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QuickBooks Pro 2010
Notes for Development Organisations
CONTENTS PAGE
The main purpose of this manual is to help you set up your company file in
QuickBooks, and discover the features of QuickBooks 2010 software which are of
particular interest to NGOs. It is assumed that the reader has experience of using a
computer and a good knowledge of accounting principles.
The Menus in QuickBooks are shown in uppercase in this manual. This is to help
you find your way round the software. For example, the option for using multi-
windows instead of single window is shown as follows: EDIT- PREFERENCES-
DESKTOP VIEW- MY PREFERENCES. The option for selecting multi windows is
displayed in the last window.
Select the menu HELP for detailed information about how QuickBooks software
works.
The appendices at the end of the manual contain checklists to help you to decide if
QuickBooks 2010 is the appropriate software for your NGO and to give you an
illustration of checks and operating procedures for NGOs using QuickBooks 2010.
Make a list of the NGO’s budgeting, accounting and reporting requirements; review
and agree the Chart of Accounts that you will use in future. This will enable you to
prepare the “specifications” that your NGO requires from your new software.
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It is advisable to run QuickBooks on a computer that has access to the internet, for
registration and updating of the software. You may find using a mouse rather than
a keypad an easier way to move round the various menus and for entering
transactions.
The QuickBooks manual that comes with the software explains how to install and
activate the software. Close all open programmes, including anti-virus, before
installing the software. The activation process includes online connection to Intuit
or a phone call. Print the details of the Serial number, Installation key and Licence
key after activating the software. The programme will stop working after a few uses
if it is not activated.
4 IT procedures
AIM: To ensure that the software runs smoothly and data is not lost.
Your NGO should have a written IT Policy including regulations about computer
access and security, and anti-virus precautions. Regular Backups must be kept in a
secure location away from the computer. Backups should be stored on an external
hard drive or on CDs.
If QuickBooks is installed on more than one computer each user must have their
own licence. If you transfer company files across from one computer to the other
this can be done by backing up via the menu FILE – SAVE COPY OR BACKUP. The
backup file can then be transferred to another computer where the programme is
already installed, and then “restored” via the menu FILE- OPEN OR RESTORE
COMPANY. Take care that the correct filenames are used during this process, so
that you do not delete a needed file on the second computer by mistake.
If your computers are connected to the internet the QuickBooks files are
automatically updated from time to time so that your computer has the most
recent version. When transferring a file from one computer to another make sure
that the same version of the software is running on each computer. A computer
with an older version may not accept a newer version file. The “Automatic Update”
feature can be switched off on both computers if this is likely to cause problems
(HELP –UPDATE QUICKBOOKS – OPTIONS).
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NGOs should never rely on their software systems alone to provide sufficient
checks and controls on the accuracy or security of their accounting systems.
Reports that are produced from the accounting software must be checked; backups
kept; access to the software restricted to the accounting staff and arrangements
made for internal and external audit of the records by someone who is not involved
in the daily accounting work. An example of good organisation is as follows:
a) The “Administrator” (the person who sets up QuickBooks) will be a senior staff
or board member, for example the Finance Director. The Administrator will have a
password (keep a copy of this with someone who does not make entries in
QuickBooks) and will set up other Users, with their own passwords..
c) The documents supporting the bookkeeping entries, including cash and bank
transactions and journals will be approved and countersigned by the Finance
Director and/or others who have authorised transactions and checked the
documents. This should be done before the accountant enters transactions into
QuickBooks.
d) The Finance Director will ensure that financial reports are prepared in a timely
and regular way, say each month, and that these are thoroughly checked. There
should be strict controls over the procedures to correct mistakes or to change
previous entries in QuickBooks. See section 15 for further details.
e) Those responsible for internal and external audit of the QuickBooks records will
compare the entries in QuickBooks with the supporting documentation and with
the approved management reports and accounts. Particular attention will be given
to examination of cash and bank reconciliations. Other key reports include the
General Ledger, and the Audit Trail where all transactions, including changes and
deletions, are recorded. These reports are located in REPORTS - ACCOUNTANT &
TAXES.
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Once QuickBooks is installed a separate “Company” file has to be set up for your
NGO. Go to the menu called FILE at the top left of your screen and follow these
steps:
Select and click on NEW COMPANY. “EasyStep Interview” Window opens
Option to Start or Skip interview
START INTERVIEW
Enter details as listed (it is not necessary to complete all fields)
Company name
Address etc.
