Welcome to our quick and easy guide to improving your business finance system, which breaks down how to use QuickBooks in your small business.
For many small business owners, managing the business’ finances is one of the more intimidating and tedious tasks. There are, however, plenty of tools and online resources, such as QuickBooks and ScaleFactor, to ease bookkeeping and accounting for accurate and reliable finances. This is a crash course in Accounting 101 using QuickBooks, designed with small business owners in mind.
Here’s our advice: Manage your small business finances with ease using QuickBooks.
Business owners know tracking finances takes an enormous amount of time. They lose an incredible amount of work hours to finance tasks like writing receipts, bookkeeping, driving to the bank, and processing payroll. Business accounting is complicated, time-consuming, and sometimes frustrating. There’s no doubt that basic accounting for a small business is a vital task, but it can take owners away from what they do best—business! Simplify the process and take back that valuable time.
In this easy-to-follow guide, you’ll learn:
- What exactly QuickBooks is, and how you can leverage it for your business
- The benefits of QuickBooks for business accounting
- The steps to prepare your financial data and processes to get the most out of QuickBooks
- How to navigate QuickBooks
- Resources to help set up and manage your QuickBooks account
What Is QuickBooks?
QuickBooks is an accounting software service that replaces paper or spreadsheet accounting processes. So instead of entering transactions into a ledger or a spreadsheet, they are entered into a database. QuickBooks has all the essential accounting forms a business will ever need. Plus, there are many tools and reports that will make the job easier. But first, any old data from paper documents and spreadsheets will need to be integrated into the QuickBooks software.
The Benefits of Using QuickBooks
The biggest benefit of using QuickBooks is this: All financial data lives in one place, creating a great historical record to reference. No more looking through various spreadsheets or files to find information. It’s all right here.
Robust, Historical Reports
The reports available through QuickBooks are ideal for many scenarios, such as tax reporting or investor relations. As your accounting file, it will house your financial data as long as you continue using it, meaning you can use it to year-over-year or other long-term reports. One challenge worth noting is that the reports themselves aren’t always easy to access or understand without accounting knowledge, which is where more intuitive software partners like ScaleFactor come in. But as long as you need those numbers, they’ll be there for you.
Secure Data That’s Also Backed Up
In QuickBooks, data is also secure and backed up, a very important requirement for financial information.
QuickBooks Crash Course: How to Set Yourself Up For Success
Before you can set up QuickBooks, there are several things that must be done to properly use the new system. Think tasks like building accounts, entering customer and product information, and importing old data.
Integrating the old data into the system is likely the most stressful part of the process, but it doesn’t need to be (more on that soon). Spend some time planning ahead to make this task easier. Consider what the business needs to do to make it a smooth transition.
Step 1: Questions to Consider Before Importing Your Data Into QuickBooks
Plan ahead for a smooth transition into QuickBooks.
1. What setup needs to occur?
Before any data can be entered, accounts need to be built to hold the information. Get familiar with the new software by building these accounts and working in them. Enter a few test transactions to see how the system works.
2. When is the target go-live date?
Consider the time of year and what business practices will be impacted when the business transitions into QuickBooks. Choose a less busy time of year, if possible. The end of a fiscal year makes the most sense, but each owner should consider their individual business needs.
3. How will data be entered into the system?
Most Excel spreadsheets are imported directly into new accounts but will likely require reformatting to match QuickBooks. Columns will be reordered and some special formatting will be removed. Hard copy data must be entered by hand.
4. What duties or processes will change?
Look at how any new duties or responsibilities involved with receiving and recording data into QuickBooks will be done. Write procedures and plans, develop training for changes and discuss them with relevant employees.
Step 2: Consider Changing Accounting Processes and Workflow
Each business has a process for how bookkeeping and accounting work is handled. These processes may change when the business finances are transitioned to QuickBooks. Good processes and workflows help the business run efficiently, so now is the time to perfect them.
