Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Chapter 24
Chapter 25
Chapter 26
Chapter 27
Chapter 28

Chapter 16

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Chapter 16

For the Owner

The owner always has a few jobs which can’t be delegated.  QuickBooks handles the critical and essential records of your business.  The program does this well, but needs support from the general manager. You need to know what is necessary to assure that your records will continue to be there for your business, and make sure that these things happen.  A few hazards exist.  Here are the suggested steps for controlling them.

File damage.   On rare occasions files will develop problems or even become unusable. Backing up (making reserve copies of your data) is your first and foremost defense against file damage. People who have learned cynicism the hard way say there is no “if” about a hard drive crashing, only “when.” This is an exaggeration.  With luck, the hard drive will last until it is obsolete.  However many programs have access to the disk, and may possibly damage files belonging to other programs. QuickBooks has also occasionally been known to put a problem into the data.  There are corrective procedures (see Chapter 25 on File Maintenance), but backups must be available if you need them.  Be sure that they are a regular part of your procedures, and that they are stored in a safe place.

Unauthorized access prevention.   QuickBooks provides a password system which is relatively strong, and will keep out most unauthorized people.  QuickBooks 3.1 and later have four levels of password protection:

Owner password has authority to install, change, or remove other passwords. 

Data Entry password can only enter new transactions.

Payroll password can run payroll.

Transaction password has access to historical transactions, and is typically used during visits by your accountant.

The password system runs as designed, but there can be no guarantee that it will keep out a skilled hacker.  QuickBooks does not encrypt the data.  If a password is in use, QuickBooks only refuses access to the data, until the password is entered.  The only sure protection is control of physical access.

Forgotten password?  No field procedures are available for removing passwords.  Intuit will do it, but only if the file is sent to Intuit, and a delay can be anticipated.  Passwords will not be removed over the phone.  Some people make a business of recovering data from crashed hard drives, and they might be able to remove a password. 

Any readers still using QuickBooks 2 or 3.0 for Windows, or the DOS versions and doing payroll will be using the older separate payroll program.  That program has a password feature which is seriously weak, and the same password should not be used in QuickBooks.

Fireorothermajordisaster : This was written in March, 1997, as people along the Ohio River were recovering from floods.  Arkadelphia, and other towns in Arkansas, faced the task of rebuilding from a major tornado.  Insurance may replace property, but will not cover your records or data.  The only insurance comes in additional backup copies, taken to a location not likely to be damaged by a common disaster.  If your backup drive is not a standard floppy drive, be sure that, if destroyed, it could be replaced.  A data tape cartridge is of little value if no matching drive can be found.

The File Maintenance chapter suggests a cycle of about five disks for backups, overwriting the oldest.

Hostile termination.   A few employees have been extremely angry before departing and have left their mark, either deleting files, or installing a new  “owner” password.  The best solution is the same as disaster readiness: off-site copies.  If it is generally known that the owner has copies elsewhere, negative efforts will be less likely, and should they occur, will have less impact.

These comments are intentionally general. Specific suggestions probably would not help much as each businesss situation is unique, and solutions need to be adapted to your own environment.

Accounting knowledge and skill absolutely must be available to your company.  If QuickBooks is not launched under the guidance of an accountant, a mess may be generated.  Accountants can clean up messes, but they do not like doing so, and you can expect them to charge full rate for every hour needed.

QuickBooks does accounting correctly.  Where a business has unique situations involving user discretion, the program must allow exercise of the user’s judgement. An accountant should work these through.  The program insists on following the rules of double-entry accounting.  Many service calls are from individuals in business who do not understand accounting, and want QuickBooks to do things that no accounting program should be able to do.  This is an observed fact, and is one of the substantial reasons for writing this book.

Accountants are coming to accept QuickBooks.  Intuit saw how to do financial accounting without the time-tested debit and credit tools.  To people unwilling to accept change, this is wrong.  QuickBooks allows clerks to do the data entry.  An accountant, who accepts QuickBooks can visit periodically and perform the tasks requiring professional skill.  The long term result should be lower cost with improved quality of accounting.

Reports.  “How much money have we made?  Where is it?  Why are we short on cash?”  The QuickBooks reporting system is excellent.  It is extremely capable and flexible, but the flexibility has the side effect of complexity.  The best results are available only to people who understand how the report system works.  Because it is so flexible, you have to know where to bend it.  I am aware of my audience.  People running small businesses are busy.  If short-cuts could be had, they would take them.  You can take your accountant’s word for the state of your business, or you can find the time to master the reports, and see for yourself.

Network or multi-user operation is not available, and there are no workarounds.  In the Compuserve QuickBooks Forum, this has been the cause for many emphatic complaints. Other than that, the general concensus is that QuickBooks is the best program in its class.

My hope is that, with the help of this book, Quickbooks will soon become a true business partner and loyal friend.

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Last modified: May 21, 2004