Best Ways to Avoid Making a Mess in Quickbooks Online

There was a time when accounting was the most difficult task for every business organization. But with the changes in technology in the 21^st Century, businesses can now perform this daunting task easily with various dynamic options which have changed the traditional accounting process in a big way.

With the availability of efficient software in the market, the accounting process has become relatively easy. It is now reported that approximately 37% of small businesses in the US are using cloud-based applications and this share is expected to grow by more than double to 78% by 2020.

The purpose of the software is to provide an easy way to get things done. Similarly, accounting software, especially cloud-based application has come up as a “Knight in Shining Armour” for accountants and businesses across the world.

One of the most popular cloud-based accounting application is QuickBooks, which has been developed by Intuit, has clearly shown its impact on businesses. QuickBooks has become one of the most used cloud-based accounting application and has made the process of calculations really easy. According to a survey report, 46% of the small businesses are using QuickBooks to manage their book of accounts.

QuickBooks has two versions, one is a Desktop Application and the other is QuickBooks Online. The one that is used most commonly by small businesses is QuickBooks Online, as it is available at an affordable cost and is easy to use.

But that does not mean they can be used by anyone without proper training and practice. Without the proper knowledge, it is difficult to use them and it can lead to lots of problems.

In order to avoid any problems, the new users of QuickBooks Online should keep in mind the following points:

1. Get Training and Practice:

The word training usually creates an impression in our mind that it will be boring and tough. However, training is important to use any software and becomes more so when software involves dealing with accounts.

Secondly, practice how to use QuickBooks Online (QBO) as practice makes you perfect. So any person who is going to manage accounts using QBO should be well trained and should have spent ample time practicing before handling accounts so that no errors are made as QBO is a powerful accounting tool that has a lot of features to learn and understand.

2. Build a Strong Foundation:

If you have a strong foundation, then you can build or rebuild anything on it. Likewise, in QBO, you should build a strong foundation of the chart of accounts and products and service list, as these are at the core of the software. The transactions are recorded and controlled by a chart of accounts and product and service list. You should focus more on customizing your chart of accounts and product and service list precisely.

3. It’s all about the Bank and Credit Card Statement:

Cash in and Cash-out transactions in the QBO brings transparency between your credit card spending and bank transactions. Proper cash flow is the backbone of any business, regardless of its size. Initially, if you want to enter cash in or cash out a transaction in the QBO that accurately matches your bank statement, then you can do it easily without spending hours of time in correcting the entries.

For example: If your bank statements show that you have deposited $5000, then likewise it will be reflected in your QBO. In this way, your bank and credit card statements act in tandem and are coordinated by QBO.

4. Learn How to work with downloaded banking transactions:

Half knowledge is always a dangerous thing and when the accountants starting using accounting software without appropriate training and skills, it leads to a big mess because they lack the knowledge to perform many operations using the software. This becomes a bigger issue when downloading banking and credit card transactions. You should keep 2 simple things in mind while downloading a bank statement:

• Downloaded transactions do not replace bookkeeping:

Many of the small business owners who are new users have the misconception that QBO is only used for downloading bank and credit statements. However, there many more features in it which help you in maintaining your books smoothly.

• Each and Every downloaded transaction should have the correct vendor/company name and the category:

Most of the users make the mistake of accepting transactions in QBO without verifying its categorized name. This can lead to a wastage of time when the re-categorization of the transaction has to be done if the expenses or income is not assigned appropriately.

In a nutshell, Accounting is about keeping an account of income and expenditure and accurate business accounting is important for the well-being of every business. An accountant should be smart enough to manage the tasks appropriately and to avoid any kind of mistake because that can reflect on the company’s reputation.

So it is better to understand the intricacies of the software that is to be used for accounting in order to maintain accounts efficiently.

If you are not a pro at using the accounting software and need help with the same, you can outsource the work to a company that provides experienced staff to get your task done. Contact Cogneesol and make your work easier. Call us now at +1 646-688-2821 or email us at [email protected].