There is a reason why QuickBooks software is the #1 Accounting Software in the Country – it’s easy to use! Even though it’s easy, it is still very powerful and able to compete with the more complicated and expensive softwares out there. Although, QB has a high ease of use, there are some pretty common mistakes that people do and I would like to point those out so you don’t do them also!
#1 Don’t use Write Checks if you are Paying Bills that were entered in QuickBooks
When you enter a bill to be paid into QuickBooks, the only way to get that bill marked as paid is to write a Bill Payment Check. It seems to happen a lot, that clients will go to Vendors>Enter Bills and then to pay the bill, they go to Banking>Write Checks. When they do this, the check that gets written does NOT attach itself to the original bill. Make sure you go to Vendors>Pay Bills to pay any outstanding bills you may have in QuickBooks.
#2 Don’t enter invoices and then make a deposit without first receiving the payment
If you are entering invoices in QuickBooks to record your sales, be sure to use the Receive Payments screen to apply the payment against the invoice. Sometimes people make the mistake of skipping that step. But if you go right to the Make Deposits screen, the invoice won’t show as paid, and your sale might end up being counted twice.
#3 Don’t accidentally record your customer payments twice
When you receive a payment for an invoice and enter it in the Receive Payments screen, QuickBooks automatically puts that money in the Undeposited Funds account. Sometimes people do this but then also make a separate deposit for the same amount, and that makes a mess of their records. Instead, when you go to the Make Deposits window, include the payment in the Payments to Deposit window that comes up. This will move it from Undeposited Funds to your bank account.
#4 Don’t choose your bank account in the Expense Account field when writing a check
When they’re using the Write Checks window, sometimes users don’t realize that the check is already affecting their bank account, so they select their checking account as the expense account. This causes the money to go out and immediately back into your checking account instead of reducing the checking balance. Typically, you’d want to specify one of the expense accounts you’ve set up, such as Utilities, not the bank account the check is drawn on.
#5 Don’t rename or delete the accounts that QuickBooks creates automatically
To simplify the job of setting up your company file, QuickBooks software creates critical accounts like Retained Earnings and Sales Tax Payable for you. Changing the names or account types it assigns, or moving these accounts, can seriously impair QuickBooks’ ability to work for you. QuickBooks automatically sets up other accounts as well: Accounts Receivable, Cost of Goods Sold, Estimates, Inventory Assets, Payroll Liabilities, Payroll Expenses, Purchase Orders, Retained Earnings, Sales Tax Payable, and Undeposited Funds. Moving or editing these accounts can easily introduce errors to your financial records
#6 Don’t assign Items to the wrong kind of account.
In QuickBooks, an item is anything your company buys, sells, or resells in the course of business, such as products, services, shipping and handling charges, discounts, and sales tax, if applicable. Think of the line items on an invoice. For your records to be accurate, you need to associate every item you create with an account and account type that make sense. For example, any item you sell must be assigned to the right income account.