Archive for July 2016

25 QuickBooks & Bookkeeping Procedures You Need To Learn

25 QuickBooks & Bookkeeping Procedures You Need To Learn

If you are new to QuickBooks or bookkeeping in general, there are certain procedures you are going to want to know how to perform. These 25 tips for QuickBooks and bookkeeping will lay down the foundation for a very tight bookkeeping system.

1. Reconcile QuickBooks Accounts – This is number one on the list for a reason: it is the most important task. Reconciling your accounts is the only way to know that all of your transactions are recorded. Make sure to reconcile all of your accounts, not just bank accounts. Any account that you receive a statement for that has a beginning and ending balance can be reconciled. This includes bank accounts, credit cards, loans, and lines of credit.

2. Back Up QuickBooks – It seems simple but many users do not back up QuickBooks. A simple backup can save lots of stress and headaches down the road. You should also look into automatic backups of your QuickBooks file. If you use QuickBooks online, your data is always secure and backed up since it is a cloud-based program.

3. Print Checks From QuickBooks – Printing checks from QuickBooksincreases efficiency by reducing unnecessary data entry. It will also make your monthly reconciliations go much smoother.

4. Enter and Pay Bills In QuickBooks – Entering bills and paying bills directly through QuickBooks will help you manage your accounts payable. When you pay bills, you should either print your checks or use online bill payment linked to QuickBooks.

5. Customize Your QuickBooks Icon Bar – Customizing the QuickBooks icon bar boosts efficiency by keeping your favorite and most commonly used functions easily accessible.

6. Set up 1099 Vendors – It is important to understand how to set up 1099 independent contractors in QuickBooks. Having 1099 vendors set up correctly in QuickBooks from the beginning will save you a lot of time come year-end.

7. Use Ask My Accountant In QuickBooks – The QuickBooks Ask My Accountant feature is a great place to put questions as well as transactions that you want to research. You want to make sure to review and properly code all transactions in this account before filing your taxes.

8. Understand QuickBooks’ Undeposited Funds – The QuickBooks undeposited funds account gives many users trouble. You need to think of the undeposited funds account as those customer payments that are recorded in your QuickBooks file, but are not yet deposited in the bank.

9. Use QuickBooks Memorized Transactions – QuickBooks memorized transactions are another great tool. You can use memorized transactions to automatically enter any bill, check payment, invoice, or journal entry that regularly reoccurs. Using memorized transactions can really help you to get a handle on cash flow by posting future transactions before they occur.

10. Record A Journal Entry In QuickBooks – You’ll want to know how to record a journal entry in QuickBooks as the need will arise at some point.

11. Learn QuickBooks Online Banking – QuickBooks online banking allows you to easily download transactions from your financial institutions into QuickBooks.

12. Set Up Different QuickBooks Users – You want to set up different QuickBooks users if you have multiple users to whom you need to give varying levels of access. This is a good way to control which users have access to certain areas of QuickBooks.

13. Familiarize Yourself With The Chart Of Accounts – You should learn how to use the QuickBooks chart of accounts. Knowing how to add and organize new accounts in QuickBooks is important. You should know the differences between the account types and how to choose the correct type.

14. Set Up Invoices For Online Payment – You can set up the option to allow your customers to pay QuickBooks invoices online via ACH bank transfer. A small fee of $0.50 per transaction makes it very affordable.

15. Link email to QuickBooks – You can link Outlook to QuickBooks, which makes emailing invoices and reports both simple and efficient. You can also link Gmail to QuickBooks, as well as Yahoo and certain other email programs.

16. Merge Accounts In QuickBooks – You can merge accounts in QuickBooksthat are redundant or unnecessary. You can also merge vendors, items, employees, and customers.

17. Edit QuickBooks Preferences – Editing the QuickBooks preferences can make things much more efficient. Changing your preferences allows you to tailor QuickBooks more toward your needs.

18. Properly Record Outsourced Payroll – It is important to properly record your outsourced payroll in QuickBooks. If you don’t handle your payroll transactions correctly, you could over-state or under-state your expenses and net income.

19. Use The QuickBooks Find Feature – The QuickBooks find feature is one of my most used functions. It is a great way to quickly find transactions that you know only a little bit of information about.

20. Understand QuickBooks Class Tracking – QuickBooks class tracking is something many people don’t use because they don’t understand what classes are. QuickBooks classes allow you to organize your data into different segments that are meaningful to you and your business. Examples of classes are department, location, and source of income.

21. QuickBooks Job Costing – QuickBooks job costing is important for contractors or anyone else who needs to track income and expenses as they relate to a particular job.

22. Keep A Clean Accounts Receivable – You need to learn how to manage your QuickBooks accounts receivable. Keeping a clean AR will give your business a healthy cash flow position.

23. Inventory Tracking In QuickBooks – Tracking inventory in QuickBooks can be difficult. Make sure you understand how to track inventory or look into a different inventory tracking system.

