What are QuickBooks Data files?
Let’s review managing QuickBooks data files when using Windows. Windows allows you to organize your files into Folders or Directories or Libraries (these synonyms have been in use over the various Windows Operating Systems). The QB program has defaults (assumptions) to create, name and manage your Folders. You can control this, such as keeping Client files in one folder and your own Company files in another. The Naming of Windows files has not changed much all these years: Filename (the first part) and File type (that part after the Dot) or Extension, such as My Letter.doc or My file.qbw or My Picture.pdf. File type allows Windows to launch the program which manages the data of a specific file type. The QuickBooks program works with its own File types, the same way Word is the program that works with .doc and Excel is the program that works with .xls and Adobe works with pdf files. For QB, these are the file types for Company Data Files: .qbw = Working file
.qbb = Backup file (compressed for easier storage) .qbm = Portable file (think of the “m” as Mobile; smaller that a .qbb and sometimes easier to send via email) The .qbw can be Opened; the others are compressed and must be decompressed by using the Restore function. When moving data to a new computer, it is best to copy the recent backup (.qbb) on the new computer, then use the program and the Restore Existing File function. Open the “HowToRestoreExternalFiles.txt” found file in your Restored folder, and read it for any remaining tasks. When updating a computer with a new Version (year) of the QB program, make a backup of each company file, then use the function of Open an Existing File and let the new program update it. If it does not update correctly, you can try the Restore process next. There are other specific filetypes used by the Accountants Edition for managing Accountants Copy functions. Information on these can be found in the in product Help system.
Quickbooks: Tracking Cost, Price and Profit
Let’s examine how to use QuickBooks Items for tracking cost, price and Profit. Setting up and using Items on your purchase and sales transactions is how you control the flow of the data to the accounts. You don’t use an Inventory Item Type unless this is something you stock, count, reorder and manage. You can get similar info for your activities by using Service Item Type, No inventory Item Type and Other Charge Item Type. These Types have a box to checkmark on the left edge, when setting up this item, to define it as “two Sided.” This provides an Expense account link on the left, for the data flow when you purchase this item, and an Income account link on the right, for the data flow when you sell this item. You set the Price at what you charge for this item. You can fill in Cost, but this is only notational. It will be used when you place an order or enter this on a purchase transaction, but you will need to change that purchase for this actual cost. QB offers to update the cost in the set up, but this purchase is where the financial data happens. You can leave the cost at $0, even, since actual purchases create the cost data. If you leave both cost and price as $0 in the item’s setup, the actual cost becomes the price for Job Tracking (assigning the customer is the direct reaon for this purchase) and Billable purchases. Job Tracking as Billable means QB will offer that to me for selection, when I create a sales receipt or invoice for the customer, so that actual cost is their actual price. Or, set up a general rate, such as all Lightbulbs are $3 Price to customers, even if you bought one for $1.75 and another for $3.50. The reports to use for these activities are Sales reports, including Item Profitability and Sales by Item. I like to run the Sales by Customer Summary, changing it to Columns by Item Type and then Columns by Item Detail. Sales by Customer Summary is a flexible report, offering interesting perspectives on your sale activities.