Important Considerations for QuickBooks Implementation

There are some standard considerations when implementing QuickBooks. This list is not intended to be all inclusive. Primarily it is to encourage management to understand the complexity of QuickBooks implementation or the setup of any other accounting software. Remember the old Information Technology adage, “Garbage in, Garbage out.” When it comes to implementing accounting software this holds very true.

Some of these considerations include:

  1. Gather basic information on the company such as name, address, phone number, month tax year ends, key company contacts, CPA firm the company uses if they do, whether the business is a C-Corp, S-Corp, LLC, Partnership, or Proprietorship.
  2. Does the company report on a cash or accrual accounting basis?
  3. How many employees do you have and will you use QuickBooks to prepare payroll? Note: Payroll is an add-on feature at additional cost.
  4. How many people will use the system and how many at the same time?
  5. Will you need remote access? Note: this is also something to consider when selecting the QuickBooks Product and Edition to use.
  6. Does the company carry and track inventory?
  7. How many customers and vendors does the company have?
  8. Are customers invoiced and then pay later or do they pay at the time of service or merchandise sale or are both methods used? Along with that, does the company accept prepayments or deposits from customers?
  9. What are invoice terms for customers?
  10. Are contractors used who require a Form 1099?
  11. Is there somebody in the company that already knows some QuickBooks or that has the skill set to be trained to use and manage the accounting system?

Some More Considerations

QuickBooks implementation requires careful planning to avoid pitfalls and to have a setup that produces accurate and meaningful information. There are a number of standard questions to answer once you are ready to start the implementation process. Note, by implementation process I include the information gathering above and in this section. You don’t want to just sit down and install the software without some planning. Here are just a few examples of some questions to consider:

  1. Is this an existing company or a new one?
  2. How much historical information do you want recorded?
  3. If you are starting during the year, is there someone who can enter historical information?
  4. Is there a chart of accounts and if so does it need some modifications to make it more useful? (See 4 Reasons to Use QuickBooks Account Numbers for more on how critical this can be)
  5. Will customer jobs be tracked?
  6. Does the company have sufficient historical data or will this require additional work?
  7. Are there accurate inventory records that agree to the existing general ledger?
  8. Do fixed asset need to be tracked in QuickBooks?
  9. Does the company have receivables from customers and/or employees and do the details agree to the general ledger?
  10. The issues are too numerous to mention here, but if you will be using QuickBooks to prepare payroll there are extensive issues to address.
  11. Are there good lists of customers, vendors, and employees?
  12. Will the company require custom forms?
  13. Will the company write checks to vendors and/or make electronic payments?
  14. Does the company have sufficient computing resources to run QuickBooks?
  15. Is there a backup procedure in place or does one need to be established? Note that every company needs a backup of electronic records, these should be regular, and an offsite copy should be maintained that is recent enough that should there be a system crash that very little information needs to be reconstructed.

And There Is More

The 11 items in the first section and the 15 in the second section are really just the tip of the iceberg. There are many more standard issues to address and questions to be answered. Even when a standard list is used to address implementation issues there will always be additional items that come up during the process. See QuickBooks Non-Inventory Items for an example of a unique situation that the standard list of considerations does not consider.

So here is the bottom line and the real point of the above. Each company and situation is different. While it may be that someone within the company will be able to manage QuickBooks implementation, there is a very high probability that is not the case. If so, save yourself a lot of heartache and ask for help from someone knowledgeable in QuickBooks. Set it up correctly and use it correctly and you will get good, meaningful information. Do it incorrectly and you can create an accounting and management nightmare. Don’t let that happen to your company.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.


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