Start a Small Business in 8 Easy Steps
When a small business is just starting out, it is very common for the business to make little-to-no profits. In fact, many small businesses don’t break even for the first year, and sometimes longer. As a result, doing the necessary accounting early on is vital to ensure that your business model is sustainable and well positioned for success. Depending on the nature of your business, it is not always easy to track inventory, expenses, daily transactions, and other important factors without the right software. Quickbooks is a well-known software that offers accounting and inventory tools for businesses of all shapes and sizes. In this article, we will explore what exactly Quickbooks offers and how it can help serve your business needs.
What is Quickbooks?
is a brand of accounting software that was developed in 1992 for both the IBM PC and Apple Macintosh computer. It quickly became one of the most popular accounting software options on the market, offering small businesses a simple and intuitive platform to organize their expenses and transactions. Over the years, the software went through dozens of updates and redesigns to improve security and functionality. Today, Quickbooks has numerous versions of its software to fit the specific needs of your business, we will cover those a bit later.
What are the Advantages?
Quickbooks offers a number of great advantages over similar products on the market:
- It’s easy to use – Intuit, the company behind Quickbooks, is aptly named. The software design is intuitive and catered to small business owners with little-to-no bookkeeping or accounting experience. Additionally, Quickbooks offers numerous tutorials and user-friendly guides to get you started, so it’s easy to figure things out as you go along.
- It saves you time (and money) – Trying to manage all of your small business’ bookkeeping needs on your own is both stressful and time-consuming. This time would be better spent on growing your business. With Quickbooks, all of the heavy lifting is done for you, so that you don’t need to spend time doing the bookkeeping yourself, or the money to hire a professional accountant.
- Built-in business analytics – In addition to tracking all transactions and expenses, Quickbooks can display information in helpful graphs and charts so that you can get a better idea of how your business is doing. Looking at the big picture will allow you to analyze your expenses and income over time.
- Compatibility with tax software – If you are concerned about keeping tabs on all of your tax liabilities and write-offs, Quickbooks can help. The inventory, expenses, income, and similar information that is recorded in Quickbooks can be integrated into tax software. This way, you don’t have to spend as much time pouring over your tax documents or spend money hiring a tax professional.
What are the Disadvantages?
- Lacks some features included in other software – Quickbooks can do a lot, but it can’t do everything. For example, some bookkeeping software includes features like barcode scanning and eCommerce tools; and though Quickbooks doesn’t offer the industry specific tools, it still offers a wide range of business and accounting tools that are more ubiquitous.
- Limited customer support – Since Quickbooks is very intuitive, most issues with the software can be solved by consulting one of the many tutorials. However, many users prefer to speak directly with an IT or customer support professional, which is not currently an option with Quickbooks. As a result, if the tutorials don’t solve your problem, you may have a hard time tracking down the right answer.
- Limitations with file size – The longer you are in business, the more data you will need to track and store. Overtime, you may have trouble storing everything in one place, and may need to come up with a backup storage plan in case Quickbooks’ limited space becomes a problem.
What Versions of Quickbooks Are Currently Available?
While all versions of Quickbooks have the same basic accounting and bookkeeping features, they each cater to different business types, industries, and budgets. There are 4 online versions of Quickbooks, as well as 3 desktop applications. It is important to note that Intuit frequently runs promotions on their products and offers discounts for longer subscriptions, so the prices listed below are simply the standard costs for each version. In any case, let’s break down each version of Quickbooks to see which is right for your business:
As the name implies, Quickbooks Self-Employed is designed for freelancers and other self-employed individuals who need to keep track of invoices, customers, revenue, etc. While it does not have as many features as other versions, it is significantly cheaper at only $10 per month. This is the best option for those who need bookkeeping software, but don’t want to shell out a lot of money for additional features.
Quickbooks Simple Start offers some improvements over the Self-Employed version, with additional features like sales tax tracking and tax deduction assistance. While it does cost $20 per month, the added cost is often worth it for some businesses. This version is best for small, online retail businesses and any small business with numerous tax write-offs and deductions.
Quickbooks Essentials takes the features of Simple Start and adds bill payment and management, as well as sales and profit reports. At $35 per month, Quickbooks Essentials offers more robust software that is ideal for businesses that see dozens of transactions per day, and need a better way to track and analyze their finances.
In addition to all of the features included with Quickbooks Essentials, Quickbooks Plus includes inventory tracking and tools for contracting 1099 workers. At $60, Quickbooks Plus is the most expensive of the online versions, and it is best suited for small businesses that store and/or ship larger inventory, or those that need to make contracts for more than one freelance worker.
The desktop versions are ideal for any businesses that have a brick-and-mortar location, or prefer to store business data locally. Quickbooks Pro Edition offers more ways to customize reports and manage payroll. Additionally, Quickbooks Pro Edition is ideal for businesses that need multiple employees to access the software at the same time on different computers. The Pro Edition supports up to three users simultaneously. This version costs $299.95 per year (or about $25 per month), which is significantly cheaper than both Quickbooks Essentials and Plus.
