QuickBooks is an accounting program package designed to manage the needs of every small to medium-sized business, such as 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 needs and includes tools for marketing, services, products, supplies for merchants, and training solutions.
QuickBooks offers different package options, depending on your and your company’s needs.
A contractor version of the software is available. It is built to meet every kind of contractor; therefore, do-it-yourself accounting is not as easy, and many users make mistakes.
Incorrect Payroll
Managing payroll is difficult, 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 complicated, and businesses can be negatively affected by errors resulting in tax penalties.
Not Reconciling Accounts
Reconciliation is necessary for all of your accounts, including your savings and checking accounts, 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. If possible, this should be avoided, especially in the case of small companies where one parent account is adequate.
Not Backing Up The Company Data
It is necessary to back up the Business QuickBooks files daily to prepare for the unpredictable. This will prove to be immensely helpful in case of a computer crash.
Not Reviewing
The balance sheet and P&L statements have valuable business health insights. 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
Recording any loans taken by the business is necessary. Each payment’s principal and interest breakdown is monitored and reconciled with the monthly loan balance.
Not Creating User Permissions and Passwords
Suppose multiple users are accessing your QuickBooks file. Giving each of them separate roles, permissions, and logins is necessary. 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 it. One option is to void a transaction rather than delete it. But that, too, can cause problems if 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 correctly deducted from the Payroll Liabilities. Therefore, to ensure that the payroll liability balance is deducted correctly, paying the payroll taxes from the Payroll Liabilities window is necessary.
Conclusion
In conclusion, QuickBooks is a versatile accounting solution tailored for diverse business needs, offering both on-premises and cloud-based applications. It caters to various industries with specialized tools, including a dedicated contractor version. However, users should be cautious to avoid common mistakes, such as mishandling payroll, neglecting account reconciliation, and utilizing excessive accounts.
Proper data backup, regular review of financial statements, setting sales tax preferences, and maintaining accurate loan records are essential practices. Additionally, creating user permissions, avoiding transaction deletions, and paying payroll taxes contribute to QuickBooks’ effective and error-free use in managing business finances.
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