Frank J. Gnisci, B2B CFO®

Frank J. Gnisci, aka Tampa Bay CFO, is an Advanced Certified QuickBooks ProAdvisor and a partner with B2B CFO.

Are you frustrated with trying to get QuickBooks to work correctly?

My practice is focused on  reducing your QuickBooks frustrations and problems. I help new and established companies use QuickBooks products and QuickBooks integrated applications efficiently so that you can concentrate on successfully growing  and operating your  business.

The solutions that I provide include (i) training for business owners and their staff, (ii) the proper set-up of your company file, (iii) scheduled maintenance, (iv) troubleshooting and (v) correcting technical errors that will save you time and money. I will also show you how to get the most out of your QuickBooks products. Click Here to see my LinkedIn profile.

I am a Diamond Level ProAdvisor in the Tampa Bay area (the highest QB certification).  I can also offer you the best pricing on all Intuit products and services. Click Here  to see my client reviews.

 Weekend Service is Available 

My clients are the owners of closely held companies ranging in size from $1 million to $30 million of annual revenue. I provide them with QuickBooks and / or CFO consulting services ranging from a few hours per month to days per week. The amount of service that I provide is based upon their specific needs and goals.

My background is in finance, operations and information technology. For the past ten years me and my partners owned and operated a successful company in Ft. Lauderdale. We later sold the company to United HealthCare at a premium.

In todays challenging economic environment having access to an Advanced Certified QuickBooks Pro Advisor, a former business owner and a CFO / COO with over 25 years of business experience will help you get to where you want to go faster and with less risk.

You can send me an email at fgnisci@b2bcfo.com if If you would like to set up an appointment or call me at 813-994-0416. You can also find me on Facebook and Twitter.

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This is the title of an article that recently appeared in the New York Times. The article provides some good insight for business owners regarding the benefits of working with an outsourced finance chief. Click Here to read the complete article.

QuickBooks provides a feature called Classes that permits you to group items and transactions in a way that matches the kind of reporting you want to perform. Think of this feature as a way to “classify” business activities. To use classes, you must enable the feature, which is listed in the Accounting section of the Preferences window.

Some of the reasons to configure classes include:

• Reporting by location if you have more than one office.
• Reporting by division or department.
• Reporting by business type (perhaps you have both retail and wholesale businesses under your company umbrella).

You should use classes for a single purpose; otherwise, the feature won’t work properly. For example, you can use classes to separate your business into locations or departments, but don’t try to do both.

When you enable classes, QuickBooks adds a Class field to your transaction windows. After you create your classes, you can assign one of them to that field.

Adding a Class

To create a class, choose Lists | Class List from the QuickBooks menu bar to display the Class List window. (Remember that you must enable Classes in Preferences to have access to the Class Lists menu item.) Press Ctrl-N to add a new class. Fill in the name of the class in the New Class window. Click Next to add another class, or click OK if you are finished.

TIP: It’s a good idea to create a class called Overhead. This gives you a way to sort transactions in a logical fashion when there’s no link to one of your real classes.

Using a Class in a Transaction

When you’re entering transactions, each transaction window provides a field for entering the class. The invoice form adds a Class field at the top (next to the Customer:Job field) so you can assign the invoice to a class. However, it’s more useful to link a class to each line item of the invoice. To accomplish this, you must customize your invoice forms to add classes as a column.

TIP: When you add the Class column, add it to the screen form, but not the printed form. The customers don’t care (and it’s none of their business anyway).

Reporting by Class

There are two types of reports you can run for classes:

• Individual class reports
• Reports on all classes

To report on a single class, follow these simple steps:

Open the Classes list and select the class you want to report on.

Press ctrl-q to open a Quick Report on the class.

When the Class Quick Report appears you can change the date range or customize the report as needed.

If you want to see one report in which all classes are used, open the Classes list and click the Reports button at the bottom of the list window. Choose Reports on All Classes and then select either Profit & Loss By Class, or Graphs. The Graphs menu item offers a choice of an Income & Expenses Graph, or a Budget versus an Actual Graph.

The Profit & Loss By Class report is the same as a standard Profit & Loss report, except that each class uses a separate column. The Totals column provides the usual P&L information for your company.

Totals for items not assigned to a class appear in a column called Unclassified. This is likely to be a rather crowded column if you chose to enable class tracking after you’d already begun using QuickBooks.

You can also display a graph for Income & Expenses sorted by class, or one that compares budget versus actual figures sorted by class.

Customizing Other Reports for Class Reporting

Many of the reports you run regularly can also be customized to report class information (for example, aging reports). Use the Filters tab to add all, some, or one class to the report.

