The price of gasoline is just one of many factors putting pressure on our economy as a whole. Now it’s more important than ever to keep a close eye on your company’s performance. Many business owners compare financial results to an annual budget.  If you don’t have your budget in place yet, we’ll show you how to get started. Even if you have, we’ll show you how to use last year’s results as a measuring stick with comparative financial reports. Once you understand these techniques, we’ll explain why you should create a monthly appointment with yourself to ensure that your results continue to measure up-and take action if they don’t.

TIP: Keep in mind that tough financial years do have a silver lining-you’ll likely pay less in income taxes. If revenues are down or expenses are up, don’t forget to trim your withholding or estimated tax payments accordingly. Doing so enables you to boost your cash flow now, rather than waiting around on a tax refund next spring.

Budget Basics

The QuickBooks Planning & Budgeting menu gives you the ability to create budgets and forecasts. In reality, both features work the same way, so we’ll use creating a budget as our example. But which one should you use? You might find it helpful to use the Forecast feature as an alternate budget and as a best-case scenario, while the Budget feature offers a better expectation of reality. Either way, here’s how to create a budget in QuickBooks:

1. Choose Company, Planning & Budgeting, and then Set Up Budgets.


2. When the Set Up Budgets window appears, click the Create New Budget button in the upper right-hand corner.


3. Select the year that you’d like to create a budget for (such as 2008 or 2009), select Profit and Loss, and then click Next.

Balance sheet budgeting:  QuickBooks offers the ability to create a budget for balance sheet accounts, such as planning for expected levels of cash, inventory, accounts receivable, liabilities, and so on. However, most small business owners find that just a Profit and Loss budget is sufficient for their needs.

4. Most users will choose No Additional Criteria on the next screen. However, QuickBooks does provide the option for a more granular budget that you break down to the customer, job, or class level. Click Next once you make a selection.
5. The next screen asks if you want to start with a blank budget from scratch or if you want to use last year’s actual data as a starting point. Most users will find it helpful to use the previous year as a starting point.  Click Finish after you make a choice.


6. At this point you’re presented witha screen similar to Figure 1. You won’t see any numbers if you chose the From Scratch option in step 5.
   

Figure 1: Starting with prior-year actual numbers can jumpstartyour budget process.

    7.    Proceed with entering or updating your budget. Click the Save button as needed to
       preserve your work as you go, and then click the OK button when you’re finished.

Budget Tips: The Copy Across button enables you to copy the same amount across all twelve months. As shown in Figure 2, the Adjust Row Amounts button provides a quick way to adjust existing numbers up or down by either a percentage or dollar amount.  You can edit your budget at any time: choose Company, Planning & Budgeting, and then Set Up Budgets. Choose your budget from the Budget list, and then make changes as needed.

Figure 2: The Adjust Row button makes it easy to quickly increase or decrease budget figures by a dollar amount or percentage.

Budget Reports

QuickBooks offers four budget and two forecast reports. You’ll use these steps to run most of these reports:

1. Choose Reports, Budget & Forecasts, and then the report of your choice.


2. A three-screen wizard appears, asking you first which budget or forecast you wish to use. Once you’ve made a selection, click Next.


3. The next screen asks which report layout to use – you may only one choice, Account by Month – click Next after you confirm your choice.
4. Click Finish to display your report:

• Budget Overview – As shown in Figure 3, this report provides a twelve-month view of your budget.


• Budget vs. Actual – This 52 column report can be tricky to navigate, as the default format shows these columns for each month, as well as a 12-month total.

Figure 3: Budget overview gives you a birds-eye view of your 12-month budget.

Report Taming Tips: There are a couple of ways to bring this report down to size. First, most users can eliminate the % of Budget column. To do so, click the Modify Report button, and then deselect % of Budget in the Add Subcolumns For section. Next, you can shrink the width of the columns. To do so, drag the diamond between the first actual and budget columns to the left, as shown in Figure 4. When you release the left mouse button, choose Yes when asked if you want to resize all of the columns. Alternatively, click the Export button to send the report to Excel.

Figure 4: Narrow column widths can condense particularly wide reports.

