Regardless of whether you are using QuickBooks desktop software or transitioning to QuickBooks online, missteps during setup can have a long-term negative impact on outcomes. Incorrectly categorizing transactions, neglecting regular reconciliations, and mistakes made when setting up user permissions are among the most common issues that lead to wasted time and money.

Setting Up QuickBooks Correctly from the Start

Spending time upfront to get the initial setup correct is worth every minute. It’s critical to consider the company’s future needs during the setup period. Your set-up configuration should be designed to take into account expansion plans, dashboard elements, tools for profitability analysis, and preparation for tax time. Neglecting to do so can lead to time-consuming and costly consequences.

Once accounting software is up and running, and with some basic training, most clients become self-sufficient, even without prior bookkeeping experience. When an unusual situation arises, we can provide the safety net to keep things humming along.

Clients who have already mastered QuickBooks now face new challenges since QuickBooks Desktop has been phased out. As Intuit aggressively points customers to move to online options, many managers face the task of transitioning.

While migration from desktop to online can be handled internally, it is critical to involve a specialist who possesses a good foundation in the program. Tasks such as assigning transactions to the correct category — if not done accurately — can lead to costly duplication. A seemingly simple mistake during setup can turn into a nightmare at tax time. 

Potential Red Flags

Whether you choose to make the transition on your own or work with a professional, here are some red flags worth noting:

1. Protect the integrity of your data: Historical data on QuickBooks Desktop can be lost if your subscription expires or if you are utilizing older versions that are no longer supported. Utilize a specialist like Fischer Cunnane to ensure historical data is converted correctly during the migration to QuickBooks Online.
2. Learn how the bank feed works: Some companies opt to utilize the bank feed, which enables every bank transaction to flow into QuickBooks. It’s a terrific feature, but only when the initial setup has been done correctly. Classifying transactions and creating rules for particular deposits can be tricky. It’s worth taking the extra time to set the bank feed up correctly from the start to avoid future challenges.  
3. Integrating payroll: Some clients choose to utilize QuickBooks Payroll to streamline the process, help with filing taxes, compliance, and more. When you convert to online, it’s imperative that the year-to-date figures from the desktop version agree with the online version. Make sure to check that W2 details convert accurately, and check that rates are accurate, as they might not transition properly for different jurisdictions.

Working Online

Once the transition to online has been made successfully, the enhanced functionality can provide greater ease, flexibility, and provide room to grow. Consider the case of an auto body shop owner who started with one shop but anticipated that he would soon have multiple locations. With QuickBooks, he was able to account for and classify different locations. So, when expansion occurred, a P&L could easily be run for each location.

Similarly, a solar panel company needed to establish parameters for tracking projects. With QuickBooks, each project was assigned an individual classification to enable project profitability analysis.

Beyond flexibility, working online enables access to secure real-time information. It prevents users from accidentally working from a dated saved version, because all data is in real time. Data is secure in the cloud, so it’s always up-to-date and at your fingertips.

Whatever platform you choose, using accounting software is a gamechanger that can streamline operations, track payments and cash flow, reduce errors, and manage finances in real time. Working with a trusted accountant to set your system up in an optimal manner or relying on them to support a move to a cloud-based platform is a great next step.

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Rick Stiebritz, CPA, serves as President and Managing Shareholder of Fischer Cunnane Certified Public Accountants & Consultants and has more than 30 years of experience serving as an active, client-facing partner on client engagements with public and private companies. With more than a dozen years of experience as a CFO for both a startup and a Fortune 500 company, Stiebritz understands what it’s like to be in his clients’ shoes. If you have questions regarding accounting software or other accounting-related needs, please contact Fischer Cunnane at 610-431-1003 or email Rick Stiebritz at [email protected]. Visit Fischer Cunnane for more information.