Explore Common End of the Year Accounting Topics

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Hector:                   Welcome everybody, this is QB Power Hour with QuickBooks at Year End Part 2. January 22nd. Michelle Long and Hector Garcia, myself, yours truly, run this webinar series. Michelle Long could not be with us today, she is an author in the QuickBOoks world. She has many books on Amazon. Check them out. Her LinkedIn group is probably one of the best things out there, it's over 100,000 members and people who actively give answers to QuickBooks and technical questions so go to LinkedIn and search for successful QuickBook consultants or go the URL on the screen.

                                    Myself, I work and live in Miami, Florida. I teach QuickBooks in my own classroom in Miami, I love teaching QuickBooks, that's my thing. There's my website. We do CPE training for CPA in south Florida as well. I have a masters in taxation and finance and I'm a CPA and member of Intuit Trainer/Writer network.

                                    Pending that Michelle Long could actually make it somehow, we'll probably not do QBO topics because I wasn't prepared for QBO topics. Everything here is going to be QuickBook Desktop topics, so people who don't use QuickBooks Desktop you may not want to, you may want to learn something from here or just set the expectation that I may not have time to jump into QBO.

                                    I'm going to cover some pretty popular, I'm not going to say popular, some pretty common end of the year topics that have to do with, most of the times, correcting my client's QuickBook files. For the most part, when the accountant has complete 100% control over the QuickBooks file, we don't deal with these issues. When the client gives it to us, yes. We're going to be covering things like an open balance on accounts receivable or accounts payable in a cash basis balance sheet, something that drives people insane so I'm going to try to walk through all the different things that cause that. I'm also going to talk about un-deposited funds and working with uncleared un-deposited funds.

                                    I didn't prep a file, so I'm going to be working with a sample file and we'll probably be cleaning the transactions that caused this issue on the go. The last part is, I have a special guest, a friend of mine fro a company called Money[inaudible 00:02:23] who developed an application called 2qbo Convert Pro that I've been using for about a year or so, who really, really need it. It can take CSV files or [inaudible 00:02:33] and convert them into .QBO. You can import them into QuickBOoks great at the end of the year. It also has a module that can import most of the major banks PDF bank statements, and convert them into .QBO. I put there QBO, I really meant to say .QBO. I'll put in parentheses here, Web Connect. I'm not talking about QuickBooks online, I'm talking about the file format .QBO.

                                    All right, you guys that are new here today, QB Power Hour basically runs every two weeks. Next webinar will be February 5th and the next two weeks we'll do mostly tips and tricks and advanced insights related to QuickBooks directly. One thing, most users, actually all users are muted. I'm getting some comments saying "Why am I muted?" This is a one way webinar. I talk, you listen. We don't open the voice over to the attendees because we have over 500 attendees so it's impossible to manage the background noise of having people un-muted. Everybody is muted except for me. We usually do about 50% QB desktop and 50% QB online. Michelle and I agreed that she was going to do the QB online and I was going to do desktop. When she's not available, this webinar tends to be a little more QuickBooks Desktop driven, however I did see Michelle logging on, so I want to see if the audio is working.

                                    Hey Michelle, are you on? It looks like she's trying to log in, that's a good thing. Go to Qbpowerhour.com to give us some feedback, specifically on the topics you want. Reviewing November and December, the most popular common theme for what people were asking us to do is year end related topics; because year end related topics was the top thing that was requested. A little bit of a conflict because of the value pricing webinar doing at that time, so we'll figure out if we can get around that. We'll see.

                                    CPE process. We have not issued CPs for the last one, I apologize, it's actually really really heavy for us. As long as you attend at least 50 minutes, you give us the correct CPE password and you registered and we use the email that you registered originally. At the end of the day we have a spreadsheet with everybody and we match them all the CPE certificates.

                                    I wanted to clarify, next week is also going to be end of the year topics. I'm getting some comments here saying "Why don't we get the topic emailed before we announce the meeting?" I'm announcing it right now. Next two weeks, February 5th, is also going to be year end topics.

                                    Couple of important announcements. There's a new webinar series called, value pricing or fixed pricing or something like that from Ron Baker. It's a four part webinar. You can go to Intuit Academy. It's free. I strongly suggest it. Ron Baker is one of the most influential minds of the value pricing world. I strongly recommend that you look into that. The other thing I want to show you, we were testing it the last couple of weeks or so, is a new QB Hour app. I'm going to launch and emulator that I have to give you an idea of exactly what that looks like. If you go to the ios store, the Apple Store on your iPhone or the Google Play store on your android, you're going to be able to download the QB Power Hour app. It's free. It doesn't have any in app purchases, we're not trying to get anything out of you.

                                    What we like to do for the purpose of having the app is to have a central location where you can watch previous videos. If you click on, for example, the videos button there, it's going to have a link to all the YouTube videos for our previous recorded webinars. A really easy place for you to watch the previous recorded webinars. Also if you click on the blog, you will see all the blog articles that I write and that Michelle writes, so we'll try to aggregate both Michelle and my articles into this QB Power Hour app so it can be something that maybe everyday or every two days you click on blog and you see things that we're writing and some things may be interesting to you guys. If you go here, where it says register, it will take you to a registration page. I cannot do it on the emulation app, but it will take you to a registration page. If any of you are logged in and listening live you don't need to do that, because you are already registered. Everybody is permanently registered. That's what I wanted to show you guys, I recommend that you look for it. That's it for the app. All you have to do is search Michelle Long or Hector Garcia or QB Power Hour on the ios store or the Google Play store and you'll be able to see that app.

