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12 posts from July 2009

QuickBooks Inventory: Why Are There Two Cost Fields in My Inventory Items?

If you are using QuickBooks to track inventory, you've likely been wondering why there are two separate cost fields within each inventory item in your item list - the purchase cost and the average cost fields:

Inventory Costs

Purchase cost - the amount that appears in this field is what carries over to the cost column when a purchase order for that item is created in QuickBooks.You have complete control over the value that appears in this field. If you are creating a purchase order and the purchase cost for the item has increased, the new cost can then automatically update the purchase cost field of the item. Or you can simply open up the item and type in the cost you would like to appear on your next purchase order.

Average cost - the amount that appears in this field is automatically calculated by QuickBooks. When you first create a new inventory item, there are On Hand and Total Value fields available, as shown below:

Inventory Item - New 

Once you finish creating the item, the Total Value field is then replaced with the Average Cost field, which in this example is $12.00 per unit ($1,200 total value / 100 qty on hand). 

Inventory Average Cost

IMPORTANT CONCEPTS:

  • When you sell an inventory item, the value that is in the Average Cost field is then posted to your cost of goods sold on your financial statements. The Purchase Cost field does NOT post to your cost of goods sold.

  • In addition, the Average Cost field is used to calculate the value of your inventory which appears on your Balance Sheet. The Purchase Cost field is NOT used in this calculation either.

  • The Purchase Cost will ultimately appear on the bill you enter in QuickBooks when the item is received and/or the vendor bill is received.

In a future post, I'll share the QuickBooks trick on how to adjust your Average Cost field, since you are not able to make changes to it like you can do with the Purchase Cost field.

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Need help figuring out the inventory or other features of QuickBooks?

Connect with Scott Gregory, a specialist in QuickBooks Pro, Premier and Enterprise software @ Bottom Line Accounting Solutions.

He is also a CPA that understands the "QuickBooks side of accounting", AND the "accounting side of QuickBooks".

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QuickBooks Enterprise 9 and Virtual Servers

The QuickBooks Enterprise web site "tech specs" section doesn't offer us any insight on the use of Enterprise in a virtual server environment. This is similar to the situation mentioned in my previous post about QuickBooks Enterprise 9 and 64 bit computers.QuickBooks Enterprise

So I inquired about whether QuickBooks Enterprise 9 runs on virtual servers or not. Here is the response I received from Rich Walker, my contact at Intuit:

"While our Quality Assurance (QA) teams have not done extensive testing on virtual machines, all versions of QuickBooks will run on virtual machines, such as those running VMware. Basically, QuickBooks recognizes the appropriate Windows operating system running on the virtual machine, and then launches as usual."

In addition, I called the Enterprise support desk to hear what they had to say about their experiences - they indicated that they have customers that are successfully running QuickBooks in a virtual server environment, but this setup is not officially supported.

I'm not sure I'd put my mission-critical QuickBooks application into a non-supported virtual server environment just yet. I would expect to see some additional focus from Intuit around the virtual server technology in their upcoming QuickBooks Enterprise 10 release.

Are you using QuickBooks in a virtual server setup? Had good experiences or bad? Please post a comment below to let our readers know your thoughts.

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Need help with QuickBooks?

Scott Gregory is a specialist with QuickBooks Enterprise, Premier and Pro. Connect with Scott @ Bottom Line Accounting Solutions and tap into his expertise to help solve your QuickBooks questions and concerns.



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Why It is Critical to Verify Your QuickBooks Data

Want to ensure that your QuickBooks company file works as efficiently as possible and avoid possible data corruption problems? Make sure you verify the data within the file on a regular basis.

Warning SignWhat verify really means...

In basic terms, the data verification process in QuickBooks is a tool that examines the health of your QuickBooks company data file. In many cases, the verification process will run and the end result is a "clean report" that the data has verified successfully. If so, there is nothing else to worry about.

However, in other cases, the data verification process is a really good "early warning indicator" that some trouble is brewing within your QuickBooks data file. In these cases, the verification process simply can't (or won't) finish and you are told to "rebuild" your QuickBooks data file. The "rebuild" is another tool built into QuickBooks for your benefit. It helps put all of your QuickBooks data back in the right place and re-organizes it for optimum usage.

