We hope you’ll be ringing out a successful financial year at month’s end. Here’s what you should know about preparing for a new year.
End of the year: QuickBooks has been hard at work for the past 11+ months, recording and tracking and storing all of that financial data that you’ve entered so faithfully.
But when you turn the calendar page and make a new start January 1, your accounting software could use some closure on the year that’s just passed. Here are some actions you can take to ring out the old and ring in the new. There’s more you can do (we can help you with the advanced activities) but we’ll just hit the highlights here.
- Reconcile, reconcile, reconcile. Yes, we know it’s not one of your favorite chores, but we really like to see all bank and credit card accounts reconciled by the end of the year if at all possible. Void all checks necessary and enter missing transactions.
Figure 1: You can make yourself crazy looking for a nickel when you’re reconciling, but it’s a critical function.
- Make accrual adjustments. This is complicated, and it only applies if you accrue payroll and liabilities or prepay expenses that are then carried as assets. We’ll need to create journal entries for you.
- Close your books. This is totally optional. It depends on whether you want to lock 2012 data to everyone except those who have the password and permissions. If you don’t close them, you’ll have easier access to last year’s transaction details. Regardless of what you choose, QuickBooks® will automatically make some year-end adjustments.
- Do a physical inventory. Then compare this with what QuickBooks® says. Reports | Inventory | Physical Inventory Worksheet.
Figure 2: It’s good to match up your physical inventory count with QuickBooks® occasionally, and the end of the year is as good a time as any.
- Check W-2 and 1099 data. You can’t create these forms, of course, until after your final 2012 payroll, but you can get a head start. Ask employees to verify their names, addresses and Social Security numbers for accuracy. Also, make sure that your EIN and SEIN are correct, as well as the company address.
- Clean up, back up. We can monitor the health of your QuickBooks® data file anytime. But year-end is a good time to scrutinize your software’s performance. Has it slowed down, started crashing or returning error messages? We can troubleshoot to find the problem and clean it up. We’re sure you’ve been backing up your file faithfully, but archive all of 2012 and store it in a very safe offsite location – or use Intuit Data Protect for online storage.
Figure 3: Frequent backups are critical, but you should be sure to have a copy of your entire 2012 data file stored somewhere safe.
- Double-check tax liabilities. If you’re handling your own payroll, look back to see whether all of your payments and filings have been completed.
Thanks for another year
Again, these are suggestions. QuickBooks® does not require you to do any of them. There’s more you can do, and you will need assistance with some of these. So let’s set up a December or early January meeting to get you started right in 2013.
We want to take this opportunity to thank you for letting us serve your company in 2012. We certainly appreciate your business, and we’re happy to do what we can to help your business prosper.
This article of QuickBooks Tips and Tricks was based on the 2013 version of QuickBooks.
We wish you a joyous holiday season and a happy, healthy new year!
Jill, Kristen & Rhonda
New Business Directions
Each January we rush around to gather tax information on the independent contractors we paid in the prior year in order to send them a 1099. Here are some basic tips for making it easier and less hurried in your year-end preparations.
As a trade or business, you are required to obtain a Form W-9 from your independent contractors before you pay them, better yet – before they do any work for you. This is regardless of how much money you pay them. This form will give you the name, business name, address, entity type and taxpayer identification number.
Who Needs a 1099?
Service Providers – Anyone you pay in the course of your trade or business for services rendered. This includes Accountants, Consultants, Architects, Engineers, Designers, Contractors, Plumbers, Electricians, Installers, Landscapers, Snow Removal companies, Cleaning companies, the Auto Repair technician, Entertainers – anyone who performs a service or casual labor for your business who is not your employee.
Rents – If your business pays rent for office space or land or equipment, you are required to send the recipient a 1099 for the amount of rent you have paid them.
Exclusions – Sole proprietorships, partnerships and LLC’s that are taxed as sole proprietors and/or partnerships receive a 1099. You are not required to send 1099’s to a Corporation or a Tax Exempt entity. The Form W-9 will provide information regarding the entity type.
Threshold – Send to recipients to whom you have paid $600 or more during the calendar year.
Using the QuickBooks® 1099 Wizard
QuickBooks® has a 1099 Wizard to create accurate 1099 and 1096 forms. It allows you to review and edit your vendors, set up account mapping preferences, run a summary report to review data, and print 1099 and 1096 forms.
Note: QuickBooks® is only capable of preparing 1099-MISC. If you need to prepare other types of 1099’s (e.g. 1099-INT, 1099-DIV), you will need to do so outside of QuickBooks®.
January 31st of the following year to recipients. February 28th to the Internal Revenue Service.
Rhonda Rosand, CPA is an Advanced Certified QuickBooks® ProAdvisor and helps small business owners streamline the process of making money by setting up and cleaning up their QuickBooks® files. She is the owner of New Business Directions in North Conway and can be reached via email at email@example.com.
This article of QuickBooks Tips and Tricks was based on the 2012 version of QuickBooks.
There are different ways to reset a lost password. In QuickBooks there are three different password types. In this article we will outline the purpose of different password types and the ways in which to reset them if they are lost.
This allows unlimited privileges. When logged on as Administrator you can add, change, and delete users of the file. If the Administrator Password is lost, you will need help to recover it by using the Automated Password Removal and Reset Service.*
*This service is not available for Point of Sale or any version on QuickBooks for Macintosh – you will be directed to the assisted password removal option if using these products.
