QuickBooks-Common Problems and Pitfalls, with Gail Perry
[Session Moderator] Welcome everyone! We have just about five more minutes before we get started. Any questions before we begin?
[Session Moderator] Good afternoon all!
[Session Moderator] Thanks for joining us today for Gail Perry's workshop "QuickBooks: Common Questions and Pitfalls."
[Session Moderator] Before I introduce Gail, I'd like to remind you that this workshop series is for you. Please feel free to ask questions by simply typing a question in the bar below our chat format.
[Session Moderator] Keep in mind that any questions that are not immediately answered will be answered at the end of the session - we have you covered!
[Session Moderator] And with that, please allow me to introduce Gail!
[Gail Perry] It's wonderful to see so many people here - welcome and thank you all for coming!
[Session Moderator] Gail Perry is a CPA, tax specialist, author, speaker and instructor. Her column, "Fun With Taxes," provides readers with practical tax insights and advice presented in plain English with a touch of humor.
[Session Moderator] She is a former senior tax consultant with the international firm of Deloitte and Touche, where she provided tax planning services and advice to individuals and small businesses.
[Session Moderator] An accomplished free-lance writer, Perry is the author of over a dozen books, including "The Complete Idiot's Guide to Doing Your Income Taxes," "Using QuickBooks," and "TurboTax for Dummies." In addition, she has written several computer training books and is co-author of a book for trainers, "The Computer Trainer's Personal Training Guide."
[Session Moderator] Perry is a regular guest on America Online's Money Whiz Q&A program, and she has been featured on Fox television's "Good Morning New York," Bloomberg Business News's "Bloomberg Forum," WOR Radio's syndicated program, "Manage Your Money with the Dolans," as well as dozens of radio shows across the country.
[Session Moderator] Gail, thanks for being here!
[Gail Perry] The first thing I'd like to say is that I welcome questions - we can make this as formal or informal as you like, so feel free to interject comments and questions throughout the workshop
[Gail Perry] As an accountant I find QuickBooks provides me with a mixed reaction
[Gail Perry] My clients love the price of the program, although many of them find it confusing to use
[Gail Perry] when I teach other accountants about the program, there is general frustration at the fact that the program is so forgiving - people can change their numbers whenever they want to!
[Markkleeberg] As an accountant, I found QuickBooks to be a disaster. I could not enter journal entries properly. It is not possible to see where one entry starts and the next ends.
[Gail Perry] You're right - journal entries are not a main feature of QuickBooks. The makers feel the users of the program will generally not use this feature (leave it to their accountants to figure out), so they hide the feature and make it non-user-friendly
[Wade Holwell] Is there a way to disallow changing numbers by setting controls
[Lowell] What are your impressions of QB2000. I have heard a lot of negative feedback.
[Markkleeberg] When are they going to come out with a web version of QuickBooks similar to NetLedger?
[Gail Perry] Yes, Wade - you can set controls, and QuickBooks is getting better with this feature as they offer new versions of the program. You can password protect the program so that each user has access to particular areas
[Gail Perry] As to my impression of QB2000, I think that Intuit is stretching each year to offer a new version, but they haven't really improved the features very much in the past few years - the major exception is the ease in exporting reports to Excel
[Gail Perry] I'm afraid I have no knowledge of plans for a web version of QB - at least not yet!
[Gail Perry] One of the things I want to discuss to day is the three ways to set up a company in QuickBooks.
[Gail Perry] You can use the Interview process, which is very time consuming and somewhat confusing for the novice user
[Gail Perry] I recommend that if you are advising a user on setting up with the Interview, provide that user with a checklist detailing everything the user should have in front of him before he begins making entries. That will help organize the data entry person.
[Wade Holwell] I have found that a real problem for clients is that they do not have the basic accounting skills. Because of this there retained earnings is always off.
[Gail Perry] You can bypass the Interview to set up a new company with a journal entry reflecting the trial balance - keep in mind that accounts receivable and accounts payable cannot appear in the same journal entry, so you will need at least two journal entries for a complete set up of beginning balances.
