Up-to-date, accurate accounting works as the lifeblood of every successful small business. Irrespective of the type of business you operate, you need to understand and follow the accounting best practices to run it smoothly both in present and time ahead. If you have been involved in manual accounting tasks since the inception of your business, dealing with the ropes of small business accounting may seem intimidating. However, with QuickBooks accounting software by your side, you will have no fear.  

Being one of the best accounting software, QuickBooks has been designed with features that can simplify various accounting tasks. Its astounding share of 81.74% in the small business accounting market already speaks volumes of its potential. To be able to utilize its features maximally, you must have a clear understanding of its features and benefits. 

Before we take you through the perks of using QuickBooks for small businesses, let’s take a look at the role that small business accounting plays. 

Importance of Small Business Accounting 

Business accounting refers to the systematic recording, analysis, presentation, and interpretation of financial information. In other words, accounting is how you keep track of business operations. Depending on the scale of the business, you may need only one person to do the accounting tasks or a big team full of experienced CPAs.  

It’s the accountant’s responsibility to gather, organize, analyze, and file every bit of data related to business finances. This includes receipts, invoices, bill statements, payroll records, bank statements, and more. After fulfilling the data-gathering duties, accountants deal with the numbers to make profit & loss projections and diagnose the financial health of the business. 

How Can QuickBooks Help with Small Business Accounting? 

1.Profitability tracking 

Using QuickBooks’ intrinsic features, you can track items and expenses by customers via the Account setting to get a complete picture of the overall profitability. Using the data obtained, you can follow the earnings and make plans to grow it further in the future. With the help of profitability measures, you can track transactions easily to determine how much your small business earns on inventory. Some of the profitability ratios you can check here include the return on assets ratio, gross margin ratio, return on equity, and others. 

2. Cash flow management 

Being a responsible owner of a small business, you must have a good understanding of different revenue streams. With accurate accounting backed by QuickBooks software, you can tell how much income the business is making in a specific period and track spending accordingly to ensure steady cash flow for various expenses. 

The easy availability of organized financial records also makes it easier to analyze areas that need improvement. 

3. Streamlined tax preparation 

Accurate tax preparation and filing are based on the efficiency of accounting tasks handled within your small business. Any error in the recorded accounting data can lead to tax filing issues, which may later have serious financial implications. By using QuickBooks accounting software, you can save time in recording different transactions as they come up. 

This way, you can prevent the last-minute hassles of tracking required business information at the end of a financial year. With streamlined bookkeeping, you can check the type of taxes and calculate the total tax payable more accurately. 

4. Easy reporting 

Even if you run a small business, you will need to report crucial business information to potential investors and many other stakeholders like partners. QuickBooks’ reporting features allow you to get easy access to easy-to-consume financial data in the form of charts, graphs, tables, and other visual aids. As a result, it increases the precision of data and helps communicate the strength of your business while wooing investors. 

You can also use the reporting features of this software to define the financial state of your business to the employees, thereby motivating them to do better for its growth. 

5. Business plan creation and evaluation 

Accurate accounting also lays the foundation for improvements and upgrades in different areas to forecast the future of your small business. You can trace the financial records to evaluate performance levels, identify patterns, and compare them with previous findings. This will help you realize where you can trim costs without affecting performance. You will also get to know if the firm needs more employees or operational modifications to achieve new targets. 

Steps to Manage Small Business Accounting with QuickBooks 

Using QuickBooks for small businesses may make accounting tasks easier that otherwise seem daunting to those who do not use the right tools. Being a top-quality accounting software, it can offer businesses a slew of benefits to organize transactions and create financial documents automatically. Let’s see what you can do using QuickBooks software: 

1. Connect business bank account directly with QuickBooks 

Irrespective of the type of business bank accounts you use, you can sync them along with credit cards to the QuickBooks platform for quick and easy referencing. 

2. Record expenses and income 

Using QuickBooks desktop accounting software, you can easily record various outgoing and incoming transactions in one place by enabling automatic syncing of the accounts. You can use its expense tracker feature to check all expenses and income through a unified dashboard. 

3. Select the right accounting method 

QuickBooks for small businesses also allows you to switch between cash or accrual accounting methods seamlessly. It will report the account activities the way you prefer irrespective of whether you choose to record transactions when money changes hands or recognize the income/expenses whenever they occur. 

4. Create journal entries 

QuickBooks also ensures that all the credits and debits equal out in the business accounts as you use the double-entry method. You can simply upload the accounting information to QuickBooks and compile financial information without facing any data entry errors. 

5. Generate financial statements 

Using the financial reporting capabilities of QuickBooks for small business, you can generate financial statements for any given accounting period easily. It compiles various business accounts and journal entries to generate accurate balance sheets, cash flow statements, income statements, etc. 

What Can QuickBooks Cloud Hosting Do for Your Small Business? 

As a QuickBooks user, you might already know that you can either use the desktop software installed locally on a computer system(s) or host it on the cloud. With cloud technology becoming the backbone of every type of business, you can easily find cloud-based business applications available for your perusal.  

If you are worried that migrating to cloud-hosted QuickBooks for small businesses won’t fit your budget, you need to dig deeper to know the truth. QuickBooks hosting solutions tend to democratize cloud technology for all businesses irrespective of the scale at which they operate. You can select the most basic cloud hosting plan and still get significant benefits for the business.  

Let us take you through the benefits of cloud hosting for your licensed QuickBooks version: 

• It ensures the complete security of your accounting data, including stock availability, client information, supplier information, and more. This way, you need not worry about losing business-sensitive data as in the case of a local-hosted QuickBooks setup. 

• You can access cloud-hosted QuickBooks from any device of your choice anytime. This helps in getting rid of the restriction of using QB software only on office-based computer systems. The compatibility of the software on different devices mainly depends on the cloud provider you select. 

• QuickBooks hosting also allows you to get rid of redundant to-and-fro sharing of accounting data via unsecured methods. Multiple authorized users can work on the same data files simultaneously, irrespective of where they are located. 

• Under cloud hosting solutions, the expenses of setting up and maintaining the required infrastructure are taken care of by the cloud provider. Whether it is hardware, server, or space, you need not worry about it by switching to QuickBooks on the cloud. 

• If you have faced situations related to loss of data or data theft, you can prevent them from occurring again with QuickBooks cloud solutions. QuickBooks hosting plans offered by renowned cloud providers like Ace Cloud Hosting, also include a data backup facility to deal with such circumstances.  

Conclusion  

You can perform a wide variety of small business accounting tasks using QuickBooks software. To further enhance its capabilities, switching to the cloud is the need of the hour. Make sure you understand the benefits and features of QB hosting before taking the required leap.