simple start presentation

7/31/2019 Simple Start Presentation

1/53

A Guide to the Essentials

QB_05/2005_01


2/53

2

QuickBooks Business Benefits

Maximize Profits Minimize Costs Cash Flow Management

Minimizing Bad Debt Inventory Control Tax Compliance-IRS, FTB, SBOE, City

Prepare Financial Documents to Obtain aBank Loan

Can Be Optimized to your Business


3/53

3

QUICKBOOKS BUSINESS APPLICATION

QUICKBOOKSEXCELWORD

CUSTOM REPORTSINDUSTRY QB DATA

FILES

FEDERAL TAXSTATE TAXSALES TAXCITY TAXPAYROLL TAX

INCOME STATEMENTBALANCE SHEETCASH FLOW STATEMENTBANK RECONCILIATION

COST ANALISYSPROFITABILITY REPORTSINVENTORY REPORTSCASH FLOW MANAGEMENT

BOOKKEEPINGINVOICINGWRITING CHECKSPAYING SALES TAXPAYING BILLS


4/53

4

QuickBooks Simple StartFeatures

Track Sales, Expenses and Sales Tax Create Invoices and Estimates Run Financial, sales and tax reports Payroll Download Credit Card and Bank Transactions Automatically Populate and Print Tax Forms Import Data from Excel


5/53

5

QuickBooks Pro Features

Advance Job Costing Multi-User Integration with Word, Excel, & Outlook Inventory Create and Customize Professional-Looking

Forms Cash Flow Projector Fixed Asset Tracker


6/53

6

QuickBooks Premier Features

Sales Orders/Back Orders Inventory Assemblies More Powerful Reports for Accountants Export Reports Templates Business Planner Tool Create Purchase Orders from Estimates and

Sales Orders Improved Invoicing for Time and Expenses


7/53

7

QuickBooks Enterprise Solutions

Up to 30 Simultaneous Users Enhanced Security Expanded List Capacity QB Employee Organizer Combine Reports from Multiple Companies Intuit Statement Writer Enhanced Custom Field Capability Additional Reports


8/53

8

1. Introduction to FinancialManagement2. Why Accounts are Important3. Using Reports4. Managing Essential Tasks:

Practice Session5. Tips and Resources

6. Appendix: AdditionalConcepts & Terms

Financial Management Essentials


9/53

9

1. What is Financial Management?

Process of:

Running yourbusiness

Recording moneycoming in and out

Using reports to :

Understandhow yourbusiness isdoing

Make decisions


10/53

10

Six Ways Financial ManagementHelps Your Business Succeed

4. Compliance.Report your

companys incomes,expenses, and payrollaccurately to the IRS.

5. Insight and Decision Making .Make informed decisions and price your product or

service for profitability with financial reports

6. Funding.To be considered fora loan or investment,

youll need completefinancial statements.

1. Cash Flow.Track the moneygoing in and out ofyour business.

2. Manage Customers and Sales.

Know and understand your customersthrough consolidated records.3. Production.

Obtain goods andservices. Apply for and

establish credit withyour vendors.

YOURBUSINESS


11/53

11

Information is Power

What do you want to know about your business ?

How much money am I bringing in?

How much am I spending?

Is my business making any money?

Whats the value of what mybusiness owns?

How much does my business owe toothers?

What is my business worth?

Sales

Expenses

Sales Expenses

Assets

Liabilities

Equity


12/53

12

2. Financial AccountsWhy They Matter to Your Business

Accurate record keeping lets you understand and useall your information

Money in frompayments received

Data on customersand vendors

Record of yourbank accounts

Money out forchecks written,refunds and otherexpenses


13/53

13

Cash Flow:Money In and Money Out

CUSTOMERS

Sales

Services /

ProductsOut

YOURBUSINESS VENDORS

Expenses

Services /ProductsIn

Money In Money Out


14/53

14

Major Account Types

Assets Current (cash, inventory,

accounts receivable, etc.) Fixed (property, vehicles,

machinery, etc.)

Liabilities Current (within one year) Long Term

Equity Contributed capital: owners

investment Retained earnings (profits)

Assets = Liabilities + Equity

Everything yourbusiness

possesses

Everything yourbusiness has

borrowed

Everything yourbusiness owns


15/53

15

Categorize Your TransactionsWith a Chart of Accounts

Chart of Accounts

Master account lists a chart ofaccounts are used to sort your

transactions into categories Each account category containssub-accounts


16/53

16

Chart of Accounts:Your Master List of Accounts and Sub-Accounts

INCOME ASSET

Sales Income Checking Bank

Other income Other income Accounts Receivable Accounts Receivable

EXPENSE Undeposited funds Other Current Asset

Advertising Expense Equipment Asset

Car and Truck Expenses Expense LIABILITYContract labor / payroll Expense Loans Liability

