Prepare QuickBooks and Your Accounting for 2011

It is that time of year . . . time to prepare your business finances (and your QuickBooks file) for 2011.  We are all beginning to think about 1099's and W-2's and Annual Reconciliations, but there are other important accounting activities that need attention now, before the start of the new year.

We recently attended an incredible day of training and education at the Small Business Bounce Back conference, featuring speakers such as UK Men's Head Basketball Coach John Calipari, representatives of the Kentucky Small Business Development Center (SBDC), and other outstanding leaders.  The first speaker (from SBDC) stressed the importance of not only having accounting software (and he specifically, repeatedly, referred to QuickBooks) but having it configured correctly and understanding the operation of the program and the reports generated.  He said not to rely on your CPA to interpret the reports and recommend action.  Your CPA provides valuable financial and tax services, but he said it is mandatory that the business owner understand the accounting activity in their organization, and be able to accurately interpret the reports and use the resulting information to effectively manage and lead.  If you need help in setting up your reporting features, or in understanding and interpreting them, give Fifth Point a call.

As we approach a new year, it is the perfect time to either (1) get your existing QuickBooks file "cleaned-up," corrected, and reorganized (if needed) so that you can go into 2011 with a more enhanced view of your company's finances, OR (2) begin using QuickBooks so that you can take advantage of the effective, efficient manner in which the program assists you in gathering financial information and producing critical reports to help you  truly understand what is happening within your business and can take needed action.

Year-End Tips and Tricks for QuickBooks Users:

1. In QuickBooks, go to the Help Menu, and select Year-End Guide.  This is a great tool to guide you through important year-end activities.
2. You do NOT have to "close" the books to move to the next calendar and/or fiscal year.  Closing the Books is an option in QuickBooks. 
3. QuickBooks will automatically make year-end adjusting entries to your books, based on your fiscal year start month.  That mysterious Retained Earnings account in your Chart of Accounts will be adjusted on the first day of your new fiscal year to reflect the previous year's net income.  You start each new fiscal year with a net income of zero.
4. Year-End is the ideal time to perform a file "cleanup."  This function gets rid of unused/old Customers, Vendors, Items, etc., so that your QuickBooks program runs more efficiently.  If you have a significant number of entries in your various Lists that you would like to get rid of, talk with us about the "Cleanup Company Data" feature.
5. If you want or need to perform an Inventory Count, year-end is an excellent time to do it.  For assistance in handling the process in QuickBooks (and for help in managing the actual Physical Inventory Count), go to the QuickBooks Help Menu, the Search section, and type Inventory Count.  There is a series of helpful windows of information to help you.
6. Copy your Budget to a new year.  There is a simple trick to copying an existing year's budget to a new year.  Go the File Menu, Utilities, Export, and then List to .IIF Files.  Select Budgets in the Export window.  Click OK.  Enter a filename (such as 2010budget.iif).  Open the .iif file in Excel (or similar program).  Change the year in the column "STARTDATE."  Save.  In QuickBooks, go to the File Menu, Utilities, Import, and IIF Files.  Select the file in which you just changed the date.  You are now ready to go with a new Budget for 2011.

As always, if you need help with any of your QuickBooks activities, contact Tammy or Wanda at the numbers or e-mail addresses listed in this newsletter.  We will be happy to help you.