As a non-accountant, using accounting software can be frustrating. That's because you know there's something you’re doing wrong. Yet you can't pinpoint what it is or even know how you committed them. You just know something's not adding up.
Entrepreneurs are guilty of not spending enough time with their accounting software. They suck it in, boot up the computer, and try their best to put the numbers in. That's where the mistake is often rooted.
Let Unloop unravel these mistakes and how a single decision can help take them all off your plate. But first, let's give brief information about Quickbooks.
Overview of Quickbooks
This section is intended for a small business owner with different accounting software who would like to transition. But, more importantly, it's for those business owners who are still doing their bookkeeping manually.
Quickbooks Desktop
On-site small business accounting still exists. The ones who are commonly using Quickbooks Desktop are the traditional brick-and-mortar enterprises. It's like Microsoft Office but for accounting, and it has to be installed on your computer.
Here's a brief description of each plan option.
Quickbooks Pro Plus - Max of 3 users. $200 is charged per added user. You'll get tax tracking, income and expense tracking, and bills and inventory management.
Quickbooks Premier Plus - Up to 5 users. It can do the essentials such as tax recording, inventory management, bills payment, invoice, payroll, and report generation.
Quickbooks Desktop Enterprise - Up to 40 users. The complete package. It has what Premier Plus offers but with automation, staff training, and a dedicated accounting team.
Quickbooks Online
Both on-site and ecommerce small business accounting are perfect for Quickbooks Online (QBO). The main selling point for this Quickbooks product is that it is cloud-based, and you can access it on any device.
Here's a brief description of its plans.
Quickbooks Online Simple Start - Ideal for the sole proprietor. It can do basic transaction recording, invoicing and receipts, basic reports, and sales taxes.
Quickbooks Online Essentials - Up to 3 users. It has everything the Quickbooks Simple Start offers, but with the addition of bill management and time entering.
Quickbooks Online Plus - Up to 5 users. It has inventory management and profitability projection capabilities.
Quickbooks Online Advanced - Similar to the Desktop Enterprise, but with cloud accounting features, such as premium app inclusions and data restoration.
Common Quickbooks Mistakes Small Business Owners Make
Using a Quickbooks product may expose you to certain problems. Some common things are unorganized entries and books that won't balance. These symptoms manifest due to one or several of these Quickbooks small business software mistakes.
Not Categorizing Transactions
Quickbooks Online has a bank sync feature that downloads your bank account transactions. However, these are not automatically categorized.
One chaotic mistake non-accountants make is adding these synced transactions as entries without categorizing them first. This leads to disorganized journals and ledgers.
Creating Too Many Account Types
Quickbooks can have sub accounts under the main ones. While adding a sub account may be helpful when organizing expenses, it can also confuse.
Some sub accounts can cause redundancy and may end up just cluttering your financial statements. So be sure to know the nature of the income or expenses before creating a separate account.
Deleting Transactions Instead of Reversing Them
Deleting transactions is like removing a piece of a puzzle in a set. Even if the rest is in order, that missing piece may throw the entire thing off.
If you delete a transaction that's supposed to be recorded, you will have to recreate it and fix the transaction amount. Choose instead to adjust or rearrange the transaction amounts.
Double Entry of Transactions
Double entry happens when different people handle the bookkeeping. It can also happen when the one in charge forgets that they have entered the transaction already.
In most cases, Quickbooks has a feature that recognizes duplicate transactions. But to avoid double entry, tuck away any source financial document after it has been recorded.
Treating Sales Tax Payments as Vendor Payments
This is when you take the check payment option route and fill in the details on the entry fields. As a result, it will reflect on a different part of your financial statement and may distort your profit and loss report.
Recording Loan Payments in the Wrong Account
Principal payments that fulfill the loan obligation must be debited as loans payable instead of as a business expense. That's because a loan payment is a liability. Thus, it should reflect on your balance sheet.
On the other hand, interests you pay that don't form part of the original loan amount should be debited under interest expenses. This will land the amount on your income statement.
