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7 posts from February 2011

Running a Sales by Item Report in QuickBooks

Trying to find an easy way to recap exactly what you sold during the last month, quarter or year?

The Sales by Item Summary report in QuickBooks makes it a snap to see that information!

Accessed by clicking Reports (in the menu bar), then Sales, then Sales by Item Summary, a report like this appears:

  Sales by Item Summary

This report recaps the following information:

  • Quantity of an item sold
  • Total $ amount of an item sold
  • Total $ of item sold as a % of total sales
  • Average selling price of an item
  • Average Cost of Goods Sold (COGS) and Gross Margin $ and Gross Margin % IF the item is set up in QuickBooks as an Inventory Part or Inventory Assembly item. If the item is set up as anything other than those, it will NOT show COGS or Gross Margin details, since QuickBooks is not tracking that information for those types of items.

NEED A DIFFERENT DATE RANGE THAN THE DEFAULT MONTH-TO-DATE?

Just click the Dates drop-down list in the upper left hand corner of the report and choose the date range you prefer to see. QuickBooks will then refresh the data with these new dates for you.

RELATED POST: How to Run a Sales by Customer Summary Report

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Running a Sales by Customer Report in QuickBooks

I often see people using QuickBooks go down the wrong path when it comes to setting up their chart of accounts (after all, a chart of accounts is nerdy accountant stuff anyway!).

As they create their chart of accounts, one of their first thoughts is "well, I need to know what my sales by each customer are, so I need to create a separate sales account for them so I can see the results". Makes sense, right?

So, this means their chart of accounts may look something like this:

  • Sales - Company A
  • Sales - Company B
  • Sales - Company C
  • Sales - Company D
  • etc.

While this does provide a way to get a sales by customer report, it is not the preferred way to do it.

A BETTER WAY TO GET A SALES BY CUSTOMER REPORT IN QUICKBOOKS

In our example above, our chart of accounts would only have one account

  • Sales

We would not see a separate sales account for each customer.

To get our desired information, we would take advantage of the Sales by Customer Summary Report, found by clicking Reports > Sales > Sales By Customer Summary. This report instantly recaps your sales by customer based on invoices and sales receipts that have been created in QuickBooks. Even better, it allows your chart of accounts to be "lean and mean" and a LOT less confusing!

Here is a screen shot of the Sales by Customer Summary Report:

Sales by Customer Summary
ADDED BONUS: You can then hover over any amount in this report and double-click the amount. You will immediately see the transactions that make up the summary value in the report. If I hover over Violette, Mike in the list above and double-click, here is the result:

  Sales by Customer Detail

Let QuickBooks do the hard work for you when it comes to tracking sales by customer!

Need help getting your QuickBooks organized and streamlined for easier use? Click the Contact Scott button below!

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Can QuickBooks Automatically Remember What Accounts to Use?

Here's a tip to help keep your bookkeeping in good order - preset default ledger accounts for your vendors to ensure that payments that you make to them go to the correct accounts.

ACCOUNT PRE-FILL FEATURE TO THE RESCUE

Tucked away in newer versions of QuickBooks is the "Account Prefill" option. You will find this handy feature within the Vendor Center, located as a tab on each of your vendor accounts. A screen shot is shown below:

Account Prefill Rent

In the example above, every time a check is written, a bill is entered, or a credit card charge posted using the "Davis Business Associates" vendor name, the Rent Expense account will prefill on the form automatically. This takes the guesswork out of your bookkeeping!

As you can see, you can set up to three default accounts to pre-fill for each vendor account.

BUT WHAT IF I NEED TO CHANGE THE ACCOUNT ONE TIME?

If that is the case, just erase the Rent account when it shows up on the Write Checks, Enter Bills or Enter Credit Card Charges screen and substitute the account you prefer to use that one time. If you need to reset the default accounts to use, simply return to the vendor account in the Vendor Center and update the information on the Account Prefill tab!

