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How Does a Client Import an Accountant’s Work From an Accountant’s Copy Import File?

Chief Mechanic · September 12, 2010 ·

To import an accountant’s work prepared in an Accountant’s Copy import file (.QBY), the first step is to receive and save the .QBY file on your computer.  Given the small size of most .QBY files, this file is normally transmitted via email.

For background, use of an Accountant’s Copy in QuickBooks is an easy way for a client company to transfer data to a third-party (such as an accountant), have the accountant make changes and return just those changes, and incorporate them with the company file subject to the client’s review.  In an article on our blog, we’ve described how a company can easily transfer an Accountant’s Copy export file (.QBX) to us using Intuit’s secure servers.  This file could also be delivered via other methods, such as delivery on a flash drive or other physical media.  In separate articles, we’ve reviewed how an accountant works with client data received from an Accountant’s Copy and returns that data to a client.

Working with an Accountant’s Copy is essentially a 5 step process:

  1. client sends an Accountant’s Copy export file (.QBX) to an accountant or third party
  2. accountant or third party works with the data
  3. an accountant or third party returns completed work to the client
  4. client imports changes made by accountant or third party
  5. resolving problems if the client import fails

Throughout this article, we’ll refer to different file types with similar names.  The function of each of these files is very specific. For more information, see our article describing the different file types in QuickBooks.

Here’s a sample message with an Accountant’s Copy import file (.QBY) attached.  In Outlook, right click on the attachment, and choose Save As… in the drop down menu.  Specify a location, and save the file.  Write down the location you specify so you can quickly locate the file when you return to QuickBooks.  The exact steps to save an email attachment may vary slightly in your own email client.

QuickBooks Accountants Copy Client Email

Once you’ve saved the file, return to QuickBooks.  Click the File->Accountant’s Copy->Import Accountant’s Changes… menu selection.  This menu selection will only be available if you have an outstanding Accountant’s Copy.

QuickBooks Accountants Copy Import

You’ll see the Incorporate Accountant’s Changes window.  Note that these changes are not yet incorporated – you’ll have a chance to review them first.

QuickBooks Accountants Copy Incorporate Changes

In this window, you can:

  • read the note from your accountant regarding changes made
  • review a list of those changes
  • print or save a PDF report of those changes
  • incorporate those changes into your company file

In this example, we recorded a single change in the .QBA file created from the client’s data, a journal entry.  Changes initially appear as single line items, and you can expand (+) or collapse (-) the detail that appears below a transaction by clicking the appropriate indicator to the left of the transaction.  If your accountant has recorded more than a few transactions, you can also click the Expand All and Collapse All buttons to perform those tasks on all of the transactions in the .QBY file.  At this point, the changes are described as not yet incorporated into your company file.  We’ve attached a sample report in PDF format showing the output at this stage.

After completing your review, click the Incorporate Accountant’s Changes button.  You’ll see a message that QuickBooks needs to close all windows.  Click Ok.

QuickBooks Accountants Copy Incorporate Changes Close All

Before incorporating the changes, as a precaution QuickBooks forces you to perform a backup.  To proceed and backup your data, click Ok.

QuickBooks Accountants Copy Incorporate Changes Backup

QuickBooks will prompt you to specify a file location and name to save the backup file.  When the backup is successfully completed, click Ok.  QuickBooks will proceed to incorporate the changes recorded in the .QBY file.

QuickBooks Accountants Copy Incorporating

When the changes have been incorporated, you’ll see a window reflecting the successful result.

QuickBooks Accountants Copy All Done

It’s strongly recommended that you click Print or Save as PDF to document the changes made.  If you click the Close button before producing a report of the changes, you’ll be cautioned to produce a report first.  Click Cancel to return to the previous window to print or save a report.  If you ignore the caution and click Ok, you’ll lose any chance to produce a report of the changes that were just incorporated.

QuickBooks Accountants Copy Print Caution

To document your work, click either the Print or Save as PDF button.  At this point, the changes recorded in in the Accountant’s Copy have been sucessfully incorporated into your company file.  We’ve attached a sample of the PDF produced by QuickBooks after this step.

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How Does an Accountant Working With Client Data From an Accountant’s Copy File Return Completed Work To a Client?