Each accounting task will need to be analyzed and ordered in the most efficient way possible. Then, they need to be documented. The best way to document a process or workflow is with a flowchart. Flowcharting how data is handled or how a task is completed provides a structured, visual image of the process. Done correctly, it can be used as a training tool. A flowchart also helps maintain consistency and builds confidence in working with a new system.
Workflows can also give employees an idea of how to prioritize new tasks. Create charts and graphics to remind employees of new workflows. Consider what normal workday tasks may look like. Then, think about weekly, monthly and even annual tasks when assessing workflow.
The more planning that goes into processes and workflow, the better.
Step 3: Once Initial Legwork is Complete, Integrate Old Data into QuickBooks
Accounts have been built and old data is properly formatted. It can now be entered into the new QuickBooks accounting system. Check and double check figures to be sure all data was accurately integrated.
Do not stop using old forms of accounting until the data is completely accurate. Some business owners even do test run data integration phases to be sure nothing is missed. One thing is certain, the new accounting system cannot go live until old data is integrated accurately.
Step 4: Go Live
The go-ive date means the new accounting system has reached a point where data is in and ready for real-time work. All new workflows begin now. Perform tasks and work in the new system exclusively.
Input any other data that was received between the initial integration and the go-ive date. Your system should now be fully integrated. It may be beneficial to run reports and check for discrepancies.
Be Patient During Transition
Completely upending your accounting process isn’t going to go without a hitch or two. Just expect to see a few issues and have a plan in place to resolve them. Owners and employees will need time to acclimate to the new process of recording and working with data.
Remember, QuickBooks has a support option that business owners can always rely on.
How to Navigate Your QuickBooks Account
Navigating QuickBooks can take some getting used to, but most business owners will be up to speed in no time. From the Home Screen, you have several options to manage accounts, reports, and banking.
The Features and Tools at Your Disposal
Understand these QuickBooks basics to fully use the new business accounting system. QuickBooks offers a variety of features that help streamline the accounting role and create accurate, useful data storage and reporting.
- Sales, customers, products, and services lists are used for invoicing and sales transactions. Enter detailed customer information into each customer account. Do the same for any services and products that the business offers.
- Vendors and Expenses lists are directly related to where the business spends money. Create accounts for vendors and enter expense transactions here.
- Accounting lists are where all transactions can be found. The chart of accounts will allow owners and employees to view individual transactions by the account they are assigned to.
2. Reporting Tools
Print invoices, expense reports, and product information for specific clients, vendors, or accounts. Prepare reports for business meetings and the end of year reporting. Custom reports are available, too.
3. Banking Features
Manage your banking transactions through QuickBooks by adding and using online accounts for deposits, check printing, and other tools. Business owners can even pay bills with this feature!
Prepare for quarterly or end-of-year taxes with specific tax related reports. These reports go directly to tax accountants for tax preparation.
Not Quite Ready to Get Started? Check Out This QuickBooks Account Example
Here’s a link to a sample company. It comes complete with existing data and fully functioning features and tools. You can use this to get a feel for how QuickBooks functions work before you commit. It can also be used as a training tool for employees who will work with QuickBooks in your company. All you need to do is open the link, validate to prove you are not a robot, and the dashboard will open.
Where Can I Get Additional Help?
Did this Accounting 101 crash course simply scratch the surface? Of course, it did! There is a lot to know about QuickBooks, and fortunately, there are other resources available. QuickBooks has a great set of tutorials for small businesses. Simply click the link and watch one of several videos that walk through different QuickBooks screens.
Need more hands-on help to set up your finances to get the most of QuickBooks? It’s easy to get started with our small business bookkeeping, accounting, and finance solutions today. ScaleFactor integrates with QuickBooks, as well as other financial software providers, to manage all of your business’ finances in one place.
ScaleFactor also empowers companies by providing Accounting 101 support with small business finances. Please feel free to contact us with any questions! We are here to help.
Sean Haughey, CPA