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8 posts from October 2008

Customer Type field in QuickBooks - how it works

Within each customer and job listing in QuickBooks, there is a tab called "Additional Info" that provides a number of extra fields of information. One of those fields is the "Customer Type" field:

Additional Info Tab 

The customer type field can be used to track specific information about a customer. Some examples I have seen that work quite well:

  • Have customer types of Residential, Commercial, Government to track various types of customers.
  • Have customer types of Distributor, OEM, and End User to track various types of customers.
  • Have customer types of Internet, Yellow Pages, Web Site to track HOW that customer discovered your business.

The way you use the Customer Type list in QuickBooks is really about what works best for your business. Just remember - you can only have one type per customer. If you wanted to track other information about a customer, you would want to explore the custom fields within the Customer Center.

You can find the actual list of customer types so you can add new ones, edit or delete existing ones, etc. by clicking Lists > Customer and Vendor Profile Lists > Customer Type List from the menu bar in QuickBooks.

BONUS:You can create a customer listing in QuickBooks and then filter it by the types of customers you have created. For example, you could create a list of customers that have a type = Commercial and use it for additional marketing or informational purposes.

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Using Account Numbers in QuickBooks

By default, the ability to use account numbers in your QuickBooks general ledger is turned off. Turning this option on is easy once you know where to look:

In the menu bar, click Edit, then Preferences, then Accounting, and finally, the Company Preferences tab where it looks like this:

Using Account Numbers 

Once you turn this preference on, a box will appear in the upper right hand corner of each account in the chart of accounts where you can enter an account number:

Account Number Box     

The use of account numbers in QuickBooks is not mandatory in any way. Many businesses survive quite well without them. However, your CPA may ask you to use them to make things easier for them to work with your QuickBooks data file. By using account numbers, it definitely reduces the possibility of posting entries to the wrong accounts. In addition, you can type either the account number OR the account name when adding the account on a bill, credit card entry, etc. to make your QuickBooks data entry even faster!

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New Features That Should Have Been Included in QuickBooks 2009

Dear Intuit:

Now that the hype about the QuickBooks 2009 product line is in full swing, I wanted to share some thoughts with you about it, and make some suggestions to really, really help drive your product sales with the 2010 product release.

Stop Catering to the Accountants...

First of all, might it be time to stop catering to the accountants out there (many of whom have no idea how QuickBooks works and don't want to have any idea) and start focusing on businesses that are actually attempting to use your software for their accounting? I sure think so.

In the 2008 version of QuickBooks, the big news was all of the new and improved capabilities with the accountants' copy feature. In the 2009 version, the big news is the Client Data Review Tool. No question, this tool will be quite helpful for those accountants (me included) that are dialed into improving their client QuickBooks data files. However, how much development time went into this feature at the expense of other more pressing and beneficial improvements? My hunch is a lot.

Foreign Currency Capabilities - So?

Another highly touted feature in the Pro, Premier and Enterprise versions of QuickBooks 2009 is the ability to handle foreign currencies. Based on the polling I have done with clients and businesses in the QuickBooks classes I teach, this feature has been met with a collective yawn. I've seen it stated in your press releases that over 30% of those businesses using QuickBooks (or some similar figure) were asking for this feature. Maybe 30% of those who are using QuickBooks Enterprise need it - if so, why not make the a selling point of the Enterprise line? The majority of the smaller businesses using the Pro and Premier editions of QuickBooks don't have a need for this feature. They are having a difficult time as it is generating sales in US dollars.

What You Should Be Adding to the Product Instead:

As a member of your Certified Pro Advisor and Certified Enterprise Advisor teams, I'd like to suggest some product enhancements that sure make a lot more sense and would benefit far more QuickBooks users than the Client Data Review Tool and Foreign Currency. They may not be home runs, but they sure are practical ones. Here are a few for starters:

  • How about having a remit to and a physical address capability for vendor accounts? What seems so logical and so badly needed has been missing for years. My guess is that you'd be feeling the love of accounts payable and purchasing deparments by the tens of thousands by making this one small change.
  • What about the ability to have multiple shipping dates when creating a sales order? Businesses today requires flexibility, and the current setup in QuickBooks doesn't accomodate this need in any way. A business shouldn't have to use QuickBooks add-on software to get this functionality.
  • While we're at it, why not make the Custom Fields boxes within inventory items plain and visible when viewing item details? The screen space is there - why do we have to click on the Custom Fields box to see what they contain?