NEXT “Select your industry”
Scroll down the list and highlight “Non Profit”
NEXT How is your company organised?
Select Non-Profit
NEXT Select the first month of your financial year
NEXT Set up your Administrator password
It is recommended that you enter a password, even if this is a temporary one, such as
“admin”, and time to be spent later setting up passwords and users. See sections 10 and 15
for further details. It is very important to use, and to control the use, of passwords!
NEXT Create your company file. No action required
NEXT
Filename for New Company
QuickBooks will assume that you want your file to have the same name as your company
name entered previously. It will create the file in a folder called “Company files”. This is a
sub-folder of “QuickBooks” which is a sub folder of “Intuit”.
SAVE
(Wait while your new company file is created)
Customising QuickBooks for your business
NEXT What do you sell?
Suggest that you select “Both services and products” – even if your NGO does not sell
anything!
NEXT Do you charge VAT?
“No” will already be selected. This will normally be the case, so leave this as it is unless you
are a UK company or charity that does charge or claim Value Added Tax.
NEXT Do you want to create estimates in QuickBooks?
“No” will already be selected.
NEXT Tracking customer orders in QuickBooks
“No” will already be selected
NEXT Using Sales receipts in QuickBooks
“Yes” should be selected (if not already marked) as your NGO may wish to use this facility to
issue receipts.
NEXT Using statements in QuickBooks
Select “Yes”
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Choose “Bank” as the type of account when you create a new account in
which you will record cash transactions
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EDIT – PREFERENCES
There is a list on the left hand side of the Preferences window, starting with
“Accounting” at the top. When you have time explore these preferences. The
following preferences may be required immediately:
ACCOUNTING
When you select accounting you will see two tabs “My preferences” and “Company
Preferences” – select “Company Preferences”
If your Chart of Accounts has account numbers (and this is recommended), tick the
box “Use account numbers”. We shall revisit this preference again to select “Use
lowest sub-accounts only”, but this cannot be selected at this stage.
If, as is likely, your NGO manages different funds or programmes and you want to
track income and expenditure on each one you should now tick “Use class
tracking”.
You can now move on to the NEXT Preference on the list on the left – BANKING.
When you select this QuickBooks prompts you to save the preferences that you
have just selected and changed – select “Yes”.
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BANKING: My Preferences
There is nothing urgent to be done here until after you have set up your chart of
accounts. You may return to this preference later and set up one of your bank (or
cash) accounts as the “default” account. (“Default means that when you open a
menu to enter transactions, QuickBooks will open the “default” account first).
Check that “View” is set for “Multiple Windows”. You can open as many windows as
you like while using QuickBooks – but close down unused windows from time to
time via the menu WINDOW – CLOSE ALL. If you have too many windows open the
computer may crash!
a) Introduction
LISTS – CHART OF ACCOUNTS. Click on this. You will then enter the chart of
accounts window. There will be some system generated accounts already there
(Payroll liabilities, Giro, Opening Bal Equity, etc.)
It is assumed that you have already prepared a list (chart) of numbered accounts.
In section 7 above you will have selected: EDIT-PREFERENCES-ACCOUNTING-
COMPANY PREFERENCES -“Use Account Numbers”. In this case most of the system
generated accounts will already have account numbers but some may not (for
example the account Exchange Gain or Loss).
Enter appropriate numbers for these existing accounts, and your new accounts, as
follows: Move the cursor to the account where you wish to enter (or change) the
account number, so that this is highlighted. RIGHT CLICK on your mouse or keypad
and select EDIT ACCOUNT. Enter the account number in the top right hand corner
of the new window and then click on SAVE AND CLOSE.
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It is important that ALL accounts have numbers. This is essential if you have
accounts arranged in a hierarchical structure (i.e. accounts with sub accounts, sub-
sub accounts etc.).
It is recommended that you select this preference: EDIT – PREFERENCES –
ACCOUNTING – Company Preferences – “Show lowest subaccount only” . This
preference can only be selected once all accounts have be allocated numbers. If
this preference is NOT selected you will find that, when you enter a transaction, the
name of the “sub” account is not visible on the screen, but only the name of the
account at the “top” of the hierarchy!
