QuickBooks is an online accounting software product that simplifies small business invoicing, financial management and accounting to help small business owners stay on track with their finances. Read on to learn more about QuickBooks, how it functions, and the benefits it can provide for your small business.
This article is independent, not sponsored in any way, and is one of our guides to software for small business owners.
QuickBooks: What Is It and How It Works
QuickBooks helps track unpaid invoices, monitor cash flow, manage sales, manage expenses, process payments, prepare tax reports, and manage employee payroll, among other things.
Over 25 million small businesses use QuickBooks to automate their business accounting tasks and manage their finances effectively. QuickBooks can be an excellent option to consider if you don’t have the resources to hire an accounting team to handle your company’s accounting needs.
QuickBooks features a simple-to-use interface that doesn’t require accounting expertise so even as a new small business owner without prior accounting experience, you can use it to handle the daily transactions of your company and remain up to date on its business finances.
There are two main versions of QuickBooks software: QuickBooks Online and QuickBooks Desktop, which are divided into different subcategories. Each version differs in functionality and subscription plan.
As we progress in this article, we’ll dive deeper into each version and which is best for your small business and how it can help with everything from improving cash flow to payroll, issuing invoices and managing stock. With that, let’s find out how QuickBooks can help your small business.
Benefits of Quickbooks For Your Small Business
Helping you Automate Repetitive Business Processes
Time is money, as every successful business owner knows, and automation can help you run your company more efficiently. With QuickBooks, it’s easy to automate daily accounting tasks like sending invoices, updating financial records, and processing payments, among other things.
This helps you save time, allowing you to focus on other essential aspects of running your business.
Ensures the Accuracy of Financial Records
When entering data manually into your spreadsheets or accounting books, it’s easy to mix up figures and thus mess up your whole financial record. This could lead to inconsistent records and making wrong financial decisions, which could affect your business’ growth.
However, accounting software like QuickBooks can be configured to compile financial reports from your business transactions automatically. This eliminates manual entry and minimises errors in your financial statements.
Integration With Other Business Software for Improved Efficiency
QuickBooks integrates well with several third-party software programs that are essential to run your business efficiently. For instance, it allows integration with apps like Microsoft Excel, Zoho, Salesforce, Woocommerce, Amazon, Hubspot, Paypal, and Expensify.
Integrating QuickBooks with software relevant to your business processes can help improve efficiency and productivity in your small business.
Track and Manage Business Finances and Processes on the Go
With QuickBooks, you can control and manage your business wherever you are. This online software is compatible with PCs (laptops, tablets, and mobile phones) and even desktops.
Also, it backs up and syncs your data to the cloud. So you can easily access your QuickBooks account and take care of your business finances while on the go.
You can send invoices to clients, process payments, send financial records, etc., from anywhere, at any time.
Six Ways to Use QuickBooks in Your Small Business: QuickBooks Primary Features and How to Use Them
You can use QuickBooks to manage customer invoices effectively and ensure you don’t lose money. You can create customised invoices and send them to your customers via post or email. You might already by using a basic invoicing software system and want to upgrade to track all of your finances – but still need to issue invoices.
You can also automate your invoicing tasks. You can set the software to analyse daily sales, track outstanding invoices, and send reminders to your customers of soon-to-be-due or overdue payments.
Altogether, you can use QuickBooks to make your accounting much faster, easier, and more efficient because manual invoicing can be highly time-consuming and strenuous, especially if you have a vast customer base.
To Track Online and Offline Purchases
You can also use QuickBooks to track business purchases and expenses by linking your business accounts and credit cards to the app. This will automatically record your expenses each time you make an online purchase.
Consequently, for offline purchases with cash or a cheque, you can enter your transactions manually into the system. QuickBooks can also help you track pending bills and payments.
When your suppliers or vendors issue your bills, you can manually enter them into the system. This way, you have a record of upcoming payments and are unlikely to incur late fees.
Overall, staying on top of your business expenses is also essential for making sound financial decisions, and QuickBooks can help you manage your expenses effectively.
To Process Payments
You can use QuickBooks to process and manage payments in your small business. QuickBooks includes a unique payment feature called QuickBooks Payments.
With this feature, you can attach a payment button to online invoices to encourage customers to make payments immediately. QuickBooks payment feature allows you to receive payments via different payment channels such as credit cards, debit cards, eChecks, electronic bank transfers, and contactless/wireless payments through mobile applications.
Using QuickBooks to process payments will allow you to offer flexible payment solutions to your customers. This can significantly increase client satisfaction and increase sales for your small business.
To Prepare Financial Statements
Keeping financial records such as profit & loss statements, cash flow statements, and balance sheets is a critical part of being a small business owner. More importantly, these records need to be accurate and frequently updated.
Doing this manually can be counterproductive and time-consuming. Moreover, the chances of mixing up numbers and getting inaccurate data are much higher.
But using QuickBooks to process your business operations, like sales, billing and invoicing, purchases, inventory management, etc., will ensure that important financial records are updated each time a transaction is initiated and can be accessed when needed.
The balance sheet, profit & loss statement, and cash flow statement provide a picture of your business’s financial health. It’s also an important document for accessing business loans and lines of credit.
