For small businesses, QuickBooks is unquestionably a critical element for accounting. From inventory management, sales and payroll to other financial record-related items, QuickBooks has helped several small businesses succeed.
However, anybody who uses QuickBooks has this nagging feeling that they are doing something wrong. Whenever new clients bring their bookkeeping to QuickBooks accounting services in India, we find several common mistakes. These mistakes are not to be overlooked. If you don’t catch them early, they will cost you big especially during the tax season.
But the good news is that those mistakes can be fixed. Let’s look into the most common slip-ups and how to fix them.
Mistake 1: Missing Transactions
When you’re busy running your business, it’s common to fall behind on accounting. But if your books don’t regularly reflect the finances, it’ll be tough to understand the health of your business. There is only one solution to this – make a habit of recording each transaction the same day or the same week. We understand that this might not be the most glamorous part of running a business. Luckily, you have several QuickBooks certified professionals in India who can help you with this, so you wouldn’t have to catch up on a quarter or year of missed transactions.
Mistake 2: Not Reconciling All Your Accounts
This is an extremely important step. Every transaction that your business makes from paying bills, making deposits to paying customer invoices, all should be checked and recorded. Reconciling all your accounts i.e. checking, savings, loans, taxes, etc. secures your business account. Once you hit “Reconcile Now” on QuickBooks, it’ll ask you for Statement Ending Date and Ending Balance. After you check off all the items in the Checks and Payments column, the bottom right corner should read zero. If doesn’t read zero, check your work again.
Mistake 3: Too Many Accounts & Sub-Accounts
When setting up your QuickBooks, make sure you keep all your accounts clean. While creating multiple accounts and sub-accounts might seem like you’re organising your finances better, but do you really need all those sub-accounts? Say you have an account for Office Supplies. You don’t need sub-accounts like pen, paper, etc. So many sub-accounts will complicate your financial system.
Sometimes keeping things minimal and simple is the best strategy for the long run. Identify the accounts you need and keep things simple, so reviewing them later doesn’t seem like a humungous task later on. QuickBooks bookkeeping services in India can help you identify the accounts that are appropriate for your business.
Mistake 4: Not Using Purchase Order System
Using the functionality of purchase orders will help you manage your inventory better. This will allow you to minimize data entry as well. Here’s how you can ease up your inventory:
a) Create a purchase order when you buy product from a vendor
b) Receive product against a purchase order
c) Mark “closed” against old orders, and periodically check the purchase order report to ensure there are no stale dated orders.
Mistake 5: Using the Write Checks Window to Pay Payroll Taxes
Some business owners make the mistake of accidentally paying the payroll taxes using the “Write Checks” window. When this happens, the amount paid is not deducted from the “Payroll Liabilities” window. So, ensure that payroll taxes are paid directly from “Pay Liability” window. QuickBooks properly tracks and records the payroll liability balances.
Mistake 6: Deleting Transactions
QuickBooks transactions are linked together, so one needs to be extra cautious about deleting any transaction as this could create unwanted changes in other transactions. In case you need to delete any transaction, instead of deleting, the best practice is to void a transaction. Offshore accounting services in India can suggest you different ways of handling the transaction.
Mistake 7: No User Roles, Permissions and Passwords
Often small business owners have only one access to their account. But if you have more than one person working in your QuickBooks file, ensure that each of them has separate logins, roles, permissions and passwords. This way you create more transparency and are more in control of what happens in your books.
Here’s a bonus point for you! Backups – You must always plan for the unexpected. So, ensure that you are backing up your QuickBooks file at the end of each day. Being mindful of these common mistakes can help you have a smooth and accurate experience while working on QuickBooks.
At BMC SAAS, we are proficient in providing a 360 degree accounting service to clients around the world. BMC SAAS will take care of all your accounting frustrations so you can focus on what you love.
To learn more about how BMC SAAS can help your business, contact us about your business’ requirements.
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