Cost of goods sold Expense Sales Tax Payable Other Current Liability

Entertainment / meals Expense EQUITY

Office expenses Expense Contributed Capital Equity

Repairs and maintenance Expense (Owners invested funds)

Supplies Expense Retained Earnings Equity

Taxes and licenses Expense (Business profits)

Utilities Expense

Other expenses Other expenses

NAME TYPE NAME TYPE


17/53

17

Accounts:What Weve Learned

Consolidate yourrecord keeping

Use a standard set ofaccounts or categoriesto file awaytransactions there isa common language

Keep it simple:Significant accountsonly

Use Industry SpecificAccounts

Master account lists a chart of accounts

are readily available formost types ofbusiness. Choose onespecific to your

industry, and makeminor changes ifneeded.


18/53

18

3. ReportsUnderstanding Your Business and Decision-Making

Use reports as aplanning tool

Gain insight intoyour sales

Income statement(P&L) shows yourprofitability

Balance sheetshows assets,liabilities andequity

Regularly monitoryour profitability and your cash flow

Reports help you understand how your business isdoing


19/53

19

Make the Most of Your Reports

What do you want to know about your sales ? What is selling? Who is buying? Who owes me money?

Gain insight intothe health ofyour businesswith reports: Sales by item Sales bycustomer

Unpaidinvoices bycustomer


20/53

20

Summarizes therevenue andexpenses of acompany over aperiod of time

Also called aProfit & Loss orP&L

Income Statement


21/53

21

Shows the assets,liabilities, andequity at a givenmoment in time

Assets =Liabilities + Equity

Balance Sheet

Equity also referred toas Owners Equityor Retained Equity.


22/53

22

4. Manage Essential TasksPractice Session: Marks Atomic Graphic Designs

Money inA. Record a saleB. Invoice a customerC. Receive a paymentD. Make a depositMoney OutE. Write a check / record an

expenseF. Use a credit card / record an

expense

Remember, the betteryou understandyour cash flowsituation, the

better youll beprepared to makethe right businessdecisions.


23/53

23

A. Record a SalePractice Session Money In

Money In: Record a Sale

Customerbuys

businesscards.Pays on spot

with cash.You issue

salesreceipt.

1


24/53

24


Issue salesreceipt

Record:1. Customer2. Item3. Quantity4. Payment type

5. Date

1

2 3

4

Track Your Business

5


25/53

25


See Where Your Business Stands Profit & Loss6. Sales increaseby $200.00

Balance Sheet7. Assets

increase by$215.50

8. Liabilities(sales taxpayable)increase by

$15.509. Equity

increases by$200.00

6

7

8

9


26/53

26

B. Invoice a Customer Practice Session Money In

Money In: Invoice Customer

Customer buysgraphic

designservices.You complete

the design.You invoice

customer.1


27/53

27


Track Your Business

Create invoiceRecord:1. Customer

2. Service3. Quantity/hours4. Payment terms5. Date

1

2 3

4

5


28/53

28


See Where Your Business Stands

Profit & Loss7. Sales

increase by$90.

Balance Sheet8. Accounts

receivable

increase by$90.9. Equity

increasesby $90

7 8

9


29/53

29

C. Receive a PaymentPractice Session Money In

Money In: Receive Payment

Customer paysby check for

businesscard designservicesinvoice.

Record receipt

of payment.

1


30/53

30


Track Your Business

Receivepayment

Record:1. Customer2. Payment

type3. Enter

amount

1

2

3


31/53

31


See Where Your Business StandsProfit & Loss4. Unchanged.Balance Sheet5. Accounts

receivabledecrease by$90.

6. Undepositedfunds

increase by$90.

7. Equityunchanged.

4

5

6

Undeposited fundsappear in Other Current Assets

7


32/53

32

D. Make a DepositPractice Session Money In

Money In: Make a Deposit

Go to bank todepositcheck for

designservices andcash forbusinesscards.

Make deposit.1


33/53

33


Track Your Business

Make depositSelect:1. Cash and

Check2. All funds to

deposit

1

2


34/53

34


See Where Your Business StandsProfit & Loss3. Unchanged.Balance Sheet4. Checking /

Savingsincreases.

5. Other currentassetsdecrease.

6. Equityunchanged.

35

4

Undeposited fundsappear in Other Current Assets

6


35/53

35

E. Write a Check / Record an ExpensePractice Session Money Out

Money Out: Write a Check

Pay yourtelephonebill by

check.Write check /

recordexpense.

1


36/53

36

Track Your Business

E. Write a Check / Record an Expense Practice Session Money Out

Write checkSelect:1. Payee2. Amount3. Transaction

type(Expense Utilities)

1

3

2


37/53

37

E. Write a Check / Record an Expense Practice Session Money Out

See Where Your Business StandsProfit & Loss4. Expense

(Utilities)increases by

$45.Balance Sheet5. Checking /

Savingsdecreases

by $45.6. Equity

decreasesby $45

4

5

6


38/53

38

F. Use Credit Card / Record an ExpensePractice Session Money Out

Money Out: Use a Credit Card

Buy officesupplieswith credit

card.Use credit

card /recordexpense.