• Profit & Loss Budget Performance – This report compares your month and year-to-date actuals to the budgeted amounts, and also displays the 12-month budget. Although this report doesn’t display dollar or percentage variances, you can easily add these columns. Click the Modify Report button, and then select $ Difference and/or % Of Budget in the Add Subcolumns For section, as shown in Figure 5.

Figure 5: It’s easy to add or remove columns on any QuickBooks report.

• Budget vs. Actual Graph – This report doesn’t enable you to choose a budget – the current year budget is displayed automatically. As shown in Figure 4, this report enables you to get a graphic view of how your results measure up to your budget. You can choose between different budget views:




• P&L By Accounts – This view compares your Profit & Loss accounts, also known as income and expense, to the corresponding budgets. The report automatically sorts variances by difference, and you can view up to six accounts at a time.


• P&L By Accounts and Jobs – This view compares your P&L accounts on a job-by-job basis. Jobs with the largest total variance from budget will be presented first, and as with accounts, you can view six at a time.
• P&L By Accounts and Classes – This view compares your P&L accounts on a class basis. As with the other views, you can view up to six classes at a time. This button appears even if you haven’t set the Enable Class Tracking preference.

Class Tracking: Classes allow you to you track costs by department, project, or other categories. To enable class tracking, choose Edit, Preferences, and then Accounting. On the Company tab, select Enable Class Tracking.

Graph Printing limitation: You cannot print more than one page of the budget graphs at a time, so you’ll have to click Next Group and then click Print to create a hard copy of each report group. QuickBooks doesn’t provide a way to print all of the graphs in one fell swoop. You also can’t modify the graph format, other than to choose a different date range.

Comparative Reports

Regardless of whether you use budgets in QuickBooks or not, it’s always helpful to compare this year’s results to last year. Doing so enables you to see trends in your data, such as how automobile expenses have increased. Such a report is just a couple clicks away:

1. Choose Reports, Company and Financial, and then Profit & Loss Prev Year Comparison.


2. By default you’ll see this year compared to last year. However, you can easily create a multi-year comparison:

a.    Click the Modify Report button.

b.    In the Columns section, choose Year from the Display Columns By drop-down list, and then click OK.

c.    On the report screen, choose a date range, such as 1/1/04 through 12/31/08, and then click the Refresh button. As shown in Figure 6, a multi-year comparison will appear onscreen. If you find this format helpful, click the Memorize button to save this report for later use.

Figure 6: You can convert the Profit & Loss Prev Year Comparison into a multi-year report.

Summary

In this article we discussed how you can use the budget and forecast feature in QuickBooks to plan the future of your business. As each month rolls by, you can compare your plan to actual results. In addition, you can compare this year’s results to last year, or even the last several years. 

Did you know?

Did you know that an accountant’s copy of a QuickBooks file can be converted to a normal QuickBooks company, i.e. a .QBW file? There are limited circumstances where you’d want to do so, because it’s not possible to merge two .QBW data files together.  However, let’s say that you lose access to your QuickBooks company because your hard drive crashes or someone steals your laptop. These are situations where a converted accountant’s copy would be better than starting from scratch. If you need to do this, ask your accountant to carry out these steps in their version of QuickBooks:

1. Choose File, Utilities, and then Convert Accountant’s Copy to Company File (QBW).


2. Choose the Accountant’s Copy to convert.


3. Click OK on the prompt shown in Figure 7.


4. Assign a name to the new company file, and then click Save.

A final warning prompt will appear to confirm that this copy will overwrite any existing client copy of the books.

Figure 7: Converting an accountant’s copy to a working QuickBooks company can serve as a disaster recovery method.

Of course, the best defense is to make frequent back-ups of your QuickBooks data on removable media, such as the USB flash drives that often cost less than $10. These easily allow you to carry your QuickBooks back-up offsite, such as in your purse or briefcase.  But, it’s good to know that your accountant might be able to provide a working QuickBooks company -as long as you recently sent your accountant’s copy along to them.

