To The Point
News from First Tier Accounting


November 2013
In This Issue
Getting a Handle on Cash Flow
QuickBooks Corner - What's New in QuickBooks 2014
This Month's Quote
If opportunity doesn't knock, build a door. - Milton Berle
Fun Fact
The SBA supported more than $29 billion in lending for small businesses in fiscal 2013.  Way to keep our economy moving!
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First Tier Accounting is committed to helping small businesses maintain accurate and timely accounting records, understand their financial data and use this information to better manage business operations.
Greetings!
  
I have lots to share with you this month!
  
First of all, thanks to those of you who donated and/or shared your support for my family as we participated in the Walk to Defeat ALS in September.  Our family raised over $2,000 and had a very special time together walking and remembering my brother, Steve.
  
I will be teaching a couple of free seminars for WomenVenture this month at the Roseville Library.  Click on the "view my upcoming events" link in the sidebar for details.  If you or someone you know is interested in attending either seminar, let me know and I can put you in contact with WomenVenture to register.
  
Intuit has released QuickBooks 2014.  There are a number of new features and improvements in the 2014 products.  See the article below in the QuickBooks Corner for details about some of the new and improved features and the various versions available.  If you are currently using QuickBooks 2011 or an older version, please keep in mind that upgrading to the 2014 version is strongly recommended.  Intuit only supports the 3 most current years, so support for 2011 will be phased out early next year.  As a QuickBooks ProAdvisor, I can get a significant discount on the software and related services, which I am happy to pass along to my clients.  So please contact me if you are interested in upgrading your software to the newest version and I can help you get the best product at the best price for your company.
 
Also in this newsletter, I discuss the third and final financial report that you should be familiar with and review on a monthly basis - the Cash Flow Statement.  Understanding this report is critical for predicting your cash flow needs, as well as effectively managing your cash. 
 
Lastly, with year end fast approaching, I encourage you to give me a call to discuss what forms your company will need to order, schedule an appointment to close out the books, and make sure you have things in order before year end.  Feel free to call or email me to answer any questions you may have or to plan for year end. 
 
Feel free to share this newsletter with colleagues, friends or business owners who you think might benefit from the information. 
   
Have a great month!

Tracey
Getting a Handle on Cash Flow
In the previous two newsletters, I discussed the Balance Sheet and Income Statement.  The third, and often overlooked, statement that makes up the monthly financial report group is the Cash Flow Statement.  This report shows the activity for the month as it relates specifically to cash.  It shows the overall increase or decrease in the cash accounts on the Balance Sheet and the specific changes that resulted in the increase or decrease in cash for the month. 
 
A common misconception among many people is the belief that the income shown on the Income Statement is the same as cash.  The reality is the cash generated by or used in the business operations can be significantly different than the business's income or loss for the period.  Why?
Because in accounting, we use something called the "accrual" basis for recording transactions.  Income and expenses are recognized at the time they occur - whether or not cash has changed hands.  So, although the Income Statement may show a profit, the cash may not yet be in the bank.
  
In addition to the timing and accrual basis issues, there are also transactions that do not show up on the Income Statement at all.  For example, owner distributions (or draws) decrease the cash in the bank, yet they do not affect the Income Statement at all.  Also, purchases of fixed assets, such as vehicles or equipment, decrease cash, but the cost of the equipment is spread out over time on the Income Statement in the form of depreciation, so the period in which the cash is used is different than that period(s) the expense is shown on the Income Statement.  To understand the activity in your cash accounts, you need the Cash Flow Statement, which takes into account all of those transactions that have an impact on your cash balance, but not your Income Statement.
  
Since negative cash flow is the single most common reason businesses fail, it is in your interest to become very familiar with the ebb and flow of your cash and how you can make sure you maintain a positive cash flow and meet all of your business obligations.  The Cash Flow report is one tool you can use to stay on top of cash flow; however, it doesn't stop there.  Taking additional steps to improve billing and collection procedures, negotiating better terms with your vendors and budgeting for large expenditures are other ways you can improve cash flow for your business.  If you would like to review and discuss ways you can improve cash flow for your business or just understand the Cash Flow Statement better, please contact me at [email protected] to schedule an appointment.
 
QuickBooks Corner - What's New in QuickBooks 2014

ProAdvisor Logo

QuickBooks 2014 has many new and improved features.  The features are all available in Pro, Premier, and Enterprise versions of QuickBooks.  Here are a few items that you may be interested in:

  

Bounced/NSF Checks:  Quick and easy way to record an NSF check from your customer, including options to adjust the bank account, re-bill the customer and record the NSF fees from the bank.

  

Income Tracker:  New all-in-one screen for tracking customer transactions.  Allows you to filter for specific transactions (unbilled, unpaid, recently paid, etc.) and take action to follow up in a timely manner.  All data is in real time so you are always working with the latest information.

  

Job Reporting:  Ability to assign sales rep to job and to filter reports based on sales rep and/or job status, allowing for better job reporting and quicker access to relevant job data.

  

New Print Options:  Scale reports to print to one page or specified number of pages wide to print more concise reports and save paper/ink.  Also more reports are available in the Ribbon areas of the screen, making it easier to find the reports you want.

 

QuickBooks for Mac also has a number of new features, including a new Income Tracker feature (similar to the one described above), ability to assign sales reps to customers and jobs, ability to search within a report, and the ability to adjust sales tax when recording sale tax payments.   

 

QuickBooks Online is also rolling out a newly revamped interface.  The new interface is already available for new users of QuickBooks Online as of October 7th.  Existing QBO users will be upgraded to the new interface sometime around the end of 2013.  If you are using QBO and want to see what the new interface will look like, you can test drive it here.

 

This is just a sampling of all of the new and improved features in the QuickBooks products for 2014.  If you would like to learn more about the various versions, are planning to upgrade or just have questions, please email me at [email protected].