February 27, 2020

QuickBooks Online Best Practices

QuickBooks Online
Ronald B. Allen

The best and most efficient ways to get things done in QuickBooks Online are collectively referred to as “best practices.” You should be using them!

We all fall into habits at work. And, generally, these are ways that make life easier and get things done faster, like make sure to answer emails right away or making a few notes before meeting with employees. Or maybe you have learned to do certain tasks when you are fresh and rested and do the more routine work at other times.

In this regard, working in QuickBooks Online is no different. You will fall into certain habits, usually because you are doing things just like you have always done them. This may feel comfortable but it may not be the most efficient use of your time and other resources. Ideally, you will incorporate QuickBooks Online best practices into your business routines and make them your habits.

Consider these four habits when you are using QuickBooks Online.

Look Over All New Transactions Each Day

QuickBooks Online lets you stay in touch with your financial accounts in real time. But, this only works to your benefit if you routinely import and/or download this data and check it every day. If you do not adopt this best practice, you may miss crucial changes in your business or simply find the backlog too overwhelming and not do it at all.

Our recommendation is that you review all account transactions on a daily basis and update fields when needed

Click in the left vertical pane on Banking to see an account register. Choose the account you want to review. A window like the one above drops down offering you options. Defining and clearing transactions that you download can be tricky until you get the hang of it. Contact us if you need help getting started.

Make Sure to Set up Categories for Expenses and Assign Them Properly

As with all necessary business tools, you get benefits from QuickBooks Online in proportion to how much time and effort you devote to it. When you conscientiously complete transactions and records, the report QuickBooks Online generates will be very helpful. This is especially true when you correctly assign categories to your expenses and make to mark them as billable or not. You will need this information at tax time and if you do the job right every day, you will have the necessary information with few key strokes. If not, you will need to pay more in taxes or spend a lot of time fixing what you could have done right in the first place.

Run Your Aging Reports One or Two Times a Week

Staying up to date on how much money is owed you and how much you owe is crucial for effective business operations. You can do this by running aging reports once or twice each week. While the dashboard gives you a snapshot of totals for unpaid invoices, it does not show you which of your bills are soon to be due or ones that you have overlooked and are overdue.

Run your aging reports at the beginning and end of each week by using the Accounts Receivable Aging Summary and Accounts Payable Aging Summary. Both of these reports can be customized by just clicking the Customize button although this is rarely necessary. Ideally the only numbers are in the first column which is Current. Anything else is an indication of late payments by either you or your clients. You can see the details of any transaction by simply clicking the associated number.

Always Set Reorder Points for Your Inventory

For best results let us help you set up inventory tracking in QuickBooks Online

When you keep an eye on inventory levels of your products, your business runs more efficiently and is more profitable. The key is to set a Reorder point when you create a record for an item by going to Sales, Products and Services, and New. Your Products and Services page lets you know which stock items are low (Low Stock) or which you are out of (Out of Stock). In a table beneath those numbers you will see your Qty on Hand and Reorder Point in a table.

NOTE: The QuickBooks Online inventory tracking feature is rather advanced. For businesses that need it, this feature is an absolute necessity but you may need help setting up inventory management features for your business. Contact us for help setting this up.

Other Best Practices in QuickBooks Online

QuickBooks Online has many great features and each has best practices which make the feature more efficient. Let us help you by making sure you are using best practices for your reports such as your Balance Sheet and Statement of Cash Flows. These are reports you need for sharing information with a third party about the financial health of your company or for making long term strategic business decisions. Let us help you set these up and analyze them regularly or help you with any aspect of QuickBooks Online that you are finding difficult.

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