                                    Let's jump in now, into what I'm going to cover. The first thing I want to cover is A/R and A/P balances in cash basis balance sheet. One of the articles that we wrote, not that I wrote, that I re-wrote that I took from Intuit's original article in their knowledge base. I basically just reworded a couple things here and posted it here. It actually walks you through the four areas where you can have issues on your balance sheet. If you pull in a cash basis balance sheet, in theory you should see no accounts receivable and no accounts payable. In theory. Cash basis balance sheet should have no accounts receivable and no accounts payable. However, in QuickBOoks, because of how the database works and how things are structured, there are certain transactions, and they're all listed here in the article, so look into it, that one by one. I'm going to show you examples of a couple of these that actually caused that issue to happen.

                                    I'm going to jump into QuickBooks now. Jump into my trusty QuickBooks Desktop here and I'm going to show you a cash basis balance sheet. I'm going to open QuickBOoks, hold on one second, there we go. I have a cash basis balance sheet up, and the most important premise here, the frame around what's going on around here is that generally there should be no accounts receivable and no accounts payable in a cash basis balance sheet. I want to make sure everybody agrees with me on that. However, there's certain transactions that will cause this problem to happen. One of them is to receive a payment for an invoice in the future.

                                    I'll show you an example. I'm going to go to customers here and I'm going to go to transactions, I'm going to click on invoices and I'm just going to look at the invoices that are dated this year. On the balance sheet we had open, we were focusing on last year's. I'm going to take a look at any invoices that are dated this year, and I'll take a look at, for example, this one. It was dated 2019 and what we did last year on the sample file, we're talking about 2018. What I'm going to do is I'm going to receive a payment to this invoice using the previous year, 2018. I'm going to go to customers, receive payments, and then I'll receive a payment of $5,000, make it very easy, very clear. I'm going to un-apply it here for a second just to show you, I'm going to date this for some point in 2018. The payment itself lands into QuickBooks in that previous year, but the invoice related to it is for a future year. What that's going to cause ... When I go back to my cash basis balance sheet, you're going to see now I'm going to have negative accounts receivable. That's the number one reason for negative accounts receivable on actually both a cash basis and [inaudible 00:11:05] basis balance sheet.

                                    As you're trouble shooting this, you may want to take a look at what specific invoices are causing you problems. If I double click on this number, and I want to make sure I'm looking at multiple years here, if I double click on that number, typically the reported sale, and in this particular case it's easy because ... I'm going to make the font smaller because it's hard for me to work trying to make it easier for people in the webinar but the font is difficult. Typically when I look at a report like this, in the real world, you're not going to have just one item there showing up and telling you this is the one item that has the problem. There's multiple techniques that we can use to identify and pinpoint the issues here. In this particular case I'm going to add something to this report that makes things a little more difficult. I'm going to double click on this payment and I'm actually going to apply it. I'm going to take a payment for $5,000 for the previous year belonging to an invoice for the following year and I'm going to apply it.

                                    In theory, the way QUickBooks works is, as long as I have an applied payment, a cash basis report will modify the financial statement and it will create that income based on the payment date. There's an exception to the rule here. If the payment is before the invoice date, then that new payment date is actually going to be applied at the actual invoice date. In cash basis, if the payment's in the future, the income gets pushed to the future. If the income is in the past, the income gets pushed to the actual original invoice date. That's an important concept to keep in mind. That's one of the things that causes negative accounts receivable in my balance sheet.

                                    This next one will cause positive accounts receivable in a cash basis balance sheet. I'm going to do an example here. I'm going to create an invoice. I go to customers, create invoice. I'm going to create an invoice in 2018, so I'm going to leave the 2018 date there. I'll choose a sample client here, Hector. It will be my sample client, Hector. What I'm going to do, is I'm going to invoice him a service item. I'm going to grab any of my service items, like custom work, labor, something like that, I'm going to take my service item and I'm going to make this $12,000. If I invoice something in 2018 and it's not paid and I'm pulling a cash basis balance sheet, the question is are you expecting to see accounts receivable, yes or no? You can answer these if you want to, via the chat if you want to give me some feedback. Are we expecting to see $12,000 in our cash basis balance sheet? The answer is no. I'm going to hit save and close. I look at my balance sheet, the answer is no. However, this is the trick behind this problem, if that invoice, I'm going to just search the invoice real quick, if that invoice contained, in this case, an inventory part, an inventory part. I'm going to change this from custom work to some sort of inventory part in here. I'll pick this one here. Just double check I pick on item that we have in stock or that will take us into a whole other issue here.

