Learn About Job Costing and Job Profitability in QuickBooks
Learn about these two features in QuickBooks and QuickBooks Online.
Hi everybody, once again we're getting started with a QB Power Hour. First slide here, we're going to talk about an introduction to the QB Power Hour. We're a webinar series that runs about every two weeks or so, and the next one's going to be the 18th of December. It's on Thursdays, 12pm, Eastern. The very last one we'll have for the year will be the next, December 18th. We talk about tips and tricks and advanced insights of QuickBooks. About 50% of the content is desktop, the other 50% is online. We usually have a guest speaker or sponsor to add some value to the topics that we're covering. If you want to give us some feedback about what topics you would like to do, and this is for you, this is for the very purpose of helping the accountants and advanced Quick Books users out there. Just go to QBPowerHour.com and add some suggestions in there.
My partner in crime, Michelle Long, couldn't make it today because she's doing some sort of event in Seattle actually. I'm saying some sort of event, some exciting event in Seattle she's doing, so she can't be with us today. Check out her blog, she has great information, she's an author, she has an amazing LinkedIn group, it says 94,000 members but it's actually over 100,000 members. Myself, I'm also a CPA, I live and work in Miami. I teach QuickBooks in my own classroom, there's my website. I do a lot of training for Intuit as well, member of Intuit Trainer/Writer Network.
The agenda for today was making those quick introductions. We'll talk about the CPE process in a second. Michelle Long is not available so my good friend Ibrahim from Intuit is going to cover the new QBOA. There's a huge launch happening so Ibrahim from Intuit's going to show us something brand new most of us haven't seen before, so that should be very exciting. I will cover some job costing topics, specifically some of the ones that I actually couldn't even work with, I couldn't cover the very last time. I'm going to cover the job costing topics that I didn't get to cover on the very last webinar, and then I'm going to jump into customizing reports. Our guest speaker is John Power from BizTools, he's going to show us how to create single report set that give us powerful KPIs, which is going to be perfect for post-tax season consulting. Sorry for the misspell of that.
CPE process, if you need CPEs, just remember you must attend the webinar live, you must be here for at least 50 minutes, and you must answer the CPE question when the question is asked. Near the end of the webinar you will answer the polling question, and as long as you answer that you will have the answer. CPE certificates are emailed within about three weeks. The very last webinar has not been issued, okay? If you haven't gotten it yet don't email me like crazy, I'll work on it this week.
Big announcements, today it's going to be the launch of the new QBOA, QuickBooks Online Accountant. Also the new QuickBooks Online Certification Test goes live today. This week, I'm not sure if it's today or the next couple of days, the QuickBooks Online Advanced Test will launch as well, so this is a huge week for our QuickBooks online, new things coming in the pipeline. Next week the QuickBooks Vcon, quickbooksvcon.com. It's going to be three days, tons of free training, free CPE, check it out. Between the dates of December 16th, and January 15th there's going to be a live tour in 18 cities throughout the United States. Go to Intuit Academy, just Google Intuit Academy, go in there and check it out if you want to attend. It's to prepare you for the regular QuickBooks online certification. Very last QB Power of the year is going to be December 18th, it's going to be a special episode. We'll talk about five specific apps that Michelle and I hand-picked to be the practice transformation apps we recommend for next year.
I'm going to switch it over to Ibrahim from Intuit, which is going to cover the QuickBooks online topic of this, and he's going to specifically talk about the new QuickBooks Online Accountant. I'm going to make him a presenter. Ibrahim are you available?
Ibrahim: Yep, I'm right here.
Hector Garcia: Perfect. I'm switching over and making you the presenter, so you can now do a screen sharing and show us your live demonstration.
Ibrahim: Great, can everyone see my screen?
Hector Garcia: I can see your screen.
Ibrahim: Wonderful. Thanks a lot Hector, I'm really, really excited to be showing everyone the brand new QuickBooks Online Accountant, which like Hector said, has launched today. I'll just jump right into it because I don't think anything speaks for the product like the product itself. This is the home page of the new QuickBooks Online Accountant. There's a lot going on here so I'll sort of walk you through it step by step. Right smack in the center we have all of our clients, this page is the client hub. You have a list of all your clients, and you'll notice we have some things going on over here, you have a tab for bookkeeping, a tab for payroll, and a tab for other things, and we'll go over what each of those is in a second. Right here you obviously have the QB, the QuickBooks icon, and if I click on that I can dive straight into my client's QuickBook files.
We also have some information over here on what's actually going on inside the books. Now previously you used to have to dive in, into the books, go around and fish around for what's going on, what's been changed, what's good, and what's not so good. With this new product we've sort of brought everything together such that we can see what's happening inside the books and bubble that up to you so you don't have to waste time fishing for it, it just appears for you right here.
You'll notice that some clients don't have anything going on over here and that's because in addition to have QuickBooks online clients over here, you also have just regular clients, clients that you service every day that don't necessarily use QuickBooks online. They could be QuickBooks desktop customers, they could be clients that use no accounting software at all, they can use a different Cloud accounting software. You could have them all right here on a single client list, that way you go in, you have a holistic view of your practice, you know what you need to do today, and you can see everything that needs your attention. There are also some features for collaborating with these clients, even if they don't use QuickBooks online. I'll go into those in a little bit. Let's start with some of this information that we have bubbled up over here. You'll see the last close date, you see the last download from banking, but there's also, it looks like in [Alvarez 00:07:03] Books we have a few things that we want to take a look at.