What bad things can happen if you don't take care of your QuickBooks data:

  • Your company data file can become corrupt, and one day it simply won't open.Those are bad days for sure!
  • Your financial reports (profit and loss, balance sheet, etc.) can become out of balance. It's true - I've seen it happen!
  • You won't be able to upgrade to a newer version of QuickBooks and/or QuickBooks Enterprise because the data has too many problems with it.

How often should I verify my QuickBooks data?

If you have multiple users in your QuickBooks file, my suggestion is that you verify the data once per week. If you only have one user in the file, my suggestion is that you verify once every couple of weeks. You can't hurt anything by verifying the data too often!

How do I verify my QuickBooks data?

Fortunately, QuickBooks makes it very easy to verify. There are actually two ways to get it done:

  1. Click File > Utilities > Verify Data and follow the instructions
    Verify Data via File Menu
  2. Via the backup process:
    Click File > Save Copy or Backup. Click Backup Copy, then Next, then the Options box. You will see a box that looks like this:
    Verify Data via Backup Menu

OUCH...

I recently did a work for a new client that was trying to upgrade to QuickBooks Enterprise and had never verified their data (in over 5 years of use). There were simply so many problems in this data file that we had no choice but to create a brand new data file at that time. Needless to say, that wasn't the plan that we originally set out to follow, but we really didn't have any other good choices.

VERY IMPORTANT NOTE: Always run the verification process on the computer where your QuickBooks data file is actually stored!So, if the file is stored on the server, you'll want to log into QuickBooks there and verify.

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Scott Gregory is a specialist with QuickBooks Pro, Premier, and Enterprise software. He has been helping bring clarity and comfort to QuickBooks users for over 10 years.

Contact Scott @ Bottom Line Accounting Solutions for help with your QuickBooks today!

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What Is a Sales Order in QuickBooks and How Can it Help Your Business?

The Premier and Enterprise versions of QuickBooks have a feature called sales orders that can end up being very beneficial and a great time-saver for many businesses:

Sales Order Button

An easy way to think of a sales order is this - it is a document you can use in QuickBooks to track a customer order that is in-house that hasn't shipped yet. For example, let's say you had to special order some parts for a customer that aren't going to arrive for four weeks. You can use the sales order form in QuickBooks to keep track of this customer order while you are waiting for the parts to arrive. Even better, you can turn this sales order into an invoice when you are ready to ship with just the click of a button - no re-typing needed!

If you notice in the screen shot of the QuickBooks home screen above, the sales order sits between the estimate and the invoice. You can create an estimate, and then when the customer wants to order, turn the estimate into a sales order (again with just a click). Once the order is built and/or is ready to ship, you can then turn the sales order into an invoice. The use of sales orders is completely optional, but can be a huge time-saver.

More benefits of using sales orders in QuickBooks Premier or Enterprise:

  • Consolidate multiple customer orders into one invoice - you can choose from a list of sales orders for a given customer, click OK and have them all consolidate into one invoice.
    Sales Order Consolidation
  • Create partial invoices -a sales order is the perfect tool to use for tracking partial shipments. If your customer has ordered 150 widgets and you can only ship 60 of them right away, create a sales order for the 150 widgets and then invoice for the 60 that are shipping now.
  • Tracking backorders - in the example above, you have a backorder of 90 pieces. The sales order is the perfect place to track it until it has shipped completely. (Hint: Go to Reports > Sales > Open Sales Order by Customer report) for easy tracking
  • Using the sales order fulfillment worksheet -Once you begin using sales orders in QuickBooks, you can then take advantage of this feature. It is a great way to assess all of your open orders in one place and it can help you make decisions on what to ship and what not to ship. Please see my related article on the sales order fulfillment worksheet for more details.

Don't mess around trying to "trick out" estimates in QuickBooks Pro trying to get them to behave like a sales order does. I've seen some real doozies that have been created in QuickBooks Pro to get estimates to mimic sales orders. Use the sales order feature instead - you'll find it very easy to use.