But Wait, There are More...

The list continues - once you have tackled the above, let's talk about these improvements:

  • Provide businesses (not just their accountants) a tool to help fix problems with sales tax. Call your support department and ask five of them how to go about fixing problems within multiple tax agencies on the sales tax liability report. You'll immediately see why this is such a problem for a regular business.
  • Don't make a business modify an open sales order report just to see what the open dollar balance is on the sales order. Most clients I deal with expect that an "Open Sales Order Report" would show a listing of what sales orders are open, AND what the open balance is on the order, NOT just a listing of sales orders that have not been closed.

  • Help businesses that are using the assembly feature within QuickBooks Manufacturing Edition to quickly identify what components are out of stock when building an assembly. Highlight the items in red or do something else to draw attention to them. Don't just tell them there aren't enough to make the assembly - this is really problematic with long bills of material.

One Final Thought for the Moment...

The suggestions above are simply an accumulation of various things that have driven my clients nuts with QuickBooks over the years (there are more for sure!). Many other suggestions could easily be added to this list, including this big one:

  • Update the tool set available to modify QuickBooks reports. The current one is tired, really tired. It has served its' purpose, and it is now time to build in some better tools for users to have at hand. Simple things like adding subtotals and adding more sort options are just the beginning of things you could do here. Even better, if you built in a more advanced reporting tool set into the Premier and Enterprise versions of QuickBooks, you'd be able to sell more copies of those. Businesses today require the ability to create and modify their own reports with a more robust set of tools, and they should have more options than having to use the ODBC option in Enterprise or go to a third party solution for common reporting enhancements.

There are many other things that could be baked into QuickBooks 2010 to make the user experience even  better than it is today. I hope to have the opportunity to talk with you about them someday soon!

Scott Gregory, QuickBooks Specialist

What do YOU wish QuickBooks would add to their software in the 2010 release? Submit your comments below!

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Dashboard in QuickBooks 2009

Called the "Company Snapshot" in the Pro, Premier and Enterprise versions, this dashboard feature allows you to view key QuickBooks metrics in a screen like the one below (click the image for a larger view):

QB 2009 Dashboard

Within the Company Snapshot, you can review your Income and Expense trends in graph form, see a list of Reminders within QuickBooks, check balances on key ledger accounts (i.e. bank accounts, A/R, etc.), review customers that owe your business money, and list vendors your business owes money to.

Much of this information is already available to you in various QuickBooks reports, but you have to run each of these reports separately to obtain the details. The Company Snapshot feature makes it easier, as the key data is summarized on one screen easily available by clicking the Company Snapshot icon.

While this is a worthwhile attempt at creating a dashboard like feature, the Company Snapshot is missing the ability to do any customization (with the exception of choosing ledger accounts and what date range to show in the graph). When I heard that QuickBooks was going to offer a dashboard like feature in the 2009 edition, I was hopeful it would be a robust and useful tool. Unfortunately, this "dashboard 1.0" leaves me wanting more. Much more in fact. Let's hope "dashboard 2.0" provides us with a much more powerful approach to seeing key metrics about our businesses.

What are your thoughts on the new QuickBooks 2009 dashboard? Post a comment below!

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Customer Statements - What a Waste of Time and Money!

Consider this idea to modernize the accounting system of YOUR business...

Let's talk about NOT sending out customer statements any longer, and why you should embrace that idea sooner rather than later.

But wait you say - my customers won't pay if I don't send them a statement. I disagree!

Under the assumption that your business sends out invoices for each sale made on credit terms (i.e. net 30, etc.), the use of customer statements simply provides a way for your customers to stretch out their payments to you (if you don't send out invoices, more details below).