The first thing I see this account watch list, and I can get a pretty good sense about whether or not things are out of whack just by looking at some of these numbers and making sure that these accounts are in order. This is called the client detail page and you'll notice I have several tabs here, but in the bookkeeping tab we have some information that's being bubbled up. Now we have some unaccepted transactions and if I click review now, which I'm doing, it's going to take me straight into the client's QuickBooks file. It actually takes me directly to the page that I need to see, the page where there are 89 unaccepted transactions. Now I can go through, I can review these, I can take care of them, I can do what needs to be done. It's been brought to my attention and I can go straight there, directly to what needs my attention.
Hector Garcia: Ibrahim, can I jump in and ask you a question here while you're doing that?
Hector Garcia: How would you feel doing this with clients that you're collaborating with? Not just clients that we have complete control over the books, but the clients that do some work and we do some work. How does that play into it? What's your take on that?
Ibrahim: That's a great question. Let me go right back. We were right here in Alvarez Books. This is telling me that the last time I closed. The book status here on the bottom right, it's telling me the last time that the books were closed, the last sign in that happened, the last download that happened, and then what's happened since then.
Hector Garcia: You're referring to reconciling, not setting up a closing date, correct? Is that what you're referring to?
Ibrahim: Well you have several things here. The closing date is the last time the books were closed, right over here. There also changes that happen to reconciliation. [crosstalk 00:09:01] if there's a back and forth between the accountant and the client, the accountant does some work and then they see where they left off, where the client picked up, and where there may have been some mistakes potentially that the accountant can go and take care of.
Hector Garcia: Okay perfect, thank you.
Ibrahim: No worries. Here if I'm directly in the client's books and I'm looking at these unaccepted transactions, I can actually hop around and do other things in the client's books. We've put together this accountant tool which is a consolidated list of all the different things that ... The efficiency tools that accountants need to be really efficient with their client's books. You can jump straight to reconciling, journal entries, accountant reports, chart of accounts, and so on. We also know that just because you're in Alvarez Books doesn't mean that you don't have to switch to someone else's, another clients books. Let's see, you get a call, you get an email, something interrupts your day such that you have to jump into another client's books, you don't have to log all the way out and log back in. Straight from here, from the client switcher, you can go into whoever's calling you. If I have [Zoney 00:10:09] calling me, I can jump straight to their books right from here, and I can be right in the middle of what needs attention. That way [inaudible 00:10:19] on top of what's going on.
Also from here I can go back to my practice, which is the home page for QuickBooks Online Accountant, or this'll take me to the very same place, if I just click on the QB Accountant logo. Then we're right back here where we started. Now another interesting thing we've done is bring your books, the accountant's books directly into QuickBooks Online Accountant. There's a tab here on the left that says your books. You'll notice something very interesting. First of all I'm still in the same QuickBooks account so to speak, I haven't really switched or gone out of it. We're still in the same file. My own practice and my own books are now one in the same.
Now if we go to my customers table here, let's say I want to invoice a customer, you'll notice that I already have populated here all of my clients. We're smart enough to say, "Hey, if they're clients of yours, they're probably also customers and you may want to invoice or do some other action with those customers." If you add a client in your practice you'll see them appear here and vice versa, if you add a customer you may see them appear in your practice. Now I know a lot of people are thinking, "I don't want everyone to be seeing this. What about my employees or other folks that work with me. This may not necessarily be things that I want everyone to see." Well no worries, we know that lots of people haven't been adding their team members previously because of, not privacy or not showing everything that they wanted to show, and so we've added some really cool roles and permissions around your team members.
If I go into team, I see all of my employees here. Let's say I want to add an employee. I add a user, and I'm just going to add a test user here.
Hector Garcia: Whilst you do that real quick, I have a question. Somebody's saying when you log in and out of client files, does it post into the audit log that you're logging in and out?
Ibrahim: Yes it does.
Hector Garcia: Okay, thank you.
Ibrahim: Absolutely. Let's say I just have someone working for me seasonally, I know that's not the right title but just for the purpose of the test. I can actually specify their access to the firm, the books, whether or not they see the rest of my employees, whether or not they see my firm information, accounts receivable, accounts payable, and so on. In this case let's say they were a pretty basic user, I don't want them to see anything at all about my actual books.
Hector Garcia: This is not the QBO user in my QBO file, this is the QBOA user, correct? [crosstalk 00:13:04]. They tied together?
Ibrahim: They're tied pretty closely together. That's what these two different sections are, you have client access and you have firm administration and books. As a QBOA user, I'm here specifying what they have access to in QBOA. In my own firm's books, in my own firm's administration, what do they have access to? With regards to users, that's a QBOA functionality, I can specify their access to subscription and billing, but also in my own firm's books I can specify whether they access accounts receivable or payable or not. To answer your question [crosstalk 00:13:44] go ahead.
Hector Garcia: How many staff members can we have here?
Ibrahim: You can add as many as you want.
