Quickbooks -- the Basics (what are they?)

[Black Bart]

The following is a quote from Snaggletooth on the "EA" thread back there:

There are not many Public Accountants anymore. One of the earlier posts said that his state doesn't license new ones but has grandfathered existing PAs. Some PAs eventually became eligible to be CPAs, some good ones actually sold their practices to CPAs and went to work for them, scores of them literally evaporated with the advent of electronic bookkeeping and payroll, such as Excel and QuikBooks.

While not all the Public Accountants have evaporated (173 left in Arkansas and I'm one), I'm apparently fading away. Right up until a few months ago, I had a nice little trade in monthly sales tax, quarterly payroll taxes, year-end reports, etc., but the lousy economy has run many of those clients right out of business. Fast food joint sold out last month; referred successor, a bright, sharp young guy with a laptop to me, a brig...(never mind that part) old guy with a Cross. He's got Quickbooks, writes and prints all checks on it, posts sales as they occur, and yesterday, I understood him to say "I sent off my payroll taxes (an FTD I guess) through Quickbooks and got a receipt for them." That jolted me awake and upright -- I checked and all Arkansas tax reports can also be filed online.

I've always sent off paper reports and made coupon tax deposits for clients and, since most of them didn't keep any books, it worked well. Now, if I'm understanding this right, he won't need any of that. He doesn't know that much about accounting, but he said that QB will file his quarterly reports for him. Is that correct? I'm still doing his sales tax, but does QB do those? Guess I should have kept up with the times, but those ruts are (make that "were") soooo comfortable.

His previous tax guy is still going to do his income tax -- client said he's going to "send the books" to him every month. Is that sent by email? I guess the main question is, what does Quickbooks do for a client and is there any need for an accountant at all if he's posting his own stuff? Since he's already got the system, what's my role?

I've got an efficient, but obsolete bookkeeping system on my computer (yes, yes, I promise I have one). I bought QB 3 years ago, but it seemed deliberately over-complicated to me -- like it was designed to draw clients into an intricate system, get 'em wrapped up in details, and on the update treadmill, etc. I put it on the shelf and there it lays today (is it still any good or do you have to buy a new one every year?)

Should I buy a 2008 QB package? Get a whatchamacallit ("PRO"?) advisor? Forget it -- check and see if the state still keeps up an Old Folks Rest Home/Poor Farm? Quit eatin' there and give that impertinent young upstart a cussin'? Phone a psychic? Sump'n else?

Thanx for any opinions/enlightenment.

[BHoffman]

Garbage in, garbage out

IMHO: Clients will perform the data entry and print checks and figure, "Hey, I'm doing ACCOUNTING!!". What they don't do is look at the reports because none of them can read a balance sheet. They don't look at trends or ratios. And, it's the odd client who can correctly code anything.

So, our role changes from data entry bookkeepers to report analyists and advisors. Higher fee, lower volume. Not bad. I have monthly clients where I clean up their inhouse books and have a meeting where we go over the financial statements - income statement, balance sheet, statement of cash flows, AR and AP agings, overhead budget, gross profit margin, current ratio and working capital, comparisons, etc. Gone are the days when they hand me paperwork and I give them back paperwork they never look at and don't understand.

I'd advise you to first get familiar with navigating QB and learn about all the reporting capabilities it has. It fun and easy. There are sample companies in the software and tutorials.

[Nashville]

Black Bart & QuikBooks

As long as PAs are around and Bart is one of them, they won't fade away.

Personally, I hate QuikBooks. But perception rules the roost. Small businesses have been promised it will solve all their accounting problems. The American-owned motel across town has one, and so does Ma and Pa Kettles little restaurant, and Mr. Hewitt's locally-owned Ace hardware store, so if it's good enough for them, it oughta be good enough for the rest of the town, right?

Wrong, but they will buy it anyway, and they won't use that guy's bookkeeping shop on the corner anymore.

QuikBooks gives these accounting wannabes the freedom to do whatever they want, meaning these sets of books are going to be in terrible shape by the time they have to do their taxes. My favorite experience with a QuikBooks client is the one who went out and bought a new plasma TV with company money, and didn't know where to charge it so he created a new account and called it "TV."

Without exception, my fee structure for finalizing financial statements for a QuikBooks customer is based (in part) on the number of general ledger accounts created. It is not uncommon for clients to create HUNDREDS of accounts when only 3 dozen or so are needed.

QuikBooks also makes it easy for clients to correct their many errors. In fact, so easy that they can do so without leaving an audit trail. Also so easy that after YOU close their books for them, they can go back into a prior year and change things so that you'll never know it's been done unless you try to tie out to beginning balances.

