Q. Why is our G/L out of balance? What do we do about
The General Ledger can become out of balance if a posting is interrupted by a system crash, a server freeze, or a network problem. If these events prevent a posting from being completed, only part of the transaction's entries will have been saved, resulting in one-sided entries and incorrect account balances. Since it's difficult to anticipate system problems, Clients & Profits X includes built-in G/L auditing tools. These tools, such as the Auditor and the Out of Balance Checker, help you find the incomplete entries. Once found, they can easily be fixed by making adjusting entries or verifying an account balance.
Q. Why do
job tasks need debit and credit G/L account numbers?
The debit and credit accounts
on your job tasks automate the financial accounting for
job costs and client billing. These default accounts are
copied from the Task Table when a new task is added to
a job ticket. They are then copied to A/P and A/R invoices
whenever you type in a job task then press Tab. They prevent
data-entry errors that can make your financials less accurate,
since cGLs (i.e., credit G/L accounts) and dGLs (i.e.,
debit G/L accounts) are set by default. They ensure that
the same G/L accounts will be updated whenever a certain
job task is used for costing or billing. (Plus, it's simpler
for users since they don't have to decide which debit or
credit G/L account to use for job costing and billing).
The job task's cGL is copied to client invoices, and is
an income G/L account. The job task's dGL is copied to
vendor invoices and job cost checks, and represents a cost
G/L account. For more information, see the Job Tickets section of the Clients & Profits X user guide.
Q. I'm adding
a job invoice, but I think the wrong billing amount is
coming up. Why?
The billing amount is based
on the job's unbilled costs, which are totaled up on the "unbilled" column
in the Job Ticket. The "unbilled" total is updated whenever
a job cost is posted, and should always equal the total
of the job's costs -- based on the gross amount, which
includes markups and commissions. If the billing amount
seems wrong, cancel the invoice then find the job in the
Job Tickets window. Look at the task's "unbilled" total,
then print a job cost report to see its detail. If the
job task's costs (all unbilled costs added together) don't
equal the "unbilled" total, then there was probably a posting
problem. Problems like this are fixed by verifying the
job's totals using the Verify/Recover utility (choose Setup > Utilities > Verify/Recover). For more information, see the A/R section of the Clients & Profits user guide.
Q. Why doesn't
Clients & Profits print payroll checks?
The complexity of payroll
laws and regulations in the U.S. and other countries makes
it impractical to maintain a payroll system for specialized
markets like advertising agencies and design firms. The
resources needed to develop, test, and support a multi-state
payroll are only supported by companies like CheckMark, who
make generic payroll programs that apply to all kinds of
businesses. Plus, many agencies outsource payroll to companies
like Paychex and ADP,
so you don't find in-house payroll processing cost-effective. For more information, see the General Ledger section of the Clients & Profits user guide. The Payroll
FAQs page contains answers to other frequently-asked
Q. A job's
cost report doesn't match its Job Summary - what's wrong?
The job summary's unbilled
column is based on the job's unbilled costs, which are
totaled up on the "unbilled" column in the Job Ticket.
The "unbilled" total is updated whenever a job cost is
posted, and should always equal the total of the unbilled
job's costs -- based on the gross amount, which includes
markups and commissions. If the job summary's "unbilled" amount
seems wrong. Look at the task's "unbilled" total, then
print a job cost report to see its detail. If the job task's
costs (all unbilled costs added together) don't equal the "unbilled" total,
then there was probably a posting problem. Problems like
this are fixed by verifying the job's totals using the
Verify/Recover utility (choose Setup > Utilities > Verify/Recover). For more information, see the Job Ticket section of the Clients & Profits X user guide.
Q. Why would
we use client retainers?
Retainers are used to routinely bill clients for monthly service fees that are applied to the month's jobs. They are not billed to jobs, unlike job billings, so don't include a job number. Typically, a client gets an invoice at the beginning of the month for the agreed-upon retainer amount. Retainer invoices do not credit an income account, instead they credit a liability account that is used just for retainers. As jobs are billed throughout the month, payments are applied from the retainer balances. When the client's job invoices are printed, they will see each job's total billing less the payment applied from the retainer. Clients & Profits X keeps track of the client's retainer balance from month to month. You can even print a special client retainer aging report that summarizes unpaid retainer invoices. For more information, see the A/R section of the Clients & Profits X user guide.
Q. How do
I credit a vendor's account?
