Queen’s Year End Article #1:

After a period of time your QuickBooks file will become larger and larger. One way to reduce the file size is to archive or clean up data. Before you begin this process, it is important to know how QuickBooks cleans up data and what transactions are affected.

Below is a detail of how QuickBooks cleans up data and what transactions are affected. The reports on a cash basis will be the most affected and in reality, it is a good idea to run reports on an accrual basis.

How QuickBooks cleans up data

Important: When you clean up your data file, QuickBooks deletes transactions that you no longer need, replacing them with new general journal transactions that summarize, by month, the deleted transactions. You can also choose to have QuickBooks clean up data by removing list items that you no longer need.

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….and pay for your next vacation

Income taxes, that is. The Queen has no control over payroll taxes paid to the federal and state governments - if she did, it would be different than it is now. Let’s face it, right now you are recovering from either filing your income tax returns and paying the government a lot of money, or filing an extension and paying a portion of what you will owe the government. If you’re lucky, that is what you have just done. If you are completely in denial, you didn’t file your tax return, you didn’t file your extension, and quite frankly, your next step should be to buy land in Central America and go away for a long time until the IRS stops trying to find you.

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If you have an accounting question you’d like to ask The Queen, please go to the contact page and check the box labeled “Royal Questions” and submit your form. The Queen will answer and post the question and reply on this site. Thank you!

Now that the dust has settled, let’s talk about cleaning up the dust. Your 1099’s have been sent to subcontractors who made over $600. last year and provided services; your W2s have been mailed to employees and now it is time to begin the review for handing off your financials to the CPA to do the tax return.

Remember, 1099’s have to be mailed to the IRS by the 28th of February. They get the original, red sheet with a 1096 transmittal form. QuickBooks will print your 1099’s easily if the vendor is setup correctly and the general ledger accounts are mapped through Edit/Preferences.

A new year is a good time to implement changes which will make your financials work for you. You have done the work of inputting information, now it is time to reap the rewards. Is there job costing you want to implement so that the information you put into QuickBooks can be retrieved in a report to analyze how much money you made on a particular project or job? If so, now is a good time to review how QuickBooks is working for you and how you can utilize all of it’s intricate facets.

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Let’s talk about year end 2006. It is only August, why am I talking about year end stuff? Because once school starts in a fews weeks, it will soon be Halloween. Once Halloween is over the year is over and now is the time to start organizing your financial information for the tax returns next year. “What is she talking about?”, you may ask yourself. Halloween? Here is how it works. As Halloween draws near everyone is concentrating on what they will wear - everyone from 4 years old to 80 years old is planning their Halloween costume (the Queen is not because she already has an outfit). After Halloween is over, we will all slide into Thanksgiving. And we all know how complicated that can get. Travel arrangements, shopping lists, telephone calls, deciding where we will have the big feast, who will bring what - it goes on and on. Then after Thanksgiving is over, guess what we slide into next? Yes! Christmas Holidays. Even if you don’t celebrate Christmas, you will be affected by the holiday swirl. It will be a whirlwind of activity the month of December. Some businesses are smart and have closed down their entire companies from Christmas Day until the day after the New Year. No one gets any work done then anyway, why stay open? Then everyone kicks back in to gear the first week of the New Year. That is why I say - let’s start organizing our year end information right now in August.

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Article II - August, 2006

There are five important reasons to learn the basics of the language of accounting.

1. Maintain control of your money: As we saw in last month’s article, Maureen the jeweler was lucky because the bookkeeper she found was trustworthy. Not everyone is as lucky. An equally common scenario looks like this: A small medical practice consisting of two psychiatrists hire an office manager responsible for their bookkeeping. She appears competent and handles all of the day to day business. Unfortunately, she is competent but dishonest. After embezzling thousands of dollars from the medical corporation and filing payroll tax returns in the wastebasket, she finally slips up and is caught and eventually prosecuted. The two doctors feel that they should have been able to spot her character flaws. But while they may have been excellent psychiatrists, they did not know the language of accounting and lost control of their money to someone they trusted. To know what a Balance Sheet is and to review it regularly is important for principals who run a business, even if they do not do the day to day bookkeeping. In fact it is particularly important if they do not do the day to day bookkeeping.

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July 10, 2006
Article I – July 2006

The MC Hammer Approach to Accounting.

Actually, you don’t need to know accounting at all to get a lot of money. You can do different things to make a lot of money and then spend it.So let’s look at how the famous rap star who was once a bat boy for the Oakland A’s handled his money. He made millions of dollars and the money came in the door and his hanger-on “friends” helped him spend the money.

Then when the money was gone, he said, “Oh well, I’m out of money, now what?” And his hanger-on “friends” did not have an answer. Sad, but true. A similar scenario happens to dozens of famous musicians, rock stars and athletes every year. That’s life. Learn from it.

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The Queen’s third important article will be available the first week of September and will cover how to set up the perfect chart of accounts - the backbone of your accounting.
Stay tuned…