Be that as it may, Intuit has still managed to successfully create the perception that QuikBooks will eliminate the need for external accounting/bookkeeping. And we all know better, but that doesn't stop the perception. So if the question is "Do we need to know anything about QuikBooks?" I think the answer is an unfortunate "yes."

[Zee]

When the client sends his other accountant his "books" using QB, he will transmit them and they will "dump" right into the accountant's professional accountants edition on his computer. I'm also not a fan of Intuit, or QB. But, the small business world seems to love QB. It's inevitable for most accountants offering write-up or payroll work, you need to learn QB. I actually studied QB, got certified as a QB Pro Adviser. Never used it, and forgot it very quickly. Once client's reach a certain size, they recognize QB will no longer meet their needs and move towards more sophisticated software, or something written specifically for their business.

[Gretel]

I am a certified accountant and an accountant in my heart. I really could do without 1040's. I hated QB and never wanted to deal with it but realized there is no way around it since I deal mostly with small and often poor businesses.

I then decided I want to learn it thoroughly and became a ProAdvisor. Then I realized how dangerous QB is not just on the client's side. I yet have to see a report coming from a client QB that can be trusted. The IRS could make a lot of money if they hired QB experts and audited the books.

I have one client where I don't even want to see the actual file just the report because the file is beyond repair and client cannot afford to spend any extra dollar. I feel if I have the file I am required to find the errors to be able to create a correct tax return. Looking at the balance sheet is only a part of finding errors. If you don't do a thorough analysis of the file you still miss - sometimes - bad errors.

I train clients and they send me their file on a regular basis over the internet and - believe it or - not every time I need to clean up something.

If used correctly QB is a great program. It offers a lot of features, which are also confusing. There are so many things I repeatedly have to spend a lot of time re-learning since I don't use them often enough. I wished I had more clients who use all kinds of features.

[DaveO]

I dislike QB too

But mostly for their business practices. If the Justice Department spent some time looking at Intuit instead of Microsoft the business world would be soo much better off.

I had a client bring in a QB file the other day. When I looked at the income statement every number was negative. When I burrowed in I saw the other side of every entry was "Payroll Expense". She said she couldn't figure out how to set up a bank account and since they had no payroll she would use that instead.

[Black Bart]

Thanx folks.

A couple of things, though:

My QB package is "Premier Accountant Edition 2006." Is that still good and can clients send their stuff to it, or do I need a later/diferent version?

Can the client make 941 and SUTA reports on QB and transmit them to IRS and the state through QB himself, or does he have to send the data to an accountant for them to do it?

[DaveO]

QB is only forwards compatible

Meaning you can open files make with 2006 or earlier. If you client is using 2007 or newer you will not be able to open their files. If you are using the "accountant review" feature you must have the same year as them to use the review file.

Also if you open a file made with an earlier version and wish to transfer it back to your client they will not be able to open the updated file without upgrading their QB program.

[geekgirldany]

Hi Bart. You will need to get the latest version of QuickBooks. I have folks with versions all the way back to 2003. I would look into the ProAdvisors Program. I think it is around $500 per year. You get your own personal rep. He/She will atleast direct you to the appropriate tech support line if needed. Included in the Pro Advisors is all versions of QuickBooks for that year. Like the Contractors and Manufacturers Edition. Training on QBs is in with it. Plus you get the payroll subscription included for 50 customers.

In regards to the Payroll the customer uses in QBs they have three options now. Basic $99, Enhanced $200, and Assisted $51 per month. Basic is when they want the accountant to do the forms. Enhanced is when they can print out the forms. Assisted is when QBs will handle everything.

I have some customers with QBs that do not have the payroll subscription at all. I setup their QBs with the correct payroll information so they can write checks themselves each week/biweekly. Usually just memorize a transaction. They then bring it to me monthly and/or quarterly. QBs and the end user have a bad habit of messing up the payroll. Anything from not entering the new SUGA percentage to changing check dates.

Most of them would rather bring it to me to make sure the reports are correct. Others could do it themselves but after I explain decide not to. I tell them would they rather pay me $50 to $80 per month to do their payroll and make sure it is correct. Or pay Intuit and not be sure and also probably have a hard time talking to anyone to help out if something happens.

I am a ProAdvisor and I agree with the others that have posted. QBs is a necessary evil. I have made a good bit of money on cleaning up QBs messes. I got one the other day that I would not even touch. Last years accountant gave up on it and told her to find someone else. I ended up doing the same thing. Plus there was something else that didn't smell right.

I've lost several customers this year due to the economy. I guess that is what it is. Mostly builders and landscapers. I now have 8 monthly bookkeeping/payroll customers. Around 15 quarterly (includes the 8). Afraid I am going to lose one of my longtime customers because I went up in price. I guess it shows not to depend on one customer for a large portion of your income. Ahh well that is something else entirely