Product Tips
Master Tip on QuickBooks Premier Accountant EditionMaking the Most of Accountant Edition for the Billing ProcessBy: Bruce Andersen, CPA, Certified QuickBooks ProAdvisor®
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The heart of any business is its ability to bill timely and accurately for its products and services. An accountant or consultant has the same task but a higher standard since they, in turn, should be an example to their clients as to how this process should be done correctly and efficiently. An additional challenge is the range of products and services an accountant or consultant may offer. QuickBooks®: Premier Accountant Edition does a great job at assisting with this task, but it takes some planning to do it well.
The areas within Accountant Edition that are a part of the billing process include:
- Items
- Forms
- Reports
- Time capturing
- Outside contractor services
- Customer Center
The accountant must determine the management information that will be helpful in evaluating the profitability and direction of the practice. Some examples of questions that should be answered are:
- How many income tax returns were prepared last year?
- How many accounting clients are does the firm have?
- How many boxes of QuickBooks software were sold?
- What is the split of gross revenue among profit centers for the practice?
Another vital area of information needed for proper setup is the method of billing that is done by the firm. Value billing versus hourly billing affects the top-side billing to the client, but there is also concern about the way timekeepers record time.
Items
Items must be set up to capture the business of the firm. If the items are set up properly, the "Sales by Item" report will be very useful to the firm. Major areas of the firm be primary items such as Tax, Accounting, Consulting, and QuickBooks Sales. Sub-items can be Individual, Partnership, Corporation under Tax; monthly, quarterly, year-end under Accounting, for example.
Items are used for input onto forms to provide line item detail to both products, like sales of QuickBooks Enterprise Solutions, and services, like individual tax preparation for 2006. Items also provide a great management tool to the accountant, annotating both quantity and dollars from each item. If the items are clustered into groups, then it provides additional analysis. A firm can know how much revenue came from tax, audit, write-up and product sales. The firm can also know number of tax returns by type and average revenue per return.
This is an example of a portion of an item list for the Income Tax portion of the practice.
Forms
Forms are used to provide communication to clients. They include estimates, sales orders, invoices and statements. They are customizable to include firm logos, special fields, and columns for date of service, units of measure, and price per unit. There can be different information provided on an input on-screen basis versus what is printed for the client.
Estimates can be used as proposals for future work. It can be monitored as "open quotes" in the estimates section of the Customer Center.
Sales orders can be renamed as "proforma invoice" where the proposal is converted to a sales order. The primary purpose is the have the client sign the Proforma invoice and pay a deposit against future work.
Another approach is to list in the Proposal, a series of progress payments. If this approach is used, the "convert estimate to invoice" routine can be established and an invoice created for the initial deposit and all subsequent progress payments. This is a great way to be sure of billing completely for each project.
Statements can be prepared in a variety of ways to work into the needs of the accountant or consultant. Finance charges can be applied easily. The statements can list invoice numbers or they can be created in a manner which lists all line items for each invoice.
All forms can be either printed or sent out as an attachment to an e-mail.
Invoicing can also be integrated into QuickBooks Merchant Services. Intuit does frequent webinars on this topic. The schedule can be found at accountant.intuit.com.
If invoicing is done on a recurring basis, then a memorized transaction can be set up to manage this automatically.
This is the new customization screen for 2007 QuickBooks. This screen demonstrates how the Service Date can be added to an invoice. When added, the date of service is automatically populated from QuickBooks timer entries.
Reports
There are a series of reports that are very beneficial to manage the practice. The reports can be run on a cash or accrual basis. Some reports should be looked at on one basis of accounting rather than the other. For example, the total billings are important to see on accrual basis because that shows the production per month, but to show a P&L by customer on a cash basis, reflects your ability to collect from clients.
The Sales by Item Summary Report is very revealing to understand production by type of service and product. To run this report on a year by year basis provides a wonder insight into the direction of the practice.
Time Capturing for Employees and Outside Contractors
Time capturing is a vital part of the practice. QuickBooks provides several ways to capture time that will subsequently interface to the invoice processing. QuickBooks Timer is a program on each QuickBooks program disk that can be loaded on each time-keeper's computer so they can enter time activities throughout the day. QuickBooks also introduced an On-line time keeping module in 2006 which allows timekeepers to enter time through a web connection. A third method is to enter time directly into the time module of QuickBooks itself.
If time is entered into the time module of QuickBooks through any of the above routines, it can be brought into the invoice by client.
This screen shows how time can be entered from a Weekly Timesheet. This data can also be populated by importing from the QuickBooks Timer Program.
When a new invoice transaction is initiated, and there is time or costs to add, then the Add Time/Costs... icon is activated. When opened, time and costs can be added to the invoice. The Date field becomes service date on an invoice. Items can be grouped if detail information is not needed on the invoice. A special note: if detailed information is not shown on the invoice, it is still retained in the system for future reference.
The Memo on the base of the Invoice does not print on the invoice, but can be used for analysis as seen at the end of this article in the "Customer Center" screen shot.
Outside Contractor Services
QuickBooks has the capability of capturing outside contractor charges that should be re-billed to a client. This situation arises often if the prime accountant/consultant hires and has to bill the services of specialists. When the outside contractor's invoices are entered, if a client (customer) name is added to the bill, then the charge can be added to a client invoice later, in a similar fashion as bringing employee time into the invoice.
This payment now becomes billable and can be added to a Client Invoice in a similar fashion as Time using the Time and Costs screen accessed from an invoice.
Customer Center
The Customer Center provides a wonderful tool to monitor the client (customer) activities of the practice. Views can be seen by client (customer), or for the overall practice. The views can be of all transactions or certain type of transactions such as estimates (proposals), or invoices in total. If the view is by outstanding invoices, this is the same as outstanding Accounts Receivable, but is real time and in a display mode, rather than having to print out a big report.
The view can be modified to add information by modifying columns.
This is the Customize Columns screen accessed by right clicking when your cursor is in the transaction detail portion of the Customer Center screen.
The memo information is from the memo field on the base of the invoice, as shown in the Invoice screen shot early in this article.
Summary
The billing process in QuickBooks Premier Accountant Edition is very complete and offers the accountant or consultant a great opportunity to manage, control and grow his or her practice.
Good luck and Happy Consulting!
Bruce Andersen has a tax, accounting, and technology practice in Los Angeles. He is a Certified QuickBooks Pro Advisor, an Enterprise Solutions Provider, and a faculty at University of Phoenix. He can be reached at BruceA@BTACT.com.
Last Updated: 12/19/2006
