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Internal project budgets - Streamlined!

I became so excited the other night when I took a multi-spreadsheet THING that my client was referring to as a 'marketing budget' and forced it into QuickBooks. This thing was not pretty. The budget had it's own set of items specific to the short term project at hand, and since QB would not track the budget the way that the marketing team needed to track it, there was a constant need to update the spreadsheet manually and hope that nothing got missed.

Before I give you the rundown of how I achieved success, let me just point out that this is not intended to be instructional for a basic user to repeat the process. I am going to make some assumptions that most people reading this are experienced enough in QB to get the point, and that you will contact me with any questions before attempting this at home!

The budget that I received had the short term marketing project broken down into 6 categories. QuickBooks offers me a budget by class (and this client does have a Marketing class set up), but we needed to see the expenses line by line more specifically than the account level offered by a P&L by class.

Create a Budget 'Customer'
To start, I created a Customer named 'Marketing Budget'. This is the only way that I could get QuickBooks to recognize my budget in a way that would provide me with an estimate vs. actual report.


Build your budget item list

Next, I created an item called 'Marketing Budget Expense'. This is my parent item for everything else in the budget. Under that, I created items for the 6 categories on the budget and numbered them as the initial outline was written by the marketing team. Though the original list was not numbered exactly how I would have set it up, there is no sense forcing your client to change things that don't really matter. We are here to make their lives easier, remember?

Each category item then became the parent for all of the line items in it's group. I was able to map each line item to the proper expense account and the hierarchy was lovely! 


Enter your budget 'Estimate'
To begin the process of tracking the budget, I went to my client ('Marketing Budget') and entered an estimate with all of my budget items and amounts. This is what QB will use to produce your Estimate vs Actuals report.

Record budget expenses as Job Costs
Next I was able to record expenses by assigning them to the proper items and went back to add items in to previous expenses. Every expense must be recorded as an item and the proper budget (or 'customer') name assigned (in this case it was the Marketing Budget customer) for the report to come out accurate.

Everything was going GREAT, until I hit an expense reimbursement check...

So... what do we do when a budget expense/receipt qualifies as ONE item but needs to be broken up into TWO or more accounts? Well I'm glad you asked... 

My real-life example was running into an expense reimbursement. The reimbursement needed to go under the 'Travel' line item in the marketing budget, but the sum of the expenses needed to be broken out into multiple accounts (not just the default travel account set up with the item). For this, we simply enter the total on the items side to the Travel item (so that it maps to the correct item on our budget report), then we CREDIT the expense account associated with the item by recording the amount as a negative on the expenses tab. Lastly, we break it out by DEBITING each individual expense account the amount that needs to assigned by recording positive amounts on the expense tab. 

At this point, you are either thoroughly confused, nodding because you've done this before, or smiling uncontrollably because of the time saving tips you've just added to your knowledge base. 


But wait, there's more!

None of this means anything until you run your report! This is the easy part :-)

Customize your budget report
Run an 'Estimates vs. Actuals' report and customize to filter for your specific job (here it was 'Marketing Budget'). Next, filter the items to only show your budget items. If you set up your item hierarchy properly, this should be a quick step. Customize your report title according to what your report is about, and if you would like you can uncheck the last 3 columns (I did that for my budget report because the columns were irrelevant for my purposes).

Ta-Dah!

The last step is to send to your client so that they can be impressed that you fixed something in one hour that they have been working on for three months. Woo hoo!

Accounting Automation and Online Banking (The good, the bad and the ugly...)

Monday I was reading an article on IntuitiveAccountant.com that was discussing the hope that Intuit got it right with their new bank feeds in QuickBooks 2014. I was intrigued, pleased to learn that they were integrating the same solution from their online product into the desktop solution. I got excited that I would finally be able to link up US Bank accounts to desktop files and that the transaction posting faster would be so much quicker. Sunshine and rainbows are in our future!