Using Classes to Track Partners

One clever way to use classes is to track revenue and expenses by partner. This is frequently used in professional service businesses. In effect, each partner is tracked as a profit center.

Each partner’s name is established as a class, and there are two additional classes:

Other, which is used to mean “this particular item is practice-wide.”

Split, which is used to mean “add this up at the end of the year and assign a percentage to each partner.”

All revenue transactions are assigned to a partner class. Each line item on every vendor bill is assigned to a class, as follows:

Certain overhead items such as rent, utilities, and so on are assigned to other.

Consumable and other specific overhead items are assigned to Split.

At the end of the year, when the reports are run, the totals for the Split class are reapportioned with a journal entry. The percentage of income is used as a guideline for the percentage of the split, because the assumption is that a partner with a certain amount of revenue must have used a certain amount of consumable items in order to produce that revenue. While this system isn’t terribly exact, it is as ingenious and fair as a system could be.

When the year is closed, a percentage of the retained earnings figure is posted to each partner’s equity account. The profit for each partner is the revenue, less the expenses incurred by each partner (including the Split class percentage).

This system also provides a nifty way to figure end-of-year bonuses, since the partners can base the amount of the bonus on the amount of the current year retained earnings for each partner.

Email me at fgnisci@b2bcfo.com if you need some extra help in getting classes to work for you in your business or just give me a call at 813-994-0416 and I will be happy to help you.

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Many years ago I worked at a Fortune 500 company.  I had a tricky problem with accounts receivables and I needed a customized system to help track and collect them.  The “IT Department” gave me a quote of $100,000 and a wait of 2 to 4 years.  Instead, I bought a $99 copy of QuickBooks and had built a new system within two days.  Despite this initiative, I had to go through the Dilbert-like experience of a three hour meeting with all kinds of interested parties to cost justify my decision. 

Today something like 80% of small companies use some form of QuickBooks to keep their company accounts – despite the valiant efforts of Microsoft to make inroads.  This is both a blessing and a curse for consulting ProAdvisors.  It is a blessing because the accumulated knowledge of working with QuickBooks allows me to quickly tune systems and extract meaningful information.  It is a curse because the proud old profession of “professional book-keeper” has been largely replaced by legions of amateur Quick Book “experts”.  I herewith offer some collected wisdom on how to make the most of your QuickBooks installation:

1. Right Sizing: QB comes in many flavors and you should make sure you have the right product for your business.  I have seen one man companies using the $4,000 Enterprise edition and $20 million firms using QB Online.  QB PRO works for most companies up to about $1 million.  After that you can specialize with an industry version of QB Premier.  If you have lots of locations, companies and users it may be time to consider QB Enterprise.
2. QB Online:  Intuit recommends this for start up businesses.  I recommend you switch after one week.  The software works well for out of the office, on the road professionals, but it is awkward to use.
3. Chart of Accounts: A dead giveaway that you don’t pay too much attention to your financial statements is one of those P&Ls with all the expenses in alphabetical order.  You really need to build a Chart of Accounts with meaningful Sections and sub sections. Such as Payroll:  By Dept, Payroll Taxes, Commissions; Facilities: Rents, Maintenance, Property Taxes; Financial: Insurances, Income Taxes and Interest Expense.
4. Class: This is a powerful tool that is widely misused and misunderstood by many new users. Class is the QB way of segmenting information, so you can report on departments, geography or products.  Unfortunately, you can only report on one breakdown, and combining departments and geography in your Class list is a recipe for confusion.
5. Items List:  Also frequently misused.  Items are used to break down Sales and Cost of Goods by product groupings.  Item Lists are used to manage inventory and can be used with price lists.  The Item List generally gets built on a random, haphazard basis so that items are duplicated.  Again, taking the time to produce a meaningful list with a structured numbering code will pay dividends in extracting useful information.
6. Bills: This feature is often abused by small business, usually by omission.  Entering bills gives you control over cash flow.  If you just enter checks as you write them you have no ability to project and manage your payments. 
7. Expense versus Item on Enter a Bill: This is another area that many new users find confusing. If you have an effective Item List, then every bill for Cost of Goods Sold i.e. parts, contractors, freight etc will be coded using the Item tab.  Most Overhead Expenses: utilities, rent, supplies will be coded using the expense tab.
8. Balance Sheets: I often have to blow the dust off of the Balance Sheet when I first print them out because many business owners don’t look at them.   Old paid off balances, and negative assets or liabilities are rampant.  Remember, your banker will form an instant impression of your business from this, and you must have a credible Balance Sheet if you are serious about growing your business. Print one out today and circle every suspect amount. Ask your accountant/ bookkeeper/ Controller to explain it to you.
9. Reports: QB has an extensive reporting capability, but most companies begin and end with a single period P&L.  Explore the use of filters and the ability to customize columns and rows.  It’s surprising what you can produce – especially if you’re Chart of Accounts, Item and Class Lists have been set up correctly and firing on all cylinders.
10. Credit Card Management: I have seen double counting of charges, when individual items are downloaded and then a bill is created categorizing the credit card payment. This is too big of a topic for here; but it is a classic area for mismanagement.
11. Know when to quit: To a QuickBooks “expert” every solution is QuickBooks.  But don’t limit yourself.  If you have grown fast, maybe it’s time to leap beyond QuickBooks.  Sophisticated inventory might need a Great Plains or SAP.  Maybe an industry specific software package is more appropriate for your business.
12. Control your CPA: If you can’t get financial statements in less than 30 days after month end, because your CPA is still making “adjustments”, you need to ask some questions.  If QB is used correctly, you should be able to produce decent reports within 5 to 10 days – essential if you are serious about your business.

