PRESIDENT'S MESSAGE 

Dear Members,

Hi, happy February! I am glad January is over. I am in cruise mode checking off one account at a time for the final reviews and tie outs. I love quotes and thought I would share a few of my favorites and new ones with you each month. Hope all of you are well. See you at the meeting.  

"Life is full of obstacle illusions" ( this can be true of the piles in front of us :0) by Grant Frazier

 "live, love, laugh and be happy" by me

       Yours truly,  
            Jennifer Loren

SECRETARY'S MINUTES 
Submitted by Paula Mauro, SBBA Secretary

The regular monthly meeting of the Santa Barbara Bookkeeper's Association was held on Tuesday, Jan. 20, 2004 , 11:30 a.m. at Mulligan's Cafe. President Jennifer Loren opened the meeting. There were three new members and one guest attending the luncheon. Job announcements were made and President Loren was the winner of the free lunch next time.

It was announced that the program for the February meeting would be "Money Camp". A sign-up sheet was passed around for those members who would like to attend an extended workshop on this program to be held on Saturday, Feb. 21.

The speaker for January's meeting was David Uhler, from BPW. David talked about IRS Form 1099, stating the information that is required, the due dates, and penalties. There was a lively question and answer session.

HILLARY TENTLER, CERTIFIED PUBLIC ACCOUNTANT, SANTA BARBARA CA 93101

QuickBooks Seminar

Using QuickBooks for your business or wondering if QuickBooks will work for you? Need to learn the basics, or get questions answered?

Hillary Tentler has been an instructor of QuickBooks and Quicken software at Santa Barbara City College Adult Education for over 10 years. She will teach what this small business accounting software can do and the tips and shortcuts to use QuickBooks to it's best advantage.

QuickBooks is the easiest and best selling accounting software available. It has become the standard of the industry for small business accounting including non profits, professional services, construction, retail, restaurants, etc.  Learn how efficient and effective use of your accounting software can assist you in making business decisions and business planning. Small group format will allow for plenty of dialogue. Large screen projection for easy viewing of the overhead display.

 SEMINAR INFORMATION

DATE: March 19, 2004 , Friday

TIME: 9am to 1pm

SOFTWARE: QuickBooks Pro 2004

PLACE: Bronfman Family JCC, 524 Chapala St. , Santa Barbara CA 93101 - Located on Chapala Street , between Haley and Cota Streets

PARKING: Limited parking available at the JCC building. Recommended parking at the CITY LOT #10, off of Ortega Street and Anacapa. (the lot behind the Metro theatre

REGISTRATION: please send your name, phone number, email and a check for $25.00 payable to the Santa Barbara Jewish Federation, 524 Chapala St. Santa Barbara CA 93101 . Attn: Qbooks Seminar

Seminar will be limited to 45, with a minimum of 10. Future Seminars are being planned now.

Questions: Call Hillary at 884-9608 or email hillaryqbooks@verizon.net

Submitted by Brenda Richter, CPA

The Santa Barbara QUICKBOOKS USERS GROUP Next Meeting:  MONDAY, Mar 1, 2004, 6PM – 8PM  @ THE SB CITY COLLEGE – WEST CAMPUS – BUSINESS & COMMUNICATIONS BUILDING  - ROOM BC214/CONFERENCE ROOM.  721 CLIFF DRIVE , SANTA BARBARA , CA    $15 TO RESERVE SEAT. Please send check payable to QB Users Group, PO Box 3302 , S.B. , CA 93130 .  Dinner included.  The topic will be "Problems" Bank Rec Out of Balance, Audit Trail, Cash vs Accrual, why does AR & AP show as negatives when running cash reports? And of course questions from the Group. For further information and future meeting dates email: qbusersgroup@aol.com, or, email Bonna Hamilton: bonna@silcom.com.   The SB QuickBooks Users Group is for ALL levels of QB users, and is an open forum for users to share experience, knowledge and support. Our meetings are very successful and informative - please come join us!

What Cost/Volume/Profit (CVP) Analysis Can Do for Your Business

Brought to you by:  Brenda Richter, CPA, a member of the Principa Alliance  

Too many businesses operate in the dark. Unaware of the impact that basic decisions have on the rest of their business, they blindly make haphazard choices and clean up the mess later. Your cost/volume/profit (CVP) analysis gives you the insight you need to make the right choices and avoid costly mistakes.

These are some of the things your CVP analysis can tell you:

            1.  The most profitable product or service you offer

            2.  Which products or services should be emphasized  

            3.  What sales volumes you need to meet in order to stay profitable      

            4. Sales goals you will need to meet in order to cover any increase in fixed costs (i.e. an increase in rent)

            5. The increase in sales you’ll need to compensate for any discounting

To make the most of your CVP analysis, you must first understand your fixed costs and your variable costs.

Fixed costs are those costs that remain the same no matter what volume of sales your business has.

This includes rent, insurance, licenses, wages for permanent employees, interest on loans and operational expenses.

Variable costs are directly related to your sales levels in dollars or units sold. For example, materials and supplies, commissions on sales, sales incentives or bonuses for employees and shipping costs are all considered variable costs.

While your accountant can help you ascertain which of your costs are fixed and which are variable, you or someone who is very familiar with your business will need to make the final determination. This can get tricky but to assist you, here are some further explanations of costs.

Combination costs. There may be times when a minimum level of cost will be incurred regardless of sales levels but the costs rise as your volume increases. You will need to determine the most important type of cost. For example, you may pay a flat fee for being able to process credit card purchases and an additional fee for each charge processed. If the cost of processing each charge is greater than the monthly flat fee, you would classify this as a variable cost. 

Relevant range of activity. Your CVP analysis is only relevant or valuable when you consider it within a range of sales that is reasonably expected for your business. Likewise, fixed costs only remain fixed over a certain period of time or within a relevant range of activity. Think about your insurance, it may become more or less expensive with time. If your CVP parameters are not clearly set in terms of volume of sales and period of time, your results will not be useful.

Cost per unit or job. To arrive at this number, add up all your variable costs for the designated accounting period then divide by the number of units sold. Service providers may want to use the number of jobs or hours spent on the jobs instead of units sold. The cost per unit or job does not fluctuate and can be useful when coming up with bids for projects.

Classifying your costs is critical to coming up with a successful CVP analysis. Your CVP analysis offers three critical types of information:

What sales volume you need to achieve breakeven? A breakeven analysis tells you the sales volume you need to reach under different pricing strategies and cost scenarios so that your business can breakeven.

Which products or services are the most valuable? A contribution margin analysis compares your different products and services and their overall profitability. Using this information, you can resolve which products to promote strongly and which products you may want to discontinue.

How your fixed costs impact your bottom line. An operating leverage report lets you examine the effects of increasing or decreasing the role of fixed costs in your operating structure.

NOTE FROM THE EDITOR:  

I wish to thank Brenda Richter, CPA for her submissions.  As always, Brenda has important information to share with all of us.  Sandy Stites will prepare the March Newsletter.  *Jo*