Some of the main points in the article were about the ineffectiveness of Web Connect and Direct Connect options. I never liked Direct Connect, it wasn't worth the crazy fees that the banks would charge and I would usually encounter some sort of connection issue. I didn't mind Web Connect, except for when my in-software browser didn't want to download or I accidentally 'over downloaded' transactions (let's be honest, who doesn't have at least one client file with super old duplicates waiting for acceptance in the online banking center?) Then there is batch-entry, a feature that I love to have but hate when I actually have to use it (though that has improved with 2014 as well). For the purpose of this article we will skip that solution ;-).

So what does all of this have to do with the Online Banking solution provided by your bank? Well.... I'm glad you asked!


 The Good

When clients are ready for a bank change (for whatever reason), Chase Bank is my GO-TO. As much as I love to be an advocate for small local banks and credit unions, they just don't make sense for many businesses. Chase offers the ability to look at all of your business and personal accounts on one page, see deposit details (and I mean real details and check images, not just your deposit slip!), and check images. You can add accounts with limited permissions for employees or outside accountants as well.


What does this have to do with QuickBooks? To be competitive for QB users, banks should offer the Web Connect, Direct Connect and (obviously) the bank feed option. The detailed information that you can pull from online banking enables you to find information and verification for your transactions. Chase has made themselves a prime banking choice for cloud based accounting and QuickBooks users of all editions.

There are other banks that are competitive with Chase's services (Wells Fargo is one), but I have yet to find one that is competitive with the services and fees.

The Bad

Well, I think that many of us know who falls into this category.... I'll try not to name names, BUT we all know that US Bank has been a little behind in the times when it comes to QuickBooks integration. The bank feed feature for QB Desktop will probably benefit them the most as a banking option, even though they could step it up a notch by offering deposit details online as well. 

There are many smaller banks whose download features are buried and hidden within the banking site and have date restrictions that make the feature useless when doing year end projects. Having continuous feed running all year, even for those you only see once a year, will be a huge time saver at tax time.

The Ugly....

Grrrr.....

If you have already used QuickBooks Online and synced up an account, you know how the acceptance process works. You skim the list, make sure that vendor names on transactions are posting the proper accounts, and accept accept match accept. Woo hoo! Good to go.

So how can this go wrong? What could be so ugly about it? Maybe some of you have experienced this before when syncing up with a smaller bank or credit union:

Name THAT vendor! Now imagine a whole month of this, or even longer with some interval clients. Some of you may be wondering what the big deal is... I'll explain. The 2nd column of the downloaded transactions window has the cute little excerpt that your online banking portal or bank statement would give you. Each institution seems to provide a varying number of characters on this screen, but as you can see all of the debit card transactions from this credit union begin with 'Xx Chk Purch', with the only variation being 'Xx Chk Purck Sig' in some places. Luckily we do have a little 'details' pull down that gives extended information, however the time lost from having pull the details on every card transactions is so significant in some cases that I wish I could just curl up with my Web Connect on QB Desktop.

Some of the other ugly's are bank changeovers. The sync window in QBO is not always updated immediatley with the bank change, preventing access (I've experienced this with the West Coast/Columbia change over recently) and sometimes the login window does not accommodate different account types (for example they will only take a username password when your account type may have a username, business ID and password).

* * *

So how do we avoid the ugly situations? 

Pay attention to the services that your clients banks are offering. Even if the individual client is not utilizing all of the services you will have the answer when they (or a new client) may need it.

Build relationships with bankers at various banks and educate them on what works for their bank. One commercial lender I know would tell everyone to use QBO (as their bank did not offer Direct or Web Connect), but we all know that QBO is not the right solution for everyone! This should become less of a problem now that we can get bank feeds in QB Desktop 2014. 

Inform and other professionals who influence your clients. Share your knowledge with the attorneys, insurance agents and financial planners in your network so that they can guide your mutual or future clients accordingly.

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Fool-proof(ish) Accounting with QuickBooks Online Apps

Are you tired of your clients screwing things up? 

If the answer is no, then congratulations! You have achieved ultimate zen in your practice.

If the answer is yes, then ME TOO!

