Expense: QuickBooks, especially compared with the hard-core accounting packages that accountants love, is pretty darn inexpensive. Different versions have different prices, but for a ballpark figure, you can get an excellent accounting software solution for a few hundred bucks. Not to go all grandfatherly on you or anything, but when I was a young CPA, inexpensive accounting software packages often cost several thousand dollars. And it was almost easy to spend tens of thousands of dollars.
❯❯ Ubiquity: The ubiquity issue relates to the ease of use of QuickBooks and the cheap price that Intuit charges for QuickBooks. Oddly enough, the ubiquity of QuickBooks becomes its own benefit, too. You’ll find it very easy to find a bookkeeper who knows QuickBooks, for example. And if you can’t, you can hire someone who doesn’t know QuickBooks and then send that individual to a QuickBooks class at the local community college (because that class will be easy to find). You’ll also find it very easy to find a CPA who knows QuickBooks. Now, you might choose to use some other, very good piece of accounting software. Almost assuredly, however, what you’ll discover is that it’s tougher to find people who know the software, tougher to find classes for the software, tougher to find CPAs who know the software, and even tougher to find books about the software.
What’s Next, Dude?
At this point, presumably, you know why you need accounting software and why QuickBooks is probably a reasonable and maybe even an excellent choice. In other words, you swallowed my line about QuickBooks hook, line, and sinker. That decision on your part leaves the question of what you should do next. Let me say this. In a nutshell, before you can begin working with QuickBooks, you need to do the following:
1. Install the QuickBooks software, as I describe in Appendix A.
2. Run through the QuickBooks Setup process, which I describe in Chapter 2.
3. Load the master files, as I describe in Chapter 3.
If you’re thinking “Whoa, cowboy, that seems like a bit more work than what’s involved in installing spreadsheet software or a new word processor,” you’re right. You might as well hear from me the ugly truth about accounting software: Accounting software, all of it, requires quite a bit of setup work to get things running smoothly. You need to build a list of expense categories, or accounts, to use for tracking expenses, for example. You also need to set up a list of the customers you invoice.
Rest assured, however, that none of the setup work is overly complex; it’s just time-consuming. Also know from the very start that QuickBooks provides a tremendous amount of hand-holding to help you step through the setup process. Remember, too, that you have your new friend – that’s me – to help you whenever the setup process gets a little gnarly.
How to Succeed with QuickBooks
Before I wrap up the little why, what, and how discussion of this chapter, I ought to provide a handful of ideas about how to make your experience with QuickBooks a successful one.
Here’s my first suggestion: Please plan on spending at least a few hours to get the QuickBooks software installed, set up, and running. I know you don’t really want to do that. You have a business to run, a family to take care of, a dog to walk, and so on.
But here’s the reality sandwich you probably need to take a big bite of: It takes half an hour just to get the software installed on your computer. (This installation isn’t complicated, of course. You’ll mostly just sit there, sipping coffee or whatever.)
But after the QuickBooks software is installed, unfortunately, you still have to run through the QuickBooks Setup process. Again, this work isn’t difficult, but it does take time. Setting up QuickBooks for a very simple service business probably takes at least an hour. If your business owns inventory, or if you’re a contractor with some serious job-costing requirements, the process can take several hours.
Therefore, do yourself a favor: Give yourself adequate time for the job at hand.
Now let me share another little tip about getting going with QuickBooks. At the point that you install the QuickBooks software and start the program, you’ll be in shock about the number of commands, whistles, bells, and buttons that the QuickBooks window provides. But you know what? You can’t focus on the QuickBooks features.
Your job is simply to figure out how to record a handful – probably a small handful – of transactions with QuickBooks. Therefore, what you want to do is focus on the transactions that need to be recorded for you to keep your books.
Suppose that you’re a one-person consulting business. In that case, you may need to figure out how to record only the following three transactions:
❯❯ Invoices
❯❯ Payments from customers (because you invoiced them)
❯❯ Payments to vendors (because they sent you bills)
So all you need to do is discover how to record invoices (see Chapter 4), record customer payments (see Chapter 5), and record checks (see Chapter 6). You don’t need to worry about much else except maybe how to print reports, but that’s easy. (See Chapter 15 for the click-by-click.)
“Oh, Steve,” you’re saying, “you just intentionally picked an easy business. I’m a retailer with a much more complicated situation.”
Okay, well, you’re right that I picked an easy business for my first example, but I stand by the same advice for retailers. If you’re a retailer, you probably need to figure out how to record only four transactions:
❯❯ Sales receipts
❯❯ Bills from your suppliers
❯❯ Payments to your vendors
❯❯ Employee payroll checks
In this example, then, all you need to do is find out how to record sales receipts – probably a separate sales receipt for each bank deposit you make (see Chapter 5) – how to record bills from vendors, how to record checks to pay your bills (see Chapter 6), and how to handle employee payroll (see Chapter 11).
I don’t want to be cranky or careless here, but one truly good trick for getting up to speed with QuickBooks is to focus on the transactions that you need to record. If you identify those transactions and then figure out how to record them, you’ve done the hard part. Really.
Here’s another suggestion for you: Go ahead and outsource your payroll. That’ll probably cost you between $1,000 and $2,000 per year. I know, that’s roughly the total cost of four discount tickets to Hawaii, but outsourcing payroll delivers three big benefits, even after considering the stiff price:
❯❯ Simplicity: Payroll is one of the most complicated areas in small-business accounting and in QuickBooks. Accordingly, you’ll greatly simplify your bookkeeping by moving this headache off your desk and onto the
