New Features in QuickBooks 2011: Multi-Instance and Balance Sheet by Class
In this article we look at two of the new features in QuickBooks 2011, Multi-instance and Balance Sheet by Class. Both of these features sound at first as if they will greatly enhance our experiences as consultants and what we can provide our clients. However, both currently have many limitations. It is crucial that consultants understand what can and cannot be done with both these new features.
Balance Sheet by Class
Note: This feature is not available in QuickBooks Pro.
If you use the Class feature in QuickBooks you know that generally, the “class” field only really works with transactions affecting the profit and loss statement. Also, for years we’ve been hearing requests for a Balance Sheet by Class report. So in QuickBooks 2011, Intuit attempted to give us what we were asking for, by creating the Balance Sheet by Class report.
Here is an example of that report:
Figure 1 Balance Sheet by Class
Notice that the report above has many Unclassified amounts.
Transaction entry remains the same and this report works with the same information that has been available all along. However, as you can see form the example above, the report brings up a whole set of issues that are somewhat difficult to resolve, especially for the casual bookkeeper.
When you first create this report, QuickBooks gives you the opportunity to review a series of guidelines on how to use the feature. Be sure that you read this carefully or you might not get the results that you expect. There are a number of restrictions.
For example, you should use only one class in every transaction. In many cases this will prevent you from effectively using the report, because businesses who really need this report are the ones who are most likely to need, for example multiple classes on each invoice.
Note that the QuickBooks help file states "...you may experience some unexpected results. Understanding and fixing these results requires a strong background in accounting and a good working knowledge of QuickBooks." There are quite a few situations where you will need to make adjusting entries to be able to get a valid report. You should make sure that you understand all of the situations (as outlined in the help file) before promising a client that this feature will be useful. There are numerous Help entries that relate to this report, including an extensive section on “troubleshooting” the report.
Here is a list of unsupported transactions from the Help file – refer to the Help file for assistance on how to resolve these problems:
- Journal entries with “unbalanced classes”
- Paychecks allocated to multiple classes
- Payroll liability payments
- Sales tax payments
- Prepayments from customers entered in the Receive Payments window
- Discounts entered in the Pay Bills window
- Using Multiple Currencies
- Pay bills with bill credit (with different classes)
- Using the Funds Transfer window to transfer funds between classes
So as you can see, with so many caveats about the report, you should be very careful not to overpromise the report’s accuracy to your clients. Maybe pitch it as a report that gives a “Listing of Selected Assets, Liabilities, and Equity Account Balances, By Class.” Even the renaming of it doesn’t help much, but at least it avoids the keyword “Balance Sheet”, which creates pretty high expectations.
For years, we’ve been calling for QuickBooks to allow us to open multiple company files at the same time, similar to the way Word, Excel, and many other programs work. Unfortunately, the feature that has been released falls short of giving us anything close to what we were asking for.
QuickBooks 2011 provides a “multi-launch” feature, which attempts to provide what we all wanted, but it has a number of pretty severe limitations.
Here’s how it works.
If you have a QuickBooks 2011 company file open you can open a second QuickBooks 2011 company file at the same time. The first will be called your Primary file, the second your Secondary file.
Figure 2 Primary and Secondary Company File
The following is a partial list of restrictions on both the primary and secondary file (a full list is found in the Help file):
- You cannot use any application that uses the QuickBooks SDK.
- You cannot manage fixed assets.
- You cannot use the Intuit Statement Writer.
- You cannot install Intuit Workplace IPP applications.
- You cannot register QuickBooks or manage/change licenses.
- You cannot install a QuickBooks update.
The restriction that can be really tricky is the first – not being able to use applications that use the QuickBooks SDK. Many businesses rely on SDK based applications to provide vital features and functions, and you won’t be able to use any of these if you have two company files open.
The following is a partial list of restrictions on the secondary file (a full list is found in the Help file):
- You cannot use the Loan Manager.
- You cannot manage currency.
- You cannot prepare letters with envelopes.
- You cannot us the planning and budgeting tools.
- You cannot use the Collections Center.
- You cannot perform many credit card processing activities found in the Customer Center (see the list in the QuickBooks 2011 help file for details).
- You cannot “Send Forms” from the File menu.
- You cannot use the Shipping Manager or do many shipping related functions).
- You cannot pay employees (Payroll).
- You cannot add, edit or delete payroll items.
- QuickBooks Messenger only works with the primary file.
- You cannot manage Templates in the Template List window.
- QuickBooks Help will only work with the primary file.
Consultants need to be very aware of these limitations. We advise against recommending this feature to your clients until you are sure it will work in their situation.
Both the Balance Sheet by Class and the Multi-Instance are features that, if fully developed, could greatly improve our and our clients’ QuickBooks experience. However, in our opinion, neither of them makes the grade in as they are currently implemented.
Charlie Russell is the founder of CCRSoftware and Computer Consulting Resources. He is also a writer for The Sleeter Group and is currently one of the writers updating our QuickBooks Consultant’s Reference Guide 2011. He writes an excellent blog called Practical QuickBooks.
Doug Sleeter is the founder of The Sleeter Group.