Attention QuickBooks® users: Shortcut keys to help you work more efficiently. Do you have tips that should be included on this chart? Comment and let us know.

.

Paisley Solutions Blog follows a four week cycle of rotating topics, 1. Quixpert: Tips for QuickBooks® users; 2. Great Local Blogs; 3. Bookkeeping Made Easy; 4. Managing Cash Flow. Subscribe to one or more that interest you and be automatically entered to win a $50 prize. Subscribe by filling out the contact form with “Blog #(s)” (the # of the blog(s) you wish to receive) in the subject line at http://paisleysolutions.com/contact-us/. Subscribers not specifying a topic by number will be subscribed to all topics.

What are you doing now that will make this year different than last year? Plan your year and outline goals to increase revenue and referrals in 2012. Check out our featured blog and be sure to read all 5 installments on the Leading Results site.

Every four weeks, Paisley Solutions will feature a blog of a local business in our Great Local Blogs category. If you have a blog you’d like to see featured please send us your suggestions.

Paisley Solutions Blog follows a four week cycle of rotating topics, 1. Quixpert: Tips for QuickBooks® users; 2. Great Local Blogs; 3. Bookkeeping Made Easy; 4. Managing Cash Flow. Subscribe to one or more that interest you and be automatically entered to win a $50 prize. Subscribe by filling out the contact form with “Blog #(s)” (the # of the blog(s) you wish to receive) in the subject line at http://paisleysolutions.com/contact-us/. Subscribers not specifying a topic by number will be subscribed to all topics.

Our last Managing Cash Flow post posed the question “Why does the Income Statement (Profit & Loss report) for my business show a profit but I have no money in my bank account”?  And you learned the equation… Assets = Liabilities + Equity.

This month we will be discussing the Liabilities of your company and how they affect the balance sheet equation Assets = Liabilities + Equity and cash flow.  First let’s talk about what liabilities are.  Liabilities are loans, accounts payable, payroll taxes that need to be paid in the future, credit card balances; basically liabilities are monies that the company must pay out at some point in time.

As we mentioned in the previous post, the Balance Sheet is based on the equation Assets = Liabilities + Equity.  If income is part of equity then how do we keep the equation in balance?  Well, we need to consider the sum of the transactions that produced the income.  Some transactions result in cash being received or paid out.  Others result in a receivable or a payable.  Other transactions occur that never affect the Income Statement.  Let’s look at some examples.

A new liability is created when you purchase something on credit.  Let’s say you purchased a computer from Dell during their special no interest for one year offer.  The computer gets entered into the Asset side of the balance sheet and then to keep the equation equal the amount of money you agree to pay Dell is entered as a liability because you will not be paying it back until next year.  This entry does not affect your net income at all until the asset is depreciated (but that is an entirely different lesson). 

Perhaps you purchased fuel with a credit card.  While this increases your expense and reduces net income, it does not affect cash.  Instead your credit card liability increases.  Then when you pay the credit card company, the liability balance decreases and your cash balance decreases.  Think about that a minute.  The decrease moved from one Balance Sheet account to another.   This is a good example of how cash flows through your business.

Watch for our next Managing Cash Flow blog post!

Paisley Solutions’ Blog follows a four week cycle of rotating topics, 1. Quixpert: Tips for QuickBooks® users; 2. Great Local Blogs; 3. Bookkeeping Made Easy; 4. Managing Cash Flow. Subscribe to one or more that interest you and be automatically entered to win a $50 prize. Subscribe by filling out the contact form with “Blog #(s)” (the # of the blog(s) you wish to receive) in the subject line at http://paisleysolutions.com/contact-us/. Subscribers not specifying a topic by number will be subscribed to all topics.

Part 1 of How to Choose a Bookkeeping Solution

Step 2:  Determine time and frequency needs

___Once a month – after the fact (Number of days___ /hours ___) You handle the invoicing, receipts and disbursements but need someone to record the transactions and create financial statements.

___Twice a month (Number of days___ /hours ___)

___ Every other week (Number of days ___ /hours ___)

___ Every Week   (Number of days ___ / hours ___ )

Step 3:  Consider your future needs

Is your business:

___Stable – 3 to 4% annual growth

___Expanding – 5% or higher annual growth

___Seeking to merge or be acquired

Step 4:  List other job requirements such as industry experience, willingness to travel, additional duties (examples:  administrative, sales, marketing), unusual hours, etc…

Watch for our May Bookkeeping Made Easy blog post for the next steps on choosing a bookkeeping solution!

Paisley Solutions Blog follows a four week cycle of rotating topics, 1. Quixpert: Tips for QuickBooks® users; 2. Great Local Blogs; 3. Bookkeeping Made Easy; 4. Managing Cash Flow. Subscribe to one or more that interest you and be automatically entered to win a $50 prize. Subscribe by filling out the contact form with “Blog #(s)” (the # of the blog(s) you wish to receive) in the subject line at http://paisleysolutions.com/contact-us/. Subscribers not specifying a topic by number will be subscribed to all topics.

While Quickbooks® makes it easy to generate financial reports; they have little value if the data is incorrect. In some cases, the person recording the transactions may have little or no accounting knowledge; resulting in mistakes, missing pieces, or duplication. The bank and credit card reconciliation function is the first place to look for problems. Once an account is reconciled, items that remain uncleared should be investigated and, if appropriate, corrected or voided.

Paisley Solutions Blog follows a four week cycle of rotating topics, 1. Quixpert: Tips for QuickBooks® users; 2. Great Local Blogs; 3. Bookkeeping Made Easy; 4. Managing Cash Flow. Subscribe to one or more that interest you and be automatically entered to win a $50 prize. Subscribe by filling out the contact form with “Blog #(s)” (the # of the blog(s) you wish to receive) in the subject line at http://paisleysolutions.com/contact-us/. Subscribers not specifying a topic by number will be subscribed to all topics.