New Business Direction LLC On November 2nd– 4th, Intuit will be hosting the 2nd annual QuickBooks Connect Conference in San Jose. The conference brings together thousands of entrepreneurs, small business owners, accounting professionals and developers 
under one roof.
There are three different tracks on the agenda as follows:
Accountant – QuickBooks Connect will help your firm get future ready by challenging you to go further, think differently, and embrace the cloud to properly value the services you provide, grow your firm, and better support your clients. *
Small Business – Whether you’re a company of one or one hundred, come to make your business dream a reality: network with fellow small business owners, entrepreneurs, self employed individuals, startup founders, and Venture Capital leaders to receive personalized advice on maximizing your success. *
Developer – Engage Intuit Developer experts to speed your QuickBooks app integration and successful launch to the QuickBooks ecosystem. Take advantage of the unique opportunity to meet and network with other developers, accountants and small business owners. *
The mission is to connect, learn and grow throughout a dynamic agenda of main stage and intimate sessions. Key speakers 
include Oprah Winfrey, Jessica Alba, Brian Lee and Robert Herjavec. Sessions topics include: Here to There: The Accountant’s Journey toward Professional Greatness, Work/Life Harmony, 10 Barriers to Service Excellence and How to Overcome Them, and Cash is King: Tips to Increase Your Cash Flow Today. There will also be speed mentoring sessions and an entire series of QuickBooks Online training topics.
Rhonda Rosand states, “This will be my second year attending the Intuit conference and I look forward to seeing many familiar faces at the event and I invite you to join me in California for this spectacular training opportunity.”
* – content is taken directly from the QuickBooks Connect Website
Small business owners have a lot on their plates, and time simply does not allow you to become an expert in all the areas required for running a business. Here are a couple of common mistakes that we see all the time. Correcting them will help you be more productive and profitable in your business.
1. Mismanaging receipts
Maintaining receipts are challenging for everyone, but the IRS requires that you have proof of business expenditures. Periodically, we come across people who feel that keeping the credit card statements are enough; unfortunately, they’re not. You’ll want to create a process to keep your receipts all in one place so they don’t get lost.
Receipts printed on thermal paper (think gas station receipts and many more) will fade within a year or two, and the bad news is the IRS could audit several years back if they come calling. Correct this by scanning them in or taking a clear picture of them using your smartphone.
Some accounting systems and/or document management applications allow you to upload the receipt and attach it to the transaction in your accounting system. This is a great solution, and if you’re interested in this, please ask us about it.
2. Ignoring the accounting reports
There are gold nuggets in your accounting reports, but some business owners don’t take the time to review them or are uncertain about how to interpret them. Your accountant can help you understand the reports and find the gold nuggets that can help you take action toward profitability.
Some of the things you can do with your reports include:
- Identifying your highest selling services or products
- Projecting cash flow so you’re not caught short at payroll time
- Getting clear on your top customers or your demographic of top customers
- Evaluating your marketing or business development spend
- Pointing out trends compared to prior years, budget, or seasonality effects
- Checking up on profit margins per product or service to make sure you are priced correctly
- Managing aging receivables or speeding up collections
- Measuring employee profitability, if relevant
- And so much more
Being proactive with your accounting will help you spot opportunities in your business that you can act on, as well as spot and correct problems long before they manifest into trouble.
3. Mixing business and pleasure
In your bank accounts and on your credit cards, mixing business and pleasure is to be avoided when possible. All businesses should have a separate bank account, and all business transactions should go through there. It takes an accountant much longer to correctly book a business deposit that was deposited into a personal account.
Taking out a separate credit card and putting all your business transactions on it will save your bookkeeper a ton of time. The credit card doesn’t even have to be a business credit card. It can just be a personal credit card that’s solely used for business. If you have employees making credit card charges, sometimes a separate card for them helps you control fraud.
The hardest area in which to separate business from pleasure is cash transactions. Be sure your accountant knows about these. The accountant can either set up a petty cash account or a reimbursement process so that you can get credit for cash expenditures that are for the business.
How did you rate on these three mistakes? Avoid these three and your accounting department as well as your business will run a lot smoother.
As a business owner, you’re likely torn in a hundred different directions every day. It can take up most of the work day just fighting fires, serving your customers, and answering employee questions – never mind the time spent on email. It’s super-easy to lose sight of what you can be doing to move your business forward the most.
That’s when “the one question” can come in handy. It’s something you can ask yourself at the very beginning of each day, even before you check your email. Make your question about you and your goals for your company.
The one question is, “What’s the highest payback thing I can do today?”