24. Customizing QuickBooks Reports – You should learn how to customize QuickBooks reports to make them more meaningful to you. After you have a good customized report, have QuickBooks memorize it, and then save it on a list of memorized reports for yourself so you can use it regularly.

25. Learn The Basics Of QuickBooks – If nothing else, at least learn the basics of QuickBooks..

These are just some basic QuickBooks and bookkeeping procedures that I feel you should know. For specific questions on anything listed or not listed here, please feel free to reach out! We would love to answer your questions.

Cost-Benefit of Hiring a Bookkeeper

Jared Hecht
CEO and co-founder of Fundera, the most trusted marketplace for connecting small business owners with the best funding provider.

Ever caught a mistake while balancing your checkbook or reconciling your bank account statements? If so, you know how easy it is to make an error. “Is that a 1 or a 7? Is that decimal point in the right place?” You also know what a mess they can make of your finances.

Now take that easy-to-make error, which in your personal finances might be, at worst, a matter of $50 or $100. Multiply it by the hundreds of transactions and the thousands of dollars coming in and out of your small business, and that innocent, no-big-deal mistake starts to look pretty scary. Yes, hiring a bookkeeper costs money—but could doing so save you from a major financial mistake?

Here’s a cost-benefit breakdown of hiring a bookkeeper to help you decide if it’s the best financial move for your business.

Bookkeeping Costs

To start, let’s take a look at the costs associated with hiring a bookkeeper. What all does hiring a bookkeeper entail? Some of the costs you can expect are:

1. Time Needed to Interview and Hire Your Bookkeeper
Like any other staff member or contractor, you need your bookkeeper to be reputable, experienced, and a good match for your business. Finding that perfect fit will require time, research, and potentially multiple candidate interviews.

2. Time to Set Up Your Bookkeeping System and Meet with Your Bookkeeper
Your new bookkeeper likely will have a recordkeeping system and software he or she prefers, which will take a bit of time to implement. Getting accustomed to your company and your particular circumstances will also take some time. Once you and your bookkeeper are on the same page, so to speak, you’ll need to meet on a somewhat regular basis to stay that way and keep everything running smoothly.

3. Bookkeeper’s Fees
Fees will vary depending on whether your bookkeeper bills hourly or at a flat rate, how many hours you’ll need from them monthly, and the extent of the tasks they are performing.

4. Software
If you aren’t already working with a specific accounting software program, your bookkeeper will probably recommend an accounting program such as QuickBooks to keep (or maybe you’ve recently purchased bookkeeping software and specifically brought in a bookkeeper to help you set it up). In either case, keeping accurate books will require investment in an accounting program and someone who experience with that program.

Benefits of Hiring a Bookkeeper

Hiring a bookkeeper has significant benefits, including:

1. Minimizing and Catching Potentially Costly Errors
This is the biggie. From data entry mistakes to lost transactions to personal/ business expenses mix-ups, there are myriad ways books can go wrong. A bookkeeper’s expertise means, first of all, that he or she will make fewer errors in recordkeeping, and secondly, that he or she will spot problems.

2. Eliminating Late Fees by Paying Bills Promptly
It’s easy to get behind on paying bills and invoicing (more on that in a minute) when you’re juggling bookkeeping with running your business. A bookkeeper will help you get your bills in order—and make sure that they get paid on time. In “When to Hire a Bookkeeper or Accountant,” The Fresh Diet CEO Zalmi Duchman tells Entrepreneur’s Eileen P. Gunn that he estimates his company is “saving 500 to1,000 in late fees per quarter.” That’s a lot of dough.

3. Decreasing Your Accounts Receivable Turnover by Invoicing Effectively
Getting your books in pristine shape means you’ll be able to invoice more effectively and quickly. Whether your bookkeeper does invoicing manually or sets up an automated system for you, you’ll be cutting down on the length of your invoicing cycle—and getting paid faster.

4. Eliminating Your Own Time Spent Bookkeeping
Hiring someone to do your books (whether that’s full-time, part-time, or on a handful of occasions yearly) means you don’t have to. That means you get back the time you were spending on recordkeeping. Depending on how complex your finances and the number of transactions you typically do, this could amount to quite a bit of your own time invested back into your business.

5. Understanding Your Numbers
You should have a good sense of your P&L and other numbers (especially if you’re doing your own books!). But a bookkeeper can help to clarify anything that is confusing about your figures and identify the cause of irregularities.

Your cost-benefit analysis for hiring a bookkeeper will depend on the bookkeeper and on your situation. Even the most thorough analysis may have to include estimated or averaged costs, rather than absolutely accurate figures, so leave some wiggle room when budgeting for bookkeeping.

In the end, you may decide that your books are simple enough that the DIY approach will do for the time being. But you may feel that the peace of mind that comes with knowing you will avoid major mishaps in your books is worth the costs. Only you, the business owner, can make the judgment call as to whether bringing on a bookkeeper is the right move for your company at this time.

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