An integral part of managing a farm operation or a business of any type is making sure the financial software being used best fits your needs. There are many options available in today’s marketplace, Peachtree and Xero are two we see often and are proficient in here at Holbrook & Manter, CPAs, but Intuit QuickBooks still remains one of the most heavily used programs. This month, we take a look at this particular accounting software and its many offerings and benefits.
QuickBooks has various editions available to best suit the needs of your type of business. Features are tailored with terminology familiar to your industry. During QuickBooks setup, by selecting the Agriculture, Ranching or Farming industry, it will create a preset Chart of Accounts that provides a set of income and expense accounts that match the Schedule F filed on your tax return. With QuickBooks you can process payroll, manage accounts payable, produce customer billing, track inventory, and perform many other functions needed on a daily basis. The General Ledger is fully integrated, allowing instant updating without batch posting the daily transactions.
Managing cash flow can be a cumbersome task. QuickBooks integrates with your financial institutions to provide bank feeds, which eliminates additional data entry. This feature also makes reconciling bank accounts much easier.
Reporting is also a key feature in QuickBooks. Reports can be run based on classes within your business allowing you to review and analyze key sectors to make better decisions. For example, many farmers use classes to track income and expenses by crop segment or by rental properties. When viewing reports in QuickBooks, most areas will allow for a “drill down,” this allows you to see various details of the transactions. Exporting data to Excel can further enhance the reporting capabilities in QuickBooks.
Tracking the value of fixed assets as they decline over time can be difficult. Thankfully, QuickBooks has a fixed asset tracker that can help to simplify the process. The fixed asset manager can record the purchase date and price of the asset, whether it is new or used and the sale price if you decide to sell it. You can select from six depreciation bases and view projected depreciation calculations. This can be a valuable tool to help with year-end tax planning and to make decisions on purchasing new farm equipment. Reports are available to view the fixed asset listing.
QuickBooks allows you to send the complete data file to your accountant for assistance with month-end and year-end closings. While your accountant is reviewing the data and making adjusting entries you can continue to work in the current period. The adjusting entries are then returned to you for importing and updating with virtually no interruption in daily activity. Data files can also be saved as of a specific point in time for use in audits, business review, etc.
QuickBooks also offers an online product which provides many of the same features of the desktop versions. A great benefit of working online allows access to your financial data anytime, anywhere with proper security. You can also be sure your data is protected without worrying about backing it up — it is on the cloud which also eliminates the costly maintenance of an on-site file server. And, software upgrades are automatically installed.
QuickBooks Online syncs with a wide variety of third party apps-approved by Intuit, which offers further security. The apps can allow non-financial users to track time, provide quotes, and manage projects without accessing the company’s confidential financial records. You can also process payroll on the go by using the mobile app, including e-pay and e-file options to meet filing deadlines. This also allows your accountant easy access to your data, without needing to transfer data files.
Although there are many benefits to the online version, it does not offer all the same features of the Desktop editions. Some functions of the Desktop editions that are not part of the online version include producing a balance sheet by class, and preparing budgets and forecasts. The online product includes some inventory capabilities, but they are not as robust as the desktop versions; also the ability to convert estimates to purchase orders or sales orders is not available.
Holbrook & Manter can guide you in choosing the best solution for your business. In fact, our team is made up of QuickBooks Professional Advisors who are certified through Intuit each year. We can help with implementation and on-going training, not only with QuickBooks- whatever your preferred software, we can be of assistance.
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through the firm website at:www.HolbrookManter.com