Chief Mechanic · September 12, 2010 ·

The approach you use to return completed work to a client depends on which way you opted to work with the Accountant’s Copy export file (.QBX) file at the outset.  Intuit does not provide electronic communications to transmit completed work to a client however you chose to work with the file initially.  The simplest electronic method to transmit completed work is via email, but that may not be feasible if you opted to work with the .QBX file by converting it to a company file (.QBW).

For background, the Accountant’s Copy export file (.QBX) in QuickBooks is an easy way for a company to transfer data to a third-party, such as an accountant.  In an article on our blog, we’ve described how a company can easily transfer an Accountant’s Copy export file (.QBX) to us using Intuit’s secure servers.  This file could also be delivered via other methods, such as delivery on a flash drive or other physical media.  Intuit uses the terms “export” and “transfer” to describe a .QBX file interchangeably.  For simplicity, we’ll refer to this file as an export file because “eXport” serves as a better reminder of the purpose of the file extension, .QBX.

Working with an Accountant’s Copy is essentially a 5 step process:

  1. client sends an Accountant’s Copy export file (.QBX) to an accountant or third party
  2. accountant or third party works with the data
  3. an accountant or third party returns completed work to the client
  4. client imports changes made by accountant or third party
  5. resolving problems if the client import fails

Throughout this article, we’ll refer to different file types with similar names.  The function of each of these files is very specific.  For more information, see our article describing the different file types in QuickBooks.  In this article we’ll address how to return completed work to a client.

There are 2 ways to work with an Accountant’s Copy export file (.QBX):

  1. Convert it to an Accountant’s Copy working file (.QBA), which allows your changes to be automatically incorporated into the client’s company file, or
  2. Convert it to a company file (.QBW), which will not allow your changes to incorporated into the client’s company file

How work is returned to a client depends on the method you opted to use the .QBX file from the start.  Hopefully, before doing any work you evaluated which method best suited your needs, because once the work is completed, your options on how to return that work are limited.

Method 1 – You Previously Chose To Convert a .QBX to a .QBA File

The principal benefits of using this method are threefold:

  • your client can continue to record transactions in the company file after the dividing date,
  • QuickBooks will record only your changes in an Accountant’s Copy import file, resulting in a much smaller file to be transmitted to the client, and
  • tools are in place from within QuickBooks to easily document changes you made to the file.

This method is only available if you are working with the Accountant Edition of QuickBooks.  From within QuickBooks, click the File->Accountant’s Copy->View/Export Changes for Client… menu selection.

QuickBooks Accountants Copy View Export

With the View/Export Changes for Client window open, you’ll be able to:

  • record a note to your client describing the work you performed
  • review the changes you made to the file
  • print or save a PDF report of your work
  • create a .QBY import file (referred to as a Change File on the button) for transmission to your client

Here’s the View/Export Changes for Client window with important sections highlighted:

QuickBooks Accountants Copy Accountant's Changes

In this example, we recorded a single change in the .QBA file created from the client’s data, a journal entry.  Changes initially appear as single line items, and you can expand (+) or collapse (-) the detail that appears below a transaction by clicking the appropriate indicator to the left of the transaction.  If you’ve recorded more than a few transactions, you can also also click the Expand All and Collapse All buttons to perform those tasks on all of the transactions you recorded.

To document your work, click either the Print or Save as PDF button.  We’ve attached a sample of the PDF produced by QuickBooks.

Once you’ve documented your work, click the Create Change File for Client button.  This will create an Accountant’s Copy import file (.QBY) from the .QBA file.  The .QBY import file will contain only the data required to update your client’s company file, so it’s much smaller in size than other file types.  That makes it easy to transmit via email, since many internet service providers impose restrictions on the size of email attachments.  In addition, security is less of a concern because you’re not transmitting all of a company’s financial information – just a record of your changes.

When you click the Create Change File for Client button, you’ll be prompted to specify a location for the .QBY file.  Be sure to write down this location.  Open your email client, address an email to your client, attach the .QBY file you just created, and send it.  Your completed work is now on its way to your client.