As QuickBooks helps you manage and track your business’s financial records, retrieving these financial statements later on, will be much easier. You can simply process, print, or download these financial statements.
To Manage Employee Payroll and Benefits
This is yet another essential feature of QuickBooks that helps you streamline your HR tasks, giving you time to focus on other sensitive areas of your small business.
HR tasks like tracking employee paid and unpaid time off, organising and calculating payrolls, filing payroll taxes, etc., can be automated with QuickBooks software.
This would ensure that employees get paid on time and prevent you from incurring payroll tax penalties. Delaying employees’ paydays can harm employee morale and affect your company’s productivity.
So, you can use QuickBooks to ensure that your employees or independent contractors get paid on time.
To Streamline Tax Returns
Compiling tax reports can be much easier by allowing QuickBooks to do all the work for you. Since you use QuickBooks to handle your business transactions, all you have to do is print out your financial statements when tax time rolls around.
QuickBooks automatically updates your financial records year-round and compiles them into the appropriate financial statements. Whenever you need to file your taxes, all you have to do is print out your financial statements or send them electronically.
There are many other great ways to use QuickBooks in your small business. These include; project management, inventory management, and organising purchase receipts all in one place.
However, the overall function of QuickBooks may differ, depending on the version of the software you’re using. Let’s see the different accounting solutions that each version offers.
QuickBooks Versions and Which is Right for Your Small Business
As said earlier, the QuickBooks software is categorised into two broad versions; online and desktop. These two versions are further broken down into subcategories, giving business owners six options in total to choose from.
Quickbooks Online version is the most popular among many small business owners, as it offers several accounting solutions and features.
It has two billing options; monthly and annually. Also, it’s compatible with all devices and stores your data in the cloud, allowing you to monitor your business from anywhere.
- Offers all essential accounting solutions mentioned above and more
- Supports integration with over 650 business software, including Paypal, and Shopify, among others
- Interface is beginner-friendly
- Advanced subscription plans are too pricey
The QuickBooks Self-Employed version is especially designed to provide tax support and basic accounting features to freelancers and independent contractors. This QuickBooks version specifically helps with invoicing, tracking expenses, tax compilations, and deductions.
It’s also designed to help you separate personal expenses from business expenses.
- Methodical interface
- Tax and invoicing support
- Easy to use
- Doesn’t support state tax compilation service
- Not ideal for businesses with advanced accounting needs
The QuickBooks Pro version offers far more advanced accounting solutions than QuickBooks Online and Self-Employed.
- Advanced accounting functions and tax support
- Supports integration with many business-related software
- Supports up to 3 users at once
- Only available on desktops
- Requires minimum accounting knowledge to use
QuickBooks Premiere is also an advanced version of the software app. It features standard accounting features relevant to both small and medium-sized businesses.
Furthermore, it includes accounting solutions uniquely tailored to specific business industries such as; professional service providers, non-profits, general contractors, manufacturing, wholesale, and retail businesses.
- Supports up to 5 users
- Sophisticated accounting features
- Over 200 software integrations are supported
- Specialised accounting solutions for specific industries
- Limited payment options integration
The QuickBooks Enterprise version is designed to meet the accounting needs of large corporations. It features advanced accounting solutions like order tracking systems, real-time business performance tracking systems, and inventory management, and others.
- Supports up to 40 users
- Advanced business and accounting solutions
- Expandable features
- Suitable for accounting needs of large businesses
- Too complex for small businesses
QuickBooks for Mac Users
This version is optimally designed for Mac desktop users. It offers complicated, advanced features while maintaining an easy-to-use interface.
- Essential accounting features like invoicing, expense tracking, bank statements, budgeting, etc.
- Logical easy-to-use interface
- Customised for your Mac device
- Doesn’t support integration with other software
Which Quickbooks Version is Ideal for Your Small Business?
Indeed, the desktop versions of QuickBooks give business owners a wide range of capable accounting tools. However, QuickBooks Online also provides a number of great accounting features.
QuickBooks Online has all the essential features necessary for managing business operations effectively. It’s beginner-friendly while allowing business owners to track their businesses and access financial records from any device.
In light of our analysis, QuickBooks Online is the best option for small businesses that are just starting out and have simple accounting requirements. You may decide to use more sophisticated versions of this software when you’re looking to expand your small business.
How to Get Started With QuickBooks
Getting started with QuickBooks is as simple as logging on to their website quickbooks.intuit.com/uk/ and signing up for your preferred payment plan. Each payment plan offers various accounting options to suit different needs.
Therefore, the best plan for you will depend on how extensive your company’s accounting requirements are. Additionally, you can benefit from QuickBooks’ free trial to familiarise yourself with the program while making up your mind.
For more than ten years, QuickBooks has given company owners the tools and insights they need to make profitable business decisions. Because of this, QuickBooks is the accounting software of choice for millions of business owners.
If you’ve been sceptical about how QuickBooks can help your small business, now you know that it can help you save time, as well as improve efficiency and profitability in your small business. So, it’s time to start using QuickBooks in your small business.