If opposing counsel is claiming that producing QuickBooks Online accounting records cannot be done, or doing so would be difficult and overly burdensome, it is not. Producing a QuickBooks Online for litigation can be done in a few short minutes. 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 file is easy.
Related article: Producing QuickBooks Desktop is Easy
A little background…
QuickBooks 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. QuickBooks Online is their cloud-based solution. As technology improves, Intuit continues to put more resources and emphasis on their QuickBooks Online product. This means that clients are increasingly likely to have their accounting records maintained on the cloud.
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 Online. 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 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 provide access to QuickBooks. Fortunately, providing access to QuickBooks accounting records could not be easier.
Related Article: Spoliation of QuickBooks Records
Nuts and bolts of the production
There is one good way to produce information from QuickBooks Online: provide a username and password. This is both fast and easy, though there are a few considerations:
- The username and password should be purpose-made for production. Phrased another way, it should not be a username and password created for internal purpose. This allows you/your client to control access to the file without affecting other users
- The user should be set up as a view only. This is both for your clients’ protection and for your experts’ protection; none one wants to be responsible for accidental changes made to a client file if the created user has write privileges.
- If there are concerns about sensitive information, as there often are in litigation matters, they are generally and frequently addressed by court protective order.
There is another way to produce information from QuickBooks Online; however, it should be used with extreme caution at best. QuickBooks Online includes data migration tools to send data to a QuickBooks Desktop file. However, these data migration tools routinely create significant and material errors in their output. IF these data migration tools are used, then additional work should be done to ensure integrity of the data extracted.
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 know how to use QuickBooks Online, 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