Guest Post by Sarah Eccleston, James Madison University
Over the past 20 years Jonathan Schrag, owner of BC2 Bookkeeping Collective Inc, has worked with many local small businesses on QuickBooks. When Schrag was first starting his business in 2017, SV SBDC helped him develop his logo, figure out what platform would be best for creating his website and directed new clients to him. More recently, Schrag conducted a workshop with the Black and Brown Owned Business Growth Program, where he shared tips for the best practices for small businesses using Quickbooks Online.
- Date matters. Make sure you double check the date for payments that are put into QuickBooks. QuickBooks will often default to today’s date or the date that was last used if it is not manually changed. Dates matter for things like when a payment was made vs when it got deposited.
- Hide categories you don’t need. Categories are the word Quickbooks uses for your accounts. If you go into your chart of accounts and click the arrow on the right, you can make “inactive” the categories that you don’t need. This helps make your chart of accounts more simplified and also helps reduce the chances that you select the wrong account when recording income and/or expenses.
- Anything over $2,500 can be called an asset.If you have business purchases that cost more than $2,500 they should be listed in QuickBooks as an asset. If those items were listed as expenses, it would be expensed only for that year. However, as assets the cost can be spread across multiple years. For example, if you bought a $10,000 car, but your business only made $9,000 that year, your profit loss statement would show a loss. If you listed the car as an asset the cost can be spread out of a number of years.
- Inventory. For most small business, tracking inventory in Quickbooks can be messy and difficult. If you have inventory it is easier and simpler to record the purchases as expenses for the month or year. If businesses want to account for their inventory it is best to do it on a separate spreadsheet, so things don’t get too complex in Quickbooks.
- Make copies. Once you have a good journal entry for recording sales, you don’t need to retype it every time. Simply open up the most recent one you used and make a copy. Schrag said a good example is restaurant owners wanting to account for their income at the end of each day it’s open. Each day at close when they add their income into a journal entry in Quickbooks, they should open up the journal entry for the previous day’s sales and use that as a template for themselves for the next day. This is much easier than entering new fields for the same things every day.
- Reconcile accounts at the end of each month. Reconciling bank statements, credit card statements, and loan statements ensure that what was inputted into Quickbooks matches what your business statements show.