New Business Direction LLCAh, the Opening Balance Equity account – as accounting professionals it’s one of the first things we look for when someone hands us a QuickBooks® file at year end. It tells us a great deal about the clients’ skill level with QuickBooks® and is an early indicator of how much time we will have to spend cleaning up the QuickBooks® file before we can rely on the numbers to prepare a tax return or financial statements.
Opening Balance Equity is a very useful account, when used properly. Although you may be tempted to delete this account, it’s much better if you use it as it was intended. It will really help if you ever need to go back and look at the original setup.
Proper Use of Opening Balance Equity
The Opening Balance Equity account is a special clearing account, which allows you to start using QuickBooks® before you have finished setting up the entire Balance Sheet.
The proper use of the Opening Balance Equity account is for the original setup of an existing company. When you start a new QuickBooks® company file with a start date later than the actual start date of the company, you will need to enter opening balances for the various general ledger accounts.
Opening balances can be entered into the company file in the form of a General Journal Entry for most Balance Sheet accounts using Opening Balance Equity as the offset account. Once all of the beginning balances are entered, the remaining balance in Opening Balance Equity can be apportioned between the proper equity accounts using another journal entry.
Once your QuickBooks data file is completely set up, Opening Balance Equity should be zero. This is because the account is only used to “park” the offsets for anything you are setting up opening balances for. If it is not zero, go back to the original Trial Balance and locate the discrepancies before moving on.
Automatic Posting to Opening Balance Equity
In some instances, QuickBooks® automatically posts to the Opening Balance Equity account.
QuickBooks® uses the Opening Balance Equity account automatically as the offset when entering a new Customer, a new Vendor or a new Account balance. This often occurs when clients set up their own QuickBooks® files. Entering beginning balances in the screen for setting up a new Customer, Vendor or Account is not the proper method of setting up beginning balances.
Do not enter beginning balances in the opening balance field.
Leave this field blank when entering Customers, Vendors and Accounts.
How to Correct Postings to Opening Balance Equity
Unlike the Retained Earnings account, the Opening Balance Equity account does have an account register. If you find that your client has inadvertently or unknowingly made postings directly to the Opening Balance Equity account during the year, you can open the register by going to Lists – Chart of Accounts and double clicking the account. Then double click each posting and make the corrections here.
For more information on how to properly set up beginning balances for Customers, Vendors and/or Accounts or for help in troubleshooting your clients’ Opening Balance Equity account, please call us.
This article of QuickBooks Tips and Tricks was based on the 2012 version of QuickBooks.
If you frequently enter the same transaction, you can memorize and schedule the entry of the transaction so that you will not have to re-enter it each time. For example, you can memorize your monthly rent or a journal entry for monthly depreciation expense or even a recurring invoice to a customer.
If the amounts on the transaction do not change (for example, if you always pay the same monthly rent), you can fill in all of the details for the transaction and can even have QuickBooks® automatically enter the transaction for you.
If the amounts or other details sometimes change, you can enter the memorized transaction and leave some of the fields blank. When you want to use your memorized transaction, just choose it from your Memorized Transaction List and edit it as needed.
Memorizing a Transaction
First, create the transaction that you want to memorize.
For a bill – Enter Bills.
For credit card charges – Enter Credit Card Charges.
For an Invoice – create an Invoice.
For a journal entry – Make General Journal Entries.
Once you have created the transaction to be repeated, click Memorize from the Edit menu.
Enter the Name of this Memorized Transaction using a name that you will recognize so that you can easily find this transaction in the Memorized Transaction List.
Set the fields as shown in the screen shot above to indicate when and how often you want the transaction entered and then click OK.
Click Save & Close to record the transaction.
Every time you open QuickBooks®, it checks your Memorized Transaction List for transactions that need to be entered automatically. If the system date is on or after the date in the Next Date Field (less the number in the Days in Advance to Enter field), QuickBooks® will ask you if you want to enter the memorized transaction.
To see your Memorized Transaction List, choose Memorized Transaction List from the Lists menu or hit Ctrl T. This report shows detailed information about each transaction you’ve memorized, including the transaction type, the account, the amount, the frequency and the next date.
Rescheduling a Memorized Transaction
When you specify a schedule for a memorized transaction, you can choose whether QuickBooks® should remind you of the transaction or automatically record it for you.
- Go to the Lists menu and click Memorized Transaction List or Ctrl T.
- Select the memorized transaction whose schedule you want to change.
- Click Memorized Transaction at the bottom of the list and click Edit Memorized Transaction.
- Select a different scheduling option for the transaction.
- Click OK
Deleting a Memorized Transaction
To delete a memorized transaction:
- Go to the Lists menu and click Memorized Transaction List or Ctrl T.
- Select the memorized transaction you want to delete.
- Click Memorized Transaction at the bottom of the list and click Edit Memorized Transaction.
- Select Delete Memorized Transaction or Ctrl D.
As always, if you have any questions or would like more information, please call us.
This article of QuickBooks Tips and Tricks was based on the 2012 version of QuickBooks.
Kristen has joined the team at New Business Directions. She has been with the company since December of 2011 and has undergone an extensive in-house training program on QuickBooks.
Kristen is a 2006 graduate of Colby-Sawyer College with a BFA in Fine Arts and has experience in graphic and web design, managing administrative functions and payroll processing. She has a successful track record of providing administrative support for businesses and individuals alike.
She has been instrumental in implementing our online marketing promotion and ensures our company branding is consistent across each platform.
In addition to marketing, she will be responsible for administration, client services and general recordkeeping tasks.
