The Biz of Pacelinebiz

Turning things on end to achieve results!

Mistakes Small Business Owners Make When Using QuickBooks

leave a comment »

Oops!

Oops!

Note: After this week, I will continue with tradition and have blogs with a Christmas theme for the next four weeks and will resume the normal schedule with a business topic on Monday December 29th.

For the last business topic of 2014 until December 29th, I will discuss common mistakes when people do their own bookkeeping using QuickBooks, the most popular small business software by far.

  1. Make a new account for every expense they pay. Ok, not every single one but the tendency is to create a new account for something that is a one-off expense and I would recommend finding an account that it best fits or take advantage of the account “ask my accountant”. That is why it exists – as a suspense account. When in doubt put it there and move on. It is easier to take care of everything you are unsure of at one time from one account rather than finding a new company truck purchase in office supplies or other various absurdities. It is useful to keep new account creation to a minimum or soon your income statement and chart of accounts is 3 pages long.
  2. Not matching dates of cash transactions (additions and subtractions) from your bank account to what you have in QuickBooks. You can use any date you want, but in the end it will be corrected to agree to what happened in the bank account to reconcile to the bank statement.  If you are writing a check in October it needs to have an October date.       Ideally, it should be the date that you create it but I will settle for any date within the month.
  3. Leaving check numbers blank when writing a check.  For example, if check number 1975 clears the bank and there is no check number 1975 in the QuickBooks check register that will slow down reconciling the bank account. Hopefully, the check amount is a unique one and I will be able to assume that the blank check number in the register for the same amount of check 1975 on the bank statement can be changed from blank to 1975 to reconcile the bank account.

These are just a few mistakes that I see and of the three I mentioned the first and third ones are an annoyance I can live with if I must. The second mistake is very aggravating and takes a lot of time to identify and correct.  Respecting the sanctity of the accounting process means respecting dates of transactions.

Have a great week following these three easy rules.

Advertisements

Written by pacelinebiz

November 24, 2014 at 8:01 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: