QuickBooks Tips: How to Handle Online Payments and Avoid Common QuickBooks Mistakes
QuickBooks can be a fantastic tool for business owners – it’s reliable, accessible, and well-suited for small businesses. But as with any solution, if not used correctly, it can lead to inefficiencies, errors, and even compliance issues.
As an Advanced Certified QuickBooks ProAdvisor at Go Get Geek!, I’ve witnessed many such problems and worked diligently with my clients to resolve them. That’s why in today’s article, I’d like to share with you my tips and tricks for successful QuickBooks management starting from the common mistakes, moving toward tried and tested solutions.
What are the most common mistakes small business owners make when using QuickBooks?
Small business owners who just begin their journey with QuickBooks Online (QBO) often encounter similar issues. Here are some of the most common ones:
Incorrect account setup;
Neglecting regular reconciliation;
Poor data entry practices;
Lack of regular review and maintenance;
Misunderstanding financial reports;
Not utilizing QuickBooks features fully;
Mixing personal and business expenses;
Not paying attention to software updates and training.
All the above points signal the main one: not seeking professional help from the start.
Enlisting the help of a Certified QuickBooks ProAdvisor
The most common (and eventually, the most costly) mistake that small business owners make when using QuickBooks is not hiring a professional from the get-go. CPAs (Certified Public Accountants) are usually either too busy, too expensive, or don’t provide this service. Therefore, the role of a Certified QuickBooks ProAdvisor in helping small business owners with the setup and training with QuickBooks is paramount.
In addition, there are a myriad of apps that connect with QuickBooks Online. You face a difficult task: you need to find the right one and set it up for proper and accurate bookkeeping and accounting, depending on the type of business. This step sets the stage for an ecosystem that’s tailored to the needs of a particular business, providing it with the right technology mix.
For example, ecommerce and retail are huge sectors of our economy, and the complexity of those financial transactions can present accounting challenges to small businesses. Synder is one such app that can help with a multitude of sales channels, website shopping portals, and payment processors, thus making it a convenient and economical all-in-one solution.
QuickBooks tips: How to avoid accounting and bookkeeping mistakes in QuickBooks Online
Avoiding mistakes in your books is a much better approach than finding those mistakes and rectifying them. So here, I’ll focus on proper bookkeeping and accounting from the start of your QuickBooks Online journey.
Make a proper initial setup
The initial setup process is critical. This includes correctly setting up the chart of accounts, tax settings, and company information. Tailor QBO settings and features to fit the unique needs of your business. This includes customizing invoices, setting up specific reminders, and using class tracking if needed.
Create integration ecosystem
By working with a Certified QuickBooks ProAdvisor who also has technical experience and knowledge working with 3rd party apps such as Synder, small business owners can save time and ultimately lots of money avoiding costly mistakes in the setup and categorizing of transactions.
QuickBooks and Synder: Helping my clients with technology
Another cool feature of the QuickBooks Online Banking page that most users don’t know about is the ability to Upload from file. One way that I use this option is to import older transactions from bank or credit card statements. This is particularly useful for transactions that date back further than the available history in the connected bank or credit card accounts within the Banking section. When linking an account, some banks will only bring in transactions from the last 90 days. Sometimes I need to import several years of transactions! This has helped me with clients who either didn’t have time to work in QuickBooks or didn’t have QuickBooks at all.
A case study of an Etsy seller
Synder has helped me and my clients in this respect too since I can bring in historical transactions. I had one new business client who created an amazing product and sold it on Etsy and received payments via PayPal but had no bookkeeping experience. Using Synder, we were able to bring in transactions for an entire year in record time into a new QuickBooks Online account so that she could file her taxes on time. I particularly like that Synder can use clearing accounts for sales channels and payment processors. This allows me to use the Upload from file feature in QuickBooks Online to clear downloaded transactions from Etsy, PayPal, WooCommerce, and other channels. By also being able to reconcile these accounts quickly, I can feel confident that the sales and fees are accurate and the books are complete for my clients.
Advancing reconciliation and accuracy with Synder
While QuickBooks Online shines with its Banking page that automatically downloads transactions for bank and credit card accounts, following shortcuts such as suggested categorization can lead to inaccurate accounting for tax purposes.
By using Synder, deposits to the checking account from sales channels are automatically recorded and matched in QuickBooks Online and fees are automatically added to the general ledger. Since these transactions are cleared, reconciliation in QuickBooks Online typically takes literally seconds. Business owners can thus feel confident that their books are accurate and their financial statements are providing proper insight into how well their business is doing.