Hector Garcia: Unlimited?
Ibrahim: Unlimited, yeah. Now I click next and I get to client access. This is the really cool part because I can say, "Hey, this test user, there's no reason he's going into [Harton 00:14:03] Hardware. He shouldn't be seeing Michael's Restaurant, and I really don't want him to see [Triaval 00:14:08] Consulting. However, I know that he's working on the rest of these." You know this, Hector, it's not always a matter of just what they should be allowed to see or not, it's also just for focus. If this person comes in and just see the three or four clients that they need to be working on, they can stay much more focused during their session and not waste time. Stay focused on what they're working on.
Hector Garcia: I agree.
Ibrahim: Absolutely. This is really cool and I think obviously something a lot of people have been asking for, and something that makes it really easy to add as many employees, as many users, obviously if there's a partner you want to add all the clients in there. Any level of employee, any level of collaboration now becomes really easy to manage.
Now speaking of collaboration, you were asking earlier about collaborating with your clients. We obviously know that collaborating with QuickBooks Online clients is going to be pretty easy because of the seamless integration, but that's not to say that it's particularly difficult or even more difficult for others. Let's go into Vanessa for example, who doesn't have QuickBooks Online at all, she perhaps a desktop client. However I can still request documents and share documents with Vanessa. If we go in here you'll see that quite a while ago I asked Vanessa for, I requested some documents from her. She was able to upload one of them but not all of them.
I feel like I may have started this backwards, let's start from the very beginning. If I want to request something from Vanessa, it used to be that I used to have to wait around for a long time. I used to send her email reminders, and phone calls, just so I can get some information from her. Now with requests I can actually request documents from Vanessa. I can say, "Need some information." You'll notice that on the right hand side here there's a preview of what my email's going to look like. "Hi Vanessa, need some docs, thanks." Then I can actually specify the documents that I want. Let's say payroll [inaudible 00:16:23] for December 2012, for whatever reason, and taxes in 2012, I don't know.
Hector Garcia: Let me add some context here, as we're getting ready to wrap up. Basically if you have a QuickBooks Online client, or a QuickBooks desktop client, the new QBOA, regardless of whether you use QBO or not, allows you to make request from within QBOA to your clients for documents. This will send an email to your client requesting two, three, four, five things. The client's going to get an email with an easy to use module so they can attach documents. You have a central location where you manage all the documents you request your client, rather than going back to your email and going through it, correct?
Hector Garcia: Okay perfect, thank you.
Ibrahim: No worries. I just wanted to add one thing, QuickBooks Online, QuickBooks Desktop, and even other clients that aren't particularly using an Intuit product.
Hector Garcia: Okay, that's a great point. This is a free tool available for ProAdvisors or users of QBOA as a document management solution that allows you to add unlimited client profiles, that have or not have QBO, have QB Desktop, have zero for all we care. People will request documents, and you have a central location to manage all your clients documents in the Cloud for free.
Ibrahim: Exactly, I think what you just said there is the whole point, is that you have everything in this one place. Whether they're using QBO or not, whether they're using desktop or not, you have all your clients, you have ways to collaborate with them, and in the case if they use QBO you have some insights that are bubbled up to you, exactly.
Hector Garcia: Awesome. Ibrahim, I don't think you're done showcasing QBOA, so we may need you back here to talk to us about other parts. Unfortunately your time is up and I have to jump in to QuickBooks Desktop. Is there something else really important that you want to talk about before we switch?
Ibrahim: Like you said, Hector, I think I can go on forever so I'll let you take it from here.
Hector Garcia: Okay. Stay on, there's a lot of questions about how the document management works, and something about QBOA and the number of users. Stay on please and answer some of the questions. You can jump in and you can see that. I'm going to jump in and I'm going to make myself presenter now. Thank you very much Ibrahim, I really, really appreciate it.
Ibrahim: No worries, thanks for having me, Hector.
Hector Garcia: Thank you. You guys should be able to see my screen now. I am not going to answer questions until we get into our guest speaker. Let me do a polling question here real quick, just to get an idea for if people are new or didn't know, that we surprised them with this new tool. I've just got a polling question in real quick here. Just wanted to find out if you guys were aware that this was happening and whether it was something valuable around having you guys see it live today for the first time? Perfect. I am seeing some feedback through the questions and comments that they would love to see more time dedicated just to workflow process through QBOA. That's really good feedback, please go to QBPowerHour.com and actually put in your feedback if you feel that we should dedicate more time to QBOA workflow management. Perfect, I'm going to close the polling questions, thank you very much. About two thirds of you were aware of the launch, so very excited you were able to see it for the first time here.
All right, so let me resume back in and talk about what we left off on the last Power Hour. We talked about contractor/construction industry and job costing. We actually did mention, this is a copy of the last slide, we mentioned how complex job costing is and how complex construction/contractor industry is. All these bullet points here, a lot of people liked this slide, I had some emails from people asking about this. These are the items that you will need to put under your belt to train yourself, or to develop working with contractors and construction industry. The two that are highlighted there in green were the two that I was able to cover on the last Power Hour. I'm just recognizing that as we talk about construction and contractor, and job costing, we're probably eventually going to get to all these bullet points, but these are the two that we have talked about so far.
