[Anonymous]

I just sat for REG yesterday now I have some time for side projects.First up:

Two friends of mine have an S-Corp that has been in business for 2 years with 3 employees. The business drop ships heavy machinery. They don’t have any real accounting records outside of simple spreadsheets, bank statements, and past tax returns.

The business is growing and they want to scale for a sales team and warehouse. The first step they want to take is to set up QuickBooks to include invoicing, payroll, and a simple inventory system so that an accountant can do a bi-weekly reconciliation. I have no QuickBooks experience. They want to pay based on the entire project. They also want data entry for all past ~5000 transactions.

How long should a project like this take considering I have no experience? And how much do you think is a reasonable price to charge for this project?

[LKD CPA]

By no means am I an “expert”, but I have used Quickbooks for the last five years on the side helping my mom with the entries for her businesses (restaurants). I also use it daily for my current job, an S-Corp that does international steel trading. That being said, Quickbooks is very easy to use for invoicing and payroll. Using the inventory feature is difficult and takes some time, patience, and practice. It's hard to estimate the amount of time it will take enter everything because that is based on the volume and activity. Once you get used to the system you can fly through it. A very, very rough estimate is that this will take you about 2 solid weeks of uninterrupted time. That is posting all sales, entering all invoices, marking them all as paid, doing any necessary JE's (accruals, depreciation, etc.), reconciling all the accounts and doing a month-end closing. THIS doesn't include inventory. Like I said, inventory is not easy in Quickbooks. Good luck!

FAR: 74, 83
REG: 76
BEC: 77
AUD: 89

[Anonymous]

If they have their info in Excel, then you can buy an add-on to Quickbooks called Transaction Copier and basically format their data and upload it to QB. You can also use it to transfer data from one QB file to another. The only limitation that I have found is that it won't let you upload payroll transactions. So the work around is to change the transaction type from “Payroll Check” to “Check”. I do it all the time.

https://bigredconsulting.com/products/transaction-copier-for-quickbooks/

[005]

you really should have someone w/ Quickbooks experience get the ball rolling

however, you can give it a shot. use the wizards quickbooks has and after every so often, pull balance sheet & profit & loss reports to make sure everything is being recorded correctly.

Just a quick run down…

Invoices – pretty straight forward. any invoice created will automatically hit accounts receivable. then when payments are received, they normally get allocated to an Undeposited Funds account. After this, you have to record the payments to whichever bank account you are using. Using these 3 wizards, this will allow company employees to link payments to employees, deposit dates, etc.

Payroll – keep your quickbooks up to date in order to have the correct rates. be sure to set up employees correctly (exemptions, state & fed, etc). Make sure you set up payroll taxes for each employee. For example, in NJ, you'd have to designate that you want NJ-Dis Employee, NJ- Dis Company, NJ Family Leave, NJ-Unemployment Comp, NJ-Unemployment Employee, Workford Dev Comp, Workforce Dev Employee, etc.

And then set up your pay periods. Once everything is set up, it's just a matter of putting in the correct salary/hours, and having the quickbooks software do the rest. And printing out the checks of course.

The “Payroll Liabilities” function will help you keep track of your payroll taxes. Your feds should be Fed withholding, Soc Sec – Comp, Soc Sec Employee, Medicare – Comp, Medicare – Employee, etc. Find out if the organization needs to pay fed liabilities on a weekly, semi-weely, or monthly basis. (form 941, etc). And then of course you got your federal unemployment (940) on quarterly basis.

Check with your state for which liabilities are do. For example, in NJ – you got your GIT (NJ withholding) on a monthly basis and then you pay your NJ927 and file NJ927 report on a quarterly basis. (for most organizations).

To process payroll forms, there's a function for that (quartlerly 941 reports, state reports… for example, NJ-927, new hire reports, NJ-WR30's, etc)

For inventory, use the tracking feature. This will help you link it to invoices. Keep on top of counts and reconciliations, etc.

Don't forget state sales tax, if applicable.

Hmmmm just tried to touch up on an overview, might have missed something…

Good Luck

BEC - ✔
REG - ✔
AUD - ✔
FAR - 11/29/14

CPAExcel, Ninja MCQs, and a sh*t ton of coffee

[Anonymous]

Thanks! This is gold.

@LKD CPA- Thanks for the time estimate. I'll run that by one other person for a second opinion

.

@005- I am starting from scratch, but I have the benefit of the Lynda.com QuickBooks Tutorial to walk me through the details of each step. I will look up those withholding as as they are relevant to PA.

Everyday transactions like purchases, sales, and payroll, are more important than inventory because eventually we will integrate a CRM and inventory management system… but that is later on.

The main objective for now is to have an organized, perpetually updated, P/L synced up with the bank account. And Payroll.

Thanks a lot!

[Anonymous]

They are certain that they want to use Quickbooks? The inventory is kind of scary in there.

