Business Finance: Typical QuickBooks User Errors

While QuickBooks offers an intuitive user interface it does not guarantee success in providing you the financial information you need to run your business.  Even if you have a simple business, you do need professional help to get help with QuickBooks setup and training for using the system in your business.  If you don't believe me, read the following list of typical client errors. 

Familiarity with how to use QuickBooks does not make you an accounting expert any more the familiarity with Microsoft Word makes you a professional writer.  Think about it.

Typical Client Errors

1. List setup errors
   • Chart of accounts
     • Account list not appropriate to reporting needs
     • Redundant or duplicate accounts
     • Unused accounts
   • Vendors
     • Redundant or duplicate
     • Vendors properly not set up for 1099 reporting
   • Customers and jobs
     • Customer and job organization not appropriate for reporting needs
     • Redundant or duplicate
     • Jobs not properly assigned to customers
     • Customer level tax status not properly assigned
     • Customer discounts not properly assigned
   • Inventory, Service, and Non-Inventory Items
     • Categorization of items not appropriate to reporting needs
     • Items set up with incorrect item type
     • Items set up with incorrect assignment for income or expense account
     • Items set up with incorrect sales tax code (taxable, non-taxable, etc.)
   • Sales Tax Items
     • Items set up with incorrect sales tax rate
     • Items set up with incorrect sales tax agency (vendor that you collect for)
   • Payroll  Tax Items
     • Items set up with incorrect tax rate, annual limit, payee, account id
     • Lack of integration with time tracking when used for employees 
   • Classes
     • Classes and sub-classes not properly planned for reporting needs
2. Transaction errors
   • Entries made to the wrong account
   • Bills improperly recorded as billable or non-billable to a customer
   • Failure to bills customer for expense reimbursements and time
   • Entries made to the wrong customer/job
   • Entries made to closed accounting periods
   • Checks from closed periods incorrectly voided or deleted
   • Vendor payments not properly applied
   • Customer payments not properly applied to customer/job
   • Bank deposits not properly recorded
   • Inconsistent use of inventory and non-inventory items in purchases and sales
   • Improper use of inventory adjustments (Adjust Quantity on Hand)
   • Inconsistent use of class tracking
   • Incorrect method of paying payroll and sales tax liabilities
   • Incorrect selection of items vs. expenses in bill, check, and credit card transactions
3. Work process errors
   • Failure to perform monthly bank reconciliations resulting in questionable financial reports
   • Failure to use physical vendor bills to prevent lost bills, duplicate entries and payments
   • Failure to secure blank checks and keep checks stubs for checks written
   • Failure to provide accounting with sufficient information to properly record transactions

Robert Guild is certified QuickBooks ProAdvisor in Austin, TX who conducts CPE courses for CPAs and individual training and group classes to QuickBooks users. His company at www.QBCoach.biz, maintains a sixteen-station QuickBooks lab, providing hands-on training. You can contact him directly at rguild@QBCoach.biz or follow him on twitter at QBPro