Darlees.com

Do you need QuickBooks at this time? Are you feeling swayed by the advertisements about how easy it will make things?

QuickBooks is a full-blown double-entry accounting system. Even though Intuit has done an excellent job making double-entry accounting accessible to many people, it still requires a certain amount of specialized knowledge to use the program effectively.

Brand new, solo, sole proprietors generally only need a few things in their day-to-day business accounting:

1. Accurate Bank Balances. Managing & reconciling the check register ® should be as easy as possible. Printing vendor checks is nice, but optional.
2. How Much Revenue? Tracking revenue for tax purposes is an absolute must.
3. Expenses Tracking. Keeping track of all expenses in their proper categories is also an absolute must for tax purposes.

Quicken can do all of these things, more easily & less expensively than QuickBooks. So… So can Excel or even a paper based system.

I’m not a big fan of switching people over to QuickBooks unless their financial situation changes. You might be ready for QuickBooks if:

4. Employees. Perhaps you have grown to the point of needing to hire people. Great! But you also might need a new accounting system to help you with all of the payroll reporting & payment requirements.
5. Inventory. Perhaps your inventory has grown to the point where you would be better off tracking it via software. QuickBooks can assist you with this.
6. Change of Entity. You may even have grown to the point where you should change from a sole proprietor to some other type, such as an S-Corp. If so, then you really need to be easily able to generate a balance sheet for tax purposes. QuickBooks can do that for you…
7. Accounts Receivable. You may send a lot of customer invoices each week or month. QuickBooks can keep track of these for you in a very organized & easy to understand way.
8. Lots of Business Debt. If you have many loan balances, keeping track of them in QuickBooks is easy.
9. Job Costing. You perform work on a job-by-job basis. Maybe it is time to track revenue & expenses for each job – this way, you can determine if you’re making money on each job, & which jobs are more profitable than others. QuickBooks does this.

If more than one of these applies to you, it may be time to make the switch.

Final Thoughts

Switching to QuickBooks means better reports & better tracking of financial data. For this, you may need professional help – you may need to hire somebody to do the bookkeeping and/or help with the setup. So switching accounting systems will cost more than just the price of the software. Before you switch, make certain that the additional data is worth the additional expense. If some of the above variables have come into play, it probably is.

About the Author: Jennifer A. Thieme is a Certified QuickBooks ProAdvisor who loves to help people with QuickBooks. So… She brings completely unique insight, clear instructions, & over ten years of experience to all of her QuickBooks articles. Owner of Solid Rock Accounting Services, Jennifer’s clients enjoy these same benefits on a personal & regular basis. You can too – visit http://www.jenniferthieme.com & contact Jennifer today.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.