QuickBooks business management….
….and accounting software has over 5 million users in the U.S. It is very user friendly. This makes QuickBooks the preferred software for many startups and existing businesses. Once installed on a desktop or subscribed to online, some users without accounting background do not completely setup the software before using it. This results in errors that affect data integrity. Some of these errors can be costly if not fixed.
Below are some of the costly errors we have been fixing for the past 14 years of our QuickBooks installation, training and support services practice.
1. Recording loans as sales error
Recording loan as sales could result in increased profit if expenses were lower than total revenues. This means the business owner would be paying tax on the loan and again payback the loan with interest to the lender.
2. Negative accounts receivable (A/R) error
This results when payments for credit sales are applied to customer’s account without first creating invoice. Negative A/R could be interpreted as customers’ refund or deposit/down payment for sales order. A lender once denied application for credit by interpreting negative A/R on the applicant’s balance sheet as the applicant would be using the loan proceeds to settle the ‘customers’ refund.’
3. Recording computer purchase and printer cartridge as office expenses error
Fixed assets such as computers create value for your business. Recording assets as office expense lower the value of your business if not corrected. Some users record computers purchase as fixed assets but miss computation for depreciation which could reduce taxable profit.
4. Multiple charts of account items error
Some QuickBooks users set up different names for the same transactions, e.g. bank fees, bank charges, overdraft fees, bank analysis fees etc. if bank fees are not recorded in one account, owners would not easily know total of bank fees and take action to reduce them.
5. Lost sales error
Entrepreneurs go into business to serve a need (s). If entrepreneur without accounting background spends more time doing bookkeeping/accounting work thus time lost making sales or sales follow-up. E.g. If you can make $10,000 in sales in few hours but you spend the same time making QuickBooks entries and losing the sales whilst you could have paid $500 to have a professional do it for you; which would you choose?
How to Avoid High Costs of QuickBooks set up Errors?
1. Have a Certified QuickBooks ProAdvisor set up and manage your transactions in QuickBooks for you so you focus on the reason you go into business – serving your customers and making them happy and get paid for it.
2. Have QuickBooks professional set up the QuickBooks for you and train you how to use it.
3. If you chose to do it all by yourself, have QuickBooks professional review your monthly or quarterly financials so year-end surprises are avoided.
Previous newsletters are available on our website www.3egk.com for a FREE download
Edwin Agbonyitor is a tax accountant, management consultant, certified QuickBooks ProAdvisor, professional bookkeeper, certified fraud & forensic examiner, information security analyst and president & founder of 3E Global Konsulting LLC. Contact Edwin at firstname.lastname@example.org or 301-922-1262
Tel: (301) 922-1262
Address: 13841 Palmer House Way, Silver Spring, MD 20904
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QuickBooks business management and accounting software has over 5 million users in the U.S. It is very user friendly. This makes QuickBooks the preferred software for many startups and existing businesses. Once installed on a desktop or subscribed to online, some users without accounting background do not completely setup the software before using it. This results in errors that affect data integrity. Some of these errors can be costly if not fixed.