Thursday, May 28, 2009

What’s better for my business, QuickBooks Online Plus or QuickBooks Pro using remote access ?

The purpose of this article is to help a typical small business owner understand the differences between using the remote access capabilities with QuickBooks Pro and QuickBooks Online Plus. A less expensive QuickBooks Online version is also available, however that software is not considered for this analysis. I did consider a more robust version called, QuickBooks Online Plus. Before we address the differences, its first important to understand the term remote access. The term remote access has been with us for a long time and has emerged to mean, according to Wikipedia ,a form of communication with a data processing facility from a remote location or facility through a data link. One of the more common methods of providing this type of remote access is using a virtual private network(VPN). The definition is further enhanced by the term remote desktop, which also according to Wikipedia , refers to a software or an operating system feature allowing graphical applications to be run remotely on a server, while being displayed locally. Remote desktop applications have varying features. Some allow attaching to an existing user's session (i.e. a running desktop) and "remote controlling" it in front of the user's eyes. Whereas, according to a Google definition, online accounting relates to accounting that can be done on the World Wide Web. I agree with both definitions, however there are important differences that an owner or accountant for a small business or even a midsize business needs to consider and they are addressed below.

Generally speaking, QuickBooks Pro with remote access gives you access to your desktop QuickBooks Pro accounting program and data while the QuickBooks Pro and data resides on your server in your office or your local hard drive. Whereas QuickBooks Online Plus is a web enabled accounting package with some advantages and some disadvantages, specifically less functionality for one of the most important parts of a business namely, no inventory capabilities. To some of you this could be important and to others not so important. Simply said, the benefits and drawbacks with a general ranking of each benefit or limitation of “online accounting” with QuickBooks Online Plus as compared to QuickBooks Pro is analyzed below.

Some of the major benefits are summarized and ranked by level of importance as follows:

1. No wired network required – you can connect with WIFI from anywhere in the world that has internet access and you can connect different department or offices in multiple locations.
2. Includes up to 3 simultaneous users plus your accountant. The cost to add another 25 users is a little more than $3 per month per user.
3. Offsite daily backup at Intuit servers
4. Automatic software updates and QuickBooks help support included in cost
5. Quicker and simpler sign in – Just press your Web shortcut key

Some of the major drawbacks are summarized and ranked by level of importance as follows:

1. Does not handle inventory and purchase orders, this rules out retail, manufacturing and distribution type companies

2. Lacks multi-currency functionality

3. Unable to open multiple QuickBooks windows in QuickBooks

4. No Company snapshot/dashboard in one desktop view

In summary, the importance of having simultaneous access from any location, allows employers, employees, owners, investors to collaborate, share and make informed and timely decisions because everyone gets the same information in real time, by simply using a typical web based sign-on. There is no time learning the remote access interface for sign on, for use with the remote software. Furthermore, your accountants can review your financials, journals, general ledgers, from their own office and answer your questions or even correct mistakes in real time. Further, you can easily outsource some of your accounting functions with QuickBooks Online Plus, as long as you set up a system to review the work product of the outsourced employee.

I am very impressed with the above mentioned benefits and for these reasons if there is not a need to account for inventories or multi-currencies then my inclination is for QuickBooks Online Plus to handle a typical small businesses accounting needs. A more detailed analysis of the functionality and data entry capabilities and performance processing will be the subject of another blog topic. Even if such analysis existed, I would recommend that you consult with an accounting professional who can best evaluate whether the QuickBooks Online Plus or remote access platform is best suited for your particular situation. When evaluating this software, its also important to determine how your employees will use the software in their to day to day activities and during a test period you should evaluate the speed in which the employees are able to enter the data and the computer/web processing(performance) speed of each relevant accounting process i.e. paying vendor bills, customer invoicing, record deposits, etc.

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Sandor Lenner CPA,MBA and a Certified QuickBooks ProAdvisor who works as a part-time consultant with Susan Missal Lenner, P.A. URL-

Monday, May 11, 2009

Four Practical Reasons to Use or Change to Online Accounting

Are you a typical small business owner that wants to be more efficient and save money and meets one of the following scenarios, then read on to learn how an online accounting system can help you save time, and make your employees more efficient, and may even streamline one of your businesses processes to save you money. These are just four common examples that may be indicative of your business. Many other examples exist, however this article will was written to solely address these four examples.