If you have a list of your Accounts on an Excel Spreadsheet this can be directly
imported into QuickBooks. Go to FILE- UTILITIES- IMPORT-EXCEL FILES and then
follow the instructions for “Import using an existing Excel file”. The accounts on the
Excel spreadsheet have to be arranged so that the account numbers are in one
column; the account names (which must not exceed 32 characters) in a second
column, and the account “Type” (i.e. Income, Expense etc. as used in QuickBooks)
in a third column. NOTE: DATA AND ACCOUNTING TRANSACTIONS CANNOT BE
IMPORTED.
e) Deleting accounts
This can be done through the EDIT-DELETE ACCOUNT menu or by holding down the
key CONTROL and pressing C. QuickBooks will not let you delete accounts in which
transactions have been recorded.
Accounts that are no longer required can be removed from the Chart of
Accounts by making them “inactive”. In the LISTS-CHART OF ACCOUNTS
window select the account concerned; right click the mouse and select
“Make Account Inactive”. If you do this we recommend that you click on
the “Account” button at the bottom left of the window and select “Show all
accounts”. The inactive accounts appear on this screen, marked with a
cross – in this way you will not forget that they are there and can be
reactivated by clicking on the cross.
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It is not possible to “import” balances from your previous accounts if these are on
an Excel spreadsheet or in other accounting software. It is recommended that you
enter the opening balances by a Journal entry (see section 14).
If possible, start your entries in QuickBooks from the beginning of your financial
year. It is recommended that you enter your opening balances by journal. The date
of the journal should be the last date of your past financial year. In this way you will
be able to prepare a “Balance Sheet Prev Year Comparison” report which displays
the past years balance sheet figures.
It is also good idea to enter the closing balances of your past year’s income and
expenditure so that a “Profit and Loss Prev Year Comparison” Report can be
prepared. You can also see that these reports are displayed correctly.
When you set up QuickBooks you were prompted to enter a Password for the
Administrator (named as “Admin”). This is a first step in establishing control over
access to the software. The menu to use to enter a new password is:
The Administrator should not normally be the person who is responsible for the
daily entering of transactions into QuickBooks. The Administrator is a senior person
with a supervisory role, and the responsibility to check that entries into QuickBooks
are authorised and accurate. The Administrator will set up other USERS, each with a
password, and will decide upon the ACCESS RIGHTS of each person.
The menu to set up Users and their Access rights is found under COMPANY – SET
UP USERS AND PASSWORDS – SET UP USERS. The Administrator can Add, Edit or
Delete Users here. The Administrator will set up the password and access rights of
the new user. The Access rights range from full access to selective access, and
where the user can modify past transactions or not.
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a) Introduction
b) Creating “Classes”
New Classes may be set up either as you enter a transaction for a new Class, or by
selecting the menu EDIT-NEW CLASS, or by selecting LISTS- CLASS LIST and then
right click on the mouse to create a new class. It is also possible to create sub-
classes. This is useful if you have a project that is co-funded or where you need to
have a sub total of income and expenditure for a group of funds or projects in the
same programme.
The PROFIT AND LOSS BY CLASS report gives a breakdown of income and expense
for each class for the dates that you specify. There is also a column that lists all
transactions that have not been classified. This is useful as you can review each
item by double clicking on the amounts listed in the unclassified column, and then
check if the transaction should have been entered into a particular class. Section 16,
Management Reports explains how you find this report.
It is recommended that you check that all income and expenditure transactions
have been allocated into their respective classes.
A column is provided in the Bank Registers and Journal where the name of
the Class is selected. If a transaction affects more than one Class, the
transaction can be split up so that the appropriate amounts can be entered.
If you decide to use Classes it is a sensible control to allocate all income and
expenditure to a class. There is then less possibility of forgetting to allocate
items to its class.
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The QuickBooks year end function closes down Income and Expense accounts.
Brought and carried forward balances for individual Classes are therefore not held
in the system. Here is an example of a suggested “Work around “ solution if you
want your class reports for the next year to include balances brought forward:
Example
ABC Literacy Action financial year ends on 31 December. It has two programmes
with the following balances in hand at the year end:
(i) Create a new account named “Opening fund balance”. The account type is
“Other Income”
(ii) Then prepare a journal entry dated the first day of your financial year
recording opening Class (Project/Fund) balances. Debit and credit the
amount of the opening balances on each funds to this “Opening Balance
account” i.e. The debit entry is the same as the credit!
(iii) Then record the debit or credit opening balances against the correct
“Classes” but do not classify the corresponding balancing debit or credit. Your
management reports for Classes should now show the opening and closing
balance to date in respect of each project.
