Many businesses you QuickBooks to generate their accounting reports and better keep track of their finances. Some companies may rely on QuickBooks alone to do their bookkeeping, but this software is best utilized with a professional accountant to provide important insights and perform error-free bookkeeping.
QuickBooks can be complicated for people who are unfamiliar with bookkeeping reports, and it’s easy to make simple mistakes. Here are a few tips on how to use this software to its full potential.
1. Reconcile Accounts Correctly
To reconcile accounts and make sure all transactions match your bank records, you need to make sure select “reconcile” and click “reconcile now” on every account in QuickBooks. You can then enter your bank statement information and make sure you reconciled the accounts correctly by making sure the “Checks and Payments” column equals zero.
2. Generate Profit and Loss Statements
You can access profit and loss statements in your QuickBooks by going to your “Chart of Accounts” and reviewing your accounts. Here is where you can analyze your business’s financial health and look out for any big mistakes in your bookkeeping to ensure you have the full, accurate picture of your finances.
3. Update the Items List
Your items list can help you keep track of your products for sale and inventory. However, you have to keep this list updated to ensure it’s useful to you. Make sure to add and remove items as things go out of stock, you add new products, or you stop selling certain products.
4. Deduct Payroll Taxes Correctly
A common mistake when deducting payroll taxes is clicking the “write checks” function, which deducts money from “payroll liabilities.” Instead, you want to calculate tax deductions with the “pay liability” function.
5. Avoid Account Clutter
You want to make sure the way your QuickBooks is setup is useful for you and easy to navigate. Remove clutter and simplify your accounts by grouping together items when possible.