The Premier Edition takes all of the features of the Pro Edition and adds reporting for specific industries, backorder tracking, support for up to 5 users simultaneously, and more. Needless to say, if you are a retail business with multiple employees facilitating transactions at the same time, the Premier Edition is a perfect fit. It is best for brick-and-mortar businesses that need better tracking features for inventory, and more analytic data to evaluate their business. Quickbooks Premier Edition costs $499.95 per year (or about $42 per month).
Enterprise Solutions (Desktop)
Quickbooks Enterprise Solutions is definitely the cream of the crop when it comes to Intuit’s accounting software. However, it’s costs and additional features may be excessive for most small businesses, so it is best suited for mid-to-large sized companies. It includes everything from the Quickbooks Premier Edition, with a few more features like improved inventory tracking (up to 100,000 items), EDI Transaction Manager Software, up to 30 simultaneous users, fixed asset management, and more. Quickbooks Enterprise Solutions costs about $50 per month.
Getting Started with Quickbooks
While there are many tutorials for any of Quickbooks’ features, there are a few features that the majority of small businesses commonly use. Here are the most common Quickbooks features:
- Tracking Sales and Income
- Tracking Inventory
- Online Bill Payments
- Sales Tax Management
some of these features are only available in higher-tier versions of Quickbooks.
How to Track Sales
In order to record an individual sale, you will need to do the following:
- Open Quickbooks and select “Create Sales Receipts”
- Enter a name for the customer or select from a drop-down menu of previously saved customers
- Enter a name for an item sold or select an item from the drop-down menu
- Enter the quantity of each item sold
- Select the payment method
- Click “Save & Close”
However, to view information related to all sales and income, you will need to use the following steps:
- Go to the “Reports” tab on the left sidebar
- Select the “All Reports” tab
- Select “Review Sales”
- Select “Sales by Custom Detail”
- Choose the period of time that you would like to view (this month-to-date, this quarter-to-date, etc.)
- Click “Customize” and choose for the Rows and Columns to group by month
- Select “Run Report”
You can customize these reports based on your own needs and analyze the data to evaluate the health of your business.
How to Track
To enable inventory tracking, you will need to do the following:
- Select the gear icon from the Toolbar
- Select “Account and Settings” (sometimes shown as “Company Settings”) under “Your Company”
- Select “Sales”
- Click on the pencil icon next to “Products and Services”
- Select “Track inventory quantity on hand”
- Save your settings
How to Manage
First, you will need to set up payroll in Quickbooks:
- Select the “Employees” tab on the left sidebar
- Select “Get set up”
- Answer a few questions about your business’ payroll needs
- Select “Add an employee”
- Fill out the employee info section
- Repeat this process for each employee on your payroll
Next, you will need to do the following to begin running payroll:
- Select the “Employees” tab on the left sidebar
- Select “Run Payroll”
- Fill out the payroll hour/rate info for each employee
- Review and submit your payroll
How to Manage
In order to enable online bill payments, you will need to sign up for online payments from your Quickbooks account dashboard. Then, you will need to do the following:
- From the dashboard, select “Bill pay online”
- Select each bill that you would like to pay online
- Enter the amount to be paid for each bill in the “Payment” column
- Select the date for the funds to be withdrawn from your account in the “Process Date” column
- Select the payment method for each bill
- Review and submit your new online bill payment settings
How to Set Up
First, you will need to set up your sales tax rate and settings by giving Quickbooks information about your location:
- Select the “Taxes” tab on the left sidebar
- Select “Set up sales tax”
- Confirm your business address
- Tell Quickbooks if you collect taxes in more than one state
- Tell Quickbooks how often you file sales tax
- Click on “Sales Tax Settings”
- Choose the date for Quickbooks to begin calculating sales tax
Next, you will need to give Quickbooks information about what kinds of products/services you sell:
- Select “Products and Services” from the “Sales” tab on the left sidebar
- Select “edit” for each product that is taxable
- Check the “is taxable” box and choose a tax classification for each product
*Note: most services are not taxable, so you can generally focus on products for this step.
Finally, you will need to give Quickbooks some information about your customers:
- Select “Customers” from the “Sales tab on the left sidebar
- Select the name of tax-exempt customers (schools, non-profit organizations, etc.) and click “Edit”
- Select the “Tax Info” tab
- Check the box marked “This customer is tax exempt”
- Provide a reason from the drop-down menu for the tax exempt status
*Note: you should also update the addresses for all of your customers, as sales tax can vary by location.
Is Quickbooks Right For Your Business?
Quickbooks is an excellent tool for tracking expenses, income, tax liability, customer information, and a myriad of other important metrics for small business owners. It is a well-trusted product and is easily the most popular accounting software on the market. That said, it is not the only accounting software available. There are certain programs that are cheaper (like Xero) or have more features (like AccountEdge), and even online bookkeeping services that take the load off of small business owners entirely. Nonetheless, there are reasons that Quickbooks is so popular, It is extremely intuitive and versatile, and there is a version for every business type and budget. Consult the Quickbooks website now for more information!
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September 22, 2019
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