Date 01/01/2011 Entry No:
Account Debit Credit Memo Name Billable Class
Opening Balance 5675 Alpha School Opening Balance
Opening Balance 5675 Alpha School Opening Balance ALPHA
Opening Balance 4000 Beta College Opening Balance
Opening Balance 4000 Beta College Opening Balance BETA
(iv) The PROFIT & LOSS BY CLASS Report will display the Opening Balance after
the Income and Expenditure for the Year to date. Thus the final balance at
the end of the page will be the balance in hand and carried forward at the
report date.
(v) No journal is required at the end of the year as the QuickBooks year end
routine will automatically zero out this “Opening Balance” income account.
Budgets and Income and Expenditure reports may be prepared for each “Class” (see
section 19 and 20 below for further details).
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Here are some general notes about the way QuickBooks works, and procedures to
be followed:
When receipts or payments are being entered you can find the account
name by typing in either the name or the account number (but be careful if
two accounts have similar names).
Use Control C to Copy and Control V to paste the same details (or use the
mouse to copy and paste)
It takes time to enter each transaction when you start; however, it becomes faster
as you get used to how QuickBooks works; and as QuickBooks memorises names.
There are two methods of recording payments in a particular bank (or cash)
account:
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METHOD 1
This is a good method to use to start with as the screen looks like a cash book and
you can enter receipts and payments! However, this Method does not work for
foreign currency bank accounts – go to Method 2A and 2B!
a) Close all open windows except the “HOME” window. On the far right of the
screen you will see “Account Balances” and under this there is a list of your cash
and bank accounts. Double click on the bank account in which you wish to enter a
transaction. Alternatively go to the main menus and select BANKING – USE
REGISTER – Select Account.
b) A screen opens that looks like a cash book! Enter the transaction as follows:
Date: Date of the transaction
No: Cheque (or supporting voucher) no.
Payee: the name of the person you are paying; the first time you enter a
new name here you will be prompted to say whether this person
is a Supplier, Customer, Employee or Other.
Amount: the amount – payment in the first column or receipt in the
second column
Account: Enter the account number /name here
Memo details: write brief details here about the transaction i.e. brief
description of goods or services.
c) If this is all you need to enter click on RECORD (bottom right corner). The
transaction is then permanently recorded in QuickBooks.
e) When you have finished entering the transaction click on RECORD (bottom right
hand side of the window). QuickBooks then permanently records the transaction.
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METHOD 2A
(This is an alternative method for entering payments - all the details you need to
enter are displayed in the window).
a) Close all open windows except your “HOME” window. On the right of the screen
you will see “Banking” and under this you will see “Write cheques”. Click on this to
open the WRITE CHEQUES window. Alternatively go to the main menus and select
BANKING – WRITE CHEQUES.
b) You will see a frame that looks like a cheque! Above this there is a place for the
name of the cash or bank account in which you are going to enter transactions.
Make sure that the right account is selected. You can make the cash or bank
account that is used most often appear each time you return to this window. Go to
EDIT-PREFERENCES-BANKING- My Preferences and “Select Default Accounts to
Use”. Then enter the account number/name of the bank or cash account that in the
“Write Cheques” box (and also the “Make Deposits Box)
When you open the Write Cheques window the ending cash or bank
balance is displayed above the cheque, on the right hand side.
c) Under the cheque you will see a box labeled “To be printed”. Untick this.
d) Use your mouse or the TAB key to move from one entry to the NEXT as follows:
No: Cheque (or reference) no.
Date: Date of the transaction
Pay order of: the name of the person you are paying;
Amount: the amount
Memo: write brief details here about the transaction i.e. brief
description of goods or services.
e) Under the cheque you will see a box with a tab called “Expenses” (ignore the tab
called Items – no details are required under this tab)
Account: Enter the account number /name here
Amount: The amount will already appear but you can change this if the
amount paid is to be entered into different accounts.
Memo: not necessary to use this if you enter details in the first Memo
space
Customer Job: no entry is necessary
Billable?: No entry is necessary
Class: Enter the name of the programme or fund if you are tracking
transactions against different programmes or funds (see section
11 for more details).
