Quickbooks has some really great features. It also has some things that drive me absolutely batty. In the attempt to make it “so easy,” the software can also get you in real trouble. So I’m going to tell you the things I run into that have frequently gotten people in trouble (or least made life more difficult).
I’m going to focus on Quickbooks Online. Why? Because that is what you should be using UNLESS you have inventory, which Online doesn’t handle as well as Enterprise, or you use an add-on package that only functions with desktop.
But I’m telling you, online is where Quickbooks (and all software) is going, so you might as well jump on board. And Quickbooks does make it easy peasy to switch from Desktop to Online. If your file is not corrupted or some other nonsense, you can do it in about 15 minutes.
Now, a review of the most common mistakes in QuickBooks. Part 1!
1. Not Using Account Numbers
This doesn’t cause problems in the day-to-day use of Quickbooks, but if you really want to spend quality time with your Profit & Loss Statement, add accounts numbers. Otherwise, your P&L will be listed in alphabetical order with no headings and you’ll spend more time digging through it than you should. I highly recommend 4 to 5 major headings with all your expenses as subaccounts within. Then it is easy to get a one-page snapshot of your P&L to watch for trends. Then you can dive into the expanded detail when you need to.
You know what else it helps? There are some accounts you may not want to use, but Quickbooks won’t let you get rid of them. I’m looking at you Uncategorized Asset & Expenses. If you find something posted to a non-numbered category, you’ll know it was a mistake.
To use Account Numbers, go to the Gear Icon in the upper right, choose Settings from the left-hand column titled Company Settings. Then choose Advanced from the left-hand menu. See below for the Advanced Setting screen. You want to edit “Chart of accounts.”
My preferred “top level” expense categories are: People, Resources, Marketing, Travel, and Administrative. Feel free to adjust for your business, but I recommend keeping it to less than seven categories.
2. Copying Bills and Invoices
I have started using the copy feature more and more. It can be super handy, particularly if you have a lot of line items on a bill or invoice, as it keeps you from re-entering all that drivel. But, when you copy a bill or invoice, it brings the attached document with it. So, you can get super confused as to why the same document is attached to multiple invoices. What did we learn? Copy, but remember to delete the attachment from the original invoice or bill.
The copy feature is available under the “More” option on the black stripe at the bottom of a transaction.
Just remember, the Copy feature does not discriminate. It copies EVERYTHING from the original, including the attachment.
3. Letting Quickbooks Auto-Fill
Quickbooks would love to fill in everything for you, which can be good — until it’s not. For example, if you let Quickbooks pre-fill your expense or bills, it becomes very hard to determine if you are looking at a previous bill or are entering a new one. And needless to say, that can get you in big trouble.
Maybe it’s just me, but I function much better when I don’t let it pre-fill items because it is easier to keep track that I am entering a new item AND it doesn’t overwrite any fields if I happen to enter things in the wrong order.
Once Quickbooks auto-fills the fields, I have no idea whether this is a new expense or the old one. So, I practice safe accounting and I don’t let it auto-fill for me.
To turn off Auto-Fill (or Pre-fill), go to the Gear Icon in the upper right, choose Settings from the left-hand column titled Company Settings. Then choose Advanced from the left-hand menu. See above for the Advanced Setting screen. You want to edit “Automation.”
There is only so much knowledge you can absorb at one time, so I’ll be back soon to give you the next dose of common Quickbooks mistakes.
Is your Quickbooks Online in a rut? Do you hear it screaming when you are working late at night? Don’t go it alone. Reach out to us.