Many businesses can benefit from tracking revenue and expenses by project. Known as job tracking in QuickBooks parlance, it’s ready for your immediate use. For instance, let’s say that your company installs residential elevators. Several different builders contract with you to install your product in their high-end homes. In such cases the builder would be the customer, while each house that you install an elevator in would be a job. You can associate as many jobs with a customer as you wish. As you’ll read in this article, you can not only associate revenues, but also expenses with jobs, as well as create a budget so that you can track your prognostication against reality.

Jobs versus Classes

Users sometimes confuse jobs with classes. Both allow you to track revenue and expenses, but are typically used for different purposes:

• Jobs are helpful when you want to track activity for a specific project for any of your customers. In addition, jobs allow you to create estimates and utilize progress invoicing.
• Classes are effective when you want to track costs by department, for an internal project, or other activities where you’re not necessarily billing a customer. In addition, you must enable classes in QuickBooks by choosing Edit, Preferences, Accounting, and then choose Use Class Tracking on the Company Preferences tab. For instance, a medical office might create a class for each doctor, so that expenses can be allocated fairly among practitioners. Once you enable class tracking, you’ll notice Class fields appear on various transaction screens that you can use as needed.

Note that you can associate customer invoices and expenses with classes, but you’ll find that jobs typically work better for that purpose. However, you can also use jobs and classes in conjunction with each other, for even greater tracking capabilities.

Create a Job

Unlike classes, no special set up is required for jobs, which are always associated with a customer. Since you probably already have numerous customers established in QuickBooks, let’s see how to add a job:

1. Click on the Customer Center button on the toolbar (or press Ctrl+J).
2. Right-click on a customer name in on the Customers & Jobs tab, and then choose Add Job, as shown in Figure 1. Alternatively, you can choose Add Job from the Edit menu after you select a customer name.

Beware: It’s possible to create a job within a job, so be sure that you click on the customer name, and not a job name, when you click Add Job.

Figure 1: The Add Job choice appears amidst many other choices.

1. At this point the New Job window appears, as shown in Figure 2. Assign a job name, and then complete the Address Info tab. Much of this should carry forward from the associated customer record, but you can override the information as needed for this job.

Figure 2: The New Job dialog box is almost a mirror image of the New Customer dialog box.

1. The Additional Info and Payment Info tabs work in the same fashion as with customers, but you’ll note that jobs have an additional Job Info tab. This allows you to maintain these fields:

Job Status: This field lets you assign one of these labels to the job: None, Pending, Awarded, In Progress, Closed, and Not Awarded. You cannot add additional choices to this list, but you should change the status as the job works through the various stages of its lifecycle.

Start Date: Enter the date the job begins.

Projected End: Enter the expected end date for the job. Doing so will later let you compare how your projected job end dates match up to the actual job end dates.

End Date: Leave this field blank until the job is completed.

Job Description: This field allows you to assign an additional description beyond what appears in the Job Name field at the top of the screen.

Job Type: This user-definable field allows you to assign types to jobs as you wish-choose Add New from the list to add a new type. You can edit or delete this list by choosing Lists, Customer & Vendor Profile Lists, and then Job Type List.

Job Info tab: Confusingly, the Job Info tab also appears when you add a new customer. However, you cannot add a customer and a job at the same time. You can use the Job Info tab to store information about that customer, but it’s best to first add the new customer, and then add the job in the fashion described above.

Assign Jobs to Transactions

Estimates, Sales Orders, and Invoices can only be assigned to a single job, but you can split other transaction types among multiple jobs. Therefore you’ll choose a job name from the Customer:Job drop down at the top of the Invoice screen-estimates and sales orders work in the same fashion. Other transaction types have either a Customer:Job column or a Name column where you can assign line items to specific jobs. For instance, Figure 3 shows the Customer:Job field on the Enter Bills screen. In addition, each transaction screen includes a Billable column where you can indicate whether an expense is reimbursable by your customer. You’ll leave the Billable field blank if you’re simply tracking costs for a given job, or click in the field to place a checkmark that will indicate that your customer should be billed for the charge.

Figure 3: The Customer:Job column on the Enter Bills window is one way to assign expenses to a job.

