How to Take Care of Your Files in QuickBooks 2015
 
 
 
How to Take Care of Your Files in QuickBooks 2015

Not only is it important to learn how to enter your company's financial data into QuickBooks, it's also important that you learn how to protect the data that you enter.   Data losses are not uncommon, and even the newest computers are known to crash.   In this article, we are going to focus on ways to protect and maintain the data you've entered into QuickBooks, as well as your company file.

Single-User Mode

Some maintenance tasks that you'll do in QuickBooks will require that only one person have access to the company file while performing those tasks.   This means if you set up QuickBooks for multi-user mode, you are going to need to switch to single-user modes for tasks such as:

  • Merging/deleting accounts

  • Setting up finance charges

  • Condensing or exporting data

  • Saving an accountant's copy of your company file, as we have already seen.

To switch to single-user mode from multi-user, you will need to take the following steps:

1.       Ask everyone else to log out of QuickBooks. They can do this by going to File>Close Company/Logoff.

2.       Once everyone else has logged off, go to File>Open Previous Company, then select your company file.

3.       Go to File>Switch to Single-user Mode.   When you see a dialogue box informing you the file is in single-user mode, click OK.

4.       To switch back to multi-user after you finish, go to File>Switch to Multi-user Mode.

Backing Up Your Company File

To back up your company file, go to File>Backup Company>Create Local Backup.

 

Select "Local Backup."   This means you will save the backup to your computer or external drive.

Click the Options button.

 

In the Tell us Where to Save Your Backup Copies field, click Browse to find the location on your computer where you want to save the backup. 

Make sure that the Add Data and Time of the Backup to the File Name is checked. This will help you indentify the most recent backup.

Select the rest of your options in this window. If QuickBooks recommends a setting to you, it's recommended that you heed their advice.   That is, unless you have a particular reason for doing otherwise.

Click OK when you are finished.

You are now back to the Create Backup dialogue box.

 

 

Tell QuickBooks when you want to save your backup copy, then click Next.

 

If you choose to just schedule a backup, QuickBooks will then allow you to schedule it.

 

Click Finish after you've scheduled your backup.

Restoring a Backup

If you ever need to restore a backup copy of your company file, go to File>Backup Company>Restore Previous Local Backup. Choose the backup file that you want to restore from the submenu.

You will then see the Open or Restore Company dialogue box, which will let you know how important it is that you are careful when choosing the restore location.

Click Next.

In the Save Company File dialogue box, choose the folder where you want to restore the file. 

Type a new name for the file you are going to restore in the File Name box if you don't want to overwrite your current company file.

Click Save.

Sending a Company File to Other People

If you need to send your company file to someone else, you can create what is called a portable company file. However, before you can send a portable company file, you have to create one. 

To create a portable file, go to File>Create Copy.

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Select Portable Company File, then click Next.

 

Choose the location where you want to save the portable file.

Click Save.

You can then email the QuickBooks portable file to someone else.  

Verifying Your Data

If something should happen, and you are left to wonder if any of your data has been damaged, you can run the Verify Data utility to check.    This utility can be helpful if your files won't open, you are getting errors, or you are suddenly missing transactions.

To run the utility, first close QuickBooks, then start it again.

Once QuickBooks is backed up, go to File>Utilities>Verify Data.

If your company file has issues, you will see this message: A data problem prevents QuickBooks from continuing.

 

The Rebuild Data utility will try to fix your data for you.   However, Intuit recommends that you only use this utility if an Intuit technical support person tells you to run it. Even if they tell you to run it, you should make a backup of your company file before trying to run the utility. Do not overwrite any backups either. You may need those if the rebuild does not work for you. 

To run the Rebuild Data utility, go to File>Utilities>Rebuild Data.

Condensing Data

The Condense Data utility creates an archive file. It also deletes obsolete list items and transactions that are prior to the date you choose when running the utility. This helps reduce the size of your company file. Just be aware that if you have a large company file, the utility can take hours to run. Make sure the run it at a time when nobody will need to use QuickBooks.

Before you run the utility, make sure that you export any budgets that you've created. They can be imported back in after the utility has been run.

Next, go to File> Utilities> Condense Data.

You will then see the Condense Data dialogue box.

 

Select Transactions Before a Specific Date, then select the date.

You can also choose to have a report created that shows you which transactions could not be removed.

Click Next.

You might see How Should Transactions Be Summarized? If you do, select the option you prefer.

Click Next.

In addition, you might see How Should Inventory Be Condensed?    Keep the checkmark beside the option selected, and click Next.

In the Do You Want to Remove the Following Transactions window, uncheck boxes to keep transactions that the utility would condense. 

Click Next.

You will see the screen: Do You Want to Remove Unused List Entries?"   Again, if you want to keep certain list items, uncheck them, then click Next.

 

Click the Begin Condense button.

Getting Rid of a Company File

There isn't a way to delete a company file in QuickBooks.   If you want to delete a company file, you will have to delete it from your computer by locating the file, then deleting it.  

