The Best Ways to Customize Your QuickBooks
Feb 13, 2023So many accountants have a love hate relationship with QuickBooks! You'd think they'd love it; it's so common, it's widely utilized, and it makes bookkeeping easier, right? Sort of...
There always seem to be hiccups and things that can slow us down along the way but it all depends on how your account is set up!
What do you need to see on a regular basis in terms of metrics and measurements? I recommend you divide your accounts so that you can see information more clearly. If you have a lot of contract labor costs, you can divide it into advertising, consulting, etc. to see where your money is actually going.
You can also divide income reporting! Instead of just using the general sales category QuickBooks provides, you may want categories like coaching, courses, or consulting. When you do this you can get a better idea of where your money is coming from and where you want to put your attention and energy.
"When it comes to organizing your chart of accounts, there are a couple of things to keep in mind. One is how you want them to be presented on the tax return, but also how you want to report your information so you can consume it easily."
In this episode, you will learn the following:
1. How to customize your QuickBooks chart of accounts for your specific industry and business needs.
2. Strategies for segmenting income into recurring and non-recurring streams to better measure success.
3. How to use classes in QuickBooks to separately track different revenue streams.
What you'll hear in this episode:
- How to customize the chart of accounts and the Quickbooks setup to make it really work well for clients who aren’t the typical cookie cutter
- When you have a huge chunk of your expenses in one account, break it out.
- How to break out your income based on service types.
- Split your income between recurring vs non-recurring revenue.
Here are some brief snippets from this episode:
[00:00:50]
A lot of accountants have this sort of love-hate relationship with QuickBooks. If you know how to use the product really well, you can have it work for you really well in your business.
[00:01:28]
When QuickBooks gives you a company, what they do is they give you a standard set of accounts. Now, until QuickBooks comes up with some type of industry layer, what we have to do is customize a lot. When it comes to organizing your chart of accounts, there are a couple of things to keep in mind.
[00:02:54]
How can you measure what you need in your business using these financial statements in the most accessible way possible? Break out these bigger accounts into sub-accounts you can actually subdivide.
[00:05:02]
How can you report your income effectively on your profit and loss? Instead of putting all your stuff in sales, use a different account and use different ways of organizing these accounts. Split up your income between sources of recurring and non-recurring revenue.
[00:08:48]
Split out big cost centers with sub-accounts that will help you understand where your money is going. Major costs are the cost of acquisition, cost of operations, and cost of service. You can also work with your bookkeeper to implement some of these ideas.
[00:11:37]
There's this thing called classes in your QuickBooks. Classes are layers or dimensions of your business that you can use to distinguish between divisions or channels of income. You can have total creative freedom when it comes to your Quickbooks and how it's presented.
Related episodes:
213. Creating a Cost-effective Agency Model with Paul Seaton
217. Designing Systems to Scale with Ernesto Mandowsky
Resources:
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
