CDR Troubleshoot Balances Tool
Regardless of how experienced or well trained QuickBooks users are, they will almost always create data entry and setup errors over the course of time. It is important to regularly analyze the condition of the QuickBooks file to provide reasonable confidence in the accuracy of the data. Many small business owners spend tremendous human resource energy to maintain accurate financial information in QuickBooks while, at the same time, they have no confidence in those numbers to make strategic decisions about their businesses. When you analyze the data file regularly, you can provide this confidence at least quarterly – if not monthly.
I have found that many QuickBooks consultants seldom attempt to communicate the value of periodic data file analysis services. You need to understand that your clients need these analytical services which are designed to detect issues on a proactive basis to implement preventive steps to preclude errors, rather than simply providing QuickBooks consulting only after your clients create errors in their QuickBooks files. In other words, If clients don’t call with QuickBooks questions or concerns, advisors often don’t provide any consulting – or not until someone has to prepare an income tax return using the unreliable QuickBooks data.
There are several tools that can help you perform logical standardized analysis services, but one of the best of these is the QuickBooks Client Data Review (CDR) tool. Over the last several years this tool has been improved and expanded to streamline not only identification of a majority of common QuickBooks user mistakes, but also resolve those errors in a minimum of time, when compared to the older 'manual procedures' that were so time consuming. Using this tool allows you to 'focus' less on the easier but very time consuming issues, and place your emphasis on the problems which CDR currently is unable to resolve.
So let's look at the benefits that both you and your client can realize when you provide periodic data file analysis services for the client's QuickBooks file:
- Your clients will have enhanced confidence in the accuracy of their QuickBooks financial reports several times throughout the year, not just at year end or after the Company’s annual income tax return is filed and the adjusting Journal Entries are entered.
- If you do not perform analytical services regularly throughout the year, you will have to analyze all 12 months at year-end, or during tax season if you are going to prepare the client’s business income tax return. There are two problems with doing the analysis only at year end or during tax season:
- These are typically the busiest times of the year and as a consultant you probably don’t have time do conduct as thorough an analysis, and you certainly don’t have the time to work with the client to make transaction-level corrections to the data file. Corrections you make are then more of remedial actions rather than a learning experience for your client.
- Both the 12 month analysis and the tax return preparation fall under the same engagement. Since this data analysis and data troubleshooting is time consuming, you will often write down tax preparation fees – or you will send a highly inflated invoice to the client that they must pay at one time. If you had performed the analysis quarterly, the fee would have been spread across the year. As a result, you may increase your billings (including non-tax season billings).
In many cases you can couple the analysis and correction engagements with quarterly or monthly financial analysis services. Once the financial reports in QuickBooks are accurate to within immaterial discrepancies, you can use a variety of products to automatically create financial analysis reports for your clients.