I bristle when business owners look to QuickBooks as a surrogate accountant. It’s software. Nothing more.
Paradoxically, Intuit’s marketing strategy of implying that anyone – no matter their accounting acumen – can purchase and successfully use QuickBooks serves to empower and sabotage their customers at the same time. Final result? It’s a wash, at best.
How do you know if need supervision while using QuickBooks? It’s simple. If you don’t know what accounts on the Balance Sheet and Profit and Loss Statements are debited and credited each time you click “Save and Close,’ you need supervision.
Still not convinced?
You just might need supervision when using QuickBooks if
1. You have a balance in your Undeposited Funds account. This should always be zero.
2. You can’t get your bank reconciliation “difference” to zero, so you click reconcile anyway letting QuickBooks post the unreconciled amount to “Reconciliation Discrepancies.”
3. You set up “Items’ to use in your customer invoices and make them “inventory” items instead of “non-inventory” or “service” items. Inventory is a complicated way to go in QuickBooks and should not be used unless you understand the concept of putting the inventory on the Balance Sheet then bringing it down to Cost of Goods Sold on the Profit & Loss once it’s sold.
4. You create expense accounts using vendor names or income accounts using customer names. Run a Profit & Loss report and look at the names of the accounts.
5. You create payees using the type “Other” because the person you’re paying doesn’t seem to be a “Vendor.”
6. You created a bank account for your personal checking account because you need a place to record your owner contributions and/or distributions.
7. You have sub-accounts in your chart of accounts, but you post transactions to the heading accounts.
8. You use the “items” tab instead of the “expense” tab when entering a bill for the purchase of resell products from a vendor. (See # 3 above.)
9. You aren’t using the Credit Card account type and credit card module to track your company credit cards.
10. You use the online banking transaction download feature and download your deposits into your check register before you enter them as customer payments (see #1 above). This is an issue only if you create customer invoices.
11. You make a large purchase on credit (such as Dell or Best Buy) and only enter the payments into QuickBooks, posting the entire payment to an expense account. The cost of the equipment has to be entered as does the creditor’s finance charges each month.
12. You enter a bill in QuickBooks upon receipt of a vendor invoice. Then, when you pay the vendor, you don’t use the Accounts Payable module. Instead, you pay the bill by writing a check in QuickBooks, coding that check to an expense account. Now your expense is entered twice and your Accounts Payable is still “unpaid.”
And the last reason you just might need supervision using QuickBooks
13. You pull a Profit and Loss report, look at the numbers and think to yourself, “This doesn’t look right.”