QuickBooks Online is an amazing program — if you know how to use it correctly.
We’ve been working with QBO for over ten years and, as much as we love the program, the idea that it’s easy to use is a bit misleading. Although QBO has a great user interface and lots of nice graphics, there’s some complex stuff going on underneath. In reality, most people can’t set up their company file correctly or use the program effectively unless they have a) an accounting background and b) significant prior experience with the QuickBooks ecosystem.
But don’t worry, we’re here to help. We eat, sleep, and breathe QBO and we decided to put together a list of five general tips that will help you get the most out of the system:
Tip #1: Choose the right version.
This might seem obvious but the first step with QBO is to choose the right version for your business. QBO now comes in four different versions (five if you include QuickBooks Self-Employed), and each one has a different set of features and capabilities.
There’s a handy chart on the QBO website that provides an overview of the differences. However, this is an accounting program you’re choosing — not a box of cereal. If you’re not sure which version is the best fit for your business, you should chat online with a QB specialist or find a ProAdvisor and ask them for a little advice. Naturally, you can contact us, too.
Tip #2: The joy of bank feeds.
If you want to know why QBO is so much better than QB desktop, the #1 reason is bank feeds. This revolutionary feature (which is at the heart of all cloud-based accounting systems) allows you to connect QBO to your bank and credit card accounts and automatically download transactions into your accounting system. Why is that so great? Because it eliminates huge amounts of data entry and manual bookkeeping work, that’s why.
Bank feeds can be a little scary at first, but after a while most of your accounting work will consist of adding and matching transactions rather than entering things by hand. You’ll still need somebody to oversee the system and review transactions before adding them to your books, but bank feeds streamline the process enormously. Regular accounting work that used to take 2-4 hours can now be done in 15 minutes.
Tip #3: get to know your bank rules.
If bank feeds are the superhero of cloud accounting, then bank rules (also called “auto-coding rules”) are their trusty sidekick. Why? Because bank rules work in tandem with your bank feeds, enabling QBO to recognize familiar transactions — like your Verizon cell phone bill, your monthly software subscriptions, and your Square sales receipts — and automatically code those transactions every time they come in.
If you’re not an accountant, you might not understand the elegance and efficiency that bank rules bring to the accounting process. But trust us, they save humongous amounts of time. With a good set of bank feeds and auto-coding rules in place, QBO can do most of the boring, repetitive work that you used to pay Marge the Bookkeeper to do. Experts call this “light touch” or “no code” accounting, and it’s the way the entire accounting industry is headed.
Tip #4: Use QuickBooks Payments.
We sometimes run across QBO users who are still using third-party merchant accounts to handle their credit card processing. Although we never say so out loud, the question we ask in our heads is: “Are you crazy? Do you like doing things the hard way?”
As we pointed out in our software review, one of the advantages QBO has over Xero and FreshBooks is that it integrates seamlessly with Intuit’s other established products. This is especially true with QuickBooks Payments, an add-on service that can simplify your customer billing and credit card operations dramatically.
Long story short: When QBO and QuickBooks Payments are used together, 90% of your behind-the-scenes accounting work gets done automatically. Customers’ payments get matched to their invoices or sales receipts, your merchant fees get deducted and recorded, and your bank deposits get automatically batched and entered.
Congratulations, you just saved yourself 10-20 hours of accounting work each month, simply by using the right tools.
Tip #5: use QuickBooks Payroll service.
We’ll make this last tip short and sweet. If you have employees, take everything we just said about QuickBooks Payments and apply it to QuickBooks Payroll Service.
Payroll is an even bigger headache than merchant service accounting, and that’s why most small businesses outsource it. But if you’re using QBO, there’s no reason to shop around and look at other payroll providers like ADP and Paychex. Instead, just sign up for QuickBooks Payroll Service. It’s affordable, it works hand-in-hand with QBO (no need to import data or make journal entries), and it will make your payroll life ten times easier.
Footnote: In addition to providing payroll services, Intuit now offers the popular app TSheets. So if you need an online timesheet solution that syncs directly with your payroll system, there’s another nice add-on you might want to look at.