This document outlines 13 common mistakes people make when using QuickBooks. Some key mistakes include having a disorganized chart of accounts and items list, not using features like the purchase order system, failing to properly reconcile bank accounts and credit cards, incorrectly applying payments, and not setting proper user permissions and report settings. The document recommends organizing accounts and items with clear structures, using features like purchase orders and reconciliation regularly, and checking with an accountant before making changes to transactions.

1. 13 QuickBooksMistakes
You’reMaking EveryDay

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1 YourChartofAccountsisaMess
Makesuretogroupsimilaraccountstogether.
CreateParent-Child Accounts WhenNecessary
Expert Tip: Once your chart of accounts is set up, make sure to enter data in the lowest
level account. For example: if you have an account for Marketing with 3 child accounts
(web, print, and trade shows), make sure to enter your expense into the proper child
account--never the parent account.

3. 2 Your“Items”ListisJumbled
Thingsyousell=“items”
Deactivateanyitemsyounolongersell.
Labeleachitemaseither“inventory,”“non-inventory,”etc.
Makesurethe“quantityonhand”amountiscorrect.
Double-checkthatthecostsforeachitemaredefinedandupdated.
Tag eachitemwiththeappropriaterevenue&costaccounts.
HowtoOrganize Your Items List

4. 3 YouʼreAvoidingthePurchaseOrderSystem
Use It!
CreateaP.O.every time you buy productfrom avendor.
Youknowyou’re usingthe PO system rightwhen:
Youreceive your productsagainstaPO.
YourPOreport doesn’t have entriesover1yearold.

5. 4 Youʼre Not Reconciling Your Bank Account
No,it’snotaboutentering every transaction intoQuickBooks.
Open the reconciliation module and:
Gothrougheachtransaction
Makesure each transaction hit therightaccount
Verifythat each transaction clearedthebank
Wereanytransactionsoverlookedordouble-booked?

6. 5 YouʼreNotReconcilingYourCreditCards
For the most accurate financial statements:
Use the reconciliation module for credit cards, loans
and other balance sheet accounts.
Reconcile credit cards and loans once a month.

7. 6 Signsthat you’re doingitwrong:
Open the accounts receivable aging report...
If you see customer balances with negatives
or balances on the report that shouldn’t be there....
You’re doing it wrong.
Every time you get paid by a customer, you should
be able to receive that payment against an
open invoice.
YouʼreMisapplyingDepositstoInvoices

8. 7 IncorrectlyApplyingPaymentstoBills
Youknowyou’vedonesomethingwrongwhen:
When you seevendorsyou knowyou’vepaid
in the accountspayableagingreport.

9. 8
You’re usingit wrongif:
youreceivepayments from customers,butyour
cashaccountisn’t increasingon yourfinancial reports.
ExpertTip:
Whenyoureceive acustomerpayment,openadepositmodule,
batchcheckstogetheryou’retaking tothebank,
andrecordthemasonesingledepositinthesoftware.
YouʼreNotUsingtheUndepositedFunds
AccountCorrectly

10. 9 YouHaveIncorrectReportSettings
CommonProblem:
Areyourreportssettocashoraccrualsetting?
CashReports:showyou the cash in/outflow
oftransactions within your company.
AccrualReports: showyou the overall performance
ofyourcompany.

11. 10 YourPreferencesAreIncorrectlySetUp
What you can dowith preferencesettings:
Setupemailtemplates
Determinefinancechargesforcustomerlatepayments
Definereportingoptions
Assigndefaultbankaccountsforpayingbills,recevingchecks,etc.

12. 11 DonʼtForgettoLockClosedMonths
Warning:
Makesuretolockmonths/periods once
theyareclosedto preventothers from
messingaroundwiththenumbers.

13. 12 YouʼreNotCreatingUserRoles&Passwords
Takethetimeto:
Createdifferentuserroles,
assignpermissionsto each role,
createnewpasswordsfornewusers.

14. 13 YouʼreDeletingTransactions
The Domino Effect:
Transactions in QuickBooks are linked
to other transactions.
If you delete a transaction, you are
setting off a chain of events that you might
not be aware of.
Check with your accountant before
deleting transactions.

15. Visit
www.ignitespot.com
for more QuickBooks help.