Your Taxes: QuickBooks 101 |

Your Taxes: QuickBooks 101

This may seem like an odd topic for a tax preparer to write about in the middle of tax season, but this is also the time of the year when I find myself helping many small business owners with their QuickBooks files. In the classes that I teach (new ones coming soon … visit my website if you would like the details), I have a few main pointers that I share. If you are, or want to be, a QuickBooks user, read on. If not, please pass this along to your favorite small business owner, as rumor has it that 95 percent of business owners use QuickBooks.Choosing the right software is the first step. If you have an LLC, partnership or corporation, I recommend using QuickBooks. If you are an individual or sole proprietor, I recommend using Quicken. The difference is simple: QuickBooks keeps a double entry system of debits and credits, whereas Quicken is a more simplified register and allows you to more easily co-mingle business and personal funds (something LLC’s, partnerships and corporations aren’t allowed to do). If you decide your business needs the help of QuickBooks, then the Pro version usually works just fine and should cost around $175. You should avoid the Simple Start version (often tempting because it’s free, but you get what you pay for!), and the Premier version is more sophisticated than most users need and has an added cost. When you purchase the software, I also recommend paying for the CD if you buy online. Downloading is fine until you need to get a new computer and then all too often you can’t relocate your software. And, for you Mac users out there, I personally dislike QuickBooks for Mac, but it’s made huge strides in the 2011 version, so it’s more usable than it ever has been in the past.Once you are up and running, the first pointer I always share is “use the Open Windows function.” Why this isn’t a default in the program, I’ll never know, but if you go to View / Open Window List, you’ll see a running tally of the windows you have open along the left hand side of your screen. This lets you easily move between screens such as bank accounts and reports and will speed up your productivity significantly.Want to see all transactions for a certain account? When using reports, there is a little known trick of simply pressing the “A” key on your keyboard immediately when you pull up a report. This will change the date range from the default of This Month-to-Date to All. You can use this trick from just about any report, and it comes in handy if you are viewing an annual profit & loss, but want to drill down on your office supplies account and see every transaction since the beginning of time.On the topic of reports, I’ll interject a little advice on your profit & loss and balance sheet. These reports should contain primarily positive numbers. Just because an account is a payable, loan or liability, doesn’t mean that it should be negative. If you pull up your balance sheet and see negative figures in any category except the equity section at the bottom, you almost certainly have errors! All too often the balance sheet gets neglected, and if you want to use QuickBooks to successfully run your business, you need to keep an accurate balance sheet.If you haven’t taken the leap to QuickBooks, I can’t say enough about it. With a little guidance in the beginning, QuickBooks can be a powerful tool that lets you manage your business in 20-30 minutes per month. And, when it comes to tax time, you simply e-mail the file to your accountant, and they sing your praises because you are so organized!

Michele Knight, owner of Knight Accounting & Technology, is a CPA and QuickBooks ProAdvisor based in Dillon. For more info and to contact her, visit

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