If you see the benefits of using sales orders and need to upgrade, be sure to save some dough and get a discount on Premier or Enterprise. Remember, all your data in QuickBooks Pro will upgrade to Premier or Enterprise, so you won't have any headaches there.

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QuickBooks Webinar - Just a Few Days Left to Register!

My QuickBooks webinar on Tuesday, July 21, 2009 from 2pm to 3pm ET will be a perfect way to increase your clarify and comfort with QuickBooks.

The webinar is titled: QuickBooks "Deep-Dive: Customizing QuickBooks, Understanding Preferences, and Finding Info Fast!

It is perfect for those QuickBooks users who:

  • Didn't know there was a Preferences option on the Edit menu
  • Did know there was a Preferences option on the Edit menu but didn't know what it was about
  • Want to work smarter with QuickBooks.

Register for my webinar before July 19, 2009. Use discount code QBE25 to save 25% off the price of your registration too!

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Scott Gregory is a specialist with QuickBooks Pro, Premier and Enterprise software. He has helped hundreds of businesses learn more about QuickBooks over the last 10 years.

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QuickBooks Enterprise 9 and 64 bit Servers and Desktops

Seeing that the "tech specs" section of the QuickBooks Enterprise 9.0 web site didn't mention anything about compatibility with 64 bit computers, I did some digging directly with Intuit.

0212.QB09ES_3D.Enterprise A thank you to Rich Walker from Intuit for coordinating directly with the Enterprise support team and for getting feedback for me on this issue.

In essence here is what you need to know - QuickBooks Enterprise 9.0 will run on 64 bit desktop and server computers. In fact, Intuit has many successful installations in these environments. According to Rich, full support is provided for these 64 bit installations of QuickBooks Enterprise 9.0. The Enterprise support team will address questions and help resolve customer issues in these environments, just as they do in the standard 32 bit computing environments.

I have asked Rich to provide some insight on Intuit's position relating to the use of QuickBooks Enterprise in a virtual server environment, and I hope to have additional insight on that issue soon.

Are you running QuickBooks Enterprise in a 64 bit computing environment? Had a good experience with it? Post your comments below...

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Contact Scott for special promotions on QuickBooks Enterprise 9.0. He is a specialist with QuickBooks Enterprise, Premier, and Pro software.

Scott has been helping businesses gain comfort and clarity with QuickBooks for over 10 years.

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Change Default Text in QuickBooks E-mail

Wish you could change the default text that appears when you send an e-mail out of QuickBooks?

Changing the text is easy once you know where to find the option to do it. Click Edit > Preferences > Send Forms, and then click the tab that says "Company Preferences". You will see a screen that looks like this:

Send Forms Default Text

Note that in the drop-down box that says "change default for", you can change the default text for invoices, estimates, sales orders, and other documents that are commonly e-mailed from withinQuickBooks. Once you have made your updates, click the OK button to save your changes.

In addition, if you put your e-mail address in the "bcc" box, you will always get a copy of any e-mail that is sent, yet the recipient won't see your e-mail address in their message.

Remember - even if you reset this default text, you can always override it on a case-by-case basis when sending forms from QuickBooks. If you want to return the e-mail text to its' original state, just click the Default button on the screen, then click OK. All of your updates to the text will then be forgotten.

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Scott Gregory is a specialist with QuickBooks Pro, Premier and Enterprise software. He has helped businesses like yours gain clarity and comfort with QuickBooks for over 10 years.

Connect with Scott @ Bottom Line Accounting Solutions today!

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3 Important Questions to Ask Your Bookkeeper Today

I know you're busy running the business and don't have much time to worry about the bookkeeping.

However, it's critical that you reserve some time to keep tabs on this extremely important function within your organization. Ignoring your bookkeeping can lead to all sorts of bad things down the road, including:Bookkeeper

  • Incorrect or non-existent financial reports - without good numbers, how are you going to make good decisions?
  • Penalties and/or interest on missed or overdue payments - you could be racking up these charges and not even know it!
  • Fraud and/or theft - unfortunately, this is a growing problem within small businesses that don't spend the time to set up their systems and procedures properly

Here are 3 questions to help get you started in a meaningful dialogue with your bookkeeper:

  1. Are all of our payroll deposits made on time and our payroll tax returns filed on time? If you have outsourced your payroll to a third party company like PayCycle or Paychex, this isn't even an issue to worry about.

