Every small business owner or manager knows they need to keep an eye on their books; otherwise the wheels could fall off quick. Eventually, the bookkeeping tasks will be outsourced when either the revenue hits a certain level or the stress hits a certain level. Until that time comes, it makes sense to stay in tune with QuickBooks best practices. Making
sure that QuickBooks is being used as efficiently as possible will allow for a smooth transition to the new bookkeeper. I find that owners and managers tend to be really good a using QuickBooks for one or two things such as customer billing and tracking income while many other areas get neglected along the way such as Accounts Payable, reconciliations, financial reporting, etc. As these areas get neglected, business decisions may be based on inaccurate data. As bookkeepers, we like to make sure that our clients are making strong business decisions that are data driven. Nothing is worse than seeing an owner make decisions based on their gut feeling and inaccurate financials.
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A function in QuickBooks I often see overlooked or completely misused is the Enter Bills and the subsequent Pay Bills function in QuickBooks. Both are great functions that give an
overview of what the company's total liabilities are to vendors, when they're due, and the ability to print or even pay them online through QuickBooks. In this two part post we'll discuss the process of entering bills and then we'll dicuss how to properly pay the bill via the Pay Bills window.
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Often, to the small business owner, the word reconciling is associated with just the checking and savings bank accounts. There is much more that needs to be reconciled in order to be certain your financials are accurate. Reconciling liabilities in QuickBooks sounds a lot more intimidating than it really is. What good is reviewing financial reports if you can't prove they are 100% accurate? Depending on how your business's bookkeeping system was set up, walking through the reconciliation process for banks accounts, payroll liabilities, loans, lines of credits, garnishments, and other withholdings can be easy or a major pain in the butt. Previous posts have discussed account reconciliations in a more general sense, so let's dive into Liabilities for now.
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In QuickBooks you will sometimes find it necessary to edit or delete a deposit. The steps to maintain accuracy are not difficult, but for many users it is not clear how to keep the books straight. Watch this short QuickBooks Video tip on editing or deleting a deposit.
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Accounting is an extremely crucial part of your business. In fact it would not be wrong to say
that the survival of your business depends on how you maintain your accounts. Nowadays people prefer using accounting software like QuickBooks to make the accounting process easier and also enable them to concentrate their energies in making their business a grand success.
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As technology evolves and changes, some software and computer programs have gone the way of the dodo. In other words, it takes a lot to stick it out on the front lines – especially when almost every top rated program is eventually overshadowed by an open source program that offers a similar product for free. If you’re like most financially responsible individuals, though, you know that sometimes “free” isn’t the best option. That’s why QuickBooks still remains the front runner in bookkeeping and accounting software. People who know money know that this program is worth every dime.
The reason for the long-lasting popularity of QuickBooks is largely due to the fact that it sets itself apart from many other accounting software programs – which you can tell by glancing through any industry QuickBooks Tips blog. Several of the common “best practices” apply only to this particular program. Here are a few:
1. You cannot skip steps – If you go to Enter Bills and enter a bill, you must go to Pay Bills before going to Make Deposits or Write Checks. Everything in QuickBooks has a flow that must be followed. This eliminates stress for those of us who like to skip ahead and forget to fill in the blanks later.
2. Check for unapplied credits at least a few times per year. Failing to do so could mean that your cash based financials are incorrect. Simply go to Reports, then Customers and Receivables, click on Open Invoices and Reports, then choose Vendors and Payables and finally Unpaid Bills. If you see any negative amounts, this might mean that you failed to enter a corresponding bill or invoice for a payment.
3. Remember that the beauty of QuickBooks is that it is a transaction-based program. To get the most from this software, you should enter transactions appropriately – not directly to a register.
If you’re looking to become a QuickBooks guru, be sure to use it often and familiarize yourself with the interface. Additionally, there are plenty of QuickBooks blogs for additional help and reference. Of course, if you’d prefer you can always leave your bookkeeping and accounting duties to the professionals at Salt Lake City Bookkeeping.
What are some of the best practices you’ve discovered with QuickBooks?
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Remember the days of balancing your checkbook or credit card with nothing more than a sharp pencil and a
basic calculator? Crunching the numbers of your business expenditures each month could take hours and had to be checked and double checked numerous times to avoid expensive errors. Many of us put off balancing our credit cards and checkbooks until the last possible moment – if only to retain some small amount of sanity. It's things like this that really make you appreciate new developments in bookkeeping technology – such as the QuickBooks reconciliation feature.
Instead of tapping away at your calculator for hours on end, this simple feature allows you to balance your accounts in minutes so there’s no excuse for waiting. It saves you precious time, and it can also save you a great deal of money.
Essentially, this feature allows you to double check your deposits and credits against your bank or credit card statement. Simply open “Banking” from the startup screen, then click on “Reconcile” and enter in the statement date and end balance. Use the statement to check off each item in the “checks and payments” column. When complete, the amount in the right bottom corner should say “0.” If not, there is an error in the records or in the statement.
What many business owners fail to realize is that banks and credit card companies can make errors too. Often these errors go unnoticed and can add up to a rather large amount of lost money. Generally you only have about 30 to 60 days to contact credit card companies and banks to ask that the errors be reversed, so it is important to catch them early. By using the QuickBooks reconciliation feature to balance your accounts in a timely manner, you are much more likely to catch errors in enough time to have them changed.
All in all, this handy aspect of the QuickBooks program can be a real lifesaver. However, in order to save even more time, you may want to hire a Salt Lake City Bookkeeping professional. Our educated and thorough experts can save you more time and money than even the best program available.
What benefits have you found from the automation of bookkeeping?
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