Many of our clients already use QuickBooks for their bookkeeping, and when you work with Assemblage LLC, we use QuickBooks as our exclusive accounting software as well.
However, usually when a client goes from DIY to an accounting service, there tend to be mistakes in the ledger, balance sheet, or there may be some tips that clients are not aware of that could help them further the financial health of their business.
We want you to know that you can transform the way you handle your finances by avoiding these 4 common mistakes below.
There Are Missing Transactions
As a small business owner, it can be tough to keep up with your records. However, when it comes to your finances, whether as a sole proprietor or a corporation, you’re determining the overall health of your business.
Therefore, it’s best to get in the habit of recording transactions every day or within the week it takes place. If you’re playing catch-up at the end of the year, you risk missing transactions too easily.
Not Backing Up Your Accounts
You should always export and save your books in case you have to switch accounting platforms or if you have to shut down your business. This can also be beneficial if you receive random audits or if you have to prove your business was a success to new investors.
Also, if you cancel your QuickBooks subscription, you’ll have one year of read-only access. So, it’s important to export and save your books right away.
Using Accrual Instead of Cash-Basis Accounting
QuickBooks does default to accrual-basis accounting, however, if you’re just starting out as a business, it’s best to use cash-basis accounting. Cash-basis accounting clearly shows when a transaction took place and how much cash you currently have.
There Are Missing or Incorrect Adjustments
If you’re doing accrual-basis accounting, you will need to adjust journal entries at the end of the month, quarter, or year to make sure the statements match the expenses and revenues for those periods. If you’re using QuickBooks and doing everything DIY, you may forget to make adjustments as you go.
At Assemblage LLC, we offer Bookkeeping & Accounting Services to small and medium-sized businesses. If you need help getting your accounting books together, contact us today!
You can also check out our latest YouTube video for another helpful QBO tip!