3 simple tips to leverage your data in Quickbooks
Putting off adding transactions in Quickbooks (or any other system) is so common among business owners, and they’re usually working entire weekends trying to get it up to date in order to file taxes.
By doing this, you’re missing out on essential knowledge throughout the entire year.
Here’s 3 tips that can help you gather that data in a much better way so you can actually use that information to help you grow your business in a sustainable way.
Don't use generic categories in the Chart of Accounts. Create and customize subcategories that make sense to you and to your practice. This information is not only necessary for your tax preparation, but also to YOU as the business owner to stay connected with your money. However, DO use generic names for Clients names, such as “Therapy Client” and use the same for everyone. Accounting softwares are generally NOT HIPAA compliant and they don’t replace your EHR.
Don't rely on rules or suggestions from the software in the bank feed blindly. Adding transactions without checking that the fields are correct can create gigantic messes that will only make you even more overwhelmed. Use the Memo field to add as many details as possible.
Reconcile your accounts on a monthly basis. This is important because it'll help you catch duplicates, missing transactions, or any other errors. The reconciliation process consists of you actively matching what’s in your bank and/or credit card statements to the transactions added in Quickbooks. You’ll need to have those statements handy for this step.
How is this going to help you leverage the information?
All those transactions add up, and will eventually work their magic to create financial reports for you. But those reports are only as good as the information put in. By increasing the "quality" of the data going IN, you're making it easier for yourself to run reports you can trust and understand(aka turn that boring data into essential knowledge).
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This is for informational and educational purposes only. Please seek individual legal and tax advice.