One of the hazards of being an accountant is the QuickBooks question. Wherever I go, the grocery store, the bookstore, the farmer’s market, as soon as word gets out, the question pops up.
It’s understandable what with QuickBooks being the elephant in the small business accounting industry. Too bad the answer isn’t as easy to give.
Not that I don’t want to answer but usually I’m trying to decide what to make for dinner or if that magazine is worth buying or if the corn is just so and can’t turn my full powers of concentration (which are considerable – a superpower of focus) to the questioner. The real problem is that I can’t possibly know all the vital facts around that person’s situation in the minute and a half we’ve talked.
So, I usually give a vague answer like “QuickBooks is really useful and I recommend it frequently but it may not work for everyone.” Wow! Not helpful, huh? I hate that version.
Here’s what I should say instead of that wishy-washy clap trap.
It’s easier to say when you don’t need it than when you do. If you have a few transactions, maybe a couple dozen a week, and your dollar amounts are low, less than a thousand dollars per transaction, you really don’t need it. If you’ve been keeping up with a basic system that has all the information and makes your end of year reporting hassle free, there’s no pressing reason to incur the expense and trouble of converting to an electronic system. Same thing applies if you’re using Quicken and are happy with that.
Even those volume and dollar amounts aren’t set in stone. I’ve seen many businesses with relatively high sales that are otherwise uncomplicated operated with low tech systems for years. The catch comes when or if you want to expand or sales and complexity increase.
The trick to starting with QuickBooks is doing it before you really need it. Unlike paper systems and simple electronic versions like Quicken, it’s a true double entry system and has all kinds of accounting quirks built in where you can’t see them until they’re screwed up. That means you’ll want some time and expertise to get started before you need to rely on it.
When your business grows, in size or complexity, to the point where you’re having trouble keeping all the records up to date, you need to use invoices for billing, you’re adding payroll or you need more detailed and frequent reports that’s when to consider upgrading to QuickBooks.
Just remember, it’s an upgrade and those usually cost money, effort and time. Like most things you have to learn to use the program and I strongly recommend you have a qualified accountant or bookkeeper set up your system so all those hidden accounting type things aren’t broken from the start.
I know, that’s not a much more definite answer than the first but at least it leads to more conversation and questions about the situation. That’s the only way to get a useful answer. Are you wondering about your own situation? Let me know in a note or the comments and let’s see what we can come up with.