This is required to log in as a User of a QuickBooks® file. Users can change their assigned password, but cannot change their user name or level of access to the QuickBooks® file data. When a User Password is lost, the Administrator can reset it by logging in and modifying the User Record in the Set Up Users window.
Closing Date Password:
This locks the file so users cannot add, edit, void or delete any transaction dated on or before a specific date – unless they enter this password. Only the Administrator has permission to enter this password to make a change to a closed period. If the Closing Date Password is lost, the Administrator can reset it in the Accounting Company Preferences window.
Passwords can be rejected for any of the following reasons:
- Passwords are case-sensitive – check your Caps Lock
Are you in the correct version of QuickBooks®?
Are you in the correct Company File?
Could a space have been recorded inadvertently when you created or entered the password?
Make sure the Numbers Lock is not interfering with numerical characters.
The keyboard might not be functioning properly
- Enter the password in a text editor program such as Notepad to be sure the keyboard works properly.
- An incorrect login screen appears
- A login screen that asks for a password but not a user name is the Administrator’s login access. If the Administrator’s login screen appears, close QuickBooks® and reopen it.
Automated Password Removal & Reset System:
To reset the Administrator Password by using the Automated Password Removal Service, you must have the product license number and the phone number and zip code you registered the product with. Note: The version of QuickBooks® you last opened your company file with must be on the computer you are using to remove and reset the password.
After completing the Automated Password Removal Service, proceed to use the Automated Password Reset Tool which will reset your Administrator password in any version of QuickBooks® for Windows. All information must match exactly what was used to register the product. The email with the new Access Token will only be sent to the original email on file. The Automated Password Reset Tool will guide you through the remainder of the process.
- Keep a record of your clients’ Administrator passwords
- It is best that no one, not even the owner, uses the file as Administrator. Set up a username and password for the owner and give the owner full access to the file, except for the ability to affect closed periods. This will add another layer of protection to the closed financial periods.
For more information on this matter, please call us or visit Intuit’s support page on Password Removal here: http://support.quickbooks.intuit.com/support/passwordremoval.aspx
This article of QuickBooks Tips and Tricks was based on the 2012 version of QuickBooks.
QuickBooks® 2013 has a number of new features as well as improvements to existing ones. It also has a few problems as evidenced by the fact that they have already issued Release 3 to fix the bugs and it only just hit the retail store shelves in October.
Changes in the User Interface
There are major changes in the visual design of the program and how you navigate each of the screens. Fonts, spacing and colors have changed in just about every area of the program. This was done to try to standardize the look and feel throughout QuickBooks®. Change is not always welcomed by people who are used to things the way they were and it will take a little bit of getting used to in order to find where they put your favorite things.
Left Icon Bar
Instead of the top icon bar that we have been using since 2006, the navigation bar is now on the left hand side of the screen much like it used to be back in 2005. If you have a low resolution monitor, this icon bar takes up a great deal of real estate on your screen. You do have the option of moving this back to the top, but it’s not as pretty as it used to be and harder to read with gray on black.
More White Space, Smaller Labels and Scroll Bars
The Home Page and other screens have more white space which makes things less busy but it also shows less information – about 30% less information is displayed in the same size window. Some of the Labels are really small and the light gray color is too faint to actually see. The Scroll Bars are so small it can be difficult to get your mouse cursor on them.
Ribbons on Transaction Windows
The most commonly used transaction windows will have a new “ribbon” interface at the top similar to the ones in Microsoft Word 2010. This combines the features that relate to these transaction windows into one easy to use place. The content of the ribbon will change from form to form, but the general layout is the same.
This is the most improved area as far as additional features for small business owners who use the software for their bookkeeping needs. In the Customer, Vendor and Employee Centers, Tabs have been added to quickly access Transactions, Contacts, To-Do’s and Notes. You can now have multiple Notes per record, instead of just one. There are now 24 contact-related field labels and you can choose which eight (8) to show on your screen. The To-Do list is much more convenient and can be filtered by Customer, Vendor or Employee.
Color Scheme Preference
In QuickBooks® 2012 we could set each QuickBooks® file to have a different color scheme in the Desktop View preferences. This was helpful when working in multiple company files. This has been removed in QuickBooks® 2013. If you don’t like the color settings in the new program, you can’t change it. You do still have control of some of the colors used in some individual windows and the colors are less intrusive.
There are a number of changes in the QuickBooks® Accountant version of the software. Send general journal entries to clients via email is a simple way to send the year end journal entries back to clients, batch enter transactions allows you to quickly enter (or import) large numbers of checks, credit card charges or deposits, Starter Copy is easier to find and work with, toggle to the Bookkeeper edition is available and the QuickBooks Statement Writer is now supposed to be compatible with 64 bit versions of Microsoft Excel. Client Data Review received a few improvements in converting the Other Names and Writing Off Invoices.
There are a few improvements that are only available in the QuickBooks® Enterprise version of the software. We now have Automatic Purchase Orders, Default Classes and Larger List Limits. In the Advanced Inventory add on feature to Enterprise, we now have Barcode Scanning, Bin Location Tracking and FIFO Cost Lot History by item Reporting.
Look before you leap. If you don’t have to upgrade right now, don’t – It’s buggy at best and for the regular small business owner using the software for everyday bookkeeping needs, it has no real improvements over the prior year. QuickBooks® will be sun-setting the 2010 version of the software in May of 2013 and hopefully by then they will have resolved most of the issues and we can help you make a smooth transition to the latest version.