"10 Most Common Quickbooks Mistakes Made By Small Business Owners...And How To Avoid Them"

 

 QuickBooks users get into trouble by saving and copying date files, taking them home, working on them, and then copying the file back to the computer.  Or, giving the file to the accountant who makes adjustments to the file and gives it back.  Be consistent about where you keep your data file and make sure you delete old copies.
 

Remember, you are not only using QuickBooks to satisfy your accountant or to help the accountant prepare your tax returns.  You should be using the reports to help you make decisions in your business.  Here are the top 5 reports you should be reviewing monthly:

 

Profit & Loss - This financial statement summarizes your company's operations (revenues and expenses) for a particular time period.

 

Balance Sheet - This financial statement summarizes your company's resources (cash, inventory, accounts receivable), obligations (accounts payable, payroll tax liabilities, credit card liabilities, loans), and equity (capital contributions, distributions) on a particular date.

 

Cash Flow Statement - This financial statement reconciles your net income (loss) to your ending cash.  There are cash transactions that do not affect your Profit & Loss, such as loan principal payments, payroll taxes payable, and capital contributions or distributions.

 

A/R Aging Summary (if applicable)

 

A/P Aging Summary (if applicable)

 

 

Ideally, you should be reconciling monthly.

 

The Credit Card feature is a very easy way to track your transactions.  You may want to consider downloading the transactions directly from your credit card company if you have a lot of activity. 

 

Entering bills with a date AFTER the check date, which creates a credit in Accounts Payable if the report date is before the bill date.  Also, make sure you enter the invoice number and the date of the invoice when you enter a bill.  This makes it much easier to reconcile your data with your vendor(s).

 

Not Separating Deposits for Easier Bank Account Reconciliation…

Remember, the entries in QuickBooks should tie to each deposit that has cleared in the bank statement.  Thus, there should be separate entries for credit cards.  You only need to try and reconcile one month of "lumped" deposits to cure you of this mistake.

 

Not Backing Up The Data File…

 Ideally, you should be backing up your file every time you make a change to the file.  The best option is to keep a backup file offsite, either on a CD or a tape backup.  Or, try using an online backup service.

 

Small business owners often neglect bookkeeping because of the time and effort it takes to set up and tend to a bookkeeping system.  Let’s face it, accounting or bookkeeping is not why they went into business. Most business owners would rather be out generating sales than sitting in the office making journal entries or entering debits and credits.

 

To help you better determine if outsourcing your Quickbooks is right for your business, we’ve compiled a special free report for you titled: “The Top 10 Warning Signs To Help You Determine If Outsourcing Is Right For Your Business”

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