QuickBooks is a great accounting program for home-based businesses to track their income and expenses. It is easy to learn and simple to use. It has a great Help file. You do not need an accounting background to be able to generate reports such as a Profit and Loss and Balance Sheet needed for tax preparation and managing your business. I have listed a few key points to consider when using QuickBooks.
Cash or Accrual Basis of Accounting? The first step in setting up your company in QuickBooks is to determine if you will track income and expenses on the Cash Basis or Accrual basis. Most small businesses operate on the cash basis of accounting. What this means is you record your expenses when you write the check or charge your credit card, and you record your sales or income when you take the money to the bank and deposit it into your account. This is the easiest way to account for your transactions. Some businesses are required by the IRS to report on the accrual basis. This normally pertains to large publicly traded companies and/or some manufacturing entities. On the accrual basis, you record income at the time of sale, not at the time you receive payment. You also...
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