Not Locking in a Bookkeeping Period
Once you're confident that every transaction in a certain period is balanced and correct, you have to lock it. Not doing so will result in possible tampering. This can happen if the current period has transaction issues. This leads one to think that the only way to solve it is by adjusting certain accounts in previous periods.
That's not supposed to be the practice. If all previous periods are balanced, you'll only need to look at present transactions to fix the error.
Not Checking Transaction Dates
Transactions with inaccurate dates will appear in period reports where they shouldn't be. This can be problematic, especially if you're prepping for tax filing.
Double-check the transaction dates, and lock them on Quickbooks once you're done recording them. If left unchecked, it can mess up the balancing and reporting of your transactions.
Not Checking Client Details on Payments
The online Quickbooks accounting software doesn't recognize the vendors where the payment deposits came from. This can directly affect accounts payable transactions where you have to issue an invoice for payments received.
More than the burden of accounting inaccuracy, misappropriating client details can lead to the wrong issuance of an invoice to the wrong client.
Not Decluttering Uncleared Transactions
If there are certain pending payments or charges without a cleared date, and your transactions are already balanced for the accounting period, you have to declutter them.
Any transaction scheduled for payment during the accounting period that doesn’t get cleared has to be removed. Otherwise, you must reverse it and carry it over to the next period.
Fix Common Quickbooks Mistakes With Unloop Professional Services
Handing over your Quickbooks records to professionals is an excellent way to reduce or even eliminate these common mistakes. This is because they are skilled and know how to spot and fix these errors when they present themselves.
Unloop has a team of accounting and bookkeeping professionals that can offer the following.
Ecommerce-Ready Bookkeeping
If you're a small business owner who has a shop set up online, our team of professional accounting and bookkeeping experts is equipped with skills to help you transition or streamline your accounting.
These people are specialists in accounting and bookkeeping for several ecommerce platforms such as Amazon and Shopify. They know how these marketplaces work and how to record transactions accurately.
Clean Up and Deep Dive Accounting
Unloop bookkeepers are trained to have attention to detail. We want everything in order, so we will dive into your business transactions and accounts and clean it up until it's all in good order.
No need to dread the task of decluttering your transactions and committing accounting mistakes. Our accounting experts will track the errors down and correct them. We will even offer advice on avoiding these errors moving forward for a smooth transaction.
Accurate Monthly Financial Statement Reporting
Our bookkeepers are capable of generating accurate statements. This is the benefit of them being meticulous with your business transactions. We don't just generate your financial statements during tax time; we will generate them monthly with accuracy because we can.
With our consistency, you can be more confident in managing your business's performance. In addition, you'll get a month-by-month comparison of how your business is doing, and all you need to do is ask.
Unlimited Financial Accounts and Monthly Reconciliations
You can put as many credit or debit card accounts associated with your business. Our accounting experts will ensure each synced transaction is properly reconciled with your books.
Consequently, we can assist in categorizing downloaded transactions so that they go to the right place and reflect on the right sections of your financial statements.
Tax Filing Assistance
You won't need to worry about knowing how to pay your taxes in your Quickbooks business tax software properly. Our bookkeeping experts are backed by a network of accountants that you can tap to file taxes for yourself. Just say the word.
On the other hand, if you choose to use your accountant to file the taxes, that can also be done. The bookkeepers will hand over your statements and assist your accountant with anything they need.
Responsive Communication
You can coordinate with Unloop whenever you need to. Once you get our team to work on your accounting, you'll be given access to Slack where you can chat with the accounting and bookkeeping professionals.
Put Your Quickbooks Business Software on Autopilot
An ecommerce business owner who uses QuickBooks software will benefit greatly from Unloop. By hiring us to take over the system, you’ll avoid all of the common mistakes small business owners commit on the platform.
Unloop is adept with the way this accounting software works. Once you hand over your accounting, you can just let us work while you focus on your business. Truly, it's like putting your Quickbooks software for business on autopilot.
Talk to us if you're tired of making these common Quickbooks mistakes. Let us set it right and give you peace of mind. Dial 877-421-7270 for a quick call, or check out our ecommerce services now.