[Dale] To continue Wades question, setting passwords will not protect from numbers getting changed will it. It just stops people from getting into a different area, but they can still change numbers in their own area. Is this a correct assumption?
[Gail Perry] You're right, Wade - the makers of QuickBooks have created a program that has tremendous appeal to the non-accountant, as a result most users are not trained to understand how the program works.
[Gail Perry] Setting passwords can accomplish two things - you can protect certain areas, so for example you can keep someone out of payroll, or prevent them from entering sales information
[Gail Perry] The other thing you can do with passwords is set a closing date and prevent designated users from making any changes before the closing date.
[Gail Perry] The administrator, however, will always have the right to change any number he or she wants (grrrr!)
[Markkleeberg] I was surprised to see that p&l accounts are also rolled forward in account analyses. Why doesn't QuickBooks close these balances?
[Lowell] Isn't it also the case that you can keep someone from making changes to something they created in a previous session?
[Rick Howard] Our largest problems with QB (and this is shared by other CPAs I talk to) is that the client's bring in their year-end accounting in worse condition than when they prepared their financial records by hand. It takes more time to prepare the tax return, and the clients have difficulty understanding an increase in accounting fees. Has anyone been able to address this problem?
[Gail Perry] QuickBooks really doesn't close anything - the program is perpetual and depending on what date you enter for reports, you can always access information from different years and time periods
[Wade Holwell] But as far as deleting previous entries, the problem is that there are a lot of ways someone can do this. Before they realize what they have done, the data is lost.
[Eva Rosenberg] Oh, Stop complaining about the ability to make changes. How many times have you made a journal entry backwards and have had to make another one or two to clean it up? With a clear audit trail of your embarrassing errors?
[Gail Perry] Rick - I think you hit on the greatest complaint that accountants have with QB - users buy the program, and don't call their accountant until they're very deeply in trouble. By then it's often a nightmare - frequently the best thing to do is start over again
[Gail Perry] Hi Eva! You're right, of course - the ability to make changes easily is great when you know what you're doing - just a bit frustrating when the user changes things from a prior year after statements have been issued
[Session Moderator] Wow, this sounds like a problem that most of you have encountered! Besides the two suggestions you made earlier, are there other options?
[Eva Rosenberg] Sure Gail, That's why we get a disk and hard copy when we do the tax returns
[Dale] I am putting a training class together for some of the firms clients. Any material you could suggest I get to help with this?
[Gail Perry] One suggestion for circumventing the problem of changing information is to STRONGLY recommend that your clients meet with you and have some initial training before they begin using the program.
[James Wilson] For our QuickBooks users, we try to make an appointment with them to come out and "cleanup" the books before year-end, thus separating QuickBooks costs from Tax Prep costs. The benefit to the client using QuickBooks is the day-to-day information they have at their fingertips, even though it may not be absolutely correct.
[Gail Perry] Great idea, James
[Markkleeberg] What is the largest company (in terms of employees) known to have used QuickBooks for their accounting?
[Eva Rosenberg] Is it OK if I bring up a question? (I will anyway,. so...) I have a client that wants one person to be able to do the bkpg and another to be able to do A/R. On separate machines. How can they integrate the information without messing up the data? Is there a multi user version?
[Lowell] I am a CPA and a Certified QB Pro Advisor. We make sure that our clients know that they should get training before getting in to deep.
[Gail Perry] As for training material, there are a few books on the market that are useful. The best book for non-accountants, in my humble opinion, is the Complete Idiot's Guide to QuickBooks (written by yours truly)
[Gail Perry] For accountants who understand the process, I recommend Using QuickBooks or The Official Guide to QuickBooks.
[Lowell] We stress that it is cheaper to get training up front then for us to fix it later.
[James Wilson] Yes, the latest versions are Multi-user. You just need to purchase enough license copies for each user.
[Eva Rosenberg] can they use them simultaneously? Or log into a network?
[Markkleeberg] When setting up accounts, there is an option for doing cash accounting. However, I cannot understand what affect this has on the program. Can you explain?
