Should you use Quickbooks Online for your Business

Intuit Quickbooks Online

 

Intuit is really pushing new and existing Quickbooks users to go use their Online version of Quickbooks.

While I like Quickbooks Online and it’s features, I do not feel that it is a good fit for all businesses. Before you jump the gun and move to Online you really need to look at whether this is a good fit for your business bookkeeping.

A New Program

QuickBooks Online (QBO) is a different program than the desktop version (as you can see from the screenshot below), there is a different user interface and there is a learning curve when you first use it.

This isn’t necessarily a bad thing, but don’t go head first in expecting every thing to look and work just like the desktop version.

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No Backups

One thing a number of people keep bringing up to me is that there is no backup file to save. This is correct, the data is stored in the “cloud”. The cloud is basically servers that make up the Internet. Intuit handles the servers and backups the data for you as part of their service agreements.

If you decide to move from Online to another version or program, you will not be able to get the data off. The best you can do is print off the GL, or export it to an excel file.

Problems Within Online

There are still some bugs on the Online version, just like there is with the Desktop version. Intuit is constantly upgrading the Online experience, which is a good thing, and sometimes these bugs are fixed.

There are other times where you need to contact support to make a correction, for example if you make a mistake with your payroll and process a cheque, you will need to contact Support to make the correction for you.

Good Things with Quickbooks Online

Let’s talk about some of the good things now, since this seems to be a negative position I am taking, which is not my opinion.

First, the fact the you can access you data anywhere you have the Internet working is a big plus. You can work on your books at your office and continue working at home or elsewhere with your laptop. I know a number of people who say this is the best best feature, and I agree.

You can also have your accountant access your data for you and make corrections or get the information for your taxes. Currently, most plans allow you to add two “Accountant” users to your books.

This is another great feature for someone like myself, who offers bookkeeping services. I can take full control of a set of books from anywhere, or even just provide support for reconciliations, returns or journal entries.

Downloading bank and credit card transactions works very well with QBO, which is another great feature. Once you connect your bank to QBO it will seamlessly download them and have it ready for you to post when you login.

Once you start posting the transactions, it will remember what you posted in the past and make suggestions or match them with invoices and bills, which is a great time saver.

What Kind of Businesses Should Use QBO

After using QBO for over two years for clients and discussing it with other users and professionals, if you are a business that needs to manage and track Inventory such as a manufacturing plant, this is not the program to use.

As well, if you have a number of hourly employees, or even salaried employees, this is not for you.

You could use another program to manage inventory and employees if you wish and use QBO to manage sales, purchases and the bank accounts but you would be doing extra work using a second program.

Ideally, if you are a service business, or a very small home/hobby business this could work out very well for you. If you don’t have a strong staff member doing your books and need a third party working on them remotely, again this could be the best fit.

Some examples could be a freelance graphic designer, a sub contractor who has a number of contractors working for them or a professional such as a doctor.

Take your time before you decide to move to QBO, speak with your bookkeeper and/or accountant and get their opinion as well. QBO can be a great program to use for the right business. But once you move it is not easy to go back to the desktop.

If there are other areas I failed to mention – please contact me to discuss them.

What expenses can you deduct as a proprietor?

Being a sole proprietor has a lot of great advantages, some that you may not even realize you can use.

There are a number of deductions that you can use to help offset any income you will be claiming on your tax return.

Here are some that you may be able to use, keep in mind that some of these may not apply to your industry. If you are not sure, please seek professional advice.

As you probably know, you can deduct any expenses you use directly in your business, like materials used in production or construction, supplies and tools you need and use every day, wages to employees, and rent and utilities.

Home Expenses

You can also use a portion of your home expenses if you have a home office. You will need to keep all your bills for utilities and expenses such as telephone and internet. You can use the portion that is used by the business, a safe way to determine this is to calculate the square footage of space you use for the business and divide this by the square footage of your home. This will give you the percentage you can deduct.

You can only use this if you have net income on the business, the expense cannot be used to increase a loss in the business. This can be carried forward and used in the future for any income.

Auto Expenses

Auto expenses can be deducted as well as long as the driving was done for the business.

Again, you need to keep all receipts regarding the auto expenses, such as gas, oil, repairs and license expense.

You will need to keep a log of kilometres driven for the business and the total driven for the year. CRA can and will request to see these from time to time and it is strongly recommended that you be diligent and keep records.

Other Expenses

Other expenses can include dues and fees to associations, training and travel to training events. Cell phone costs and internet costs. These should be pro rated for the amount used for business purposes.

Keeping the receipts for all of these kinds of expenses is very important. Even if all you do is keep a separate folder and throw them in there to organize later, you will be thankful you did this come time to file your return.

There are also some good receipt scanners that can scan these on your computer as well and can be very helpful.

 

 

Categories Tax