What’s one thing all profitable businesses have in common? Excellent bookkeeping. Whether handled by a full-time bookkeeper or a diligent business owner, financial records must be accurate, organized, and compliant to ensure smooth operations. Luckily, financial entries are rarely hand recorded in large, dusty ledgers.
Today, electronic accounting software, such as QuickBooks Desktop and QuickBooks Online, streamline bookkeeping through automation and artificial intelligence (AI), making financial management more efficient than ever. However, mistakes can still happen.
In this guide, we highlight accounting software best practices and common QuickBooks mistakes to help you maintain accurate, organized financial records. These accounting principles also apply to other software, such as Xero, as the core fundamentals remain the same despite differences in interface.
Click the links below to explore the ABCs of QuickBooks in more detail.
A is for “Applying Customer Payments to Invoices Correctly”
One of the most critical bookkeeping tasks is accurately matching customer payments to invoices. Failing to do so can lead to misleading Accounts Receivable (A/R) reports, making it difficult to track cash flow and outstanding balances.
Always double-check that payments are applied to the correct invoices to maintain an accurate financial picture.
B is for “Bank Reconciliation”
Bank reconciliation ensures that the cash balance in your company’s books matches the balance in your bank account. This essential process helps detect errors, prevent fraud, and keep financial records accurate. Perform regular bank reconciliations to catch discrepancies early and maintain a clear financial overview.
C is for “Chart of Accounts”
Think of the Chart of Accounts as the table of contents for your financial transactions. It categorizes revenue, expenses, assets, and liabilities, helping you track where money is coming from and where it’s going. Customize your Chart of Accounts based on your industry and business needs as an accounting software best practice. Avoid unnecessary accounts that create confusion.
D is for “Double Downloads”
Duplicate transactions in QuickBooks can distort cash flow, inflate account balances, and lead to time-consuming corrections. These errors often happen when transactions are imported multiple times. Read the article to learn how else double entries happen and how to avoid them.
By following these QuickBooks best practices, you can improve financial accuracy, streamline bookkeeping, and ensure long-term business success.
Bernstein Financial Services is a full-service accounting and tax firm that helps business owners meet their financial goals in their personal and professional lives. For personalized guidance, please schedule a consultation appointment with a Principal.