QuickBooks is excellent accounting software for running a small business. I like to tell clients that QuickBooks is great for a small business owner that doesn't necessarily understand accounting.
The reason I say this is that many of the accounting entries are done behind the scenes in QuickBooks just by carrying out the day-to-day activities of your business.
However, I also see a lot of business owners not using QuickBooks to its full potential. Here are 20 ways QuickBooks can help run your small business.
1. Control Cash Flow
QuickBooks can be a great tool to help you manage your cash flow. Instead of using your online bank balance you should keep your QuickBooks file updated regularly and understand how to use it to manage your cash flow.
By entering your financial transactions often and doing daily reconciliations in QuickBooks you will get a great handle on your cash flow. The key is sorting your QuickBooks bank accounts by cleared status.
2. Invoice Customers
I always like to train clients to create and send their own invoices in QuickBooks. When you have a customer that wants to give you money for products or services, the last thing you want to do is wait on sending them an invoice.
Learning how to properly invoice customers will decrease your accounts receivable and increase your cash flow.
3. Manage Bills and Accounts Payable
Keeping your vendors and suppliers happy is important as well. You don't want to fall behind on your outstanding bills with vendors. Using the enter bills and pay bills functions in QuickBooks is simple.
Entering the bills to your vendors with the correct terms and due dates will help you stay on top of keeping your vendors paid and happy. Paying your bills directly through QuickBooks via online bill pay or printing checks will reduce unnecessary data entry and increase productivity.
4. Manage Employee Time
You can enter employee time from the employees' section of the home screen. You can enter a single-time event or use a weekly timesheet. Tracking time in QuickBooks can help measure employee productivity and can prove to be valuable for job-costing purposes.
5. Customized Chart of Accounts
Your QuickBooks chart of accounts is all about your needs and should be customized to those specific needs. I often see clients make their chart of accounts so complicated that the reports become meaningless.
Make sure your chart of accounts speaks to you and provides you with valuable information that you can use. Don't worry too much about tailoring your chart of accounts to your taxes; it should be more geared toward helping you run your business.
6. Memorized Transactions
You should use QuickBooks memorized transactions to automatically enter transactions that occur on a regular and predictable basis. This can include invoices, bills, journal entries and payments. The idea is to boost efficiency and have certain items be entered automatically into QuickBooks.
One example of a good use of a memorized transaction is a bill that you have set up to be automatically deducted from your checking account like your mortgage payment.
By memorizing a check you can have the payment automatically post to your checking account a certain number of days in advance.
7. Always Reconciled
The most important thing you can do for your small business bookkeeping system is to make sure to reconcile QuickBooks on a consistent basis. You should reconcile all of your applicable accounts not just your bank accounts. Make sure to reconcile bank accounts, credit cards, loans, lines of credit and payroll liabilities.
8. Printing Checks
Printing checks from QuickBooks is a great way to keep cash flow updated and increase your efficiency. Since the check will not clear your bank until the payee deposits it you want to make sure to include it in your cash flow analysis. Printing checks from QuickBooks will eliminate unnecessary data entry.
9. Online Banking
You should set up your QuickBooks accounts for online banking download. Many major financial institutions offer data downloads into QuickBooks. This will reduce a lot of unnecessary data entry.
10. Keep Questions Organized
If you come across transactions that you are not sure how to handle don't let them stop you from reconciling and closing out your financials. Use the QuickBooks ask my accountant code on your chart of accounts. This will allow you to enter the transaction and reconcile all while keeping your questions organized in one spot.
11. Journal Entries
Journal entries are sometimes necessary to fix issues or create year-end entries per your CPA to match your tax return. Although journal entries are getting more into the "accounting" end of things you should still be familiar with them.
12. Accept Online Payments
You can turn on the Intuit payment network services which allow customers to pay their invoices easily online. The best part is it only costs you $0.50 per transaction with no percentage of the invoice being charged as a fee. So you could send a $50,000 invoice and only pay $0.50 to get that money sent directly to your checking account. Hard to beat that price given the typical merchant processing fees.
13. Email Invoices and Statements
You should set up all invoices and statements to be emailed directly from QuickBooks. This will help reduce the amount of time it takes for your customers to pay you, which will increase cash flow. You can turn on the online payments as discussed in #12 above to help you get paid even faster.
14. Payroll Management
You can process your payroll directly in QuickBooks or use an outsourced payroll service. We typically recommend outsourcing your payroll to reduce your liability. When you use an outsourced payroll it is important to record your outsourced payroll correctly in QuickBooks. Many payroll companies even offer files that can import your outsourced payroll data into QuickBooks.
15. QuickBooks Class Tracking
QuickBooks class tracking is one of the more powerful functions of the software that often is not utilized. QuickBooks classes are a way to track your data in a way that is meaningful to your business. Examples of QuickBooks classes are locations or departments. I use QuickBooks classes to track sources of income so that I know the source of every penny that our business has ever made.
16. Financial Reporting
One big mistake I see is small businesses not taking advantage of the reporting that is available in QuickBooks. Small business financial reporting is a crucial piece of the bookkeeping process. Without running and analyzing financial reports your bookkeeping system is not performing to its full capability.
17. Owner Memorized Reports
I develop a custom set of reports for myself to run our business. We also work with our clients to develop a set of reports that the owner finds particularly useful to run their business. While many reports are available in QuickBooks it is nice to organize them all in one spot for easy access. Under Reports/Memorized Reports you can find your memorized report list. You should create a new list called 'owner reports' and memorize important reports to that list to make them easily accessible.
18. Custom Importing
If your financial institution does not offer import capabilities into QuickBooks you still have some options. You can use a CSV converter to QuickBooks to make your data importable into QuickBooks. Additionally, you can create Intuit Importable Files also known as IIF files which import into QuickBooks. You may need to seek a developer or programmer that can create IIF files.
19. Web Apps
There are a whole lot of apps that work with QuickBooks that may help your business. It is worth browsing the apps to see how they can help your business. Be sure to get an app that is approved and supported by Intuit. One QuickBooks app that we recently started using is Time Tracker by eBillity. This app allows our employees to track and enter their time from their computer, mobile phone or tablet. The administrator can then approve the time, which can then be set up to sync with your QuickBooks file.
20. QuickBooks as a Tool
Lastly, I want to talk about using QuickBooks as a tool to run your small business. Many small business owners look at bookkeeping as a hassle or as a means to filing their taxes. I think some small business owners simply don't like bookkeeping, others are intimidated by it and some don't see the value in it. If your bookkeeping system and QuickBooks file are set up properly and tailored to your specific needs they can help you run your business. Your QuickBooks file should be a tool that you can use to aid you in making key business decisions.
QuickBooks can be a valuable tool to help you run your small business. If you look at your bookkeeping as a hassle then you have not been shown how to properly use your bookkeeping system to aid you in making business decisions.
How have you found QuickBooks useful in running your small business?