10 Quickbook Insider Hints and Tips
Posted August 6, 2015
10 QuickBooks Insider Hints and Tips
Want to get the most from your QuickBooks software? So do we! Check out these practical ways to optimize your QuickBooks experience.
1. Use the Quick Math Calculator
2. Use Classes for better Tracking
Using Accounts in QuickBooks mostly organizes transactions into financial categories: income, expenses, payables, receivables, etc. But using Classes helps you streamline those transactions into any category you want. You have full control over what those categories are. The Classes list is empty when you first create a QuickBooks file, so you can set up anything you want in it.
3. Customer Notes
Jot down important dates and information about specific clients and the work you are performing using Customer Notes. This simple tool helps you to keep track of significant things that might otherwise slip your mind over time.
4. Expand Functionality with Bill.com add on
View your bills and process your payments (from your desktop or mobile device) using information that you have already plugged in to QuickBooks.
5. Get a system in place to handle your overdue accounts
Cash flow is the heart line of your business, don’t let staggering accounts slip through the cracks or stay on the back-burner for too long. Keep them on the forefront of your line of sight so that you can be sure to stay on top them.
6. Run a Profit and Loss Report EVERY month
This gives you a significant recap of your income ins and outs as well as a great trending tool to see what and where things are happening repeatedly over time.
7. Back up data on Hard Drive or in Cloud
4.7 Million businesses suffer annually from some type of data loss.
8. Leverage the F2 Function
Don’t let disorganization and clutter get in the way! The F2 Function tells you EVERYTHING – the size of your files, the totals in each list, how fragmented everything is (which if left unchecked can render your system unstable). If your files are too large (250MB or more for Pro or Premier Versions, 750MB or more for Enterprise) or your fragments are high (20 or more), you are more likely to experience corrupted data and it’s probably a good time to super-condense and give your system some space to breathe.
9. Get qualified help when setting up QuickBooks
If your QuickBooks is already set up, have a professional look it over to make sure that you are using the right system that best suits your requirements and meets your financial reporting and tax needs. Starting off wrong in the beginning is a recipe for disaster later. As a small business, the most common impression is that doing your own Quickbooks is a no-brainer. THINK this over carefully though! The correct filings, deposits, and data accuracy are crucial to your financial health and stability. This is why most successful businesses delegate their bookkeeping to a professional. We would be happy to discuss what this step entails.
10. Use Period Copy
Did you know that the IRS can request a copy of your QuickBooks file? They Can! With access to this file, they can look at all of your transactions for the entire history of your organization! This means all activity outside of your audit period becomes questionable and leads to loads of extra WORK for you- Keeping a trail of evidence makes it clear that none of your data has been manipulated.
In this case, it may help you to use the QuickBooks feature (located under Utilities) called a Period Copy. This feature (depending on the version) allows you to remove data outside of that audit period. Making a back-up copy at the end of each year is also helpful with providing the IRS with exactly what they need (as an original file) without including post-period transactions.
The important thing to remember when doing your own books is that two great minds are better than one. As you get the hang of things, it becomes easier, but ALWAYS be sure to get a periodic “checkup” from an expert.
LRBBC provides monthly, quarterly and annual services to help ensure that everything is running smoothly. The same way you would go to a doctor for a wellness exam for time to time – you should routinely see a professional to ensure financial health, security and the best business practices. Don’t let this task get lost in the shuffle of life again. While you’re thinking of it, schedule your next QuickBooks checkup TODAY!
You can give us a ring: 703-519-7954 or shoot us a quick message here: http://lrbbc.com/contact-us/
Top 5 Tips to Avoiding an Audit
Posted June 16, 2015
Top 5 Tips to Avoiding an Audit – LRB Business Centers – Your Bookkeeping Experts
Each year, the IRS plugs in data for more than 27 million tax returns. It would seem that computing and crunching all of these numbers from millions of tax returns and finding a reason to point at you would be nearly impossible right? Not exactly.
It turns out that the process for determining who should be audited and who shouldn’t is actually pretty simple: the IRS mostly just compares expenses to income. If you have large expenses relative to income, the computer flags you for an audit.
Avoiding IRS audit doesn’t mean you should have to pay more than you owe just to stay off the radar, but you also want to be sure that you don’t make yourself a target. The odds of being audited are a favorable 1 in 116. But, as your money goes up, so do your chances of an audit. So Professionals who generate more than 200K a year = 1 out of every 37 returns! Budget cuts at the IRS may mean fewer audits this year, but it doesn’t mean everyone is getting off scot-free. Simple mistakes made by many taxpayers are putting them at risk.
