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Top Accounting FAQs |
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Applies to: [x] C&P Classic [x] C&P Pro [ ] Job Tracker [x] C&P SQL [ ] My C&P! See also: |
Q. Why is our G/L out of balance? What do we do about it? The General
Ledger can become out of balance if a posting is interrupted by a
system crash, a server freeze, or a network problem. If these events
prevent a posting from being completed, only part of the transaction's
entries will have been saved, resulting in one-sided entries and incorrect
account balances. Since it's difficult to anticipate system problems,
Clients & Profits includes built-in G/L auditing tools. These
tools, such as the Auditor and the Out of Balance Checker (which are
explained in the G/L chapter of your C&P user guide), help you
find the incomplete entries. Once found, they can easily be fixed
by making adjusting entries or verifying an account balance. For
more information, see the General Ledger chapter in your Clients &
Profits user guide. Q. Why do job tasks need debit and credit G/L account numbers? The debit and
credit accounts on your job tasks automate the financial accounting
for job costs and client billing. These default accounts are copied
from the Task Table when a new task is added to a job ticket. They
are then copied to A/P and A/R invoices whenever you type in a job
task then press Tab. They prevent data-entry errors that can make
your financials less accurate, since cGLs (i.e., credit G/L accounts)
and dGLs (i.e., debit G/L accounts) are set by default. They ensure
that the same G/L accounts will be updated whenever a certain job
task is used for costing or billing. (Plus, it's simpler for users
since they don't have to decide which debit or credit G/L account
to use for job costing and billing). The job task's cGL is copied
to client invoices, and is an income G/L account. The job task's dGL
is copied to vendor invoices and job cost checks, and represents a
cost G/L account. For more information, see the Job Tickets chapter
in your Clients & Profits user guide. Q. I'm adding a job invoice, but I think the wrong billing amount is coming up. Why? The billing
amount is based on the job's unbilled costs, which are totaled up
on the "unbilled" column in the Job Ticket. The "unbilled" total is
updated whenever a job cost is posted, and should always equal the
total of the job's costs -- based on the gross amount, which includes
markups and commissions. If the billing amount seems wrong, cancel
the invoice then find the job in the Job Tickets window. Look at the
task's "unbilled" total, then print a job cost report to see its detail.
If the job task's costs (all unbilled costs added together) don't
equal the "unbilled" total, then there was probably a posting problem.
Problems like this are fixed by verifying the job's totals using the
Verify/Recover utility (choose Setup > Utilities > Verify/Recover).
For more information, see the A/R chapter in your Clients &
Profits user guide. Q. Why doesn't Clients & Profits print payroll checks? The complexity of payroll laws and regulations in the U.S. and other countries makes it impractical to maintain a payroll system for specialized markets like advertising agencies and design firms. The resources needed to develop, test, and support a multi-state payroll are only supported by company like CheckMark, who make generic payroll programs that apply to all kinds of businesses. Plus, many agencies outsource payroll to companies like Paychex and ADP, so you don't find in-house payroll processing cost-effective. For more information, see the General Ledger chapter in your Clients & Profits user guide.
Q. A job's cost report doesn't match it's Job Summary - what's wrong? The job summary's
unbilled column is based on the job's unbilled costs, which are totaled
up on the "unbilled" column in the Job Ticket. The "unbilled" total
is updated whenever a job cost is posted, and should always equal
the total of the unbilled job's costs -- based on the gross amount,
which includes markups and commissions. If the job summary's "unbilled"
amount seems wrong. Look at the task's "unbilled" total, then print
a job cost report to see its detail. If the job task's costs (all
unbilled costs added together) don't equal the "unbilled" total, then
there was probably a posting problem. Problems like this are fixed
by verifying the job's totals using the Verify/Recover utility (choose
Setup > Utilities > Verify/Recover). For more information,
see the Job Ticket chapter in your Clients & Profits user guide.
