Learn about the Audit Trail Feature in QuickBooks Desktop and Online from Rhonda Rosand, CPA from New Business Directions, LLC.
The Audit Trail tracks the who did what when: it tracks the history of a transaction, where it started, what changes were made and what it looks like now. This tool can be especially useful to accountants.
All business functions need to run smoothly, including your accounting system, to maximize profits in your business. Here are five signs you can check for to determine if it’s time to upgrade or replace your current accounting system, or if you need more training on the features of your existing software.
- Not enough users
If your current system limits the number of users you can have in the system at any one time, this could be a major enough reason to switch to a larger option. If you’re not sure how many users you currently have a license for, we can help you find out. It might be as easy as buying more licenses if you’re not at the maximum capacity. But if you’re already at maximum, it may be time to look for a better accounting system with room for you and your business to grow.
2. System is Outdated
If your accounting system runs on desktop-based software that’s upgraded every year and you have not paid for or installed the upgrades, then your system is outdated. If it’s been sunsetted, that means the software company no longer supports that version. You are at major risk for the software crashing, getting buggy, getting hacked, or worse, permanently breaking.
The cost of getting the system current may be better spent looking for a new alternative, or moving to a cloud-based system where updates occur automatically.
3. Lack of functionality
It is commonly the case that your business has grown so much that it’s outgrown your original accounting solution. That’s good news! It’s time to find a solution that will scale better for your business, as you might be missing important features that are costing you more time and money than if you were on a system that offered those features.
Something that we see regularly, is that there is existing functionality in a software solution that is not being utilized because users aren’t aware that the feature exists. Spend time learning everything you can about what your software solution provides for features.
4. Lack of reporting and analytics
If you’re unable to receive the reports and analytics you want to run your business better from your current accounting system, it may be time to switch. With better data comes better decision-making and if lack of data is costing you money, then it’s time to find a more robust system. Again, users may not have the knowledge or training they need to customize the reports and analytics that already exist in your software solution.
5. Lack of integrations
Thousands of apps exist to expand accounting systems’ core functionality. If your current accounting system lacks integration capabilities or does not have apps that are built to integrate with it, you may be missing out on additional functionality. This include mobile apps; it’s quite common now to do much of your accounting work from your mobile phone or tablet.
Does your current accounting system have any of these red flags? If so, please reach out. We can help you find a best fit for your accounting needs, and help you with additional training.
Join Rhonda Rosand, CPA and Advanced Certified QuickBooks ProAdvisor of New Business Directions, LLC, and learn how to Record PPP or EID Loans in QuickBooks Desktop and QuickBooks Online:
Join Rhonda Rosand, CPA and Advanced Certified QuickBooks ProAdvisor of New Business Directions LLC, to set up your COVID-19 Expense account, payroll liabilities account, payroll items and tax credit in QuickBooks Desktop. See what it looks like when you process a payroll and where to go to find the remaining balance of your tax credit.
Mobile Accounting is Here, Now
Now that it’s officially 2020, it may be time to jump on that accounting app bandwagon if you haven’t already done so. The exciting news is you can do a lot of your accounting tasks from your phone instead of your computer.
Here are just a few examples of accounting tasks you can manage on your phone.
Are you still trudging to the bank to make your deposits? If so, there is a better way: Mobile Deposits. Simply download your bank’s mobile app, login, and look for the Make Deposit function. Follow the prompts to endorse and photograph your check through the app. Like magic, the deposit will soon be in your account.
Shoeboxes of receipts are a thing of the past. (Thank goodness, we say!) Send your receipts to your accountant simply by taking a picture of them and sending them via email or through a document entry system like Receipt Bank or AutoEntry. You’ll need to set this up to connect with your accounting system, but once it’s set up, it’s a real time-saver.
Wondering how much income you made last month? Download your accounting app on your phone and login to get many of the features that you have on your computer onto your phone. You’ll need to be on a cloud system like QuickBooks Online or Xero, or possibly have a hosted desktop solution in order to have this functionality.
There’s no need to be tied to your desk on payroll day if you can submit or approve payroll from your phone. Many payroll systems have apps you can download so you can be free of your computer.
There’s a mobile app for almost any add-on you might need, such as TSheets for time tracking and scheduling or Square for taking payments.
If you find yourself often on the go, having quick access to your business accounts will be beneficial. Feel free to reach out to us if you’d like to find out more or get help moving some of your accounting functions to your mobile phone.
There’s an App for That
Using apps can increase the functionality of your accounting system, saving you lots of time and frustration. Because every business is different, you may—and likely will—need add-on features that may not be included in the accounting system you currently use. The right app will provide deeper functionality in the areas you need them. Here are some examples:
These payroll apps were created to help you implement an easy and automated method of managing payroll and all things HR-related. Popular payroll options include Intuit’s many options, Gusto, ADP, OnPay, and Patriot.