    However, if you do your own payroll, things can get really fouled up and deposits made late or missed completely and returns never filed. The bad news for you is that the tax agencies don't usually accept "I forgot" as an excuse to waive the penalties and interest that accrue for late or missing tax deposits and returns.

    Even worse, you can be held personally liable for these missed payments (more on this issue in a future post)!

    THE TEST: Pick a couple of recent months or a quarter and have your bookkeeper pull all the related tax forms, reports and payments. Are you able to verify that everything was done on a timely basis - how do you know? If you are doing your own payroll, ensure there is a master schedule prepared each year of exactly what is due and when. From there, it's easy to figure out what got done on time and what didn't.

    THE HEADACHE STARTS: When your bookkeeper can't provide any of this information, says "they'll get back to you" and don't, or they get indignant that you even ask about this in the first place!

  2. Are all of your bank and credit card statements reconciled on a timely basis? The reconciling process is nothing more than ensuring the transactions recorded in your accounting software match those as recorded by your bank or credit card issuer. Nothing more than that. Unfortunately, in many businesses, this is made out to be a process more complicated than calculating the interest cost on the federal debt. It doesn't have to be.

    Good bookkeeping practice dictates that these accounts are reconciled shortly after the receipt of the statements. This allows any discrepancies to get ironed out fast.

    THE TEST: Ask your bookkeeper to show you the most recent reconciliations for your bank and credit card accounts. If you are using QuickBooks or other accounting software, the ability to reconcile is built-in.

    TEST #2: Have you taken time to spot check the canceled checks and charges that appear on these statements? If you haven't, you should! This is a great way to quickly spot what we'll call "suspicious activities" going on with your bank or credit cards.

    THE HEADACHE STARTS: When your bookkeeper says (pick one): they don't have time to reconcile and do all the other work you ask them to do; they'll get around to it one of these days, they don't know how to use the reconciliation feature built into your accounting software.

  3. How long does it take to close out the month and prepare the financial reports for the business?

    A well tuned accounting system should allow your month-end to be completed in five (5) days or less. If you are still waiting on your profit and loss statement from December 2008, you've got some problems indeed!

    It is critical to get timely and accurate financial reports at the end of each month so you know where you are, where you've been, and where you're going. These serve as your financial roadmap to get there.

    If it is taking longer than five days for this process, it tells me you have some areas within your accounting area that need to be streamlined or tightened up a little (or maybe a lot!).

    THE TEST: Go ahead, ask your bookkeeper how long it takes them to close out the month...

    THE HEADACHE STARTS: Immediately. In some cases, you'll get a blank stare. In others, you'll be told - we only do our statements once a year when the tax guy does them. And in others, you'll then be asked to sit down so you can hear the litany of reasons why it is so hard to close the month and why it takes so long to get it done.

There are many other questions to pose, but these three will likely get you pretty involved for quite a while (and I feel your pain!).

It's your business - don't settle for "good enough" when it comes to the management of your business finances!

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Scott Gregory helps businesses bring clarity and efficiency to their accounting systems. He is a specialist with QuickBooks Pro, Premier, and Enterprise and has been working with QuickBooks since 1999.

He has also served as the CFO for a $15 million enterprise for ten years, overseeing the accounting, finance, banking, IT, purchasing and inventory control functions.

Connect with Scott @ Bottom Line Accounting Solutions today!

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Results CRM For QuickBooks: An Introduction

Customer ServiceToo bad QuickBooks only lets you track two contact names and two telephone numbers for each of these contacts! Unfortunately, the customer relationship interface in QuickBooks has had this limitation for a long, long time. And that is just the beginning of a list of weaknesses in QuickBooks when it comes to managing customers and prospects.