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METHOD 2B
a) Close all open windows except your “HOME” window. On the right of the screen
you will see “Banking” and under this you will see “Record Deposits”. Click on this
to open the MAKE DEPOSITS window. Alternatively go to the main menus and
select BANKING – MAKE DEPOSITS.
b) At the top of this window you will see a place for the name of the cash or bank
account in which you are going to enter transactions. Make sure that the right
account is selected. Then using your mouse or TAB key enter the details of the
transaction:
Date: Date of the transaction
Memo: Voucher number and Brief memo
Received from: Name of person from whom cash is received
From account: Ledger account (for example- donations, grants)
Memo: Further details if required
Chq No: No entry necessary – but this column could be used for
recording the voucher reference
Pmt Meth. No entry necessary
Class: Enter the name of programme or fund (see section 11)
Amount: Enter the amount
b) At the bottom of this window you will see three further boxes: Cash goes back
to, Cash back memo and cash back amount. The use of these boxes is optional.
c) When you have completed entering the transaction click on Save and Close.
13 Bank reconciliation
AIM: To ensure that the transactions recorded in QuickBooks agree with those on bank
statements – and that entries on both records are correct.
Have the most recent bank statement NEXT to you and follow the instructions on
screen. You may temporarily “Leave” the bank reconciliation to make an entry or to
correct a figure in the bank account, while you are preparing the bank
reconciliation.
Print out the detail report when you have finished the reconciliation. This is a useful
control report, especially the end of the financial year. This can be a workpaper to
support the accounts, and to give to the auditor.
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14 Journal entries
AIM: To enter non cash/ bank transactions, corrections, year end adjustments, etc. in
QuickBooks.
The following message comes up the first time that the Journal is opened
“QuickBooks automatically assigns numbers to journal entries”. You can enter your
own journal reference if you prefer, and this preference may be changed.
QuickBooks will not Save and Close the Journal until the Journal entry balances.
The Finance Director should ensure that there are procedures for checking
transactions both before and after they have been entered so that mistakes are
seen and corrected immediately.
No further changes should be permitted once the monthly accounts have been
discussed and approved. Any corrections should be made by preparing a Journal
entry in the NEXT financial reporting period.
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A Password can only be entered here by the Administrator, and not by any other
User. The Administrator can change the password if it is lost.
All correction or modifications are recorded permanently in the AUDIT TRAIL. The
Audit Trail is found via the menu: REPORTS - ACCOUNTANT & TAXES - AUDIT
TRAIL. The screen that first comes up discloses transactions entered or modified on
today’s date. Change the date range as needed. The listing includes Deleted
transactions – it is advisable to click on the tab: “Modify Report” and check that the
“Show Deleted Transactions” box is ticked.
There is an alternative report CLOSING DATE EXCEPTION REPORT which discloses all
changes made to entries prior to a Closing Date.
16 Reports
AIM: To produce timely management reports at the press of a button!
a) Introduction
You will find a large number of reports, and illustrations, via the menu REPORTS –
REPORT CENTRE. On the left hand side there is a list of report groups. The groups
that are of particular relevance to NGOs are:
Once you have selected a report in a particular group you will usually find the
following menus at the top of the report:
Modify Report Memorise Print
E-mail Export Hide Header
Collapse Refresh Dates From/ To
Columns Sort By
The Modify Report menu is of particular interest. This menu has options to change
dates, format the report, add or remove columns, etc. There is a facility to “filter”
the accounts information, allowing you to select certain accounts, classes etc. as
required for your report.
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b) Key Reports
The key reports you can create, where they are found in REPORTS, and how they
are presented include:
COMPANY & FINANCIAL – STANDARD PROFIT & LOSS ACCOUNT
COMPANY & FINACIAL – PROFIT & LOSS BY CLASS
COMPANY & FINANCIAL – STANDARD BALANCE SHEET
The MODIFY REPORT menu allows you to change the name of the report for
example change “Profit and Loss” to “Receipts and Payments”. You can make other
changes for example, change fonts, show amounts without decimal places, show
negative figures in brackets or not display zero amounts.
The COLLAPSE menu hides any sub- accounts that you have created, so that you can
have a summarized report displaying the main accounts.
There are some headings that are generated by QuickBooks that cannot be
changed, for example, the heading “Assets”. You can change the header, including
the date on the report – BUT be careful! You may prepare a report later for a
different period and it is easy to forget to change the header to the new report
date!
There is a report in this group where previous year comparative figures can be
displayed and also an “income and expense graph” which includes a “pie chart”.