If your goal is to boost profits, then ask “What’s the highest payback thing I can do today that will boost my profits?” If your goal is to empower your employees, then ask “What’s the highest payback thing I can do today that will empower my employees?” If your goal is to make a difference in your community, then ask “What’s the highest payback thing I can do today to make a difference in my community?” If your goal is something else, tailor your one question to that specific goal.
It’s not about fighting fires or answering routine employee questions or even serving current 
customers. Although those tasks are all important and essential, none of them will take your business to the next level.
It could be meeting with a power partner or referral source that sends you a lot of business, designing the next campaign that will bring in a higher level customer, meeting with your employees for lunch, or researching new products to sell. It’s going to be a task that gets you working “on” your business instead of “in” your business.
If you like this idea, consider writing the question on a sticky note and posting it to your bulletin board so that you can see it 
every day. I write my question and my intentions each morning on a colorful piece of paper that I carry with me all day. I do this while having my coffee and long before I check an email, text or telephone message.
Try asking yourself this one question each day: “What’s the highest payback thing I can do today?” Then do it, and watch your business grow.
As we move into the fall season and the final quarter of the year, it’s a perfect time to commit to a project in your business that will help you reach the year’s end in better shape. Here are five ideas:
1. Back-to-School Time
If payroll expenses are one of the higher costs in your business, then it makes sense to boost your team’s productivity and maybe also your own. Fall is back-to-school time anyway, so it’s a natural time of the year to take on a course, read a business book, or hire an organizer to help you get more from your workspace.
If you spend a lot of time doing email, consider taking a course on Microsoft Outlook® or even Windows; learning a few new keystrokes could save you tons of time. If you need more time, look for a book or course on time management. Look for classes at your local community college or adult education center.
2. A Garage Sale for Your Business
Do you have inventory in your business? If so, take a look at which items are slower-moving and clear them out in a big sale. We can help you figure out what’s moving slowly, and you might even save on taxes too.
3. Celebrate Your Results
Take a checkpoint to see how your revenue and income are running compared to last year at this time. Is it time for a celebration, or is it time to hunker down and bring in some more sales before winter? With one more quarter to go, you have time to make any strategy corrections you need to at this time. Let us know if we can pull a report that shows your year-on-year financial comparison.
4. Get Ready for Year’s End
Avoid the time pressure of year’s end by getting ready early. Review your balance sheet to make sure your account balances are correct for all transactions entered to date. You will be ahead of the game by getting the bulk of the year reviewed and out of the way early.
Also make sure you have the required documentation you need from vendors and customers. One example is contract labor that you will need to issue a 1099 for; make sure you have a W-9 on file for them. If we can help you get ready for year-end, let us know.
5. Margin Mastery
If your business has multiple products and services, there may be some that are far more profitable than others. Breaking these numbers out to calculate your profit margins or
contribution margins by product or service line can help you see the areas that are adding the most income to your bottom line. Correspondingly, you can determine if you have any items that are losing money; knowing will help you take the right action in your business. Refresh your financials this fall with your favorite idea of these five, or come up with your own fall project to rejuvenate your business.
Some numbers need reviewing on a daily basis, and one example of this is cash. When cash is coming in from a number of places, it’s great to have a daily summary of what was collected.
It’s also great to make sure all the collections hit your bank account so you can feel confident that no errors were made along the way. A daily cash reconciliation report will serve both needs very well.
A daily cash report will vary depending on the type of business you have, but it will look like a combination of a bank reconciliation and a sales report wrapped into one.
If you are managing your cash closely from day to day, then this report will help you stay sane. You’ll need two very brief spreadsheets to get started. The first one below is your daily sales from all sources. Your accounting system may be able to generate this.
| Today’s Sales | |
| Cash | $300.00 |
| Checks | $600.00 |
| Total Bank Deposit | $900.00 |
| Mastercard Visa | $400.00 |
| American Express | $200.00 |
| Total Credit Card Due | $600.00 |
| PayPal | $100.00 |
If your accounting system is up to date, all you’ll need to do is pull the cash balance and adjust for today’s activity. The following day, you can double check your accuracy and adjust accordingly using the last two rows.
| Daily Cash Report | |
| Book Cash Balance | $5,000.00 |
| Deposit from Today’s Sales | $900.00 |
| Merchant Deposit | $600.00 |
| Less Checks Written Today | ($1,200.00) |
| $5,300.00 | |
| Expected Bank Balance Tomorrow | $8,300.00 |
| Actual Bank Balance | $8,300.00 |
| Explain any differences |
If your accounting system is not updated in real time, you’ll need to start with the bank balance and correct it for uncleared transactions as well as list today’s activity.
| Daily Cash Report | |
| Bank Balance | $5,000.00 |
| Deposit from Today’s Sales | $900.00 |
| Merchant Deposit | $600.00 |
| Less Checks Written Today | ($1,200.00) |
| $5,300.00 | |
| Checks Still Outstanding | ($3,000.00) |
| Deposit from A/R Paid | $5,000.00 |
| Expected Bank Balance Tomorrow | $8,300.00 |
Using these formats, you can easily extend them to cover the entire week. This way, you’ll know what your cash balance will be from day to day.