So, you may be asking yourself “What can we do to make sure we avoid an audit?” Again, the easiest way to avoid selection for an audit is to be sure your expenses are comparable to your income. Here are also Our Top 5 Tips that you can use as precautionary steps and for growing your business:
1. Double-check the Numbers
The devil really is in the details. Double-checking your numbers once and then again is always best practice. Why chance careless mistakes that could make you appear to be intentionally filing incorrectly? Also, as a safety precaution, get a second pair of eyes on your books – your spouse, trusted employee, a bookkeeper – SOMEONE!
Here are some useful bookkeeping practices to help you keep you numbers straight:
Automate as much of your bookkeeping as possible to avoid inevitable human errors. You can use formulas throughout your spreadsheets. The only “hard input” would be in the input tabs. You can also use the “vlookup” function in Excel and import the entire trial balance.
Make specific references to avoid confusion. You should cite general ledger accounts and actual file names, especially if you are referring to information in another system. Be as specific as possible — even if the location is something like “my receipt drawer”
Create separate general ledger accounts for significant items as well as items used to compare book/tax differences. This technique makes it easier to find information and review it quickly but accurately. It also eliminates the need to dig through other accounts and conduct separate reconciliations.
Now, all this double-checking and careful attention to detail is asking a lot – it takes time. And you know as well as anybody that time is valuable for business owners.
You are the leader of your company. You should be focused on money-making activities rather than spending more time on the arduous paper work. This is exactly what successful business owners do – they outsource the menial task of accurate bookkeeping. Not only is it easier to outsource, but it also saves time and money in the long run. Now, let’s move on to our next practice for avoiding an audit.
2. Keep to the Straight & Narrow
This one is pretty straight forward – Be honest and stay out of the hot seat!
For business owners and private individuals alike, there is nothing worse than the terrifying words IRS audit across the headlines of your mail. The odds of it happening may be in your favor, but ask anyone who has suffered the painstaking process on the losing end of those odds. It’s not worth playing the tax game, and if you are looking to have an outside source assist you with your books, be just as diligent with holding them accountable.
Do the right thing or make sure that your books are in honest hands. At the end of the day you are held liable, so put your trust in a reputable and reliable source, with plenty of proof of practice!
That leads us to the next point about receipts.
3. Keep & Leverage Receipts
Why are so many Americans saying “No” when asked whether they want a receipt? “But it’s just one receipt – one small expense. Surely that can’t make much of a difference with my taxes, much less getting an audit.”
You’re probably thinking the same exact thing right now, but saving receipts is actually quite important, especially for small business owners. Don’t you just hate the feeling when tax season rolls around and you remember that you didn’t keep the majority of your receipts – what a sinking feeling. You probably not only missed out on some extra tax exemptions, but you failed to keep these receipts as records for audit protection – tiny pieces of paper that can actually guard you from the piercing bullets of an audit. Let’s make it our goal to take receipts more seriously.
Here are a couple practical tips to help you conquer the clutter of receipts.
a. Keep them all
b. Take notes on your receipts to remind yourself what is their business purpose
c. Scan your receipts and keep them for at least 6 years; or take pictures w/ your phone
d. Don’t rely on credit-card statements and canceled checks
e. Stay away from using cash – if you can’t track it, you’ll lose that expense record
4. Avoid “DIF” – Use a Professional
Our fourth suggestion is this to be “DIF savvy”. In order to be “DIF score savvy” it usually takes hiring a professional. DIF is the code word of Feds for “Discriminate Information Function,” or that is, the secret IRS decision making process if you’ll be audited. Provided, these DIF details are secret. But, seek ways to become savvy with tax laws and lower your chance of ever being audited.
At the end of the day though, each choice you make is a factor that can make a difference is avoiding “the audit hook”. Every decimal, accurate deduction, filing exemption, and even crumpled receipt can ultimately impact your DIF score and likelihood of receiving an audit.
Knowing the law and what deductions you are allowed as a small business is a big part of becoming “DIF” savvy and minimize the risk of an audit. (This is also a great way to benefit from tailored tax write-offs at the same time.) Tax laws are a tough nut to crack and they are forever changing, so it may not be worth your time to learn all the ins and outs yourself.
That’s why we suggest you delegate the duty of bookkeeping to trusted experts. You can save yourself time, headache, and money by choosing to work with a great bookkeeper and CPA. But don’t take that advise before you read our last point.
5. Be Smart When Delegating
Yes, it makes sense to hire the experts, but, we must also be careful how we utilize the genius of the professionals. You don’t want to be paying your CPA big bucks for sifting through your receipts and getting the numbers together for taxes. This will cost you way too much!
Have a bookkeeper, at a reasonable rate, help take care of your everyday business accounting. Then when tax season creeps upon us once more, your books will be in order and you will pay your CPA for his pure expertise – knowing the law and filing your taxes. Find a trustworthy bookkeeper to do the prep work and SAVE.
Contact us today at LRB Business Centers (703-519-7954) for all of your bookkeeping needs. We are here to help you delegate, avoid audits, and to help you grow. At LRB we give small businesses BIG IMPRESSIONS.