{"id":3137,"date":"2016-04-25T05:00:06","date_gmt":"2016-04-25T12:00:06","guid":{"rendered":"http:\/\/evergreensmallbusiness.com\/?p=3137"},"modified":"2019-07-01T15:44:42","modified_gmt":"2019-07-01T22:44:42","slug":"accounting-system-recommendations-for-novice-bookkeepers","status":"publish","type":"post","link":"https:\/\/evergreensmallbusiness.com\/accounting-system-recommendations-for-novice-bookkeepers\/","title":{"rendered":"Accounting System Recommendations for Novice Bookkeepers"},"content":{"rendered":"

\"Overworked<\/a>Small-business owners ask us all the time about how they should set up their accounting system.\u00a0Accordingly, in our office, the accountants have talked about this issue\u2014which accounting system recommendations to give as general guidelines\u2014quite a lot.<\/p>\n

Here are our thoughts.<\/p>\n

Thought #1: Use QuickBooks Online<\/h2>\n

Okay, so a first question is which accounting software you should use. And we\u2019re going to give you a very standard, somewhat boring answer. We think you should use QuickBooks Online. And for a very simple reason: so you can quickly and easily get help from a CPA when you need it.<\/p>\n

For the sake of fairness, we\u2019ll note that for many businesses, desktop accounting software is a better fit. For example, QuickBooks desktop has a more robust set of features, as you\u2019d expect from a more established product. Because of its better and more advanced\u00a0features, QuickBooks desktop is a good fit for a wider variety of businesses. And if your business has an in-house CPA acting as a\u00a0comptroller or CFO, then there\u2019s often not\u00a0a compelling reason to go with QuickBooks Online over QuickBooks desktop.<\/p>\n

Nevertheless, we think most\u00a0small businesses\u00a0ought to use QuickBooks Online. Your accountant will be able to\u00a0provide you with very efficient, cost-effective help when you need it. Most accountants\u00a0already know the product. And with QuickBooks, you\u2019re dealing with a big software company (Intuit) that\u2019ll very likely be around for all of the years you\u2019ll run your business.<\/p>\n

Thought #2: Have a Business-Only Checking Account<\/h2>\n

We think you need a business-only checking account, something that\u2019s just for your business that\u00a0you use to \u201ccatch\u201d or \u201ccollect\u201d all of your income and from which you pay all of your expenses.<\/p>\n

And just to make this important, if slightly redundant, point: Don\u2019t ever charge personal expenses to business accounts, and don\u2019t ever charge business expenses to personal accounts. Doing so creates the kind of mess that really only a knowledgeable accountant can appropriately clean up and look after.<\/p>\n

Note:<\/strong> If your business needs access to credit sometimes, you might also want to have a business credit card. But make that a business-only account too.<\/p>\n

Thought #3: Connect Your Bank Account to QuickBooks Online<\/h2>\n

One really neat feature of QuickBooks Online is that you can connect your QuickBooks Online bank account information to your actual bank\u2019s online account information. And if you do this, QuickBooks Online regularly matches transactions across the accounts, which means you more easily keep your bank account\u2019s balances and its list of transactions up to date.<\/p>\n

Connecting QuickBooks Online and your bank account by far represents the single<\/em> most effective way to avoid a multitude of errors in your books. And you eliminate a lot of manual data-entry work, too. Just use\u00a0the \u201cupdate\u201d feature\u00a0every few days to track your expenses.<\/p>\n

Intuit\u2019s tutorial on connecting your bank account to QuickBooks Online is available here: http:\/\/quickbooks.intuit.com\/tutorials\/connect-to-bank-account\/<\/a>.<\/p>\n

Thought #4: Reconcile Your Bank Account Every Month<\/h2>\n

While we\u2019re on the subject of bank accounts, do you reconcile your bank accounts every month? You\u2019ll save time over the year and keep your accounting system clean.<\/p>\n

By the way, if you have trouble the first time you reconcile the bank account, ask a CPA to do the first one for you. After someone\u2019s done\u00a0your first bank account reconciliation correctly, subsequent reconciliations will be very straightforward as long as you were good about following the recommendations discussed in thought #3 during the statement period.<\/p>\n

Intuit\u2019s tutorial on reconciling the bank account in QuickBooks Online is available here: http:\/\/quickbooks.intuit.com\/tutorials\/reconcile-accounts\/<\/a>.<\/p>\n

Thought #5: Don\u2019t Do Payroll Accounting Yourself<\/h2>\n

And our final thought\u2026<\/p>\n

If you have more than one employee and you pay your employees on a regular schedule, then you probably want to use an integrated payroll product such as Intuit Full-Service Payroll<\/a> or Gusto<\/a> to manage payroll for you.\u00a0Your CPA can help you do the initial setup for one of these payroll systems.<\/p>\n

However, if you\u2019re in the unusual situation where you have only one employee and you don\u2019t pay him or her\u00a0very regularly (e.g., you\u2019re a one-man-band S corporation that has to do payroll as a tax law formality), then you\u2019ll possibly get a better deal hiring a local tax professional to calculate one payroll check for you once a year, in addition to preparing the payroll tax forms. Ask this tax accountant if he or she will\u00a0record the payroll transactions for you in QuickBooks Online.\u00a0The answer will probably be yes.<\/p>\n

Note:<\/strong> We\u2019ve also got an economical DIY payroll approach that works for one-employee businesses in states with super-simple state payment tax systems (such as Washington State). You can click here<\/a> for more information about that option.<\/p>\n

If You Are a Small-Business Owner, You\u2019re Probably Paying Too Much\u00a0Tax!<\/h2>\n

\"\"<\/a>For small-business owners, every penny counts, yet they often don\u2019t maximize\u00a0their legitimate tax deductions. They don\u2019t structure their business operations to protect appropriate\u00a0deductions. They often\u00a0don\u2019t do enough to create new deductions. And seldom\u00a0do they understand how to recycle, or double-deduct, amounts that\u00a0can be used more than once.<\/p>\n

What\u00a0a financial tragedy! Getting smarter about tax deductions can save business owners a bundle.<\/p>\n

If you\u2019re thinking maybe you can do a better job with your tax deductions, consider our ebook\u00a0Small Business Tax Deduction Secrets<\/i>.<\/p>\n

This 70-page ebook ($40) provides detailed instructions\u00a0about how you can save thousands of dollars every year\u00a0in income and related taxes simply by more effectively using legitimate small-business tax deductions. Want to know\u00a0more? Click here.<\/a><\/p>\n