Montana Association of School Business Officials

2. Montana Association of School Business Officials Summer Conference 2019

3. Quickbooks Users Agenda Welcome and Introductions Audit Trail Chart of Accounts/Classes Fund Balance Budget Clearing Funds ACH Payments Reports Fixed Assets Your Choice

4. Quickbooks Users Meeting • Audit Trail • Automatically turned on in newer versions • Old versions – may require selection under preferences • Useful for error hunting • Shows all activity by account, entry, date, you pick how you want to look at it

5. Audit Trail – How to Get There • Reports • Accountants & Taxes • Audit Trail • Pick date range – I usually use the date I entered, not the date of the transaction. It is easier to find. • Customize Report makes it easy to filter by dates, accounts, class, amount, etc.

6. Audit Trail - example

7. Chart of Accounts • Classes • Needed for Fund Accounting • Unique for each fund • Must be used for all transactions involving Funds • Caution – QB does not care if class matches fund or coding • Use the Profit & Loss by Class Report to find misclassified entries • Easiest is to use fund names (General, Retirement, etc.)

8. Chart of Accounts – cont. • Accounts • Use OPI numbering system (with some modifications due to system limitations) • For this to be successful, you must be familiar with the OPI system so you can cross-walk some of the numbers. Go to the website and print the chart of accounts if you do not have a copy. • Such as: • Fund: 101 – General Fund • Balance Sheet Account: 101-101 – General Cash • Revenue: 01-3110 – Direct State Aid • Expenditures: 10 – 120 – Instruction Teacher Salary • Sped 28 – 920 – RSBG Transferred to Coop • For an example, see the Balance Sheet and Profit & Loss Reports

9. Chart of Accounts – cont. • Use Control Accounts to get Totals on Reports • 101- General Revenues –Totals Revenues by Fund • 101 – General Expenditures – Totals Expenditures by Fund • 10 – Instruction – Totals Expenditures by Function • The trick is in how each account is built in relation to the others. • This system also helps with completion of the TFS • For an example, see the Profit and Loss Report • The Profit and Loss by Class Report can show misclassified expenditures

10. Fund Balance • Quickbooks uses Retained Earnings and Net Income to arrive at equity. • Fund Accounting uses Fund Balance and the effects of revenues, expenditures and changes in encumbrances to reflect equity. • If you encumber, it is easier to do it using journal entries since there will probably not be many entries. • The following will be done for year end closing:

11. Fund Balance – cont. • Record any encumbrances using the Journal Entry Function. • Company – Make Journal Entries • Create a Claim or Purchase order to keep track of the transaction. • Write the GJ number on the document or attach a copy for ease in documentation. • Record the transaction according to the following example:

12. Fund Balance – cont.

13. Fund Balance – cont. • Adjusting Fund Balance in Quickbooks • The Balance Sheet Report at 6/30 will show Retained Earnings and Net Income • If you have adjusted your Fund Balance in the prior year, the R.E. and N.I. Should be the same numbers but one negative and the other positive • Fund Balance should usually be equal to Cash adjusted for any Due From/Due To/Encumbrances • See Balance Sheet Example

14. Fund Balance – cont. • Quickbooks Balance Sheet at 6/30/18 General Fund Transportation Fund Cash 12,155.82 Cash 505.51 Encumb -453.94 Due to Other Gov 232.75 FB Should be 11,701.88* FB Should Be 272.76* QB FB is 10,175.47 QB FB is 272.76 Adjust Needed 1,526.41 Adjust needed -0- *Must match TFS

15. Fund Balance – cont. • Please see the examples: • Balance Sheet before adjustments • Spreadsheet calculating adjustment • Balance Sheet after adjustment

16. Budgeting – How to Get There • Company • Planning & Budgeting • Set Up Budgets

17. Budgeting – cont. • Create New Budget • Select Year • Budget Type (Should be Profit and Loss) • Next • Criteria – Choose Class • Create Budget from Scratch • Finish • Enter all items in the July column (QB wants to spread by month and we all know that our revenue and expenditures are not that exact.)

18. Budgeting – cont. • Enter Revenues from the OPI Budget Document. • Enter Expenditures for the areas that will have expenditures. • Hint: Use the previous year’s Profit and Loss Report and adjust for inflation, raises, etc. • Super Hint: Be very sure that the budgeted revenues and expenditures match the budget document. • How do you do this? • Run a budget report and check. You can always go back into the budget creation function and make corrections/adjustment.

19. Budgeting – cont. • Where is the Budget Report? • Reports • Budgets • Budget vs. Actual • Choose budget for the appropriate fiscal year. QB will hold them all. • Next • Choose Account by Month • Next • Finish

20. Budgeting – cont. • When the report comes up • Choose the date range you want (month, quarter, fiscal year) • In Show Columns choose year • That will reduce the budget report to four columns • CAUTION This report is different than we are used to • This report has a column”$ Over Budget” • For Revenues a Negative Balance means amounts not yet collected • This is normal for a budget report • For Expenditures a Negative Balance means Expenditures not yet made • This is the reverse of most budget reports • Be sure to explain this to your Board of Trustees or other users so no one has heart failure • Write an explanation in the column addressing this issue and again tell them when they see it

21. Clearing Fund • A Clearing Fund is much easier to use than writing multiple warrants. • You can use one fund and one warrant series. • Quickbooks has a transfer function to use for moving cash from the various fund to cover the warrants written during the month. • Monthly reconciliation with the County Treasurer is easy. • Ask the Board of Trustees to permit the establishing of a clearing fund. • Inform the County Treasurer of the need for the fund and ask that it be added.

22. Clearing Fund – cont. • When writing warrants. Use the class designation on each expenditure line. This will spread the expenditures to the various funds. • At month end, run a Profit and Loss Report for the Month. The total for each fund should be the transfer needed to cover the warrants written from the clearing fund. • Run a balance sheet at month end. The balance in the clearing fund after transfers should be equal to the warrants written plus any quarterly withholdings not yet remitted. (State Income Tax, Work Comp, Unemployment)

23. ACH Payments • For a while I was using a General Journal Entry to record ACH transfers. • Then the light came one and now I write a check using a dummy check number (so it does not goof up my warrant series). • The number Iuse is year/month/number i.e. 190601 would be the first dummy check written in June of 2019 for the Federal Deposit. • These numbers now show up on my check listing that I provide to the County Treasurer and the Board of Trustees. • Be sure to let the Treasurer know each time you are making or receiving an ACH transaction. They really appreciate it.

24. Reports • There are many reports available in Quickbooks. • Common ones that are helpful are: • Company and Financial • Balance Sheet • Profit & Loss • Accountants and Taxes • Transaction Detail by Account • Audit Trail • Banking • Check Detail • Budgets • Budget vs Actual

25. Fixed Assets • Quickbooks does have a fixed asset application. • That will be a discussion for a future meeting. • At this point, I am using an Excel Spreadsheet to maintain fixed asset records. • A copy is included in the packet and on the MASBO Website

26. Fixed Assets – cont.

27. Questions? Contact Information Robert Martelle rjmartelle@midrivers.com 406-351-1340

28. THANK YOU Have a Great Conference