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There will be some reports that will be needed on a regular basis, for example, the
Profit and Loss Account, and the General Ledger. When these key reports are
created for the first time, and it has been formatted in the way you would like it to
appear when it has been printed, the report can be “memorised”. Click on
MEMORISE. You will be prompted to give a name to the report, for example “Profit
and Loss”. Then click on OK. When you want to retrieve this report go to REPORTS
– MEMORISED REPORTS and then click on the report that you need from the list on
the screen.
An even quicker way to retrieve a report is to add it as an icon to the Icon Bar.
When the report is on the screen, select the menu VIEW- “ADD (name of report)
TO ICON BAR”. You will then be prompted to give a “Label” (a short name) and a
description for your report. Click on OK, and a new icon for your report is added at
the right hand end of the ICON BAR.
Click on VIEW- CUSTOMISE ICON BAR (or right click on the Icon Bar) and then
follow the instructions to delete icons or to change the order in which they appear.
Note that changing the Regional and Language settings may have an impact on
other Excel files so you should make a note of changes you have made, in case you
have to change them back to the original settings.
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QuickBooks automatically “closes down” all income and expense accounts on the
Year end date. The balances on these accounts are transferred to an account called
“RETAINED EARNINGS” on the first day of the new financial year. The balance on
this account represents the overall surplus or deficit for the year on all funds and
projects.
Accounts must be set up in the ledger for each fund or project that is managed by
the NGO. These accounts should be created as “EQUITY” accounts. There will be no
movement on these accounts except an annual journal that should be prepared on
the first day of the new financial year. This journal is transfer the income and
expenditure on each fund from the RETAINED EARNINGS account to the respective
fund account. There should be a ZERO balance on the Retained Earnings account
after entering this journal.
After the Annual Accounts have been finalised it is recommended that a file is
prepared containing print outs of key reports that back up the accounts. This would
include:
TRIAL BALANCE
JOURNALS
BALANCE SHEET
These reports should be kept in your archives for at least seven year (some
countries may require documents to be kept for a longer period).
It is recommended that a back of the company file is prepared via the menu FILE –
SAVE COPY OR BACKUP. This should be on an external hard drive or CD.
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A) GLOBAL BUDGET
Select the menu COMPANY- PLANNING & BUDGETING- SET UP BUDGETS. Select
Create a New Budget – specify the year end and type (leave type as Profit and Loss).
NEXT Additional Profit and Loss Budget Criteria
Leave as “No additional criteria”
SAVE as you proceed and when you have finished entering the budget figures
(including zero amounts – see below) click on OK. This takes you out of the Budget
menu.
B) PROGRAMME BUDGETS
Select the menu COMPANY- PLANNING & BUDGETING- SET UP BUDGETS. Select
Create a New Budget – specify the year end and type (leave type as Profit and Loss).
NEXT Additional Profit and Loss Budget Criteria
Select “Class” Do NOT leave as “No additional criteria”
NEXT Choose how you want to create a budget
You will probably want to create budget from scratch (with new figures)
FINISH.
There is a box on this screen labeled “Current Class”. Select the “Class” for which
you wish to prepare a budget.
The screen lists all the income and expenditure account with a column for monthly
budget figures. These are totalled to make up the annual budget. See the section
above (A) Global Budgets for information and notes as to how to enter budget
figures.
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SAVE as you proceed, and when you have finished entering the budget figures
(including zero amounts – see below) click on OK. This takes you out of the Budget
menu.
The amounts you enter in your Class budgets are NOT be included in your global
NGO budget report.
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On the NEXT screen, “select the budget to use when generating the budget report”.
Select the budget with the name “FY…. – Profit and Loss by Account”
This takes you to a very large spreadsheet where the budget is broken down by
months, initially for “This Financial Year to Date” with columns for Actual, Budget,
Over Budget and % of Budget for each month.
Select MODIFY REPORT. On the first Tab “Display” you can change the date to the
period required. If you want to see the budget by Year rather than by Month you
can change the “Display columns by month” to “Display columns by Year”.
On the NEXT screen, “select the budget to use when generating the budget report”.
Select the budget with the name “FY…. – Profit and Loss by Account and Class”
This takes you to a very large spreadsheet where the budget is broken down by
months, initially for “This Financial Year to Date” with columns for Actual, Budget,
Over Budget and % of Budget for each month.
THIS SPREADSHEET INITIALLY DISPLAYS ALL Actual Income and Expenditure and
the CLASS budget(s)- so the report now has to be modified so that only the budget
and actual expenditure for a particular class is displayed. This is achieved as follows:
Then in the box labelled “Class” select the Class (or multiple Classes) for which you
want to display the actual and the budget figures. Click on OK.
