QuickBooks is the best-selling small business accounting program on the market. It can be used by accounting professionals to provide a full range of services and it can also accommodate small business owners who have no prior experience in bookkeeping and accounting practices.
If you are a business owner, you can use QuickBooks to do at least some of your own bookkeeping; significantly reducing your business expenses as a result. Although not required to successfully use QuickBooks, a basic understanding of accounting is always helpful. Introductory Financial Accounting provides an overview of basic accounting.
QuickBooks comes in two major varieties. The standard desktop version has been around for years and is still appropriate for many organizations. More recently, however, QuickBooks is also available in an online version. This tutorial will focus on QuickBooks Online but most of the topics covered also apply to the desktop version of QuickBooks as well.
The online version is preferable in many cases for four reasons:
It is cloud-based so you can use it anywhere you have an Internet connection. Especially for small business owners who travel a lot, this is a great way to securely bring your financial software with you anywhere.
The initial costs are significantly lower. QuickBooks Online offers a 30 day free trial after which time service continues for a small monthly fee that varies depending on the package you select. A traditional QuickBooks installation can cost hundreds of dollars up front and if you decide in the future that doing your own bookkeeping is not for you, you have no way to recover that investment.
Since QuickBooks Online is cloud-based, you can rest assured knowing that you are always using the most current version of the software. This is especially important if you plan on transferring your financial data to your accountant for end of year tax processing or other complicated tasks. In the desktop version of QuickBooks, you would be required to purchase a new product every time it is released if you want to keep up with the latest in home accounting technology.
This cloud-based technology offers a final benefit. Payment processing has never been easier thanks to QuickBooks Online. In traditional QuickBooks and most other accounting programs, it can be difficult to set up payment processing services to accept debit and credit card payments from your customers. QuickBooks Online makes this extremely simple and supports most major credit card processing companies including PayPal.
As previously mentioned, QuickBooks Online is a cloud-based service which requires an Internet connection for access. The only other prerequisite is an Internet browser. Current versions of Internet Explorer, Firefox, Chrome, and Safari are all supported by QuickBooks.
Major QuickBooks Components
QuickBooks is a very powerful accounting solution that offers a large variety of tools for advanced accountants and small business owners interested in basic bookkeeping tasks at home. No matter what your current experience level is, there are three major components you will be relying on heavily to complete tasks in QuickBooks.
Forms – As the name implies, a form is used to record information. Unlike traditional accounting systems which require knowledge of double ledger accounting, journals, etc., QuickBooks provides most information to users using various forms.
For instance, when a bill is received, the “Enter Bills” form is used to record the bill in the accounting system. Once you enter this information, you click “Save” and QuickBooks records the bill as both a debit and credit entry. Fortunately, all of this happens behind the scenes – making QuickBooks extremely easy to use.
Lists – A list in QuickBooks is used to make it faster and easier to enter information into forms. In the “Enter Bills” form mentioned above, there are drop-down lists available for the Vendor which make importing a specific vendor especially easy. You won’t have to worry about entering inaccurate information as long as the information is properly recorded in the appropriate Vendor tab.
Using lists makes it much easier to enter data; regardless of how complex the form you are using may be.
Registers – Registers are often referred to as general ledger accounts in accounting and bookkeeping courses. The best way to think about a register is to think of your checkbook register at home. Your checkbook register is used to record the checks that were written and the deposits that were made. The result is an accurate running balance for the checking accounts.
Likewise, QuickBooks allows you to create multiple registers to keep track of general accounting information. You might have a register for your business bank account showing all of the transactions going into and coming out of that account during a specified period.
Mastering QuickBooks teaches you how to create multiple registers for a customized business solution.
Your business may have a single bank account it uses for all business related transactions or it may have multiple accounts. Either way, QuickBooks makes it easy to create registers for every account you need to keep track of.
You can learn more about Quickbooks components (as well as advanced usage of Forms, Lists, and Registers) in QuickBooks Training – Bookkeeping Made Easy.
Of course, this only scratches the surface of many of the features available to QuickBooks Online users. The point is that QuickBooks does things slightly differently by removing the columns of numbers typically required to keep accurate accounting records. By providing everything in an easy-to-understand format, QuickBooks Online is truly designed for anyone to start performing basic accounting tasks on their own.
If you really want to maximize your experience with QuickBooks Online, it definitely doesn’t hurt to become more familiar with accounting practices. You will often find tools within QuickBooks that you simply will not understand without an accounting background. This isn’t to say you should drop everything and enroll as an accounting student, but taking a class such as Basics of Business Finance can certainly help you leverage the power of QuickBooks for your business endeavors.
QuickBooks Online represents the future of small business accounting. It is portable, easy-to-use, affordable, and powerful. If you are not currently using QuickBooks to manage your own business, you are probably losing out on money that could be better spent growing your business.