In Part 1 of this article (mini-series) we looked briefly at the basic information about the new QuickBooks Online Advanced ProAdvisor Exam and Preparation class instructed at QuickBooks Connect. In addition to the basic information we also covered details from the first two modules of the preparation course and exam. Before we begin our review of Modules 3 through 5, I just want to remind you about the exam questions as they related to the various modules.
The new QuickBooks Online Advanced ProAdvisor Exam consists of 33 questions, and will require a passing score of 80% on each of 5 ‘exam modules’. Candidates will have 4 attempts to pass each module of the exam. There is no time requirement related to the exam, and candidates may save and exit the exam as many times as they wish. Seven questions will come from Module 1 – Complex Conversions and seven questions will come from Module 2 – Customization. Module 3 – Special Transactions will be the source of five questions on the exam, and seven questions will be taken from Module 4 – Reporting and Complex Problem Solving. Module 5 – Advisory Services will be responsible for 7 questions.
So let’s look at Module 3 – Special Transactions. This module covers transactional topics like daily sales summaries in which it is necessary to categorize your sales and payment methods, as well as sales tax jurisdictions if multiple jurisdictions apply. This type of transaction might be used by a small store that uses a cash register to handle sales transactions but which needs to post those daily transactions to QuickBooks. Similarly a restaurant running a specialized point-of-sale system might also need to post their sales to QuickBooks in such a way as to reflect different categories of sales such as food, beverage, tip income, tips paid out, sales tax collected, etc. Creation of appropriate QBO Items and proper posting of the sales were reviewed.
Posting of Payroll processed by an outside provider was another specialized transaction presented within this module. Differing situations based upon the 3rd party payroll company’s responsibilities will necessitate variances in the set-up and posting of these transactions, additional considerations must be managed in the event it is necessary to allocate payroll for class, location or customer tracking.
Options in managing client retainers or deposits, these options include 1) use of the QuickBooks Online ‘Deposit feature’, 2) the normal A/R workflow by recording of a Receive Payment thus creating an A/R Credit balance for the customer which is later applied to the invoice, and 3) the Unearned Income Method. The recording methodology and implications of each of these methods upon the financial statements was emphasized.
Additional transactions within this module include barter transactions, allocating overhead using a journal entry, dealing with ‘bounced checks’, Write-off of bad debts, and cases where a zero-dollar check should be issued.
Module 4 – Reporting and Complex Problem Solving (also known as ‘Troubleshooting’) – we will begin by looking at the ‘Reporting’ portion of this module.
Reporting - so to me this all seemed very ‘basic’ stuff, the module began with the steps and options to customize reports using the various selections available such as General (date range, accounting method, etc.), aging, rows and columns displayed, dates, lists, status, and Header/Footer variances (this is not an ‘all inclusive list’) and remember in QuickBooks Online the customization options are directly dependent upon the type of report you are processing. Many of these option settings used in QBO reports take the place of, or have essentially the same effect as, the various ‘filters’ which may be modified in QuickBooks (desktop) reports.
Two different aspects of QBO report logic were presented, the first dealt with report size limitations when both displaying reports, and when exporting reports to Excel. The second area deals with understanding the various report types such as summary and transactional reports, while some of the characteristics of reports in QBO differ greatly from QB-Desktop versions; this is all pretty basic stuff. Differentiation of cash vs. accrual reporting was emphasized in terms of how QuickBooks Online makes conversion from accrual to cash including use of ‘unapplied cash’ accounts.
Considerable time was spent reviewing the ‘superiority’ of the QBO Audit log to the QuickBooks ‘desktop’ Audit Trail report. It seems fairly reasonable to assume that there should be at least one test question on the Audit log so anyone preparing for the exam should probably review how to modify the report, and view detailed history for transactions as well as identify historical changes not associated with transactions. Understanding the differences between QB Desktop and QBO Audits reports is probably a very wise idea for taking the exam.
Several additional reports were reviewed within this module including the exceptions closing date report which has differing locations depending on if you are using QBO or QBO-Accountant. Other custom business reports include best sellers and profitability by product, open sales orders which should more properly be called the ‘accepted estimates report’ in my opinion (QBO doesn’t have true sales order functionality). Producing documentation for Non-profits was also included in this module including use of statements as annual donor or pledge reports.
Troubleshooting – I think topics like this always get lumped with reporting because the process relies on knowing which reports to review and modify, as well as which reports to compare. To quote the study guide, “Whether working with a new client or performing a periodic check-up, ProAdvisors offer a valuable service to businesses when they perform a data review to check on the health of the company’s data and offer solutions to fix mistakes found.”