1


39/53

39

Track Your Business

Update creditcard register

Select:1. Payee2. Transaction

type (Expense-- Supplies)

3. Amount1 3

2



40/53

40


See Where Your Business StandsProfit & Loss4. Expense

(Supplies)increasesby $95.

Balance Sheet5. Credit cards

increasesby $95.

6. Equitydecreasesby $95.

4

5

6


41/53

41

6. Tips and Advice

1. Getting Started2. Helpful Resources

3. Online Resources4. Congratulations!


42/53

42

Getting Started

1. Build your toolkit Consider software packages such

as QuickBooks Simple Start(Trial Edition is available)

2. Structure your accounts Start with a minimum # of accountsand add as needed

3. Establish an accountingroutine and stick to it

Reconcile accounts monthly Update financial statements

quarterly

Establish GoodAccountingHabits

Recordtransactionsregularly

Accuracy andconsistency areessential

Fix mistakes asthey happen

Manage andreconcile bankaccountregularly


43/53

43

Helpful ResourcesAdvance Your Knowledge

Professional Help Accountants

Look for knowledge of your industry QuickBooks ProAdvisors

Expert set-up can save you time Free 1-hour consultation

Small Business Development Center(SBDC) counselors

Training Tools Take classes (either online or at local

colleges) QuickBooks Learning Solutions (lookunder Training at www.QuickBooks.com)

Expert help can makethe process of setting-up and maintainingyour books mucheasier. Be sure to lookfor a professional withknowledge of yourindustry and ofcourse, dont be afraid

to ask for references.


44/53

44

Online Resources

Small Business DevelopmentCenterswww.sba.gov/sbdc/sbdcnear.html

Internal Revenue Service www.irs.gov/businesses/small/

U.S. Chamber of Commercewww.uschamber.com

QuickBooks FinancialSoftwarewww.quickbooks.com

Find a Certified QuickBooks

ProAdvisorwww.usequickbooks.com/locateadvisor)


45/53

45

Congratulations!

You now know: Why financial management is critical to

effectively run a business How to set-up and manage your accounts The usefulness of financial reports

Time to put your knowledge towork! Good luck!


46/53

A Simple Start to Managing YourBusiness Finances

Fi i l M g t


47/53

47

1. Business types2. Cash or accrual3. Debits and credits

4. Journal5. Ledger

Financial ManagementTerms and Concepts


48/53

48

1. Sole Proprietorship One owner

2. Partnership or LimitedLiability Corporation

Two or more owners3. S Corporation

Small business with one ormore shareholders

4. C Corporation Large business with one or

more shareholders

5. Non-profit Organization

Determine Your Business Type

There are more than

23.7 million smallbusinesses in theUnited States.572,900 new firmsare founded eachyear.

Source: SBA, Office of Advocacy.Based on 2003 data.


49/53

49

Cash or Accrual?A. Cash accounting The practice of recording sales and

expenses only when cash is actuallyreceived or paid out

B. Accrual accounting The practice of reporting income when

earned and expenses when incurred Businesses with inventory (e.g.

retailers) must use this method

Most businesses opt for accrualmethod of accounting

At any given time, gives a more realisticpicture of the health of the business

Choosing an Accounting Type

Choose whicheveraccounting methodworks best for you the important thing isto be consistent onceyouve selected anaccounting type

D bi d C di


50/53

50

Debits and CreditsDouble Entry Accounting

Accountants use debits andcredits to describe howtransactions are recorded inthe general ledger

Each transaction increasesone account and decreasesanother

System balances itself

You dont need to betoo concerned withthe mechanics ofdouble entryaccounting, debits

and credits, assoftware programshandle automatically.But as a businessowner, you might runinto these terms.

Marks Atomic Graphic Design:


51/53

51

Mark s Atomic Graphic Design:

Journal

Journalentriescapture allcash in

and allcash outactivity.

Marks Atomic Graphic Design:


52/53

52

Mark s Atomic Graphic Design:

General Ledger

Generalledger(GL)shows all

activity byaccounttype.


53/53

53

Intuit would like to thank the following advisors for their help developing this presentation: Peter Pappas, Regional Director,

Connecticut Small Business DevelopmentCenter, Groton, CT

Neal Nelson, Counselor, MaricopaCommunity College Small BusinessDevelopment Center, Phoenix, AZ

Charles Eason, Director, Solano CollegeSmall Business Development Center,

Fairfield, CA

Acknowledgements

Do you have feedback, success stories or suggestions for improving this course? Email us at [email protected].