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The QuickBooks Software License Agreement: Things You MUST Know

I know – you blew right past the license agreement when you installed QuickBooks, right?

It’s critical to take a moment and understand what you agreed to when you clicked ok to the End User License Agreement (EULA). If you don’t, it may come back to haunt you. In a big way…

EULA IMPORTANT DISCLAIMERS:

  • I specifically asked the Intuit legal department for guidance about the information below to ensure that my intepretation of their seventeen (17) pages of legal-ese was accurate. They declined to engage with me on this very important issue, citing "the official Intuit interpretation of the license agreement is the EULA itself". Say what?

    A big shout out to Intuit for being so unhelpful and having this type of condescending attitude toward those of us who are trying to help the thousands of users out there that are mystified by the license agreement, especially in a multi-user environment.

  • I am not an attorney. If you have a question about whether your business is violating the QuickBooks license agreement, please consult your legal counsel for guidance. The wording below is strictly my understanding of how the licensing is supposed to work. So here goes...

WHO/WHAT IS EULA?

Well, she is the End User License Agreement you agreed to when you installed QuickBooks on your computer. Remember her now?

There seems to be a lot of confusion in the land of QuickBooks regarding licensing, so I thought it made sense to dig in, take a look around the legalese and share my findings with you.

In case you need a refresher on the terms of your QuickBooks EULA, you can click on Help, then search for the term “license.” From here, you can review or print the agreement for your records.

FOR SINGLE USERS OF QUICKBOOKS


First, let’s focus on the single user portion of the EULA. Here is the section of the EULA that relates to a single user license:

"Single User License and Single User Add On Pack Purchasers. You may: (a) install the Software on one computer for access and use by only one specific person; and (b) install the Software on one additional computer (e.g., a laptop that you own and use in your business or a home computer that you own and use in your business), so long as only the same specific person accesses and uses the Software"

Translation to non-legal speak: you can install QuickBooks on one computer as your main computer, AND install it on another computer, BUT only if YOU are the only one using the software in both places. For example – you have QuickBooks installed on your desktop computer at the office, and also have it installed on your laptop computer for use at home and you transfer your QuickBooks information between the two via a flash drive. The laptop computer is considered your “one additional computer” in this case and this arrangement complies with the terms of the EULA, especially since YOU are the only person using QuickBooks in both places.

However, if you have QuickBooks installed on your desktop computer at the office, and also have it installed on another desktop (or laptop) computer at the office with someone else using it (even if it is your spouse), the second desktop (or laptop) computer is not truly a backup copy of QuickBooks. In this example, you’d be in violation of the EULA. Two people using QuickBooks = 2 licenses required.

My interpretation of the EULA is that each PERSON that will be using QuickBooks needs their own licensed copy of QuickBooks software. That approach prevents any misunderstanding as well as any possible violations of the EULA, whether accidental or intended.

FOR MULTI-USERS OF QUICKBOOKS

Ok, here is the legalese first:

"Multi User License and Multi User Add On Pack Purchasers. You may: (a) install the Software on the number of computers equal to the number of user licenses you purchased; (b) access and use the Software solely by the number of specific persons corresponding to the number of user licenses you purchased, with no substitution of such users (for example, if you purchased a 3 user license pack and you have 10 employees in your company, the original 3 specific persons who were initially provided with access to and use of the Software, are the only persons licensed to use the Software unless you purchase additional licenses; (c) place a copy of your software data files on a network for access by licensed users; (d) install the Software on 1 additional computer above the number of the license(s) you purchased, solely to accompany your software data file, and not for use of the Software by another user; and (e) for each user license you purchased, make one copy of the printed materials accompanying the Software, if any, or print one copy of any online user documentation solely for use by licensed users. Notwithstanding (b) above, you may replace a specific user if such user leaves and must be replaced with a new employee."