                                    Let me just make sure that I pick an item that we have in stock. Let me just look for something I have in stock. I'm going to go to reports, inventory, where's my inventory? My inventory is not here for some reason. That's strange. For some reason the inventory report is not there. I'll just pick this one and hope that I have it in stock. I'm going to sell this inventory part for $12,000. I'll just put here $12,000. The difference that we did from the first option, is first we went to a service item, the service item did not post in my accounts receivable, but my inventory item did post in my accounts receivable. This really strange thing happened. My accounts receivable used to be negative $5,000, now it's negative $4,968. Why is this happening? If I double click and inspect under accounts receivable, let's make the font a little bit smaller here, if I double click on inspect, I see the original $5,000 that is causing a problem, I now see a real random number, 32. $32.00 effected my accounts receivable.

                                    Anybody want to guess through the chat or a question why is this strange number of $32.00 showing up in my accounts receivable in my cash basis balance sheet? Anybody want to guess? Exactly. Somebody said cost of goods, somebody said cost of the item. The issue is, because there's a transfer of a transaction from balance sheet to balance sheet, basically I'm moving, in this particular case, I'm moving the value of the inventory from cost of goods into sales. I'm moving it away from something. I'm moving it from inventory to cost of goods, sorry. I'm moving it from inventory to cost of goods, because I'm affecting my balance sheet, then that accounts receivable needs to be affected. Whenever you have an accounts receivable transaction in a cash basis balance sheet that is not paid, but is effecting a balance sheet item, you will still see that effecting your accounts receivable.

                                    I'll give you another example here which is peculiar. I'm going to go up here, I'm going to create an item that effects a balance sheet of some sort. I'm going to come in here and see if I have some sort of current asset or current liability. Here. Customer deposits. I'm going to put here deposits. I'm going to grab an item called deposits that effects my balance sheet, and then I'm going to put here negative $4,000. For whatever reason the client had, we adjusted this invoice to some sort of balance sheet accounts, I'll hit save and close. Notice what happens. This is what is kind of insane about this. What is happening is, a proportion of that amount, I want to make sure you guys can see the entire report here, so now what ends up happening is, a proportion of that invoice which is the $32.00 and the $4,000 are now effecting my accounts receivable in here because it's effecting the balance sheet.

                                    Then this other entry, which basically takes the proportion of the cost of the item, this is really what makes things kind of tricky, the proportion of the balance sheet, which in this case is $4,000 divided by $12,000, we're talking about two thirds. The system is netting two thirds of the original cost of that part and it's posting it into the balance sheet. That's kind of interesting on how QuickBOoks behaves. That's a very interesting concept and it's important to understand it. When you're trouble shooting that number, you have to keep that into consideration. What most people will do in this case is they will come in here and they will make a journal entry take away accounts receivable, we'll debit accounts receivable and credit your sales, which is not entirely wrong. I think at the end of the year it will probably be okay, for most IRS scenarios. The problem you're having is that you're not correctly identifying the root cause of the problem; because of that it's very tricky, or very difficult, to actually deal with a cash basis balance sheet. You have to keep that in mind about that.

                                    Let me go to accounts payable now and talk about accounts payable. Still, this is a cash basis balance sheet and I have an accounts payable amount. Let's talk about the two circumstances. One is a negative accounts payable and two a positive accounts payable.

                                    Something that would show a negative accounts payable in this case would be an un-applied payment. I'm going to go to vendor center and I'm going to go to transactions here and I'm going to go to bill. I'm going to look for a bill dated this year. I just grabbed whatever bill is opened. This one right here. I have a bill dated 2019 and I'm going to pay this bill, but as of 2018. I'm going to go to vendors, pay bills, I'll date this 2018, perfect. Then I look for Peacock, there you go, this is 2018 still, I want to make sure that's clear. We're talking about a payment in 2018. I'm making a payment in 2018 and in this case it's an applied payment, but when I go into my cash basis balance sheet, now I see that number, the $2,000 something caused that number to go to negative. An applied or un-applied, actually both payment dated one year where the bill itself is dated in a future year is going to cause you to have negative accounts payable. If I double click on this $560, in this particular case, in this report, things are being, it's just bringing it down to one transaction that is causing the issue. In real life when you guys deal with this, you're going to have tons of transactions causing a problem here. That's an important piece to keep in mind here as well.

                                    The other thing that would cause accounts payable to go over would be a bill that contains inventory. If I go to vendor, then to bills, I could take a bill dated 2018, again, we're talking about 2018 dated bills. I'll select any vendor here. I select any account, for example, gas. I'll put here $10,000. In theory, if I save this bill it will not effect my accounts payable. Right? I think all you guys would agree with that because it is a bill, it's open, it hasn't been paid, it will not effect my accounts payable. I hit save and close. Not effecting my accounts payable. I just want to illustrate it by showing you on the balance sheet. If I take that same bill and instead of doing some sort of expense account, I use an actual inventory part. I'm going to go back in here, I'm going to get rid of this thing, and instead of hitting an expense account I'm going to hit an inventory part, and let me just select any inventory part that's here and this will be whatever, $10,000. I hit save and close. We're going to go back into our balance sheet. With an unpaid bill that had an inventory piece and that caused the issue. That is, in a nutshell, what causes a problem with negative or positive accounts receivable or accounts payable in the balance sheet, when the balance sheet is cash basis.

                                    Michelle, are you still on? I think you were waiting for me to get into a break. Are you still on?