2. Time Tracking
The best and most accurate way to keep track of an employee’s time is with an app. A wide range of apps can make not only tracking but scheduling your employees’ time simple, too. These apps include T-Sheets, ClockSmart, BigTime, Time Tracker and more.
Each app will offer different features. For example, most have timers, but only one might offer geofencing, so find the one that’s best for your business. Regardless of which one you choose to use, you will quickly discover how much time and energy you save without having to do time tracking manually.
Need more functionality to better manage your inventory? If you run an ecommerce, retail, or wholesale operation, you may need an inventory app to give you more features. Back order functions, drop ship handling, and recall functionality may be required depending on what you sell. Here are some popular apps for inventory:
- SOS Inventory
There are also many ecommerce apps in this space: WooCommerce and Shopify, to name a few.
4. Cash Flow
Dozens of apps exist to help you manage your cash flow as well as get funded:
- Cash Flow Frog
- Blue Vine
- Many others
Managing your cash and debt are important areas and ones that are easy to find to help you get quicker answers to your questions.
Now that it’s 2020, try working smarter, not harder. Add-on features can help! Remember, the examples listed above are just a few apps currently available. Determine what you need for your company to make better decisions, and then look around for the perfect app. Each app has different features. Explore them and find which one works best for you and your business needs.
And, if we can help you implement your ideas faster, feel free to reach out to us anytime.
Ever wonder why you’re so busy this time of year? As you probably already know, there are a lot of extra tasks needed to be completed for year-end. While much of it is required by the government, clean-up and adjustments are vital to keeping your books accurate.
Here are just some of the items that are performed at year-end:
- Just about every asset on your balance sheet needs to be verified in some way or other:
- Petty cash accounts need to be reconciled and reimbursed as of year-end
- Bank accounts need to be reconciled with the bank statements. This includes PayPal.
- Accounts receivable balances and all other receivables need to be tied to each customer and any amounts determined to be uncollectible need to be written off.
- A physical inventory count needs to be taken and the inventory account should be adjusted accordingly.
- Fixed assets need to be reconciled to their fixed assets ledger and depreciation should be properly recorded.
- Goodwill accounts need to be checked and amortization adjusted.
- Prepaids, deposits, and all other asset accounts need to be adjusted if necessary.
- Liabilities and equity need to be adjusted too:
- Accounts payable balances and all other payables need to be tied to each vendor.
- Credit card accounts need to be tied to the statements and reconciled.
- Liabilities that haven’t been recorded need to be added to the books.
- Loans need to tie to lender statements, and interest paid on loans needs to be properly expensed.
- The Equity accounts need to be checked and tied out to prior year balances.
- Corrections and adjustments need to be made:
- Any misclassifications and corrections need to be made on the books with adjusting journal entries or other classification tools.
- If the client is a cash-basis taxpayer, a reversing journal entry needs to be made to get the correct tax numbers.
- A clean set of reports can now be run and used.
- If you have payroll, employees need to be sent their W-2s before the end of January, and the federal and state government need a copy of the W-2s with a W-3 transmittal.
- For employees, you may also be required to have an up-to-date W-4 signed by them.
- For employers, your federal unemployment 940 return is due.
- If you have contractors, they need to be sent their 1099s before the end of January, and the IRS needs the 1099s and the 1096 transmittal.
- For contractors, you must also have an up-to-date W-9 form from them. You may also need to request an insurance certificate, or you may get a surprise at your workers compensation audit.
- For vendors who claim exemption from sales tax, you’ll need to be sure you have an exemption certificate in your files from them.
- If you pay sales tax annually, your return and payment are due.
- Your personal federal, state, and local income tax and returns are due in the spring, or they can be extended until later in the year.
- Depending on the type of entity your business is organized as, you may have franchise, federal and state tax returns to file. This deadline comes up sooner than the individual tax return due date.
- This is a good time to file and store your receipts in case you are ever asked for them. For long-term storage, thermal receipts should be copied or scanned in before the ink fades.
- This may be the perfect time to start thinking about paperless document storage!
We are often so busy this time of year because of all the extra work we must do over and above the normal monthly load. If you have questions about any of this, please reach out anytime.
Custom fields in your accounting software are data fields that you can define yourself. They are typically associated with customers, vendors, employees, and items, and they can help you store and categorize additional information about these stakeholders and your products and services in your business.
An example custom field that can be associated with customers is their anniversary date with you. You could also decide to store their birthday, their spouse’s name, their favorite color, or their shoe size.
