Every profession has its own best practices but proper accounting and bookkeeping techniques are crucial across the board. Whether you’re a hospital administrator trying to write off equipment costs or a small online retail business with complicated multistate sales tax issues, knowing where you stand financially can help with every aspect of your business operations.
Adopting these seven practices in QuickBooks Online can enhance productivity, ensure data integrity, and improve the accuracy of your financial records month after month — and year after year.
Why Best Practices Matter
Implementing general best practices in your accounting tasks for any type of business can:
- Maintain the integrity of your QuickBooks Online data.
- Improve accuracy in your accounting work.
- Save time.
- Provide valuable insights into your business’s financial health.
These practices can also indirectly strengthen your relationships with customers and vendors. When, for example, you send professional-looking invoices in a timely manner or provide detailed receipts for services rendered, you assure your clients and vendors that you’re looking out for their best interests, and that they can trust you for the long term.
Top 7 QBO Strategies for Modern Business Owners
1. Track 1099 Vendors
If your business employs contractors, mark their 1099 status in their vendor records. This ensures accurate reporting and compliance during tax season. Create and deliver 1099s easily within QuickBooks Online.
2. Regular Reconciliation
Reconciling your accounts after downloading transactions is crucial. This process helps identify errors, discover missing transactions, and provides a better picture of your cash flow situation.
3. Keep Lists Up-to-Date
Over time, your QuickBooks Online file can become cluttered. Regularly update and clean your lists of products, services, customers, and vendors. Make unused records inactive to streamline your data management and avoid confusion.
4. Categorize and Classify Transactions
Properly categorizing and classifying your transactions allows for better data organization and reporting. Use features like Classes, Categories, and Tags to group related transactions and gain deeper insights.
5. Assign User Permissions Carefully
Protect sensitive business data by restricting user access to specific areas and functions. QuickBooks Online allows you to manage user permissions to ensure that only authorized personnel can access critical information, like customer billing details and your company credit card number.
6. Utilize QuickBooks Online Reports
Make full use of QuickBooks Online’s report templates to stay on top of your financial health. Regularly check reports like “Who Owes You” and “What You Owe.” Generate standard financial reports such as Profit and Loss and Statement of Cash Flows for thorough analysis.
7. Security Practices
Always log out of QuickBooks Online when not in use, especially in multi-person offices. It is also wise to avoid using the mobile app on public Wi-Fi networks to protect sensitive company information.
More Than Common Sense
While these best practices may seem like common sense to experienced users, they are essential for new users to understand. Adopting these practices ensures the long-term safety, accuracy, and usefulness of your company data.
If you have questions or need assistance with using QuickBooks Online effectively, contact the Experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