Q. Why would we use client retainers? Retainers are
used to routinely bill clients for monthly service fees that are applied
to the month's jobs. They are not billed to jobs, unlike job billings,
so don't include a job number. Typically, a client gets an invoice
at the beginning of the month for the agreed-upon retainer amount.
Retainer invoices do not credit an income account, instead they credit
a liability account that is used just for retainers. As jobs are billed
throughout the month, payments are applied from the retainer balances.
When the client's job invoices are printed, they will see each job's
total billing less the payment applied from the retainer. Clients
& Profits keeps track of the client's retainer balance from month
to month. You can even print a special client retainer aging report
that summarizes unpaid retainer invoices. For more information,
see the A/R chapter in your Clients & Profits user guide. Q. How do I credit a vendor's account? Vendor credits
can be added two ways: (1) as a separate A/P credit invoice, or (2)
as an adjustment on a vendor check. The method you'll use depends
on whether or not you want the job to reflect the credit amount (and
therefore possibly credit the client's billing, too). If so, add the
credit as an invoice into Accounts Payable just like any other invoice
-- except with a negative amount for the credit. Just remember-- the
gross amount is what you are going to bill the client, so if you don't
want credit the client's billing, just make sure the gross amount
is zero. If you want the vendor credit to appear only on the shop's
income statement, you can enter the credit amount as an adjustment
on the next check you write to the vendor. For more information,
see the Job Costing chapter in your Clients & Profits user guide.
Q. How do I credit a client's account? Like vendor
credits, clients can be credited two ways: (1) as a separate A/R invoice,
or (2) as an adjustment when a client makes a payment. The proper
method depends on whether or not you want the job to reflect the credit
amount. If so, add the credit as an invoice into Accounts Receivable
just like the original job billing -- except that the billing amount
will be negative. When this invoice is posted, you can mail it to
the client as proof of their credit. The credit invoice will then
appear -- with its negative amount -- on statements, the aging report,
and in the Add Client Payments window. If the credit shouldn't affect
a job ticket, then it can be added as an adjustment amount the next
time a client payment is added. For more information, see the A/R
chapter in your Clients & Profits user guide. Q. What happens to job costs when they are written off? The cost's billing
status is changed to "write-off" to indicate that it is neither unbillable,
unbilled, or on-hold. Write-offs are summarized on Job Costs reports
(see Snapshots) to track these unprofitable costs by client. Since
job costs are debited to cost G/L accounts during posting, writing
them off doesn't affect the General Ledger (i.e., because they already
were accounted for on the income statement). Q. Do purchase orders affect the General Ledger? No. Purchase
orders (as well as insertion and broadcast orders) only affect the
job ticket. Since they only represent a commitment to purchase something,
they aren't the actual bill from the vendor. PO amounts appear on
job reports, but don't affect vendor balance, financial statements,
or client invoices. (That's one reason why they're not posted.)
Q. Why isn't the accounting period based on the date? Accounting periods
are used to reconcile income, costs, and expenses into the period
in which they occur, regardless of the actual date they are added
into Clients & Profits. If the accounting period were based on
the date, you couldn't account for late invoices from vendors, pre-billings
to clients, and other less-than-timely accounting entries. So why
doesn't the accounting period change on the first day of the next
month? That's because it's rare to have all of the month's entries
added before the first day of the next month. If the period changed
automatically, many transactions from the previous month would be
inadvertently entered into the next period. Changing the period is
user-defined so that the accounting manager can personally determine
the right time to start next month's work. Q. Why would I use the cash flash? The Cash Flash is a fast, simply way to take a snapshot of the shop's financial status at any time. It gives you a single place to see what you owe to vendors, what's owed to you by clients, the day's checks and deposits, and company's cash position. The Cash Flash report can be printed at the end of each day for the shop's principals to keep them up-to-date on the shop's balances. Unlike your old accounting, there's virtually no drudge work to get the shop's numbers -- it takes less than a minute to print.
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