The 6 most common QuickBooks mistakes business owners make

February 25, 2021

Cloud bookkeeping platforms are a godsend. And we aren’t just saying that because they make our jobs easier as bookkeepers – many of our clients come back to us after we set them up, wondering how they ever did their bookkeeping any other way!

And if not, you can read our previous article on the 3 reasons to choose QuickBooks cloud bookkeeping to get caught up on how cloud bookkeeping can make your life easier.

And it isn’t just businesses that are getting in on it – many previously desktop PC-bound bookkeeping platforms are offering cloud services, including QuickBooks. In fact, here’s why tradies love using QuickBooks for their operations.

If you follow our blog, you know the benefits of taking your bookkeeping to the cloud. And if not, you can read our previous articles to get caught up on how cloud bookkeeping can make your life easier.

Of course, that’s assuming that your system is set up properly in the first place!

Everybody has experienced tech issues at one point or another. Your cloud bookkeeping platform is no exception – if it isn’t set up properly, you might run into all sorts of issues:

  • Inaccurate bookkeeping records
  • Transactions not being tracked
  • Historical cash flow not being recorded
  • Wasted time and energy

What specific issues can cause these problems?

Cloud bookkeeping platforms

Are you making these 6 QuickBooks mistakes?

Mistake 1: not migrating your existing records over

When setting up your cloud bookkeeping, it’s essential your historical records are carried over into your new system.

After all, you’re going to need previous information to refer to!

One of the first things you should be doing when you get set up with cloud bookkeeping (be it QuickBooks or otherwise) is migrating your current records over – this will give you a clearer image of how your business is performing.

On top of that, migrating your old records over can also help you get set up. A lot of the reports that QuickBooks generates rely on collating information from the past – without your previous records, these reports may be incomplete.

Unfortunately, some business owners don’t seem to consider this, simply creating their account and getting to work. People who do this are usually forced to refer to their old, inefficient previous system every time they want to look at their previous records.

In other cases, business owners might end up botching the job of migrating their information over, leaving them with incomplete figures and records.

Mistake 2: not reconciling accounts

One of the biggest benefits of cloud bookkeeping is how everything is automated – platforms like QuickBooks take information from your bank accounts, POS system, invoicing system and more, automatically collating the information and creating reports.

Of course, we all know that it can take time for transactions to be processed, and it’s always possible for mistakes to occur.

And that’s why it’s so important that you reconcile your accounts manually, comparing your internet banking statements against the records in your bookkeeping software instead of simply relying on your system to do it all for you.

Just to be clear, in the vast majority of cases QuickBooks gets it right – that said, when it comes to your business’ finances, it’s always better to be safe than sorry.

Mistake 3: locking periods as soon as they pass

Bookkeeping, be it manual or cloud, is done in monthly, quarterly and annual periods.

While it isn’t an issue with pen-and-paper bookkeeping, it can be an issue with cloud bookkeeping platforms such as QuickBooks. These platforms include settings to “lock” periods once they pass, or after a set amount of time.

This isn’t a bug, but a feature – amending your past bookkeeping records can have flow-on effects, changing your bookkeeping records as well as reports for subsequent months.

The issue is when you either lock your bookkeeping periods immediately, or set the automated lock period too low.

While bookkeeping records from 3 years ago are unlikely to change, ones from the month previous are a different story as late invoices come back to you.

Lock too early, and you won’t be able to edit or modify any of the bookkeeping data. If you need to make a correction, tough luck!

And on a related note…

Mistake 4: deleting old transactions

One of the biggest mistakes small business owners make is deleting old transactions.

Not only does this reduce the amount of information you have to refer to when making decisions, but as we mentioned above, it can also impact your ability to gauge your current financial position.

Like we said before, making edits to previous periods impacts your current snapshot of your bookkeeping, as QuickBooks automatically recalculates everything to reflect your edits.

And that includes if you delete an old transaction.

Whether deliberate or by accident, deleting an old transaction impacts all subsequent reports and records.

Mistake 5: not setting permissions properly

One of the best things about cloud bookkeeping isn’t just that it can be accessed from anywhere – it can also be accessed by anyone within your organisation.

Our QuickBooks bookkeepers in Melbourne understand that this sort of thing can make business owners like yourself feel antsy – luckily for you, platforms like QuickBooks allow you to set permission levels for each individual user.

This means each user has permissions to do any bookkeeping tasks, applications or reports that their position might need them to do, without exposing the important areas and details.

For example, your floor staff might have permissions to file leave requests and file expense reports, but not to access sales figures or expense reports.

It’s important that these permissions are set up properly – unfortunately, it’s also something that many business owners don’t  consider, or do improperly.

While most of the time it’s harmless, it does increase the risk that a staff member with ill intentions can get into your business’ bookkeeping and steal important information or even embezzle your hard-earned money.

cloud bookkeeping training

Mistake 6: using trial-and-error to learn how to use cloud bookkeeping

While cloud bookkeeping is generally pretty easy to use, upgrading to cloud bookkeeping can be rough – that’s why our bookkeepers in Melbourne offer cloud bookkeeping training to help you out.

But maybe you want to figure it out on your own. While we don’t recommend it, platforms like QuickBooks offer extensive online resources, including:

  • Video tutorials
  • Forums
  • Online lessons
  • FAQs
  • Phone hotlines

Whatever you do, don’t try to figure things out completely on your own!

Trial-and-error learning is slow, and can result in countless mistakes along the way – neither of which you can afford when it comes to your business’ finances.

Get your business set up with cloud bookkeeping

Whether you eventually settle on QuickBooks or another cloud bookkeeping solution such as MYOB or Xero, it’s important that you get the right help when setting up.

And take our word for it, when it comes to something as important as how QuickBooks bookkeeping helps your business finances, there’s no shame in asking for help!

Our team are experts at QuickBooks bookkeeping for small business in Melbourne, offering a range of services to help you make your bookkeeping faster, more accurate and most importantly, easier.

And that’s on top of our other bookkeeping services!

Whether you’re looking for help with cloud bookkeeping or want our assistance cleaning up your entire bookkeeping operation, our team is ready to help, putting together a comprehensive package of bookkeeping services.

Find out how our bookkeeping team can help you – give us a ring on (03) 9589 0128, or click here to get in touch online for a virtual appointment.