[Gail Perry] As for actual training material, there are a few organizations that offer training classes. One that I can highly recommend is Real World Training: www.realworldtraining.com - they offer training for new users and also advanced training for accountants
[James Wilson] They have to at least be networked on a peer-to peer network to access the single database. The program handles the necessary file-locking, etc.
[Gail Perry] Note that the multi-user version of QB accommodates up to 5 machines, but as many users as you like
[Rube Blanchard] Is there an easy way to print out just the detail for one GL account? This might be a stupid question, but, unlike the other reports you are able to generate (A/P and A/r) on one specific acct, whenever I try to print out the detail on a GL account, it prints out ALL of the GL accounts (although the transaction history is just listed for that particular GL acct). Any way to have it just print that one acct only? Understand my question?
[Gail Perry] (actually I think there's a limit to number of users - maybe 100 or so - I'm not sure)
[Wade Holwell] I have a new client who had bought QB last year. It is running really slow because of all the cash transactions. Is there a way to compress some of these to speed up the problem
[James Wilson] You can compress transactions through a given date, using the utilities, but I would recommend backing up the database first (and renaming it) so that you still have the detail available at your fingertips.
[Gail Perry] Yes, Rube - sometimes the reports in QB are somewhat limiting. This is one situation where the new compatibility with Excel really comes in handy. With some of the reports, you can use the Filter and Customize options to get just what you want. If that doesn't work, you can transfer the report to Excel and it's easier to filter over there
[Gail Perry] And speaking of reports in QB, here's a nice trick - if you create custom fields on your forms, you can then use those fields as a sort feature with your reports
[James Wilson] What we try to do for clients is after we have completed year-end adjustments, we create a copy of the file with a year designation (i.e. CompanyA99, would be the '99 books) and then on the 2000 version, we compress the data file through the '99 year end. They can still access the '99 data just by opening the file. (Assuming they have enough room on their hard drives).
[Gail Perry] That's an excellent idea. I think as more and more users have QB around for several years, the data compression techniques are going to become more of a requirement than a luxury
[Wade Holwell] Thanks James-good idea
[Markkleeberg] Can you let me in on the secret of the cash accounting option. Does anything really change if you tick the box?
[James Wilson] On cash accounting, the only thing that changes when you check the box is how the reports are gathered together and prepared. Nothing changes in the data itself.
[Bryan Jeffrey] A few years ago we looked at QuickBooks and Peachtree with the idea that we would choose one of the programs and use it internally as well as recommend it to our clients. We choose Peachtree as we felt it was a stronger program in terms of its reporting and audit trail. Its been a while since we looked at QuickBooks is the comparison still valid?
[Dale] I think it is as I use both QB and Peachtree
[Gail Perry] I would love to hear some comments comparing the two programs. I don't use Peachtree so I'm not able to speak to this, but people seem to either love or hate both of these programs
[James Wilson] It really depends on what you're looking for. Peachtree has debits and credits, so it is usually the choice of accountants. QuickBooks is the non-accountants choice ( I think!)
[Rick Howard] A great report to help all of you who are trying to figure out what your client did to change prior-year balances is to run a Journal (Report-Other-Journal) with the filter set to 1) transaction dates ON or BEFORE the previous year-end date and 2) the created/modified date AFTER the date we gave the file back to the client... It tells all.
[Eva Rosenberg] I tried Peachtree on behalf of a client. and found it reaaaalllly sloooow. Both on his machine and mine, which are pretty fast for other things.
[Gail Perry] Definitely QB is going after the non-accountant audience. And those who try to use QB when they have a partial understanding of debits and credits seem to get confused by the fact that their entries are one-sided
[Gail Perry] Excellent point, Rick
[Rube Blanchard] Is there anyway to change the size of the lettering on your reports? some of the reports I generate have the wording so small, one of our office workers almost needed a magnifying glass (luckily she wears bifocals!)
[Gail Perry] In the customize area of reports there are some font controls
[Madeline Richmond] When using Peachtree the non-accountant really needs to have help setting up the program. Otherwise after it is set up and they are shown how to use it, they do fine.
