Two Common QuickBooks Mistakes

QuickBooks is likely the first accounting software a small businesses considers when it’s time for more than paper and spreadsheets. But here is a warning.

Everybody is an Accountant

In the attempt to not spend too much, many business owners decide they will just go out and buy a copy of QuickBooks and then do their own installation, setup, and use.

Mistake Number One

There are multiple versions of the software, such as Pro, Contractor, Manufacturing and Wholesale, etc. Unless the appropriate version is used a company may soon realize that the results are not what they expected. Along with this, the installation and setup, no matter what version is used, must be done correctly. For example, pick the wrong starting date and reports won’t be correct. Record beginning balances without the appropriate level of detail and the company may have difficulty tracking accounts receivable and accounts payable. In addition, nearly every company will require the use of at least some items. It is critical that the appropriate type of item is chosen and setup correctly to accomplish the intended purpose. Choose cash basis when you are an accrual basis business or vice versa, your reports will not be correct.

Mistake Number Two

Okay, so maybe you did have someone help you select the appropriate version, install it, and get all the setup done correctly. Don’t stop there. When you start using QuickBooks there are very specific ways to do things. Do things the wrong way and you may find accounts getting charged or credited twice. Or, you may discover that your accounts receivable, inventory, and accounts payable balances in the general ledger do not agree to the Accounts Receivable Aging Report, the Inventory Valuation Report, and the Accounts Payable Aging. Invest some time and a little of your financial resources being trained on how to use QuickBooks. It doesn’t take that long to be taught the basics.

Do It Right the First Time

Think about the things above. If you do not have the appropriate accounting background or knowledge of QuickBooks, do you really want to take a chance and end up with a real mess?

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As always, your comments are welcomed.

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