What I'll talk about this time was two important items that I didn't get to showcase in the last Power Hour, which is the work in progress report, the new work in progress report for QuickBooks Enterprise, which is actually really, really, really neat. The Job Costing Center that's been out there forever, and a lot of people haven't used. I'm going to QuickBooks Desktop, while I do the switch here real quick I'm going to put the CPE keyword up in the screen, so you guys write this down, horse, write down your keyword. Then towards the end of the webinar when we put the CPE polling question, you make sure you have to answer the question correct so we can automatically issue that CPE certificate. I'm going to leave it up for another 10 seconds, and then I'm going to go ahead and switch to QuickBooks Desktop.
Perfect. Switching over to QuickBooks Desktop. What I have here is QuickBooks Desktop Enterprise edition, and I will actually tell you when the specific function that I'm showcasing, it's available only in Enterprise, or it is also available on the regular premiere contractor edition. We are talking about the contractor edition of QuickBooks, sorry about that. The first thing I want to talk about, let me see, I can only see the screen, I only see Hector. Okay, maybe you guys cannot see my screen, sorry about that. Let me just make sure that you guys can indeed see my screen. I apologize, you guys, you all should be able to see my screen at this point. Give me one second, I have some feedback that ... Okay, you guys can see my screen. Perfect, sorry about that.
In the contractor edition of QuickBooks there is two specific tools that people don't use, it's incredible, they're out there, people don't use. One of them is the Job Costing Center. You have to be in the contractor edition, so the first thing I'll do I'll go to Job Costing Center. I'm going to show you what's in there, because it's interesting to see what's in there. The Job Costing Center basically has a highlight of some of the job costing related reports and related areas that people actually explore. One of them is the top three most profitable jobs, and it gives you a quick graph in terms of revenue and cost. Unfortunately I cannot customize this and show the top five or something like that.
It also shows you a really neat link here, there's 23,000 expenses not assigned to jobs. I love this one because this one actually gives you a shortcut to all the expenses that maybe you forgot to assign to job costs. I'm going to click on this 23,000 here that says it's expenses not assigned to jobs. Basically you have all these here are expenses that the system did not see you put in any, in this case, in any job in particular. Now what you're seeing in here for the most part are operating expenses, things like meals and entertainment, or things like gas. Maybe it's common and it's usual that we don't job cost this thing.
The one thing I didn't show you last time is what I like about this report is you go into this report first, and then we go to customize report, we go to filters, and then we switch this out. Instead of showing all accounts, then we go down and we go to, only cost of sales accounts, and what happens is you only will get the expenses that are related to costs of goods sold, which in this case there is none. At this point we can memorize this report and this is probably a report you want to monitor. 99% of times we job costs things like cost of goods sold, but we don't job cost things like operating expenses. That's one little trick about using that report in combination.
I'm going to go back to the Job Costing Center here and a couple of things here, we have an item profitability ... By the way, all these are available through the reports tab. These reports here are the same thing as these reports here. What I like about this, it's sort of a very easy, simple way of seeing it. I apologize, this screen here is a small screen with small text, and there's no way to really increase it. Some people are saying that the text is really small. It is what it is. If you click on any of these jobs by themselves that will take you to a job profitability detail report, and these are all by item, so these are very nice here to look at. These are a really nice way to get you started, it'll get your clients started in the job costing world.
That was one of the things I wanted to cover. The other thing I want to cover is in the new QuickBooks Enterprise 2014, so 2014 or 2015, they added a new report called work in progress summary. There's a big difference between what traditionally you had available as a work in progress summary, and what the new work in progress summary report does. In the past the closest thing to a work in progress summary we had was pulling up an estimates versus actuals summary report for example. This is in the past, before this 2014 Enterprise. We actually had to export this to Excel, and we had to divide where we stand in terms of estimated cost versus actual cost, multiply that times the revenue, and kind of see how much revenue we are supposed to invoice up to date. That is supposedly how we did work in progress reports in the past. It took an extra step.
Now somebody asking a question, if Job Costing Center is both in Enterprise and Premiere? Yes, Job Costing Center, it's in all contractor editions, Premiere or Enterprise. Let's talk about this specific report which is ... A lot of people undermine the value of this report. The work in progress summary report is extremely important, because if you have a client that has to report revenues in a true cost of completion way, basically the percentage of completion in this particular case ... I'm going to zoom this in real quick by just changing the font here, and we'll focus on one particular job. We'll look at this job here for [Albert Cruz 00:27:37] remodel. This is 64% complete, which means that the estimated cost versus the actual cost is 64%. The revenue, you are supposed to recognize in your books, based on a cost of completion method, this is [inaudible 00:27:53], is supposed to be 64% of my estimated revenue. Therefore if I have invoiced 200,000 I am overstating my revenues based on that cost of completion method for contractors.
It's extremely important. By the way I'm still in the same work in progress screen, I haven't moved anywhere else. I'm just using the numbers that we're looking at on the screen to make the explanation. Somebody said the screen is stuck, I'm still on the same screen here, I haven't changed anything. What we never got in the past before is this representation of how much of our revenue we have earned versus how much we've actually invoiced. The old reports only give me estimated revenue versus actual revenue. Now we get earned revenue which is a multiplication of your actual costs versus estimated cost, times the revenue. You get to compare whether or not you're under-billing or over-billing. If any of you don't do contractor/construction accounting and are mind-blown about this, maybe we can explain it in some other detail later on, but this is a very specific thing with job costing.
