Frequently Asked Questions

The following FAQ's are some of the most asked questions from clients. Some of these you can not find in your QuickBooks® User's Guide or in online searches.

If you do not see your questions answered here, please email us.

Noteworthy Tips

What are the most critical points I should know for accounting and using QuickBooks®?

  • Everything is date driven.  Anytime there is an error or you find something missing on a report in the system, always check the date of the transaction first.  That will more than likely be the cause of the problem.
  • Most everything you do in QuickBooks can be retrieved and edited.  There are very few instances where the data is not accessible.  Keep this in mind as you start to use the program and are unfamiliar with it.  Accu-Service can find your information or data and correct it's allocation easily.
  • Keep your accounting system simple, unless you are trained to use a detailed system and are well-versed in QuickBooks.  When first using the system, setup the basic features to get you started.  Once you have the system up and running for several months and feel comfortable using it, then begin researching how to implement new sections of the software.  If at all possible, contact Accu-Service for further consultation and to guide you through the setup process.
  • Starting a new company file is generally not necessary if you have data that you feel is a complete disaster.  QuickBooks is very flexible with editing, merging and moving accounts and lists, which makes correcting of problems very workable.  You don't want to start a new company file halfway through the year just because you feel frustrated with the current data outcome.  Always ask a professional FIRST before you make any rash decisions that will end up being costly and unproductive with your valuable time and money!

General

Should I upgrade to QuickBooks® Basic 2021/Pro 2021 or Premier 2021?

QuickBooks® 2021 versions have several new features and benefits. One of those features is a great time-saver if you use email to invoice customers or have customers pay online.  There are many pros and cons to upgrading but it is beneficial to have the latest release from QuickBooks® for any version you may be running.  Compare your needs to those the new version is offering to determine the value of upgrading.   If you do not think that you will use these features on a regular basis, there may be no need to spend more money to upgrade. Of course, if you have any questions to see if you should upgrade, we can help you.

Click here to view the comparison reports for each new type.

Should I upgrade to an industry specific version of QuickBooks® (such as Retailer's Edition or Contractor's Edition)?

QuickBooks® industry specific versions are very useful for the industry if you are looking for more detailed features and/or reporting.  The QuickBooks version looks very similar to the Premier edition, with another task bar section located on the top section of your screen.  These tasks are directly related to your industry.  For example, there will be many construction related tasks, such as detailed job costing or detailed job reports listed rather than the generic job reports that come with the Premier version.

What is a portable file?

The Portable Company file (.QBM ) is much smaller than the QuickBooks data file (.QBW) and depending on the size of the QBW file, it could be as small as one sixth of the size of the QBW file.

QuickBooks users need to move or copy the data file to offsite locations. For example, a user might want to work at home by sending the file to herself as an email attachment and then opening the file at her home computer. Or, the user might provide her accountant with a copy of the data file for year-end tax preparation work. With previous versions of QuickBooks the user typically created a QuickBooks backup (QBB file) for this type of electronic transfer because the backup file is much smaller than the data file. However, in QuickBooks 2007, backup files are not as compressed as they were in earlier versions, so the Portable Company file was developed so that users could create a highly compressed version of the data file that would transfer faster over the Internet.

To create a Portable Company file, select the File menu, select Portable Company file, and then select Create File. QuickBooks creates a file with an extension of .QBM and places the file in a folder of your choice. After you transfer this file you can open it on the remote workstation by selecting the File menu, selecting Portable Company file, and then selecting Open File.

Intuit does not recommend using portable company files as a means for daily backups.  You should continue to use the backup feature (.QBB) for daily backups.

Bank Statements

I haven't reconciled my bank accounts for several months. Can I do one reconciliation for that entire time period?

It is best to do a month-to-month reconciliation, otherwise it will make errors harder to spot. This is critical, especially if you have a large bank reconciliation every month.

What is the difference between a summary and full report after reconciliation?

The full report gives a detailed recap of the reconciliation for uncleared and cleared checks.  This could come in handy when there is a change after the last reconciliation and your opening balance doesn't match for the next month's reconciling.  You can compare the details to those in your check register to spot the problem.  The summary does not provide that detail to you, only the recap.

I reconcile my bank statements manually. Do I have to do it in QuickBooks® also?

It is best to do the reconciliation in QuickBooks® so that any errors, bank charges and/or interest can be entered. You will never be able to reconcile your opening balance that QuickBooks® shows and truly verify all the figures unless you do it in the computer. Your CPA requires that your financials are correct and match the bank statement, so this is the best way to ensure that they have been matched identically.

Payroll

Should I use QuickBooks® Payroll features or go with a payroll service?

Payroll services are a great feature to help you with your in-house payroll needs. There are many benefits to using a payroll service, especially if you would like to be responsible for as little as possible regarding payroll taxes and reporting. Payroll is a complex function of accounting and needs to be handled by a professional who knows about all the rules and regulations with the Internal Revenue Service and Employment Development Department. This topic, like many others, needs to be discussed with your CPA and/or QuickBooks® Professional and compare the benefits and costs with your local payroll service.

How can I tell if I have the current version for payroll?

Go to Help:About Tax Table, then go to TTS Website. This will tell you what the most current version is for your state and if you are currently subscribed to the Tax Table Update, then you can update your system right from the website. If you are not subscribing to the Tax Table Update Service, make sure you do so right away. If you are not able to download the information from their website, Intuit will send you a floppy disk to ensure you have the most current rates. They send the disk ANYTIME there are any changes without having to worry about it!

QuickBooks Online vs. QuickBooks Desktop
Which to choose?

