13 QuickBooks Mistakes

You’re Making Every Day

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1 Your Chart of Accounts is a MessMake sure to group similar accounts together.

Create Parent-Child Accounts When Necessary

Expert Tip: Once your chart of accounts is set up, make sure to enter data in the lowest level account. For example: if you have an account for Marketing with 3 child accounts (web, print, and trade shows), make sure to enter your expense into the proper child account--never the parent account.

2 Your “Items” List is JumbledThings you sell = “items”

Deactivate any items you no longer sell.

Label each item as either “inventory,” “non-inventory,” etc.

Make sure the “quantity on hand” amount is correct.

Double-check that the costs for each item are defined and updated.

Tag each item with the appropriate revenue & cost accounts.

How to Organize Your Items List

3 You r̓e Avoiding the Purchase Order System

Use It!Create a P.O. every time you buy product from a vendor.

You know you’re using the PO system right when:

You receive your products against a PO.Your PO report doesn’t have entries over 1 year old.

4 You r̓e Not Reconciling Your Bank AccountNo, it’s not about entering every transaction into QuickBooks.

Open the reconciliation module and:

Go through each transaction

Make sure each transaction hit the right account

Verify that each transaction cleared the bank

Were any transactions overlooked or double-booked?

5 You r̓e Not Reconciling Your Credit Cards

For the most accurate financial statements:

Use the reconciliation module for credit cards, loans and other balance sheet accounts.

Reconcile credit cards and loans once a month.

6Signs that you’re doing it wrong:

Open the accounts receivable aging report...If you see customer balances with negatives

or balances on the report that shouldn’t be there....You’re doing it wrong.

Every time you get paid by a customer, you shouldbe able to receive that payment against an

open invoice.

You r̓e Misapplying Deposits to Invoices

7 Incorrectly Applying Payments to Bills

You know you’ve done something wrong when:

When you see vendors you know you’ve paidin the accounts payable aging report.

8You’re using it wrong if:

you receive payments from customers, but yourcash account isn’t increasing on your financial reports.

Expert Tip:When you receive a customer payment, open a deposit module,

batch checks together you’re taking to the bank,and record them as one single deposit in the software.

You r̓e Not Using the Undeposited FundsAccount Correctly

9 You Have Incorrect Report SettingsCommon Problem:

Are your reports set to cash or accrual setting?

Cash Reports: show you the cash in/out flowof transactions within your company.

Accrual Reports: show you the overall performanceof your company.

10 Your Preferences Are Incorrectly Set UpWhat you can do with preference settings:

Set up email templates

Determine finance charges for customer late payments

Define reporting options

Assign default bank accounts for paying bills, receving checks, etc.

11 Don t̓ Forget to Lock Closed Months

Warning:Make sure to lock months/periods oncethey are closed to prevent others frommessing around with the numbers.

12 You r̓e Not Creating User Roles & Passwords

Take the time to:Create different user roles,

assign permissions to each role,create new passwords for new users.

13 You r̓e Deleting TransactionsThe Domino Effect:

Transactions in QuickBooks are linkedto other transactions.

If you delete a transaction, you aresetting off a chain of events that you might

not be aware of.Check with your accountant before

deleting transactions.

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