Quickbooks is accounting software that small businesses use to track their income and expenses. The software’s functions make it easy to monitor the financial well-being of a business but also make for smoother recordkeeping and tax-filing processes.
QuickBooks offers several solutions that work great for individual freelancers and midsize companies, from allowing them to pay bills to invoicing customers to tax prep.
The Benefits of Using QuickBooks
Most small businesses see QuickBooks as a tool for tracking cash flow, paying bills, and managing invoices. QuickBooks features allow small businesses to create end-of-year financial and monthly progress reports as well as prepare for annual or quarterly taxes. QuickBooks is versatile enough that business owners can use it themselves or outsource the work to bookkeepers.
These are some of the software’s most praised functions:
1. Tracking and Creating Invoices
QuickBooks lets you create invoices, print them, or send them to customers electronically. The software automatically monitors how much your customers owe you and gives insight into your accounts receivable.
2. Monitor Bills and Expenses
QuickBooks automates bill tracking. You can connect the software to your credit card or your bank account. Your expenses are categorized and automatically downloaded. You can do so seamlessly if you need to input information manually into QuickBooks.
3. Create and Print Key Financial Statements
QuickBooks’ features and benefits include managing your cash inflow and outflow. You can easily print financial statements that let you know how your business is performing. These financial statements can be given to lenders so that you can get a line of credit. Examples of financial statements that you can quickly produce in QuickBooks include:
- Balance sheet report
- Statement of cash flows
- Profit and loss report
4. Track Employee Time, Expenses, and Payroll
Whether you are working with employees or subcontractors, you need to keep track of the number of hours they work and ensure that subcontractors and employees have been paid promptly and that the required taxes have been gathered. Mistakes in calculating employees’ paychecks lead to unhappy people, which can tarnish relationships.
QuickBooks payroll integration ensures that your financial statements are up-to-date based on the latest payroll run. You can use QuickBooks to cut a check for your employees or make direct deposits. Federal and state payroll taxes can be automatically gathered. QuickBooks can fill out payroll tax forms. It gives you the power to pay your payroll taxes automatically from QuickBooks.
5. Track Inventory
Another positive of QuickBooks is the software’s ability to track inventory. QuickBooks allows you to keep track of the inventory you sell and the value of the inventory you have on hand. It reminds you when to order new inventory if inventory stocks are low.
6. Simplify Taxes
One of QuickBook’s most popular features is its ability to simplify taxes. The biggest headache you will have during the year as a business owner is sorting through your business taxes. However, you can print your financial statement at tax time if you use QuickBooks during the year. Or you can give your tax advisor access to your account. They can review the numbers and then print and file your taxes for you.
As a small business owner, you should be attentive to your organization’s accounting needs and identify signs indicating that you may have grown and require a more comprehensive tax prep and accounting software. It may be time to move on from QuickBooks online if the following things have happened.
Your Business Is Growing Quickly. If you are scaling your business rapidly or are experiencing unexpected organic growth, it might be time to upgrade to a more comprehensive accounting software platform.
You Are Regularly Paying Fees and Penalties. If you notice that you are regularly paying fees and penalties due to improper or inaccurate accounting, it might be time to consider that you have outgrown the use of QuickBooks.
You Have Been Approved for Financing. Any time an entrepreneur or business owner is approved for financing for their venture, it is highly advisable to consider hiring a professional bookkeeping service.
The Right QuickBooks Setup
When starting a small business, it is easy to want to just get things done for the sake of having accounting systems in place, but if you don’t have QuickBooks set up properly it can have devastating consequences on the financial health of your business. An inaccurate set-up that doesn’t take into account absolutely all the financial aspects bespoke to your business and industry, can create a ripple effect issue for the overall financial records of your company. Inputting one number inaccurately can lead to accounting inconsistencies, invoicing issues, and possible tax penalties. The one thing that every small business owner using QuickBooks should invest in, is a professional QuickBooks setup.
Fusion CPA is a team of professional accounting controllers. We understand Quickbooks’ benefits, know if it’s right for your organization, and can help you get the most out of it. Learn more about how Fusion CPA uses QuickBooks Online and other accounting software to help organizations like yours make the most out of their finances. Click on the Discovery button below to learn more.
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.