Attorney books comparison reports

Hi there, Linda Ardisani, Ardisani Accounting. So the past few weeks we've been going through ways of cleaning up client files, and we use the Books Review feature in QuickBooks Online. That's really, really helpful in making sure the client books are balanced and also really quick way to do some cleanup. Now we're going to move into 2 of my favorite reports that I like to use once we've done all the cleanup, just as a double check to make sure things are really accurate in the right categories and things are— balances look similar. Basically, that's what you're going to use these 2 reports for. I'll just show you a couple of little tiny tricks that aren't even in the article that's attached to this but will help you to do a quicker cleanup. Reclass tool is your best friend. So remember that it's not mentioned in the article, but the reclass tool— I would throw my date range up for the past year and just kind of go through and just look and sort. I'll show you that in a moment in the file. But also there's a couple other ways you can kind of clean up a category if you happen to be in it. So let me share my screen. I'll just show you a couple more tricks of the trade. So we're in my demo file, but I wanted to show you one thing. So by default, your date range is typically last month in your date range on, on any default report. So if I were to go into my default reports, it would come up last month. And if it does that, we're in January, so it's going to show December. I really want to show the year. I just want to show you what happens when you, when you go into The report section. Say I want to produce a profit and loss. It's just a pet peeve of mine, but I wanted to demonstrate it because if you come in here, you're going to see this. And as you come into profit and loss comparison, it's here. And if I'm like, oh, I don't want to just see December, I want to see all of last year, let me just change the date range to last year and run the report. Watch what happens to the report. Take a look at the 2 columns. It's showing December 2021 comparing it against 2020. I hit Run Report. Watch what happens. It just combined everything. It made it just a regular P&L report. It didn't— took away the comparison. Why this happens, I have no clue, but it drives me crazy. So I just want to show you what you should do first. If you're an accountant or bookkeeper and you're using the accountant's version, come over to your Report Options, select Last Year. And then if you aren't doing that, make sure that you set your records to show last year and then your basis that you want to do it on. Now, if I come over here and do the reports, and I run that profit and loss comparison report, now it's going to show year over year. I'm comparing 2020 to 2021. Why do I want to do this? Well, I want to see if there's variables in the data and if there's something that just seems off. So I looked in the beginning when I looked at the profit and loss, or when I went through the books review, or I looked at the balance sheet as we did last week, you're going to see negative balances that just don't appear to be in the correct column. Like if you see a negative AR, you know that why they overpay the AR. or a negative liability account. You wanna look and see those things. You don't wanna see negative liabilities or negative trust balances. So those are things you wanna pay attention to. But here it's more looking in the finer details. Like if I come up to legal business income, there's not a lot of data from last year. We kind of didn't load it up too much. If you look here, I've had $159,000 in legal fee income in 2020, but in 2021, I had only $102,000. And maybe there's a reason for that. Maybe, maybe they were short an attorney, maybe the staff changed, or whatever reason. Maybe somebody was sick, but you probably know that. Maybe there was some change in direction which caused the firm to have less sales. You want to see that. And overall, it did have a lot more sales. And just kind of disregard— this is my test files, there's a lot of little mistakes in here, so disregard that. But if you're looking, I had $256,000 in sales. That's pretty good increase in sales compared to last year. And you just want to go through each, each account and If you see like filing fees and there's nothing here for this year, but last year there was something, then you want to go investigate where did that get booked in? Did it get booked in the wrong category? Now, this is just one way to go through the file and kind of look at the direction of the individual account balances and see. You can do this also in the balance sheet and kind of compare balances and look at them. And don't forget, balance sheet builds on itself year over year where the profit and loss just kind of gets wiped out at the end of the year. But you want to Even in the balance sheet, you want to kind of look at the balances and see where they're at, see how the balances are, just to kind of check them. Not so much the trust because you're doing that 3-way bank reconciliation, but you should really look through the other balances just to make sure they're right. Balance sheet's not as much, you know, I don't look so detailed as I do in the profit and loss. Also, I will go through the, through this section called reclassification, and I'll use the reclass tool. If you have Advanced, you actually have this in your file. Even