What Is QuickBooks & What Does It Do?

QuickBooks is the most popular small business accounting software businesses use to manage income and expenses and keep track of the financial health of their business. You can use it for invoicing customers, paying bills, generating reports, and preparing taxes. The QuickBooks product line includes several solutions that work great for anyone, from a freelancer to a midsized business.

Small business owners typically use QuickBooks to manage their invoices, pay their bills, and track their cash flows. They also use it to generate month- and year-end financial reports as well as prepare for quarterly or annual business taxes. Some business owners manage QuickBooks themselves while others prefer to use an in-house or outsourced bookkeeper.

1. Create and Track Invoices

You can create invoices easily and either print them or email them to customers. QuickBooks will record the income and track how much each customer owes you automatically. You can view the number of your outstanding invoices—known as your accounts receivable (A/R)—as well as how many days they’re overdue by running an A/R aging report. Below is a sample A/R aging report from QuickBooks Online:

2. Keep Track of Bills & Expenses

QuickBooks keeps track of your bills and expenses automatically by connecting your bank and credit card accounts to QuickBooks so that all of your expenses are downloaded and categorized. If you need to track a check or cash transaction manually, you can record it directly in QuickBooks in a few minutes.

You can also enter bills into QuickBooks when you receive them so that QuickBooks can help you track upcoming payments—or A/P. You can ensure that you pay your bills on time by creating an A/P report. This report will provide you with the details of your current and past-due bills. Below is a sample A/P aging report from QuickBooks:

3. Print Financial Statements for Your Business

By managing all of your cash inflow and outflow activities in QuickBooks, you can print financial statements that provide useful information about how your business is performing. Lenders often require financial statements when you apply for a small business loan or line of credit.

Profit and Loss Report

The Profit and Loss report will show you how profitable your business is by summarizing its income minus its expenses. The report shows you the bottom line net income (loss) for a specific time period, such as a week, a month, or a quarter.

Balance Sheet Report

Statement of Cash Flows

The Statement of Cash Flows in QuickBooks will show you all of the activities that affect the operating, investing, and financing cash inflows and cash outflows for your business.

4. Track Employee Time & Expenses

Employees or subcontractors can enter their own time as they progress through the day, or a bookkeeper can enter their weekly time if the employee submits a manual timesheet. Time entered and assigned to a customer will be available to add to the customer’s next invoice. Any expense entered can be marked as billable and assigned to a customer. Just like time, these billable expenses will be available to add to the customer’s next invoice. You don’t need the payroll add-on to track employee time for billing purposes.

5. Payroll

Payroll is an area that you don’t want to skimp on by trying to do it manually. Mistakes made in calculating paychecks can result in steep penalties and unhappy employees. QuickBooks has its own payroll function that can automatically calculate and run payroll as often as you need. When you enter employee time as discussed above, the hours not only flow to your invoices but also to the payroll module. This way you can be confident that every hour you pay your employee is also considered for billing to a customer.

The best thing about using QuickBooks payroll is that it’s integrated with QuickBooks so that your financial statements are always up to date as of the latest payroll run. The purchase of a QuickBooks Payroll subscription is required to run payroll, but you have several levels of service to choose from to fit your needs.

QuickBooks Online Tutorial: A Beginner’s Guide

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However, as a new user, you may be feeling a little overwhelmed right now. Even though QuickBooks Online is user friendly, it might help to get a little more acquainted with some of its bookkeeping features, which include double-entry accounting.

How to use QuickBooks Online

Our QuickBooks Online introduction can help, guiding you through some of the common features found in the software as well as providing easy, step-by-step instructions for using those features.

1. How to set up QuickBooks Online

Perhaps the most important task in QuickBooks Online is the initial setup process. After logging into QuickBooks Online for the first time, you’ll see a display screen where you can choose the features you’ll be using in the application.

Tips for using the setup feature in QuickBooks Online:

2. How to set up and use the bank connection feature

QuickBooks Online gives you the option to connect your bank accounts directly to the software. By connecting them, you can easily track both income and expenses in QuickBooks Online automatically, reducing the amount of data entry required.

Once you choose the account(s) you wish to connect, QuickBooks will automatically download transactions for the last 90 days, and it will continue to automatically download transactions on a regular basis, ensuring that your balances are always up to date.

Tips for connecting your bank accounts in QuickBooks Online:

3. How to categorize bank transactions

Once you set up your bank connection, you can start categorizing all imported transactions. The nice part about this is that much of the transaction posting is completed automatically, making month-end reconciliation a breeze.

Tips for categorizing bank transactions in QuickBooks Online:

4. How to set up invoice preferences

Tips for using the invoice customization feature in QuickBooks Online:

5. How to create an invoice

No worries, since invoice creation in QuickBooks Online is a simple process, where you can easily enter a customer, product, or service on the fly, add an online payment option, and email the invoice to your customer all from one entry screen.

Tips for using the invoice feature in QuickBooks Online:

6. How to track expenses

Along with producing quality invoices for your customers, you’ll also want to properly manage your expenses, whether it’s to create an expense report or to simply better track your business expenses. The Expense feature in QuickBooks lets you do just that.

Tips for using the expense feature in QuickBooks Online:

7. How to pay bills

Perhaps you’ve just received your electric bill, but it’s not due until the end of the month. If you want to enter the bill to be paid when it’s due, you’ll want to use QuickBooks Online’s accounts payable feature, which you can access by clicking on the Bill feature in the application.

When the bill becomes due, you can choose from a variety of payment options available in QuickBooks Online, including an option to pay electronically directly from the application.

Tips for using the expense feature in QuickBooks Online:

Reconcile regularly

QuickBooks Online will save you time and effort – but it works best when you keep it up to date. You should reconcile your accounts regularly (QuickBooks recommends doing so every month) so that your accounts reflect what’s on your bank and credit card statements. As Float pulls through real-time information from QuickBooks Online, regular reconciliation also ensures that your cash flow forecast is always accurate.

• From the home screen, click on the gear icon and then ‘Reconcile’
• Choose the bank account you want to reconcile
• Enter your ending balance and end date from your statement
• Click on ‘Start Reconciling’ – this will pull through the transactions for the specified period
• Check the transactions in QuickBooks against those on your bank statement
• In QuickBooks, tick the correct transactions
• The difference amount should be zero – this means that the transactions match
• If there is a difference, check that the number of transactions is the same on both sources. If there are missing transactions in QuickBooks, you can manually add these in.
• If the issue is with the date of transactions, just click on the date and change it to the correct one as per your bank statement
• If neither of these things solves the issue, check that the amount of each transaction is correct in QuickBooks
• Click on ‘Finish Now’

Need to know how to undo reconciliation in QuickBooks Online? If you need to undo an entire reconciliation period, this can only be done in QuickBooks Online Accountant. Otherwise, you can manually undo transactions one by one by following these steps.

QuickBooks is easy for beginners and ideal for small businesses who need to save time and money whilst keeping on top of their spending and income – and syncing it with Float will ensure your forecast is always up-to-date with a live picture of your cash situation.

Source:

https://fitsmallbusiness.com/what-is-quickbooks/
https://www.fool.com/the-ascent/small-business/accounting/articles/quickbooks-tutorial/
https://floatapp.com/blog/how-to-use-quickbooks-online/