Method 2 – You Previously Chose To Convert a .QBX to a .QBW File

If you opted to convert an Accountant’s Copy export file (.QBX) file to a company file (.QBW) and record your work in that company file, you’ll need to replace your client’s company file (.QBW) with the company file that contains your work.

Unlike the previous method, QuickBooks doesn’t provide any tools to assist in this process.

Because a company file (.QBW) is the primary file for recording data in QuickBooks for Windows, the file is considerably larger than other file types.  You may find that the size of the company file makes electronic transmission, especially via email, more difficult.  For example, the company file containing the sample data we used in these examples is 7944 Kb, or nearly 8 megabytes, in size.  By comparison, the Accountant’s Copy export file (.QBX) created from this company file to be sent to an accountant is only 328 Kb.  The Accountant’s Copy import file (.QBY) containing our 1 journal entry is less than 2 Kb in size, which is about the space required for 1 transaction.  If we had recorded 100 transactions resulting in a .QBY file of approximately 200 Kb, it would be easier to transmit that file via email than a file containing nearly 8 Mb of data.  If the company file (.QBW) containing your work is too large for transmission via email, you can consider:

  1. compressing the file with a file compression utility,
  2. using a file service that isn’t subject to the limits imposed by your internet service provider on email, or
  3. physical delivery of the file on electronic media.

Before replacing your client’s company file with the one containing your work, be sure to create a backup copy of the client’s data.  If the client did record transactions in the company file, those transactions will be lost once you replace the client’s company file with the one containing your work.  The backup will provide the ability to identify those transactions at a later date and enter them manually.

If you created and emailed a .QBY file, your client will need to incorporate the changes that are recorded in the Accountant’s Copy import file (.QBY) that you supply.  We describe incorporating the changes in an Accountant’s Copy import file (.QBY) in a separate article.

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How Can I Improve the Performance of QuickBooks?

Chief Mechanic · September 12, 2010 ·

QuickBooks is a complex program that processes a lot of data.  As data is added to a QuickBooks company file (.qbw), loading and processing times increase.  Within the program, slower processing is usually seen when performing tasks that involve the entire company file, such as running utilities or preparing reports.  Since QuickBooks is typically used every day over a period of years, it’s highly likely that at some point you’ll find a need to improve performance.

There’s no single solution that will improve performance in every circumstance, but there are a series of steps you can take that together will have a dramatic impact on QuickBooks performance.  We’re ignoring the “common sense” recommendations of “buy a faster computer with more memory” or “upgrade to the latest version/update to the latest release.”  Spending money on new or upgraded hardware and not running outdated software will improve performance.

We recommend that you:

  1. Close your company file before exiting QuickBooks and reduce to a minimum the amount of windows that do open once you open your company file.  This will dramatically reduce the time it takes to load QuickBooks, which is one way users measure performance, but it won’t have any impact on performance while working in the program itself.
  2. Perform a manual, verified backup on a regular basis.  QuickBooks maintains a transaction log file (.tlg) that is used in conjunction with its manual, verified backup routine.  This .tlg file grows and can often become bigger than a company file (.qbw) itself.  A manual, verified backup reduces the .tlg file size and improves performance.  Scheduled QuickBooks backups don’t count, nor do other backup routines that you happen to use.  When the .tlg file exceeds 25% of the size of the company file (.qbw) size, it’s time to do a manual, verified backup.  Remember that the primary purpose of this step is to reduce the .tlg file size, not to back up data.
  3. Reduce your DB file fragments if they’re too high.  DB file fragments represent the degree to which pieces of your QuickBooks company file (.qbw) are scattered over your hard disk.  The more fragments you have, the lower your performance will be.  For most organizations, DB file fragments in the single digits are reasonable.  Organizations running Terminal Services will see more DB file fragments, into the low double digits, and that’s reasonable.  If your DB file fragments exceed those levels, convert your company file (.qbw) into a portable file, and then convert that portable file into a company file (.qbw).  That conversion routine will reduce DB file fragments and improve performance.
  4. Clear the queues for forms to be printed.  Large numbers of forms with the To be printed flag set can degrade performance.  The most common example of this problem is a large number of invoices that are in the print queue.  Remove these invoices from the print queue and performance will improve.
  5. Run the clean up utility to reduce your company file’s overall size.  For QuickBooks Pro and Premier, Intuit recommends keeping data files under 100 Mb for reasonable performance.  The clean up utility can remove stale list items and consolidate closed transactions, thereby shrinking file size and improving performance.
  6. Avoid excessive use of sub-accounts, sub-items, and Jobs, which are effectively sub-customers.  Relatively speaking, a sub-account requires more processing than a top-level account, so the more sub-level list entries you create, the slower your performance will be.  The performance penalty is small, so don’t let this fact alone discourage your use of sub-level entries when necessary.  Some organizations have used sub-level list entries excessively, when other QuickBooks features would have been better suited to the purpose.
  7. Stop using Google Desktop.  Google Desktop can only index a QuickBooks company file (.qbw) when that file is open.  Google Desktop indexing routines consume processing and memory resources, leaving fewer of these resources available to QuickBooks.  That will degrade performance.  Uninstalling Google Deskop will improve performance.
  8. Consider an upgrade to Enterprise Solutions.  The database engine behind Enterprise Solutions is more robust and is capable of handling larger company files at reasonable performance levels.  If your business has grown and your QuickBooks company file can’t be cleaned up to where it offers reasonable performance, Enterprise Solutions will provide improved performance.
  9. Investigate network issues if QuickBooks is installed on a network.  For example, mismatched network interface card (NIC) settings can significantly reduce network performance.  If QuickBooks is the primary program that’s used over the network, this network configuration issue can appear to be a QuickBooks performance problem.

