QuickBooks: Ten Tips to Stay Organized and Efficient Deana Jordan, CPA with Dentalcpas.com, an affiliate of Naden Lean, LLC


by Deana Jordan, CPA with Dentalcpas.com, an affiliate of Naden Lean, LLC

I'VE LEARNED A LOT FROM CLIENTS
when they have come on board with us for bookkeeping assistance and guidance. My aim is to give QuickBooks users tips on what they should be doing to not only help them manage and organize their practice finances but also help your advisers as well, especially in regard to practice decisions.

1. The beginning
Before we begin talking about QuickBooks, let's review some basic bookkeeping tips that will help you begin your journey.
  • Keep your personal and practice checking accounts separate.
  • Do not comingle funds.
  • Keep track of your receipts to support your expenses.
  • Use a separate credit card for practice transactions.


2. Version selection-remote access
One of the first ways to be more organized and efficient is to choose the version of QuickBooks that best suits your needs. We recommend QuickBooks online versus the desktop version. Here are just some of the benefits.
  • QuickBooks Online provides the user with convenient remote-access options.
  • You, your bookkeeper or your accountant can log in to your QuickBooks from any web browser at any time from anywhere.
  • There is no software data to manage-no upgrades or release updates.
  • No backups required and your data is stored on Intuit servers.
Using remote access is a better solution than using the QuickBooks Accountant's Copy method, for several reasons. First, the CPA avoids the need to have the client's edition of QuickBooks running. Second, the CPA and client do not have to send the Accountant's Copy files back and forth. Third, remote access provides full access to the client's data in real time.

3. Chart of accounts
Customize your chart of accounts, however, start with a standard dental chart of accounts. QuickBooks will generate a chart of accounts based on the type of business entered at the time of the initial setup. In your case, it would be for dental practices. It will also automatically generate various assets, liability, revenue and expense accounts. You should review the chart of accounts and customize it to better suit your specific practice and the reports you prefer to see.

For example, for our dental clients we have direct expenses separated into a parent account called "direct expenses" and have sub-accounts which include assistant and hygiene wages, their payroll taxes, supplies, lab and any other expenses that are directly related to dental procedures. This allows us to use the reports and look at direct expenses as a total or as a percentage of collections to easily compare against the industry benchmarks. You can also have separate accounts for the types of patient payments received, such as patient, insurance, credit card, care credit, etc.

4. Data input
One of the challenges of setting up and maintaining your QuickBooks file (especially after you've been in practice for a while) is keeping the information organized. Over time there is a tendency to add accounts, rename accounts and generally create a mess in your chart of accounts. This becomes a problem when your balance sheet and your profit-and-loss statements become difficult to read. The balance sheet shows your practice's financial position at a single moment in time and also shows a lifetime of results. Wouldn't you want that to be accurate?

When key punching any type of transaction, you should enter as much detail as possible. This will save you time later on if there is a question on what expense category it belongs in or during an audit. Identifying and correcting coding errors in your practice can significantly affect your income. You might be surprised how simple awareness can impact your practice's bottom line. If you are unsure of where to put an expense, you can use the account "ask my accountant" feature. This will alert the CPA that there are issues that need to be dealt with before any analysis can be done. For most companies, a significant number of transactions recur regularly, and QuickBooks accommodates this by enabling you to memorize recurring transactions.

For example, suppose a company makes the same monthly rent payment. QuickBooks can memorize the transaction and automatically enter them for you at regularly scheduled times. This feature can help you reduce mistakes, save time and increase accuracy.

5. Bank feeds
A newer option for QuickBooks is the ability to download the transactions right from the bank or credit-card company. This has become a huge timesaver. Once the transaction has been coded it will be memorized for future transaction download.
    There are two downloading options:
  • Downloading by most-recent transaction. This is a great option for a practice that needs to download their activity on a daily or weekly basis or any time before the statement is ready.
  • Downloading by statement. The second way to download banking (and especially credit-card transactions) is by statement if the information is not time sensitive.
As long as the bank where you have your checking account and the issuing bank of your credit card offers the download of information into QuickBooks, this capability should exist. In most cases there are no extra fees for this service, but be sure to ask.