Automate data entry
A new business or startup may not have a lot of sales in the beginning, so entering orders manually in QuickBooks may not be an issue. But as the company grows and the volume of sales increases, doing this just isn’t feasible anymore.
Another mistake that most QuickBooks users make is just adding the net deposits of sales from PayPal, Stripe, Square, and other channels to the checking account as sales income. However, these are just net sales as the fees for processing them are usually taken out before paying out to the checking account. There’s no accounting for fees!
That’s why automatic data entry and adequate allocation of different types of transactions into the right accounts are so important.
Utilize custom reports
One of the most underutilized yet powerful features of QuickBooks is its capability to create custom reports. Custom reporting in this accounting software allows you to tailor your financial data analysis to meet the specific needs and nuances of your business.
To get the best of reports, start by identifying the key metrics that are most relevant to your business (a QuickBooks Pro Advisor will be able to help you with that). This could include cash flow trends, expense categories, revenue sources, or customer demographics. Understanding what matters most to your business is indispensable in customizing reports that provide meaningful insights.
Use report templates
QuickBooks offers a range of report templates that you can customize. Familiarize yourself with these templates and modify them to suit your requirements. For instance, you can start with a standard profit and loss template and tweak it to focus on specific areas like departmental expenses or revenue streams.
Filter and sort data
Use the filtering and sorting tools in QuickBooks to hone in on specific data points. For example, you can filter sales reports by customer type or region, or sort expenses by vendor or time period. This granularity allows for a more detailed analysis of your business activities.
Combine reports for comprehensive analysis
Sometimes, the key to deeper insights lies in combining data from multiple reports. For instance, merging sales data with expense reports can give a clearer picture of your profitability and cost centers.
Seek professional help
As mentioned before, don’t hesitate to consult with a QuickBooks Pro Advisor, who will put everything in order and educate you on how to best utilize QuickBooks to your advantage. The advisor can help you understand your key financial statements like profit and loss statements, balance sheets, and cash flow statements. Apart from this, they’ll explain how those numbers work for different aspects of your business.
What are the QuickBooks Online keyboard shortcuts?
This QuickBooks tips list wouldn’t be complete without common shortcuts. QuickBooks offers a variety of keyboard shortcuts designed to make your accounting tasks faster and more efficient.
Embracing QuickBooks tips for business success: Closing thoughts
Mastering QuickBooks Online and leveraging its full potential starts with setting a foundation for sustainable business success. By understanding the importance of a proper initial setup, creating an integrated ecosystem, and automating data entry, businesses can navigate the complexities of online payments and financial management with confidence.
Remember, the bookkeeping and accounting journey with QuickBooks Online is a continuous learning process. Whether you’re dealing with online sales and their corresponding fees or scaling your business to new heights, the right approach to QuickBooks can make a significant difference.
However, the most crucial tip is to never underestimate the value of professional guidance. A Certified QuickBooks ProAdvisor doesn’t just offer solutions; they provide a partnership to ensure that your business’s financial health is always at its best. With their expertise, you can transform QuickBooks from a mere accounting tool into a powerful ally for your business, ensuring that every financial decision you make is informed, strategic, and tailored to your business’s unique needs.
So, use these tips, and watch how QuickBooks becomes a cornerstone of your business success.
The First Thing You Should Do After Creating A QuickBooks Online Account
As a QuickBooks ProAdvisor, I have the Accountant version of QuickBooks Online. This lets me access all of my client accounts, the ones where I have been added as an Accounting firm user. This allows me to do bookkeeping, troubleshoot issues, and help with QuickBooks training.
It also gives me the ability to create new QuickBooks Online accounts for clients, which automatically adds me as an accountant user. I can either bundle this with other value-added subscriptions such as payroll and with services that I provide such as setup, bookkeeping, and technical support and bill my clients directly. Or I can just pass on the billing and a current discount of 50% off for 3 months for the QuickBooks Online subscription to my clients.
The advantage to adding new clients this way is that I have a different experience during the QuickBooks Online account creation. For one, I don’t have to go through the wizard with all the questions that clients would have to complete if they created the account themselves. Part of this is to help the user with the setup and company preferences, but the other part I believe is for marketing what services Intuit may want to provide. For accounts that get converted from QuickBooks Desktop, I have control over what gets converted. For example, a user may not want jobs automatically converted into projects. I also get a report and Excel spreadsheet with what converted successfully as well as any account balance discrepancies. This is critical in that I may have to make adjustments with journal entries in the new QuickBooks Online account so that the financial statements match the ones in QuickBooks Desktop.
