10 Common Mistakes When Using QuickBooks for Contractors

QuickBooks for Contractors - Complete Controller

QuickBooks is an accounting program package that is designed to manage the needs of every small to medium-sized business, such as managing payrolls, bills, inventory, sales, etc. It offers software solutions for both on-premises and cloud-based accounting applications. It’s the accounting program used most. The package develops solutions according to the industry’s need and includes tools for marketing, services, product, and supplies for merchants and training solutions. 
QuickBooks offers different package options, depending on the needs of you and your company.
A contractor version of the software is available. It is built to meet every kind of contractor; therefore, the do-it-yourself accounting is not as easy, and many users fall prey to many mistakes. LasPass – Family or Org Password Vault

Incorrect Payroll

Managing payroll is a difficult task, and any business can benefit from outsourcing this time-consuming process to a payroll firm. As local, federal, and state laws regularly change, managing payroll can become a complicated task, and businesses can be negatively affected by errors resulting in tax penalties. 

Not Reconciling Accounts

It is necessary to reconcile all of your accounts. You need to reconcile your savings and checking accounts and taxes, loans, and mortgage escrow accounts. Otherwise, you will not know if the money in the business account register is correct. Reconciliation is an important step in bookkeeping and must be done regularly.

 Using Too Many Accounts & Sub Accounts 

While QuickBooks offers one advantage in creating further sub-accounts of accounts, this can also complicate the system and be very time-consuming. This should be avoided, if possible, especially in the case of small companies where one parent account is adequate. Cubicle to Cloud virtual business

Not Backing Up The Company Data

To prepare for the unpredictable, it is necessary to back up the Business QuickBooks files every day. This will prove to be immensely helpful in case of a computer crash.

 Not Reviewing

The balance sheet and P&L statements have valuable insights regarding the business’s health. Reviewing these statements can help catch mistakes before they cause any financial repercussions. Thus, they should be checked regularly.

Not Setting Sales Tax Preferences

You can set up your sales tax preferences if your business makes sales subject to sales tax. To do this, go to Edit → Preferences → Sales Tax icon → Company Preferences → Owe Sales Tax and then choose from As of Invoice Date or Upon Receipt of payment.

  Booking Loans Improperly 

It is necessary to keep a record of any loans taken by the business. This means that each payment’s principal and interest breakdown is monitored and reconciled with the monthly loan balance. Exit Advisor

Not Creating User Permissions and Passwords

Suppose multiple users are accessing your QuickBooks file. It is necessary to give each of them separate roles, permissions, and logins. This ensures that everything happening in your books is controlled smoothly.

  Deleting Transactions

In QuickBooks, many transactions are interconnected, and deleting one transaction can affect other transactions linked to the deleted transaction. A choice is to void a transaction rather than delete it. But that too can cause problems in the case that the deleted transaction is for a closed period. Refer to your accountant and get the transaction reversed through the current period.

Paying Payroll Taxes using the Write Checks Window

QuickBooks keeps track and records the payroll tax a business owes as the payroll is managed in the Payroll Liabilities account. Accidentally paying the payroll taxes through the Write Checks window will result in the paid amount not getting properly deducted from the Payroll Liabilities. Therefore, to ensure that the payroll liability balance is deducted correctly, it is necessary to pay the payroll taxes from the Payroll Liabilities window.

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