Adhering to best practices in QuickBooks will help your business become healthier and more competitive. Your recordkeeping will improve. You'll be able to analyze your company's progress more effectively by running reports that provide focused views of your revenue and expenses. Your data will be safer. Here are seven best practices to consider implementing.
Yes, it can be time-consuming and frustrating. But it's the only way to be sure that what you're seeing in QuickBooks Online matches your financial institutions' records. If you don't reconcile your accounts monthly, you'll hit a point down the road where your financial books are no longer accurate. You'll have to reach back to try to determine where you went wrong. Untangling an unbalanced accounting system is not something you want to have to attempt. Instead, each month hover your mouse over Transactions in the toolbar and click Reconcile.
Unless you have a very small business with few transactions, you should categorize transactions daily. Accurate, thorough categorization is required so your reports and taxes are correct. Be sure to check the Billable box when it's warranted.
There are two reports you should be running once a week: A/R Aging Summary Report and A/P Aging Summary Report. You need to keep a close eye on who is behind on paying you and which bills you may have missed.
There are two other pages that provide this information quickly. Hover your mouse over Sales and click Customers to see the status of your invoices and estimates. To see an accounting of your own bills and other expenses, hover your mouse over Expenses and click Vendors.
If you have multiple employees working in QuickBooks Online, don't give them all full access. This is for both your protection and theirs. Set up limited user permissions for them so they can only go into certain areas and perform specific tasks. Click the gear icon in the upper right and click Your Company | Manage users. Click Add user and proceed through the wizard to assign individuals to roles like Track time only, Accounts payable manager, and Standard limited customers and vendors.
If your business stocks inventory, you know what a balancing act it is. Too many items, and you have an unnecessary amount of money tied up in inventory. Too few, and you risk running out, which you certainly don't want to do — you'll lose sales and maybe even customers. So be sure you're entering a Reorder point for inventory items. Just open a product record and click Edit in the Action column to add these.
This should be your No. 1 priority. Windows should always be updated. Windows Defender (built in) does a good job of protecting you, but you may have your own favorite antivirus and anti-malware applications. If you get hacked and your QuickBooks Online data gets compromised or deleted, the future of your business will be in danger. If other people in your office are on a network with you, stress the importance of good PC safety protocols, like not clicking on attachments in emails.
What do you usually do when you can't complete an expense transaction because you're unsure of how to categorize it, for example? If there isn't an account in your Chart of Accounts titled "Ask My Accountant," you can create one. Click the gear icon in the upper right and then Your Company | Chart of Accounts.
Click New in the upper right and enter the title. Then select Expense as the Account type and Other Business Expenses as the Detail type. This will put your transaction into a kind of holding tank to deal with later. Your Porte Brown accountant can create a Profit and Loss report to find those transactions and deal with them.
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