Custom fields add functionality to your accounting system. Here are a few examples of practical uses for custom fields:
- Contact for customer – if customers are assigned a particular team member, you can add their name in a custom field
- Frequency of service – daily, weekly, monthly
- Warehouse location
- Type of customer; for example, non-profit, construction, retail, restaurant
- Referral Source
- Preferred method of contact: email, phone, fax, text, chat
- License number
Our customer custom fields track which version of QuickBooks you use, what payroll service is active, who your tax preparer is, etc. Then we can sort on any one of these fields.
Some software allows you to choose the type of custom field you want to add. In some cases, this allows for cleaner data as the data can be limited to a certain type or certain values upon entry. Here are the most common types:
- Free form text – this is the default type; it can come as a single line or paragraph
- Check box – choose one or more values from a limited number of choices
- Radio button – choose only one value from a limited number of choices
- Drop down – choose a value from a dropdown list
- File upload – add an attachment
- Image upload – upload an image that will be displayed
- Date/time – enter a date or time
- Number – enter a number; it can be currency, integer, or another mathematical type of number
Custom fields allow you to meet your company’s unique needs over and above what the software provides by default. It’s a great way to make your data more meaningful. If you have some ideas for custom fields in your accounting software and want help setting them up, feel free to give us a call anytime.
If you want to swap services with a vendor or customer, great! But did you know barter transactions are taxable, and they need to be recorded on your books. Here’s a video from Rhonda on exactly how to record barter transactions: https://www.youtube.com/watch?v=iOAaOrojGhI
A great way to make a wonderful start to 2020 is to wrap up 2019 feeling organized and on top of the world. Here’s a checklist of items that you can start on now to make your year-end close go smoother than ever before. And don’t worry if you don’t know how to do some of these tasks – that’s what we’re here for.
- Catch up on your books, especially if you do them only once a year. By doing it now, you’ll be able to get into your accountant faster this time of year and they will appreciate getting the work done ahead of their crunch time.
- Catch up on bank reconciliations in case they are not up to date. Don’t forget your savings accounts, PayPal, and any other cash equivalents. Void any old uncleared checks if needed.
- Review unpaid invoices in accounts receivable and get aggressive about collecting them, especially if you are a cash basis tax payer. Clean up any items that are incorrect so that the account reconciles.
- Write off any invoices that are no longer collectible.
- Ask employees and vendors to update their addresses in your payroll system so that W-2s and 1099s will reflect the correct addresses.
- Collect any W-9s that you don’t already have on file for contractors that will receive a 1099 form from you.
- Collect workers compensation proof of insurance certificates from contractors so you won’t have to pay workers comp on payments you have made to them.
- Collect sales tax exemption certificates from any vendor who has not paid sales tax.
- Decide if you’ll pay employee bonuses prior to year-end. Reminder: This payroll is subject to withholding taxes.
- Review employee PTO and vacation time and reset or rollover the days in your payroll system.
- After the final payroll runs, contact your payroll software company to make any W-2 adjustments necessary for things like health insurance.
- Set the date to take inventory, and once you have, make adjustments to your books as necessary.
- Write off any inventory that is unsalable. If possible, sell scrap inventory or other waste components.
- Prepare a fixed assets register, calculate depreciation, and make book adjustments as needed. Leave the calculations and adjustments to us or your tax preparer.
- Record all bills due through year-end, and reconcile your accounts payable balance to these open bills.
- Make loan adjustments to reflect interest and principal allocations.
- Perform account analysis on all other balance sheet accounts to make sure all balances are correct and current.
- Make any additional accrual entries needed, or if you’re a cash basis taxpayer, make those adjustments as needed. You can leave these entries to your tax preparer.
- Get an idea of what your profit number will be. Choose whether you want to maximize deductions to save on taxes or whether to want to reflect more income. Decide what you can defer into 2020 or what you want to have as part of your 2019 results.
- Match all transactions with their corresponding documents – receipts, bills, packing slips, etc. – to make sure you have the paper trail you need. Go paperless – digitize these documents!
- Download your bank statements and store them in a safe place.
- Download any payroll reports and store them in a safe place.
- Scan in paper documents so that they’re stored electronically.
- File any important papers such as new leases, asset purchases, employee hiring contracts and other business contracts.
- Prepare a revenue and profit plan for 2020 and enter it into your accounting system.
- Take a look at the 2020 calendar to determine which holidays you’ll close and you’re your employees a copy of the schedule.
- Review your product and service prices if this is the time of year you do that and make any changes you decide on.
- Update your payroll system for any new unemployment insurance percentages received in a letter each year.
- Update the mileage deduction rate if that rate has changed at the beginning of the year.
- Set a time with your accountant to go over 2019 results and get ideas on how to meet your financial goals in 2020.
- Review the metrics you’ve been using in 2019 and decide on the list of metrics and corresponding values that will take you through 2020.
- Celebrate the new year; it’s a wonderful time to gain perspective and be hopeful about the upcoming year.
Start 2020 with a bang and this year-end checklist, and feel free to reach out if we can help with anything.