Those are the two things about job costing that I wanted to talk and talk about the value of that report, because it's actually a very powerful report. Now I'm going to switch over to custom reports, and this is one of my favorite things to showcase in my classes is how to use custom fields to build custom reports. What I'm going to do here is I'm going to a regular invoice. Let me go to customers, I'm going to go to regular invoice, I'm going to go back to any invoices, doesn't really matter which one it is.
I'll ask you to just forget about the specific items that you see there and the specific descriptions. What I want to focus in is working with custom fields. Whatever this item is, FP billing, imagine this is something else, whatever it is. I'm going to create a column here for a custom field, and the custom field's going to be an item level custom field. Custom fields can only be added in the item [inaudible 00:30:06] columns for item levels can only be added from within an item. I'm going to go into the item list, and I'm actually going to double click on any of these items, it doesn't really matter. I'm going to double click on any of these items, and by the way it doesn't matter which one I double click on, this is just how I get to it.
Then I'm going to go into custom fields. Then I'm going to get basically the screen that gives me all the different options in terms of what custom fields I can create. I'm going to create and define fields, and then I'm going to create three custom fields. One is going to be color, and the other one's going to be size. For the time being I'm going to enable both custom fields, color and size, and I'm not going to restrict the type of data that goes in there. In QuickBooks Enterprise only, you the option to restrict the kind of data that goes in there. In QuickBooks Premiere, or QuickBooks Pro, it's only a free text which is exactly what we're about to do here, so I'm going to hit okay, and then I'll hit okay again.
Now that this custom field has been created, the two custom fields, I can go to any invoice, I'll just create a new invoice, it'll be a lot easier. I'll create a new invoice here, and I'll create a test customer. I'm going to put here, item code, I'll put here concrete. Then on the second item I'm going to put wall framing. Now the two custom fields that we created were for item levels, so I want to be able to use those custom fields within an invoice. Step one is to enable them, step two is to go into formatting here and go to customize data layout.
Once I go into customize data layout, this is where I have the opportunity to edit the template and enable those custom fields to be now used in the new template. The specific custom fields that we're working with are going to be the columns, because these are the ones that manipulate the specific items. I'm going to go ahead and enable color and size. Now I'm not going to print them because maybe this is going to be a specific thing that we're tracking entirely, and we don't really need the customer, per se, to actually look at these things. I'm going to hit okay, and now both of my custom fields for color and size are open. Then I'm going to put here 200, I'm going to put here 600. The color for concrete I'll put here grey, and the size I'll put S for small. Color for wall framing I'll put brown, and then I'll put L for large.
I'm going to build up to how we build custom reports with custom fields here. I'm going to go ahead and save this invoice, and then I'm going to do another invoice altogether with the same type of scenario here. Let me go ahead and hit yes to these things here. Okay, perfect. I'm going to do another invoice here using other two items, whichever they are, doesn't really matter. Roof flashing and excavation. Then under the template I have to make sure that I did go back to the very first template here, so I'm going to go back to the template that I edited. I'm going to put here roof flashing, I'm going to put here black, and for size I'll put large. Then for color here I'll put grey, and for size I'll put small. I'm going to put here some dollar values and I'll hit save and close.
What's the purpose of this, is that we pull in some sort of detail report that narrows down maybe things like all black colored items, whatever those black color items are, or all small items, or all large items. The first thing we have to build is a detail report, a custom detail report. We'll go to custom reports, we'll go to transaction detail, and then I'll click here, all dates, and then under filters I'm going to go ahead and put here, go down to the actual custom field. There's size, and I'm looking for everything that I sold that is small. In context, whatever I said that I'm putting there, I'm looking for everything that's small. Then I'll hit okay. Once I hit this report I get all the items that have this small custom field element added to it.
Now what's the challenge with this is that what if the person writes small, or misspells small? This is where QuickBooks Enterprise really comes in to help, because what you want to do is avoid that data entry error, because if for whatever reason instead of putting the word S, they type in small, and I'll show you, I'm going to type in small in this one. I actually went into one of the invoices and I changed it from S to small. I'm saving it. When we go back to that custom report and we refresh it, that data item should go away because no longer am I going to be able to see that. Let me see, this one. This one says small, we'll save and close, and we'll build this report again.
Report, custom reports, transaction detail, filters, I go down to size, I'm going to put S ... I'm going to type small, this way when I type small I'm not going to get anything that just has S in it. That's the example I'm trying to illustrate. The way we fix this is in the item list, only in Enterprise, we're talking about just Enterprise, when we create this custom fields which we only do from the item list, when we edit them we have to make sure that we restrict the amount of data, or the kind of data that goes in there. This is this edit multiple choice option. Then we're going to put here options like small, large, medium, whatever it is. Then when we're actually building an invoice, I'm going to go back to this invoice. By doing this the user no longer has to sit there and retype things, and make sure that whatever they're typing is not restricted. It's restricted to a specific group of information. That's really the purpose of creating them with a drop-down menu with prefixed values.
