What your Small Business Could be Missing
By now you have probably seen a commercial for it, or heard somebody talk about it, or even have a friend that uses it. You have heard stories about how it has improved their business, made everyday tasks easier, and even saved them money. What is this miracle product, you wonder?— QuickBooks ®.
QuickBooks, by Intuit, is a powerful tool that can organize your finances, track sales, and expenses, and make tax time easier. You can use it to write checks, manage payroll, and even process credit cards. Then, with a few clicks of the mouse, you can have a report detailing all your profits, expenses, and cash and even compare it with previous periods.
For those who know how to use this remarkable software, the benefits of QuickBooks are
undeniable. Even though QuickBooks offers numerous benefits, the lack of knowledge when using the software can cause negative effects because, as with all software there is potential for human error.
For example, a person with limited accounting knowledge, using QuickBooks, may unknowingly misclassify a transaction, which could lead to misstated financial statements. Incorrectly inputting information can lead to overstated assets or revenues or understated liabilities or expenses. Mistakes like this may seem inconsequential, yet they can have detrimental effects on businesses. Just because QuickBooks pulls up a report does not mean the report is correct. If the supporting information was not properly entered, then the report is not accurate.
What Can Go Wrong?
- Incorrect Item setup— Items are directed to the wrong account.
- Transaction entered to the wrong period—wrong month or year.
- Misclassified transaction.
With any software, especially financial software, it is important to be properly trained. Whether it involves tutorials, classes, or forums, it is important that any person using the software have an appropriate understanding. If it is not possible to take the time to train yourself or your staff, outsides services may be able to provide the assistance you need. Outsourced services can manage the system for you, full-time or part-time, and offer consultation services for assistance.
Tips to Ensure Accurate Financial Reports
- Have an expert (CPA or QuickBooks Advisor) review your item setup. If your financials look wrong, they can often quickly identify and correct the setup.
- Review all Balance Sheet registers. Transactions incorrectly coded to a future year will stand out. They are delineated after a blue line.
- Review reports that are customized by month. This will enable you to see inconsistencies that may be the result of data entry error.
Taking managing your finances one step further, if you have QuickBooks Online, there
is also a mobile application available for the iPhone that includes features that allow you to send invoices, track payments, and many other features. The mobile application is free with the purchase of QuickBooks Online; for more information see the link below.