If you see the value of this report for your business and would like help creating it, please reach out.
Sales tax laws are constantly changing, and sales tax audits have increased since states and local agencies have become creative about finding new ways to generate revenues. If you haven’t made any changes in your sales tax procedures in a while, you are probably at risk.
Taxability
From state to state, the taxability of items varies. For example, data processing services including web hosting and graphics are taxable in Texas but not California. Because of these intricacies, it makes sense to consult an expert in this area. Some states have been taxing certain services for many years now.
Nexus
The new buzzword in sales tax is “nexus,” which simply means presence. If your business has a presence in a state, then certain items you sell could be taxable. “Presence” is a little gray, but here are a few examples of some characteristics that the courts have decided prove nexus.
- If you have employees or contractors working in a state, you are liable to collect and remit sales tax. This can play havoc if you hire virtual or remote workers. Even if they are part-time, you have nexus in that state.
- If you outsource inventory fulfillment in any way (think Amazon sales), you have nexus in states where there is a physical warehouse that houses your products.
- If you own business property in a state, you must file sales tax.
- If you participate in trade shows or are a public speaker, you have nexus in states where the conferences are held.
The Risk
If you fail to collect taxes where you should, the risk is easy to calculate. Take the potential taxable sales times the sales tax rate, and add any penalties. The numbers get scary if you’ve been in business for several years.
Let’s say your annual revenues are $5 million. You didn’t realize that your Texas sales were taxable, and this amounts to 10% or $500K. Your tax liability is $41,250 per year. If you have been doing it wrong for five years, well, you can add it up. Add penalties on top, and it’s not a small amount. It can wipe out your entire year’s profit.
Sales tax liability becomes more important if you plan to sell your business. A traditional valuation will always include a sales tax risk analysis. Even if you don’t plan to sell, the odds of you getting audited or a disgruntled employee blowing the whistle can be too much to risk.
If you want help calculating your risk or assessing nexus or taxability for your business, reach out and we can help.
A couple of years ago, QuickBooks® gave Accounting Professionals a tool just for us – it’s only in the QuickBooks® Accountant and QuickBooks® Enterprise Accountant versions. It’s called Period Copy and it allows us to extract transactions between a set of dates for a specified period of time and condense transactions outside of the range.
This preserves transactions in the condensed file only for a particular period with entries prior to that period summarized and entries after that period removed.
This is useful for clients with file size and list limit issues as well as for third-party requests of information – not only for audit requests, but also in the event of a business sale, a divorce or legal dispute when you do not need to provide the entire QuickBooks® file.
First thing – BACKUP your data file. You are creating a new file to be issued to a third-party and you do not want to overwrite your working file.
Then under the FILE menu, UTILITIES, CONDENSE DATA –
Accept the prompt that it is ok to lose Budget data.
When it prompts you for what transactions you want to remove, select “Transactions outside of a date range” to prepare a period copy of the company file. Set your before and after dates to include the period you want to keep.
Then when it prompts you how transactions should be summarized, choose “Create one summary journal entry“.
Remove the recommended transactions.
Begin Condense.
Once complete, you will have a QuickBooks® data file with only the relevant transactions for a specific period of time and you won’t be disclosing more information than need be.
Many businesses operate with seasonal peaks and valleys. Retail stores flourish in their busy holiday season. Construction contractors are busy when the weather is good. Accountants are very busy from January through April, but also experience a quarterly peak in July and October.
Your business many have its own calendar of busy and slow times. If your business goes through slow times, then your cash flow may suffer at certain times of the year. But having seasonal sales is only one of the reasons for a bumpy cash flow.
You might also have a business where annual payments are made for many items such as equipment purchases, software licenses, insurance renewals, and other large costs. On the revenue side, it could be that your clients pay you annually, which can be hard to predict.
There are many solutions that can help to smooth out the seasonal bumps, and here are a few ideas for your consideration.
Plan for Prosperity
When income and expenses go up and down and up and down, it’s really hard to know if you have enough money for obligations coming up. Creating a budget can help a great deal. Consider creating two budgets: one that shows the ups and downs and one that averages a year’s income and expenses into twelve equal parts.
With both budgets, you’ll be able to see which months will be deviating from average and by how much. From there, it’s easy to create some forecasts so you can stay on top of your cash requirements.