That's really as much time as I have to talk about custom reports. Wow, time does fly. I'm going to switch over to our guest speaker from BizTools, meanwhile I'm going to put up a polling question here. The polling question is have you ever used a third party program or Excel to build a custom report for your clients? Have you ever had to use a third party program or Excel to build some sort of custom report for your client. I'm going to go over these questions while I switch over to John Power from BizTools. John, let me see if your audio is enabled. Your audio's enabled now. I'm now going to switch over and make you a presenter, can you hear, John?
John Power: Yes I can.
Hector Garcia: Okay, I'll make a quick disclaimer here, John is in Australia and it's 4:30 in the morning over there, so if you fall asleep in the middle of this thing, John, we won't hold you up to it and I'll pick up, that's okay. I'm going to make you a presenter so you can go ahead and show us how to work with BizTools this tax season.
John Power: Nice one, thank you. I think you need to ...
Hector Garcia: You're now presenter. I'm going to go ahead and get out of the polling question here, thank you for answering that guys. I'm going to close the polling question here, and you should be able to show your screen now.
John Power: Okay, can you see the screen, Hector?
Hector Garcia: Not yet.
John Power: I did not get the message to ... Sorry, it's just come through, so let's do that now. Okay, so thanks everyone for joining us today. We're going to quickly talk about QuickBooks and BizTools, and specifically for accountants and ProAdvisors about growing your business and helping your clients achieve more as a trusted advisor. We have only a few slides, I'm going to do some live demos. Little bit of background about BizTools, we were fortunate enough to win the Sleeter Awesome App Award November 13th of the year 2014. Prior to building solutions for QuickBooks, BizTools was historically a consulting practice working for mid-market type companies. Typically in the 100 million plus turnover range.
I'm going to pace through this really, really fast. The slide deck will be available to people who attended afterwards. Fundamentally we think that there's a great opportunity for accountants and ProAdvisors to act as trusted advisors to their clients, because of their high level of accounting skills and specifically their expertise with QuickBooks. You've heard many people talk about this in the past, many of you would know Doug Sleeter of course. What we would suggest to you is that being trusted is not enough, the reality is there's about 100,000 ProAdvisors around the world now working in the QuickBooks ecosystem. Really what's more important is to be proactive and actually deliver useful advice that helps your clients improve their businesses and achieve more.
Okay, so why should you be interested in this? Well fundamentally it's about there are profitable business opportunities for advisors that can deliver data driven analytics based on their clients QuickBooks files. This is about moving away ... Apologies for that. From just the compliance work and moving into more value added services. It's a great opportunity for value billing and to create recurring revenue streams. By recurring, the nature of this kind of work or services that you offer the client are typically done on a monthly or quarterly basis, and certainly not annual, that's really insufficient if you want to stay relevant to the client. There's an easy way to get started and we'll be showing you some examples of that in the demo in about one minute.
Okay, introducing BizTools, we have two SKUs. One for [SMBs 00:40:42] and one for advisors, so we're talking accountants, CPAs, ProAdvisors, et cetera, which we refer to as BizTools professional analytics. The key thing is it lets you work with unlimited client data files and there are no per client data file fees. It's very easy to use if you can use a website and have basic Excel skills, you can be successful with BizTools. The software does the heavy lifting for you.
Our focus is on KPI monitoring, score-carding, financial statement, and ratio analysis. It's very rich in terms of comprehensive sales reporting and analytics, and it actually enables you to go to the next level beyond just KPIs and dashboard type solutions to build very interactive custom reports that you can use to slice and dice a client's data and discover new insights that they can improve their results. BizTools is unique, it's the only OLAP based solution available for QuickBooks in the world. What that means is it makes complex analytics really easy for non-technical users. We've just got a couple of samples of out of the box content on the screen at the moment. We do a rolling 12 month trend analysis on over 25 ratios and out of the box for any clients that you process, you produce a comprehensive status report. That could represent your first billable deliverable and we'll talk about that a little while later.
A key thing some of you may have had exposure to pivot tables in the past. What you're going to see in a minute or two are pivot tables that are very, very different. Much more powerful and more importantly much faster, and much, much easier to use. Something of the nature of that's on the screen at the moment, would take about under 15 minutes to create.
I'm just going to go into the demo, and we'll open up BizTools.
Hector Garcia: While you do that, John, I just wanted to shed some light. Some people are asking about BizTools, does it work with QBO, and the answer is no, correct? Only QuickBooks Desktop?
John Power: Not currently, BizTools currently only works with QuickBooks Desktop, so [crosstalk 00:42:50] Pro, Premiere, and Enterprise.
Hector Garcia: We're talking about deep financial data that you're analyzing, so it's unlikely that a QBO client will be heavily in depth with financial data, correct? [inaudible 00:43:03].
John Power: I'm going to say no because we have not done the testing on QB Canada. That said, it probably does, but we have not tested it so we don't sell into the Canadian market at the moment. Maybe that's something we need to do some work on. [crosstalk 00:43:22]
Hector Garcia: Okay thanks. The other question some people are asking, what's a KPI? [crosstalk 00:43:27]
John Power: Key performance indicator.