Payroll: The paycheck detail screen allows you to assign payroll to a job, but it’s best to use QuickBooks time tracking feature to do so. The paycheck detail screen doesn’t allow you to specify whether time is billable, but the other screens do. Choose Employees, Enter Time, and either Use Weekly Timesheet or Time/Enter Single Activity. The Enter Time window is shown in Figure 4.

Enable Time Tracking: Choose Edit, Preferences, Time Tracking, and then Yes to enable time tracking.

Figure 4: Use the Enter Time window to assign billable hours to a job.

Apply payments: Remember to apply customer payments against the job and not the customer itself. Otherwise you might encounter situations where the customer has a credit balance and the job has a debit balance that net out to zero.

Budgets

QuickBooks enables you to create a budget for your job, but there’s a catch: you can only budget within a single fiscal year. So, if your job spans more than 12 months, or crosses fiscal years, you may have to use some creativity, such as splitting the job budget between two fiscal years. However, with that caveat in mind here’s how you’ll create a budget for your jobs:

1. Choose Company, Planning & Budgeting, and then Set Up Budgets.
2. Click the Create New Budget button to launch the Create New Budget wizard.
3. Specify a fiscal year, choose Profit and Loss, and then click Next.
4. Choose Customer:Job on the Additional Profit and Loss Criteria screen, and then click Next.
5. Choose Create Budget from Scratch on the Choose How You Want To Create a Budget screen, and then click Finish.
6. You’re now presented with the screen shown in Figure 5, where you can select a customer and/or job, and then enter your budget on an account by account basis.

Figure 5: All customer and job budgets are stored within a single budget screen.

Consolidated Budget: Keep in mind that you only need to run the Create New Budget wizard once for a given fiscal year. Simply change the Customer:Job field on the budget screen to budget additional jobs. Once you’ve run the wizard, you can view or maintain your budget by choosing Company, Planning & Budgeting, and then Set Up Budgets. If necessary, choose your budget from the drop-down list. QuickBooks automatically assigns a name like FY2009–Profit and Loss by Account and Customer :Job.

Merritt will lead the team of outsourced bookkeepers, supervisors and controllers to continually develop systems of communication for clients and their accountants using the most innovative solutions in online communication and accounting. Merritt will also work with clients to develop policies and procedures to streamline their accounting services and organize accounting resources to fulfill individual customer needs.

“We are thrilled to bring Kris onto the team to fill this important position. Her accounting and client services experience with Fortune 500 companies make her an ideal fit for OSI and it’s clients,” says Dennis Najjar, Managing Member of OSI.

Merritt’s extensive background in both public and private accounting for large and small companies provides the necessary leadership experience to contribute to OSI’s proven success. In her most recent position, portfolio controller, her development of the company’s internal audit program and implementation of corporate policies drove consistency and profitability for her company.

In watching the news and seeing how many bookkeepers embezzle funds each and every day, it is not surprising that most business owners do not even have a clue where they stand financially.  In fact, The Association of Certified Fraud Examiners estimates that in the U.S. alone, occupational fraud has cost employers $400 billion through larceny of cash, skimming and fraudulent disbursements. 

If you are not receiving timely financials, I hate to inform you that you are at risk for the above scenario.  You may trust your bookkeeper implicitly…in every embezzlement case this was true. 

I recently uncovered embezzlement by a receptionist of a medium-sized firm who was pocketing cash on a daily basis.  Why didn’t the owner or the CPA catch this earlier?  Trust.  The owner stated “I would not in a million years have suspected her.  We had this relationship built over five years.”

As a business owner, you should be reviewing your financials and asking questions, especially in small firms where one person handles everything from managing the office to doing the bookkeeping.  In this situation, we understand the difficulty of maintaining controls as you would in larger organizations. 

OSI Business Services, LLC not only closes your books each and every month, but your CPA/Manager consults with you reviewing your financials, answering your questions and training you in areas you may not be familiar with.

Contact us http://www.OSIBusinessServices.com/contactus.html today for a free, no obligation proposal.  We will be happy to speak with you regarding your needs and concerns.

