Accounting software is great, particularly QuickBooks Online. The ease of use and ability to access from multiple devices anywhere in the world is fantastic. Though often times I see clients and small business owners not using QuickBooks Online to its full potential, resulting in poor books and records alongside plenty of unnecessary headaches to get proper financials.
Let’s make sure you are a step ahead of the rest and using QuickBooks properly. Take a look at the below list to ensure you haven’t picked up these bad habits.
Here Is the List of Things You Are Doing Wrong:
Expenses Recorded to the Wrong Bank Account
It’s often that I see when new users are getting up to speed on processing expenses, they are just happy to get them entered. These users often end up booking their trip to Staples or Office Depot in a savings account rather than their checking. It is important to ensure that when you are entering both deposits and expenses you are entering these into the right bank account. This will make your end of the month closing process a breeze!
P.S. If you coded the expense incorrectly, simply select that transaction and change the account in the top left that it is correlated too. Just make sure you haven’t yet reconciled this transaction!
Bank Feeds Aren’t Being Used
Automation is the key to success in today’s business environment. Why spend hours manually performing mundane tasks if it can be done in minutes? QBO bank feeds pulls down transactions from bank accounts to credit cards, letting you code them in a matter of minutes. Additionally, when you use the same vendor on a regular basis QuickBooks online remembers the information from the bank memo and helps you speed up this coding process.
P.S. Do you enter checks when write them? Well you should and now with bank feeds you can see these checks clear and automatically match them!
Not Entering Bills on a Regular Basis
Do you feel like your financials are inaccurate? Perhaps you are seeing expenses this month for something that occurred months ago?
Most clients I deal with do not realize that to properly keep accrual-based books they need to enter their bills on a regular basis. I cover all this in detail in my book, QuickBooks Small Business Bookkeeping and Accounting Guide: The Best QuickBooks Pocket Guide For Successful Small Businesses.
For the nature of this post just realize that you need to enter your bills weekly and record payment to those bills when you write a check (more on that in a second). Enter bills with a proper invoice number and term dates, this will allow you to get true financial reports and easily manage your payables.
Not Utilizing Bill Pay
When you write a check are you simply entering a check? Are you just selecting the expense account and entering the check number? Oh no!
What happens when you reconcile your statement from a vendor? How do you match the invoice numbers you have paid and the invoice numbers you have not paid?
When I review books and see clients not using bill pay, I get worried. This means that they may have overpaid a vendor. Most importantly it means they are not processing their payables correctly resulting in having no idea what they owe from one week to the next.
At the root of it, it means they lack the organization for financial success! Entering bills and using the bill pay function ensures bills are recorded and paid in a procedural manner ensuring money in and out of the business can be tracked.
Final Thoughts on QuickBooks Online
Hopefully, this shortlist shows you some of the simple things you may be doing incorrectly. Make sure you make some quick changes to your procedures, pick up my book, and make some real changes for the better!