Michelle:              Hey Hector, can you hear me better now?

Hector:                   Yes, now we can hear you perfectly. I'm going to put this on pause because I know you have to get back into the training, and I'll make your presenters so you do end of year tips on QBO.

Michelle:              Very good, thank you Hector. I'm sorry everybody for some of the technical difficulties. As he said, I'm up here in Toronto today and evidently the internet did not want to work in my room. I am getting the presentation pulled up here. I'm just going straight into Power Point. There we go. Show my screen. I'm going straight into QBO not Power Point. Sorry about that.

                                    I just wanted to share a few things for you this time, as Hector mentioned we can get more in depth on some of these things a little bit later, but a few key things when it comes to year end.

                                    First of all, when you're in the reconciliation window, right now I'm in the reconciliation area. Some things that you'll want to look for when you're starting to work with your client and clean up year end things. First of all, look and see if they made any changes to reconcile transactions. When you go into the reconcile window, you'll see this column where it says changes. If I click on that, it will show me at a glance what happened and what transaction was changed. In this example, we have an expense here and they changed the amount after we cleared it and reconciled it. At a glance you can go in and see when they changed transactions that have been cleared. You can find them and you can figure out what you need to do to fix them a lot quicker and a lot easier. Use that change column.

                                    The other thing is, when they force the bank reconciliation. You know the clients that do that. They click reconcile now and it posts to reconciliation discrepancies. This will allow you to see. This auto adjustment column is when they force that bank reconciliation. You can see that at a glance and you would be able to undo if you need to do that.

                                    The other big tool that we have that we're going to use at year end is reclassify transaction. When you're going in and you're finding and fixing mistakes that your clients have made, if you don't know about the reclassified transactions already, you really need to start using it. I know it's available in the desktop version under the accountant menu. It's a client data review tool. It's also available in QuickBOoks Online.

                                    On the left side here, I can review what my client has in these various expense accounts. As I'm reviewing that, let's say for example here under fuel expense, let's pretend that these were in the wrong account. I'm just going to select two of them, you can select as many as you need. Keep in mind, when you have a client, they're going to have way more transactions than this sample company does, if you click on name and sort things by name, you would group all the ones that are the same name together, don't sort by date. This is going to be easier to select the one that are wrong. Select all of them, and down here at the very bottom you're going to click the box that says change the account to, and I'm just going to put it to advertising. Now I know that's not correct, but I just want to show you, instead of opening each one, changing the account, save and close, we very quickly can use this tool to not only review the activity in the accounts but then reclassify it. If I click on reclassify, we're going to take two of these and we're going to move them over to the advertising expense account. Now you can see, if I click on the left under adverting, you'll see there's the two gas and oil ones that I moved from fuel expense over here to advertising. Again, a few key things to remember.

                                    On the left is where you can review the activity in the various accounts and you can change it to look at balance sheet accounts or P&L accounts, and you can go through and reclassify expenses or non item based transactions. See how it says up here non items? I'm going to talk about how you can change an item in just a Intuit. This is when they post it to the wrong expense account pretty much. You can go through and fix those things.

                                    If you had class tracking turned on, you also, right down here on the bottom, you would see another line right here, with a box class to, that you could assign a class or reclassify transactions. Not just changing what account it's posted to, but you can assign a class or fix and reclassify it using classes. You cannot do that with the location tracking. Only with the class tracking. That's something that is important to keep in mind. This tool can really save you a lot of time when your clients have things classified to the wrong accounts.

                                    The other thing that's very helpful is when they items might be mapped incorrectly. Keep in mind, in the desktop version it's called the items list. In QuickBooks Online it's called our products and services. I've already got this pulled up for us here under the products and services list. When you go through here, and let's say I'm reviewing my account mappings to make sure that things were set up properly, they're mapped to the right accounts, let's say that I discover that something is wrong. I'm just going to go into this design right here and you'll see up here all the details for the design. If you scroll down to the income account here, if I want to change that, watch what happens here. Right now it just says it is taxable or not. The minute I choose a different income account, let's choose landscaping services, look what happens right here. Also update this account in historical transactions. With the reclassified transactions, we could go through and do a bunch of them that's the wrong account, but you can't do an item based reclassification.

                                    If you have items that are mapped to the wrong account, you can come in here, change your account mapping, then you can choose if you want it to update historical transactions. Be careful. I don't think, I would have to test it to be 100% sure, but I'm pretty, pretty sure, it will change them without regard to the closing date password. In other words, if I have a closing date password, let's say I'm cleaning up 2014 and if I had a closing date password set for 2013, I don't think it applies. I think it will change all these transactions for all of the history. Be careful. You don't want to mess up your prior year information. Before you would do this, double check, make sure, be careful. If you've got a new client and it's been wrong all year, then this is a great way to go ahead and update all those transactions in one fell swoop and it's going to save you a lot of time. Just be careful if you have prior years. I would actually come in here and test it out in the sample company before you go do this in your real client files because it's easier to test things in the sample company. I've told you all how to access that sample company before. Go in there and test it out, play with it, see how that works, but that will save you a lot of time when it comes to doing that.

