​Be proactive about the security of your QuickBooks company file, and you'll be less likely to encounter data theft.
Thanks to the internet, privacy has been on the wane over the last few years. We assume that our addresses and phone numbers are public information, thanks to sites like Switchboard and 411.com.   We hope that our dates of birth are private (though the number of birthday wishes on Facebook makes that doubtful), and we assume that our Social Security numbers are hard to get.
Your customers trust you enough to provide you with additional private information, like credit card numbers. And you've seen what an uproar occurs when major corporate entities like Target and Home Depot get hacked.
Your small business may not have hundreds of thousands of customer information files, but you can still be targeted by external hackers and even your own employees. Are you taking measures to ensure the security of that data stored on your hard drive and/or in the cloud?

​The last thing you want to imagine is that one of your own employees has been tampering with your QuickBooks company data. It happens, though, and you need to protect yourself from potential internal attacks.
One of your internal controls, then, should include the establishment of boundaries for every employee who has access to QuickBooks. You can restrict each staff member to specific areas of the program instead of sharing a master password and giving everyone free rein. Go to Company | Set Up Users and Passwords | Set Up Users to do this.

 
The User List window opens, which will display all users who have been set up already, including you as the Admin. Click Add User and enter a name and password. Click the box in front of Add this user to my QuickBooks license, then click Next. Click on the button in front of Selected areas of QuickBooks. Click Next.
The next 10 screens break QuickBooks down into separate activities and activity areas, like Sales and Accounts Receivable, Checking and Credit Cards, and Sensitive Accounting Activities. On each screen, click on the button in front of the correct option:
•  No Access
•  Full Access
• Selective Access (lets you specify what areas and actions will be allowed for that employee)
Other Internal Controls
QuickBooks' Audit Trail is your friend. It records everything that is entered or changed in the software, by whom, and precisely when. To view it, open the Reports menu, then click on Accountant & Taxes, then Audit Trail. Like all QuickBooks reports, it can be customized to display the entries you need to see.

​Figure 2: QuickBooks' Audit Trail provides a detailed history of all activity in the software

​There are other reports that you should review frequently, and some that we should create and analyze for you at least every quarter, if not monthly. We can suggest reports that would help you look for fraud, and tell you what to look for.

• It  goes  without  saying  that  protecting  your  entire  hardware/software/cloud configuration will help keep your QuickBooks company file safe from external marauders. You   must   employ   state-of-the-art   antivirus   and   anti-malware applications and keep them updated. Talk to us if you need recommendations and/or help implementing them.
 If you're a sole proprietor or you work from your home, restrict the computer where QuickBooks resides to business software and websites only. Never let anyone install applications, play interactive games, etc. on it.
• Change your own QuickBooks password at least every 90 days, and do backups to secure drives or websites.
• When you run into problems with QuickBooks' functioning, please let us help. Even a computer troubleshooting specialist will not understand the program well enough to solve problems, and he or she may compromise your data file further.
As security software and systems get smarter, so do the hackers. Don't let your company and its customers be victims of data theft.

When you think about it, it's pretty amazing that Intuit is able to pack the lion's share of your financial data into one giant company file.  Certainly makes it easier to separate from QuickBooks and move when necessary.

There are actually three options for saving and relocating that file.   You know about backups, since you should be producing them religiously.  You generate them so that if QuickBooks – or  your computer itself -- stops working or your file becomes corrupt, you can re-create the entire environment.  Portable company files are more limited, and are best used when you want to save your file to a temporary location and/or email it to someone else.

​You would only use an Accountant's Copy, of course, when you want us to check your progress. We'll work with you on setting this up.

Figure 1:  Once you save and send off an Accountant's Copy, you can't work on transactions created before the dividing date.

​We can't emphasize this enough:  Losing your financial data can be the beginning of the end of your company. You won't know what you're owed, so you'll be unable to collect. You'll miss vendor payments.  Payroll will be impossible to reconstruct, and you won't be able to submit payroll taxes.  And how will you know what your income tax obligation is?
 It can happen to you.

QuickBooks simplifies this process.  Click File | Create Backup . . .  You'll be asked whether you want to back up locally -- to a network folder or thumb drive, for example – or  to  the  cloud,  using  Intuit  Data  Protect  (fees  apply).    If  you  select  the  local preference, click on Options to designate a location in this window:

Click OK, then Next. QuickBooks will ask when you want to save your backup copy and offer scheduling options. When you're done, click Finish.
 
​Warning:  If  you're  using  Intuit  Sync  Manager,  there  are  special  rules  about copying the company file.  Let us help you handle this safely.

 Just the Facts
Portable company files are more compact than backup files, so they can be easily e- mailed as attachments or copied onto another computer.   But they don't contain everything that backups do.  They lack, for example, letters, logos, attachments, images and templates.   Don't use this option if changes will be made, since they can't be merged back into the file.
​
Be sure to create a current backup before you begin to move your file.
 To save a portable company file, click on File | Create Copy (you can do this to copy any kind of file, actually). This window opens:

Select Portable company file and click the Next button.  In the following window, you'll browse to a location for your file. QuickBooks will already have entered the name and will save your data in .qbm format.  Click Save, then OK when QuickBooks tells you it must close and reopen your file first.  Click OK again when you're told that the file has been created.

Opening the File Elsewhere

When you're ready to open the file at another location, click File | Open or Restore Company . . .  In the window that opens, select Restore a portable file.  The Open Portable Company File window opens; make sure that the file's location is displayed in the Look in: field.  Click Open. QuickBooks then asks where you want to restore the file.

The following step is critical.  Rename your file unless you want to overwrite your current company file.  You can add a date or some other identifying information like a version number.

