The Mess of QuickBooks
QuickBooks is an intuit product meaning it is “intuitive” to use. I will give them credit they have taken double entry accounting and made it “easy” to use, however, intuitive…….. not so much.
The beauty of QuickBooks is that you can enter things just like a check register, which most people are used to using (though most people don’t do) and ultimately it creates your financial reporting – a profit and loss and a balance sheet.
Here is the kicker – there are also all these “add on” features like Bill Pay and Invoicing and Payroll which then integrate with the Check Register to create your reporting. When these are not set up and then used correctly what happens is QuickBooks creates entries to keep itself in balance – because after all it is a double entry accounting system. What do you end up with? A mess. And if you are using QuickBooks online it is a mess on steroids.
Just this week I corrected a set of books and found this company had paid tax on a profit that didn’t exist in their company the year before. They were on track to do it again this year based on how their books were set up and yet they were strapped for cash flow.
I have seen it over and over where people are doing their own bookkeeping, thinking they are saving money. Then they take their reports to a CPA to file their taxes. The CPA can see from the Balance Sheet that the accounting is not good so they pick through the P&L, ask for your loan and bank statements at year end and file your taxes.
What you are left with is a set of books which really don’t mean much, and ones you certainly can’t make decisions from, and you may have paid too much or too little in tax – but neither you or your CPA know the answer to that.
You think because you have done all the right things – kept your books and used a CPA – you must have good numbers.
Yet you just can’t reach the next level of growth in your company and your cash flow just keeps getting tighter and tighter.
As an accountant, I love numbers. I geek out on the functionality of a piece of software like QuickBooks and how it can support an entrepreneur when done correctly. If you are part of the 90% of the population who doesn’t resonate with this then give yourself a break and hire someone who is to help you in this area.
Money and numbers are emotional enough without banging your head on the wall trying to keep your QuickBooks up to date. I will guarantee you that you are either leaving money on the table or you are paying way too much in tax if you are doing your own accounting. Not to mention lost revenue if this is not your zone of genius. How else could you be spending your time? Would it generate more revenue?
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