Translation to non-legal speak:

  • You have to have a paid license for EACH PERSON that will be using QuickBooks regularly. For example, if you want 4 people in your office to use QuickBooks regularly, you should purchase 4 licenses to be compliant. It doesn't matter whether these 4 people are all in the same office location or if three are in the main office and one is in a remote office. 4 licenses for QuickBooks would still need to be purchased.
  • If you want to put the full copy of QuickBooks (and not just the database server manager) on your server or host computer, that is permissible, as long as nobody is regularly using QuickBooks on the server or host computer. This is key – if someone is going to be using QuickBooks regularly on the server or host computer, a license must be purchased for it.
  • This discussion of users has nothing to do with the number of users that can be created within a QuickBooks company file. This discussion relates to the actual installation of the QuickBooks software.

CRITICAL NOTE: Even if you purchase the right number of licenses, another restriction may apply. That restriction is the simultaneous access restriction which is discussed below.

BUT WAIT - YOU'RE NOT DONE YET!

MULTI USER IS
NOT THE SAME AS SIMULTANEOUS ACCESS

Simultaneous access is not a copyright protection device, but a product feature within QuickBooks that allows multiple users to access a data file at the exact same time. 

Each of those users must still be licensed, whether or not they are using the simultaneous access feature at any given time. 

QuickBooks Pro, Premier and Enterprise licensing is sold in packages to allow simultaneous access for businesses needing multiple users of QuickBooks. Examples – Pro 2 user, Premier 3 user, Enterprise 5 user, etc.

TO ILLUSTRATE:

Let’s say that your company has 6 people that need to use QuickBooks. 4 of these people will use QuickBooks regularly, and the other 2 will only need access once in a while.

For you to comply with the multi-user portion of the EULA – since 6 people will need to access QuickBooks, your company would need to purchase 6 licenses of QuickBooks to be compliant. You may very well find that you can get a discount when you purchase multiple licenses of QuickBooks, but you still need to purchase a total of 6.

But, as part of this process, you don’t feel you should have to shell out for 6 licenses, especially since two of the people won’t be using it regularly.

So, you purchase 5 licenses of QuickBooks Premier and install it on the 6 different computers, figuring nobody will know.

PROBLEM #1:

By doing this, you have violated the terms of the EULA. You should have purchased 6 licenses.

PROBLEM #2:

Even if you did purchase 6 licenses to be in compliance with the EULA…

Only 5 computers could connect to your QuickBooks data at any one time. That is because you purchased the Premier version of QuickBooks, and by default, the Premier version only allows up to 5 people to have "simultaneous access" to the company QuickBooks data file. QuickBooks Premier allows no more than that, no matter how hard you try (QuickBooks Pro allows no more than 3 in the 2011 edition and no more than 5 in older editions). In this situation, to have all 6 people access the company QuickBooks data file at the same time, the only option is to purchase the Enterprise edition of QuickBooks, which allows up to 30 people access at the same time.

This is due to the simultaneous access restriction that is embedded into QuickBooks Pro, Premier and Enterprise. No matter how many licenses you need to purchase to be compliant with the EULA, access will be limited to the maximum number of simultaneous users (i.e. 3 users maximum for Pro, 5 users maximum for Premier versions, etc.)

CONCURRENT USERS OR PER MACHINE LICENSING?

I am constantly asked this question and can offer the following advice…

For all intents and purposes, you will need to toss both of these terms out when it comes to purchasing QuickBooks licenses and get comfortable with the idea that a license needs to be purchased for each person that will be using QuickBooks, and that the simultaneous access feature embedded in QuickBooks may still prevent all of these users from connecting to QuickBooks at the same time.

THE FINAL WORD

The reality is this – to avoid any unexpected visits by the software police (and remember, a disgruntled employee can make one phone call to make that happen!), simply follow these guidelines:

  • Purchase one license for EACH PERSON that will be using QuickBooks. This will keep help you keep everything legit regarding your QuickBooks licensing.
  • If you are going to have more than 3 people connecting to QuickBooks at the same time, purchase either the Premier version (which allows up to 5 simultaneous users) or Enterprise version (which allows up to 30 simultaneous users). This covers you when it comes to the "simultaneous access" control feature in QuickBooks software.

