QuickBooks: What Entrepreneurs Need to Know

Accounting for everyone!

What is QuickBooks?

Starting a small business as an entrepreneur is scary enough until the dreaded accounting word comes up. Let’s face it, most small business owners are following their passion and not looking for reasons to do accounting. Here is where QuickBooks accounting software enters the picture.

So then, what is QuickBooks? QuickBooks is really more than accounting software. It is actually a business software that includes the ability to receive payments, complete payroll, track inventory, and manage expenses. You don’t have to know any accounting to use QuickBooks but that does not mean you won’t need an accountant at some point.

Who Makes QuickBooks?

QuickBooks is an accounting software developed by the company Intuit Inc. When you go to the Intuit.com website you will find their five major products prominently displayed. In addition to QuickBooks you will find links for TurboTax, Mint, Credit Karma, and Mailchimp.

TurboTax is a tax software. Mint is personal finance software. Credit Karma provides credit reports and credit scores for individuals. Finally, Mailchimp is a service to help collect, manage, and efficiently utilize email address lists.

As you can tell, Intuit is geared towards helping individuals and small businesses with various tools to run their business and improve their finances. Although it may seem that Intuit only caters to the small operation, all of their software services are scalable so you will not outgrow them any time soon. It is possible that they will fit your needs for as long as you want.

Why should a small organization use QuickBooks?

One reason to use QuickBooks is that your accountant is probably already proficient at using it. Most accountants and bookkeepers already use QuickBooks with other clients. The accounting firm can access the information and bring it into their system to generate your reports and do your taxes.

However, if you are like most small business owners, you are trying to find smart ways to reduce your accounting costs. It is possible for you to keep up with most of the day-to-day tracking of sales and expenses. This will reduce your bookkeeping bill.

Then, when it is time to do the taxes, your QuickBooks file will be tax time ready for the accountant to take over. Since less time is needed to do the return, you will save money on tax return preparation fees.

QuickBooks reports can also provide you with reports and information on a regular basis. Depending on the version you have, you can run reports on inventory, payroll, profit, milage, expense, receivables, bills, and that is just a start. You can run these reports whenever you need them with very little training.

Which QuickBooks is right for me?

What was the benefit of QuickBooks Desktop? QuickBooks Desktop was software that was loaded onto one of your computers. Because it was on the computer, an internet connection was not needed. Another benefit was that you could have as many companies as needed using that same software.

Desktop had its shortcomings too. For example, the data files were kept locally on you’re the machine where the work was completed. Therefore, the data needed to be backed up or at least saved to a cloud drive like Google Drive.

QuickBooks Online, or QBO, is a cloud-based service. Business owners pay a monthly fee for access to QuickBooks Online. Pricing depends on the level of service needed by the small business owner. The software does everything that Desktop did with the benefit of never having to back up the business data.

As an internet-based service, you can access your company from any web devise. QuickBooks Online works well with mobile phones. There app can help you track expenses on the fly by uploading the receipts using your phone at the time of the purchase. You can also track milage if there is a business vehicle in use.

One drawback is that you will need a license for every business you have. Though you can have multiple licenses under the same account, you will still be charged monthly for each license.

What functions does QuickBooks Online offer everyone?

There are different levels of QuickBooks Online. You can find these options by first going to the QuickBooks website. To get to the website wither select “QuickBooks” from the Intuit website or go directly to quickbooks.intuit.com. Scrolling down you will see the plans that are available.

There are some excellent functions available to all plans. Every plan includes the ability to track your expenses. You can connect your credit card, Square, banking, and various other accounts directly to your QuickBooks account. By connecting your accounts to QBO, the transactions are automatically uploaded. You can provide QBO with rules to categorize the transactions as they come into the QuickBooks business.

All plans allow you to use the QBO mobile phone app to make managing your business more immediate. For example, you can snap a picture of receipts to have them directly imported to your business. Through the app you can also track miles automatically using GPS tracking. You can then access milage reports which are especially helpful at tax time.

What level of QuickBooks Online do I need?

Once you decide that QuickBooks Online is right for you, then you will need to determine what level of plan you want to subscribe. Remember, you need a license for each business you want to track but most small business owners will just need one license. Each plan provides an increased number of features and functions.

The most basic plan is called Freelancer. At this time, it priced at $15 per month with a discount for the first 3 months. Now Intuit does not make it easy to find the Freelancer level. It is not presented in the products page. To find Freelancer level, first select Plans & Pricing, then scroll down below the initial pricing list.

Freelancer is a level for individuals that have a small business. The product is for an individual who runs his or her own business as a sole proprietor and reports this on their personal tax return using a Schedule C. Think of a sole proprietor like this, you are the business, and the business is you. There is no separate company or corporation only you. In a sole proprietorship, you and the business are one.

With freelancer you can do the basics. This includes tracking income, manage expenses, capture receipts, track miles, and run basic reports. This level may be all you need and because it is the basic level you are able to save some money. No need paying for something you do not need. Plus, you can upgrade anytime you want.

The next level of service is called Simple Start and it is currently at $25 per month with a discount for the first three months. You can do everything in Freelancer as well as manage cash flow, provide customer estimates, provide 1099 forms to contractors, and run more reports that might be useful to you.

Essentials is the next level up at $50 per month after a three-month discount. Essentials is for the business that has grown and now needs to have more than 1 user. With Essentials you can have up to 3 users. You can also track employee time.

Then we get to the Plus level. Plus, costs $80 per month after the three-month discount. It does everything the others can do but it provides inventory tracking and allows your business to track projects. As your business grows you will find managing inventory is a crucial part of operations. Project tracking is also useful for some organizations. For example, a contracting firm may want to track the profitability of each project in addition to the overall profitability. Really, these functions are for the business that has grown and is now servicing many clients at once.

The most robust QuickBooks Online level is Advanced. It costs $180 per month after 3 months of discounts. It has business analytics and employee expense reports. With Advanced you can batch invoices, provide customized roles for employees to access QBO, and automatically process tasks. One of the most important upgrades with Advanced is that you will get a dedicated account team should any issues arise.

QuickBooks Add-On Services

QuickBooks Online has additional services that you can add to whatever plan you select. This means that you may pay more than just the plan amount. However, this also means you are not paying for something you don’t want or need either. It will be up to you to determine if you need the additional service.

The most significant add-on service is QuickBooks Payroll. Understand that are NOT required to use the payroll service if you have employees. You can choose to do the payroll yourself and you can still use QuickBooks just fine. However, there are benefits to QuickBooks Payroll.

First, QuickBooks Payroll service will run automatically. They will calculate, file, and pay your payroll taxes for you. This benefit means that you don’t need to understand payroll.  You will also reduce your chance of a payroll error. Payroll must be completed, and taxes paid as per specific deadlines. Missing payroll tax and withholding deadlines will result in significant penalties and fees. Errors are easy to make unless you or your staff has some payroll training.

Consider the expense of hiring an employee with payroll expertise or having an employee trained to do the payroll. The added payroll service will take the risk and stress of payroll from you so you can focus on your business.

QuickBooks also provides the ability to receive payments.  They provide their own service called QuickBooks Payments that allows customers to pay you using a card or Apple Pay.  You can create invoices that are instantly payable by a button on the invoice that takes the customer directly to a payment form. 

Final Thoughts

QuickBooks is a business software that goes beyond accounting. It is scalable, so you can start off paying less and upgrade your plan as you grow. QuickBooks is relatively easy to learn, however some training is useful. You will probably still need an accountant to help you with formal financial statements, taxes and possibly payroll. However, a small business owner can reduce the need for the accountant by learning to input most day-to-day transactions.


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