QuickBooks Pro

Protecting Your QuickBooks Data Against Hackers

Every month, we provide information on how to better use QuickBooks. By implementing the best methods for managing your accounting data, you can actually improve your financial bottom line.

But all of your careful work is for naught if a malicious hacker gets in to your computers, or if you experience identity theft by an employee. Social Security and credit card numbers, home phone numbers and addresses, an excruciatingly detailed profile of your company – all can be lost in the time it takes to realize that it’s gone.

Are you guarding all of that precious data? QuickBooks provides ways to help you. Some are automatic, but you have to initiate others.

Control Cyberspace

QuickBooks displays some screens using Internet Explorer (IE); the browser opens when you access certain features. It’s important that you set the security level correctly so that you’re not exposed to shady outside influences.

To check your configuration, launch IE and go to Tools | Internet Options. This window opens:

Figure 1: Be sure that your Internet zone in Internet Explorer is set to Medium.

Click on Security, then on Internet, and move the slider bar to Medium (Intuit recommends this). Click OK and close IE.

Your best defense is a good antivirus program. If you’ve hesitated to buy one because of the price or the software’s intrusiveness, consider Microsoft Security Essentials. It’s free, it’s good, it can be used in businesses that have up to ten PCs, and it guards against viruses, spyware, and other malicious software (malware).

Limit Access

If you have QuickBooks on a network, or multiple people sign in and out on the same PC, you will want to limit the access of employees to only their work areas. Go to Company | Set Up Users and Passwords | Set Up Users, and you’ll see the User List window. Click Add User, and enter a username and password in the next window (if you’ve already set up passwords but not permissions, highlight a name and click Edit User). Click Next.

Unless the person should have full access, choose Selected Areas of QuickBooks and click Next. You’ll see this:

Figure 2: As you go through each module, you’ll select an access level for the current employee.

You’ll work through a series of windows, including Inventory, Checking and Credit Cards, and Payroll and Employees, indicating in each window how much access should be granted to the user. When employees sign in, they will only see the allowed screens.

Payroll – A Special Case

Be very careful when you assign Payroll permissions. Employee Social Security numbers are stored there, and anyone granted full access can see them. If you’ve assigned Selective Access to an employee for creating and printing payroll transactions and reports, he or she will still be able to view them on printouts and in reports.

To prevent this, go to Edit | Preferences and click the Payroll & Employees tab, then Company Preferences. At the bottom of the window, you’ll see a line that reads Display employee social security numbers in headers on reports. Make sure this is checked only if you want the numbers to appear.

And, of course, you may not want Social Security numbers printed on paycheck stubs and vouchers (though you may not have a choice; the state of California, for one, requires it). In this same window, click on Pay Stub & Voucher Printing to make your wishes known. You’ll see this:

Figure 3: Do not check the box next to Employee social security number unless you want it printed on paycheck vouchers.

Intuit and You

Intuit, publisher of QuickBooks, works hard to keep your data safe. The company:

uses a data encryption technology similar to that used by major financial institutions for QuickBooks’ online banking and online vendor payment tasks
does not know your passwords
offers a subscription-based, automatic online backup service, so that your files are safe in case of loss or damage (QuickBooks 2011 only; QuickBooks Online Backup works with all versions)

Figure 4: Regular backup is more than a good idea. It could save your business someday.

But it’s important that you do your part. Use passwords wherever offered, make them complex, and change them frequently. Maintain regular backup files on your own if you don’t subscribe to Intuit’s service. Cross-train employees so that if you experience a disaster, more than one employee knows the ropes. Know a lot about who is managing your network.

To be doubly safe, ask us to evaluate your whole system’s security profile. We can help you if your business suffers a breach, but better to try to avoid it ahead of time.

Tracking Bills in QuickBooks, Worth the Effort

Next to payroll, paying bills is probably your least favorite task in QuickBooks. You don’t have to use this feature — you can keep stacking bills on your desk, scrawling the due dates on a paper calendar, and writing checks.

If you’re still operating this way, though, you’re missing out on the numerous tools that QuickBooks offers to track your accounts payable, including the ability to:

Enter bills as they come in
Set reminders for bills due
Pay bills easily
Locate a bill or payment quickly
Enter bills as (or after) you receive items
Link bills to purchase orders
Have instant access to a bill’s status

Receiving the goods

When an expense bill comes in (from a utility company, for example), click the Enter Bills icon on the home page, or Vendors | Enter Bills. A window like the one displayed above opens. Select the vendor and fill in the blanks. Make sure that the Expenses tab below is selected and the appropriate account number and amount fields are completed. If it’s a bill for an item that already has a related Item Receipt (the shipment preceded the bill), QuickBooks instructs you to use Vendor | Enter Bill for Received Items. Follow the prompts. Note: Dealing with incoming inventory is complex. Consult with us if you plan to use this feature. If the bill came simultaneously with items, click Vendors | Receive Items and Enter Bill. When you select the vendor from the list, this box opens (if you have sent a purchase order):

Figure 2: QuickBooks is telling you that you have open orders with this vendor.

Click Yes. The Open Purchase Orders box opens, containing a list of open POs. Select the one(s) you want and click OK. The bill form opens, containing the details of that purchase order. Change quantities if they don’t match the shipment, and edit other fields as necessary. Save the bill.