If you need more functionality to manage customers and prospects, consider this - the Results CRM package is an excellent add-on if you desire to bring CRM into your business, yet keep the core accounting functionality of QuickBooks in place.

What's In It For You?

Results CRM  was built to make your business far more efficient when it comes to tracking customers and prospects. For example, with Results CRM, you are able to:

  • Access information using one centralized database.
  • Effectively manage your customer, prospects, vendors and other contact information
  • Measure your results with powerful analysis & reporting tools
In addition, you have the capability with Results CRM to:
  • Link email communications with your contact records
  • Schedule individual and workgroup appointments & activities
  • Improve service and build better customer relationships
Compare Results CRM with QuickBooks...

Wish you could do these activities in QuickBooks?

  • Attach files to any contact or appointment (i.e. pictures, faxes, contracts, etc.)
  • Instantly view appointments and to-do lists (the To Do list feature in QuickBooks is not unique to each user and really isn't designed to track appointments very well)
  • Notify others of scheduled appointments (can't do that in QuickBooks)

In addition, if your business is looking for help in streamlining sales processes - Results CRM can help you:

  • Automatically trigger a process by completing an event
  • Find information in the database using "sounds like" spelling
  • Save common searches for easy access and re-use by staff

ResultsLogo_tagline-big

How Does a QuickBooks Add-On Work?

Don't let the concept of an "add-on" frighten you away from improving your business. In fact, an add-on doesn't have to be scary at all.

A QuickBooks add-on is nothing more than a separate piece of software that addresses some specific functionality (i.e. CRM) that QuickBooks doesn't handle. This separate software is installed and configured in your business just like QuickBooks was (or in some cases, you connect to the add-on via the internet). Once that process is complete, an "electronic bridge" is built to allow data to flow between QuickBooks and the add-on software.

In the case of Results CRM, it was built to handle the customer relationship management portion of your business. It was NOT designed to process your vendor bills or credit card transactions. Nor can it handle the creation of your financial statements and reports. That is where QuickBooks shines.

Results CRM has a very tightly knit integration with QuickBooks. It has been very thoroughly tested and allows your business a great deal of control and customization about what data crosses over the "electronic bridge" between the two software packages.

Naturally, it is very important to ensure that any add-on you choose meets the goals and criteria you  compiled before any evaluation takes place. Be sure to have your top 3-6 "must have" features identified before reviewing any new software. This will help you avoid getting caught up in features that are not important to your business.

The Best of Both Worlds

When you extend the reach of QuickBooks by selecting an add-on such as Results CRM, your business will enjoy the advanced functionality of the add-on, yet retain its' investment in the core QuickBooks accounting software that everyone knows and likes so well. This approach is preferred by many businesses, rather than the alternative of having to not only purchase and learn new and complicated accounting software, but purchase and learn other complicated modules that go with the accounting software as well.

A Test Drive of Results CRM

Take a complimentary test drive of Results CRM so you can have a first-hand experience on how your business could benefit from a better approach to its' CRM needs.

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Scott Gregory is a specialist with QuickBooks Enterprise, Premier and Pro software. He has been helping businesses get comfort and clarity with QuickBooks since 1999.

Contact Scott at Bottom Line Accounting Solutions today to discuss your QuickBooks software or QuickBooks add-on needs!

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QuickBooks and CRM: Using CRM to Gain and Maintain a Competitive Edge

I recently came across an article that was published by Naseem Saab, the president and Founder of Results Software. His article provides excellent insight into some of the "high level" benefits of having a CRM system for businesses today as well as the critical needs of having the CRM system integrate with QuickBooks and Outlook.

I appreciate Results Software allowing me to republish his article...

Why CRM?

CRM (Customer/Client Relationship Management) is software to record, track and report on all prospect, customer and vendor activities and transactions.  CRM allows businesses to have information that is immediately available, complete and up-to-date, enabling them to respond appropriately to any request, to increase effectiveness and success.  Firms used to consider this type of centralized and comprehensive information resource a desirable option.  Now it’s a business necessity.  As the speed of business has increased and competition grown, good CRM software has become a critical component for success and will help you and your clients survive the current economic crisis.