For some of these recommendations, the impact will be significant.  For others, it may be imperceptible.  What works or doesn’t work will be heavily dependent on your own configuration.

Intuit describes some of these recommendations in this knowledge base article.

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How Do I Delete or Remove an Existing Loan From Loan Manager?

Chief Mechanic · September 12, 2010 ·

To delete or remove an existing loan from Loan Manager, follow these simple steps:

  1. Open Loan Manager from the Banking->Loan Manager menu in QuickBooks
  2. Highlight the loan you want to remove by clicking on it in the Loan List
  3. Click the Remove Loan… button
  4. Click Yes in the Remove Loan? window

Here’s the main screen of Loan Manager with a single loan.  If the loan you want to delete or remove isn’t listed, the GL liability account is probably inactive.  In that case, close Loan Manager, make the GL liability account active, and restart Loan Manager.  Here’s the Loan Manager after the loan has been selected:

QuickBooks Loan Manager Loan Added

Here’s the Remove Loan? window:

QuickBooks Loan Manager Remove Loan

It’s important to understand that Loan Manager is primarily a tool to calculate payment schedules and to simplify the process of distributing interest and principal payments to the appropriate GL accounts.  When you create a new loan in Loan Manager, the outstanding balance for that loan will start as $0 – until you record a transaction in the liability account in QuickBooks itself. Once the liability account is increased to reflect the loan’s principal, Loan Manager can assist you to record the regular payments.  Likewise, when you remove a loan from Loan Manager, you are not making changes to the liability account balance.

Therefore, deleting or removing a loan by following these steps will not impact your financial statements or other reports produced by QuickBooks.

For more information on using Loan Manager, see our related articles on adding a new loan and recording a debt re-financing.

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How Do I Add a New Loan To Loan Manager?

Chief Mechanic · September 12, 2010 ·

To add a new loan to Loan Manager, there are some preliminary steps to make before running Loan Manager:

  1. Evaluate if this is a loan that Loan Manager can track.  Loan Manager doesn’t track interest-only loans, so if your loan requires you to make regular payments of interest over time and the entire principal in a single payment at the end of the term, Loan Manager isn’t the right tool
  2. Verify the liability account for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
  3. Verify the payment account (normally a bank account) which will be used to make payments on the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
  4. Verify the expense account which will be used to record interest expense for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
  5. Verify the expense account which will be used to record other fees (such as bank fees) for the new loan exists in your QuickBooks chart of accounts and that it is active; if not, add it or change its status
  6. If your loan has escrow payments associated with it, verify that the asset account which will be used to record prepaid expenses (such as property taxes or insurance) for the new loan exists in your QuickBooks chart of accounts and that its active; if not, add it or change its status
  7. Verify the vendor or other name to which payments will be made exists; if not, add the vendor or other name
  8. Enter the journal entries in QuickBooks so the current balance of the liability account associated with your new loan equals the original amount of the loan
  9. Have in front of you the following information about the new loan: the origination date, the term, the interest rate, whether your lender uses daily compounding (and if so, whether it’s on a 360 or 365 day basis), the payment amount, the sequential payment number, the due date of next payment, and the escrow amount (if any)

