These four Quickbooks Online bookkeeping tips discuss what a Quickbooks Online bookkeeper does to not only help small business owners manage and organize their finances, but also to help educate you on how to use the fundamental functionality of Quickbooks Online bookkeeping software.
1) Reconcile
Reconciling the books validates the accuracy of all transactions recorded for a particular month. Consider reconciling all asset & liability accounts such as checking & savings accounts, credit cards, loans, lines of credit, and payroll liability accounts. One mistake that many QuickBooks Online bookkeepers make is not sorting appropriately. Quickbooks Online allows you to sort transactions by date, amount, or payee when reconciling to help identify discrepancies and save time. Always correct discrepancies - do not post an adjustment in order to balance the account. Clear dangling transactions before completing the reconciliation. Dangling transactions are those that cannot be reconciled. Ask yourself, was this transaction entered incorrectly? Was it entered twice? Is it possible that this transaction will clear the bank account next month? Reconciliation should be given due importance as it helps ensure the integrity of all financial reports.
2) Create Subaccounts
Subaccounts add detail to reports without requiring much effort. Subaccounts provide more detail as to what type of transactions make up the total balance in an account. For example, a sub account can be created under travel expenses for meals, transportation, lodging, incidentals, etc. These accounts can later be expanded or collapsed on financial reports produced within Quickbooks Online. Subaccounts can be created and modified in the Chart of Accounts.
3) Identify 1099 Vendors
As you may know, a 1099-MISC form should be filed at year-end for each person paid $600 or more during the year. These forms should be sent to contractors by the end of January and mailed to IRS by the end of February. Since all your accounting data such as who you have paid, when, and how much is already in your QuickBooks Online bookkeeping system, it takes only a few keystrokes to prepare 1099s. If a vendor in Quickbooks Online is a possible 1099 contractor, click the box “Vendor Eligible for 1099” in the additional info tab. This way, at year-end when it is time to run 1099 reports, Quickbooks Online will recognize which vendors need to be included in 1099 processing.
4) Backup Outside of QuickBooks Online
It is a good idea to always backup QuickBooks Online bookkeeping to an external source such as a drive, CD or USB port. Although Quickbooks Online automatically backs up your company file, you can be assured that the data is also safe in another place. Being proactive in backing up is crucial - better safe than sorry.
Quickbooks Online bookkeeping software is the leading Financial Management solution for Small Businesses, and with a deep understanding of the best ways to utilize it efficiently you will finally be able to spend more time on growing your business. Using features to help you keep track of 1099 vendors, backing up your system to keep it secure, and the other best practices listed here will serve as an excellent starter guide to using Quickbooks.
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Need to hire a bookkeeper? Schedule a free consultation with a Quickbooks Online bookkeeper. Contact eBookkeeping Solutions today to receive a product recommendation that is specific to your business.
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