QuickBooks 101
QuickBooks is an accounting software package developed and marketed by Intuit. QuickBooks is the premier accounting software used by small and medium-sized businesses to manage income and expenses and keep track of the financial health of their business. Among other things, QuickBooks can be used for invoicing customers, paying bills, generating reports, and preparing taxes.
One of the more popular QuickBooks products is QuickBooks Online and QuickBooks Pro.
Why QuickBooks?
One of the most useful functions of QuickBooks for business is the wide array of automatic reports and information tracking offered. QuickBooks also has functionalities such as pre-authorization of electronic funds and time tracking options for employees. Further, QuickBooks is easy to use, even for those business owners who lack financial or accounting experience. Finally, QuickBooks offers integration with a wide array of other applications often used by business owners.
QuickBooks Options
QuickBooks offers several software options to business owners, including QuickBooks Online, QuickBooks Desktop, and QuickBooks Self-Employed.
QuickBooks Online is typically used by a small to medium-sized business looking for flexibility in access to financial data. Pricing for QuickBooks Online ranges from $25 per month to $180 per month. QuickBooks Online is a cloud-based program that does not require software installation. Because QuickBooks Online is offered in multiple subscription levels, it is ideal for businesses flexible in what they need from their accounting software. QuickBooks Online provides immense connectivity and easy integration with third-party applications such as PayPal and Shopify. However, QuickBooks Online does lack some of the functionality found on QuickBooks Desktop, such as the ability to run more than one company.
In comparison to QuickBooks Online, QuickBooks Desktop is used by small to medium-sized businesses in any industry and costs between $349.99 per year and $1,275 per year. QuickBooks Desktop comes in six versions, each of which requires you to download software onto your desktop computer. The common capabilities across versions of QuickBooks Desktop are core accounting, payroll functionality, billing and invoicing, inventory management, and financial reporting.
QuickBooks Self-Employed is used by self-employed individuals such as independent contractors, real estate agents, and rideshare drivers. QuickBooks Self-Employed costs $15 per month. Benefits of QuickBooks Self-Employed include a mileage tracker – users can log trips by entering the date, purpose, and miles driven, and the software automatically calculates the deduction. However, QuickBooks Self-Employed lacks invoicing capabilities with no connection to a payment gateway.
9 Uses of QuickBooks
Some of the more popular uses of QuickBooks include managing invoices, paying bills, tracking cash flows, generating financial reports, and preparing business taxes.
1. Create and Track Invoices
QuickBooks allows you to create invoices and print them or email them directly to customers. QuickBooks also automatically tracks income for the business and each customer’s balance due. Additionally, by running a simple accounts receivable aging report, you can quickly view the amount of your outstanding invoices.
2. Keep Track of Bills and Expenses
By connecting your bank and credit card account, QuickBooks automatically keeps track of and categorizes your bills and expenses. Though QuickBooks also allows for the manual tracking of cash or check transactions. Further, QuickBooks allows for the manual entry of bills and then tracks upcoming payments based on bills entered.
3. Print Financial Statements for Your Business
QuickBooks allows for the production of three primary financial statements. These include Profit and Loss Reports, Balance Sheet Reports, and Statements of Cash Flows.
Profit and Loss Reports summarize income minus expenses. This report shows you how profitable your business is and shows you the bottom line net income (loss) by designated time periods (i.e., a week, a month, or a quarter).
Balance Sheet Reports shows your business’s assets, liabilities, and net worth at a particular point in time.
The Statement of Cash Flows shows all the activities that affect your business’s operating, investing, and financing cash inflows and cash outflows.
4. Track Employee Hours and Run Payroll
QuickBooks offers an extremely useful payroll function that can calculate and run payroll as often as needed. QuickBooks tracks employees’ hours and compares the hours tracked to both your customer invoices and your payroll. Running payroll through QuickBooks also allows you to pay employees via check or direct deposit, calculate federal and state payroll taxes, fill in payroll tax forms, and e-pay payroll taxes.
QuickBooks payroll requires an additional subscription.
5. Track Inventory
In addition to the Inventory Valuation Summary Report from QuickBooks Online, QuickBooks allows you to track the quantity and cost of your inventory, allocate a portion of inventory to the cost of goods sold automatically, and remind you to order inventory when quantities are low.
6. Simplify Taxes
QuickBooks simplifies taxes by compiling income and expenses throughout the year and making this information easily accessible by printing financial statements. Additionally, QuickBooks allows you to invite your tax preparer to access your account directly.
7. Accept Online Payments
By adding QuickBooks Payments to your subscription, your customers can pay their invoices online directly via their emailed invoice.
8. Scan Receipts
The free QuickBooks mobile app allows users to take a picture of a receipt and upload it to QuickBooks Online. You can then attach that receipt to the corresponding transaction, allowing you to easily track expenses and organize your receipts come tax season.
9. Track Mileage
If your employees use their personal vehicles for business purposes, QuickBooks allows for easy recordation of dates, miles, and purpose of trips so that you can easily compile the necessary information for a tax deduction. To do this, the QuickBooks mobile app uses the GPS in your phone to automatically sense every time you are in a moving vehicle. You can then review your trips and add notes with the purpose of each trip.
In conclusion, QuickBooks is the premier accounting software for small and medium-sized businesses, offering extensive features and functions to help your company run smoothly!