“We are excited to have Kristen as part of our team!” says Rhonda Rosand, owner of New Business Directions. “Her attention to detail is what makes her a great asset and a really good fit for the company and our clients!”
At New Business Directions we help small business owners streamline the process of making money. If you would like to create order out of chaos and improve your bottom line, call us at 603-356-2914 or visit our website at www.newbusinessdirections.com.
Did you know that there are at least 40 different file extensions in QuickBooks®? Those are just the ones that I found when researching this article – I am sure there are many more!
There are extensions for everything from Loan Manager and Financial Statement Designs to Online Banking and Images. There is even one called LGB which stands for Little Green Box. This file contains encrypted information on user names and passwords.
Here is just a sampling of the file types and extensions in QuickBooks.
It is important for accounting professionals to understand the different file types and file extensions involved with QuickBooks®.
There are five (5) main file extensions used for holding transactions and data for a QuickBooks® company file. The table below describes these file extensions.
| Extension |
File Type |
Description |
| .QBW
|
QuickBooks® for Windows company file |
This is the main file type for a QuickBooks® company file. All of your data is entered into this file. |
| .QBB | QuickBooks® backup file
|
A backup file is a compressed file containing everything you need to recreate your company file and QuickBooks® environment. Use a backup file to safeguard your QuickBooks® files against accidental data loss. When you create a backup, QuickBooks® starts a log of transactions (.TLG) that you have entered since the last time you backed up. To open a .QBB file, go to the File menu and click Restore. Double-clicking the file and choosing Open from the File menu will NOT restore or open a backup file. |
| .QBM
|
QuickBooks® Portable company file | This is a compressed file that contains all of the data of a QuickBooks® company file, but not the database indexing, so it is much smaller than the .QBW or .QBB files. It is useful for transferring data through the Internet because the data file size is much smaller than any of the other file types and it can be restored to the full .QBW on the receiving end. |
| .QBX
|
Accountant’s Copy (Export File) |
This is also a compressed file format and it is used specifically for transferring a file from an end user (client) to an accountant for review. This includes a Dividing Date which prevents the client from creating transactions on or before this date. |
| .QBA
|
Accountant’s Copy (Working Copy) |
When the accountant opens a .QBX file they must restore and convert it to a .QBA file in order to enter transactions and run reports. |
It is important to assess the client’s needs and determine which file type is appropriate for the situation. It will depend on the type of work to be performed, the condition of the client’s current data file, the nature of their operations and a number of other factors. If you have a solid
understanding of the different file types and options available, then you can make a more informed decision on how to best serve the needs of your client.
QuickBooks® also uses many other file extensions to access or store other types of data associated with QuickBooks®. The table below describes a few of these file extensions. It is not an all-inclusive list.
|
Extension |
File Type |
Description |
|
.QBW.TLG
|
Transaction Log File for QuickBooks® company file
|
When you backup a company file, QuickBooks® starts a log of transaction that you have entered since the last backup. In case of accidental loss of data, Intuit Technical Support can use your most recent backup in conjunction with the transaction log file to recover your data. This log file is also used if you sync your QuickBooks® data with certain online services using Intuit Sync Manager. This allows ongoing syncs to happen much more quickly than the initial full upload of QuickBooks® data into your online service. Note: A manual backup (not an automatic backup) is required to ‘reset’ the .TLG file. If the .TLG file is too large, create a manual backup. |
| .QBA.TLG
|
Transaction Log File for Accountant’s Copy
|
When you backup an Accountant’s review copy, QuickBooks® starts a log of transaction that you have entered since the last backup. In case of accidental loss of data, Intuit Technical Support can use your most recent backup in conjunction with the transaction log file to recover your data. Note: This file is created during backup provided that you have set a verification level. |
| .QBY
|
Accountant’s Copy (Import File)
|
When you (the Accountant/Consultant) are finished making changes in an Accountant’s Copy, you provide the client with a .QBY file to be imported into their company file. Note: This file only includes the changes made by the Accountant and not all of the transactions of the company. |
| .IIF
|
Intuit Interchange Format file
|
You can import and export lists and/or transactions using text files with an .IIF extension. |
| .ND
|
QuickBooks® Network Data file
|
A configuration file that allows access to the QuickBooks® company file. Note: DO NOT DELETE this configuration file. |
| .DES |
Form Design Template file |
This file type is created when you export a form design from the templates list. |
For a printable list of file types and extensions, click here.
This article of QuickBooks Tips and Tricks was based on the 2012 version of QuickBooks.
Rhonda Rosand, CPA received her designation as an Advanced QuickBooks® ProAdvisor from Intuit, the makers of QuickBooks®, in June of 2012.
In order to be eligible for Advanced Certification, she was required to complete the three (3) most recent, consecutive QuickBooks ProAdvisor certification exams and to pass a rigorous examination testing both accounting and technical expertise.
The QuickBooks Advanced Certification Course is designed to deepen the expertise of ProAdvisors who are already knowledgeable in QuickBooks and distinguish these “QuickBooks experts” as highly proficient in this field.
The Advanced Certification is the highest designation that Intuit offers QuickBooks® experts. Only 11% of Certified QuickBooks® ProAdvisors within a 500 mile radius of the Mount Washington Valley are Advanced Certified.
Advanced Certification entitles her and her clients to increased discounts on QuickBooks software and supplies as well as access to unlimited U.S. – based Diamond level VIP technical support.
Rhonda Rosand, CPA is the owner of New Business Directions. She specializes in QuickBooks consulting and training services, coaching small business owners and providing innovative business solutions.
For more information or to sign up for our Free monthly QuickBooks® Tips and Tricks newsletter, please visit www.newbusinessdirections.com.
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Tips & Tricks in QuickBooks®