 

The CRM Advantage

Consumers and businesses want to buy from the firms that know them and care about their individual needs and desires.  In the late 1990s, many companies discovered the best way to build customer loyalty is to obtain good information on all of their customers and use that information to create programs that cater to each customer's preferences.  The most effective of these programs gives everyone within the enterprise access to customer data, which enables anyone who might have contact with a customer, from the salesperson in the field to the shipping clerk in the warehouse to, in effect, be a customer service agent.  The continuing need for firms to present this single face to their customers is the primary reason why CRM software is expected to be the hottest selling business application of the early 21st century.

Sales of CRM software actually began to soar in the late 1990s. According to figures compiled by AMR Research, CRM software sales topped $762 million in 1997 and then jumped to more than $2.3 billion in 1998 and $16.8 billion by 2007.  AMR predicts that this market will continue growing at a rate of 49 percent a year.

"CRM applications are so hot because they enable companies to create strategies that focus the entire enterprise on serving customers," AMR's Peggy Menconi says. "Companies are realizing that they can increase earnings faster if they know their customers better. If they have a better picture of their customers, they can tailor goods and services to them. They can cross-sell and up-sell to them. After all, it is a lot cheaper to sell more of your products to an existing customer than it is to find a new customer."

Menconi also notes there is urgency among firms to become more customer-focused, and that is helping to move the purchase of CRM applications to the top of many companies' list of priorities. "When you have clear potential for increasing your revenue line, you don't wait," Menconi says. "If you do, you could find yourself suddenly losing market share because your competitors know more about your customers than you do."

 

A properly implemented CRM system allows companies to segment their clientele and track preferences and trends.  This permits them to target promotions and client contact in ways that say “We know you and care about you.”  The result is more client loyalty, better success with promotions, and increased client referrals.  In a difficult economy the importance of client loyalty and referrals is even more pronounced, increasing the value of a well-tuned CRM system.


Whenever you pick up the phone your CRM system becomes your information hub, where you go to immediately know who it is on the line, how you know them, what they were promised, what was delivered and whether it’s all been paid for.  With a good CRM, businesses can expect to increase sales, reduce costs and improve cash flow.  The CRM provides business continuity and makes information a truly valuable business asset by centralizing all of your client information, sales opportunities, documents and communications history.

 

Integration with Business Systems

No one needs a case study to tell them that it’s time-consuming and even frustrating to search for a particular email or document.  Add to that the problem when it’s on someone else’s PC or might have been archived or deleted.  The CRM system can integrate with Outlook and also have a Document Management capability, so you gain an almost complete contact record, tying together all of your client-related emails, documents and notes in one place.  The time savings and improvement in client service are significant once you eliminate the need to look in different places for all the client-related information.

 

Staff Accountants and Bookkeepers report that too much of their time is spent preparing QuickBooks reports for Sales and Management personnel.  Sales and Management complain that the account information they have is rarely up-to-date enough because they have to wait for Accounting to provide periodic reports.  A CRM system that properly integrates with QuickBooks will give everyone in the organization visibility to the data they need, without giving them access to the books. 

 

When a CRM Solution is designed to be fully integrated with both Outlook and QuickBooks, it becomes all-encompassing to the data that matters; from communications, to operations to finance.  CRM empowers firms to respond to client requests and sales opportunities with great speed and efficiency, regardless of whether they are a small business or the largest, most well-staffed corporation

 

Conclusion

CRM provides firms with competitive marketing advantages and improved client satisfaction.  In difficult economic times customer loyalty and the success of marketing efforts are the key ingredients for survival.  As you consider your business plans for adding efficiency and planning for business growth consider the benefits to your firm and to your clients’ firms in implementing an integrated CRM solution.


Get a demo of Results CRM software to see for yourself how it can help your business take care of existing customers and better track those prospects in the pipeline.


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Scott Gregory is a specialist with QuickBooks Pro, Premier and Enterprise software. He has been helping businesses get clarity and comfort with QuickBooks since 1999.

Connect with Scott @ Bottom Line Accounting Solutions today!


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