Click Save. QuickBooks will convert your portable file to a standard company file with a .qbw extension.

QuickBooks makes it easy to create copies of your data, but an error here can threaten your company's future. We can help ensure that that doesn't happen.

QuickBooks handles billable expenses capably, but it's critical that you understand the process thoroughly before proceeding.

 Billing for inventory parts is easy.  Pick the items from a list and specify a quantity.  Poof.  Done. Billing for costs, time or mileage is a little more complex.  QuickBooks has built-in tools to help you do this, but it's a bit of a process.
 
To simplify your workflow, do this groundwork first:
Go to Edit | Preferences | Time & Expenses | Company Preferences.  Click the Yes button under Time tracking and indicate your choices under Invoicing options.  If you plan to mark up some costs and want a default number, enter a percentage and account (these can be changed on individual invoices).

Figure 1: As you do with other QuickBooks processes, make sure that your Preferences are set correctly.

Add any billing items necessary by clicking Lists | Item List and then Item | New in the lower left corner.

If you plan to bill for mileage, go to Lists | Customer & Vendor Profile List | Vehicle
List and enter information about every business vehicle.

If you're a service-oriented company, you bill for time frequently.  This is easy. You're probably already familiar with the Enter Time entry in the Employees  menu.   Whether you make individual time entries or complete a timesheet, it's critical that you make the correct selections for each Customer: Job, Service Item and Payroll Item field, and check the Billable box.

When you create invoices, this box will open after you select a customer:

​You can let QuickBooks enter the time totals now, or add them later by clicking the Add Time/Costs button.  Either way, the Choose Billable Time and Costs window opens.

Add a checkmark next to each entry that should be billed, and click Options . . . to indicate whether you want one line for each time entry or would rather combine all similar service item types.

Figure 3: QuickBooks wants to know which entries should be invoiced.
​

If you're done with billable expenses for this invoice, click OK.  If there are other costs that you covered, click the Expenses tab to see all transactions that you earmarked for this client on a bill, check or credit card.   You have the option here to mark up the cost by a percentage or amount (even if you established this in Preferences), and to specify an account.

​​Do the same for Mileage, which you would have entered previously – when it was incurred -- at Company |  Enter  Vehicle  Mileage.    Then  select  any  Items  that  you  purchased  for  the customer.  Your  records should  be  correct  –  assuming  that  you  were  conscientious  about assigning expenses to customers and jobs. 

Figure 4: It's easy to pull billable expenses into invoices if they're documented carefully.
​

Turning expenses into invoices and then into income can be complicated.  Let us know if we can help. We are your partner in building a successful business.

Here's a cool little keyboard shortcut.   Hit F2 while you're in QuickBooks, and you'll get the Product Information screen. It'll tell you everything you want to know about your specific copy of QuickBooks, like your release and license number, the file size, number of users logged in, audit trail status and the total number of accounts, customers, employees, etc.

​It may seem like a no-brainer – cut expenses to make more money – but many small changes can result in significant savings.

It looks like the economy may finally be looking up.   Still, this is no time to loosen the purse strings in terms of your business expenses.  Rather, why not re-double your efforts to cut costs and boost your profitability?

Excessive expenses cause debt, which in itself can be very costly. So any money-saving actions you take will be doubly rewarding.
​

To cut expenses significantly, poke into every corner of your company's finances. Inventory is a good place to start.  If you sell multiple units of the same item and reorder regularly, you should be using QuickBooks' inventory-tracking tools. Go to Edit | Preferences | Items & Inventory | Company Preferences.
​

​You should be stocking your inventory to match the pace of sales. You don't want to be caught short, nor do you want to be sitting on too much and tying up money unnecessarily. QuickBooks can help, but you'll need to calculate the sweet spot for each item. Several built-in reports can help, including:

• Inventory Valuation Summary.  Displays the current asset and retail value of each item and inventory as a whole
• Inventory Valuation Detail.  Shows how individual transactions have affected the value of your inventory
• Inventory Stock Status By Item.  Helps you set up smart reordering procedures
• Open Purchase Orders.  Outlines each purchase order and its expected delivery date

​Ratio reports, like profit over sales, can also be very telling.  QuickBooks does not supply these, but we can help you create them in Excel.
​

​The efforts you make toward reducing expenses in other ways can result in more savings than you might think. Here are some actions you can take that will accelerate your cash flow:

Use QuickBooks' budgeting tools.  This doesn't need to be as onerous as you might expect – you can start by pulling in your real data from the previous year as a base.  Build in line items for ongoing accounting support like QuickBooks maintenance.  Click on Company | Planning & Budgeting | Set Up Budgets.
​

​Minimize your April 15 obligation with year-round tax planning. Work with us throughout the year on the next year's taxes to, for example, make smarter quarterly payments, and we'll help you reduce your tax bill by making better decisions every day.
 
Get discounts by paying invoices early. Set up a custom field in vendor records to track this.

Analyze the cost-effectiveness of your transportation.   Can you replace some in-person sales calls with web-based communication? Make sure that your delivery routes and sales call paths are efficient.
 
Change product/service prices to build in your own cost increases.  Do it across the board, in small increments. It may not even be that noticeable to customers.

Talk to us about establishing a line of credit.   We'll help you determine if this is a viable option for emergencies. It's cheaper than using credit cards.
  
Cross-train employees.   Have employees train each other on their tasks where it makes sense. You can avoid costly temp help and relieve overworked departments.
 
Don't try to change everything at once.  Establishing these new procedures will require some extra work. And you may not notice a reduction in expenses immediately.  But over time, you will see a positive change – one that will give you extra dollars and hours to invest in making your company flourish.