When creating a new QuickBooks Online subscription from scratch (not converted from QuickBooks Desktop), I also have control over what accounts get added to the Chart of Accounts. If you create the account as a non-accountant, then you may end up with a chart of accounts filled with accounts that you will never use or are not related to how your business operates. You can make these accounts inactive but then adding new accounts may count against the chart of accounts list limit, depending on the QuickBooks Online plan you choose. And renaming and changing the account details of existing accounts is time consuming. Therefore, I recommend wiping the data of a newly created QuickBooks Online account. This is called a purge and deletes all data, including all but the necessary accounts in the chart of accounts. Note: this is not available with the QuickBooks Online Simple Start subscription.
To purge the data, follow the steps listed below:
Log in to your QuickBooks Online account.
Change the URL to include /purgecompany.
Example: URL shows https://...qbo.intuit.com/app/homepage, change to: https://...qbo.intuit.com/app/purgecompany.
The next screen will provide a summary of the items to be deleted.
Type the word “YES” once the data gets deleted, then click OK.
Click Wipe Data once your selections are complete.
Once the deletion is complete, you will be rerouted to your home page.
Even when I create the account, I do this step to make sure that any unnecessary accounts are removed. Purging the data is also useful when importing data such as lists and/or transactions and there are issues and you want to delete everything and start all over. It is important to note that you can only do this within the first 60 days after creating the QuickBooks Online account. Otherwise, you will just have to cancel the subscription and start a new account.
Do You Need to do Backups for QuickBooks?
QuickBooks Desktop
Backing up QuickBooks is a critical task for any business owner who relies on the software for their accounting and financial operations. QuickBooks Desktop is a powerful tool that helps businesses manage their finances, track expenses, and generate important reports, but it is also vulnerable to data loss and corruption. A backup of your QuickBooks data ensures that you have a copy of your financial information in case something goes wrong.
Here are some reasons why backing up QuickBooks is so important:
Protection against data loss: There are many things that can cause data loss, such as hardware failure, natural disasters, malware, or human error. If you do not have a backup of your QuickBooks data, you may lose all of your financial information, which can be devastating for your business. Having a backup ensures that you can quickly recover your data and continue running your business.
Compliance with regulations: Depending on your industry and location, you may be required by law to keep accurate financial records. If you do not have a backup of your QuickBooks data, you may not be able to provide the necessary documentation in case of an audit or investigation.
Peace of mind: Knowing that you have a backup of your QuickBooks data can give you peace of mind. If something goes wrong, you can quickly recover your data and avoid any disruptions to your business operations.
So, how can you back up your QuickBooks data? There are several options available, including:
QuickBooks Backup: This built-in feature allows you to create a backup of your QuickBooks data and save it to a local or external drive. It is recommended to use either a cloud connected drive such as Google Drive, Dropbox, or OneDrive.
Online Backup Services: There are several online backup services available that can automatically back up your QuickBooks data to the cloud. This service comes included with QuickBooks Desktop Enterprise subscriptions.
Manual Backup: You can also manually copy your QuickBooks data file to an external drive or another computer. Note: never keep your company working file in a cloud-backed up folder.
Aren’t automated server or scheduled backups enough?
Not necessarily. If you use QuickBooks in a multi-user environment, it is essential to still do manual backups in single-user mode. This along with the complete verification option selected, will also verify your QuickBooks data file for corruption. If there is a problem, then QuickBooks will prompt you to rebuild your data file in an attempt to fix the issues. Following this process will ensure that you are backing up a clean data file. It will also improve the performance when working in QuickBooks.
Quickbooks online
You don't need to worry about saving your QuickBooks data on a flash drive because QuickBooks Online automatically backs your data up with the same level of security used by banks and financial institutions.
Data security is a first priority for Intuit, the company that created QuickBooks.
How does Intuit keep your data safe and secure?
Whenever there are changes to your company file, your data is saved to two hard drives.
They periodically copy all data to a third-party hard drive in order to protect your data in case something happens to the first two hard drives.
Automatic backups are performed every night.
Should I still back up my QuickBooks Online data?
You should, if you want to restore your data to specific point in time. If you subscribe to the QuickBooks Online Advanced subscription, the option to back up to a 3rd party app is included. For the other subscription levels, Rewind is a 3rd party app that can provide daily automatic backups, for a fee.
No matter which method you choose, it is important to back up your QuickBooks data regularly. Ideally, you should back up your data at least once a week or more frequently if your business operations generate a lot of transactions.
Backing up your QuickBooks data is a critical task that should not be overlooked. It is important to protect your financial information from data loss, comply with regulations, and ensure business continuity. By backing up your QuickBooks data regularly, you can enjoy peace of mind and focus on growing your business.