[Gail Perry] And you can always take your report to Excel where you can really dress it up
[Price Kong] Can you set up one group that pertains to multiple classes for an invoice? If using classes for location, can I designate a certain part of the invoice to one class and the rest to another?
[Gail Perry] Madeline's statement seems to hold true for both programs, the difference being that the non-accountant doesn't realize he needs help when setting up QB
[James Wilson] For the non-accountant, Peachtree is usually worked by memorizing steps and following them. They don't necessarily understanding what they're doing. QuickBooks is easier to understand for those who can at least balance their own checkbooks.
[Gail Perry] Here's how you can address the class issue on an invoice - customize the invoice to include a class column, instead of using the class box at the top of the invoice. Then you can enter class information for each item on the invoice
[Dale] I like the reports in Peachtree better, as I can customize them to the client and what and how the clients wants to see them. I can't do it as easily in QB.
[Gail Perry] QB seems to have decided to leave the report customization to their Excel link
[Pat] I agree with you Dale. I find it a lot easier to get the reports I need from Peachtree.
[gambino] Me to Dale I agree with
[Rube Blanchard] If you have two classes set up (for two store locations), how does this affect the generation of F/C's when creating monthly statements? Does each location get credit for the F/C, or does the F/C cover the two locations as a whole? We are opening up a new location and I want to make sure statements are printed correctly.
[Pat Krakauskas] Since QB leaves report customization to Excel, can you save the excel report and then link to current data?
[Lowell] I can't get over the bad experience I had with Peachtree in the DOS version
[James Wilson] But what about the end-user. Which one works the best for them. If they understand QuickBooks better and can get the information that they need to run their business, then us accountants will have to do what we can to get the info. we need to prepare t/r's, etc.
[Wade Holwell] good question pat-I want to know this too
[Pat Krakauskas] Peachtree windows is nothing like DOS, so much better
[Sean] F/C's (help)???
[Gail Perry] It's hard to go back from Excel to QB (although not impossible) - but you can set up some templates in Excel for your design and apply a template after you import the report
[Rube Blanchard] I'm sorry, finance charges!
[Lowell] I just find that it is easier to get my clients to understand QB. We stress proper training if they want to get good information.
[Gail Perry] Rube - the finance charges can be applied to customers or individual jobs. If you have a specific class associated with a job, the finance charge should go to the proper class
[Jacki Betz] I agree. Training is the key to any software...for us and the clients.
[gambino] understand QB. If they don't know what the other side of the entry is they just stick to opening balance equity
[Dale] I do the same for Peachtree and I have a client that now loves Peachtree because they can get reports how and when they want them without my help all the time.
[Eva Rosenberg] my clients like QB because it is so forgiving. They don't feel so inept when I can fix their errors easily. (with no unnecessary audit trail)!
[Wade Holwell] I agree gambino
[Gail Perry] Opening Balance Equity is one of the major accountant headache accounts. However, although it enables users to create the dreaded one-sided entry, it does give the accountant a place to go, besides the audit trail, to find out what the heck the user did
[Pat] I have a client that pays mileage on paychecks. Is there a way for them to enter the mileage on the paycheck and have that mileage charged to a job?
[Gail Perry] Yes - you can relate expenses to jobs as long as the job costing feature is turned on - there should be a column on the paycheck detail form that lets you link to a job
[Gail Perry] Does anyone have any comments about tracking Inventory in QB?
[gambino] I do use Peachtree
[Gail Perry] lol!
[Gail Perry] For manageable-sized inventories, I have found one excellent solution to the problem of being forced to use the weighted average method
[James Wilson] When I go out to "clean up" a clients QuickBooks, that's (Opening Balance Equity) the first area I work on. But it's important to explain to the client why you have to fix those entries, but explain it's ok to put them their if they don't know where else to go. However, in some cases, we have setup and Expense account- Unclassified, and told them to use it. That way at least, their not surprised by the swings in P&L when I do make the adjustments.
[Lowell] I do the same thing James
[Price Kong] If you receive a different amount of a product than you entered on the purchase order, and don't go back to the original purchase order to change the amount ordered to the amt received, will the correct amount of product be credited to inventory?