Regardless, everything shouldn't take longer than 2 weeks. Even figuring 30 seconds per transaction, that is only 41 hours for the 5000 transactions. The rest should not take longer than a week, max.

[mla1169]

First they should do some research. Find out what other similar companies are using (drop shipping heavy equipment is an industry). Quickbooks may or may not be right for them.

Second the biggest challenge is mapping it out. Even with quickbooks you do not simply insert the disk then start entering data. You need a clear vision of how many users, will they need remote acces, what do they want the P&L to look like. Will they want to track profitability by customer? By order? Just getting to the point of drawing out the chart of accounts can take a couple of weeks. It's your job as the accountant to draw attention to these questions. They should not be thinking what their needs are today, they should be thinking ahead 5 or even 10 years. It's unwise to set up quickbooks now if they have a growth rate that will outgrow QB in 2-3 years. You'd be doing them a huge disservice to go along with the “it's all we need for now” mentality because guess what? When they figure out they need MORE, they'll be too busy to invest the time they should be investing right now. I've seen it over and over again where companies find thrmselves scrambling to find something that meets ALL their needs and upgrade to something so-so then pay a consultant big bucks to tweek this or design a report for that. In this case failing to plan truly is planning to fail. For the P&L are they going to want to seperate by product lines? Are they doing progress billings or shipping internationally and are they dealing with currency conversion or do they hope to in the future? If so, QB may not be their best solution.

They may not have a CPA but who does their taxes? Cash basis or accrual basis? Ideally whoever does their taxes will need an accountants copy of the file-make sure to know what they're looking for.

For the data entry 5k transactions? Are they going back to the beginning of the business? It's likely not necessary to go back more than a year or so. Someone experienced in QB and who knows the ins and outs of the company could likely get it all entered in a couple of weeks. If you're learning QB on the fly and are going to see an invoice to a customer and have to ask questions to enter it (revenue recognition, taxes, which P&L they want to see it on) it could be a lot longer.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

@CFO — I am located in PA and just make sure when setting up the QB payroll, you will need to incorporate the Act 32 withholding. You can do multiple rates just watch the set up (if you use the payroll set up feature that will help). Also watch putting in beginning balances especially with accounts receivable and accounts payable. The annoying thing about QB is that if you are using journal entries, the only allow one AP OR AR transaction per journal entry.

If you get stuck, you can look for a QB Pro Advisor in your area. That is how I get a ton of clients — I am one myself.

Good luck!

[mla1169]

And one more thing-unless you have payroll experience have then outsource the payroll (QB provides this service and it's not expensive). That is one area I would discourage even a seasoned accountant from doing in house especially if they were relying on tutorial websites and message boards as resources. The nominal cost of these services far outweighs the risks involved when it comes paying employees. Besides if you're only doing this as a side job think about who will be maintaining the records when you're done. Hiring a professional to take responsibility for maintaining all the rates and reports is vastly different and more expensive than hiring an admin or bookkeeper who just submits the hours to an outside payroll firm. You need to set it up so that the skills required to go forward are easily maintainable.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

You do not need to outsource payroll. That is just ridiculous. Payroll in Quickbooks for a few employees like that is about as easy as it gets. I was doing it since I was 18 or 19 years old for a company with about 50 employees, including printing all of the necessary reports, paying all the federal and state taxes, and preparing W2 forms for employees at the end of the year.

[mla1169]

Bear you are correct that it's not necessary. I've worked for very large and very small companies and all agree it's easier and cheaper to outsource it. The difference with quickbooks between doing payroll yourself ($20/mo) and getting their full service ($79/mo). Even if you paid a bookkeeper $15/hour unless they were completing ALL the payroll activities in under 5 hours per month there is no benefit to keeping it in house. Actually even if it took the accountant an hour total per month I couldn't justify keeping it in house to save 11.20 per week. Just because you've had one experience don't think that the input of someone with decades of accounting experience is “ridiculous”. I'm sure at 18 or 19 years old you were taught by an experienced payroll person and not watching tutorials online.

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[Anonymous]

Well, it isn't worth bickering over, but the activities Full Service provides don't take nearly 5 hours per month. You still have to enter hours, and print checks.

The only things they really provide that lower time are paying the payroll taxes, filing the payroll tax forms, and filing W2 forms. I personally had to do payroll taxes monthly, and it took about 5 minutes to do Federal and State. Not 5 hours, 5 minutes. Payroll tax forms are mostly prepared in Quickbooks, and take under an hour per quarter. W2 forms can take a little longer, but still not more than a couple hours per year.

If you don't want to deal with these hassles, and don't have anybody to train you how to do these, it probably isn't worth the hassle, because yes, I was trained by somebody who had experience. But our company saved just short of $500 annually by me taking <10 hours per year to perform these tasks.

[Author]

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