Why is it that you do not handle all of these things on your own?  First of all, if you’re anything like me, who can barely even check my oil much less change it, you’re smart to let the experts handle it.  You pay someone else not only for their expertise, but because you have other obligations such as supporting your family through working.  There are only 24 hours in a day and there is simply not enough time to get everything done and spend quality time with your family and friends. 

As far as your business is concerned, it makes sense to outsource your accounting for several reasons.  If you are spending too much time managing your books and not enough time growing or running your business, your profits go down.  Your quality of life goes down as well when you are constantly working.  You end up making unnecessary mistakes with your accounting when you do not have the time to dedicate to it.  You might not even understand how to read your financial statements but you are interested in learning. 

The benefits of outsourcing your accounting with OSI Business Services, LLC are unsurpassable on so many levels.  First off, OSI is entirely U.S. based.  All staff is highly knowledgeable in the practices of accounting and follow very detailed company procedures.   

Each and every client is assigned not only a bookkeeper, but a controller to oversee the account.  This is a daily accounting and bookkeeping service working in real time.  Each client has access to their staff daily by telephone, email and instant messenger. 

We encourage you to visit our webpage, especially the Frequently Asked Questions page http://www.osibusinessservices.com/faq.html to gain more knowledge on why your business would benefit from accounting and bookkeeping outsourcing.  Contact us today for a free quote!

Simply opening each and every piece of mail and organizing everything by date took me over three entire days to complete.  At the end of this project which took me months to input into accounting software, I was still missing numerous bank and credit card statements.

Statistics show that both the frequency of your accounting and the quality of the records you keep can dramatically affect your company’s survival rate. How frequently you do your accounting can affect your company’s survival rate. How well your records are kept can also affect your company’s survival rate.  (Source: The Small Business Book; Robert Hamilton and John English)

As a business owner, you should be taking an active role in the finances of your company.  Perhaps you are a small business owner who handles your own finances and the scenario above is not too far off from your situation.  You need help and you know it.

To learn more about how OSI Business Services, LLC can help you improve your financial situation, please visit our website at http://www.OSIBusinessServices.com.  You may call or email us to discuss your needs or fill out the Contact Form on our website.

Unfortunately, we know first-hand what an inexperienced bookkeeper can do to a business because companies hire us all the time to clean up their accounting.  Let’s start out by looking at what your bookkeeper is really costing your business.

The median hourly rate for a bookkeeper with 5-9 years experience is around $15 at 40 hours per week.  Health insurance for the employee with no dependents we’ll estimate at $350 per month.  Add on two weeks of vacation per year, ten paid holidays and for some companies, sick leave, and you’re looking at an additional $2,000 – $2,500.  Other expenses include payroll taxes, workers’ compensation and retirement plan/401K match. 

Now, let’s take a look at what you probably never really have taken into consideration.  How many hours do you spend when you’re first hiring a bookkeeper placing advertisements, doing interviews, calling references, etc.?  How many hours a week do you spend initially training your bookkeeper and then how many hours on a weekly basis afterwards?

Typically, most companies both large and small have a CPA (wise idea).  Perhaps you hire your CPA to close out each month or quarter or you simply have that person prepare your year-end tax returns.  If you are lucky enough to have a bookkeeper who actually knows how to prepare financial statements (most don’t) then this may not be an issue. However, we’ve found that companies spend an exorbitant amount of money on CPA’s to clean up mistakes bookkeepers have made.  This is simply unnecessary.

So in summary, if you add up all the costs, you are looking at well over $4,000 per month in comparison to the initial assumption that you’re paying a flat $15 per hour or $2,600 per month.  If you would like to calculate costs based on what your company is currently paying for your bookkeeper, visit our website using this link and plug in the numbers: http://www.osibusinessservices.com/calculate_cost.php

Our concern is the success of your business and we are here to answer any questions you may have with regard to your accounting.  Please feel free to send us an email or give us a call.  We look forward to hearing from you. 

New York, NY (PRWEB) December 20, 2007 — When AAA Academy for Children sent out a plea for accounting help in order to get the necessary funding to grow the children’s charity organization, OSI stepped up to help.

OSI Business Services (http://www.osibusinessservices.com), an outsourced bookkeeping and accounting services firm, will donate monthly expert accounting services for the organization.

