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Caesar's Brook Babblings
QuickBooks News You Can Use 
January 2011 - Vol 4, Issue 1
In This Issue
Budgets and Forecasts
Intuit Payment Network
Customizing COA Columns
Tax Relief Act signed
Caesar's Brook


Welcome to the January issue of Caesar's Brook Babblings.

The Roman god JanusJanuary is named for the Roman god Janus.  Janus was the god of gates and doorways as well as beginnings and endings.  He was believed to have the gift of seeing both the future and the past.  Since January is a traditional time for looking forward and back, this month's feature article is on using QuickBooks to create Budgets and Forecasts.  We also have short article on Intuit Payment Network with a warning about changes implemented in the latest QuickBooks 2011 release.  Our QuickTip shows you how to quickly review your 1099 account mapping and we hit some of the 2010 Tax Relief Act highlights with a reminder to be sure that you always have the latest payroll updates.


Happy New Year!


FeatureFeature Article

Budgets and Forecasts

All QuickBooks editions include the capability to create a budget.  If you are running QuickBooks Premier or Enterprise, you can also create a forecast. 

Budgets and ForecastsSo what is the difference between a budget and a forecast?  In my days of working for large corporations, the budget was set at the beginning of the year and didn't change.  The forecast was year-to-date actuals and a projection of future performance that was revised monthly.  However, in QuickBooks, the answer is not much.  Forecasts are set up and behave exactly the same as Budgets, but are somewhat more limited.

Here are the differences:
 Budgets and Forecasts comparison

You will find Budgets and Forecasts on the Company pull-down menu under Planning & Budgeting.  The set up process begins with selecting the year and whether the Budget you are setting up is based on the Profit and Loss statement or the Balance Sheet.  On Profit and Loss Budgets, you then have the option of selecting whether the budget is for your entire company, for a class, or for a specific customer:job.  You can have one budget per year per company, one budget per year per class, and one budget per year per customer.  So for 2011 you might have a budget for the company as a whole, and one for each of three classes.  You cannot create a second "what if" budget without exporting to Excel.  If you are running Premier, you might use a Forecast for that purpose.

The next step is to select whether to create your budget from scratch, entering the numbers manually or to let QuickBooks create a budget for you based on the previous year's actual data.  When you click Finish, QuickBooks will create the budget and open it for editing.  By default, QuickBooks creates a monthly budget, but if you want an annual budget just enter the total amount in the January column.  For a quarterly budget, enter your amounts in January, April, July, and October.  You can copy amounts across a row or adjust monthly amounts up or down by a flat amount or percentage.

You can also import a budget that you've created in a spreadsheet, but it needs to be an .iif file (Intuit Interchange Format) and map to your QuickBooks Chart of Account names exactly, so it's a bit tricky.   

Once you have created your budget, use the Budget vs. Actual report, the Profit and Loss Budget Performance report, or the Budget vs. Actual graph to track your progress. Budget Calculator

Sound simple?  It is.  The hard part is creating a meaningful budget based on past performance and your best guess of what will happen in the year to come.  QuickBooks can help you with the past performance.  Here are some of the management reports you may want to look at to help you build your budget.  On most of them, you will need to change the date range to Last Fiscal Year.

Sales Information

  •  Profit & Loss Previous Year Comparison will give you two years of data
  • Sales by Item Summary will help you forecast changes in sales income based on product mix
  • Sales Graph will help you quickly identify seasonal trends


  • Purchase by Item Summary provides quantities and total dollar amounts
  • Item Profitability (under Jobs, Time & Mileage) gives you the actual cost and actual revenue by item

Operating Expenses

  • Profit and Loss Standard modified to show % of Income when compared across multiple years will help you identify and forecast variable costs


QuickBooks 2011 - Intuit Payment Network warning


Intuit Payment Network logoThe Intuit Payment Network is a service similar to PayPal.  It allows you to send payments to and receive payments from any other network member.  The sign up is free and there are no monthly fees.  You can send payments for free and the fee to receive a payment is only $0.50.  Once you are signed up, you can add a link to your invoices and your customers can pay you online in seconds.  And the payments sync automatically into your QuickBooks file via the Intuit Sync Manager.  Sound good?  It really is pretty cool. 

So why the warning?  Well, I have seen slightly different things in different QuickBooks files, but it appears that with the 2011 R4 release, Intuit set the preference to use the Intuit Payment Network on by default.  This can have two (hopefully) unintended consequences.

  1. If the box to allow online payments is checked on the invoice and the boxes in the Payments preferences to add the link to emailed and/or printed invoices is checked, QuickBooks will add the payment link to your invoices even if you aren't signed up to receive the payments.  Oops! 
  2. In at least some files, the payment link appears to have moved out of the body of the invoice into a box at the bottom of the invoice.  If you've customized your invoices, you may suddenly find that there is a box with a message where it doesn't belong.  Turning the preference to add the link to printed invoices off removes the message, but not the box that surrounds it.  To fix this, you must edit each of your customized invoice templates to remove or reposition the message and/or box.

Note:  If you already have an Intuit Merchant Services account, the sign up for IPN takes seconds.  If not, you do need to go through an application and approval process which can take several days. 


Customize COA Columns To Show 1099 Mapping

2010 Form 1099One of the most common issues people encounter when preparing 1099s in QuickBooks is making sure that all of the appropriate accounts in their Chart of Accounts are mapped to the correct boxes on the 1099.  While the actual mapping is done in the Company Preferences, a quick way to review what accounts are mapped to which boxes is to customize the columns displayed in your Chart of Accounts to display the 1099 Account column.  Simply right-click anywhere in the Chart of Accounts and select Customize Columns from the pop up menu. 

Tax Relief Act

Obama signs tax relief lawOn December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Authorization, and Job Creation Act of 2010 (H.R. 4853). The act includes a two-year extension of the Bush tax cuts for all income levels.  Some important changes:

  • Social Security reduction - For 2011, the employee portion of Social Security tax will be reduced from 6.2% to 4.2%.
  • Advanced Earned Income Credit (AEIC) is eliminated - The payroll credit (advance payments of earned income credit) expires 12/31/2010. Starting in 2011, eligible employees claim this credit on their individual tax returns.
  • HIRE Act expiration - The HIRE Act Social Security payroll tax exemption expires 12/31/2010. It does not apply to any wages paid in 2011.

As always, if you are running your own payroll, make sure you have downloaded the latest updates!


banner 2I hope you found these babblings useful.  Your feedback is important to me.  Please drop me a line and let me know what you think.


Susan Dugdale
Caesar's Brook Business Solutions, LLC
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