Do You Have These Business Problems ?

1. Your checkbook doesn't always balance or someone has to call the bank to get the daily balance.

2. Your bills are manually prepared in Word or Excel in the evenings and then re-entered into your computer and not promptly sent out.

3. Your estimates/proposals are manually prepared without the benefit of seemless electronic integration to your invoices.

4. You keep your receivables and payables in your head and its hard to get customer and vendor information in real time.

By having an online based accounting system, like QuickBooks, you can make changes and have real time access on your notebook computer, or access your accounting information from any web enabled computer from your home, your vacation hotel room, even your customers ‘office, or just about anywhere. Or if you choose, you can access and read some of your accounting information on your I Phone or Blackberry. Imagine if you are at a customer's office, and you or your employee finished the project or your billing arrangement allows you to progress bill,then you can quickly prepare the bill and either print it out and hand it to the customer or email it to the customer. This step in itself, will improve your cash flow for two reasons. Firstly, the bill is prepared and delivered to the customer in real time and if you can make this simple procedural change and become disciplined to carry out this new process and bill in real time, then you don’t have to prepare the invoice after the fact, in the evening or on the weekend. And secondly, given the particular circumstance, you may be able to save considerable time for yourself or save time or reduce the time required by your bookkeeper. By training field employees to bill in the field in real time, they can quickly email the bill to your designee or to you for your prior approval or better yet, you can review the bill as soon as its prepared by your employee in the field or at the customer’s office, because you have an online accounting system , taking advantage of the wireless internet or WIFI.

Now it gets better, by using the estimate feature in QuickBooks or any other online accounting system, you can have consistency, accuracy and completeness between the estimate and the final invoice. Two more important benefits is (a) cash flow improvement resulting from quicker billing and (b) the potential to improve the process , you may be able to save considerable time for yourself or save time or reduce the time required by your bookkeeper. Remember, you do not need a wired network when using an Online Accounting system, since you’re getting the information from the Internet through WI-FI. And don’t forget the time savings and fuel savings by not having to go to your office to get your accounting information when you are now able to access in online from almost anywhere.

Some small business owners do not maintain a correct checkbook balance of their cash and they often have to spend valuable time contacting the bank to obtain the current cash balance. Running a business without a properly reconciled checkbook is not a wise way to run your business. Infact, not maintaining a properly balanced and reconciled checkbook is a serious detriment to any system of internal control and could have serious ramifications including fraud,and among other things, prevents you from checking on the accuracy and completeness of your bank balance and could result in bank overdraft balances ,excessive bank service charges and could strain your banking relationship and further result in your banker terminating their relationship with you.

Unfortunately, some businesses do not have the time to use the accounts receivable or accounts payable programs included with most accounting packages or if they use it, they do not use in real time. This information is critical to effectively running your business. Among other things, an effective and operating accounts receivable and accounts payable systems gives you real time information to make business decisions and to properly understand you future cash positions. As a business owner, you can review your accounts receivable aging reports on a daily basis and make those calls for money to pay your bills. Another benefit of any online accounting system will also result in one central location or repository in real time for invoices and support for customer deposits. More importantly, when a customer says they paid, you are able to see the customer deposit and billing histories from anywhere. It also provides the business owner with a tool to make sure that all customers were timely billed. With an online accounting system you can be anywhere or even be on the go, that is traveling to appointments an you will know how much is owed to you . One quick tip, is to make sure that you are emailing your bills to your customers from the accounts receivable program. Not only is there a small monetary savings, an electronic bill helps your cash flow, because there is a time savings from not mailing or faxing the bill.

