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Phase I - Setup QuickBooks

Although QuickBooks is relatively easy to use, someone must setup QuickBooks correctly in order to record transactions quickly and to generate reports that are reasonably accurate. You should retain someone who has the experience to know what needs to be set up properly in order to make QuickBooks easy to use and useful to management. Here are the tasks for which you should retain an experienced user and installer such as my Firm.  If the account list is not set up properly, owners will not get the financial reports in the format they need.  Also, setting up account lists improperly can cause extra work and cost when tax planning and preparing returns, if your business does not record transactions to the correct accounts.

  1. Pre-set up. Confirm whether your existing or future hardware has sufficient power to operate QuickBooks quickly. It will cost you money and create stress if your employees are waiting for QuickBooks to process transactions and reports because your computer system needs to be upgraded.

  2. Set up preferences in QuickBooks. Doing so can make using QuickBooks much easier.  There are also some key decisions to be made, such as the method of accounting the business should use when generating management reports during the year.

  3. Set up the Account List. Setting up the Account List is the most important setup step. The Account list is how you tell QuickBooks to record and summarize your business's transactions. It also affects report formats. The person(s) doing this step should have extensive knowledge of your business's reporting needs. The person should also envision how your staff will enter transactions. Also, the person setting up QuickBooks should know the reports that the staff will need to prove the accuracy of account balances presented in reports. Finally, the person setting up QuickBooks should know the information that QuickBooks should provide for tax returns and perhaps for unique reporting to external parties.

    Takeaway:  Incorrect setup of the Account List can result in wasted time to "redo" formatting or to reprocess transactions to move them into the proper accounts at a later time. Worse, you may not get accurate reports you need to monitor your sales, profits and cash flows.

  4. If this is a new setup, my Firm will setup the beginning records from your existing system. This includes entering the latest account balances, outstanding checks and deposits, and other records needed for your staff to continue processing your business's financial records using QuickBooks.

  5. Set up input screens to make it easier for staff to enter transactions; and to give you the ability to easily view or print useful reports and graphs. For example, you can enter sales information using the invoice or cash receipts screens, or by journal entry. Certain reports will be the same; but you cannot get graphs showing customers, type of income, if you record transactions via journal entry. You also will not be able to locate or separate the sales information as easily.

  6. Set up reports for the staff to prove the accuracy of account balances.

  7. Set up reports and graphs for staff to provide to management. The person performing this step should discuss your needs for financial information before they set up the reports.

  8. If you will invoice using QuickBooks, we need to show you how to set up Items to create invoices, to account for sales taxes, and to account for income in the financial reports.

  9. We will need to show you how to set up different types of vendors -- 1099 vendors, frequently used vendors, occasional vendors. If we train your staff to setup 1099 vendors properly, you should be able to easily print 1099 forms each year-end. The IRS now charges $100 for each missing 1099 form.

  10. If you will process payroll using QuickBooks, we need to show you how to set up Payroll Items, or to set them up for you. This is particularly true if you would find it helpful to track payroll costs by cost center.

  11. Organize the icon bar so staff can easily enter data and access data and reports. We organize the icon bar buttons into sections: Procedures (Ex: find data, backup), Lists; Data entry screens; Reports; and then buttons for any unique procedures.

As you can see, there is more to QuickBooks than simply installing the program and start using it. If your business invests the time and dollars to the properly set up QuickBooks, you will have a much greater chance of receiving useful reports in a reasonable timeframe. Not setting up the system correctly can result in incorrect or incomplete data, redo time to correct data, staff not staying current, frustration, and you rarely receiving accurate information to make informed decisions to operate profitably. When your system is not setup properly, you will probably spend more dollars paying your tax preparer to simply fix errors -- and worse, you cannot effectively monitor your profitability and cash flow during the year. We strive to empower your staff to provide you with reasonably accurate financial information on their own as soon as possible.


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