When I started up my own house painting business two months ago, a friend of mine (also a house painter with his own business) gave me two bits of very sage advice: First: hire a good tax accountant; and second: set up a bookkeeping system that will: A. clearly show the source of every penny of my earned business income; and B. conspicuously demonstrate how every penny of my business expenses is spent.

Following my friend’s first piece of advice was easy. I visited the local offices of the man considered by many to be the best CPA in the state. Next year he will prepare all my income tax returns.

The second bit of advice (setting up a bookkeeping system) was quite a bit more difficult. You see, I am not gifted with a great deal of business acumen or experience. Because I’ve worked as an employee of either a government agency or a private company for the past thirty years, all I’ve ever needed is enough business sense to balance a checkbook, reconcile my credit card accounts, and track my investments.

Now, of course, that’s all changed. Now I need enough business savvy to understand and carry out a multitude of activities related to my business. Now I must calculate profit and loss; maintain a steady cash flow; find and eliminate unbilled charges and hours; estimate jobs; invoice customers; pay subcontractors and vendors; manage inventory; and do some good old-fashioned bookkeeping.

Where to turn for help getting started? I asked my friend, and he wholeheartedly recommended the accounting system he’s used for the past two years: QuickBooks, a business accounting software package from Intuit. Actually, QuickBooks is a lot more than just a "business accounting software" package. It’s a robust, all-encompassing set of software tools designed for use by small and medium sized businesses. With QuickBooks, business owners and managers can quickly and effectively manage the day-to-day fiscal affairs of their companies.

MY EXPERIENCES WITH QUICKBOOKS PRO 2001:

Installation and Documentation:

I purchased QuickBooks Pro 2001 (the latest, most full-featured and most powerful version of QuickBooks) on June 27, 2001. I immediately set about installing it. The program quickly installed from a single CD-ROM without any hassles. QuickBooks Pro 2001’s "footprint" is surprisingly small for such an all-encompassing package. It only requires about 105 MB of hard drive space (small by today’s standards) to install all the program’s components; an additional 70 MB is needed to install Internet Explorer 5.5 (included with QuickBooks Pro 2001)

QuickBooks Pro 2001 comes with two user's manuals: a small one that covers program installation and conversion of Quicken and other financial programs to QuickBooks; and a large and fairly comprehensive user’s manual that helps guide the user through basic tasks. Both manuals are well written, effectively laid out, and accurate. One problem: the user’s manual doesn’t actually explain the "how-to" of most tasks, but rather points the user to topics within the program’s "help" system. I find this a bit inconvenient.

First Impressions:

The first time I opened QuickBooks Pro 2001, I found it thoroughly daunting on the surface. Where to begin? QuickBooks Pro 2001 actually made this pretty easy! It took me through an "interview" about my business. It asked me all the basic questions: name of business; address; telephone number; type of business; bank account and credit card information, balances; etc. (Don’t worry… none of this information is ever transmitted outside the confines of your computer… unless you choose to go online with it. And that’s something I never do!)

Once the interview was complete, QuickBooks Pro 2001 set up a series of accounts based on my answers. These accounts were grouped into Income, Expense, Equity, Bank, Credit Card, and Cost of goods sold. I was able to add accounts at any time I needed one, and I could tailor existing accounts to my specific requirements.

Basic Navigation:

Whenever I open QuickBooks Pro 2001, I am greeted with an intuitive and user-friendly interface. It has the typical drop-down menus and menu "buttons." The vast majority of the screen is taken up by a working window. On the left side of the screen is a small window called "Navigators." Here is a list of different areas I can go to work: Company, Customers, Vendors, Employees, Banking, Business Services, Reports, and Info and Support. When I double-click on any item in the "Navigator" window will take me to the applicable area in the working window.

Digging in and getting to work:

At this point, I could easily bog you down with a truckload of "computer-geek speak" on how each area of QuickBooks Pro 2001 works, but, have no fear… I will have mercy on you, the reader. (It wouldn’t do any good anyway, since, even after two months of steady use, I’ve only begun to scratch the surface of QuickBooks Pro 2001!

The best way to explain the program’s basic features, and how well they work, is to take you through one of my daily sessions with QuickBooks Pro 2001. I’ll use last Friday – August 16, 2001 – as my example.

That hot and sunny morning, I buy a 28-foot extension ladder from my local hardware store. I pay for the ladder with my business credit card. Later that afternoon, the vendor delivers the ladder to the site where I’m beginning a new house painting job. My receipt accompanies the ladder. (The first basic rule of business accounting has nothing to do with QuickBooks Pro 2001 or computers, for that matter. The rule is simple, applies to all small business owners, and imposes potentially dire consequences on those who violate it: Always get a receipt from your vendor for your business-related expenses!)

