It seems like it has been a lot longer than it really has been, perhaps because of the COVID-19 crisis impacting how so many of us measure time due to the way it changed our lives. The reality is that we have only been through forty article together here at Insightful Accountant as part of QuickBooks Online® Basics and we have had a few 'weeks off' for a variety of reasons including holidays, but we have finally come to the last topic in this set of features.
We started with talking about why bookkeeping is crucial for business success, broke QuickBooks Online workflows down into digestible chunks, and here we are capping it all off with my list of gotchas.
Thank you, constant readers! I hope you’ve learned a lot and have come to love QBO as much as I do! So, here we go, with my TOP DOZEN MISTAKES PEOPLE MAKE!
Day in and day out, I work with bookkeepers and small business owners to set up and use QuickBooks Online…and to troubleshoot their files when their reports are wonky. Over time I have seen patterns emerge – I find myself coaching people through the same mistakes over and over again.
Here is my list of Top 12 Errors that I see, so that you don’t make them, too!
1) Not going through Account and Settings to turn on and off the features you need. Some of them aren’t obvious, and hinder your ability to use QBO to its fullest.
2) Adding too many categories to the Chart of Accounts. Reserve details of items bought and sold for the Products and Services list. Your COA should be short and your Invoices detailed!
3) If Products and Services are purchased in order to sell them, be sure to “buy” them using the Item Details table instead of the Account Details table. This opens up additional profitability reports.
4) Making new Vendors for every gas station, restaurant, and parking lot. Use generic names like “Gas Station,” “Restaurant,” and “Parking” unless there is a specific reason to track one particular establishment. The location details will still be saved in the Bank Detail from the Banking Feed.
5) Improperly classifying Meals. Starbucks and lunch are not business expenses, unless it was for a business meeting. If it was, there needs to be a paper receipt with a note of who was there and what was talked about. Include that information in the transaction’s Memo.
6) Creating two Rules for Transfers. Create one Transfer Banking Rule for one bank account, and let the Bank Feed Match it in the other account. Otherwise you’ll create two separate debit and credit transactions that aren't linked.
7) When you create a Payment, always verify which Invoice it is applied to. If the amount isn’t exact, QBO will try to apply a Payment to the oldest Invoice first.
8) Depositing checks directly to the bank. Instead, put them all in Undeposited Funds. The Banking Feed will find individual checks there and match them automatically. And when you take checks to the bank, create a Bank Deposit to gather them into a group that matches the total amount on the deposit slip, the Banking Feed, and your bank statement. Also, fill out the physical deposit ticket with an itemized list so you have a record of which transactions created that total. Even better, use your phone app to deposit checks, so the amounts easily match.
9) Sucking in Deposits & Income from the Bank feed. Be sure to make Sales Receipts or Invoices so that you can trace the income. If you find yourself typing the customer and sales account on a deposit, you’re doing it wrong.
10) Uncategorized Income, Uncategorized Expenses, and Uncategorized Asset. When P&L gets reviewed, look for transactions here. If you see them, it means you pulled them in through the Banking Feed without categorizing them into an Account!
11) Never Reconciling the bank accounts. The Bank Feed is not good enough! This is the only way you’ll catch duplicated or missing Deposits and Expenses. Reconcile ALL the Balance Sheet accounts, not just checking, savings, and credit cards. That’s the only way you’ll find lingering tax liabilities that shouldn’t be there.
12) Not getting help when you need it. If you're not sure how to manage a transaction, call another trusted professional, a local QuickBooks ProAdvisor (findaproadvisor.com)...or call me! It's much more cost-effective to ask a short question and do it right into the future than it is to pay someone to go in after you and clean up incorrect entries.
Series Wrap-up
Following these 12 tips will save you time, money, and a great deal of frustration. Once these systems are in place, solving problems and troubleshooting is going to be SO much easier!
If you enjoyed this series over the last year, I would love to be your “personal trainer.” I have a Masters in Teaching, and a Mentorship Membership program. From my video courses, to my monthly Office Hours, to meeting with me monthly to review your trouble spots, I am here to help.
Because this is my final column for the summer, I have a gift for you…subscribe to my Bronze-level Mentorship Membership program and get your first month for just $1.00. ONE DOLLAR! The retail for all the courses together is $1299 (there are about 50 of them!). After your first month, it’s just $29/mo to continue. Use coupon code IAMEMBER for the $28 off. If you don’t want all the courses, but just see one you like, you can also use the code for ANY course!
So why not spend your summer filling your head with all kinds of QBO goodness? Your expertise level will soar. You’ll be able to serve your clients with confidence, get super-efficient, and grow your practice. Please head over to https://royalwise.com/insightfulaccountantreaders/ and sign up.
This is Alicia Katz Pollock signing off for the summer, but…I’ll be writing to you soon in more features with Insightful Accountant, and also co-hosting several future webinars.
Make sure to also register for Alicia's next webinar with Insightful Accountant on August 12, "Vendor Workflow in QBO." You can register here.
A Personal Note from the Editor
It takes a big commitment when someone agrees to write a feature for Insightful Accountant, and when they agree to write a mini-series that is even a bigger commitment. But, when someone agrees to take and turn an entire book of content into a series of weekly features, that is a huge commitment.
Alicia not only willingly entered into such a commitment, but kept up regularly and consistently providing content in a timely manner so that we could publish her material week-in and week-out with only the exceptions of the holiday schedule we had set forth at the very beginning, other than a couple of Thursday's when I absolutely had to make a substitution out of necessity.
I want to personally thank Alicia for her diligence and her expertise in presenting 'great' content covering QuickBooks Online® Basics. Our readers have benefited greatly, and will continue to do so from this valuable resource that will remain in our archives and available for future generations.
So from all of us here at Insightful Accountant, thanks again Alicia!
Murph