Once you delete a company file from your computer, you will have to remove references to the file in QuickBooks.

Here's how to do it:

First, delete the company file from your computer.

Next, go to File>Open Previous Company>Set number of previous companies.

If the menu item is gray, that means you don't have a file open.   If that happens, go to File>Open Previous Company, then choose another file besides the one you deleted. If you see the No Company Open window, then open the company file you work with by double clicking it. 

At that point, you should be able to see the "Set Number of Previous Companies" menu item.

Type 1, then click OK.

Go to File>Open Previous Company>Set Number of Previous Companies again to reset the number of previously opened companies.
 
Purchasing and Entering Inventory

QuickBooks allows you to enter and track your inventory using the program. However, before you can do that (as with most things QuickBooks), you must do a few things. 

First, you must tell QuickBooks that you want it to track your inventory. Then, you must create an item list, if you haven't already done so. You must include on this list anything that you might put on an invoice.   All items that you order and sell MUST be on this list. 

To tell QuickBooks that you want it to track your inventory, go to Edit>Preferences. You will then see the Preferences dialogue box. 

Click on Items and Inventory on the left hand side of the window. Now, check to make sure that the Inventory and Purchase Orders Are Active box is marked. Also, that the Warn if Not Enough Quality on Hand and Warn if Duplicate Purchase Numbers are checked as well. 

 

As for the item list, if you need to now add items to your list, go to Lists>Item list. Click the Item button, then select New.   

The Inventory Center

You can access the Inventory Center by going to Inventory>Inventory Center.

The Inventory Center is pictured below.

 

In the left pane of the Inventory Center, you will see all the inventory parts that you've added to QuickBooks. You will also see the sales price that you charge your customers.

Click on an inventory part in the left pane, and you will see all the information you've entered for that inventory part in the right pane.   You can even add an image of the part if you want.

At the bottom of the right pane, there are two tabs: Transactions and Notes.

Under the Transactions tab, you will see all transactions that include the inventory part you've selected.

What Is An Inventory Item?

An inventory item is simply a product that you manufacture, assemble, or purchase to sell to a customer. Inventory is also items that you store or use that are resold to customers. However, if you store low value parts to do a job (such as a plumber who might store pipes, valves etc.), you may want to track those as non-inventory items.

 

Creating Inventory Items

To create an inventory item, go to the Item list (Lists>Item List) and open the Item List window. Press CTRL+N to add a new item, or click Item at the bottom left hand side of the window as we did when we learned to create an Item list.  

Now, we are going to add a new item. Note that in the Type category, we chose Inventory Part.

Next, enter the following information:

  • Enter the item name. This is the name you will use to reference the item in the software.

  • Enter the manufacturer's part number. This will need to be included on purchase orders when you reorder inventory.

  • You don't need to enter anything for Description on Purchase Transactions or a cost if you don't want to. These fields will be filled in when you create a purchase order.

  • Enter a sales price. This is the price to your customers.

  • Choose a tax code.

  • Select the proper accounts for COGS (Cost of Goods Sold) and Income accounts.

  • Enter a number in the Reorder Point field. This should reflect the minimum amount of the product that you want to keep in stock.

  • Do NOT enter information into the On Hand or Total Value fields. QuickBooks will track these for you.

Press OK when you are finished.

Recording Inventory

It is important to remember that inventory is actually things that you buy. All items that you buy and/or resell must be added to your Item lists in order to be tracked in your inventory. 

Here's what this means.   If you purchase items and record the bill, you are entering it into inventory. If you enter in a purchase receipt, you are entering your purchase into inventory.  

This is why it is so important that you fill out the information under the Items tab when you record bills. We have pictured the Items tab for recording bills below as a reminder:

 

If you do not record the items on a bill, those items cannot be entered into inventory.

Recording Inventory Purchased Over the Counter

Let's say you bought two dozen spatulas from a discount store while you were out shopping.   You paid cash for them.   There wasn't a purchase order for them  or a bill. However, since your company sells spatulas, you want to add them to your inventory and resell them. 

To, enter inventory that you purchased "over the counter" (or paid cash at time of purchase), go to the Write Checks window . Write the check for the items, and assign it to the proper account. In this case, if you paid cash, perhaps you have a petty cash account.

Counting Inventory

QuickBooks will keep track of your inventory for you, letting you know how many of each item you have on hand. However, even though it is not fun, you will also want to do a physical inventory every so often to make sure that the number of items QuickBooks says you have on hand matches the number of items you actually have in stock.

To do this, you can print a physical inventory worksheet by going to Reports>Inventory>Physical Inventory Worksheet. This lists your items in alphabetical order along with the quantity you have on hand. There's also a column in the worksheet that's set up so you can fill in your physical count. 

To print the worksheet, click the Print button to bring up the Print Reports window. 

Things to Do in QuickBooks While You Do a Physical Count

Of course, once you print out the worksheet, you don't want QuickBooks to "freeze" until you get the physical count finished. In other words, if two more of an item are sold after you print the worksheet – but before you do a physical count – it can mess up the physical count. 

