Do You Need to Use QuickBooks' Fixed Asset Tools? The Basics
Managing your company’s fixed assets is a complicated process, one that will require some extra assistance.
Much of the work you do in QuickBooks is short-term. You send an invoice and it gets paid. Your purchase order is fulfilled, and the products move into your inventory. You run payrolls and submit their related taxes and other payments.
Managing the life cycle of your fixed assets is an exception. Simply, fixed assets are physical entities that you purchase to help your business generate revenue, like property, a vehicle or a commercial oven. By definition, they must be in use for over 12 months.
Figure 1: You’ll need our help in depreciating the book value of your fixed assets, but careful recording of them will make your QuickBooks reports, your taxes and your company’s worth more accurate.
QuickBooks can help you track these, but both the value of your company and your tax obligations – and the sale price, should you eventually sell them -- are affected by how the book value of your fixed assets is depreciated. It’s important that you work closely with us over the life of each one. What you can do on your own, though, is to maintain absolutely accurate records in this area.
The best time to start recording information about a fixed asset is while you’re creating a transaction related to its purchase. You can build an item record for it as you’re filling out the Item section of Enter Bills, Write Checks, Enter Credit Card Charges or Purchase Order.
Let’s say you’re writing a check for a new company truck. You’d go to Banking | Write Checks and fill in the blanks. Click the Items tab below the MEMO field, then click the down arrow in the ITEM field. Scroll up to the top of the list if necessary and select <Add New>. You’ll see this menu:
Figure 2: Keep track of your company’s fixed assets by creating item records for them. You can do this as you’re entering transactions for their purchase.
Click on Fixed Asset to open the New Item window.
Transactions Not Required
There may be times when you’ll want to create an item record for a fixed asset when you’re not processing a transaction. Such situations include:
· Cash purchases
· Transfer of a personal asset to your company
· Purchase of a fixed asset with personal funds, or
· A multi-item purchase.
To do this, click on the Lists menu and select Fixed Asset Item List. If you’re adding a new one, right-click anywhere in the list part of the screen and select New (or click the down arrow next to the Item button in the lower left of the screen and click New). The same New Item window that you opened from the check-writing screen appears.
You’ve already chosen Fixed Asset as the TYPE, so your cursor should be in the Asset Name/Number field. Enter an easy-to-recognize name so that you’ll be able to quickly identify it in reports. Select the correct Asset Account (ask us if you’re not sure) and type a description in the Purchase Description field, clicking the correct button for new or used.
Enter the Date purchased, the Cost and the Vendor/Payee. Don’t worry about the SALES INFORMATION fields until – and if – you eventually sell the asset.
Figure 3: You should be able to complete the New Item window in QuickBooks for your fixed assets on your own, but consult with us on any questions.
Under ASSET INFORMATION, enter the Asset Description (you can write a lengthier description here), its Location, PO Number if applicable, Serial Number and warranty expiration date. Add Notes if you’d like, and you’re done – unless you want to incorporate Custom Fields. If so, click the Custom Fields button in the upper right, then Define Fields.
(We can provide the depreciation and book value numbers under FIXED ASSET MANAGER.)
Your fixed asset records are critical elements of QuickBooks. You may be storing similar information elsewhere in your office records, but QuickBooks needs it, too, so you’ll have a comprehensive accounting of your company’s value.
8 QuickBooks Reports That You Should Be Running Regularly
QuickBooks provides dozens of customizable report templates. You know when you need some of them, but which are musts?
You send invoices because you sold products and/or services. Purchase orders go out when you’re running low on inventory, and there are always bills to pay, it seems like. All of this activity is, of course, important in itself, but all of your conscientious bookkeeping culminates in what’s probably the most critical element of QuickBooks: your reports.
Reports can tell you how many navy blue sweatshirts you sold in March, what you paid for health insurance premiums in the first quarter, and how much you bought from your favorite vendor last month. They’re very good at drilling down to get the precise set of numbers you need.
But reports – carefully customized and properly analyzed – can do more than tell you how many golf clubs to order and when it’s time to switch phone services. They can help you make the business decisions that will help you take your growing company to the next level. There are several that you should be looking at regularly, some of which you can interpret easily and use in your daily workflow. We’ll help you with the interpretation of the more complex financial reports.