I could go on – but I won’t.  If you think your QuickBooks needs a tune up or a review, then email me at fgnisci@b2bcfo.com to set-up an appointment or give me a call at 813-994-0416.

A nice article that was written by my San Diego based B2B CFO® Partner, Grant Brisacher

Grant talks about the interaction of the finance and sales teams in collecting past due accounts receivable and the overriding importance of cash flow to the entire organization.

Read the complete article here

I enjoy working with the owners of start-up companies. I have found that they are generally wholesome and courageous people. Most are just trying to do something different in their life so that they can improve their personal economic circumstances.

When I ask if they have a revenue model and a business plan they almost always say yes. They reach into their stack of papers and pull out a spreadsheet showing me that there are 1 billion potential consumers in this market and all they have to do is reach 1% of them. They believe that they can make a $100 million overnight. All that they need is just a few dollars to get started.

They look at me with disbelief when I tell them that no rational person will lend or invest money into a project or a business without a fully tested business model and a thoroughly documented business plan. The problem is that they get fooled by the 1% number. They think that it is such a low amount that anybody can achieve it.

I explain that building a successful business does not happen overnight. It takes planning and testing and a great deal of hard work. I share what I went through in starting and selling my own business. Getting 1% of anything is a lot harder that you think. Some people understand this and unfortunately some people don’t.

I recently came across an article by Rob May in Fastcompany .com that addresses the same issue. Let me know what you think.

Read the complete article here.

This is a video that was broadcasted on the CNBC cable channel. It discusses the reasons for our present economic dilemma. The guest on the show is Paul Ryan. He is a congressman from Wisconsin and he is going to be the new chairman of the house budget committee.

I normally do not put much stock into anything that a politician tells me – right or left. However, Ryan seems to have his finger on the pulse of why we have such an anemic growth rate in small business. I just hope that he also has a plan to correct this mess.

Here is the video.

The operating margin is an important metric regarding the financial health of your business. This metric is important because it is used to measure the overall profitability of the company. The underlying factors that influence the operating margin are for the most part within the control of the owner.

The operating margin is a reflection of the company’s (i) pricing, marketing and sales strategies, (ii) purchasing capabilities and vendor management skills, (iii) labor costs and employee relations, (iv) delivery systems to the customer and (iv) overhead rate.

A high margin rate indicates that the company is being managed profitability and efficiently. A low margin rate is an indication that there are fundamental problems with the execution of the company’s economic strategies.

The operating margin is a scorecard of the day to day decisions that an owner makes. It is like a sailor following a compass. The operating margin tells the owner / sailor if the business is on the right course. This is especially important during tough economic times.

Here is a great way to get started on improving your operating margin. Dino Eliadis is an expert on sales and marketing strategies. You can find additional revenue information here.

Please feel free to contact me with any comments or questions that you may have.

The Tampa Bay Business Journal is reporting that Tampa is leading the economic recovery in Florida as compared to Orlando and Miami.

Read the complete article here.

A business owner should not try to be an expert in managing cash flow. It is not a good use of their time; and it is not the reason why they went into business in the first place.

It is more important for a business owner to recognize the broad underlying business reasons why cash flow goes up and why it goes down. The owner is the visionary of the business. Their time should be invested in planning and managing the growth of the company.

In this video Nelson Davis and Jerry Mills discuss a number of strategies for managing cash flow. It was produced by Wells Fargo Bank. I hope that you find it helpful.

The video is about 7 minutes.