Regardless of the size of the business, certain tasks are required. One of the most important is the basic bookkeeping function. Often small businesses hire outside accounting firms to manage this function, which is wise.
These relationships work best when accurate information is shared by the business and the accounting firm. Each side meets their respective responsibilities. For the small business, it is to collect the information needed by the accountant and collecting money for goods and services provided.
In years past, the business owner kept a set of books and the accountant would review them either on-site or take the books back to his or her office for review, depriving the business owner of those books for several days. With the advent of electronic data transfer, the books could be transferred electronically. Generally, this required locking the information prior to a certain date, which is not generally a problem but is time consuming and inconvenient.
With the advent of highspeed and secure internet access, Intuit introduced a web version of their QuickBooks platform, QuickBooks Online or QBO as it has come to be known. Given the size and resources of Intuit, security is not an issue. They have encryption and IT security that no accounting firm can match.
Since QBO is a multi-tiered, password protected website, the small business owner can authorize appropriate access to employees and the accounting firm charged with supporting the business and generating the necessary reports. Employees only see what they need to see to do their job.
QBO, with appropriate training, allows the small business owner to pay bills, create invoices, collect payments and if Intuit’s merchant services are used, the full sales cycle can be done in a few steps. I don’t comment on the use of Intuit merchant services because there are many factors to determining which service a company uses and that decision needs to be made on a case by case basis. At the same time, the accountant can log in as needed to perform reconciliations, reports or other tasks.
The key to effectively using QBO is proper setup and training. Unlike Microsoft Office©, improperly using QBO can create a Gordian knot that can be very labor intensive and costly to untie. The backbone of QBO is the Chart of Accounts. These accounts categorize the transactions for reporting purposes. While QBO has a wizard to guide a business owner through the process, I recommend having a competent accountant set up the company and conduct specific training for all who will be using QBO.
Engaging a competent advisor from the beginning results in a smoother transition onto the QBO platform and results in the employees having the skills necessary to serve the business’s customers. With regular discussions between the business owner and accountant, the business owner can rest assured that the accounting function is being completed accurately and in a timely manner, so he or she can focus on what they do best in their business.
As the business owner becomes more comfortable with QBO, he or she can generate ad hoc reports to see how the business is doing. Issues that come up can be communicated to the accountant for resolution.
The QBO dashboard also gives the business owner a snapshot of the company’s current financial health. When reports are due, be they payroll, sales tax, income tax or other regulatory requirement, then information is captured in one location without having to search through stacks of receipts and other records to rebuild the year’s financial data, thus saving time and money.
QBO is not the only software solution for the small business owner, but it is by far the most popular. Part of this is due to excellent marketing. However, a significant reason for their popularity is that QBO isn’t designed for accountants. It is designed for business owners. From the onset, Intuit recognized their target audience and wrote a package that is designed for that audience.
QBO is a tool that can significantly aid the collaboration between business owner and accountant. It isn’t the only took and there must be effective communication, but it is a tool well worth considering.