5 Common QuickBooks Mistakes to Avoid

QuickBooks is an undeniably useful tool for small businesses that allows them to maintain accurate books and keep their finances in order. However, this software is deceptively easy to the point where users feel confident in their bookkeeping abilities when they are in fact making significant errors that can have serious consequences.

QuickBooks mistakes can cause you a lot of headaches and, under some circumstances, could cost your company a lot of money.

In this blog we’ve detailed some of the most common QuickBooks mistakes that users should work to avoid.

1) Miscategorizing the outflow of cash

Many QuickBooks users mistakenly categorize outflowing cash as expenses when they should actually be categorizing it as assets. Some examples include prepaid expenses and inventory. These should be considered assets that are expensed over time instead of simply categorizing them as expenses in the first place.

2) Failure to reconcile accounts

You must regularly reconcile your bank accounts with your expenses in order to maintain an accurate business account register. You need to be entering the dates and balances of your bank statements, and reconciling your accounts with all of your payments and checks.

3) Writing a check for a bill without entering it into the system

Some business owners may receive a bill and immediately use QuickBooks’ “Write a Check” feature to pay it without actually entering the bill into the system. This means no accounts payable will be created for the bill, which means you cannot track it in order to plan for future expenses. When you receive a bill, enter it into QuickBooks first, then use the “Pay Bills” feature to pay it (as opposed to the “Write a Check” feature).

4) Not upgrading your QuickBooks for a long period of time

QuickBooks does not necessarily need to be upgraded every year, but neither should you go multiple years without upgrading to newer QuickBooks software. QuickBooks releases a new version every year, and if you fail to upgrade for a long period of time certain features of your old software may become obsolete or have data compatibility conflicts. However, if you are making a large leap from a very old version to a new version, you may also need to upgrade your computer system or upgrade to in-between versions of the software before you can upgrade to the newest version.

5) Not backing up data

Backing up data is “Computers 101.” You should consistently back up all of your sensitive data, and when you run a business, few types of data are more sensitive or important to your company than your finances. Think what kind of chaos would occur within your business if your computer system crashed and you lost all of your QuickBooks data. Backup your data often.

If you have more questions about QuickBooks for your small business, or you are interested in letting an accounting specialist manage your QuickBooks so that you can make the best use of the software, please contact Desnoyers CPA.

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Written by Desnoyers CPA

Desnoyers CPA

Known for her friendly, outgoing nature and her rare talent for financial foresight, Lydia Desnoyers has been serving individuals and small businesses in Florida since 2010. After earning her Master’s Degree in Accounting from Nova Southeastern University and her Bachelor’s Degree in Accounting from Florida State University, she became a Certified Public Accountant and a Certified Fraud Examiner.