The Necessary Evil Known as Quickbooks

Whether it’s online or desktop, practically every small business uses Quickbooks. Here are some notes on why it is a forgone conclusion.

Small Biz Owners are tricked into using it. Intuit, the maker of Quickbooks, lures its new customers, small business starters, with its sleek marketing and easy-on-the-eyes Quickbooks dashboard. That’s the whole point. Intuit wants you to think you can do the books yourself. If you can do your personal finances, why can’t you manage your business’s as well, especially since you can’t afford a bookkeeper yet? Isn’t it just recording checks going out and deposits coming in? Especially since online business banking can sync with any version of Quickbooks, what will be so hard about it?

As with anything important and meaningful in life, bookkeeping may look simple at first, but looks can be deceiving.

Knowing Quickbooks doesn’t necessarily mean you understand accounting, specifically Generally Accepted Accounting Principles, or GAAP. A disciplined, experienced bookkeeper knows, understands, speaks, and breathes GAAP, as do all accountants, auditors, financial consultants, CFO’s, controllers, and the IRS.

Basically this means as a small business owner, you probably wear a dozen hats on a daily basis for your company, including bookkeeper. But don’t kid yourself. You’re just recording the in’s and out’s, maybe even syncing with your online banking. But Income Statements? Balance Sheet? No one who looks at business financials professionally will take your work on Quickbooks seriously. I know, because this is how I make a living. You should see the look on the faces of the accountants I help with their clients’ mess of books.

Quickbooks (but more so accounting itself) may be too steep of a learning curve for business owners, but the software is also too simple and confined for technical bookkeeper and accounting professionals. It’s nicely stuck in a purgatory. But then again, Intuit’s business model isn’t about that mid-level, mid-range. It’s all about entry-level for them.

You can easily abuse Quickbooks. If you don’t know what you’re doing, you can easily delete transactions literally with one click. I just did that myself the other week. It was a long transaction, too, with over a dozen line items. Luckily there’s Audit Trail and sure enough, the ghost of the accidentally deleted transaction was there for my reference.

Online vs Desktop vs Mac: They’re all different. On the outside, they look very similar, of course. But in practice, for a regular user it’s different. Switches, features, toggles, icons, options; they may be there for one version, but non-existent for another.

Your tax accountant may not know how to use it that well. This surprises me, too. You would think it’s only logical that your CPA would be a wizard on your bookkeeping software, but a lot of them are not. Why? Because they actually use it not as often as you think. They mostly use tax software and spreadsheets, and the only thing they need from Quickbooks is a reliable set of financial statements. For that to be produced, you’ll need a reliable bookkeeper.

The competing products aren’t as good. But if they are, no one knows how to use them. Xero? Freshbooks? Peachtree? Do you really want to use the competitors’ software, that when combined, they only make up 10% of the market? Even if it is a good product — which I haven’t found them to be — you won’t find many bookkeepers who know how to use it properly.

A necessary evil, but also the devil you know. Quickbooks is just a tool like anything else you use in your business. So make it do your bidding. As long as you have a smart, resourceful and knowledgeable bookkeeper on hand, it is a solid small business accounting software. Unless your company does at least 25 million in revenue per year and you can set aside $15k per year for a fancy ERP-level software, Quickbooks will be the necessary devil you know.

- Thomas Kim from Tabular LLC