Tweet

The One QuickBooks Tip That Will Save Your Business Thousands

Written by: Scott Gregory

Article Overview: Spare your business the time, aggravation and expenses that have been incurred by others when it comes to dealing with their accounting.

The One QuickBooks Tip That Will Save Your Business Thousands

As a business owner, you know how you've said that you might have taken different actions at various times if "you knew what you didn't know"? (or said another way - "I didn't know what I didn't know, so I didn't know what to ask!") This tip is designed to share a critical idea with you to help you "know what you should know", especially when it comes to managing the accounting and finances of your business.

Here's the tip...

Don't let anyone touch your QuickBooks (or any other accounting software for that matter) unless they have demonstrated they know what they are doing with it. Not now. Not ever.

That includes you.

Some tough advice for sure, but advice that has been proven time and again to pay big dividends for small businesses.

It's a Crock

You see, this concept that "if you can write a check, you can do your own bookkeeping" (a concept made popular in an ad campaign a while back) is quite frankly, a crock of crap.

There is one key word that was left out of that campaign, but a very important one for sure...

"Correctly"

The question should really be - "If you can write a check, can you do your own bookkeeping CORRECTLY?"

The answer in far too many cases is, sadly, no.The required bookkeeping knowledge and experience simply isn't there (no matter how many classes are taken or DVDs reviewed) and "correct" becomes "incorrect" or "disaster" pretty quickly.

How Quickly The Excitement Fades

For the new business that is excited about "doing their own accounting", they run out and purchase the software, load the CD, and then often say "ok, what do I do now?" Especially when they are confronted with terms like "chart of accounts", "sales tax", "items", and "balance sheet".

The eyes soon begin to glaze over and the excitement quickly fades. Errant decisions are then made just to "get through with the stupid setup" so invoices can be created and checks written.

Unfortunately, the setup of the accounting software is one of the most critical junctures in the process. Loading the CD into the computer is easy. Getting it set up right beyond that isn't easy, no matter if the software says it is easy or not.

"We Had a Bookkeeper That Really Didn't Know QuickBooks"

For the existing business doing their own accounting, this is a phrase that I hear with startling regularity. The end result? Their books are either a moderate or full-blown disaster.

Common problem areas and "Tums Moments" that unskilled bookkeepers can cause:

* Bank and credit card accounts not reconciled for months, if ever.

* The chart of accounts showing customers and vendors in it, and is set up wrong.

* The profit and loss report spewing out wrong numbers (True story - one business I worked with was showing 50% less sales in the income section of their profit and loss than they should have been because of a critical setup error).

And this list of common problems is just scratching the surface...

Would you let a mechanic that wasn't qualified perform service work on your car? Probably not.

Why would you let someone that wasn't qualified to work on your accounting software run the risk of turning your critical financial reporting system upside down? Without good financial data, it is extremely hard to make good business decisions.

You're Skeptical About the Magnitude of This Problem

Don't just take my word for it - connect with any of the 50,000+ QuickBooks ProAdvisors that have been working with QuickBooks for a couple of years. They will be able to quickly share with you similar tales of woe that they have seen at their clients. I guarantee it.

Think of it another way - why would there be 50,000 QuickBooks ProAdvisors out there if there weren't a lot of mistakes going on?



So How Do I Save Thousands With This Tip?

Here's a few ways for starters:

* Your business will avoid the interest and penalties that occur from the mishandling of payroll taxes because you outsourced the payroll and didn't let your bookkeeper mess it up. Unfortunately, this issue is like a ticking bomb at many small businesses. Even worse, the extent of the problem isn't known until a year or three down the road because of the reporting delays inherent with many tax agencies. Just because you have a bookkeeper on staff doesn't mean he or she should be doing the payroll!

* Your business will avoid extra fees that are paid each year to your tax accountant to untangle the mess they are given at year-end. These costs can add up rapidly if your books are in poor shape. I don't know about you, but I'd rather have my tax accountant figuring out strategies to lower my taxes than figuring out if the profit and loss statement is accurate.