                                    Speaking of closing date passwords, we do want to make sure we set that closing date. To do that you go under your company settings, you click on the gear, and under company settings, and I know a lot of people have said they cannot find it because they look under company. Where you see the accounting method cash or accrual, I can turn on classes and location, I don't see closing date. People think it's not in there or they just don't see it. It's actually on the advanced tab. You can get to it a couple of other ways, but here's the advanced tab. Close the books. This is where you want to go through here and if you want to set a closing date, you can choose do you want to just give people a warning that you shouldn't do this. I don't know about you, but sometimes that is not good enough. Usually you want to give them a warning and require a password. This is where you can choose whether you want to give the password to the client or not. If you're going to give the client a password, make it a really good one. I used to use Ask Michelle, thinking that before they made this change they would call me and ask me, and that didn't work very good, they would just do it anyway. Now I use something like 500 Bucks because if you make this change it's going to cost at least 500 bucks for us to go in and fix it. They will think twice before they make changes to a closed period.

Hector:                   Make it 5,000.

Michelle:              There ya go. Some people just don't give that password to the clients at all. That's up to you. Some people will change the closing date every month. Once they reconcile the bank accounts, they'll set a closing date. Once you've set a closing date, then you will have a report that's going to populate. Just like in the desktop version, it won't populate unless you set a closing date password. Under the reports, under the accountants reports, that's where you're going to find, down here, the exceptions to the closing date. In other words, you set a closing date password, they went in, you set a closing date, they went in and made some changes to transactions before that closed period, so just be really careful with that aspect of things.

                                    I only had time today to share a couple of key things with you on getting into year end, we can get into a lot more details on trouble shooting and cleaning things up, but there's one other thing I just want to mention today and I do want to go over it more in depth with you on another webinar.

                                    Under the accountant tools, which, by the way, I am in the new QBOA, you know it's the new one because I have green over here. In the old QBOA, the old new one, the version two, you clicked on year over here on the far left, to the left of settings, that's where you would see the accountants tools, the reclassified transactions and things like that. In the new QBOA they moved it up here to our little accountants tool box.

                                    The one thing I want to warn you about is under the write off of invoices. We can go through this more in depth at a later time. Just be aware that if I come in here and I look for some invoices that are over due and they're less than $300, and you can choose whatever you want, this is great to write off invoices in bulk. It will do a batch write off for you, unless sales taxes are involved. If you have sales tax payable, do not use this tool to write it off because it doesn't adjust the sales taxes. It will write them off for you, but you need to do a sales tax adjustment. You actually need to create different items for a taxable write off and a non taxable write off. Just be careful and keep that in mind. What I would suggest if you do have sales taxes, join us on a future webinar and I'll go over that some more and we can use this report to give us a list. If you're just dealing with services, you don't have any sales tax, no problem. You can select all of these and in the bottom right, preview and write them off in one fell swoop. It's a great tool when you don't have sales taxes. Otherwise join me for another one and we'll go over more in depth how to do the credit and write them off when you do have sales taxes.

                                    Hector, do you have any questions or anything specific?

                                    Oh wait, one more thing that I definitely want to cover is a lot of people are using QBO, they're using their clients log in, or they're logging in through QBO, they're not going through QBOA, you will not have these accountant tools if you don't go through QBOA.

                                    In order to make sure that your client shows up on your accountant dashboard and that you're logging in as the accountant, under the gear, click on manage users. Under the gear manage users, you can do this or your client can do this, you want to make sure you invite yourself as the accountant user. Then you get an email, you accept that invitation, and that's what's going to put it on your QBOA dashboard and allow you to log in through QBOA so you have these tools available to you. You need to be set up as the accountant user in order to be able to use these cool tools that we have available to us. If you click on invite accountant and nothing happens, sometimes I have clients who say "I'm clicking it but nothing is happening" then they're probably using IE, Internet Explorer, and a lot of things don't work right when you're using IE, or they have pop ups blocked. Look in the upper right corner up here on the URL box, you'll see it's a little image with a red x on it, you need to make sure to allow pop ups otherwise it's not going to be working quite correctly. Invite yourself as the accountant user so you can use some of these tools to save you some time at year end.

                                    Any quick questions, Hector or anything else you want me to cover?

Hector:                   No, I'm going to switch over to me so I can put the CPE question up and I'm going to ask you a question that for some reason is something that I haven't been able to answer myself. They ask me all the time and I just don't pay attention to it, but it's a very important question and it's one of the questions that's there. When you use the batch reclassify tool and you're working with a previously closed period, will they just let you do it or will it ask you for a password? I think it just lets you do it, right? There's no protection when you're using that tool.

Michelle:              Yes, I'm pretty sure that it will just do it. The reason for that is they assume that accountants are supposed to be the ones using the reclassify transaction. When we're doing that, we usually are cleaning up the prior year so a lot of times there is a closing date password and they don't want to slow us down and have us put that in there all the time, so it will make changes and not ask you about the closing date. That's another one of those that the closing date password doesn't apply. It's not implemented there.

