It’s been one week since Thanksgiving Day, but there’s plenty to still be thankful for. I’m personally still feeling blessed by my family, friends, state of health, and the wonders of the central Colorado mountains. I’m thankful for my customers and readers (you! Thanks!)

But can you be thankful for QuickBooks? Well, sure! I personally use QuickBooks to analyze fundamental aspects of my business’ health and to take advantage of opportunities.

In particular, I love…

* How QuickBooks 2011 doesn’t make you call in to register, like QB 2010 did. Thanks, Intuit! You listened to your users.

* The Company Snapshot. I’m a visual guy, so I love the bar and pie charts. The numbers just have inherent meaning when I see them that way. The year-to-year comparison charts for income and expenses, and the expense pie chart help me understand trends and movements. Action can be taken accordingly. That’s something to be thankful for!

* The Customer Snapshot. You guessed it…another screen with graphs! A great tool to review key customer accounts. Shows you sales history, best selling items, year-over-year sales comparison. Good stuff.

* The ever-expanding list of add-on services that work with QuickBooks. Intuit is becoming the 800 pound gorilla of software-as-a-service offerings for small business. They keep rolling out new Intuit-hosted services. But perhaps more importantly, they partner with more and more third party developers who create solid, well-tested QuickBooks solutions that live in the cloud but talk to QuickBooks on your desktop.

That’s a very good thing. It creates the prospect of an explosive growth path for both vertical and horizontal market additions to QuickBooks functionality, without having to create kazillions of new QuickBooks editions and subeditions. I like that. Thankful for it? Absolutely!

I’m discovering that there are myriad details and moments in a regular day that can be opportunities for thanksgiving — even if it’s not a particular Thursday.

Wouldn’t it be great to start the new year with a clean, high-performing QuickBooks file?

Now is the time to plan for that.

One way is with a DIY reconciliation. Set aside a block of time in late December or early January to work on your books. Plan on reconciling all your bank accounts and credit cards (if you don’t regularly do this anyway!)

Plan some time to review your accounts receivable and accounts payable to make sure that balances are correct and flowing through to your balance sheet accounts as they should.

If you do payroll in QuickBooks, schedule some time to review your employee and employer YTD totals.

There is more you could do, but this is a start.

Another way is an accountant’s reconciliation/review. Make arrangements for your accountant to review your books at the end of the year and make whatever adjustments they think best. That way, your books should conform to accounting standards and be ready for 2011 operations and 2010 tax reporting.

Plan on sending them an “accountant’s copy” of your data. That way, you can keep working in the file while the accountant makes their changes. No data is then lost or has to be reentered when you get the changes back from them.

The third way is to recreate your company file. This option is for those who have a big QuickBooks data file, cluttered up with a lot of old information. Is QuickBooks slow or unstable for you? Or are the books just a big, unfixable mess? Then you should check out a company recreate.

You can do this yourself by creating a new company and exporting/importing your lists from your old company into the new one. You can clean them up in Excel between the export and the import steps. Put in balance forwards and/or pending and open transactions and you are ready to go.

AccountingUsers Inc. can recreate your company for you turnkey, with no downtime on your side. The recreated file is much smaller than the original, is completely reconciled, and has the amount of history you choose.

The recreate process can be scheduled at the end of the year or otherwise. Click here to find out more or get a free quote.

If you are contacted by the IRS about an audit, they may ask you to hand over your QuickBooks company data file. This comes from Revenue Procedure 98-25:

“All machine-sensible records retained by a taxpayer, whether retained under the provisions of a record retention limitation agreement or for other reasons, may be used for computer assisted auditing techniques…”  (IRS webpage)

There has been a lot of talk about this on some LinkedIn discussions and accounting blogs I follow. Reportedly, the IRS has purchased 1,500 – 2,000 QuickBooks licenses and is training auditors in its use.

There are a couple areas of concern for small businesses about this:

  • If your QuickBooks records are a mess, or don’t add up to what was reported on a tax return, that could spell trouble during the audit.
  • Most taxpayers don’t want auditors fishing around in years other than the targeted year. But with QuickBooks, there is no way to confine the file to one particular year.
  • A few ways you can help protect yourself in this scenario:

    1. Have clean books to begin with. Get a CPA or professional bookkeeper to review your books and help you make any course corrections. Your QuickBooks data should conform to good accounting principles. Do this before you file your next tax return.

    2. Run the QuickBooks Cleanup command on your data before you give it to the auditors, and specify an appropriate cleanup date. For example, if you are being audited for 2008, run the Cleanup through Dec. 31, 2007. That should at least close the door to the auditors having access to your transaction records before the 2008 audit period.

    3. Consult with a tax accountant if you get audited.

    What are your thoughts on the IRS having access to taxpayers’ QuickBooks data?

    Here are five keys that can guide you to success using QuickBooks in your business.

    1. Setup. If you were having a house built, you wouldn’t just get out there with a hammer and nails and start winging it. You shouldn’t wing it when you set up your books in QuickBooks for the first time, either.

    Find an accountant or a QuickBooks expert who can structure your accounts in QuickBooks in a way that will serve you well over the long haul. Like remodeling a house, making major revisions to your QuickBooks company after the fact can be difficult and expensive.

    If you are just starting out, QuickBooks Online Edition is easy, affordable, low-maintenance, and has the advantage of being available to you anywhere, anytime. The QuickBooks Online Setup Service can get you started right.

    2. Security. QuickBooks touches private individual information like social security numbers, and sensitive financial data like bank accounts, credit cards, and financial statements.

    You don’t want any of that to fall into the wrong hands. So make sure that every computer on your network has up-to-date internet security software installed, and use passwords that are adequate.