* Most importantly - your business will be able to make critical decisions based on ACCURATE financial data that reflect your true income, costs and expenses. The benefit of this is priceless.

YOUR ACTION PLAN

There is no question that having someone unqualified keeping your books and working in your accounting software is truly a case of pay now or pay (a lot!) more later. Unfortunately, sometimes this lesson isn't learned until it is too late and the checkbook has been depleted.

If you have not set up your books or software yet, you're in luck - you can enlist the help of a professional to get you set up the right way and work with you to stay on track.

If you've been keeping your books for a while, it would make sense to stop and get a preventive maintenance checkup on them. Having a professional set of eyes doing a review of your setup should pay for itself in pretty short order. The insight you gain from that review will allow you to fix existing problems within your accounting and also learn ways to better manage your business finances.

Don't be fooled. Keeping your books is harder and more complicated than it looks. Resist the temptation to "hire cheap" when it comes to the handling of your business finances. Don't think of this cost as a budget-buster - rather, think of it as a budget saver! You won't be disappointed.

Related Articles
  Tip on Better QuickBooks Performance
  Can I Move from QuickBooks Pro to Premier or into QuickBooks Enterprise?
  Understanding the Differences Between QuickBooks Upgrades and QuickBooks Updates
  The
  QuickBooks 2010: Will I Lose My Data if I Upgrade?

Article Tags: fixing bookkeeping problems, free quickbooks tips, hiring a bookkeeper with quickbooks experience, outsourced bookkeeping, qualified bookkeeper



Related Forum Posts
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Managing the Paperwork - Greetings All, As we all know, when an Entrepreneur starts his/her business, there is a ton of paperwork to deal with. Who wants that? All we want to do is do our work and make money while solving people's problems with our brilliance! The purpose of this thread is to find out what everyone has done to manage their paperwork/bills. I, for one, am horrible at managing such things. I still have quite a number of receipts that have to be inputted into QuickBooks Pro from last year! I'm a techie and can fix pretty much any PC issues or develop some awesome online marketing ideas for businesses....but please, dont' ask me to figure out how QBPro calculates taxes and why the GST has to be separated in the setup and inputting in the Enter Bills area. To me, this is confusing (and you too after re-reading that paragraph....) So, in the past I tried a high-school Co-Op student. This was a brilliant way to get someone who knows QuickBooks and did not cost me any money. The downside, rules stated that I could not leave him alone. So if I went out on a call, so did he. He brought paperwork to do stuff while we were out so it wasn't too bad. The other downside, he didn't truly want to be an accountant as he was late at _least_ once a week as well as absent at least one day a week (keeping in mind he was only with me 4 days a week). A pure example of someone being forced to follow a parent's footsteps. So, that little experiment went well. I did get some great work from him when he was there. I still used a regular accountant to do my taxes and they talked back and forth easily to make sure my stuff was inline. I would consider doing this again. Currently, I am looking at hiring someone for a couple of hours a week. My schedule is not at all static. I could be in Algonquin Park one day and Sarnia the next. So, having someone work once a week is a much better solution for my scenario. Has anyone done anything different? If so, what has and has not worked for you so far?
QuickBooks vs. Microsoft Money vs....? - I have always used Microsoft Money to run my business - accounting, invoicing, etc. It came with my computer when I got it and integrated well with my online banking system so everything is a breeze. It only takes 30-60 minutes every quarter to do the bookkeeping (keep in mind that I have a very simple business - no inventory, very little invoicing, I do all my payments by credit card, etc). Is QuickBooks or Money the best accounting tool for small business owners? Or is there something even better?
Re: Are you satisfied with your ISP's services? - The same in my case my ISP holds my phone number. What i don't like is that if i have a technical problem the process take to much time and they will never hurry up to solve the problem. Save God this it not happening to often. Another think that bugs me is the advertising .... to many offers and advertisements that are annoying people.
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Smart & Simple Internet Techniques

Live To Work Or Work To Live?

Download a template or see a lawyer?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.