13 Common QuickBooks Errors and How To Fix Them
QuickBooks helps small businesses to settle their finances and to keep things in order. For many years, the company is assisting businesses to solve their bookkeeping issues, but not everyone mastered the right ways to use QuickBooks. People keep making mistakes and here we are going to point out such 13 errors with their fixes, so you can get things straight the next time you use QuickBooks.
WHAT IS QUICKBOOKS?
QuickBooks is a popular accounting software developed by Intuit, which is an American company. This software has a desktop and is online with a cloud platform so small businesses can have the convenience of bills and payments. The company targets medium to small-sized companies because these businesses require affordable yet solid bookkeeping solutions. Users get time tracking options with electronic funds authorization and more.
13 COMMON QUICKBOOKS ERRORS AND HOW TO FIX THEM
If you are new to QuickBooks, it’s important to know the mistakes people often make with the software. Let’s know about the 13 mistakes from the below points.
1.A MESSY CHART ACCOUNT- If you have a messy chart account, it’s time to clean and arrange them. You can set them in a similar group, and keep it simple. Having too many accounts can be confusing at times. So, when you provide the data, ensure that the lowest account instead of the main one.
2. CREDIT CARDS AREN’T RECONCILED- before using QuickBooks, make sure to use the reconciliation module for your balance sheet accounts, loans, and credit cards. This will keep the better health for your company.
3. DEPENDING ON THE BANK FEEDS- You will get the best advantage of setting up the bank transactions with QuickBooks. However, it’s not always accurate, you may get duplicate transactions or when there are missing transactions. This can be bad for your finances and can harm the records.
You need to check the balances with information from QuickBooks. If the two accounts do not match, you need to identify the problem.
4. NOT UPDATING ACCOUNTS REGULARLY- you have to update your records regularly and QuickBooks can help you with that. But people tend to do this mistake a lot, and this can result in a misunderstanding at the end of the month or year. It can also end up in a shortage of cash for the company.
You need to implement the daily update process with QuickBooks. This can be hard when you have to take care of other jobs. So, you can always outsource an accountant for this.
5. HAVE A PERFECT CHART- you need a good chart for your accounts. Take a look at the accounts first and then arrange them. QuickBooks can help you with this. Ask your employees to help you with the process.
6. ACCRUAL REPORT GENERATION- businesses mostly use the cash basis process to report financial details. Here the expenses and revenue are reported at the time of receiving cash and making payments. The Accrual process is used to identify the expenses and the revenue when they occur. With the help of QuickBooks, you can switch these reports from Accrual to cash using just a simple click. However, if you are using the wrong process, this can end up in the understatement or the overstatement of the tax liability, and this can very expensive.
You need to solve this issue carefully. You can use Accrual or cash basis method on QuickBooks, so the software can generate reports automatically. You have to make sure to switch the function to cash before the report goes to IRS.
7. PRINCIPAL LOAN PAYMENT AS THE EXPENSES- When you take a loan for the company, you must record the loan balance in the balance sheet as a long or short term based on the type of loan. When you make the payments to the lender, each of them will be broken down between principal and interest payments.
To fix this, you have to keep track of the interest payment of the loan as the cost of the business in the main loan repayments and the income records, this will decrease the balance and it has to be on the balance sheet.
8. JUMBLED ITEM LIST- QuickBooks refers to the products you are selling as items. You can settle the inventory the way you want, but if forget to update them, it can be an issue with your company accounts. You can clean the item list in the following method.
Deactivate the products you don’t deal with anymore, and make sure to level the items with non-inventory and inventory. Check the amount you have in stock. Keep the expenses updated, and tag the products with the right cost and revenue accounts.
9. NOT AVAILING THE PURCHASE ORDER PROCESS- Like you, many businesses fail to use this function while dealing with QuickBooks. You can fix this by creating a PO each time you purchase from a supplier. Ensure the item is received against the PO only. When checking the report, the entries shouldn’t more than one year old.
10. WRONG USAGE OF THE UNDEPOSITED MONEY ACCOUNT- If you have received the payments from customers but the money isn’t showing on the records, then there is a fault.
When you get payment from customers, open the batch checks and deposit system at the same time, and keep them together in an individual deposit in QuickBooks. You can also raise a query in the QuickBooks forum, to get more help.
11. WRONG PREFERENCE SET UP You need to set up your preferences. You have to set up default bank records for receiving checks and paying bills. Reporting various options, finance fees for late payments of the customers, and email templates.
12. REPORT SETTING ISN’T CORRECT- You have to ensure the report setting is right. You need to check the method you want.
For cash, reports check the money transaction of your company. Otherwise, display the entire performance of the company.
13. NO PASSWORDS, PERMISSIONS, OR USER ROLES- If you know people working in QuickBooks, you have to give them the online profile information of your employees. This will offer better transparency and control over the functions of your financial records.
QuickBooks offer better help for medium to small companies. If you are using the latest version of QuickBooks, it’s best to check these mistakes, and you can always take help from the online forum.