Many of my clients, contractors specifically, are always on the go. Many small service based companies have busy and slow seasons, which makes it hard to justify having a staff person to handle their accounting needs. 

So what do they do? Well, DUH! They do it themselves like any good entrepreneur would! They are business owners ya know, which automatically qualifies them to run every  part of their business. IGAAP you say? EFTPS you say? Insert-Acronym-Here, you say? Regardless of how fantastically skilled these business owners are at their chosen trade, they may not necessarily be qualified to man their own accounting department.


It's our own fault really. As accounting professionals, we have not made it easy for these business owners to utilize our expertise on a regular basis. It's expensive, time consuming, tedious, and leaves them feeling lost when we have a list of 99 questions after sorting through their shoe boxes.  Sure, we can advise them on organization and try to make an 'action-plan' for the coming year, but as they (and we) go through our seasons, someone is bound to get lost along the way.


Luckily, technology is enabling us to keep a broader perspective on our clients books throughout the month/quarter/year, whereas before we would just have to sort it out at closing time. My personal favorite component to my monthly monitoring plans for service based businesses is the QuickBooks Online app for Iphone (of course there is a Droid app too...)

One of my favorite things about the QuickBooks Online app is the simplicity. 

I actually love the fact that it has limited features and does not allow banking access. My clients don't need to be touching their registers from anywhere on their phone; if they want to check their account they can use their online banking app. My clients are told to do TWO simple things from their phone: Enter invoices, and receive payments.

That is literally all that I have many clients doing. 

Why just these two things?

Well, because I can figure everything else out for myself! I can download and monitor the accounts from my laptop (though I will be SUPER thrilled when CloudSway has an app ready for account monitoring... that's another blog to come) and I can review all of their documentation at month end. If clients need additional assistance with A/P, I put them on Bill.com and have everything sent into the portal. Oh wait, did I mention that Bill.com syncs beautifully with QuickBooks Online? Yeah, I know, your welcome.

 

Questions? 

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Using Batch Entry for Quicker Client Setup

There are many things to love and to hate about the batch entry feature that came out in QuickBooks Accountant 2013. Many of us have probably experiences the frustration of posting transactions to the wrong account or wanting to reclassify transactions that were entered on a batch. I have found batch entry, in it's current state, to be the most helpful in new client setup.

Transferring data into QuickBooks for an existing company can flat out SUCK. If you are like me, you have much more desirable things to do with your time besides enter data from a spreadsheet. Something that I discovered this week was how EASY setting up new companies can be when you utilize batch entry to trick QuickBooks.

Here is my real-life example:

Client:
New corporation. Current accounting was through Freshbooks and Outright, information had been recorded in both systems. Converting to QuickBooks Online.

Solution:
Compile information from both systems into QBA 2013, iron out issues, export to QBO.

Process:

• Export expense reports and income reports from Freshbooks and Outright. The spreadsheets that these system generate are PERFECT for batch entry into QuickBooks.
• Create shareholder equity accounts as 'BANK' type accounts. The batch entry feature will only allow you to post to bank and credit card account types. But don't worry, we will work around that ;-)
• Record the expenses incurred/deposited to mish mash accounts prior to business account being opened/during the development of the business. If income generated has been received by the owners, be sure to record it as 'deposits' to the account that you are posting to.
• Batch enter to the 'equity' bank accounts (make sure you have the right account name selected!)
• Once you have the transactions recorded, go to the chart of accounts and change the equity account type from 'bank' to 'equity' (or 'liability' if you are setting up as a shareholder loan)

Are you confused yet? I sure am! Writing this out is a whole lot crazier than clicking around and making it happen...

Moral of the story is that you can really beat the batch entry into submission to get a high volume of opening transactions on to the books. These are good tools to have up your sleeve as year-end approached and people start rolling in with their 'records'....

Good Luck!

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To kick off our blog debut, we will be sharing some helpful QuickBooks batch entry work-arounds that we have discovered when setting up new companies. 

Stay tuned!