Guidance for Vancouver Small Businesses Using QBO

Using QBO – QuickBooks Online

More small-business owners are migrating from desktop accounting software to a cloud-based system. Cloud-based accounting software, such as QBO, allows the user access anywhere in the world. This ease of access, combined with the ability to download transactions from banks, vendors, credit card companies, etc., makes bookkeeping so straightforward now, pundits claim, that small businesses using cloud software no longer need bookkeepers. Unfortunately, as great as QBO is, like most things in life, nothing is that straightforward.

Based on my experience as a professional tax advisor to small businesses in the Vancouver area, cloud-based accounting software is, indeed, replacing desktop versions fast. However, there is a lot more to bookkeeping than just downloading transactions every month for posting. Businesses, such as restaurants, retailers, or startups, have transactions that are more complex. For example, startups often incur expenses that can be capitalized. Similarly, small businesses often have expenses that have been paid by shareholders directly, rather than paid by the corporate bank account. When these exceptions occur, small-business owners do not have the accounting background to record these transactions correctly. Case in point, most business owners do not even know that the bank balance on the statement has to agree with the bank balance on the QBO system every month.

The Use of QBO (QuickBooks Online)

In the absence of a bookkeeper, the businesses can seek the expertise of their professional external accountants in the bookkeeping process. This expertise becomes much more economical with the presence of QBO. Since QBO allows for ease of access anywhere, anytime without having to make the updated file physically available, external accountants are becoming more agreeable to being part of the bookkeeping process, because it is no longer a time-consuming, money-losing process.

External accountants can update accounting files, reconcile banks, and code/recode transactions quickly and simply when on QBO. This allows the business owner to more regularly maintain current and accurate financial statements, at an affordable price. Business owners must be mindful that just because all transactions have been downloaded does not mean the resulting financial statements are reasonably accurate. Expertise is still required to code correctly so that the financial statements are correct on QBO.

The bottom line is QBO cannot replace the expertise of bookkeepers. But QBO has facilitated the ability for professional accountants to deliver more useful information to their clients.