QuickBooks Online Features You Need to Use

When you start using a new tool in your business, it takes time to learn all the ways it saves you time and money. There are often little tricks hiding in the depths of the tool that you don’t find out about until months later–because you’re really just trying to get it up and running.

This is true for QuickBooks Online (QBO) and its features, especially when business owners start to use it without taking the time to set it up and learn what it’s all about.

There are so many features in QBO that it’s my go-to bookkeeping system of choice for any client. But you have to be willing to take the time to set it up right if you’re going to make the most of it.

Here are some of my favorite features that often get overlooked by business owners who choose to DIY their QBO set-up:

Connecting Bank Feeds

From time to time, I meet with potential clients or new clients that are not utilizing the bank feed feature at all. Either they are stuck in the old-school way of doing things or simply are not aware that QBO has this feature and the purpose of using it.

It’s the simple task of connecting your bank and credit cards accounts in QBO. And yes, that means entering your login credentials for that site into QBO and mapping that account accordingly. It is a bit scary for the non-tech savvy business owner but, once I explain it and the amount of time it will save them, they are sold.

By connecting the bank feeds you’ll see new transactions download every time you log in. You’ll see your QBO populate with each and every transaction, saving you time and limiting the chance of error.

Categorizing Transactions

QBO will automatically categorize, or code, your transactions for you–if you take the time to set up the bank rules. Doing this saves you the time of manually categorizing when you reconcile your accounts. Keep in mind you will need to invest time to do this when you first setup your QBO and each time you add a new bank or credit card account.

Without rules, QBO will try to categorize your transactions for you. And while it can often do this correctly, keep in mind that QBO is not a human and doesn’t always know what each transaction is for. It’s up to you to correct the categorizations and create rules to help QBO do a better job next time. Yep, this takes time. But it’s worth it in the end!

Account Reconciliation

You need to know where you stand financially at any given moment. When you connect your bank feeds and set up categories in QBO, reconciliation is a cinch. It’s a matter of verifying your month end statement bank balances from each bank and credit card at month end against what was recorded in QBO. This bookkeeping task is a must-do at the end of every month.

You are probably wondering, why–what’s the purpose?

Well, you want to ensure that the bank feed didn’t have a glitch and inadvertently download 2 of every transaction or skip a few. If that happens it means that your expenses are overstated and less profit in your business. Another common issue I see is overstated income, by recording customer payments twice. This happens when you use the receive payment feature and add the bank deposit in the bank feed. That means you’ve counted it twice and overstated your income. Whoops! Both overstated income or expenses are a problem and ultimately affect the business bottom line and the amount of tax you pay. So, it is a good idea to ensure the numbers are correct by using the reconciliation feature.

Time and time again I see plenty of clients that come to us for help and don’t understand why the numbers don’t make sense. Unfortunately, too many business owners skip this vital step–reconciliation–costing them loads of time later in the year. Hopefully, your CPA checks to ensure you have completed your bank reconciliations before they prepare your tax return. This step ensures the accuracy of the data they are using to prepare your return.

QuickBooks Online is truly my go-to bookkeeping tool of choice, and it’s simple enough for any business owner to use. But if it’s not set up correctly, you’re likely to get frustrated and turn to less intuitive and robust systems.

If you’re using QBO and want to get a better handle on how to fit it into your weekly bookkeeping tasks, grab my Weekly Workflow Template today! If you need help now check out our Support and Training packages and let’s chat.