Hi, I am Sheila Ingram, Quickbooks Pro-Advisor, MBA, and accountant. Over the course of almost a decade, I have used Quickbooks, and for almost four years, I have owned my own business and have helped other businesses with their Quickbooks and accounting.

What’s the most common mistake I have seen other business owners make when it comes to their Quickbooks?

This one is easy.  The most common mistake when initially using Quickbooks is assuming that Quickbooks is a program that can be learned on the fly … doesn’t matter if you are a bookkeeping novice or an experienced bookkeeper who is a Quickbooks novice.  Quickbooks is not just some Excel-like database where you enter in invoices and pay bills.

For starters, there are things called “items” in Quickbooks that have to be used on some sales forms (invoices, sales receipts, etc) … items are HUGELY misunderstood and the consequences for using items incorrectly can be trouble throughout your QB system (e.g., you need to set up items right to have a reliable job costing system, to manage inventory, to have correct financial reports, for time and material invoicing, payroll items for CIP accounts, etc).

Quickbooks also has a lot of limitations and requires journal entries for some type of accounting (e.g,. recording sales returns so they display as separate line item, any accrual adjustments, reversing entries, etc).  You have to know how to use QB forms (purchase and sales) so that you get proper P&L’s (e.g., sales forms vs invoices for accrual-basis inventory-clients who receive client payments in advance to sale, etc).  Quickbooks also doesn’t handle the hybrid method of accounting, and so a hybrid P&L or Balance Sheet has to be done outside the system.  These are but a few examples.

You won’t learn Quickbooks by watching five YouTube videos, trial and error, and just “diving in.”  That’s a really good strategy if you want to mess up Quickbooks.  You see, the people who do that end up calling me when they start finding out their P&L looks wrong, or they can’t figure out their inventory, or the whole darn thing is a mess.  By that point, we’re looking at rework.  And as business owners know, rework is 3x-10x more expensive than doing it right the first time.  But if you’ve reached that point where rework is involved, make sure you hire someone who has done this before and specializes in SMALL businesses.

So what’s the solution?  Call the RIGHT Quickbooks trainer in … and there are plenty who are NOT CPA’s and won’t charge you an outrageous amount.  I have never seen why CPA’s have entered the QB training market.  Quite frankly, it is not the highest and best use of their time.  It’s like hiring an engineer to fix your sink.

Until next time,

Sheila