Quickbooks for Small Businesses: An Owners' Recipe to Success

Michael Pignatelli
May 03, 2022

Disclaimer: Please note that this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Running an online business is hard. A lot of that has to do with the fact that many ecommerce business owners are trying to do everything themselves—things like bookkeeping, marketing, customer service, and more. But do you know that over 60% of online small businesses fail in the first few years? 

Ecommerce startups and small business owners have probably heard about accounting tools that would greatly improve how they handle their finances. One of the better and more popular accounting software is QuickBooks by Intuit. 

Online businesses use this financial software mainly because it's easy to use and well-supported. QuickBooks software has plenty of features that will benefit you in every part of your business, and this article will show you how you can effectively drive your ecommerce business to the top.

Top Cases of QuickBooks for Small Businesses 

QuickBooks' advanced features make your investment in the software worth every single penny. But here are the most popular use cases when using QuickBooks for small businesses.

Tracking Your Bills and Expenses 

QuickBooks has a way of monitoring your cash flows automatically by adding your transactions and connecting your credit cards and bank accounts. 

Do you have plenty of paper overflowing your work desk? You don't have to type in every receipt of your business expenses. Instead, it has built-in scanning features to sort and organize cash outflows. 

If you have dozens of upcoming payments, QuickBooks not only keeps a record but also reminds you of your unpaid bills. 

Printing Your Financial Statements 

In accounting, there are five main financial statements needed to be presented to oversee the performance of your business. Therefore, it is best if you make these statements in this order:

  • Income Statement (also known as Profit and Loss Report): Shows how much you gain or lose in a certain period, such as within the month, the quarter, or year.
  • Balance Sheet: Gives you an overview of your business's financial health within a month, a quarter, or a year. This statement uses the most vital formula in accounting, Assets = Liabilities + Equity. 

Tip: Before preparing a balance sheet, new business owners should wait for a year or a full-accounting cycle since there's still not much to report about in the first few months. To have an in-depth comparison of your historical, current, and projected date, you need to have at least a year’s worth of data. 

  • Statement of Owner's Equity: Shows the changes made in equity or capital at the beginning of the business. A typical SOE is a one-page statement, so it's the shortest among all five financial statements. 

As an owner, have you made additional contributions of, let's say $10,000 to kick off your business? Or perhaps, you withdrew $5,000 because of an emergency. 

Hence, the Statement of Changes in Owner's Equity is another term for this statement because owner transactions from the capital are tracked. 

  • Cash Flow Statement: Summarizes the flow of cash circulating in your small business. Is there more money going in or coming out? For instance, a cash inflow (increase in cash) is sales, while a cash outflow (decrease in cash) is employee salaries. Since this statement monitors cash flow, it provides cash-based information and not accrual-based information. 
  • Note to Financial Statements: Has more words than numbers as it discloses the important information about certain transactions and accounting policies your business follows. Take this as a commentary statement or footnote that will help you prepare the other financial statements. 

You're thinking that you're only starting a business. But, big or small, a business owner must know its financial health to make sound and informed decisions. 

As of this article, QuickBooks can create three out of the five financial statements: the income statement, balance sheet, and statement of cash flows. 

To prepare the first two mentioned statements, head to QuickBooks, go to Reports, then Business Overview. Then select Profit and Loss Balance Sheets. Clicking on the Recommended tab will let you view the statement faster. But if you want details about your statements, click on the All Reports tab. Lastly, click Run to open the chosen financial statement. 

Preparing your cash flow statement will depend on your accounting method. Do you record at the time of the sale (accrual accounting) or when your customer pays (cash basis accounting)? You can customize your cash flow statements through the Report Settings in the Reports tab. 

Asides from these important statements, QuickBooks can also summarize the following statements:

  • General Ledger Report 
  • Banking Reports 
  • Customer, Job, and Sales Reports 
  • Inventory Report
  • Vendor Report 
  • List Report
  • Payroll and Employee Report
  • Budgeting and Forecasting Report 
  • Accounting and Tax Report 

Simplifying Your Tax Calculations 

Calculating your tax returns is a huge challenge for many business owners, both newbies, and veterans alike. QuickBooks can compile your tax return based on your net income, the difference between your total income and total expenses. Then, it will automatically provide the data you need for doing your tax returns. 

