"Ugh, QuickBooks confuses the crap out of me..."
"This QuickBooks class is way over my head....I need basics"
"OK QuickBooks. I give up for the night..."
Do you feel the frustration here? Maybe you have even said the same things!
These poor souls were sharing their dismay on Twitter recently about working in QuickBooks.
The sad thing is, most of these people are headed for big and costly trouble and probably don't even realize it.
JUST BECAUSE YOU CAN DOESN'T MEAN YOU SHOULD...
What is it that makes small business owners think that they should actually keep their own books?
Especially when they have no background in bookkeeping and by their own admission "they don't want to be an accountant?" I have heard that phrase literally hundreds of times.
Is it because they saw the commercial that promised "if you can write a check, you can use QuickBooks" (the ad conveniently forgot to include the word "correctly" as in "use QuickBooks correctly")
Or was it the fact that they were lured in with a "free starter copy of QuickBooks"?
Either way, I believe their premise in doing their own books is simply wrong. Just because "do-it-yourself" accounting software exists and is inexpensive, doesn't mean that they should buy it and dive in.
It does NOT ensure that they will be sprinkled with "magic bookkeeping dust" and come to understand the issues behind keeping a good (and correct!) set of books for their business.
NOT AS CHEAP AS THEY THINK IT IS
The poor soul that buys into the "do-it-yourself" accounting fantasy usually gets a pretty rude awakening.
That awakening comes when they hand off their financial information to their CPA at tax time.
In fact, I can hear many CPAs bellowing in their offices right now - "what a $@!* mess this QuickBooks file is!" I've heard it every year for the last ten years.
So what starts out as a "cheap" way to do their own books quickly racks up additional costs as the business owner pays their CPA to "clean up the mess". Besides, don't they want their CPA spending time trying to lower their tax bill instead of sorting out a years' worth of mis-postings and mistakes?
Was any money really saved going the DIY route? Doubtful. Very, very doubtful.
But off in the distance, you can hear the CPA going "cha-ching".
AND THE BEAT GOES ON
Unfortunately, this same cycle repeats itself year after year. New businesses spring up on a regular basis where optimism is running rampant and cash is running tight. "I can buy a cheap copy of QuickBooks and do my own books" is being muttered right now by someone wondering the aisles of Staples.
If the truth were known to these businesses, they would read (and heed!) the warning label that should be prominently attached to their software box.
THE WARNING LABEL WOULD SAY...
"Do NOT attempt to use this software unless you have working knowledge of bookkeeping or have had an expert set it up and show you how it applies to your specific business". Failure to do so can have catastrophic consequences to your checkbook."
Skeptical? Just know that poor bookkeeping practices were one of the primary factors in over 25% of bankruptcy filings according to data from the SBA.
If you remember the old commercial that said "you can pay me now, or pay me (a lot more) later", you have captured the essence of doing your own bookkeeping.
Am I missing something here? Have your own thoughts on DIY bookkeeping? Feel free to post a comment below...
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Scott Gregory is a specialist with QuickBooks Pro, Premier and Enterprise accounting software. He has been helping businesses "think beyond the ledger" for over 25 years.