That same day, I receive payment for a previous job I had just completed. I go to my bank, deposit the money into my business checking account, and walk out with another receipt.

Every evening when I have financial transactions, I record them in QuickBooks Pro 2001. Each accounting session is quick, easy, and painless, even for a neophyte businessman like myself.

The heart of QuickBooks Pro 2001’s accounting system is the "register." It looks, feels, and acts just like a check register… and it’s just as easy to use! So, when I go to record my ladder purchase, all I have to do is open my credit card account. The credit card register automatically opens. I record my purchase, and QuickBooks Pro 2001 automatically recalculates my credit card balance.

I go through the same procedure for my bank deposit. This time, I’m dealing with my business checking account checkbook register. I’m able to keep my balances accurate right up-to-the-minute. Once again I enter and record my deposit, and QuickBooks Pro 2001 instantaneously recalculates my checking account balance.

Every Friday, I transfer funds from my business account to my personal checking account. (I pay myself a fixed salary every week. The money I transfer goes toward normal household expenses. This is in keeping with another important rule for business owners and managers: never mix business and personal expenses!) Since I have both my business and personal checking accounts set up in QuickBooks Pro 2001, I can transfer funds easily between accounts, and track the balances of both accounts.

It’s important to note here that I’m not actually carrying out these transactions with the vendor, bank, or credit card company through QuickBooks Pro 2001. I still have to deposit the money at the bank, write the check, and give the vendor my credit card. QuickBooks Pro 2001 gives me the capability to make transactions with financial institutions online, but I’m still enough of a skeptic about Internet security that I choose not to use QuickBooks Pro 2001’s online transaction features.

At the end of last Friday’s accounting session, I’ve recorded a deposit with my bank and reconciled my bank balance; made a credit card purchase and reconciled that account balance; and transferred funds between my business and personal bank accounts. I’m absolutely confident that all my balances are accurate. I’ve also listed my new ladder in my "Tools and Equipment" account. The value of the ladder adds to the overall asset value of my business.

The last action I take before closing QuickBooks Pro 2001 for the evening is to scan reports. There are a myriad of standard reports that tell me at a glance the condition of my business: Profit and Loss; Net Income; Income by Customer Summary; Expenses by Vendor Summary; and Balance Sheet ( Standard, Summary, or Detail). All these reports are drawn from the various account registers and are recalculated by QuickBooks Pro 2001 every time I record a transaction. The reports are simple, straightforward, and easy to read and understand.

In my business as a building trades contractor, I rely on job bids and estimates to generate new business and invoices to collect earned income. Perhaps the most important features in QuickBooks Pro 2001 are its Job Estimates and Invoices components. With QuickBooks Pro 2001, I can quickly and easily create an estimate for any job for which I’m bidding. I simply list my estimate for all tools, equipment, supplies, and hours of labor to complete the job. I can print out the estimate for my customer.

Once the job is completed, I can convert my job estimate into an invoice. All I have to do is make any adjustments to my estimate to reflect materials actually used and hours actually worked, then hit the "convert" button. QuickBooks Pro 2001 does the rest. Once the invoice is created, the program automatically places the "balance due" into an "accounts receivable" account and reminds me when the invoice becomes overdue. Once I receive payment and make my bank deposit, QuickBooks Pro 2001 updates the invoice and my bank balance.

Another great feature for users of Microsoft Office 97 or later is QuickBooks Pro 2001’s ability to integrate with those programs. I can’t provide any information on how well this feature works, since I use Microsoft Office Professional for Windows 95… and have no plans to upgrade.

All this may sound complicated, but it’s not. For me, at least, it all comes down to keeping a group of account registers up-to-date and creating estimates and invoices. QuickBooks Pro 2001 does the rest. It’s as simple as that.

My "Bottom Line:"

Although QuickBooks Pro 2001 is a powerfully robust business accounting software package, and has a bit of a steep "learning curve" for first-time users, it’s actually quite simple and convenient to use. It’s well designed, bug-free, and gives me the confidence to know that my future business decisions will be based on an accurate and sound accounting system.

By the way… yesterday’s QuickBooks Pro 2001 reports tell me that my business is already turning a small profit, after only two months! Who knows…maybe you’re reading the words of the next mid-coast Maine house painting tycoon!!



Recommended: Yes