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What is QuickBooks?


QuickBooks is the most popular small business accounting software businesses use to manage income and expenses and keep track of the financial health of their business. You can use it for invoicing customers, paying bills, generating reports, and preparing taxes. The QuickBooks product line includes several solutions that work great for anyone, from a freelancer to a midsized business.

Ways Small Businesses Use QuickBooks
Small business owners typically use QuickBooks to manage their invoices, pay their bills, and track their cash flows. They also use it to generate month- and year-end financial reports as well as prepare for quarterly or annual business taxes. Some business owners manage QuickBooks themselves while others prefer to use an in-house or outsourced bookkeeper.

1. Create and Track Invoices
You can create invoices easily and either print them or email them to customers. QuickBooks will record the income and track how much each customer owes you automatically. You can view the amount of your outstanding invoices—known as your accounts receivable (A/R)—as well as how many days they’re overdue by running an A/R aging report.

2. Keep Track of Bills & Expenses
QuickBooks keeps track of your bills and expenses automatically by connecting your bank and credit card accounts to QuickBooks so that all of your expenses are downloaded and categorized. If you need to track a check or cash transaction manually, you can record it directly in QuickBooks in a few minutes.

3. Print Financial Statements for Your Business
By managing all of your cash inflow and outflow activities in QuickBooks, you can print financial statements that provide useful information about how your business is performing.

Lenders often require financial statements when you apply for a small business loan or line of credit.
You can produce these three primary financial statements in QuickBooks with a few clicks:
  • Profit and Loss Report
  • Balance Sheet Report
  • Statement of Cash Flows
4. Track Employee Hours and Run Payroll
Payroll is an area that you don’t want to skimp on by trying to do it manually. Mistakes made in calculating paychecks can result in steep penalties and unhappy employees. QuickBooks has its own payroll function that can calculate and run payroll as often as you need it automatically.

QuickBooks can track your employees’ hours. The hours tracked then flow to both your customer invoices (if billable) and your payroll. This ensures that every hour you pay your employees for is considered for billing to a customer.

5. Track Inventory
QuickBooks can track the quantity and cost of your inventory. As you sell inventory, QuickBooks will allocate a portion of your inventory to cost of goods sold (COGS) automatically, which is an expense account that reduces your income. This allocation is a requirement for calculating taxable income and very cumbersome to do by hand. QuickBooks can also remind you to order inventory automatically when quantities are low.

Hope this helps,
J Wick