When small businesses in the U.S. do accounting, they usually turn to QuickBooks. QuickBooks has 80-90% of the market share. And that’s a good thing, because QuickBooks can be of great benefit to small businesses.
There are several ways that QuickBooks gives immediate benefit to small businesses:
1. Get your bills out faster and get paid faster
What business wouldn’t want to turn receivables into cash as quickly as possible? QuickBooks helps. You can get your invoices out quickly, either by email or postal mail, and you can easily track the aging of them. That way, you can follow up with late payers quicker.
There is an optional collections service with QuickBooks 2010 that automates it more. And the 2011 version of QuickBooks has new repetitive billing features that can save you time if you bill the same thing month after month.
2. Figure out where you’re making money, and where you’re not
Which parts of your business are profitable? Which parts aren’t? You can tell with QuickBooks. You can use “classes” in QuickBooks to track income and expenses by department, location, or profit center.
Then you can print out a Profit and Loss Statement for each one. That way, you know which parts of your business to expand, and which ones aren’t carrying their weight.
3. Be warned in advance about financial problems
Most new businesses fail because they don’t know what their finances are doing. They don’t know if their cash flow is healthy. They don’t know if they are making a profit or not.
QuickBooks can help a lot in this area because it gives you both the financial big picture as well as detailed, drilldown reporting for areas of concern. The Company Snapshot is a quick way to get an overview of financial trends for your company so you can anticipate financial problems and act before a crisis.
4. Automate processes, lower your workload
Are any of your financial processes being handled in Excel now? Or by pen and paper? If so, you can probably incorporate that process into QuickBooks and save a ton of time.
Do you enter bank transactions into a separate record or file? QuickBooks can download your bank transactions and tie them into the rest of your books.
Do you physically file your paper checks, invoices, bills, etc.? If you use QuickBooks, you only have to touch those documents once, as you enter and scan them into QuickBooks. Save storage space as well as clerical time and expense. Optional digital document services are offered by Intuit as well as third-party solution providers.
5. Be ready for tax time and loan applications
Are you a shoebox taxpayer? Many still are! But it doesn’t have to be that way. Use QuickBooks to prep for tax time. If you give your CPA your QuickBooks file (instead of a shoebox full of receipts!), they will be much farther down the road in doing your taxes. Their bill to you should be less.
Also, if you are talking to a loan officer, you can use QuickBooks to quickly and easily provide them with the financial reports they need to evaluate your loan request.
(Note: If you are not an accountant or experienced bookkeeper, it’s worth it to pay one to set up QuickBooks for you and teach you to use it for your business. That way, the accounting side of your QuickBooks data will be in good order.)
— Shannon Tucker blogs for QuickbooksUsers.com, an online support arm of AccountingUsers, Inc.