What is QuickBooks? How it helps in accounting?

What does QuickBooks mean?

Developed by Intuit, QuickBooks is an accounting software whose products provide desktop and online accounting applications and cloud-based ones that can process bills and business payments.

QuickBooks is mostly targeted at medium and small businesses. Ease of use and reporting functionality makes QuickBooks popular among these users.

What are the benefits of using QuickBooks?

Intuit has included many Web-based features in QuickBooks, including:

• Electronic payment functions
• Remote access capabilities
• Mapping features
• Remote payroll assistance and outsourcing
• Online banking and reconciliation
• Better mail functionality with Microsoft Outlook

QuickBooks also has help functions and other functionalities like pre-authorization of electronic funds and time tracking options for employees. A cloud solution called QuickBooks Online is also provided by Intuit, in which the user can access the software with a secure login by paying a subscription-free. QuickBooks is upgraded and updated regularly by Intuit.

Even for business owners and users who lack financial or accounting background, QuickBooks is generally considered easy to use and understand.

Another benefit of QuickBooks is the availability of ready-to-use templates to create charts, business plans, invoices, and spreadsheets. It can also help save time and effort for business owners by automating their signatures (scanned and uploaded for use) on business checks.

Integration with other applications is also a significant advantage of QuickBooks. It has a user-friendly interface and can guide users through each of its features.

Although QuickBooks is one of the most widely used accounting software brands, some other software brands are considered to provide more transparency in calculations, better audit trails, lesser upgrade fees, and better deletion history than QuickBooks.

History

Scott Cook and Tom Proulx were the inventors of QuickBooks in the year 1983.

After that, in the year 2003, it started flourishing in different industries. Since then, various versions of the software have been released. The reports and workflow processes were made according to the specific industry needs so that the application was smoother.

Over the years, it has also penetrated different international markets.

Features of QuickBooks

• Data Migration: The data in the accounting software gets smoothly transfer to the spreadsheet. This is suitable when you want to have financial data on the spreadsheet.
• User-friendly: The powerful software makes every task pretty easy for the user. Most importantly, the rich features in the software take care of small and medium-sized businesses’ needs.
• Sailing process: It’s easy to know where your business stands with the software’s help. Learning how it works is simple and easy to understand. Furthermore, it involves a very short learning curve.
• Bank Transactions: Every transaction of your business is transparent, and the software will keep on recording the transactions linked to wages, commissions, salary, expenses, profits, etc.
• Invoices Generation: Easy generation of invoices from your smartphone, tablets, and computer system.
• Tax Calculations: The feature of tax calculations in QB gives you the feasibility to calculate tax for your firm in a prompt, accurate, and efficient way.
• Business Projections: The feature of business projections in QuickBooks helps a QB user in generating future predictions. On the other hand, if anyone wants to create reports – sales, profits, expenses, it becomes simple for them to figure out the things with business projections.

How Does QuickBooks Work?

1. Chart of Accounts

The Chart of Accounts contains your company’s financial information. Checking, savings, dividend, accounts receivable, and balance sheets appear within the Chart of Account list.

Account balances and other information, including account numbers and contact details, appear within each account’s window. The list of stores appears under the Lists menu in the Chart of Accounts.

Generally, deleting a report should be avoided; instead, make the account inactive to provide more accurate tracking. QuickBooks creates several recommended reports based on your business type.

2. Vendor, Customer, and Item Lists

It provides three main centers for managing your contacts and inventory — the Customer, Vendor, and Inventory Center. The Customer and Vendor Centers contain lists of transactions related to a customer or vendor in a single location.

The Inventory Center provides streamlined and straightforward management of your inventory and non-inventory items. Inventory items consist of products you sell and keep on hand, while non-inventory articles typically deal with services.

Each center provides an option to search, add, edit, or delete customers, vendors, and items. Sort transactions by customer, vendor, or item type and customize fields within each list to suit your business needs.

3. Reports

Creating detailed reports requires that you accurately enter your customer, vendor, and item details. Once you run a report, customize the message to filter information by a specific customer, vendor, item, transaction date, or show past due payments and other important information.

Once you run a report, add it to your memorized or favorite report list for future access. A list of pre-configured reports appears within the Reports drop-down menu. The Profit & Loss report provides businesses with one of the most commonly used words.

4. Payroll

Payroll provides the capability to manage paychecks, pay liabilities, and set annual limits on special payments such as tips or vacation pay. Manage workers’ compensation, tax-exempt employees, and tax forms within the Payroll Center.

It also provides a service that provides online payroll options to send the direct deposit and email receipts of payments for a monthly fee. Assign payroll permissions to specific users if you’re using a multi-user QuickBooks account setup.

Additionally, edit information from the Employee Center to add additional deductions, tips, and other employee-specific details.

5. Billing and Invoices

QuickBooks provides two types of statements — Billing and Invoice statements. Billing statements bill a customer with charges over some time — for example, a construction company with charges that accumulate over several months as materials and other costs build up.

Billing statements get recorded in a special register called the Customer Register. Invoice statements work best for items purchased and paid for in a single transaction and don’t accumulate over time.

For instance, a bookstore that orders a book for a customer might provide an invoice payable upon ordering or receipt of the book.

Types of QuickBooks Versions

• The QuickBooks Self-Employed
• QuickBooks Online
• QuickBooks Desktop Products: The QuickBooks for Mac, QuickBooks Pro, QuickBooks Premier, QuickBooks Enterprise
• Apps of QuickBooks

Conclusion

We have seen how QuickBooks is an all-rounder when selecting a financial tool for your business. No matter the size of your operations, it offers organization, streamlining, and proper management of your finances so that your business can run smoothly.

With the exciting updates furnishing in 2020, it is yet again, ready to surprise its users with extending its functionality.

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