Since Loan Manager reads information from your QuickBooks chart of accounts when it first loads, if the accounts required to set up the loan do not exist when Loan Manager starts, you won’t be able to set up the loan properly – even if you open a window within QuickBooks to add the accounts while Loan Manager is running.

Here’s the main window of Loan Manager:

QuickBooks Loan Manager Opening Window

To add a new loan, click the Add a Loan… button.  The Add Loan window, the first step in the process, appears.  Since we’ve already followed the steps in our checklist, our accounts already exist and the balance of our liability account equals the Original Amount of the new loan.  In this example, that amount is $200,000.00.  Choose your liability account and Lender (a vendor or other name) from the pull down menus.  Enter the Origination Date for the loan, the Original Amount (which in our example is $200,000.00), the Term and the type of number the entered Term represents (weeks, months, or years).

QuickBooks Loan Manager Add Loan

Once this information is correct, press the Next button to bring up the second screen in the process of adding a loan.  On this screen, enter the Due Date of Next Payment, the Principal Amount, and the Next Payment Number.  For a new loan, the Next Payment Number will normally be 1 provided that you’re setting up the loan before your first payment is due.  Choose the Payment Period (one of weekly, bi-weekly, semi-monthly, monthly, bi-monthly, quarterly, semi-annually, or annually) from the pull down menu.  Specify whether the loan has an escrow payment associated with it, and if so, enter the Escrow Payment Amount and the Escrow Payment Account.  The Escrow Payment Account is normally an asset account because escrow payments are being made in advance of the expense being incurred.  If you want QuickBooks to remind you before a payment is due, make sure the checkbox is checked.

QuickBooks Loan Manager Add Loan 2

Once this information is correct, press the Next button to bring up the third screen in the process.  Enter the Interest Rate for your loan as a percent.  Choose the Compounding Period for you loan, which will default to the Payment Period you entered on the previous screen.  You’ll also have the option of setting the Compounding Period to Exact Days to specify that your lender is using either a 360 or 365 day year to calculate interest.  If you choose this setting, you’ll have the additional option of specifying the Compute Period as either 365/365 or 365/360.  This information would normally be found in your original loan documents.  Choose your Payment Account, Interest Expense Account, and Fees/Charges Expense Account from the pull down menus.  Normally, the Payment Account is a bank account, such as a checking account.

QuickBooks Loan Manager Add Loan 3

When this information is correct, press Finish.  You’ll see a screen similar to the one below.  In our example, we added a new loan with a principal of $200,000 at a 10% interest rate, a 60 month term with monthly payments, and a $2,000.00 monthly payment.  Since this loan is not is not fully amortizing with those provisions, there is a balloon payment at the end of the term.  Clicking on the Payment Schedule tab will display the payment information for the loan; the Contact Info tab will display the relevant information for the vendor or other name we specified as the Lender.  This information is maintained in QuickBooks itself, not Loan Manager.

QuickBooks Loan Manager Loan Added

It’s important to understand that Loan Manager is primarily a tool to calculate payment schedules and to simplify the process of distributing interest and principal payments to the appropriate GL accounts.  When you create a new loan in Loan Manager, the outstanding balance for that loan will start as $0 – until you record a transaction in the liability account in QuickBooks itself. Once the liability account is increased to reflect the loan’s principal, Loan Manager can assist you to record the regular payments.  Likewise, when you remove a loan from Loan Manager, you are not making changes to the liability account balance.  Since we completed our checklist steps before running Loan Manager, which included recording the loan balance in the liability account, the balance was displayed correctly once we added the loan.  Had we not completed that step, the Balance column for our new loan would show the balance of our liability account, or $0.

For more information on using Loan Manager, see our related articles on deleting a loan and recording a debt re-financing.

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