Vendor credits can be added
two ways: (1) as a separate A/P credit invoice, or (2)
as an adjustment on a vendor check. The method you'll use
depends on whether or not you want the job to reflect the
credit amount (and therefore possibly credit the client's
billing, too). If so, add the credit as an invoice into
Accounts Payable just like any other invoice -- except
with a negative amount for the credit. Just remember--
the gross amount is what you are going to bill the client,
so if you don't want to credit the client's billing, just
make sure the gross amount is zero. If you want the vendor
credit to appear only on the shop's income statement, you
can enter the credit amount as an adjustment on the next
check you write to the vendor. For more information, see the Job Costing section of the Clients & Profits X user guide.
Q. How do
I credit a client's account?
Like vendor credits, clients
can be credited two ways: (1) as a separate A/R invoice,
or (2) as an adjustment when a client makes a payment.
The proper method depends on whether or not you want the
job to reflect the credit amount. If so, add the credit
as an invoice into Accounts Receivable just like the original
job billing -- except that the billing amount will be negative.
When this invoice is posted, you can mail it to the client
as proof of their credit. The credit invoice will then
appear -- with its negative amount -- on statements, the
aging report, and in the Add Client Payments window. If
the credit shouldn't affect a job ticket, then it can be
added as an adjustment amount the next time a client payment
is added. For more information, see the A/R section of the Clients & Profits X user guide.
Q. What happens
to job costs when they are written off?
The cost's billing status
is changed to "write-off" to indicate that it is neither
unbillable, unbilled, or on-hold. Write-offs are summarized
on Job Costs reports (see Snapshots) to track these unprofitable
costs by client. Since job costs are debited to cost G/L
accounts during posting, writing them off doesn't affect
the General Ledger (i.e., because they already were accounted
for on the income statement).
Q. Do purchase
orders affect the General Ledger?
No. Purchase orders (as well
as insertion and broadcast orders) only affect the job
ticket. Since they only represent a commitment to purchase
something, they aren't the actual bill from the vendor.
PO amounts appear on job reports, but don't affect vendor
balance, financial statements, or client invoices. (That's
one reason why they're not posted.)
Q. Why isn't
the accounting period based on the date?
Accounting periods are used to reconcile income, costs, and expenses into the period in which they occur, regardless of the actual date they are added into Clients & Profits X. If the accounting period were based on the date, you couldn't account for late invoices from vendors, pre-billings to clients, and other less-than-timely accounting entries. So why doesn't the accounting period change on the first day of the next month? That's because it's rare to have all of the month's entries added before the first day of the next month. If the period changed automatically, many transactions from the previous month would be inadvertently entered into the next period. Changing the period is user-defined so that the accounting manager can personally determine the right time to start next month's work.
Q. Why would
I use the cash flash?
The Cash Flash is a fast,
simple way to take a snapshot of the shop's financial status
at any time. It gives you a single place to see what you
owe to vendors, what's owed to you by clients, the day's
checks and deposits, and the company's cash position. The Cash
Flash report can be printed at the end of each day for
the shop's principals to keep them up-to-date on the shop's
balances. Unlike your old accounting, there's virtually
no drudge work to get the shop's numbers -- it takes less
than a minute to print.
Q. We want to change our fiscal year, how is this done in C&P?
Please see the answer to this question on the Closing the Year FAQ's
Q. We bought stock photos recently. Only a portion of the cost is for a current job, the rest will be applied to jobs later. How do we handle this in Clients & Profits X?
Technically, stock photos that will be used indefinitely on multiple jobs are an overhead cost, much like paying an employee's salary. So enter the stock photo A/P invoice as an overhead invoice using an overhead expense account. Just as an employee's salary is allocated to job tickets via time cards and time sheets, item overhead costs are applied to job tickets via Accounting > Internal Charges. Typically, there will be a unit net and gross cost for stock photos applied to job tickets, much like a color copy (also an overhead costs applied to jobs on a unit basis). It is up to your agency to determine the net and gross cost for your stock photos. You may have various classes of stock photos, some that have a higher net and gross cost than others.
However, if these stock photos will have a definite life span and will only be used on certain known jobs in the near future, then instead of entering the A/P invoice as an overhead invoice, enter it as a job cost invoice, where a portion of it can be applied to the first job ticket, with the rest entered under job 'NONE' but costing it to a job cost account (not an overhead account). As these future jobs are produced, apply this cost as an expense report with the appropriate net and gross cost per the portion of the original cost that will be used on this job ticket.