Who Owes Money?
That’s probably a question you ask yourself every day. You don’t necessarily have to run the A/R Aging Detail report every day, but you’ll want to run it frequently. It tells you who owes you money and whether they’ve missed the due date (and by how many days).
Figure 1: By running the A/R Aging Detail report, you can see whether you need to follow up with customers who have past due invoices.
As with any report, you can modify it to include the columns, data set and date range you want by clicking the Customize button. When you create a report in a format that you think you might want to run again, click the Memorize button. Enter a name that you’ll remember, and assign it to a Memorized Report Group.
There are two ways to find the reports you want to see. You can open the Reports menu and move your cursor down to the category you want, like Customers & Receivables, which will open a slide-out menu of options there.
Or you can open the Report Center, which lets you explore reports in more depth. Each is represented by a small graphic with four icons under it. You can:
· Run the report with your own data in it
· Open a small informational window
· Designate it as a Favorite, and
· View QuickBooks help.
Figure 2: If you access QuickBooks reports through the Report Center, you’ll have several related options.
Other accounts receivable reports that you should consult periodically include Open Invoices and Average Days to Pay.
Tracking What You Owe
Reports can also keep you up-to-date on money that you owe to other people and companies. An important one is Unpaid Bills Detail, accessible through the Vendors & Payables menu item. Though you can modify its columns, this report basically tells you who is expecting money from you, the date the bill was issued and its due date, any number assigned to it, the balance due, and relevant aging information.
Vendor Balance Detail is critical, too. This report displays every transaction (invoices, payments, etc.) that contribute to the balance you have with each vendor.
Standard Financial Reports
Figure 3: We hope you’ll let us help you by running and interpreting these standard financial reports.
QuickBooks report categories include one labeled Company & Financial. These are reports that you can run yourself, but they’re critical for understanding your company’s financial status. We can customize and analyze these for you on a regular basis so you’ll know where you stand. They include:
· Balance Sheet. What is the value of your company? The balance sheet breaks out this information by account (under the umbrella of assets, liabilities and equity).
· Income Statement. Often referred to as Profit & Loss, this shows you how much money your business made or lost over a specific time period.
· Statement of Cash Flows. How much money came in and went out during a specified time range?
Reports can only generate information about what you’ve entered in QuickBooks and exactly where it’s been entered. So it’s crucial that you follow standard accounting practice as you proceed through your daily workflow. We’re always available to answer questions you have about QuickBooks’ structure and your activity there. Your reports – and your critical business decisions – depend on it.
Receiving Inventory With or Without Bills in QuickBooks
When your goods come rolling in, be sure to document them correctly.
You’re probably happy to see couriers delivering inventory items you’ve ordered since it means you can ship to customers, but recording the new stock means yet another repetitive task.
QuickBooks’ tools can help with this, but you need to be sure you’re using the right forms. There are two different ones that you’ll use, depending on whether or not you’ve received a bill.
Bill in Hand
Either way, you’ll get started by opening the Vendors menu (or clicking the arrow next to Receive Inventory on the home page). If you do have a bill, select Receive Items and Enter Bill (Receive Inventory with Bill on the home page). The Enter Bills screen opens; select your vendor from the drop-down list. If you had entered a purchase order, you’ll see something like this:
Figure 1: If any purchase orders exist for that vendor in QuickBooks, you’ll see this message.
Click Yes. The Open Purchase Orders window will open displaying a list. Select the PO(s) for the items received by placing a checkmark in front of it/them and click OK.
Tip: If you accidentally click No, the vendor’s information will be filled in on the Enter Bills screen, and you can click the Select PO icon in the toolbar.
Now the PO item information has been entered in the window. Check the form for accuracy, then save it.
Of course, if there was no purchase order, you’ll enter the information about the items you received (descriptions, prices, etc.) in the Enter Bills screen.
If you receive items without a bill, you still need to document the shipment. Open the Vendors menu and select Receive Items (or click the arrow next to the Receive Inventory icon on the home page and select Receive Inventory without Bill).
The Create Item Receipts window opens. Select the vendor by clicking the down arrow next to that field. If a message about existing purchase orders for that vendor appears, click Yes or No, and either select the appropriate POs or enter the information about what you received.
