QuickBooks Online is an amazing program — if you know how to use it.
As much as we love QuickBooks, the idea that it’s “easy to use” is a bit of a false promise. Yes, QBO has nice colors and friendly graphics — but there’s some complicated stuff going on underneath. In reality, most people can’t set up their QBO company file correctly or figure out how to use the program effectively unless they have a) an accounting background and b) lots of prior experience with the system.
But don’t worry, we’re here to help. We’ve made every mistake in the book, and we decided to put together a list of five no-brainer QBO tips that we think everybody should be aware of:
Tip #1: Choose the right version.
This might seem obvious, but the first step on any successful QBO journey is to choose the right product for your business. QBO comes in three different versions (four if you include QuickBooks Self-Employed), and each one has different capabilities.
There’s a handy comparison chart on the QBO website, which provides enough info for many people. However, this is an accounting system you’re choosing — not a box of cereal. If you’re not sure which version is the best fit for your situation, we encourage you to chat online with a QB support specialist, or find a QB 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 more efficient than QB desktop, the #1 reason is: bank feeds. These live connections between QBO and your financial accounts enable you to automatically download all your bank and credit card transactions directly into your accounting system. As a result, they virtually eliminate manual data entry and human keying errors.
Bank feeds can be a little scary at first, but after you learn the ropes 60-80% of your accounting work will consist of adding and matching transactions rather than entering things by hand. Although you or your accountant still need to review all downloaded transactions and make sure they’re coded correctly before adding them into your books, bank feeds streamline the workload dramatically. Everyday accounting tasks that used to take 2-4 hours should now take about 15 minutes.
Tip #3: Manage your bank rules.
If bank feeds are the superhero of cloud accounting, then bank rules are their powerful sidekick. Why? Because bank rules work behind the scenes, enabling QBO to recognize familiar transactions — like that $25/month service charge from Bank of America, and your outlandish monthly cell phone payment to Verizon — and automatically code similar 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 enormous amounts of time. With a good set of bank rules in place, QBO can do most of the manual, repetitive work that you used to pay Marge the Bookkeeper to do. Accounting experts call this “light touch” or “no code” accounting, and it’s the way the entire industry is headed.
Tip #3: Use online invoicing + QuickBooks Payments.
We sometimes run across QBO users who are still sending paper invoices and/or using third-party merchant accounts to process their credit card transactions. Although we never say so out loud, the question we feel like asking is: “Are you crazy? Do you like doing things the hard way?”
As we pointed out in our software review, one of the main reasons people choose QBO over Xero and FreshBooks — which are both excellent products — is because it integrates with Intuit’s other proven services. With online invoicing and a QuickBooks Payments merchant account, you can simplify your money-in process enormously by emailing invoices to your customers and allowing them to view and pay online by credit card or ACH. Easier for them, and easier for you.
As cool as online invoicing is, that’s only half the story. The other half is that, when you use online invoicing and QuickBooks Payments together, all your behind-the-scenes accounting work practically does itself. In other words: customers’ payments get automatically matched to their invoices or sales receipts, merchant fees get automatically deducted and recorded, your bank deposits get automatically batched and recorded, and there’s no manual bookkeeping or reconciliation work required.
Congratulations, you just saved yourself 10-20 hours of accounting work each month.
Tip #4: use QuickBooks Payroll.
We’ll make this tip short. Take everything we just said about QuickBooks Payments, and apply it to QuickBooks Payroll.
Payroll is an even bigger potential headache than merchant service accounting, and QuickBooks Payroll makes 90% of the work go away. Forget other services like ADP and Paychex. If you have employees and you want to get the most out of QBO, you should be using QuickBooks Payroll.
Tip #5: Help yourself to some QBO training and support.
One of the reasons that Intuit is the leader in the small business accounting market is because they work hard to educate customers and help them use their products successfully. Having said that, Intuit is a huge company and it’s not always easy to find the right support options.
To help you get started, here are our two favorite QBO links (you might want to bookmark these): QuickBooks Support and QuickBooks Tutorials. In addition, we have a package of “How to Use QBO” PDFs that Intuit gives out to ProAdvisors like us. They’re not secret by any means, Intuit wants us to give them away. So feel free to shoot us an email and we’ll be happy to send them your way.