At the Midwest Accounting Show in Chicago, I was asked a sincere question that deserved a thoughtful answer. “My needs can be met by QuickBooks Online. However, I have used QuickBooks desktop for years. It is clear Intuit wants us to convert to QuickBooks Online. How do I decide?” With this emotional question, there is no right or wrong answer. I did my best at the time, and recognized the many of you have to be asking the same question for your practice and your clients.

Others have tried to answer this question, but did not address all of the key issues, nor do I think I can cover all of your key issues. I thought I’d summarize the issues after consistently being asked a similar question for the last few years, hearing Intuit’s statement of direction from their August 2014 earnings call, seeing the QuickBooks 2015 product and reflecting on the changes and progress in QuickBooks Online.

As readers of the QuickBooks and Beyond blog or members of The Sleeter Group Consultants Network, I trust your knowledge and expertise more than any other sources. If I’ve missed key issues, please add them to this post.

Editor’s Note: Randy Johnston presents the popular “Tech Update” session at the annual Sleeter Group Accounting Solutions Conference.

Let’s start with some key strengths for QuickBooks Online:

  1. Simple multi-user access in a browser and therefore runs from any computer with good internet access
  2. Low cost per user, approximately $7-13 per user per month without payroll
  3. Automatic bank and credit card downloads
  4. Expanding third party add-ins with improving support in IPP
  5. Backup provided and automatic
  6. QuickBooks Online Accountant (QBOA) provides a simple mechanism for inviting and billing clients and managing clients from a single console
Key shortfalls for QuickBooks Online:

  1. Additional cost for running multiple companies – each company is currently considered a separate subscription
  2. Retention of older company files has a cost. A few conditions under which this can occur include:
    • Closing down a company and retaining the company file for access
    • Deciding to restructure a company’s chart of accounts, and wanting to retain the old company structure
    • Corrupt file that can’t be resolved with Intuit support
  3. Depth of inventory and costing
  4. Frequent updates make the product harder to document and teach procedures
  5. Lack of breadth of product features when compared to QuickBooks Desktop
Commonly cited issues for QuickBooks Online consultants:

  1. Learning another product and the additional certifications
  2. Features needed not in the product
  3. Internet speed at client sites or at your own firm
  4. Different sales cycle
  5. Different client base/needs
  6. Repeatable customized reporting
It is clear that Intuit has made notable progress on improving QuickBooks Online with the revisions in September 2013 and the developments in the product since that time. With Intuit’s QuickBooks Online installed base of 683,000, they have the largest installed base of any entry level SaaS product. With Intuit’s publicly stated goal of having 3 million users by 2017 and selling the product directly into multiple different countries, it is clear this is where the company sees their future. Future public revenues of the company are being adjusted to illustrate and capitalize on the recurring revenue model of QuickBooks Online.

Let’s continue with some key strengths for QuickBooks Desktop:

  1. Ability to run more than one company file at no additional cost
  2. Broad ecosystem of third party add-ons to extend the product
  3. Longevity in the market
  4. Good reference and learning materials in books, classes and consultants
  5. Ease of use improvements, including items to make users and consultants more efficient
Key shortfalls for QuickBooks Desktop:

  1. Expensive to host for online access, with costs varying from $30-60 per month per user
  2. Escalations in pricing, although still a good value for the capabilities
    • Payroll subscriptions
    • Sunsetting of older products after three years, in effect a 33% annual maintenance
    • ProAdvisor costs, including certifications
  3. Inconsistencies between the Mac and Windows versions.
  4. Periodic updates, some of which create issues
Commonly cited issues for QuickBooks Desktop consultants:

  1. Competition makes it harder to get acceptable rates for the expertise
  2. Reluctance to add third party products because of updates not coordinated with product releases
  3. Clients try to do too much on the system leading to slow downs and dissatisfaction
  4. Native reporting not customizable or professional enough
  5. Maintaining licensing and invoice complexity from Intuit
QuickBooks Desktop user counts are approaching 5.2 million. Even with the move to QuickBooks Online, current Intuit forecasts expect no more than a 25% decline in QuickBooks Desktop licensing through 2017, which would be around 3.9 million users. The higher end QuickBooks Enterprise version can reduce licensing costs in larger installations, adds slightly greater functionality, but does not notably increase end-user speeds.

So With This Background, How Do I Decide?Clearly there are many more factors than the simple lists above. What is your business model today, and what do you want it to be? For some of you, the answer may be more like a buffet line than a menu. Why choose cake or ice cream? You’ll take both. For others, you have so much expertise in QuickBooks Desktop that you don’t want to change. Still others have a relatively short time until they can slow down or retire, and frankly have little interest in learning another new product. For a few more, the clients want the local control of their files, are running multiple entities and are very happy with the results QuickBooks desktop is producing. It is perfectly fine to not change!

On the other hand, some of you see your entire future in the cloud. You might solve this problem in the short term by hosting QuickBooks with one of the 27authorized hosting companies or by creating your own private cloud with Citrix or Microsoft RDS. You may believe that people want to work from cell phones, tablets and are on the go, and truly need what a browser based product can deliver. You see the value of a permanent lease on software that is continuously updated, and believe that the ecosystem will expand to support more and more capabilities with QuickBooks Online.

The only thing I’m sure of is that both products can solve small business accounting problems. Besides, which is better a Ford or a Chevrolet (or if you prefer a Mercedes or a BMW)? For me, cars are simply transportation. Intuit’s QuickBooks offerings are two key offerings in the accounting software business, and both can get you to many different destinations. What is your destination and what type of ride do you want to take to get there?

Compliments of:  Randy Johnston and his NMGI team provide IT consulting services and recommendations to Sleeter Group Consultants Network members as a benefit and part of their membership. If you have questions on any hardware, software, procedures, or IT strategies for your firm, contact helpdesk@nmgi.com with your questions or to schedule a time to speak.