QuickBooks can provide more accurate sales taxes if you provide the necessary details, such as your country's type of taxes, product or service's tax category, and shipping location. 

Accepting Online Payments From Your Customers 

One of QuickBooks' online features is that customers can pay you online. It has integrated third-party payment apps such as Paypal, but it also has a built-in tool called QuickBooks Payments, which you can use to send an electronic invoice to your customers. 

A businesswoman using QuickBooks on her mobile

Best Versions of QuickBooks for Small Businesses in Ecommerce

Since its initial launch, QuickBooks has scaled up and dispersed into different versions to fit every type of business out there, especially ecommerce businesses. Here are the best ones. 

QuickBooks Online 

QuickBooks Online (QBO) operates on the Cloud, which works for nomadic entrepreneurs or people who don't want extra hardware setup or software installation costs. Instead, you can access your books by using the QuickBooks mobile app downloadable in the app store. 

QBO has four subscription plans readily available: 

  • Simple Start
  • Essentials
  • Plus
  • Advanced

All of them offer services for online retailers and business owners to manage their books hassle-free. You can integrate your website with QuickBooks since most ecommerce platforms such as Shopify allow integration and access to QBO.

The biggest advantage you can get from QBO is checking your business no matter where you go or where you are. In addition, you don't have to worry about its security issues as it provides a unique ID to access your business. 

QuickBooks Pro 

If you spend more time on an office desk, you will enjoy QuickBook Pro's features. This QuickBooks version is one of the three accounting software for desktops or PCs. 

Despite its limited accessibility and backup, it has in-depth payroll management and more features than QuickBooks Online. Moreover, if you aren't confident about QBO's safety features, QuickBooks Pro is potentially more secure for your ecommerce business. 

QuickBooks Premier 

QuickBooks Premier is the second QuickBooks desktop that offers more functions than QuickBooks Pro. These are just some of the functions it offers:

  • Forecasting for your online budgeting and sales
  • Features for specific industries such as online professional services, retail, etc. 
  • Reversing journal entry options

QuickBooks Premier is a great tool for growing online businesses because it has tailored-fit reports for the type of industry your online business is in. You can predict your profitability by tracking your largest sources of income.

QuickBooks for Self-Employed 

Third-party service providers such as freelancers or real estate agents can now use QuickBooks. This QuickBooks version is also cloud-based and available on your mobile phone.

What sets it apart from QBO or QuickBooks Desktop is it offers to track your business expenses and personal finance and create tax automation. However, you can't upgrade it to any other versions. So if you have goals of expanding your remote workforce or ecommerce business, this won't work for you in the long run. 

QuickBooks for Mac 

QuickBooks Pro, Premier, and Enterprise are developed for Windows users. On the other hand, QuickBooks Mac is designed for online business owners who use Apple computers. 

It has similar features to the QBO and Desktop versions but is ideally suited for QuickBooks small business users on Macs. 

A business owner learning and discussing the financials of his business with an accountant using QuickBooks

The Secret Recipe: Quickbooks + an Unloop Accountant 

QuickBooks has made accounting much simpler to deal with amidst the grind of running a small business. This accounting software may be user-friendly and versatile, but effectively connecting your small business to QuickBooks starts with a proper setup. Thus, one of the biggest drawbacks to investing in QuickBooks is that you'll have to learn how to use this advanced accounting tool. 

So if you have just installed QuickBooks recently and don't know how to maximize it, you might just end up with an expensive piece of junk software.

The success of your business all comes from utilizing your tools optimally. Unloop will help you boom with our accounting experts, such as financial consultants or accountants who are well-aware and skilled in integrating QuickBooks to any size of ecommerce business. 
To enhance your ecommerce, get QuickBooks and call Unloop today!

Sign up for weekly tips

Our newsletter is packed with the latest and greatest in ecommerce finance.
Subscription Form

Stop guessing

Know exactly where your ecommerce business stands financially.
+1 877 421 7270
228 Park Ave S #82849
New York, NY 10003
United States
7676 Woodbine Ave #2
Markham, ON L3R 2N2
228 Park Ave S #82849
New York, NY 10003
United States
7676 Woodbine Ave #2
Markham, ON L3R 2N2
About unloop

Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.