This type of review and clean-up begins with analysis of the client’s account balances starting of course with the two fundamental financial statements, the Balance Sheet and Profit & Loss reports. If you have been a ProAdvisor very long you know what to look for: excessive ‘undeposited funds’, ‘negative amounts’ appearing in the presentations, and proper statement of Equity. One biggy is always the presence of any amount in the “Opening Balance Equity” account. The study guide has a good review of what to look for more specifically on an account-type by account-type for both the balance sheet and profit & loss reports, it also contains in-depth discussions of the all too common mistakes made with both ‘undeposited funds’ and ‘opening balance equity.’
Examination of the various lists including the Chart of Accounts and Product/Service items lists. A discussion of the rather limited inventory functionality and the age-old problem of selling negative. The study guide also includes a well written review of the effects of selling inventory with ‘no cost’; this really wasn’t covered in our preparation class. A brief discussion regarding use of the ‘reclassify transactions’ tool found within QuickBooks Online-Accountant was also presented to cover situations involving both improper categorization to either ‘accounts’ or ‘classes’.
The option to ‘purge’ an entire set of data from QuickBooks Online during the first 60 days of a new subscription was discussed, this option is somewhat of a saving grace if you decide to import a client’s existing desktop file and then find that the ‘conversion issues’ are too great to overcome within a reasonable period of time. You can simply purge the data from QBO, and then either start complete from ground zero, or perhaps just import lists.
Several issues associated with review of bank reconciliations and identification of related problems associated with ‘bank feeds’ and improper or non-posting of this data. The study guide provides a lengthy and informative discussion of both the ‘matching’ functionality and the logic behind the reconciliation process. Additional areas of study include changes to previously reconciled transactions, changed un-reconciled transactions, and reconciliation adjustments. One additional report is presented near the end of this section, the steps needed to construct a ‘missing checks’ report.
Module 5 – Advisory Services The transitioning of ProAdvisor from ‘data entry specialist’ to ‘trusted advisor’ is a major topic of discussion these days at both seminars and in various trade journals, so it shouldn’t be a surprise that this topic is being covered in this ‘newest’ certification within the QuickBooks family. I’m not sure why this should be such a ‘new thing’ but to many ProAdvisors it seems much to the contrary of the services they have been providing.
This module includes a section dealing with financial ratio and trend analysis, and it involves some basic number crunching formulas you may or may not already know. Profitability, liquidity, solvency and efficient ratios are all discussed in terms of both the specific ratio computations and interpretation of both the numbers and the situations that maybe associated with unexpected values. The value of on-going comparative analysis of these ratios over time, along with comparison against industry averages was emphasized during our training.
A substantial review of the ‘cash flow’ process was presented, I could swear that the diagram presented use to be in the opening materials from the old QuickBooks (desktop) Simple Start training materials. Because that software was focused toward ‘start-up’ companies, the training materials ProAdvisors were provided contained a really good discussion of the importance of cash-flow. The study guide for ‘this module’ includes processes for review of operating characteristics of a business and tips for improving cash flow when problems are identified.
The concluding section of this module really provides a process for the implementation of Apps that may benefit your clients by expanding the capabilities of QuickBooks Online. A good check-point reference is presented under the Needs Assessment discussion with the study guide. This is followed up by a presentation regarding selection, implementation and training opportunities associated with new Apps.
I would note that there apparently are revisions already underway with the ‘Module 5’ study guide, so it may somewhat differ from my description here by the time of final release.
While there really doesn’t seem to be a lot of ‘new materials’ here from my perspective that may not be the case to a newly certified QuickBooks Online ProAdvisor who decides to take the ‘Advanced’ test without much ‘real world’ or product experience. I believe that there was a fundamental reason that the QuickBooks (desktop) ProAdvisor Advanced certification had a 3-year minimum requirement for annual QuickBooks certification, that reason was to insure that the person taking the Advanced exam didn’t simply have the ‘book (training manual) knowledge’ to answer the test question but had sufficient “real world” experience to insure that they truly were an ‘Advanced’ ProAdvisor when they earned that certification. As I mentioned earlier, I think that a large portion of the ‘core’ QuickBooks ProAdvisor community has some serious issues with how quickly this certification is being offered, and how quickly someone can earn this certification and in effect claim ‘parity’ with other “Advanced” ProAdvisors.
With respect to the preparation course, materials and examination I think the class and materials are providing valuable, but somewhat limited new, information as ‘advanced’ topics, but all of us can use a refresher of the basics from time-to-time, if for no other reason than to ‘jog our aging little gray cells’. I suspect that there may be some issues with what appears to be the ‘complexity’ with the structure of the examination questions, but since I haven’t actually attempted the examination yet, I really am only speculating based upon illustrations presented during our preparation class at QuickBooks Connect.
Best of luck in both your studies, and your examination.