When it comes to running your small business, there are so many different things you have to be on top of all the time. Finances and accounting are some of the main things. After all, if you don’t bill clients and get paid for your goods and services, then you aren’t really running a business. At least, not a profitable one. And when it comes to choosing exactly how to run your finances, you have quite a few different options. As someone who has been running businesses for most of my adult life, I have found Quickbooks to be the best, and most comprehensive option for small business accounting.
Setting Up Quickbooks
Whether you choose to use Quickbooks desktop or online version is completely up to you. Each version is slightly different with the setup and how they operate. I, personally, have always preferred the desktop version to the online version. My CPA does also because it is much more in-depth with what it can do than the online version. But, if you haven’t tried either yet, and don’t need to run more intricate reports, then the online version is a great choice.
Either way, you will still have to set up the same items after you get the Quickbooks program. If you purchase the desktop version, you will need to install it first, which can take a bit of time. There is only a one-time fee for the desktop version, which is another one of the reasons why I prefer it. If you choose to purchase the online version, then you will need to create your account and connect your billing information. You can choose the plan you want to go with, but all of their plans are billed monthly.
Once you decide on the version you want and get ready, you will need to set up the following information:
- Company name
- Tax ID
- Accrual or Cash Basis (Most small businesses are cash basis)
- Fiscal year beginning date
- Bank account information
- Credit card information
- Employee information
- Customer information for each customer you currently have
- Vendor information for all current vendors
- Customer invoice layout
- Billing item codes (making sure they have the correct tax mapping codes)
- Expense item codes (making sure they have the correct tax mapping codes)
Once you have all of this information in your new Quickbooks system, then you are ready to go!
Expenses & Income
While the set up takes the longest, once you are set up, the accounting part is pretty streamlined. Especially if you have connected your bank accounts and have chosen the ability to send invoices directly through Quickbooks. This is my favorite part of having Quickbooks as my accounting option for small businesses.
Entering new bills from vendors is a quick and simple process once you have set up the vendor. And even if you haven’t fully set a vendor up, you can create a new bill with their name and Quickbooks will ask you if you want to quickly add them. This means you just click a button and they are added to your vendor list. You can go back at any time and edit a vendor to add more information as you get it.
Once you have bills entered, you just have to choose when and how you are planning to pay them with the pay bills option. As soon as you complete that transaction and choose which account it is being paid from, it will be reflected on your banking ledger.
If you have a vendor that requires a PO, this can be done directly from the Vendor Center prior to creating the bill. Once the PO is approved by your vendor, then you can create a bill from the existing PO. Which means you don’t have to enter the information twice. This is a really nice feature in case your vendor only approves certain line items from the PO and not all of it.
Entering customer estimates and invoices is a similar process. Depending upon how you choose to handle your accounting, it can potentially be one more step than entering a bill. A lot of small business owners choose to create estimates to send to their clients for approval before work begins. But not all of us need that extra step and can just go straight to creating an invoice. Once the invoice is created and dated, you can send it directly from Quickbooks (if that is an option you have chosen). Or you can save it as a PDF to your computer and send it via email or print it out.
Once a customer invoice has been paid, just receive the payment in Quickbooks and it will automatically go directly into your banking ledger.
Ultimately, both of these processes are extremely easy to use and make the accounting so much simpler!
While not everyone feels the need to run reports, this is a very handy feature to have on hand. This is especially true when you are filing estimated or annual taxes. Using Quickbooks to run these reports takes so much less time than trying to add up all of the income and expenses by hand. And you will also have a report to keep with your filings in case of an audit.
Running reports doesn’t only help with taxes, but with plenty of other financial metrics for business also. It also helps with:
- Keeping tabs on your overall profit and loss
- How much you have spent with one vendor
- If you just want to know how one client is performing from year to year
- How much a job cost you to perform
- How much you actually made on each particular job after the expenses
- Costs that are still unbilled from a job
- Employee earnings for the year
Really, the possibilities are almost endless with the types of reports you can run within the Quickbooks platform. And this has been one of my favorite features of all!Quickbooks for small business is one of the best accounting options out there! Click To Tweet
Quickbooks for Small Business Summary
Overall, Quickbooks can be a very simple and highly intuitive accounting solution for most small business owners. You can easily input your income and expenses and connect with your bank accounts for quick reconciliation. Running reports for your CPA or to file taxes is extraordinarily easy. And even though the set up takes the most amount of time to get through, it is a very straight-forward process.
If you haven’t considered using Quickbooks for your small business accounting yet, then this is something you should certainly check out. It will definitely help reduce how much time you have to spend on accounting so that you can focus on the more exciting aspects of your small business.
Have you tried Quickbooks for your small business accounting yet? If so, what are your thoughts on this accounting option?