    3. Site. The equipment you use on-site can contribute towards success with QuickBooks.

    First, you should have a battery backup on every computer on your network — even computers that don’t run QuickBooks directly. Power blips that occur on other network workstations can affect the QuickBooks data stream being passed across the network.

    For maximum network stability, use the same kinds of network cards on all your workstations. They will know how to talk to each other better than a random mix of cards.

    4. Supervision. Having only one person with access to QuickBooks is a recipe for potential accounting errors, or worse, fraud and embezzlement.

    Having more than one pair of eyes on the books plus an occasional audit greatly reduces the likelihood of bookkeeping crime. And having a regular review can keep the books cleaner.

    5. Scale. If you have been using QuickBooks Pro or Premier and your growing business means that you now need more than 5 users accessing QuickBooks at the same time, it’s time to consider scaling up to Enterprise. All of your data will automatically convert up when you first open your company in Enterprise.

    You can scale down, too. If you find that Enterprise is more than you need, you can downgrade to Pro or Premier.

    I was driving through the grounds of a conference center last week and saw a roadsign: Speed Limit – 11 Miles Per Hour.

    I noticed the sign, and so did one of my kids. “Dad, why is the speed limit 11 miles per hour? That’s kinda weird.”

    I told her that it was kinda weird, and that was the point. If it had said 10 miles per hour or 15 miles per hour, most people wouldn’t pay attention.

    There are some signs in accounting data that should stand out to us too, and make us pay attention:

    • Decreasing net income over comparable prior-year period
    • Decreasing margins on key products or services
    • Steadily decreasing cash
    • Increasing age of receivables
    • Decreasing revenue per employee

    There are more. But these should get an owner’s or manager’s attention. Stop, look, and listen to what your financial reports are telling you.

    What indicators of financial performance really get your attention?

    With the 2010 version, QuickBooks added a new feature called the Company Snapshot. It gives you a consolidated screen of most-important information about your company’s finances.

    quickbooks company snapshot

    There are bar graphs, pie charts, and key lists of accounts. Most of them are related to income/expense trends, comparative figures for current/last year, and most important A/R and A/P accounts. Good stuff to get a handle on the financial big picture at one look.

    Intuit gives you some up-sell options, but they don’t seem too intrusive.

    These bar graphs show trends for income and expense, and you can view different time frames. This is a simple but very important metric for small business owners and managers to follow — are sales going up, or not? Are we making a profit, or not? A lot of businesses fail for lack of such basic financial information, and QuickBooks makes it easy to grasp the trends here very quickly.

    Another bar graph I like is Top Customers by Sales. Look at it and ask yourself how much attention you are giving to those accounts. They are not ones to be neglected…rather, they are the ones most likely to continue giving you substantial orders or contracts. Again, QuickBooks 2010 makes it easy to see it.

    There are 3rd party solutions that do even more with the dashboard concept for QuickBooks, but the built-in Company Snapshot is a good approach for a lot of small businesses.

    I interviewed Allison Semancik, a marketing consultant in Miami, and asked her questions about marketing principles for CPAs and other professionals. This entry is the last in the series.

    * * *

    Me: Email seems pretty low-tech these days, but studies indicate it still dominates business-to-business communications. Any ideas about how accountants and other professionals can do more with email to enhance their overall marketing?

    Allison: I love email marketing and for most people, it’s still the choice of communication online (as opposed to social media sites like Facebook or LinkedIn). It’s very inexpensive to sign up with an email marketing service (iContact and MailChimp are two I like) that offers slick newsletter templates.

    Accountants and IT professionals have a wealth of information that their clients and potential clients are craving.  Send out a monthly or bi-monthly newsletter with tips or let them know about upcoming seminars you are presenting.  The important things to remember:

    1. Be consistent with your email marketing – set up a schedule and stick to it.  Send out your newsletter every month or quarter, so your list expect.  You don’t want to have someone sign up and then not email them for months.

    2. Give your list useful information – it’s not all about selling.

    3. Build your own list – don’t buy it.  You’ll be much better off with a targeted list of people who have a real interest in what you have to say.

    4. Put a newsletter sign up form on your website and considering giving a free report to anyone who signs up.  They’ll have an incentive to sign up and it gives them a taste of the great information you’ll be providing in your newsletter.

    Me: Any final tips or ideas for us?

    Allison: Have some patience!  Inbound marketing is a great way to build relationships, drive traffic to your site and gain new clients.  But it will take time.  Give yourself 3-4 months before you can expect to see some results.  Once you do, you’ll be well on your way to expanding your online presence.

    Me: Thank you, Allison!

    Allison Semancik can be contacted through her blog.

    I interviewed Allison Semancik, a marketing consultant in Miami, and asked her questions about marketing principles for CPAs and other professionals. This entry is the 3rd in the series.

    * * *

    Me: What do you think some reasonable goals would be for accounting or other professionals who have a presence in social media? How would you recognize a win?

    Allison:  First, determine your reason(s) for getting involved in social media.  Examples might be: drive traffic to your site, network with other professionals or establish yourself as an expert in your field.

    Second, dedicate 15 minutes a day to social media and decide where you want to get involved.  Remember, even though Facebook and Twitter are very popular right now, it might not be the first place you need to start (depending on your industry).  Perhaps you start by answering questions in forums where your potential clients are asking questions.  Check out the Intuit Community forum or the QuickBooksUsers forum.

    Some of your goals can be measured concretely with Google Analytics.  You’ll be able to see the amount of traffic coming from other sites and forums to your website.   You can even set up goals within Analytics to see if that traffic converts.

    There are also other kinds of wins – you find a great referral source or you become known as an expert in your field.  These are not as easily measured, but equally important to your long term success.

    Allison Semancik can be contacted through her blog.

    • Next blog entry: How accountants can use email to enhance their marketing.