| QuickBooks is a great accounting program for | | | | minus your expenses over a period of time. |
| home-based businesses to track their income and | | | | When you choose to display a report such as the |
| expenses. It is easy to learn and simple to use. It | | | | Profit and Loss statement, you are able to drill |
| has a great Help file. You do not need an | | | | down from each account to obtain the source of |
| accounting background to be able to generate | | | | the amount in the report. For example, you see |
| reports such as a Profit and Loss and Balance | | | | that your Travel Expense account has a balance |
| Sheet needed for tax preparation and managing | | | | of $1,000.00. You want to see whom you paid for |
| your business. I have listed a few key points to | | | | Travel for the month, so you can place your |
| consider when using QuickBooks. | | | | cursor over the Travel Expense amount and |
| Cash or Accrual Basis of Accounting? The first | | | | double click to obtain a report that will show you |
| step in setting up your company in QuickBooks is | | | | the detail of transactions that make up the |
| to determine if you will track income and | | | | $1,000.00 spent. You can then further drill down |
| expenses on the "Cash Basis" or "Accrual" basis. | | | | to view the actual check written. The Balance |
| Most small businesses operate on the cash basis | | | | Sheet report shows you your Assets, Liabilities |
| of accounting. What this means is you record | | | | and Equity of your business. Assets include what |
| your expenses when you write the check or | | | | you have and what people owe you money, such |
| charge your credit card, and you record your | | | | as your bank account balance, inventory owned, |
| sales or income when you take the money to the | | | | accounts receivable, and fixed assets such as |
| bank and deposit it into your account. This is the | | | | equipment and furniture. Liabilities include what |
| easiest way to account for your transactions. | | | | your company owes to other people or your |
| Some businesses are required by the IRS to | | | | company debts. Examples include unpaid bills, |
| report on the accrual basis. This normally pertains | | | | money you owe on credit cards, loans, and sales |
| to large publicly traded companies and/or some | | | | tax you owe. Equity is the net worth of your |
| manufacturing entities. On the accrual basis, you | | | | company: equity = assets - liabilities. Other reports |
| record income at the time of sale, not at the | | | | include detailed and summary sales reports, sales |
| time you receive payment. You also enter | | | | tax reports, inventory reports, vendor reports, |
| expenses when you receive the bill, not when you | | | | sales tax reports, payroll reports, and many more. |
| pay it. The choice is yours on which basis to use. | | | | Create a Professional Image QuickBooks also has |
| QuickBooks supports both accounting methods. | | | | other features that allow you to customize forms |
| Simplify the Chart of Accounts!! The most | | | | such as invoices, statements, and purchase orders |
| important list in your accounting system is your | | | | you want to send to your customers and |
| Chart of Accounts. You track your flow of | | | | vendors. It will allow you to generate mailing labels |
| money through this list of accounts which includes | | | | and email messages to your existing customers |
| where your income comes from, where you put | | | | and vendors that are setup in QuickBooks. You |
| it, what your expenses are for, and what you | | | | can also print checks on preprinted business |
| use to pay them. QuickBooks' EasyStep Interview | | | | forms. |
| walks you through setting up your accounts. The | | | | Online banking is available with QuickBooks, which |
| system also offers sample business templates | | | | enables you to pay your bills electronically and |
| that already have accounts set up for you. You | | | | reconcile your bank accounts monthly. This is |
| can later delete or add any accounts that were | | | | essential to make sure you capture all business |
| initially setup in this interview to make it match | | | | deductions to minimize your end of year tax |
| your income and expenses better. Keep your | | | | liability. |
| chart of accounts SIMPLE! Too many accounts | | | | Keep it Separate! You should not track personal |
| result in messy reports that are hard to read and | | | | finances, investments, and details not specifically |
| analyze. Also, use descriptions for your account | | | | related to your business in your QuickBooks |
| id's, not numbers. If you assign account numbers | | | | company file. Mixing of personal and business |
| for each account, you will have to memorize the | | | | funds makes tax preparation harder and more |
| numbers for fast data entry. It is much easier to | | | | expensive in some cases if using an accountant or |
| type in the name of the account when entering | | | | tax preparation service. |
| transactions. This is a key timesaver! | | | | An accounting degree is not required to enter |
| Utilize Reports QuickBooks has many reports you | | | | daily and weekly tasks in QuickBooks. QuickBooks |
| can run for daily management of your business. | | | | is an easy to use accounting software program |
| The most widely used reports are the Profit | | | | that allows business owners to manage their |
| & Loss statement and Balance Sheet. The | | | | business more profitably. |
| Profit and Loss statement is simply your sales | | | | |