchant statements. Print and file the reconciliation reports and bank statements when finished.
      Reconcile Loan Balances and Lines of Credit – Reconcile your loan balances and lines of credit against your monthly statements. Print and file the reconciliation reports.
  4. Track your Fixed Assets
      Record your monthly depreciation.
  5. Prepaid Income and Expenses Adjustments
      Record your monthly journal entries to allocate your prepaid income and expenses.
  6. Write Off Bad Debt
      Write off any uncollectable invoices to bad debt. In QuickBooks, this can be done using a Credit Memo.
  7. Verify all Checks and Invoice Numbers are Accounted For
    Checks and Invoices are generated in numerical order. If any check numbers or invoice numbers are missing, figure out why and record the missing transactions. If they were voided or deleted, make sure you keep a record as to why they were voided and/or deleted.
  8. Review Financial Statements
    Look for any unusual balances, missing items, or mistakes. If anything looks or feels “off” look into it and figure out why the balance seems odd to you. Make any corrections or necessary adjustments.
  9. Update Budget
    Update your budget and review your budget vs. actual numbers. Determine why some budget amounts are off for the month. Feel free to adjust your budget as needed.
  10. Print and File Financial Statements and Financial Reports
  11. Close Books
    If you’re using QuickBooks, use the “Closing Date” feature. This great feature allows you to lock previous months and protect with a password. This keeps yourself and your bookkeepers from accidentally changing previous months. The “Closing Date” feature can be found under the company drop down menu. If you find any errors later on, those errors need to be corrected in the current period.
  12. Back Up
    Back up your QuickBooks, Peachtree, or other accounting software.

There you have it – 12 steps to follow to close your books at the end of each month. Adding these tasks to your monthly bookkeeping routine will help you have cleaner books, be more organized, and you’ll have an easier time preparing your books to give to your tax preparer at the end of the year.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Bookkeeping, Erie CO CPA, Month End Bookkeeping Tasks, Peachtree
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How To Create A Budget in Quickbooks 2010

October 25 3 Comments Written by Michelle Edwards, CPA

Create Small Business Budget With QuickBooksLast week we discussed the importance of a budget and the process to take when creating a budget. I know a lot of you out there use QuickBooks for your bookkeeping. This week I will teach you how to make a budget in QuickBooks 2010. It’s important to note that you need either QuickBooks Pro or above to be able to create a budget in QuickBooks. You can not enter a budget in QuickBooks Simple Start.

Follow these simple steps and you will have a QuickBooks budget.

  1. Open your QuickBooks company file.
  2. Click on the Company menu, select Planning & Budgeting from the drop-down menu, and then click on Set Up Budgets.
      If you have already created a budget in QuickBooks, your most recent budget will appear in the next window. To create a new budget, click the Create New Budget button in the top right corner of your budget window.
  3. The Create a New Budget window will appear. First, you need to select a fiscal year for your new budget. Then, you can choose whether you would like to create a Profit and Loss (i.e. Income and Expense) or a Balance Sheet Budget. Make your selection and then click Next.
  4. When creating a Profit and Loss Budget, the Additional Profit and Loss Budget Criteria window allows you to use Customer:Job or Class criteria in your budget (assuming, your company has the class tracking turned on). Make your choices, then click Next.
  5. The Choose How You Want to Create a Budget window allows you to either Create a budget from scratch or Create a budget from your previous year’s actual data. Make your selection and then click Finish.
      Create a Budget From Scratch – Lets you manually enter amounts for each account you are interested in tracking.
      Create a Budget From Previous Year’s Actual Data – This option will automatically enter monthly totals from last year for each of the accounts listed in your budget.
  6. Your Budget will appear in the next window. This window allows you to enter your monthly budget amounts for each account. QuickBooks will automatically calculate your annual budget amount for each account. When finished, click Save.
      Tips:

  • The Copy Across button will copy an amount entered in Jan across the rest of the months. Saving you the hassle of entering the same amount 12 times!
  • The Adjust Row Amounts button is a neat feature. It allows you to start at the 1st month or start at your currently selected month. Then you can adjust (increase or decrease) the monthly amounts in this row (for this account) by a dollar amount or by a percentage.
  • Beware of the Clear button. It clears your entire budget!

Congratulations, you have entered a budget in QuickBooks and are ready to track your financial progress for the year.

Related Budget Blog Entries:
Simple Steps to Creating Your Own Small Business Budget

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Business Budgets, Erie CO CPA
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CPA? Accountant? Bookkeeper? What’s the Difference???

October 11 2 Comments Written by Michelle Edwards, CPA

CPAChoosing a financial advisor for your business is a big decision. I recommend finding an advisor who you are comfortable working with, a professional with at least 3-5 years of experience, has good references, and most importantly someone who is trustworthy. Sounds easy enough, but then you start looking and realize there are a lot of choices out there. What’s the difference between a Bookkeeper, an Accountant, and a CPA?

Bookkeeper
A bookkeeper is responsible for accurately recording and posting the daily transactions of your business. This usually includes accounts payable (entering and paying bills), accounts receivable (invoicing clients and collecting payments), and entering inventory. Occasionally bookkeepers also assist with payroll. A full-charge bookkeeper can handle the data entry as well as generate basic financial statements.

The education level of bookkeepers vary. Some have an Associates Degree while others only have on-the-job training. With their limited accounting knowledge, bookkeepers are typically the most affordable option. They are a good option for basic data entry needs. Buyer beware, since bookkeepers do not have education requirements, it is important to find one with at least 3-5 years of experience and someone that comes with good references.

Accountant
An Accountant is the next step up from a Bookkeeper. In addition to the bookkeeping tasks, an accountant should be able to set up a bookkeeping/accounting system, monitor it, generate financial statements, and interpret the financial data. Many accountants will also provide tax services to their clients. However, with the new IRS rules going into place, make sure your tax accountant and tax preparer are have are registered with the IRS and have an active Tax Preparer PIN.

Typically an accountant will have a college degree in accounting or business administration. Some will also have a Master’s Degree. Accountants will be educated in basic accounting concepts and will understand the company’s general ledger. For businesses with more complex entries and transactions, accountants make a good choice.

CPA
Certified Public Accountants, CPA for short, is the next level up from an accountant. CPA’s can they perform the duties of an accountant and have the ability to perform an audit. CPA’s are a great choice for your business because not only can they help with your bookkeeping but they also have the knowledge and skills to help take your business to the next level by calculating growth ratios, following growth trends, preparing a budget, tracking your progress against your projected income levels, etc. One of the best benefits to hiring a CPA is that CPA’s are required to complete continuing education courses every year, which helps to ensure they stay current on changing accounting trends and rules. CPA’s are a great resource to help you and your business with tax planning and tax preparation.

In order to become a CPA, the accountant must pass a set of rigorous tests to ensure their knowledge and understanding of the accounting laws and regulations. CPA’s are licensed by the state in which they practice. The state boards and the AICPA set professional and ethical standards that CPA’s agree to follow. Similar to an accountant, CPA’s will hold at least a Bachelor’s Degree in accounting or business administration. With new education requirements states have put in place, many CPA’s also poses a Master’s Degree. CPA’s hold the highest level of accounting knowledge, and in return they typically charge more for their services.

As you can see, there are several options available to help your business. Everyone’s situations and needs are different. Finding the right financial and accounting advisor takes time.  I recommend interviewing several advisors to ensure you’re making an informed and educated decision.  Asking friends, family, and neighbors for a recommendation is a great place to start.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Bookkeeping, Erie CO CPA
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