Cash vs. Accrual Basis
It might help your business decision-making to convert your books from cash basis to accrual basis. This is a huge decision that should be made with an accounting and tax expert, as there are plenty of ramifications to discuss. 
In some cases, the accrual basis of accounting will help keep those annual payments from sneaking up on you as 1/12 of the payment can be accrued on a monthly basis to a payables account. This also keeps your net income figure steadier from month to month.
If your clients prepay their accounts on a yearly basis, you can book the income monthly and keep the difference in a Prepaid account. This spreads your revenues out and recognizes them over time.
“Hiding” Money
If you feel accrual basis accounting is a little too much of a commitment, your accountant can still work with you to help you avoid the impulse of spending too much during the cash-rich busy season. Perhaps the excess cash can be put into a 
savings account until it’s needed. You can draw out 1/12 each month as you need it. A little planning such as the above suggested forecasts will help you determine how much you can take out each month. You can even name the Savings account “Do Not Spend!” or “Save for a Rainy Day.”
If it’s just too tempting to have all that excess cash building up in the good times of the year, try one of the ideas above to take back cash flow control and smooth out those bumps.
Does Your Accounting Department Have Holes in It?
You’ve got someone to do your federal and state income tax returns, and you have a bookkeeper. So that’s all that a small business needs when it comes to having an accounting department, right?
Wrong.
Large companies have many functions in their accounting departments, and small and mid-sized businesses need many of the same functions as well. They just won’t need as many staff to handle them. Many of these functions will fall on the CEO, but a smart CEO will find a way to delegate some of the accounting duties to free their time up.
Here are just a few of the things you’ll want to make sure that you have covered in your small business accounting department:
Accounting Software Expertise
Who do you have on your team that can identify opportunities for making your accounting function run more efficiently? The solutions could include training on your current system or could be more comprehensive such as identifying a new accounting system that will save a tremendous amount of time and money.
Let your accountant get to know your processes because they may know of some software applications that can do what you need faster, better, and cheaper. Manual data entry is a hot spot of potential; today, you can find software, scanners, and even smartphones and tablets that can automate the data entry, even if all you have is paperwork to enter.
Business Performance Advice
Are you getting accounting reports that tie to the areas where you have challenges and issues? If not, let your accountant know where those areas are. They may be able to suggest some reports that will provide you with insight and enlightenment.
If you are receiving reports with lots of numbers that you’re not quite sure how to interpret, ask your accountant for help. They can not only help you interpret the numbers, but they can also put the report into a graphical format so that it’s more visual for you.
It’s All About the Revenue
The number one challenge of most small businesses is to attract more business and generate more revenue. Your accountant can help you study your revenue patterns by presenting “what if” tools that can help you see what happens when you change price, impact mix, or adjust volume.
Keeping the Cash Flowing
If your business seems to stampede through cash, you’re not alone. A cash flow forecasting report is in order so you can plan ahead and be ready for the valleys and hills.
Beyond Compliance
If your accounting department focuses on compliance work alone, such as taxes and recordkeeping, you’ll miss out on allowing it to become a profit center of sorts. With these added functions, you’ll discover new actions to take in your business to drive profitability. You’ll have clarity about decisions like price changes, and you’ll know your accounting function is efficient and not wasting time and money.
Take a look at your accounting department, and let us know if we can help you plug any of the holes.
Both the Desktop and Online versions of QuickBooks maintain an Audit Log showing a history of activity in the file by user.
QuickBooks Online Accountant allows you to see all of your QuickBooks Online accounts listed in one login screen and you can choose which client file to access.
Recently, we have witnessed several cross-overs of usernames in the Audit Logs. For example, you could be working in QuickBooks Online as yourself (the Accountant) on Client A, but the Audit Log shows you logged in as Client B on Client A’s file. If Client A happens to check the Audit Log, this could cause quite an alarm!
Unfortunately, there is nothing you can do to change the username retroactively in the Audit Log. There are, however, ways to fix this if it is happening now, and ways to prevent it from happening in the future.
If you have access to multiple QuickBooks Online companies, review the Audit Log in each company. If you log into QuickBooks Online as yourself, and the Audit Log lists another user’s name, this is where you will need to edit your Username record. To edit your username record in any of your QuickBooks Online company logins, go to https://www.login.quickbooks.com/.
Once logged in, you will see a drop-down menu of QBO companies that you have access to. After selecting the company with the incorrect username, you can edit that username to correct the issue going forward.
When you access a new QBO Company, it is always a good idea to check the Audit Log firsthand to prevent future issues.
We have notified Intuit Support of these Realm issues as have other ProAdvisors, and we are awaiting their solution. In the meantime, you may wish to reach out to your affected clients proactively.
