If opposing counsel is claiming that producing QuickBooks Desktopaccounting records cannot be done, or doing so would be difficult and overly burdensome, it is not. Producing a QuickBooks Desktop file for litigation can be done in a few short minutes. Copy, paste. There is no need to make any changes or modifications to the file, the company’s ability to use the file will not be altered, and there is no need to create a special file type (though we will discuss that below). In other words, producing a QuickBooks Desktop files is easy
Related article: Producing QuickBooks Online is Easy
A little background…
QuickBooks Desktop is an accounting software used by most small and medium businesses, developed and marketed by Intuit. It is market dominant: most small to medium size companies use some version of QuickBooks.
Why would you need QuickBooks in the first place?
Accounting records are needed to a variety of litigation purposes. QuickBooks accounting records are routinely used by expert witnesses for a variety of litigation purposes. For example,
- Accounting records can be to establish revenue and avoidable costs on a remedy of lost profits or disgorgement.
- Income statements, balance sheets and the details behind them are needed for business valuations.
- Transaction-level detail needs to be compared to other business records to perform a forensic audit (also known as a “special purpose” audit)
It is possible to prepare all these reports and do our work as accounting experts using information extracted from QuickBooks. However, there are many reasons not to accept this proposal. For example:
- QuickBooks files are large. Extracting all the information can take significant time depending on the size of the report.
- Because these reports are large, they can be hundreds, even thousands of pages when printed or extracted to PDF. Hunting and pecking for specific information, even with the benefit of OCR, will take significantly more time and be more expensive than it needs to be.
- QuickBooks comes packaged with powerful and versatile reporting capabilities. It is possible to recreate those reports using an Excel extract of the raw data; however, it would take significant time and be more expensive: compare several hours to the few seconds it would take using the QuickBooks program.
- The process of answering one question often raises three new questions. Going back to the QuickBooks records is significantly faster than drafting more interrogatories or requests for production. Assuming that opposing party/counsel cooperates…
- Work done this way increases the risk of costly mistakes and errors.
The quickest and easiest way to produce these accounting records, either to the opposing side or to your expert witness, is to produce a QuickBooks file. Fortunately, producing a QuickBooks Desktop file could not be easier. Just like an Excel file or a PDF, QuickBooks Desktop files are a single file that can located on a computer and can be copied. Any company professional that routinely work with QuickBooks Desktop will know how to locate this file.
Related Article: Spoliation of QuickBooks Records
Nuts and bolts of the production
There are a several formats that accountants can use:
- QBW – this is a working file. This is how QuickBooks Desktop stores its information. Any company using any version of QuickBooks Desktop will have this file. This is the easiest file type to produce because it requires no additional steps to create.
- QBB – this is a backup file. QuickBooks Desktop allows and encourages companies to create regular backups. Each backup file will have a date built into the file name. Making these files requires additional steps, but can easily be produced if the company is already using them.
- QBA – this is an accountant’s file. An accountant’s file is designed to give to a company’s accountant so they can make changes that will then be reincorporated into the working file. Making these files require additional steps.
- QBM – this is a portable file. This is a format where the file is compressed so it can be emailed or moved. Making these files requires additional steps.
- QBX – This is an accountant’s transfer file. It is another compressed file format intended to send QuickBooks Desktop files to a company’s accountant. Making these files requires additional steps.
You got the QuickBooks file, now what?
Hire an expert (like us). As an expert, we will save you time and money because:
- We already have the QuickBooks software purchased and loaded onto our systems
- We already know how to use QuickBooks, and have decades of experience using it
- We already have the requisite experience to know which of the hundreds reports to run to get meaningful data
- We already know how to run customized queries/reports to answer questions specific to your case
- We already know how to perform analyses using accounting records that your case may require
We can provide expert witnesses testimony in a simple, efficient manner so that triers of fact can understand otherwise complicated subjects