Hector:                   Right. Okay. The keyword question is Mango. Write it down, because toward the end, right at the end, at the top of the hour I'm going to put the question up and we may even go a little bit longer today than an hour because I'm going to demonstrate a piece of software that may take a little bit longer. Then we can have our guest speaker. Ralph the developer is going to come on in the next couple minutes to help me with that. I'm personally helping him develop the software so I've been using it for two years and it's great, but I would love to get your feedback in terms of how well it works.

                                    The last question, Michelle, I think on the same closing date password, if you change the item in QBO and you change the item and you put the little check mark that says change historical, so it will do things beyond the closing date as well, correct?

Michelle:              Yes. I'm pretty sure that it will change all historical transactions, not just the current period. That's where you have to be careful if they have multiple years involved. You can mess up the prior years. Just be careful before you use that tool.

Hector:                   It will let you do it.

Michelle:              Yeah. I see another question in there about what is a QBOA URL to log in? We as accounting professionals should be logging in through, you can do office.intuit.com or you can do QBOA.intuit.com. Either office.intuit.com or QBOA.intuit.com. Thank you guys, I'm so glad I was able to join you today and I'll look forward to sharing more tips and tricks with you on future webinars, but I'm going to turn it over to Hector and let you take it from here.

Hector:                   Thank you, Michelle. All right.

Michelle:              Thanks Hector.

Hector:                   Thank you, bye bye. There's another webinar at 1:00, right on top of the hour about the new changes to the [inaudible 00:39:26] run by [inaudible 00:39:29] so right at 1:00 on the spot I'm going to put the keyword question. I know some of you will probably jump into that webinar as well. I recommend it. Look it up, you can probably find it somewhere on the web. All right. I'm going to see if I can get Ralph, he's a developer of the software. I'm just going to keep him on the voice because I'll be able to give him some comments and stuff.

                                    Hey Ralph, are you on?

Ralph:                     I'm here.

Hector:                   Okay, perfect. Thank you, Ralph. Thanks for coming. I want to show you this piece of software called 2 QBO Convert Pro. It works on the Mac, it works on the PC, it's under 100 bucks. It's extremely inexpensive. What it does, it can take a PDF bank statement, so what if you had this PDF bank statement here on the screen, so let's say for example your client gives you this PDF that's on the screen here, they don't give you a .QBO file, they don't give you an excel file, they don't give you a paper statement. They send you via email or a USB drive, what they specifically send you is the original PDF made from the bank. It has to be the original PDF made from the bank because as I go through this, some of you are going to ask what's the difference between this and scan writer and that's a major difference. This tool works with the original bank PDF, it doesn't work with a scanned version of the statement. I have this statement, and the traditional way for me to do data entry for most accounting firms, they would literally have a staff member sit there and actually enter all these lines by hand because we have no there digital way of imputing it into QuickBooks. This software solves the problem.

                                    I'm going to run the software program here real quick. It's called 2 QBO Convert Pro. There's a free trial that allows you to test it if you're skeptic whether it works or not, just download it and you can see how it works. Basically, I'm going to go to convert here and click on convert and pick the file I want to convert. In this case I'll pick the file here, which is this one called February 12, and I'll hit convert to QBO. What I'll do, instead of convert to QBO, I'm going to click preview because it gives me an easy to view preview mode exactly of what's about to be converted. What the software does, it grabs the PDF, converts it into this class size spreadsheet format that you're seeing here. At this point we have a couple of interesting things you can do here. You can actually choose the mapping so if for whatever reason the mapping is not right, you can actually say this column is the date, this column is the amount, that column is the paid.

                                    Up here where it says QuickBooks account information, that's a pretty good option you have here. When you import this information into QuickBOoks and you do the next month and the next month and the next month and so forth, you have to make sure that this account number is consistent because QuickBOoks will detect it to be a different account and when you try to import it, it will think it's a different account altogether and it will force you to create a new account. However, I'll make sure I put the value number over here, I'll put the account number here, I choose the bank FID, that also needs to be consistent and I'll click okay.

                                    In the event that some statements have negative as positive and positive as negative, we can click here where it says switch signs, so when you switch signs it will count anything that's a debit as a credit and so forth. I'm going to keep it normal because it's actually not a switch signs type of transaction. After I do this, I click on create QBO, don't be confused with QuickBOoks Online, this is a .QBO file. I'm going to click on create QBO. Then I'll hit okay.

                                    In this particular, I'm just running the trial, you can only do 10 transactions, but it will be enough to illustrate. I'm going to take this file here, which is that .QBO that I created, and I'm going to load it into my QuickBooks. Now this is interesting. I can load this into my QuickBooks desktop, I can load it into QuickBooks Online, and I can load it into QUickBooks Map.

                                    This is not a software only made for a particular version of QuickBOoks, as a matter of fact, 2QBO doesn't convert to QuickBOoks at all, it doesn't even know that QuickBOoks exist. All it cares, all it's doing is preparing a .QBO file, or a web-connect file. In my QuickBooks file, file, utilities, import, web-connect files, I choose my web-connect file, and for all of you who do online banking, you know what this is all about, right? You manually download your web-connect file from your bank and you import it, but what this will do is, it will now take the information over to [inaudible 00:44:19] as if this bank was connected. I'm going to choose an existing account here, I'll just create an account here. I've created an account called Chase. That account number and FID and the routing number that was used previous, it's what we need to be consistent next time I import the same exact bank statement. If that number is different, QuickBOoks will think it's a different account and it will not import into the same account, it will try to make you create a new account for that.

