Debunking the 3 Biggest Misconceptions about Quickbooks Online
Are you a business owner and new to QuickBooks Online (QBO)? Or you have been using QBO for a little while and wonder if you have been using QBO to its full potential? Here is a quick rundown on what QBO can and cannot do for your business.
First things first, what is QuickBooks Online?
QuickBooks Online is a cloud-based financial management software. It’s designed to slash the time you spend managing your business finances, by helping you with tasks such as: creating estimates and invoices, tracking sales and cash flow, managing your customers and suppliers, and more.
In short, QBO records financial data for money coming in and out, supports financial operation functions such as receiving payments to invoices, does your company payroll and more. Its main function is to record and organize your accounting data. If you want to learn how to use QBO, here are some tutorials.
After using QBO for a while, you probably have your own idea of what QBO can and cannot do. Here are the top three biggest misconceptions about using QBO:
1. QBO suggests all the categories on the banking page and I just need to accept them.
No. QBO uses machine learning to observe and suggest the categories that have been most commonly used in business. However, it doesn’t mean that all the categories suggested are the most suitable ones you want to use for your business.
What does this mean for you? You still need to review all the categories suggested by QBO under banking session and make sure that these sources of income and expenses have been added into the right accounts (Chart of Accounts). QBO has the “rules” function to automate the transaction categorization process; still, you will have to be in charge of the final results and make sure all the transactions are in the right place in your financial reports.
2. I can export the financial reports from QBO anytime and they are in real-time and accurate.
No. The financial reports on QBO reflect all the data/transactions you have been adding into QBO. However, if you still have transactions such as banking transactions that have not been added, any depreciation cost for your assets, or bills that you have received but haven’t recorded into QBO, then the financial reports on QBO will not reflect this information. Hence, your financial reports are not complete.
What does this mean for you? You want to make sure all the revenue and expenses have been added into QBO before you run financial reports such as Income Statement and Balance Sheet. The most convenient way to do this is to create a cheat sheet that has all the common entries/transactions your company records on a monthly basis, then record them and check them off from the cheat sheet before you run reports on QBO.
3. QBO does everything money-related for my business and I don’t need to use any other software.
No. QBO’s main function is to record financial data and support selected financial operation functions. Depending on your business, you very likely still need to use other software/apps in addition to QBO. For example, if you are selling on Amazon, you might use A2X to sync sales transactions from Amazon to QBO; if you don’t want to manually input bills into QBO, you might use Bill.com for bill management. The key is to find the right software/apps in addition to QBO to speed up your business operation process and ensure your data is accurate.
QBO is a powerful software and it can do many amazing things! The trick is to know how to use QBO the right way for your business and identify the software/apps in addition to QBO for any functions that are specific to your business. If you have any other questions regarding QBO, drop us a line at the Contact Us page!