Comments about this blog post? Feel free to post them in the box below.

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QuickBooks for Manufacturers and Distributors: Profitability by Product Report

Tucked away inside the QuickBooks Manufacturing and Wholesale software is a great "Profitability by Product" report.

To access the report, click Reports > Manufacturing and Wholesale Reports, then choose Profitability by Product report.

Here is a screen shot of how the report looks:

Profitability by Product Report

Within the report, you see the following information:

  • Actual cost column - for inventory parts and assemblies, this cost is determined when the inventory is sold and comes from the average cost of the item in the item master file at the time of invoicing.
  • Actual revenue column - the revenue as indicated on the invoice when the item is sold.
  • $ Difference/% Difference - calculates the profit on each item in both dollars and as a percentage.

As with any report in QuickBooks, if further analysis of the report data is needed, you can click the Export button at the top of the report to dump the contents into Excel.

This report will NOT be found in the Pro version of QuickBooks. It is only available in the Premier: Manufacturing and Wholesale Edition and the Enterprise: Manufacturing and Wholesale Editions of QuickBooks.

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Do You Protect the Administrator Password for Your QuickBooks File?

Is your business set up with many people using QuickBooks accounting software?

If so, as a business owner, you need to ask yourself:

1) Do I know what the Admin password is for my QuickBooks file(s)?

2) Am I the only one that knows what it is?

BEING SECURE PREVENTS HEADACHES

Protecting the administrator password for QuickBooks (and all other business software) can be an excellent step in risk management.

As a quick reminder, the Admin account in QuickBooks is the equivalent to an "all access" pass to the software - whoever has it can go wherever they need to at any time.

While it is true that there are several things in QuickBooks that only the Admin account can perform, there is no reason to have the password for that account floating around the office.

BAD THINGS HAPPEN TO NICE BUSINESSES

Think of it this way - what if the people who have the Admin password were to leave? What if they changed it before they walked out the door so that nobody knew what it was?

If that happened, you could try to work through the free QuickBooks password reset tool to try and get out of your jam. In most instances, you aren't able to recover the password, since you don't know how to answer the questions that are asked.

If the reset tool doesn't get it done, your next step is to send your QuickBooks file to the QuickBooks support team and let them try to crack the password. Did I mention that your business can't use QuickBooks while they have the file? Did I mention that additional fees apply for them to attempt to recover it?

All of these roadblocks will likely happen when you're trying to put out the fires left behind from the employee who left. Why risk it?

A BETTER PLAN

For those instances where the Admin account and password are needed, just make sure you are on-site to type in the password when needed - this minor inconvenience can save you a MAJOR headache should your Admin password walk out the door in the future.

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How Do I Turn Off The Annoying Beep in QuickBooks?

I saw this quote recently on Twitter...

"Every time I hear the beep when I record a transaction in QuickBooks, I should win a prize!"

It got me thinking that not everyone feels the same way this person does about the beep.

In fact, many become quite annoyed with it after a while and want to turn it off. I know I did.

YOU'RE IN LUCK!

If you are in the "this beep is making me nuts, how do I turn it off" group, an easy solution is close at hand.

Here's how to turn off the beep when saving transactions in QuickBooks:

  • Click Edit, then Preferences
  • Click the General preference on the left hand side of the window, and you'll see a screen that looks like this:
    Beep
  • A check mark leaves the beep on. Unchecking the box turns the beep off. Your choice.

While you're on the General preferences, be sure to definitely put a check mark next to the "Pressing Enter moves between fields" option. This is a feature you want to have turned on so you can use the Enter key like it is supposed to be used when navigating around QuickBooks.

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