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. While QBO has a great user interface and lots of friendly graphics, there’s some complicated stuff going on under the hood. In reality, it’s difficult to use the program effectively unless you have a) a real 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 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 an Intuit specialist or find an experienced QBO accountant and ask them for a little advice.
Tip #2: get to know your bank feeds.
If you want to know why QBO is so much better than QB desktop, the #1 reason is bank feeds. This amazing 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 massive 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 who knows what they’re doing 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: 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. Long story short: bank rules work in tandem with your bank feeds, enabling QBO to recognize familiar transactions — like your monthly Verizon bill, software subscriptions, and 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 bank rules in place, QBO can do 60-80% of the work that you used to pay Marge the Bookkeeper to do. Experts call this “light touch” or “no code” 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 advantages QBO has over other systems is that it integrates 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 processing dramatically.
Long story short: When you use QBO and QuickBooks Payments together, 90% of your behind-the-scenes accounting work will get done automatically. Customer payments get matched to their invoices or sales receipts, merchant fees get automatically deducted and recorded, and bank deposits get batched and entered with no data entry.
Congratulations, you just saved yourself 10-20 hours of accounting work every month, simply by choosing the right tools.
Tip #5: use QuickBooks Payroll.
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 accounting — that’s why most small businesses outsource it to companies like ADP and Paychex. But if you’re using QBO, there’s no reason to shop around and look at other payroll providers. Instead, just sign up for QuickBooks Payroll Service. It’s affordable, it integrates seamlessly with QBO (no data imports or journal entries required), and it will make your payroll life ten times easier.
By the way, in addition to providing payroll services, Intuit now offers the popular app TSheets. So if you need a time tracking solution that syncs directly with your payroll system, there’s another nice add-on you might want to look at.