If the items were already earmarked for a specific customer on the purchase order, the Customer column will have an entry in it, and there will be a check mark in the Billable column. If there was no purchase order and you’re entering the information, you can complete those two fields manually.
Figure 2: If a purchase order was already assigned to a customer and is billable, that information should appear in this window.
Enter a reference number if you’d like. The Memo field should already be filled in with Received items (bill to follow), and the Bill Received box should not be checked.
Warning: Be sure that the Items tab is highlighted when you’re recording physical inventory. If there are related costs like freight charges or sales tax, click the Expenses tab and enter them there.
When the bill comes in for merchandise that you’ve already recorded on an Item Receipt, you’ll use this procedure to pay it:
· Click Vendors | Enter Bill for Received Items, which opens the Select Item Receipt window.
· Select the vendor, then the correct Item Receipt.
Note: If the bill corresponds to more than one Item Receipt, you’ll need to convert each into a bill separately. You can create a new bill if some items received were not accounted for on Item Receipts.
· Click the box next to Use the item receipt date for the bill date if you want to match it to the inventory availability date.
Figure 3: You’ll select purchase orders that you want to create bills for in this window.
· Click OK. The Enter Bills screen opens, which can be processed like you’d handle any bill.
Though it may seem like extra work, this last procedure is important, since it prevents you from recording the same inventory items twice.
It’s easy to get tangled up on these procedures. We hope you’ll consult us when you begin implementing inventory management in QuickBooks, or when you’re taking on a new task there. It’s a lot easier to prevent errors than to go back and fix them.
Spring-Clean Your QuickBooks Company File
There are a lot of clues that indicate trouble with your QuickBooks company file. Is it time for a check-up and tune-up?
After this ridiculously long winter, you’ll probably hear few complaints about things like puddles in the street, summer heat and spring cleaning. Most people are eager to throw open the doors and windows, and attack the dirt that the season left behind, both inside and outside of the house.
It’s not hard to see when your home is dirty. QuickBooks company file errors are harder to detect, but they’re there, including:
· Performance problems
· Inability to execute specific processes, like upgrading
· Occasional program crashes
· Missing data (accounts, names, etc.)
· Refusal to complete transactions, and
· Mistakes in reports.
Figure 1: If some transactions won’t go through when you click one of the Save buttons – or worse, QuickBooks shuts down -- you may have a corrupted company file.
Call for Help
The best thing you can do if you notice problems like this cropping up in QuickBooks – especially if you’re experiencing multiple ones – is to contact us. We understand the file structure of QuickBooks company data, and we have access to tools that you don’t. We can analyze your file and take steps to correct the problem(s).
One of the reasons QuickBooks files get corrupt is simply because they grow too big. That’s either a sign of your company’s success or of a lack of periodic maintenance that you can do yourself. QuickBooks contains some built-in tools that you can run occasionally to minimize your file size.
One thing you can do on your own is to rid QuickBooks of old, unneeded data. The software contains a Condense Data utility that can do this automatically. But just because QuickBooks offers a tool doesn’t mean that you should use it on your own.
Figure 2: Yes, QuickBooks allows you to use this tool on your own. But if you really want to preserve the integrity of your data, let us help.
A Risky Utility
The program’s documentation for this utility contains a list of warnings and preparation steps a mile long.
We recommend that you don’t use this tool. Same goes for Verify Data and Rebuild Data in the Utilities menu. If you lose a significant amount of company data, you can also lose your company. It’s happened to numerous businesses.
Instead, start practicing good preventive medicine to keep your QuickBooks company file healthy. Once a month or so, perhaps at the same time you reconcile your bank accounts, do a manual check of your major Lists.
Run the Account Listing report (Lists | Chart of Accounts | Reports | Account Listing). Are all of your bank accounts still active? Do you see accounts that you no longer used or which duplicate each other? Don’t try to “fix” the Chart of Accounts on your own. Let us help.
Figure 3: You might run this report periodically to see if it can be abbreviated.
Be very careful here, but if there are Customers and Vendors that have been off your radar for a long time, consider removing them – once you’re sure your interaction with them is history. Same goes for Items and Jobs. Go through the other lists in this menu with a critical but conservative eye. If there’s any doubt, leave them there.
