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Posts are primarily about QuickBooks, Xero, expense reports, and other topics useful to small business owners, CPAs, and ProAdvisors.

 


Chart of Accounts & QuickBooks Lists: Structure, not Creativity

January 24th, 2013

If your QuickBooks setup is like most, your Chart of Accounts probably got it’s start by accepting the default industry-specific settings when you first installed QuickBooks and chose your industry type (e.g. Manufacturing vs. Professional Consulting vs. Retail vs. dozens of other options).

Over they years, you probably added and removed certain Chart of Accounts entries as your business evolved, and your CPA likely helped you along the way. So, it’s safe to say that you’ve seen your Chart of Accounts 100s of times if not 1000s, and that you’d be more than a little jumpy if you saw it change unexpectedly.

ProOnGo Expense does not Modify Your Chart of Accounts

That’s why ProOnGo Expense does not currently have any functionality that causes accounts, customer:jobs, items, or classes to be automatically added to your QuickBooks file. We wouldn’t want to automatically add something to your carefully crafted accounting data without having your explicit permission. There are a few scenarios where, in the future, we think we might want to suggest certain changes to your QuickBooks lists — but if we ever go down that road you can be sure that any modifications to your lists will be preceded by explicitly asking your permission.

Your Team & Your Settings

Imagine that you have an employee that just had a lunch expense with a client, and the employee gets around to filing the expense but has trouble figuring out what Category and Class to tag it with. Would you prefer to:

(a) Let the employee free-form enter a new class name (a ‘suggestion’ to you about a class to create – but still requiring your manual QuickBooks tweak if you like the ‘suggestion’).
-or-
(b) Be forced to choose from the pre-defined class names already in place.

Your policy/decision on this front requires a moment of thought. There is no “one size fits all”. If your team is very experienced and relatively familiar with accounting, you might think about trusting them with option (a). Whereas if your employees are relatively inexperienced and have no accounting experience, you would almost certainly want to go with (b).

Updating Your Settings to Fit Your Decision

To put your thought process into action, start by sending your employees a really strong hint about where you stand on this. We give you a great way to signal your flexibility, or lack thereof, in Settings => Options => Allow Freeform Entry:

Freeform Entry: Forbidden Employee Modifications
Freeform Entry: Forbidden Employee Modifications

If you leave all of these checkboxes unchecked, that means that users will have to choose from the drop-down list of pre-defined options — for example, if they are filing an expense where they are unsure of the correct Chart of Accounts choice, they’ll have to choose their best guess as opposed to typing in a freeform name that they think should become a new account.

To “Check” or not to “Check”: The Consequences

If you choose to checkmark some of the checkboxes, that means users will be able to do freeform entry (only in the fields you checkmark). However, and this is a crucial point, even if you allow users to do freeform entry we still don’t auto-create those new Accounts (or Classes, Items, Vendors, Customers, or Jobs) in QuickBooks. We would never want to surprise you like that without you explicitly agreeing to it.

So, the “Allow Freeform Entry” merely gives your employees the ability to type in a proposed value, but it would still be on you to see their newly-proposed value and decide whether you want to add it to QuickBooks or not. You’ll hit that “fork in the road” when you go to send the expense to QuickBooks — the preview screen will show an error next to any Chart of Accounts choice that was freeform, and that’ll be your reminder to either add that Chart of Accounts entry to QuickBooks manually, or to stick to your current gameplan and as a consequence you’ll probably end up doing a fix-up to choose a valid Chart of Accounts entry for the expense in question. (you could ‘deny’ and send it back to the user to correct, but most small business owners we know just make the correction on-the-fly)

Which Fields Support the Allow Freeform Entry Toggle

The “Allow Freeform Entry” toggles (there are 8 of them), correspond to the drop-downs that appear in the expense editor popup in the web app (the Allow Freeform Entry setting does not yet propagate to the mobile app – but stay tuned for an update). So, basically anywhere in the expense editor that you see a drop-down, is an input field where you as the Master Administrator for you company can determine whether you do or do not wish to allow freeform entry:

Freeform Entry: Expense Editor Fields
Freeform Entry: The Expense Editor Fields it Pertains To

Just to be abundantly clear about the consequences of the setting: if you leave the checkbox unchecked, that means that the user will only be able to choose from the pre-filled options (which, of course, originate from QuickBooks). If you checkmark the checkbox, that means the user could optionally choose to type in some freeform text in the freeform edit area, or could choose a pre-filled option:

Drop-Down Box: Editing vs Choosing from Options
Drop-Down Box: Editing vs Choosing from Options

We hope you enjoy the fine-grained control over which fields should allow freeform entry, and which should not — your Chart of Accounts will thank you!

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