6. Lock down
A common issue we see with our clients is entering or editing a transaction in prior periods. Whether intentionally or unintentionally, changing prior-period data can cause a huge mess with the books. Known to have driven many accountants crazy over the years, posting into prior periods can actually be controlled by using the closing date feature within QuickBooks. QuickBooks allows you to set up a unique username and password for each user's preferences to prohibit them from changing items once past the closing date. You can lock down the prior-period date as the year progresses. Keep your password simple and easy to remember. I recommend writing it down and of course not forgetting where you wrote it down.

7. Reporting
Another way to organize information in QuickBooks is through the use of memorized reports. This will save you the trouble of having to recreate the reports every time you want to look at them. This will make it easy for you to access these reports quickly. In many cases, the process of preparing and printing dozens of reports is too time-consuming. QuickBooks provides a feature called Process Multiple Reports, which enables users to group together dozens of reports and print them in a single step.

8. Attachments
Another new feature allows users to attach a PDF file directly related to the transaction. This is helpful to the accountant, especially for purchases of fixed assets. The proper maintenance of fixed assets is important for several reasons.
  1. It is used to track the depreciable basis of an asset.
  2. The accountant needs it for proper personal-property-tax reporting if applicable in your state.
A common thought is that managing source documentation is a bit obsolete because bank feeds provide the information needed to enter transactions into accounting software. Beyond the legal reason that you need to prove your accounting records with source documentation, the problem is that the bank feeds don't have all the data you need. So again, while bank feeds are great, source documentation is also necessary to the process of reconciling transactions.

9. Cash reconciliation
One of the most important things we tell clients is to reconcile their cash on a monthly and timely basis. Business analysts report that poor cash management is the most frequent stumbling block for entrepreneurs. There is so much more validity to the statements if the cash is correct. Cash management is a term that refers to the collection, concentration and disbursement of cash. Cash management is particularly important for new and growing businesses. profit growth does not necessarily mean more cash on hand. profit is the amount of money you expect to make over a given period of time, while cash is what you must have on hand to keep your business running. Over time, a company's profits are of little value if they are not accompanied by positive net cash fl ow. You can't spend profit. You can only spend cash.
    Here are three cash-management tips:
  • Know when, where and how your cash needs will occur.
  • Know the best sources for meeting additional cash needs.
  • Be prepared to meet those needs whey they occur by keeping good relationships with bankers and other creditors.
10. Dentist-CPA connection
The top reason dentists leave CPA firms is lack of communication. Be upfront with your CPA and ask for help if needed. Accounting firms that are quick to recognize the new level of sophistication in clients will offer to teach them the basic accounting concepts they need to know.

The CPAs realize that by enhancing communication (speaking the same language, which is often sometimes hard to do), the bond could grow stronger. As the dental practice grows and becomes more complex, its accounting and reporting should follow. Dentists have learned that it is one thing to enter a few checks and deposits into a simple accounting system, but quite another to manage that data so appropriate reports can be generated.

Some dentists may feel insecure about the financial part of the practice. However, by teaching them the basics of the accounting software, they can conquer that insecurity and make better decisions on a daily basis. These daily decisions will impact current and long-term results. Cash is the lifeblood of a practice. Managing it efficiently is essential for success.


Deana Jordan provides professional services to the health-care industry with a specific focus on dentists. Deana has more than 20 years experience in public accounting. She started as an intern for Weiner & Berkman (CPAs) in 1990 and has been working in public accounting ever since. As a manager for Naden/Lean, LLC, Deana is responsible for individual, corporate and partnership tax returns. Deana is also responsible for overseeing staff support and meeting with clients on a regular basis. Clients turn to Deana for financial statement preparation and analysis as well as individual and corporate tax projections.

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