                                    What I just did is I took the bank statement and I brought it into [inaudible 00:44:53] using that converter software. Again, if your client had given you, this statement was only five transactions because I'm in a demo, let's make sure I'm on the correct account here. The demo only five transactions because it's a demo, but at least you can see how it works. If the client had given you access to QuickBooks and to Chase online or Bank of America online, you can download the QBO. You don't need this. If the client gave you the .QBO file that they downloaded, then you can use that, you don't need this. This is when you only have a PDF.

                                    The other thing I'll show you is another interesting piece of what the software can do. This is where I personally collaborated with Ralph. I told him I wanted the software to be a little bit more, and I'll get your opinion on whether or not that's something you would like to see. When you're converting and you pick the file, what I'm also, we're in preview mode, what I'm also giving us a change to do is, instead of going straight to creating a QBO what I wanted, I wanted to get that step that goes before the QBO, so I'm going to go back to convert, which is create it into CSV. It will grab my PDF file, it will make a CSV. I'm going to open the CSV file here. It will make a CSV. Allows me, if I want to, it allows me to make changes to my CSV. In this case let's say I want to truncate some names, or I want to rename some things and I want to speed up my online banking process by making some changes here. Save the changes I did in excel and then come back into the software and when I go convert, I pick the CSV file, I create a QBO from there. I like the ability to be able to pull it into excel, make some changes and do all that. Ralph do you want to add something or comment on something that I missed?

Ralph:                     No, I think you did a great job.

Hector:                   Okay. So there's a couple of questions here. Somebody saying "How does it compare to Ledger Sync?" Are you familiar with this program called Ledger Sync?

Ralph:                     No, actually I'm not, sorry.

Hector:                   Okay, also so just as your online doing something special pricing for this software, what did you do for the crowd here? I told you that I'm going to have a big crowd here and some people liked it, what did you do for us?

Ralph:                     We came up with a $40.00 coupon, which is more than 30% off the list price and that's just for seminar attendees. I should have the name. What is it? QBH ...

Hector:                   I'm going to put it up in the website. While I'm doing this, I'm also looking at some of the questions because there are some interesting questions here. They go to moneythumb.com right? Moneythum.com and in there somewhere is the software. It should be here under financial converters and you go to convert to QuickBooks, and it's called 2QBO Convert and when you go purchase it, there it is 2QBO Convert Pro, and first of all, for everybody that thinks this is interesting, download the trial. Try it with your clients, make sure it works, bottom line, you should go and download the trial. When you go purchase it, you'll use that coupon code called, I'm going to put it up on the screen here, and does that have an expiration? We didn't talk about that, but is there an expiration on that?

Ralph:                     I believe this one expires at the end of January.

Hector:                   Okay. This is going to be QBPH40, that's the coupon code. That gets you $40.00 off and the software is moneythumb.com. It's called 2QBO ... I suggest at the very least you download the trial and try it. Not every bank works there, so what would you say in terms of the banks that work or that don't work, that sort of thing?

Ralph:                     First of all, the software has been tested with every major bank in the United States, probably close to 100 banks world wide. It's designed to work with banks that it hasn't seen before, but obviously some small regional bank might do something really funky that we've never seen. That's why we advise you to test it. We have found very few statements that we cannot handle. Sometimes we need to tweak the translator and in that case we have a process where you can remove the account information and so forth and send it to us and we can fix it.

Hector:                   Okay, so you are open to if for whatever reason somebody has a strange bank statement, on original PDF, it can't be scanned, to receive it, and have people see if you can get it to work in the software. Right?

Ralph:                     There are very few banks that we found that do some sort of internal encryption of their PDF files that we can't get around. It's like .1% or something like that, of the things that we've seen.

Hector:                   The software is $100.00 lifetime. You don't have to pay an annual fee.

Ralph:                     That's right.

Hector:                   Are you considering moving this to a service subscription?

Ralph:                     We probably will at some point, but you can get in on it now and get it for a lifetime.

Hector:                   Some people are asking about does it work in Canada. It will work in QuickBooks, the Canadian version of QuickBooks because it can download 2QBO, however I don't know if the bank statements themselves will work because you haven't tested all the Canadian banks ...

Ralph:                     It works with the major banks like World Bank of Canada and Bank of Montreal. We also hook in with the Canadian version of QuickBOoks and use the appropriate bank list from the Canadian version.

Hector:                   Correct. The other thing I'll tell you is, you do have other converters in your website, too, right? There's a whole bunch of converters there so you want to take a look at those but the one tool ... You have your original tool which is called PDF to QBO, just did that one function of taking the PDF statement and converting it to .QBO. This tool that we worked on together it was my suggestion that we have the ability to convert to CSV and QBO because I like being able to convert that. I'll welcome some, if you guys want to email me or something, some feedback in terms of what you think if that works. That license is for once computer, right? It's not for you to install it in a bunch of computers, just one computer, correct?

Ralph:                     The way the license is worded it's for one person. If you want to install it on your laptop and your desktop that's fine, but if you want to buy it for multiple people in your office, it's multiple liceses.