[Gail Perry] If you want to use a LIFO or FIFO method for tracking inventory sales, you can set up inventory layers by using the sub-account feature. Your user must understand that basically this is going to be a specific identification method, so you wouldn't want to use this with a large inventory, but it can work
[Gail Perry] Excellent point about using the Unclassified account, so that the bottom line won't be affected
[Gail Perry] Yes - the inventory isn't affected by the purchase order - only the invoice
[Gail Perry] rather, the bill
[Gail Perry] There are some inventory/point of sale programs on the market that claim to work effectively in conjunction with QB - has anyone experimented with any of these programs
[Rebecca Claar] If you don't put in an account number on an entry, won't QB's place the entry into Uncategorized Expense or Uncategorized Income?
[Gail Perry] Yes - QB uses these uncategorized income and expense accounts when it doesn't know where to put the amounts - it keeps the user happy (and working somewhat in the dark)
[gambino] Sure it keeps the user happy, but it messes up the books
[Wanda Parnell] I have some clients who use point of sale programs, but I'm trying to learn how that works
[Art Lustgarten] MESSED UP MAYBE, BUT AT LEAST BALANCED !
[Daniel G. Amerise] How do you run a report which includes employee name , ss# and address along with quarter to date wages?
[gambino] DONT SCREAM
[Wade Holwell] So are you saying Gail that two places to look are the Opening balance equity or the Uncategorized income and expense accounts to find out what the client did with the transaction?
[Lowell] What do you do in Peachtree when the client posts something to the wrong account.
[Gail Perry] Those places, and also make sure your clients turn on the Audit Trail
[Gail Perry] The SUTA report that everybody needs is still unavailable in QB, but can be created with a little work in Excel.
[Eva Rosenberg] Actually, I try to have clients use an "exchange" account for anything they don't know where to post. Then I know to analyze that.
[Pat Krakauskas] In Peachtree, just print the GL detail, click on the entry you want to change, it brings up the original entry, so you can change the acct #
[Gail Perry] You're right, Eva - a great tip is to have your client set up an account that you and he understand will be the place to put "unidentified entries"
[Rebecca Claar] Why create another account to track, when the uncategorized accounts are there?
[Madeline Richmond] How does QB calculate depreciation?
[gambino] QB does not calculate depreciation
[Wade Holwell] Another thing that clients do is keep making new accounts all the time. Sometimes the financial statements are 4 pages long.
[Eva Rosenberg] Hi Rebecca, I do that so the clients feel they have control.
[Gail Perry] Sometimes the user will relate to an account that is specifically for him - like "Ask my accountant" or "Hold" - which will do the same thing as the uncategorized accounts. It's a matter of preference and level of comfort with your clients
[Eva Rosenberg] and to keep them from making those new accts
[Wade Holwell] can't
[Gail Perry] Yes, QB doesn't mind how many new accounts you make
[Gail Perry] At least, because the program is so forgiving - it's easy to correct problems like excess accounts
[Eva Rosenberg] you don't really want your clients doing deprec anyway. They have to need us for something!
[Gail Perry] You can open the chart of accounts and rename or merge accounts, and set up sub accounts, so that everything will look cleaner on the statements
[gambino] I think QB needs to have more controls on it. For starters being able to close a year would be nice. How many times have you given them AJES and then the following year comes around and nothing balances because they went back and changed something
[Sean] Can you do the same thing with your vendor lists Gail?
[Rebecca Claar] I agree with you Eva. You could give them a recurring journal entry amount for the depreciation expense each month that they could make through a journal entry.
[Gail Perry] QuickBooks doesn't calculate depreciation - however, I like to give my clients the number, or set up a spreadsheet or a stand alone program for computing depreciation, and set up a recurring monthly journal entry that goes on in the background
[Wade Holwell] It is funny though when you see that 50% of their accounts have 1 transaction in them
[Sean] Consolidate or streamline, I mean?
[lethu] I buy parts and when I enter them into the system, it asks me how much I want to sell them for, I don't sell parts, I combine them to make products. is there anyway for that?
[Art Lustgarten] my understanding is that QB doesn't work for manufacturing inventory.