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If you wish to compare the actual results “to date” with the budget for the
whole year select “This Financial Year” and not “This financial year to
date” for the period covered by your report. The slight problem with this is
that the header at the top of the actual column will give the dates of the
whole year, rather than the period for which you are preparing the report.
There are two suggested “work around” solutions for this. Either change
the Report heading to indicate the period covered by the report in respect
of the actual results, or export the whole report to Excel, where the header
of the “Actual” results can be changed to the dates of the period covered.
When you have arranged the report in the way that you want it, you can
“memorise” the report, and add it to the Icon Bar so that it is easily
retrievable. This will save you much time in the future! PS: If you have
modified the Header name or dates, do remember to change this on the
next report that is prepared using this template!
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21 Foreign Currency
AIM: To operate cash and bank accounts in more than one currency. To prepare reports
disclosing transactions in the different currencies.
If you have the UK or US version of QuickBooks Pro, and your “Home Currency” is
not pounds sterling (GBP), you can set up the MULTICURRENCY option in
QuickBooks and then select or set up a different currency as the your main
currency. It is best to choose this option when you set up the new NGO “Company
file” (see section 6).
Once you have selected the option to run the multicurrency feature it cannot be
changed. Budgets and key reports can only be prepared in “Home Currency”. This
should be taken into account when deciding what currency to set up as your “Home
Currency”.
You can add and edit additional foreign currency bank accounts as needed.
After Multicurrency has been activated you can add or edit currencies through
LISTS-CURRENCY LIST. Highlight the currency that you wish to edit (or create or
activate a new currency). Click on the menu Edit Currency. A screen is displayed
where you can view and edit the currency format, and change exchange rates,
including the date from which the any new exchange rate will apply. Note that this
will NOT change the exchange rate already applied to previously entered
transactions.
Go to the menu: LISTS – CHART OF ACCOUNTS then either right click or click on the
menu ACCOUNT (bottom left of screen). Select “New”
Set up the new bank account with account number, name and then choose the
currency of the new bank account from the list of currencies.
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You cannot enter foreign currency receipts of payments directly into the bank
register – you have to use the WRITE CHEQUES or MAKE DEPOSITS menus for these
transactions. See section 12, Methods 2A and 2B.
You will be prompted to set up a new name as a supplier or customer the first time
you enter a receipt or a payment in the new foreign currency bank account. You
cannot use the a name that has previously been used for “Home currency”
transactions. If you try to do this Quickbooks will “jump” out of the foreign
currency bank account into a bank account in Home currency! A way round this is
to add a prefix, such as “.” in front of the name.
There is a box in the window which displays the exchange rate between your
“Home currency” and the foreign currency. This is originally set as “1” so this should
be corrected to the correct rate. Take care that the rate is correctly entered!
Example:
Your home currency is GBP. You have opened a bank in local currency (Kenya
Shillings KES) and the exchange rate is 1 KES = 0.007144683 GBP. Enter this rate
into QuickBooks and NOT the rate of KES to the pound (139.99).
The exchange rate that you set for your first transaction will be used for
subsequent transactions – unless and until you change the rate.
It is strongly recommend that there is a report that you can quickly access on the
Icon Bar which discloses movements on your foreign currency bank accounts in
both your “Home” and the local (foreign) currency. This is set up as follows:
In the “Columns” box put a check mark NEXT to the following additional column
heads: “Foreign Amount”, “Currency”, “Exchange rate”, and “Foreign Balance”.
Click on the Tab called “Filters” and select the Filter “Account”. Then, in the
Account Box select “Multiple accounts”. Select the foreign currency bank accounts
that you want displayed on your report.
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When you have finished, click on OK, and then OK again on the Modify Report
screen.
Adjust the size of some of the columns on the report now displayed (by clicking on
the diamonds at the top of each column and then dragging your mouse to change
the size of the column).
When you are satisfied that everything is displayed on the screen, including the
foreign currency columns, memorise this report and add it to the Icon Bar (see
section 16 for instructions). Give the report a short name such as “Forex Report”.
It is very important to check that you have the right figures in your ledger –
look at the entries in the bank registers, and on the bank reports that you
have set up (Para c. above) and check the home currency and the foreign
currency amounts – IT IS VERY EASY TO MAKE MISTAKES – DOUBLE CHECK
YOUR WORK!