Hector:                   Okay, and I'm getting some questions about comparing it to Scan Writer and I know maybe Ralph you're not in the best position to make a comparison because in one way or another it is a competing software. Scan Writer is another software, it obviously costs a lot more, but it's more comprehensive and it works with scanned statements. If somebody gives you paper statements and you scan them, you would use the software called Scan Writer. I use as well because it serves an area. If you're getting the PDF original statement, or if you're getting a CSV. I have so many clients that download a CSV on their QuickBOoks, then they themselves sit there and do accounting. They sit there and put their auto expense, they'll put their transfer to whomever, to my cousin or whatever, so some of the clients go into their actual excel that they get from the bank and actually type information in there. We can actually use a CSV or an excel file that a client gave us and convert it to .QBO from here. It's not an issue. That memo, we can bring it in when we do the conversation.

                                    I do so much data conversation that this is something I deal with every day, but when we bring in a CSV file and we preview it, if your client gave you a memo, we can add that in there, and then that memo will come in when the transactions are being downloaded. You can keep some of the original wording from your client. This works on any computer, PC, Mac, and the computer if you do it locally will output a .QBO file. If you need to export it, send it to, so many people asking about hosting service, if it's hosted or whatever, it doesn't matter.

                                    I' m going launch the important question for the CPE, and I'll try to stay a little bit on so I can answer some other questions, maybe about some other things, so I'm going to launch the question for people that need to log out and go to another webinar. Some people are asking can the scanned version, does it have to be the actual PDF the bank gives you? The answer is yes. It needs to be the actual PDF the bank gives you. The original PDF. Why is that, Ralph? Do you have an explanation on that?

Ralph:                     We found that when you start to scan things, no matter how good a scanner you have, you end up with some characters that just don't make it through. You have 5s that turn into Ss and periods that disappear and things like that, and the accuracy just isn't there.

Hector:                   Okay. It has to do with how it does the OCR, correct? How it reads that?

Ralph:                     We don't currently do OCR, and we've had some customers who have taken very high quality OCRs and it will work with them, but they have to do a lot of checking and a fair amount of clean up.

Hector:                   Right. This will be interesting for you to hear, Ralph, I don't know how familiar you are with QuickBooks accountant tools, but I have a really good question from somebody. Somebody is saying "Wait a second, I have QuickBOoks accountant edition, and I have this tool call Batch Entry Transactions. If I already had the data in excel for example, I can copy and paste it in here and I wouldn't need to convert it to .QBO. The question is what is the benefit of converting to this .QBO versus doing a copy and paste from the CSV here?"

                                    First of all, assuming that you have a CSV file, copy and pasting here you can do it and you wouldn't need a third party software like this one to be able to work it. However, the difference is, when I paste information in here, whatever the name of the payee is, I'm going to be forced to create the vendor each time. Where as when I work with online banking, for example, so that's the benefit of bringing it through QBO, if I work with online banking for example and I've done online banking in the past, or I have rules set up and that sort of thing, what happens when I bring it through QBO, the benefit through .QBO, the huge benefit I have is I bring it through bank feeds, then I can do bank rules, which means when I start getting vendors that look the same, over and over and over, then they'll start learning. With QuickBooks Online, QuickBOoks Desktop, any QuickBOoks Map, any version of QuickBooks, you bring it to online banking and you get that ultimate benefit. That's assuming that the attendees, that you understand bank fees. You know how bank fees work. When we're working with clients that are going to give us 12 months worth of information this tax season and we don't want to hand key any of the transactions. That's really the big important point here. That's it. That's all I have to say.

                                    Ralph, if you don't want to add anything else I can wrap up the webinar now. What I'll do is I'll make sure people know where they can go for feedback. This is the website to look at the software. At the very least, download the demo. Download the trial. Make sure it works with your clients files and stuff like that. In our website, QB Power Hour, I'll just show you, it's important that you know that all of my blog posting and all of Michelle's blog postings are in here. The one about A/R and A/P balances is included here if you'd like to maybe look at it. We have webinar archives, that's going to be where all the previous webinars are recorded into. We're going to post them in here. That's pretty much about it. I want to make sure that you come in here and you go to suggest a topic if you haven't received one. Be patient you will get your CPE certificate for the previous webinar in the next week. If you're missing CPs from previous, the correct place to request them is there. That's it.

                                    I'm trying to look at the questions to see if there's any other comments. Try the software out for free and email me if you have any questions. I have a couple of articles on my website, a couple walk throughs on how to use that software. If you go to my website, for example QBBlog.com, this is my website, QBBlog.com, and you search in there something like PDF to QBO or something like that in the search, I wrote a couple of articles, sort of a walk through on how this software works. I've been using it for a couple of years or so and it's been very very useful. I actually have a walk through in the website, basically a step by step. What the software looks like, and you're welcome to check it out also if you want to see it in depth. All right. Thank you very much. Let me pull up the last slide here which is the survey monkey link. Make sure you provide feedback about our webinars, about what you like to see, what you like, what you don't like. Surveymonkey.com, there's the link on the screen. Thank you very much. I'll see you February 5th and everybody have a great tax season.