QuickBooks Online is one of the best tools a small business can have. It connects to your bank, tracks your sales and expenses, and gives you a clear picture of how your business is really doing. But QuickBooks is only as good as the information going into it.
As a QuickBooks Elite ProAdvisor, Debbie Hawkes and our bookkeeping team at Accounting Moncton clean up a lot of QuickBooks files. Most of the problems we see come from the same handful of habits. The good news is that every one of them can be fixed, and most can be avoided completely once you know what to look for.
Here are five QuickBooks Online mistakes that quietly cost Moncton small businesses time and money.
1. Mixing Personal and Business Transactions
Paying for groceries with the business card, or a business supply run on your personal card, seems harmless in the moment. Over a year, it turns your books into a puzzle.
When personal and business spending are mixed, it becomes hard to tell what your business actually earned. Expenses get missed (so you pay more tax than you need to), or personal items get claimed by accident (which can cause trouble if the CRA ever asks questions).
The fix: Keep a separate business bank account and credit card, and use them only for business. If something personal slips through, record it properly as an owner’s draw or shareholder transaction instead of an expense.
2. Accepting Bank Feed Suggestions Without Checking Them
The bank feed is one of the biggest time savers in QuickBooks Online. It pulls in your transactions and suggests a category for each one. The trap is clicking “Add” or “Confirm” on everything without reading what QuickBooks guessed.
QuickBooks learns from your past choices, so one wrong category can repeat itself for months. We regularly see fuel coded as office supplies, loan payments recorded as expenses, and transfers between accounts counted as income.
The fix: Take a few seconds to review each suggestion before you accept it. Set up bank rules for transactions that come in the same way every month, and check those rules once in a while to make sure they still make sense.
3. Skipping Monthly Reconciliations
Reconciling means comparing your QuickBooks balances to your actual bank and credit card statements so they match to the penny. It is the single best way to know your books are right, and it is also the step most often skipped.
Without reconciliations, duplicate transactions, missing deposits and bank errors can sit in your books unnoticed. By year end, sorting out twelve months of differences takes far longer than doing it a month at a time.
The fix: Reconcile every bank and credit card account each month, as soon as the statement is available. It usually takes minutes when it is done regularly.
4. Recording Customer Payments the Wrong Way
This is one of the most common mistakes we see. A business sends an invoice from QuickBooks, the customer pays, and the deposit shows up in the bank feed. The owner adds that deposit as new income instead of matching it to the open invoice.
The result is that the same sale gets counted twice. Your income looks higher than it is, you may pay tax on money you never earned twice, and your customer list still shows the invoice as unpaid.
The fix: When a payment comes in for an invoice, use “Receive payment” or match the deposit in the bank feed to that invoice. Check your Accounts Receivable report regularly. If it shows customers owing you money that you know they have paid, this is likely the cause.
5. Setting Up HST Incorrectly
If your business is registered for HST, QuickBooks can track the tax you collect on sales and the tax you pay on business expenses, then help you prepare your return. That only works if sales tax is set up correctly from the start.
Common problems include charging the wrong tax rate, forgetting to add tax to invoices, and recording expenses without the HST portion, which means missing out on input tax credits you are entitled to claim. Each of these can lead to paying more than you owe or having to correct past returns.
The fix: Make sure your HST registration details and filing frequency are set up properly in QuickBooks, and that each product, service and expense uses the right tax code. If you are not sure, have a ProAdvisor review your setup before your next filing.
How Accounting Moncton Can Help
Whether your QuickBooks file needs a full cleanup or you just want someone to check that you are on the right track, our team can help. We offer:
- QuickBooks Online cleanup and catch-up for files that have fallen behind or do not look right
- Monthly bookkeeping so your books stay accurate all year
- Payroll and HST filing handled for you
- One-on-one QuickBooks training so you can confidently manage your own books
We work with small businesses across Greater Moncton and the rest of Canada, and we are available 7 days a week.
Ready to get your books in shape? Call us at (506) 854-6490 or fill out our contact form, and we will get back to you quickly.