[Gail Perry] It's very difficult to track a work-in-progress type of inventory in QB. Basically, you have to reflect a sale of the misc parts to yourself, then create a new inventory item for the finished goods
[Eva Rosenberg] Your tax programs will often compute next year's deprec and you can use that for the recurring journal entry that Rebecca describes
[JOSEPH REISMAN] Is there anyway to correct mispostings while in the general ledger mode so that the program doesn't go back to the top of the g/l? or is it necessary to go to the account detail all the time?
[Session Moderator] Gail, we have about five minutes left of our workshop time. You've done such a thorough job of answering questions, I haven't "collected" any. Did I miss anyone's question?
[Gail Perry] Eva's right - and I've always been mystified that Intuit's TurboTax does such a great job of calculating depreciation, but they've never moved that technology over to Quicken or QuickBooks
[Rube Blanchard] Does this session qualify for any CPE? If so, what do we use for documentation?
[Session Moderator] Rube, we are working on that now. Currently, it does not qualify.
[Gail Perry] Offhand, I can't think of a way to consolidate vendor lists - I can't recall if you can use subvendors or not
[lethu] Can I create a package of parts for a product
[gambino] 5 minutes left, does anyone really know what time it is
[Gail Perry] Yes - you can use the inventory group feature for combining parts into one project
[Gail Perry] Joseph - not sure I understand your question
[Sean] I have a problem with clients creating 3 (or more ) vendor names for the same vendor, just takes up space.
[Eva Rosenberg] you can combine those 3 vendors
[Gail Perry] You can merge vendors - that will solve your problem
[JOSEPH REISMAN] just combine the vendors
[lethu] How do you create inventory group
[Gail Perry] To merge, say you have Vendor A and Vendor B and they are the same vendor. Rename Vendor B to Vendor A and the information from both vendors will be merged to Vendor A
[Gail Perry] When you set up an item, there is an item type (like inventory part, non-inventory part, etc) for group - if you choose the group, you are given a window where you can list all the items that you want to include in that group
[Eva Rosenberg] Gail thanks for clarifying some things I didn't realize before. Looks like I'll have to buy your book Is there a link on this site? or will you put links into this transcript?
[Pat] I am glad that I was able to attend this session and find out that others are just as frustrated as I am with the program reports.
[JOSEPH REISMAN] When reviewing the G/L, should I want to reclassify something, say towards the middle of the expense categories, when bringing up that particular check, and changing the classification, the G/L bounces back to the first a/c in the asset
[JOSEPH REISMAN] How can I keep my review at the same expense category
[Gail Perry] You can go to my web site at www.funwithtaxes.com, which I'll link in the transcript, and there is a link to purchasing my books
[lethu] Gail, what about labour, how do I charge it when I sell the products
[Gail Perry] Oh - I see what you mean, Joseph - no I don't think there's a way to keep the reports stationary - that frustrates me too! Too much mouse work!
[JOSEPH REISMAN] Thanks Gail
[Session Moderator] Thank you, Gail, for conducting an informative workshop. You provided a wealth of information!
[Session Moderator] Thanks to all of you who joined us today. Let us know about other topics you would like to see in the workshop series.
[Pat] Thanks for the workshop
[HELEN] Thank you very much :-)
[Session Moderator] Are there any more questions?
[James Wilson] Thanks from me too!
[Eva Rosenberg] Yeah, but they would take hours!
[JOSEPH REISMAN] Thanx
[Manuel Alexander] thks
[Session Moderator] Sounds like we may need QuickBooks Workshop 2.
[Gail Perry] I haven't tested it, but it looks to me like you may be able to payroll items in your group - if not you may have to bill labor separately
[JOSEPH REISMAN] I'll 2nd that
[Gail Perry] Thank you all so much for coming!
[Lowell] Thank you for your time
[Eva Rosenberg] one just for costs of sales and project costs?
[Gail Perry] Yes - I think I'll go back and experiment with groups for awhile!
[Session Moderator] Thanks again Gail and to all of you who participated. Have a great afternoon and a successful week!