Hector Garcia: I can give you some context on that too. I would like to summarize that what BizTools is about to do is take a whole bunch of financial data, summarize it into simple, easy to read reports, and then we're going to take these reports and we're going to do something with them which you're about to suggest to us when you do a demo. Go ahead.
John Power: The first thing is you've got to connect to your data file, you've got to map some accounts, and then you've got to kick off the processing of the data. That's really these three steps here. We're not going to walk through those today. In total your efforts per client data file will be less than 10 minutes, so that's the kind of effort you need to put in to get to this stage. By this stage I mean this. All this client, [Harry's 00:44:18] Custom Landscaping, let's have a look at the out of the box reports initially. We'll just have a quick look at a couple of the financial ratio reports. This is rolling trend analysis on any one of 27 key financial ratios. We could perhaps have a look at gross margin percent.
You can see it's very easy to use, it's also very comprehensive. We're covering all the basics from balance sheet ratios, income statement ratios, et cetera. What can be particularly interesting here is if you can flick through very quickly and see distinct trends. There we go, we've got a very distinct negative trend on the quick ratios. In this case of sample data the numbers are fairly high so it's actually not an issue but in the real world that would be something to really bring to a client's attention.
Tax season's about to get going and what we actually are suggesting is that there's a great opportunity to get the conversation started at the time when you provide if you're an accountant, or a bookkeeper, or a CPA. At the time you provide the end of year write up work to your client, to actually include this particular report that's going to launch in a couple of seconds, because the effort to get there in total is about 10 minutes. It's very comprehensive, it runs for 20 pages, any of these screen reports can be exported to PDF or Word. Word's a great example because you can add your own commentary and annotations to the report and really personalize it. You can deselect parts of the report that you don't want. I'm not going to flick through all the pages, we're very, very short for time, but essentially you can see that we look at the business from a overall financial health perspective.
There's a lot of information in there, it's a great way to ... And you can put your company logo or your firm logo on that as well, that takes about 60 seconds. We're seeing here rolling 12 month trends on all of the financial ratios that we were looking at before. The really easy thing to do would be to save it as a PDF and then include that in your write up materials that you would deliver to your client at the end of the financial year. That really begins the conversation for the next year, to let's talk to the client about how you can help them improve their business outcomes and start doing really high value consulting work.
Hector Garcia: John, let me get my head wrapped around what you're saying here. In about two months I'm going to be crazy busy and I'm going to prepare hundreds of financial statements for the purpose of tax work. As part of the work, we are already doing the write up, [inaudible 00:47:05] reviewing the financial statements or the QuickBooks file. We're going to print this set of reports that is about 20 pages long in Excel or PDF, and this is going to be an addendum to the work that we present. What you're suggesting is that we plant the seed to say, "Hey listen, there's a wealth of information in there. We probably have to set up some time after tax season, after April 15th, just so I can explain to you line by line what this all means and how I can possibly help you interpret this is in a monthly, quarterly basis, to make your business better, stronger, and to be better prepare us for the next tax season so we're not scrambling around for funds or whatever to pay your taxes. Is that the premise that you're setting here?
John Power: Yeah, that's exactly right. I think it's actually a mistake to wait till after April to start having that conversation. You really need to be planting the seed as you say, and get that conversation started when the client's highly focused on their tax returns and the write up work that you've done. It doesn't always have to be an accountant, it could be a ProAdvisor, it could be anyone that actively wanting to get involved with the client to help them improve their business. That's really the promise of business intelligence, it's about gaining insights from the raw data that's been converted into useful information to improve your decision making and improve your financial outcomes.
Now, look normally we do hour long demos, and I have started off with a couple of things that are pre-built. That example of the screen there would take an ordinary, non-technical user about 15 minutes to create if you wanted to. I'll just show you a quick process there. We're just going to insert the pivot table, and you'll notice that there's no data extracts, there's no table arranged of data. I'm just going to grab the balance sheet, and get the closing balance, and add the accounts, and let's add the time dimension in there. All I'm really trying to show you is speed and ease of use. It's not technical. That's the balance sheet. You can see that BizTools understands the financial structures and the financial hierarchy. It automatically reads that in from QuickBooks.
You also notice that it's got a lot of built in financial intelligence, so here's another pivot table. You can see that revenue adds up over quarters as it should. It's smart enough to know that you can't do that with a balance ratio. For example the quick ratio is not the sum of the four quarters, that's nonsensical, it has to be the value of the last quarter, or in fact the last month. Having really briefly shown you the process and ease of use to build something from scratch ... And we are definitely pushed for time. I'm just going to show you one that's been pre-built. I'll go back here.
Hector Garcia: While you do that I only have a quick question. If you build this in your own computer with a copy of the client's file in my own computer, and I create this Excel file that you're showcasing, can you email this Excel file to the client so the client can explore it, or does it have to be attached to the computer that we built this from?
John Power: No. One really simple thing to do is to show them a view. Here what I've done is I've started with the starting one which you saw a moment ago, and we've just flipped over to a sales view. This is highly interactive. We can see that's what's going on with the design class. Let's expand our residential customers, let's take the filter off that, let's have a look at what's happening in California. Look, Hector and I only spoke a few hours ago, and this took me about 20 minutes to put together for the purpose of the demo. I just wanted to give you a really quick idea of the speed and ease of use. Looking at the time, Hector, I think we might move on to-
Hector Garcia: Yeah, we can go to some questions if you want to?
