Ten Overlooked QuickBooks Reports That You Should Use
Just about every QuickBooks user relies on the Report Center and Reports menu, but if you're like most, you have a small handful of reports that you tend to rely on. In this article we'll go off the beaten path and explore ten reports that many users overlook. Even if you are using some of these reports, we're sure you'll find a few more to add to your repertoire.
1. Profit & Loss Summary Prev Year Comparison: To access this report, choose Reports, Company and Financial, and then Profit & Loss Summary Prev Year Comparison. Most business owners rely on the Profit & Loss Summary report, but comparing your results to last year can provide quick insight into whether your revenue is growing or contracting-as well as how fast expenses are rising.
2. Balance Sheet Prev Year Comparison: You'll find this report also within the Company and Financial section of the Reports menu. As with your income statement, it's important to compare where certain balances stand now versus last year:
- Accounts Receivable
- Accounts Payable
- Other Liabilities, such as lines of credit or short term loans
16 Bank Reconciliation Tips and Tricks
Although it may seem like drudgery, reconciling your bank account is a critical accounting task that you should carry out each month. Doing so helps ensure the integrity of your financial reports, since most of your accounting transactions ultimately affect cash in some fashion.
Further, QuickBooks is a much more powerful tool for your business if you use it to its fullest extent. Most likely you've been reconciling your bank account all along, so in this article we'll discuss the tricks and techniques you need to know to streamline the process.
Use Accounting Ratios to Stave Off Financial Problems
Does the mere mention of accounting ratios may put your teeth on edge, and bring back bad memories of Accounting 101? It shouldn't as ratios can help your quickly determine how your business compares against others.
Banks often use ratios to analyze your financial statements as part of the loan approval process, so it's helpful to know in advance how you'll be measured. Even better, ratios allow you to compare your business against your peers since many trade groups publish lists of average ratios within an industry.
Although ratios may have made you drowsy during accounting class, they can be a fascinating way to measure your company's financial performance.
Profit & Loss Report Versus Statement of Cash Flows
If you're like most QuickBooks users, you rely on the Profit & Loss Standard report to monitor how your business is doing. However, you may have overlooked an even more valuable report: the Statement of Cash Flows.
The Profit & Loss Standard (P&L) report is important in its own right, but it only provides partial insight into the health of your business. While the P&L shows what you earned and spent, the Statement of Cash Flows shows you where the cash came from and went to, also known as sources and uses.
As you'll see in this article, you can use the Statement of Cash Flows to determine the how various activities increased or decreased your cash balance during a given report period.
Cash versus Accrual
Unlike some accounting packages, QuickBooks allows you to run most reports on either the cash or accrual basis.
Cash-basis means that transactions don't appear on your Profit & Loss statement until either your customer pays their invoice or you pay a vendor (or employee). So, if you enter a bill in QuickBooks to be paid later, the expense won't immediately appear on a cash-basis P&L.
Similarly, invoices that you send to customers won't immediately appear on a cash-basis P&L. The expense appears when you write a check to the vendor, and the revenue appears when the customer honors their invoice. Accordingly, cash-basis reports don't necessarily report a company's true financial performance.
You could have a stellar looking Profit & Loss Report, but a list full of unpaid bills in QuickBooks. Accordingly, many accountants prefer that business owners use accrual-basis reports.
QuickBooks Helps You Navigate Tricky Waters
The price of gasoline is just one of many factors putting pressure on our economy as a whole. Now it's more important than ever to keep a close eye on your company's performance. Many business owners compare financial results to an annual budget. If you don't have your budget in place yet, we'll show you how to get started. Even if you have, we'll show you how to use last year's results as a measuring stick with comparative financial reports. Once you understand these techniques, we'll explain why you should create a monthly appointment with yourself to ensure that your results continue to measure up and take action if they don't.
TIP: Keep in mind that tough financial years do have a silver lining-you'll likely pay less in income taxes. If revenues are down or expenses are up, don't forget to trim your withholding or estimated tax payments accordingly. Doing so enables you to boost your cash flow now, rather than waiting around on a tax refund next spring.
The QuickBooks Planning & Budgeting menu gives you the ability to create budgets and forecasts. In reality, both features work the same way, so we'll use creating a budget as our example. But which one should you use? You might find it helpful to use the Forecast feature as an alternate budget and as a best-case scenario, while the Budget feature offers a better expectation of reality. Either way, here's how to create a budget in QuickBooks:
1. Choose Company, Planning & Budgeting, and then Set Up Budgets.
2. When the Set Up Budgets window appears, click the Create New Budget button in the upper right-hand corner.
3. Select the year that you'd like to create a budget for (such as 2010 or 2011), select Profit and Loss, and then click Next.
Use QuickBooks Pro to manage your business and personal checking account.
QuickBooks Pro can be used to manage many different files. In your case, you could have a QuickBooks file called "Business", and a completely separate QuickBooks file called "Home" to manage the separate checkbooks. For more information on the creation of a new company file, click on File in the menu bar, then New Company.
How To Easily Track Your Inventory
Do you know where your physical inventory items are? Whether you keep them in a closet, in an unused office, or a warehouse, you need to keep a close watch on how many products you have, how many have been ordered, and when it's time to reorder. Fortunately, QuickBooks has tools that help you track all of those numbers. If you're conscientious about making use of them, you should have a good sense of the state of your inventory, wherever you store it.
Note: These tools are not available in Simple Start or QuickBooks Online.
How to Take the Pain Out of Paying Your Bills
Settle Up Fast with Quickbooks' Bill Paying Tools
Some of the financial crystal ball-types are telling us there are signs that the recession may be drawing some of its last breaths. But those bills are still coming in, and you may have had a long, dry summer and less income that you can use to meet those business obligations.
The desktop versions of QuickBooks can help. They can't magically make more money appear in your coffers, but they can help you manage your bills so you're always aware of what's coming up and don't get any nasty surprises. This keeps both you and your vendors happy, and minimizes the chance of affecting your credit report adversely. You can also maximize cash flow by being hyper-aware of when each bill is due and timing them appropriately.
(These bill-paying tools are available in all QuickBooks versions above Simple Start.)
4 Ways to Manage Prices in a Down Economy
We are living in a period of "accelerated change". Indeed, the ground does seem to be shifting beneath us almost faster than we can comprehend, so it's important to stay nimble in these difficult times.
One way you can do so is to closely manage your prices. In some cases you may need to ratchet your prices up to cover a commodity cost-spike. Or, you may want to offer special deals to your best customers to help retain their business.
In this article we'll discuss four methods you can use to manage prices (and change) within QuickBooks.
QuickBooks 2012: New Paths to Better, Faster Financial Management
As it usually does this time of year, Intuit has introduced new versions of its Pro and Premier products. QuickBooks 2012 promises to help you get better organized, save steps, and acquire more in-depth financial insights.
The new Express Start is designed for businesses that want to blast through setup and start entering customers and invoices. You have two other options though.
Advanced Setup is the old EasyStep interview that solicits more details. You can also open an existing file or convert data from Quicken or other accounting software.
Express Start requires minimal input. Company name, industry, company type, tax ID, and contact information is all that's required. After you save your company file, it lets you start adding or importing customers/vendors/employees, products/services, and bank accounts.
Billing for Time and Expenses: How It Works
Billing for inventory parts is easy. Pick the items from a list and specify a quantity. Poof. Done.
Billing for costs, time or mileage is a little more complex. QuickBooks has built-in tools to help you do this, but it's a bit of a process.
To simplify your workflow, do this groundwork first: