...a CPA's random thoughts...
Quickbooks Does NOT Make You an Accountant
That title stings, a bit, does it not? Realistically, it should. Here is the fundamental problem: Intuit, and some other companies (but Intuit is dominant in market, so I will focus on them) loves to try to make people believe that their software can make anyone a bookkeeper or accountant. Think about it, if Intuit did not push that, and relied on only selling to professionals, they would not generate much revenue.
There is nothing wrong with utilizing Quickbooks yourself, as long as you understand how it works and involve a professional on a routine basis. But, if you expect to be able to dive into bookkeeping and accounting, prepare meaningful financials, and handle high transaction volume through bank feeds–all without prior experience or education–you are going to be facing a big surprise.
Intuit sets up its users for failure from the start by not revealing the truth to customers. Indeed, anyone can buy a copy of Quickbooks Desktop or obtain a Quickbooks Online subscription. Sure, they might be able to stumble their way around the software and do some tasks, but it certainly will not be clean. And, once bank feeds enter the picture, especially in conjunction with merchant accounts and associated batch settlements, a nightmare is in the making. You will have no idea where you stand financially, and ultimately you will either end up failing due to not having meaningful data to run your business and achieve your objectives, or you will end up paying a professional A LOT of money to clean up your records.
It is understandable why so many small business owners start out using Quickbooks, thinking they can do it all on their own. Money is always a concern. Starting a business is not cheap. It is overwhelming. But, ultimately, in the long run you are throwing potential income out the door, and certainly cash out the window, as you lose focus of your core competency (whatever your primary business is) and fail to utilize professionals to assist with other topics.
At bare minimum, if cash flow prohibits fully utilizing a professional, hire a professional bookkeeper or accountant (let me also say, not all bookkeepers are even qualified to do this) to do the initial configuration and creation of your chart of accounts. Let them show you how to properly perform common tasks. And, for the sake of you and everyone involved, do not rely on bank feeds–only professionals should do that, unless the bank activity is EXTREMELY simplistic. The same holds true for integrations with other software applications and merchant services. Feeds from Square, Stripe, Poynt, etc., are typically very problematic from a reconciliation standpoint and are often configured incorrectly (or cannot ever be configured, correctly, by their very nature). In contrast, feeds from Intuit Merchant Services is designed to be HIGHLY integrated with Quickbooks, and truly does work well to receive, record, and reconcile electronic payments.
As a side note, some people may think professionals are opposed to individuals using Quickbooks and other software to perform accounting functions in-house. Not so. The reality is we actually earn a lot of money addressing the very issues it often causes, some of which I have outlined in this post. In all honesty, though, what we really want to do is help you achieve your objectives by looking to the future. It is nearly impossible to do that if we are only involved as historians for tax return preparation, or exhausting time cleaning up messy financial records.
Sincerely,
Greg Bennett, CPA