QuickBooks Online is an amazing program — if you know how to use it.
We’ve been working with QuickBooks Online (QBO) since it first came out 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 UI and lots of nice graphics, there’s some complicated stuff going on underneath. In reality, it’s difficult to use the program effectively unless you have a) an accounting background and b) lots of prior experience with the QuickBooks ecosystem.
But don’t worry, we’re here to help. We use QBO every day and we put together five general tips that will help you understand how QBO works and get the most out of the program.
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, 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. Choosing the right version is pretty darn important so if you’re not sure which one is the best fit for your business, you should chat online with an Intuit specialist or find an experienced QBO accountant and ask for a little advice.
Tip #2: it’s all about the bank feeds.
If you want to know why QBO is so much more powerful than QB desktop, the #1 reason is this: 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 tons of data entry and manual bookkeeping work, that’s why.
Bank feeds can be a little nerve-wracking at first but after you get the hang of them, most of your accounting work will consist of adding and matching transactions rather than entering things by hand. You’ll still need somebody who understands QBO to oversee the system and review transactions before adding them to your books, but bank feeds will streamline your accounting work enormously. Regular tasks that used to take 2-4 hours can now be done in 15 minutes.
Tip #3: manage your bank rules.
If bank feeds are the superhero of cloud accounting, then bank rules (also called auto-coding rules) are their trusty sidekick. Bank rules work in tandem with your bank feeds, enabling QBO to recognize familiar transactions — like your Verizon bill, your monthly rent, your Starbucks reloads, and your Google Ads spending — 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 process. But trust us, they save humongous amounts of time and labor. With a good set of bank feeds and auto-coding rules in place, QBO can do 60-80% of the boring, repetitive work you used to pay Marge the Bookkeeper to do. Experts call this “light touch” or “code-free” accounting, and it’s where 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 (like Heartland and Elavon) 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 major advantages QBO has over other systems like Xero and FreshBooks is that it integrates with Intuit’s family of established products. At the top of that list is QuickBooks Payments, an add-on merchant account service that can simplify your customer billing and credit card payment processing dramatically.
Long story short: When you use QBO and QuickBooks Payments together, 90% of your behind-the-scenes accounting work gets done automatically. Customer payments get matched to their invoices or sales receipts, merchant fees get deducted and recorded, and bank deposits get batched and entered automatically. Congratulations: You just saved yourself 10-20 hours of accounting work every month, simply by using the right tools.
Tip #5: use bill pay for QuickBooks online.
Speaking of useful QBO apps, the other one we really like is Bill Pay for QuickBooks Online. If you’ve been around the QuickBooks world for a while, you’ve probably heard of Bill.com and know what it does. It’s a QB add-on that gives larger businesses a powerful way to manage their accounts receivable, accounts payable, and cash flow.
Well, Bill Pay for QuickBooks Online is basically a simplified version of Bill.com for small businesses that don’t need all the advanced features. It allows you to pay bills and send ACH or check payments to vendors directly inside QBO.
The reason this is such a time-saver is because it means you don’t have to use your bank’s online billpay system and then go back and match or re-enter those transactions in QBO. Now, the whole A/P process happens inside QBO and you can pay bills and vendors by clicking one button. It’s another example of using an app to simplify an everyday accounting function that used to get done by hand.
If you’re new to QBO and you want to learn more about key features and how it works, here are our two favorite Help resources (you might want to bookmark these): QuickBooks Support and QuickBooks Tutorials.