Likewise, its equally important to know what you owe, in real time. During these times, you need to have a procedure to detect duplicate, erroneous bills or fraudulent bills. As a business owner , if your accounts payable system is up to date, you can review the accounting payable reports to answer a supplier’s questions right over the phone as to why a bill was not paid or to tell the supplier when payment can be expected. QuickBooks is so easy, there is little excuse not to use these features of this software or any other comparable software, rather than making a call to your bookkeeper and waiting to get answers to your questions. Just imagine, if your bookkeeper enters the bills into an online accounting system, like QuickBooks, then you can assess that same report from wherever you are and select the bills to be sent out. It gets better, you or your designee can electronically pay the bill from wherever they are. Once again, with an online accounting system you can be anywhere or even be on the go, that is traveling to appointments and you will know how much is owed . I have only addressed three important areas i.e. cash, accounts receivable and accounts payable. I almost forgot my favorite topic and equally important, with an online accounting system, you will always be able to compare your actual monthly profit and loss statements to a budget. With proper analysis the budget tool provides you with a plan for next year and the budget is the tool that helps you see financial shortfalls before it’s too late.

Although there are limitations to online accounting when inventory is a significant component of your balance sheet, the solution is using accounting systems that have remote access. This topic of remote access will be another subject that I will write about in future blogs.

Another time savings is that your accountant can review and make necessary corrections online from the accountant’s computer in real time. So if you have a problem the accountant has easy access to your accounting information to quickly fix the information, thus avoiding the time for the accountant to schedule a visit to your office.

In summary, just like the way electronic calendars such as Outlook or Google Calendar on our Blackberrys and I phones have reduced or even eliminated the need for some secretarial skills, online accounting software should reduce or even eliminate some of your current and future bookkeeping requirements.

Sandor Lenner CPA,MBA and a Certified QuickBooks ProAdvisor who works as a part-time consultant with Susan Missal Lenner, P.A.

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Sunday, May 3, 2009

Does Outsourcing My Company’s Bookkeeping/Accounting Make Sense ?

I am new to blogging and have realized that there are numerous topics on the subject of Online Accounting to write about. From the blogging experts, I have been told to read other blogs on similar topics to ascertain current topics of interests. To this end, I am beginning to research and have found very few topics on the subject of Internalizing Online Accounting for the Small Business owner. But what I have found, are blogs from service providers in India and the Philippines on the subject of outsourcing. This perked my interest in the topic of outsourcing. Consequently, this week’s blog deals with current global topics and my attention is drawn to the topic of outsourcing to foreign countries and to outsourcing in general.

Outsourcing may result in reduced labor costs, or the conversion of fixed costs to variable costs(to some extent), reduction of training costs, insurance, benefits and some tax savings, etc. But you need to invest in scanning , because you need to scan all of those source documents to the outsourced accountant and have confidence that the outsourced company is reliable. As a business owner or the person responsible for the financial department, you must also make sure there is a process in place to monitor the activities of the outsourcing company. An important consideration is that outsourcing may make sense, as long as a competent and independent person oversees and monitors the financial results on behalf of the small business owner. We now live in very unusual times and our priorities sometimes change.

Under good economic times, outsourcing may make sense. But when business owners are facing issues such contraction, or even family unemployment, it may make sense to employ the family to help. This novel concept works, if the owners or members of the owner’s family are willing to invest the time to learn QuickBooks, or other comparable accounting programs, and have some basic financial knowledge to undertake this responsibility of entering the financial information into QuickBooks providing they are not adverse to details. Given the current economy in the United States, I have seen situations where family members who have lost their jobs are now available to help in the family business.

Quite frankly, QuickBooks is simple enough that with proper training, most detail oriented people with common sense can handle QuickBooks, as long as they have resource, consultant or CPA to ask questions, to receive timely answer and there is mechanism to allow for real time or after the fact corrections or adjustments to the accounting records. Under either scenario a CPA or a Certified QuickBooks ProAdvisor or a skilled financial services consultant and is the ideal person to monitor either the real time, monthly or quarterly financial information, and to check that the reconciliation process is working and more importantly, that outsource team, or the internal bookkeepers are doing the right job. That’s called “Checks and balances”.

With the Online QuickBooks version or any other QuickBooks version with remote access from a desktop PC, the monitoring process can be accomplished for outsourced accounting departments.

Sandor Lenner CPA,MBA and a Certified QuickBooks ProAdvisor who works as a part-time consultant with Susan Missal Lenner, P.A.

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