QuickBooks Online has great features for small businesses that need to manage their day to day financials in order to track business growth, stay current with tax liabilities, or provide up to date reports to stakeholders. Every business should adopt "best practices" policies that add to success.
“Best practices” aren’t enforceable rules. They’re simply guidelines businesses commonly follow in one area or another. If you’re in retail, for example, one best practice might be to always ask customers that are checking out if they found everything they were looking for. This serves two purposes: It conveys a feeling of concern for the customer’s shopping experience, and it may also lead to increased sales.
QuickBooks Online has many best practices, some of which may serve multiple purposes. These include:
They keep your company data safe and clean.
They provide insight on your financial status.
They save time.
They can lead you to better relationships with customers and vendors.
Do you employ any of the following common practices in your business?
1. Reconcile accounts regularly
One of QuickBooks Online’s most useful features is its ability to connect to your financial institution’s websites and download transactions. QuickBooks Online offers tools to help you keep your accounts reconciled. Reconciling accounts can help you uncover errors, it gives you a better picture of your cash flow, and it improves the accuracy and timeliness of reports.
It’s not a particularly pleasant process and if you're not reconciling your accounts regularly, you should be. In order to minimize errors and detect unauthorized activity, we need to utilize the tools we have. If reconciling is not your thing, let us help.
2. Clean up your lists
Your lists of customers, vendors, products, and services, can grow into a cumbersome pile after a several years in business. This means it can take more time than it should to find the transaction you might be looking for. It also puts unnecessary stress on your company file. In most cases you should make the item inactive.
3. Never leave QuickBooks Online open when you leave your work area
This goes for everyone, even people who work alone and don’t access their company files away from their work areas. One reason for this is to keep someone else from getting in and authorizing transactions. This minimizes errors and prevents unauthorized transactions. It also protects the integrity of your data file in case your internet connection suffers some kind of outage.
4. Keep track of 1099 vendors
Whether your company has 10 vendors or a hundred, you may have to supply at least some of them with an IRS Form 1099 at about the same time you’re preparing W-2s for employees. Your 1099-related tasks will be much easier if those individuals and/or companies are earmarked. IRS rules require businesses to issue a 1099 to any individual whom you paid $600 or more during the calendar year. If you don't, you could be penalized up to $260 for each ,late 1099. If you're not sure about these rules or need some guidance please call us at 208-935-1040.
5. Classify transactions with care
Every time you have to create a record or transaction where categories are involved (i.e., Classes, Customers, Vendors, and Territories), check and double-check that you’ve assigned them the correct classification. Improper categorization can lead to problems with daily workflow and inaccuracies with your reports. If you're not sure how to use the Classes feature, contact our office for guidance.
6. View reports on a regular basis
There are some advanced, financial reports in QuickBooks Online that you should be creating on a regular basis; either monthly or quarterly. These include Profit and Loss, Balance Sheet, and Statement of Cash Flows. Creating these reports is fairly simple but you should also take the time to analyze them. Please schedule an appointment with us for some guidance.
7. Sales by Class Detail
If you’ve been using QuickBooks Online for a while, you may have an active list of best practices. If you’re new to the site, we encourage to schedule an appointment with us to go over best practices for your business. Keeping clean books helps you to be prepared for any type of audit and you have the ability to catch changing trends in your market and industry.
By implementing best practices from the start, you will minimize stress and have a clear picture of how your business is doing. You have lots of competition out there and you need an edge to be better!