AAA Academy for Children provides a variety of services to low-income families including childcare, tutorial care, amateur Taekwondo, and more. Working with a limited budget, the organization needs a loan to grow, but needed to get their books in order before obtaining a loan will be possible.

OSI’s U.S. based staff of professional outsourced bookkeepers and accountants will work through the organizations 2007 record to prepare a comprehensive set of financial records and reports using Intuit’s QuickBooks. OSI will continue to provide monthly bookkeeping services on a pro bono basis as a way to support the charity.

“Our goal is to help businesses grow to their full potential through better accounting. When a company’s books are organized by an expert accountant, the company is in a much stronger position for rapid growth,” says Dennis Najjar, CPA, partner and Managing Director of Client Services.

Growth plans for AAA Academy include expanding to new facilities in order to provide more services for more children and families.

“Timely accurate financial information helps organizations better manage their finances. We’re excited to play a part in growing such a noble non-profit organization,” says Bill Gerber, partner and Managing Director of Sales and Marketing.

Bill Gerber was recently honored with CPA Technology Insider’s ’40 Under 40′ award designed to recognize the accounting industry’s up and coming leaders. OSI accounting is considered one of the nation’s leading outsourced accounting services provider.

About OSI Accounting Services:

OSI Accounting Services (http://www.osibusinessservices.com) utilizes a 100% U.S. based staff providing outsourced online bookkeeping and accounting services to small, mid-size and fast growing businesses. The company is passionate about its mission to provide a high-level of customer support, deliver services in a timely, efficient and precise manner, and to continuously exceed client expectations.

Winners of the prestigious of Forbes Enterprise Awards were formally announced today. From a field of thousands of nominees, only 72 companies were selected to win the coveted award—among those chosen for this select group of extraordinary companies was OSI Business Services, LLC.   OSI is a leading outsourcing firm, providing bookkeeping and accounting services to companies across the United States. Using only U.S.-based employees operating out of home based offices, OSI is on the cutting edge of professional outsourcing.

Pompton Plains, NJ (PRWEB) March 9, 2007 – OSI Business Services was recently honored with a 2006 Forbes Enterprise Award. The award, one of the most prestigious small business awards in the country, is a capstone on an impressive start for the New Jersey-based firm, which provides outsourced accounting and bookkeeping services to small and medium sized businesses.

“We are extremely proud to be recognized by Forbes, a legendary name in American business,” said Bill Gerber, partner in OSI. “This award recognizes our company’s explosive growth and the quality of our U.S.-based workforce. OSI proves successful outsourcing need not mean off shoring.”

Since 2004, OSI has witnessed a stunning 736% increase in gross sales and grown to include 18 full time accounting and bookkeeping professionals. Those professionals, all hired full-time by OSI, are employees. The arrangement with OSI allows every employee to work from their home located anywhere they live in the United States. It also allows OSI to choose from among the best of the best nationwide. The company fosters a corporate culture among their tele-workers that encourages employee suggestions aimed at helping the business grow.

OSI Business Services provides a full range of accounting and bookkeeping services to small and mid-sized businesses. It’s the best of both worlds for the hiring company; while freed from the need to employ and oversee an in-house professional, each client company still works closely with an account-specific bookkeeper, who is readily available to discuss questions or concerns about specific issues. Those accountants and bookkeepers are matched to the specific jobs they are most suited to perform and work under a controller’s guidance. Some of the services OSI can provide include sales invoicing, accounts payable, payroll, account reconciliations and financial reporting.

About OSI Business Services

OSI Business Services was formed in 2004. Co-founders Dennis Najjar, CPA and William Gerber began with a vision for how technology could transform accounting and bookkeeping for small and medium sized businesses. Since then they have turned that vision into a successful, rapidly growing, nationally recognized firm. With a proven business model, remarkable demand for its services, and now a Forbes Enterprise Award, OSI is a true leader in its field.

OSI is happy to offer free analysis of accounting databases to companies who inquire about services. OSI also considers good corporate citizenship vital; the company contributes a portion of all client fees charged to the Alternating Hemiplegic of Childhood Foundation.