Unfortunately, QuickBooks doesn't give you a way to freeze anything. However, you can make sure that sales transactions are handled differently until you finish your count. 

Here are the ways you can do this:

  • Print an extra copy of each invoice. Save the copies in a folder. Don't pick or pack the inventory for the invoices until after the physical count is completed.

  • Don't enter invoices until after the physical count is over. However, if the count takes a while, this is not a good idea.

  • If inventory arrives while you are counting, don't unpack it until after you are finished.

  • Don't receive inventory in QuickBooks until after the count is finished.

Making Adjustments to Inventory

You may have to make adjustments to your inventory in QuickBooks after the physical count is complete. You will discover that most of the time, the items you have on hand are actually less than QuickBooks figures. This is called shrinkage -- or unexplained, missing inventory.

To adjust the count in QuickBooks, go to Inventory>Adjust Quantity/Value on Hand. 

A window then opens.

 

Here's how to fill out this window:

  • Select Quantity from the Adjustment Type dropdown menu.

  • Enter the date.

  • Go to the Adjustment Account field and enter the inventory adjustment account in the chart of accounts.

  • You can use a reference number to track adjustments if you want.

  • Next, click the Find & Select Items button. A new window opens.

  • Now you can tell QuickBooks which items need to be adjusted. Put a checkmark by the items, then click add Selected Items.

  • Click the Add Selected Items button.

  • Now you can adjust the quantity in the Adjust Quantity/Value on Hand window.

Filling out a Purchase Order

Defined, a purchase order is simply a document requesting to purchase items from someone else. By creating purchase orders, you know what you have ordered and when it is coming in. There's never any doubt.   You can use QuickBooks to create purchase orders and make it even easier.

To create a purchase order:

Go to Vendors>Create Purchase Orders.

 

Select a vendor from the dropdown list.

You can also specify a drop ship and the template you want to use to fill out the purchase order.

Next, fill out the date of the purchase order, a P.O. number, the vendor, and the Ship To address.

Finally, as we have done before with other aspects of QuickBooks, go to the item column and start entering items. These items should already be in your items list, but if not, QuickBooks will ask if you want to set up these items.

It is optional if you want to fill in a Vendor Message, but you do need to fill in Memo field. Put something in here that will allow you to identify the purchase order because this is what will appear in the Open Purchase Orders dialogue box when you go to look for it. 

If you want to print the PO, click the Print icon under the main tab, or check Print Later. You can also click the downward arrow beside Print and choose Batch if you want to print several POs at once.

When you finished, click Save and New if you want to create other purchase orders, or Save and Close to close this window.

To view your open purchase orders, go to Reports>Purchases>Open Purchase Orders.

Receiving Items from a Purchase Order

Once you receive items that you ordered from a purchase order, you need to record the inventory as you learned to do in this article so they are added to your Item list. 

You can:

  • Use the Write Checks window.

  • The Create Items Receipt window

  • The Enter Bills window

How you pay for the items you receive from a PO will help determine the method you use to record the items.

Whichever method you use, once you select a vendor, QuickBooks will ask you if you want to receive the items against a PO. You do. Click Yes, and you will see the Open Purchase Orders dialogue box.

Choose the PO that you are receiving items against, then click OK. QuickBooks will fill out the Items tab with all the things you ordered on that PO. You can adjust the amounts if needed. 

Assembling Products

If you are using QuickBooks Premiere or Enterprise 2015, you can also use QuickBooks to help track products that you assemble. When you assemble products, you may purchase inventory that you don't sell. Instead, you use it with other items to assemble a product that you will sell. If that's confusing, here's an example.

Let's say you are a manufacturer of earrings made with wire and beads.   You regularly purchase wire and beads, but you don't sell these items individually.   You only sell the finished product after the wire and beads are assembled and turned into earrings.  

Since you don't sell the wire and beads, but instead ASSEMBLE the wire and beads to make a product that you sell, you have no way to deduct the wire or beads from your inventory UNLESS you assemble a product in QuickBooks.

In other words, assembling products in QuickBooks allows QuickBooks to track the items in your inventory that you have assembled to create a product. It then deducts those items from your inventory count in QuickBooks.

NOTE : To add assembled items, such as the earrings, to your Item list, you must group items together (wire and beads). 

Here's how to build an assembly such as one used in our example:

Go to Inventory>Build Assemblies. You will then see the Build Assembly window.

 

Next, go to the Assembly Item dropdown. Choose the item. 

Select the Quantity that you want to build in the Quantity to Build text box (below the line items).

Please note about the Build Assembly window:

  • QuickBooks shows you the quantities of the assembly that you have in stock. It also shows you the customers who have placed orders. 

  • The biggest part of your Build Assembly window shows what goes into the product you are assembling. This is a bill of materials.

  • The bottom of the materials list shows how many assemblies you can make based on your inventory.

  • Whenever you build an item, QuickBooks adjusts your inventory for you.

Click Build & Close. Click Build & New if you want to build more assemblies. 
 
 
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