Clients & Profits | General Ledger Newsletter

FINANCIAL ACCOUNTING QUESTIONS AND ANSWERS

GUARANTEED GREAT IDEAS!

Accounting Tips from Real
Clients & Profits Users

These Clients & Profits users share their tips on how they manage financial accounting better:

Clone journal entries to save time "I clone JEs all the time," says Kym Tedesco, accounting consultant for ParkerWhite. "When I'm doing the bank reconciliation, I add monthly bills for the next month (like insurance). I work from the previous month's proof list, find the JE in the G/L, clone it, and change the date to the correct month. If you took that feature away, it would be a nightmare for me!"

Fiscal planning through budgeting "We had lots of growth in the past few years, so I've entered budgets for our job costs and expenses," says Johnna Baker of Image III. "We realized we were spending too much and really needed to better plan our expenditures. In the near future, we'll work on budgeting income, so we can know if we're meeting our sales goals."

Lock accounting periods "I lock accounting periods to prevent people from entering work into closed months, including myself!" says Erik Kulvinskas of NetFaction.

Print comparative reports. "We use the comparative Balance Sheet and Income Statements regularly," says Marjorie Garrick of Griffith Phillips Creative, Inc. "We see at a glance if we are advancing our income without increasing our expenses. Our goal is to increase sales while trying to keep expenses under control."

Cash Flash "The Cash Flash report is an easy way to keep track of day-to-day financial information," says Suzanne Conklin of Howard Miller Associates, Inc. "The ability to e-mail those important balances to top management makes it a great timesaving tool."

Q. Are the journal entries in our General Ledger saved forever?

No, they're purged when the year is closed. However, the original A/Ps, A/Rs, checks, and client payments can still be viewed in their respective areas of your database...at least until you purge them, which shouldn't be done for at least 3 or more years.

Q. When should I change the current accounting period?

Advance the accounting period on the first day of the new month so that staffers' time entries and other work are automatically assigned the right period. For you accounting types to continue working in the prior period, simply edit it during data entry. (You trust yourself more than them, right?)

Q. What is a ratio?

Ratios are mathematical formulas. They show the relationship between the amounts of two things, expressed as a quotient. In C&P, the Ratio reports examine your shop's ability to meet its cash requirements, measure how well it's utilizing its resources, and determine your shop's overall financial health.

Q. How do I handle payroll in C&P if we use a payroll service?

If you use a payroll service, you'll receive summary information with each payroll run. Enter it as a balanced journal entry directly into your General Ledger. If it's direct deposit for everyone, you simply enter a single JE.

If anyone in your shop doesn't participate in direct deposit, enter their payroll information as a separate journal entry because you run the risk of their check not clearing in a timely fashion.You have to be able to mark those entries as cleared when you do the bank reconciliation. (Remember, you can clone previously-made journal entries, and edit them before posting to save time!)

Q. How do I handle payroll in C&P if we do it ourselves?

Simply enter the payroll as separate balanced journal entries directly into your General Ledger. Since all staffers gets their own check, they may not clear the bank at the same time. (Cloning JEs would help here, too!)

You may want to consider buying CheckMark Payroll Software. All payroll-related activities are handled through CheckMark, then imported directly into your Clients & Profits General Ledger as unposted journal entries with no rekeying of information. This saves time and cuts down on data entry errors. Their phone number is: 800/444-9922.

Q. Are the 1099s based on amounts from A/P invoices?

No. The 1099s come from the amounts paid to vendors via the checkbook. 1099s are cash basis for tax purposes.