In previous installments of the QuickBooks Clinic Series, I’ve talked about issues users typically encounter in the initial setup of QuickBooks and how to avoid some of those pitfalls. As your business grows there are always new issues to embrace and resolve. The same is true of your accounting system. Growth brings complexity in your accounting system just as it does in your business.
Now that you have the basics of your company setup in QuickBooks, the question you should be asking is, “Am I using QuickBooks as efficiently as possible and am I getting the most useful information from the system that I need in order to make good business decisions. The answer almost certainly is no.
As the business expands, a generic QuickBooks company setup isn’t going to meet all the needs of an emerging business. Whether its integrating credit card processing, handling payroll, creating effective management reports or initiating a point of sale system, add-ons can enable you to efficiently input transactions to the system and to pull reports from it.
One major reason to consider add-ons is the streamlining of laborious, time consuming processes. For example, the processing of credit card statements can be very time consuming and tedious. From gathering receipts from employees, entering transactions, and distinguishing class in QB the whole process can be very cumbersome. Using an add-on can automate the receipt collection and classifying of transactions, leaving only the review process and paying of the statement to the accountant.
Getting the setup of an add-on right at the outset is critical. Care must be taken when integrating an add-on to QuickBooks so that you have an effective enhancement to the system. If setup is not done properly, you can get results that don’t make sense. For example, if you have not mapped the chart of accounts correctly within the add-on, you might have items that belong on the balance sheet showing up on the P&L. A purchase of a new computer for the office could be classified as office supplies, an expense, instead of computer equipment, a fixed asset. These types of mistakes could result in a lot of additional reclassification time you want to avoid by ensuring that your chart of accounts setup is correct before you bring add-ons into the QuickBooks setup.
QuickBooks add-ons can provide great efficiency but you’ve got to have a correct setup of the system in place to make effective use of this efficiency enhancement tool.