A Few Alternatives
There are other options. Your copy of QuickBooks may be misbehaving because it’s unable to handle the depth and complexity of your company. It may be time to upgrade. If you’re using QuickBooks Pro, move up to Premier. And if Premier isn’t cutting it anymore, consider QuickBooks Enterprise Solutions.
There’s cost involved, of course, but you may already be losing money by losing time because of your version’s limitations. All editions of QuickBooks look and work similarly, so your learning curve will be minimal.
Also, try to minimize the number of open windows that are active in QuickBooks. That will improve your performance. And what about your hardware? Is it getting a little long in the tooth? At least consider adding memory, but PCs are cheap these days. If you’re having problems with many of your applications, it may be time for an upgrade.
A Stitch in Time…
We’ve suggested many times here that you contact us for help with your spring cleanup. While that may seem self-serving, remember that it takes us a lot less time and money to take preventive steps with your QuickBooks company file than to troubleshoot a broken one.
QuickBooks’ Custom Fields: An Overview
Part of QuickBooks’ popularity comes from its flexibility. Here’s a look at how custom fields contribute to that element.
The beauty of QuickBooks is that it can be used for so many different kinds of businesses. Its smart design lets realtors and retail shops, plumbers and plastic surgeons use it to track income and expenses, pay bills and invoice customers, and to run those all-important reports.
But Intuit knows that QuickBooks can’t – and shouldn’t – tailor itself to individual business types (except in the industry-specific versions). So its structure and tools are somewhat generic and as universal as possible.
That’s where custom fields come in. You can simply use them for your own informational purposes, but QuickBooks also lets you create and add fields to your existing customer, vendor, employee and item records and forms, and use them as filters in reports.
A Common Application
Let’s say you want to search for your best customers to create a targeted marketing mailing.
Start by opening the Customer Center and opening any customer’s record there. Click on the Additional Info tab. In the lower right corner of this dialog box, click on Define Fields. This box (with some fields already defined in this example) opens:
Figure 1: You can create custom fields for your lists of names in this dialog box.
You want to send mailings to customers who order frequently, or who regularly purchase big-ticket items. You can call them your “High-Value Customers.” Click in the first field that’s available in the Label column and type that phrase, then tab over to the Cust column and click in it to enter a checkmark. Click OK. The Edit Customer dialog box opens with the new custom field included.
This field will now appear in all of your existing customer records as well as any new ones you create. You’ll need to open the record for each High-Value Customer, click on the Additional Info tab and enter “Yes” on the corresponding line.
Figure 2: Custom fields appear in this box in your customer records.
Using Custom Fields in Items
If you sell physical inventory, custom fields will probably be needed in your item records. You might want to use them for t-shirt colors or sizes, for example, or to store serial or model numbers. They can be employed for all items types except subtotals, sales tax items and sales tax group items.
The process is similar to the one you used to define custom fields in your contact records. Open the Lists menu and select Item List (or Fixed Asset Item List where appropriate). Click Custom Fields in the dialog box that opens.
Tip: The Custom Fields tool is also available in the New Item dialog box. So you can move directly to that step as you create an item record if you’d like.
Click Define Fields and add your field(s). Be sure to put a checkmark in the Use column, and click OK.
Figure 3: QuickBooks also lets you define and use custom fields in your item records.
Reports and Forms
Custom fields can be invaluable when it comes to using them in forms and reports. Your fields will automatically appear at the bottom of the Filter list within your reports’ customization tools, but you’ll have to add them manually to any forms where they should appear.
Warning: You should probably enlist our help before you customize forms. QuickBooks provides tools to help you through this process, but you will encounter some potentially confusing messages as you add fields to forms, and you may have to use the Layout Designer, which can present quite a challenge.
Let’s say you wanted to find out how many blue coffee mugs Suzanne Jenkins sold in November. You’d proceed like you normally do when you’re customizing a report, but you’d have to scroll down to the end of the Filter list to find the Color custom field that you created. You’d enter the word “Blue” in the field supplied. Your Sales by Item Summary report setup would look something like this:
Figure 4: Filtering a report using a custom field.
This report will only run properly if you’ve added your Color field to your sales forms. Again, we’d be happy to help you with this, and to explore other uses for QuickBooks custom fields.