John Power: Yeah.
Hector Garcia: We have some interesting questions here. Some people were asking how does this compare to Intuit's Statement Writer? I could answer that very easily, but do you want to answer that?
John Power: No no, you can answer that, Hector. I'll jump in if [crosstalk 00:51:35].
Hector Garcia: Intuit's Statement Writer doesn't haven't KPIs, these easy to read metrics with color coding and trends right out of the box. You would have to build that all from scratch. Even with Intuit's Statement Writer you're not going to get the depth of information you can get with BizTools. There was somebody was asking about transaction volume metrics, so I think they're asking about item level. Can you talk to us about what BizTools focus in, and whether it's an item level or a financial statement level?
John Power: It's both. We cover all the analytics you would ever want to do across balance sheet income statement, all the financial ratios, and also sales. Sorry, I should have paused that. Sales we go into a lot of detail across items, classes, customers, time, sales reps, all of those things. The whole purpose is to be able to, literally at the speed of thought, be able to splice and dice your data and discover those insights. I may not have pointed that out in the last slide, but that color coding really highlighted where you're making profits and where you're not making profits, or where your margins are low.
Now, what does it take to get started with this, to in fact move away from doing just the compliance work? We have a couple of different methods of purchasing the software. I've just highlighted the single user options here. You can buy the software outright for 1499, that lets you work with unlimited client data files. You can browse through our website to see this in more detail later. Alternatively we have a 24 month payment plan, which is only $99 a month. When you consider the amount of content that's created out of the box with less than 10 to 15 minutes effort per client, that's the kind of investment you should be making before you send your key clients in particular, their end of financial year write up and their tax returns. Because that's the key thing to get the conversation started. It's a great time and an opportunity to do that.
We have, because our friends at QB Power Hour kind of leant on us, a special offer for QB Power Hour webinar registrants and attendees today on BizTalks professional analytics. We're supplying free setup and live training. We do that remotely over Citrix GoToMeeting and GoToAssist, similar to what we're using today. Essentially what that does is it really guarantees that you'll be up and running really fast and you'll have a successful experience. Those offers end the end of December, and there's the promo code down the bottom, QBPOWERHOUR2014. I'll be sending Hector one page instructions on exactly[crosstalk 00:54:36].
Hector Garcia: Okay. John, perfect, I'm going to go ahead and launch the CPE question for the people that have to jump to another meeting. While I have the question up I'd like for you to tell us how has one of your successful clients converted compliance work into consulting work? Can you give us a one minute example? A lot of us are about to get really, really busy, and we're about to get really inundated with compliance work. How does this $99 a month investment, or $1400 a month investment, which now you are including as a special offer, training and setup which is actually very nice for us. How can you convert compliance work to consulting work?
John Power: It's about expanding your process. If you're an accounting firm focused on tax returns and general compliance work, if you're a certified ProAdvisor working on setting up and running QuickBooks and optimizing that, it's about introducing new service offerings. I can give you one example, one of our partners, he really acts as a factional CFO, is probably the best description. Initially that turned out to be far more about getting the books right and making sure that was all structured correctly. These days he's using BizTools to really add a lot of value to his clients, and he typically is doing monthly reviews with a lot of his clients, and his average monthly effort for those clients, and bear in mind he's doing more than what I'm talking about today, he's doing the customized stuff in Excel, he's spending about three hours a month and having a two hour monthly review with the client.
I know he's charging $2400 a month for that. The client's just loving it, they've started off at about, with the relationship the client was doing about three million a year, now they're doing five, so it's really been a great story of our partner using our software to help this small business client really grow this business and stay on track. It's a combination of three things, it's a combination of great accounting software, and we're talking QuickBooks here, it's a combination of great analytical software, so we're talking BizTools, and what's in the center of that is you. By you, it's the people on this webinar, because you're the ones that make sense of this and can really leverage that great software and make a big difference to your clients.
Hector Garcia: Thank you, John. Thank you very much first of all for doing this at five o'clock in the morning. The website is biztoolsanalytics.com correct?
John Power: Yes.
Hector Garcia: Your email is email@example.com if somebody needs to contact you directly?
John Power: My email is firstname.lastname@example.org and if you can't remember that just go to our website, we have a contact form, just put your inquiries through there, it's very easy to find, and I'll certainly be tracking those and I'll respond personally.
Hector Garcia: Perfect, awesome. Thank you very much. I'm going to include John's link and offer in the email that we'll send out with the recording of this webinar. Please allow two or three weeks for CPE certificates, I still owe the CPE certificates from the last session. Remember to go to QBpowerhour.com for more suggestions, and click on the link down there to give us feedback. You will also get that on the email that will come out in a couple of weeks. I would like to thank everybody for attending, Intuit for showcasing the really exciting QBOA, and John Power for showing us your tool and being awake at this time. Go back to sleep now, thank you very much. You guys have a wonderful December, I will you on December 18th for our very last Power Hour of 2014. Thank you.