Tuesday
Mar252008
A word of advice for QuickBooks users
Tuesday, March 25, 2008 at 10:00AM
It seems like 99% of the world uses QuickBooks. That's not necessarilly a bad thing, but the majority of QuickBooks users are not accountants and that can cause problems when it comes to getting accurate reports out of the system. One of the problems I run into a lot is that people don't know how to use the reports in QuickBooks. It might be more accurate to say they use TOO MANY reports. Here's a little piece of advice I give my clients. When you open QuickBooks the first thing you should do is bring up the balance sheet and the profit and loss.
That's it, don't bother with quick reports or even open the chart of accounts. Don't run transaction reports or sales by customer or any of that stuff. Just work off the financial statements. Once in a while you will need to review vendor or customer payments and you can use the aging summary reports. Everything else can be handled from the balance sheet and profit and loss. The reason I favor this approach is that the financial statements present the actual fiscal position of the company. Using the drill down feature and the financial statements I can get to ANY transaction in the company, and I'm doing by starting from the proverbial 50,000 foot view.
I'm not just advocating a simpler method of accessing data. I'm trying to get my clients more accustomed to looking at their own financial statements. Somewhere along the way most business owners have become convinced that the only person qualified to review their statements is an accountant. That's just not true. You should be looking at your own statements every day or every week. And when you're in there every day drilling down to discover what's behind your numbers you will have a much better understanding of your financial statements and what makes them tick. That's not only more efficient, it's just better business.
That's it, don't bother with quick reports or even open the chart of accounts. Don't run transaction reports or sales by customer or any of that stuff. Just work off the financial statements. Once in a while you will need to review vendor or customer payments and you can use the aging summary reports. Everything else can be handled from the balance sheet and profit and loss. The reason I favor this approach is that the financial statements present the actual fiscal position of the company. Using the drill down feature and the financial statements I can get to ANY transaction in the company, and I'm doing by starting from the proverbial 50,000 foot view.
I'm not just advocating a simpler method of accessing data. I'm trying to get my clients more accustomed to looking at their own financial statements. Somewhere along the way most business owners have become convinced that the only person qualified to review their statements is an accountant. That's just not true. You should be looking at your own statements every day or every week. And when you're in there every day drilling down to discover what's behind your numbers you will have a much better understanding of your financial statements and what makes them tick. That's not only more efficient, it's just better business.
Reader Comments (1)
For those who are running businesses all to well know that cash flow is the life force. The number one condition that saps this strength is for a business to have slow payers.
That is why it is of the utmost importance to manage ones accounts receivables. The importance of timely payments can not be over emphasized. Research has shown that not only do slow payments drain cash but the likelihood of being paid at all is significantly reduced as time goes on. For example, on average, when a receivable goes 90 days 27% are not collectable and if they go 180 days 43% are not collectable.
Best practices suggests that reminders and demand for payment should happen early, systemically, and alternating between calling, e-mailing, faxing, and mail.
Fortunately, with current technology all businesses can access the same collection tools as the large corporations. A good example of this is A/R Connection which offers a service where by a company uploads their Aging Report and the service automatically Calls, E-mails, Faxes, or Writes those customers who are late in their payments.
If any one is interested they can be found at www.arconnection.com