Transfers should be recorded using the menu BANKING – TRANSFER MONEY. Enter
the precise exchange rate used for the transfer and after you have saved the
transaction go to the two bank account registers to check that the amounts
recorded are correct. You may find small rounding differences that will need
adjustment.
A suggested method of calculating and entering the precise exchange rate is to use
Excel for the calculation (up to 9 decimal places) and then copy and paste the result
from the cell in Excel directly into the exchange rate cell in QuickBooks.
Transfers between two bank (or cash) accounts – both designated in the same
foreign currency
These transfers should also be recorded using the menu BANKING – TRANSFER
MONEY. It is important to check that the exchange rate of the foreign currency with
the “Home currency” that will be applied to this transaction is correct, even though
the transfer is between two foreign currency bank accounts in the same currency.
QuickBooks will enter the foreign currency using the exchange rate currently set
unless this is changed.
Transfers between two bank (or cash) accounts – designated in different foreign
currencies
QuickBooks does not allow you to record transfers from one foreign currency bank
account to another foreign currency bank account. A workaround solution to this is
to assume that the transfer from one foreign currency bank account is first made to
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your Home currency bank (or cash) account (or to a specially created “Currency
transfer bank account just used for this purpose). A second transaction is then
entered transferring the money from this account to the other foreign currency
bank account. It is important to check that the amount recorded as being received
into your Home currency bank account is the same as that going out!
Your organisation must have a policy as to what exchange rates should be applied
to transactions, and how often exchange rates should be reviewed. If currency is
stable and there are few fluctuations the rate may for example be reviewed and
updated on a monthly basis. In certain situations the rate applied to payments from
a foreign exchange bank account will be the rate that was obtained on the money
that went into the bank account. This is a complicated area, and expert advice may
be necessary.
The balance on the home currency account in respect of each foreign currency bank
account may need to be adjusted from time to time due to exchange fluctuations.
QuickBooks 2010 has a special procedure for making the necessary adjustment to
the balance in the Home currency, without changing the (correct) balance in foreign
currency. The procedure is as follows:
Example
Your Foreign currency bank account has a balance of, say 80,000 and if this money
was to be changed into your home currency you would receive 7,000 at current
rates of exchange. However, because of the exchange rates that have been used
your ledger account for this bank is showing a balance of 8,000 in your home
currency.
Enter the Date on which you are making the adjustment and the Currency
Calculate the exchange rate that will convert the foreign currency amount into the
correct home currency equivalent amount (divide the correct home currency
balance by the foreign currency balance). In the example above the new exchange
rate would be 0.0875 ( 7000 divided by 80000). Enter this in the Exchange rate box.
Click on Calculate Adjustment. The new balances are then displayed in the window.
Check that these are correct. Tick the row displaying the new balance. There is a
place for a memo note at the foot of the window. Then click on Save and Close.
If you go to your ledger report you will see that the home currency balance has
been adjusted – but the foreign currency balance will not be affected.
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http://quickbooks.intuit.co.uk/small-business-accounting/compare-quickbooks-products.jsp
GENERAL SPECIFICATIONS
STRUCTURE
Password system for user access and to restrict access to closed periods ..................... YES
Sufficient number of Digits (13) .................................................................................. YES
Flexible account code structure allowing for sub-accounts .......................................... YES
Flexible secondary coding structure (could be used for Programs, Funds,
Departments) ............................................................................................................ YES
Sub codes for secondary coding structure (could be used for jointly fund
programmes, projects within programs) ...................................................................... YES
Key Report templates ready for use and easy to modify ............................................... YES
Memorise and access updated reports previously prepared ......................................... YES
Export of Reports and ledger extracts to Excel ............................................................. YES
Audit Trail .................................................................................................................... YES
Report writing facility................................................................................................... NO
BUDGETS
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Export QB Reports to Excel monthly financial report file (to link in with
Donor or other preformatted management Reports; to convert to other
currencies etc.):
TRIAL BALANCE (for monthly or cumulative account totals)..........................................
GENERAL LEDGER (for detailed list of transactions on each account) ............................
....................................................................................................................................
File reports & supporting documents ...........................................................................
Sign and send reports to the Administrator ..................................................................
Carry out back up procedures ......................................................................................
QuickBooks Pro 2010 Manual 2011 v1.03 20110706 © Richard Collins 2011