if you're not an accountant or bookkeeper, you have this as a client as well. It's a super cool tool. So I just can come through and I'll skip by the income because that's all generated off invoices. But as I get down here, what's this billable expense income-1? And it might not be— it looks like there's something on here from— I'm not sure why it's not showing. There's probably a reason that it's not showing, uh, this $445. But here we go. So if you start to look through here, one of the things I like to do— and I'll just go to something that may have more multiple transactions— I like to see— this is why you really want to make sure that you have a vendor name just to see that maybe something's in the wrong category, like MTG Disposal is probably not parking. And then if I wanted to move that because it's maybe rubbish or something, I can reclassify it right here, change the account to rubbish, which I don't even know if they have. I'll just put repairs and maintenance because I know they have that, uh, building repairs and maintenance. Maybe we're paying for the rubbish or trash fee, who knows. And then you just hit Apply. If it's a different class, you can check your classes here and kind of examine where they are. And then if you see something that's off, you can modify it here. You don't have to change the account or any of that. You can do that by just doing this and/or location as well. So I'm going to change that here. Another cool trick. So you're going to go through your whole profit and loss in each one and just kind of go through. You really want to make sure in cleanup that you go through— if you're using a payroll service, make sure you really do a balancing reconciliation against the payroll account and make sure the balances get to zero at the end of the quarter. Obviously, They don't get paid until mid-June for December. But you want to make sure that those all line up, the payments line up with the amounts so that it kind of carries forward. If they are accrual-based, you're going to have to make sure you do that journal entry to do the accrued payroll as well. Now, as we get over here, I'm just going to grab an expense. We're just going over to the vendor section here. I'm just going to show you, this is a cool trick I learned from one of my staff members, one of my team members, which I was like, oh, I never knew you could do that there. So let's just see here that you can see really at a really quick level when I see here that this says dues and the rest of these say office supplies and software. So is Adobe dues or software? You have to make that determination, and it looks like it's intended to be that. You could look at last year's, you're going to have that running total. You can see that these are all from 2019, and then all I had to do over here, if there were multiple, I can click this here and then batch action it, and then I can categorize it and then just pick You know, office general, actually software. I'll just do software and it should come up. Office appliance software and then hit apply. So if you want to go through your vendors, if you don't have a lot of them and you want to just kind of go through the vendor list, you can do this. You can go right over to expenses, go down your vendor list and just kind of go through and see if the accounts are the same. You can see here's one that says auto insurance, but this one says parking. So which one is it? Probably parking. Why is this auto insurance? So you just want to go through them. Through them really quickly, vendor by vendor, if that makes sense to you. It's the same as the reclass tool, but sometimes just kind of going through and looking at the past history is easier and helpful as you're going through the accounts. So obviously you're going to go through the profit and loss by comparable report and balance sheet. You're going to go through the profit and loss, which, which with that report, you're going to be able to show the client, hey, look, you've made more money, you've increased your sales, you've increased your revenue, you've increased your bottom line compared to last year. If it looks really good, share that with them. If they have a budget, it's a good idea to run a budget versus actual report, show them how they're doing with their budget. That's always a great time of the year to kind of look at that and then make the determination for next year's budget. And then also go to the balance sheet report. Those are just basic reports that you want to go through. And just extra, making sure the records are perfect. It's really our job to give them that great product. That's what they hired us for. They hired us to handle all the day-to-day stuff. handle the finances, help them grow, and help them prosper in their firm. And that's really the end game. And giving them that beautiful packaged up with a beautiful big red bow on it saying, here you go, Mr. Client, you're not overpaying your taxes because these records are perfect. Remember, reconcile the trust 3 ways, reconcile the advanced client costs. That's the difference when you work with attorneys, a couple extra accounts we have to really babysit and make sure that we maintain them perfectly. And on that note, I hope you all have a wonderful, wonderful week. Don't forget to hit that big A. That's how you can subscribe to my channel. And then if you want to give me a thumbs up, love to have that too. Thank you. Bye-bye.