Settling your debts

It’s good to set reminders for bills. Go to Edit | Preferences and click Reminders. Make sure that the Show Reminders List…box is checked, then click Company Preferences. Find the Bills to Pay row and enter the advance notice you’d like. Indicate whether you want to see a list or a summary, then click OK. When bills are due, click the Pay Bills icon or select Vendors | Pay Bills. A window opens displaying all outstanding bills. You can pare this down by selecting a date in the Due on or before field and filtering by vendors. The screen will look something like this:

Figure 3: You can easily select the bills you want to pay.

Enter a check mark next to the bills you’re paying, and change the amount in the Amt. To Pay field at the end of the row if necessary. At the bottom of the screen, you can set the payment date and type, use any discounts or credits, and make sure the correct payment account is selected. When you’re done, click Pay Selected Bills. Tip: You can have credits and discounts automatically applied by going to Edit | Preferences | Bills

After You’ve Paid Up

There are a number of places where your bills appear in QuickBooks, including:

The Unpaid Bills Detail report
The A/P Aging Detail report
The Vendor Center
QuickReports
In the Recent Transactions pane of some forms
On the bills themselves

Figure 4: QuickBooks displays the Paid status of bills.

QuickBooks also lets you void and delete bills, and copy and memorize them. Check with us before voiding and deleting, as this can make some complicated changes in your accounts.

You can just pay bills by using Banking | Write Checks or Enter Credit Card Charges. But the payoff for tracking bills is instant access to your accounts payable status, better relations with vendors, and a more insightful accounting of your company’s cash flow.

Turn Over a New Cliche: Adopt Best Practices

Turn over a new leaf. Make a New Year’s Resolution. Make a fresh start. Get your ducks in a row. All familiar cliches, but their message is valid: At this time of year, you probably feel like renewing your commitment to running a more successful, productive business.

There are numerous ways to do this, but you might consider adopting the concept of best practices (if you haven’t already). Most industries have them, primarily larger businesses. Best practices are a set of operational guidelines that are expected to produce a favorable outcome. Run your business using these techniques or methods, and you’re likely to be more successful.

Accounting has best practices. While they’re not carved in stone, sticking with some tried-and-true, common-sense procedures will likely lead to increased efficiency. Perhaps adopting some or all of them will make a difference in your business. QuickBooks can help.

The Three I’s

Let’s look at the three stages you’ll encounter when you decide to apply best practices to your company.

Identify

What problems are you trying to solve? Where are your bottlenecks? Are collections a problem? Cash flow? Timely, accurate payroll? Have you seen a reduction in your customer base? Are your bills being paid late? Having trouble keeping up with inventory?

Bring your employees in on this process. They’re on the front lines, and will have insight into where your systems are breaking down. They’ll be pleased to be asked, and they may have ideas that will evolve into best practices.

Figure 1. When you’re formulating ideas that could evolve into best practices, use your best resource: your employees.

Implement

Turn your ideas into policies, and formalize them. Make a big deal out of introducing them to all staff related to accounting, and explain the rationale behind them. They’re intended to improve your company’s financial bottom line, which should translate into a positive outcome for everyone. Don’t turn your presentation into a critique of past performance; emphasize the constructive nature of the changes. Put it in writing, too.

Here are some examples of best practices that other businesses have implemented.

Invoice at the time of service/shipment, instead of once or twice monthly.
Set a specific time interval to deal with collections, like once a week. If you’re running QuickBooks 2011, you can use the Collections Center. Previous versions have numerous helpful reports, like A/R Aging Detail, Open Invoices, and Collections Report.

Figure 2. QuickBooks 2011 features the automated Collections Center.

Estimate your income tax obligation monthly, not just quarterly. When payments come due, there won’t be any major surprises.
Make sure everyone who works with accounting has a backup person who can fill in. Consider having us do the training.
If you don’t have a merchant account – which QuickBooks supports – get one, and encourage customers to pay in this fashion. Pay your bills the same way wherever possible. Use all of the technology that makes sense for you.
When it’s logistically possible, have employees who incur billable time use a timer. A few minutes lost here and there adds up. QuickBooks has a built-in timer; remote employees can use Time Tracker.

Figure 3. Have employees time billable activities whenever possible.

When was the last time you looked at your pricing structure? Are you building in enough profit? Evaluate your selling ratios on a schedule. Run inventory reports regularly.

See? It’s not rocket science. It’s a matter of emulating the practices of the most successful businesses. You might network with other companies to see how they handle this formalizing of processes. Talk to us, too.

Insure

Don’t leave it at that. Evaluate the effectiveness of the new best practices by scheduling follow-up meetings with employees. What’s working, and what isn’t? Do you need to tweak your methods?

This step is absolutely critical. You might want to appoint a compliance officer who follows up with individual employees and departments. If your business is small and informal, you could bring in lunch one day a month for follow-up – and for the development of new best practices.

Not just for mega-companies

You may already know something about best practices, but have always assumed that the concept was designed for big business. While it may be more of an imperative for large companies, even a sole proprietor with a bookkeeper can benefit. It’s really just a matter of putting the most effective work processes into place and maintaining them. Implementing best practices can be a good first step towards a more successful 2011. Call us if you have any questions.

By Leon Clinton
August 30, 2011