Let me explain...

A properly designed invoice will have the date of the sale on it AND it will also have the terms and/or due date clearly stated. Immediately upon receipt, your customer knows when the payment is due for that invoice based on these factors. They can take this information and schedule payment into their QuickBooks or other accounting software. It used to be an excuse from customers many years ago that "we can only pay off a statement", but that argument went away long ago with the ability to pay by invoice common in almost all accounting software.

If you send your customer a monthly statement IN ADDITION to an invoice, you have just given them a built-in reason to slow down their payment to you. A savvy accounts payable department will simply wait until they get the statement and then schedule the payment to you based on that date and NOT the invoice due date. I've seen this trick done to perfection over the years - they know you are sending a statement out and may not even make any follow-up calls until long after the statement goes out. Why not hold payment as long as possible? Think about it - what a great plan on their part (that is costing you!)

In addition, the statement mailing process adds to your hard costs of doing business. The paper, envelopes and postage costs are all coming directly out of your checkbook. Why throw this money away every month? Eliminate it and you'll easily save hundreds if not thousands each year. Not to mention, you can take the time you and your staff spend each month "getting the statements ready" and redeploy it to revenue generating activities, like calling on overdue invoices, etc.

You can transition your customers' mind-set on this issue by way of a simple letter - the new year would be a perfect time to do this. In the letter, politely let your customers know that you will no longer be sending out statements as of (insert date here) and that you ask they pay their invoices based on the terms/due date as presented. This way, they can't say "nobody ever told me" about the change in payment plans.

NOTE: If you do NOT send invoices, but use the monthly statement as the only sales document for your customers, I would say continue to use the statement approach. A perfect example is a landscaper that bills monthly for their services. A statement is the perfect solution in this case. However, sending two documents to get paid on the same sale is overkill.

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Inventory Adjustments in QuickBooks - What Account to Use?

I was recently asked what ledger account should be used when dealing with inventory adjustments. A good question indeed!

From my vantage point, if you are using the "Adjust Qty on Hand" screen within QuickBooks, you will want to have a special ledger account called "Inventory Adjustments" created.

As you know, you are not able to complete and save your entries in the "Adjust Qty on Hand" screen without choosing an adjustment account:

  Inventory Adjustment

My recommendation is to go to your chart of accounts, create a new account with a type of "Cost of Goods Sold" and then name it "Inventory Adjustments". This is the account you should use each time you are in the "Adjust Qty" screen.

The reason? By using this special account, all of your adjustments (up or down) in quantity or value will be captured here for easy review and analysis. They won't end up buried with other transaction details in QuickBooks this way.

In addition, you may also want to consider creating another account in your chart of accounts with a type of "Cost of Goods Sold" and a name of "Scrap Adjustments". If you are using the "Adjust Qty" screen to record scrap transactions, use this account for them. As above, you are then easily able to see the impact of all the scrap transactions recorded by your business over any given date range.

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Fixing QuickBooks Data File Problems

Since QuickBooks stores all of your accounting and financial data in one big computer file, it is important to keep that file as organized and optimized as possible.

Within QuickBooks, there is just such a tool for these needs - it is called the Verify tool. Found by clicking File > Utilities > Verify Data, this tool is one you need to use on a regular basis to keep your QuickBooks running smoothly.

Once you begin the "verify" process, QuickBooks will automatically review your data file and identify any problems that it discovers with the file that need further attention. In many cases, the verification process will complete, and no problems will be found (a good thing indeed!). If problems are found, QuickBooks will ask you to continue with the Rebuild tool.

If a rebuild is necessary, QuickBooks will ask you to make a backup copy of your data file before beginning, and then it will attempt to fix any problems it has found. The rebuild process is one that you can watch happen on your computer screen, but there is really nothing else you do during it. The rebuild tool is usually quite good at resolving these problems and making sure your QuickBooks data file is in tip-top shape.

It is a good idea to run the verification tool on a monthly basis - it doesn't take very long to do, and it could identify and resolve problems in your QuickBooks data files before you even know they exist!

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