The 4 Most Common QuickBooks Mistakes (and how to fix them)

As a CFO and Wealth Coach, I’ve worked with tons of creative entrepreneurs and healers who sign up for QuickBooks with good intentions…and then find themselves in WAY over their heads. I definitely get why this happens!

Because let’s face it. Not everyone is an accountant. Most of us never spent a moment thinking about Balance Sheets or Profit & Loss reports. But then you become a business owner and suddenly this is all supposed to be part of your skill set.

So many times clients come to me, frustrated and ready to QUIT the QuickBooks. And I honestly can’t blame them!

Then after a little digging, we often discover that the things keeping them stuck are the same things that get EVERYONE. Most of the time it’s actually not big mistakes that throw them off track. It’s usually that they got tripped up by one or more SMALL mistakes.

Small mistakes, that is, that lead to BIG headaches. Definitely NOT what you signed up for when you took on QuickBooks.

So what can you do to ensure that you get the most out of this powerful software without ending up with a massive migraine?

The good news is that these QuickBooks mistakes are actually easy to fix. When you know what you’re looking for, that is!

This is just what we’ll cover today, so you can save yourself a LOT of stress and grief going forward (especially when April rolls around)!

Here are the 4 most common QuickBooks mistakes I see, and how you can avoid them.

Mistake # 1: Not reconciling each month.

The reconciliation process is the most important step in the verification process. If you haven’t been reconciling your accounts, your numbers will be off. So make a point to add in this important task each month.

Pro tip: Also be sure that you don’t have any uncleared transactions, too!

Mistake # 2: Mixing Personal and Business Expenses.

This one is a doozy! Sure, everyone runs a personal charge through their biz once in a while, which is no biggie. But when recurring payments OR more than the occasional charge gets put through, it can turn into a big mess. And FAST. Here’s why…

First, you are impacting your cash flow and messing up your budgeting flow. Second (and most importantly), when you form an LLC, the whole point is liability protection. That is, your LLC is supposed to be treated as a separate legal entity from you. It’s that separation that protects your personal assets (like your home, car, or savings) if your business ever gets sued or owes money.

But when you mix personal and business expenses, you blur that separation. It’s what we call in the business “piercing the veil”. So what’s the result? There is no separation between you and your business. This makes “LLC” is just some pretty letters.

So be sure that you are keeping your business and personal expenses separate as much as possible. Not only will it keep your Cash Flow and budgeting on point, but also give you the protection you set up your LLC for in the first place.

Mistake #3: Not Backing Up Receipts.

Did you know that if you are audited by the IRS and you don’t have a receipt for a business expense, the IRS can remove your claimed business expense? (And no, unfortunately your bank statement doesn’t count).

So make sure you’re backing up ALL your receipts. Not only does it give you protection, but it also assists your bookkeeper to put things in the right place without having to ask you “what was this charge, please?”

The best news is, that QuickBooks makes it SOOO easy to upload receipts. And once you upload it, you can throw it away (no boxes of paper receipts required).

Mistake #4: Ignoring Open Invoices.

Often, part of cleaning up QuickBooks accounts is to review a list of open invoices that have been ignored. This mistake can make you look profitable in your reports, but then you realize not only do you not have the cash it looks like you have–you were also taxed on it as income! (We talked about this in last week’s offering!)

The other downside is, if you wait too long to take care of open invoices, that customer might not even pay you what you were owed. So please look over your Accounts Receivable and review those open invoices often.

There you have it! The 4 most common QuickBooks mistakes, and how to fix them. Make sure you’re staying on top of these, and set yourself up for peace of mind come Tax Time.

Now, here’s a question: are you running your QuickBooks or is QuickBooks running you? Find out HERE if any of these common QuickBooks errors are keeping you stuck, AND what to do about them!

Take the quiz right HERE.

Until Next Time,

Love, Light, and MONEY, Honey…

Kaylee

P.S. Are you a QuickBooks genius or are you completely lost with QBO? Let’s find out if you’re running your QuickBooks, or your QuickBooks is running YOU. Take my NEW QuickBooks quiz and find out what your QuickBooks IQ really is!