The Startup Guide for Emerging Commerce Brands Part 3: Essentials for Successful Accounting
Learn the essential accounting practices for emerging commerce brands in Part 3 of our Startup Guide. Discover how to keep QuickBooks up to date and determine when it's time to find the right accounting help.
Accounting is an umbrella term for how you track business performance financially with the data aggregated by a bookkeeper. Bookkeeping is the more granular daily accounting process, including tracking business transactions and reconciling bank statements. As your business grows and you handle more transactions, you will need to consider using software and internal accounting resources or outsourcing to accurately manage your finances.
Many of the businesses we work with use QuickBooks, a comprehensive accounting and bookkeeping software tool that offers a range of products with different plans across new, small, and mid-size businesses. But it can still be hard to keep your books up to date using this software solution.
Here’s what you need to know to get the most out of your accounting and bookkeeping software and how to know it’s time to find an outsourced bookkeeper or internal accountant.
Keeping Quickbooks Up to Date
Here are the best tricks to manage, track, and stay up to date on all of your accounting and bookkeeping needs through QuickBooks:
- Use the Getting Started Tutorials: While you might want to dive into QuickBooks to start, consider reading and watching the tutorials to learn how everything works.
- Leverage ProAdvisor: ProAdvisor is great for those who could benefit from talking to a local accountant to learn the basics, go over taxes, and discuss expenses.
- Right-Click and Keyboard Shortcuts: Learn how to easily do common actions to cut time and maximize efficiency. Get the full list of keyboard shortcuts here.
- Connect Your Email: For eCommerce businesses, send invoices directly to customers by linking your Gmail, Outlook, Yahoo, or other email accounts.
- Link Bank Accounts: Connect bank transactions and credit cards by clicking on “Connect Account” in the “Banking” tab, adding your account, and linking your information.
- Create Separate Line Items for Each Product: By having individual items for each product, you’ll make issuing invoices and entering purchases faster with detailed financial information.
Managing Statements, Bills, and Payments
- Maintain Customer Details: Make invoicing and reconciliation easier by using the “Customers” tab to regularly add customers and customize payment methods.
- Reconcile on a Monthly Basis: Make sure all statements and payment remittances are consistent with your QuickBooks at least once a month.
- Print Checks Directly: Print your own checks via the “Banking” tab to eliminate check fees.
- Pay Bills Online: While costly, you can use “Online Bill Payment” to reconcile your accounts payable and accept payments directly from customers into your bank account.
- Use Undeposited Funds: This records payments until you make a physical deposit at the bank.
- Avoid Offsetting Invoices to Zero: Invoices vanish from QuickBooks’ record when offset to zero against credit notes. Prevent this by distributing credit notes to different invoices.
- Lean on Memorized Transactions: Memorize regular transactions to pay bills or issue monthly invoices along the same pattern. Click on Lists>Memorized Transaction List>Memorized Transaction>New Group to set this up.
- Use Transaction History: Go to Reports>Transaction History to keep track of related invoices, credit memos, and payments offset against specific invoices.
- Establish Recurring Transactions: Set up regular recurring transactions for bills, payments, and purchase orders — only available in QuickBooks Online Essentials or Plus.
- Set Up Recurring Invoices: Click “Make Recurring” at the bottom of invoice windows to create recurring invoices.
- Create Favorite Reports: For reports you know you will need to use regularly, choose the “Standard” tab on the Reports page to access the “Favorites” section, where you can star any report you want to add.
When’s a Good Time to Find the Right Accounting Help?
With the right finance and accounting help, this function can go from a cost-center to a strategic partner that can make sure you’re making the best decisions for the business financially - or at least fully understand the financial implications. A good hire will educate the team on how to think with a financial lens, help you navigate financial challenges in hard times, and make sure the company is best positioned for sustainable and profitable growth in good times.
-Lindsey Bunting, Blue Onion Labs, an Ampla Partner
To understand how your business could benefit from additional accounting and bookkeeping resources, answer the following questions to see where you fall:
1. Do you have limited time to do this?
- Many firms provide parts of the accounting function to fit your key areas of need.
2. Are you finding a lot of challenges with your accounting software?
- Find a partner that knows which software will work best for you and how to optimize it.
3. Are you struggling with payroll management?
- Having a payroll expert or software platform is crucial to avoid fines and liabilities.
- Having someone savvy in payroll is crucial to avoid fines and liabilities.
4. Do unforeseen expenses keep cropping up?
- Having an expert that knows how to handle unplanned events helps alleviate stress.
5. Are you struggling to receive payments on time?
- Someone who can budget and manage accordingly can help with forecasting.
6. Do you need help organizing what’s already happened or do you need help forecasting the future?
- Accounting helps you organize financial transactions that have already occurred while finance helps your forecast and budget for the future.
7. Do you struggle with unit economics?
- Have someone who knows orders sold and how much to make in gross profit.
8. Do you struggle to understand the fluctuations in inventory balance and spend?
- Have a strong grasp of these movements and its impact on financial statements.
9. Are you unsure of your cashflow and what levers to pull to improve?
- Accounting firms help identify areas of improvement with actionable next steps.
10. Are you able to keep your finances organized and in order?
- Having inaccurate or messy financial statements can be a huge red flag for investors and prevents you from reliably forecasting your business.
If you answered yes to at least 5 of these questions, then it’s probably time to look for additional help with your accounting and bookkeeping needs.
You can find the right accounting services in the Ampla Partner Directory: https://directory.getampla.com/service-partners