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Using QuickBooks Pro Desktop As Your Accounting Software
I’ve posted about this before, but here are some more benefits of using Quickbooks Pro Desktop (not the online version.)
I started “playing” Quickbooks Pro Desktop in 1999 while I was using a transmission shop-specific shop management program. I had heard of QB before and thought it was more for accountants than a shop owner. As I used it more and more I discovered so many customizable features, I likened it to more of a minefield of rabbit holes. On top of that, I was forced to learn accounting. I didn’t like it at first, but in the end, it turned out to be a blessing in disguise.
Fast forward a few years and I had somehow managed to design my own estimates, repair orders, reports, and chart of accounts. I eventually abandoned my shop management program (and the monthly payments) for QB. Out of all the good things I could say about QB, the most important benefit was the ability to print a highly accurate profit & loss statement along with a balance sheet in real time. I didn’t have to wait days, weeks, or months for an accountant to supply these to me.
The accountant’s P&L and balance sheet were effectively an obituary of how we were doing in the distant past, not an accurate reflection of up to the minute in real-time. I could accurately measure how we were doing day to day, week to week, and month to month with a few mouse clicks. Unbeknownst to me, over the years QB had become the gold standard of small business accounting. Our CPA loved it and charged less than his other non-QB clients.
Lastly, not only was I free of a monthly fee for shop management software, I was free from accountant fees. The only thing that cost was our CPA for the annual tax return. All in all, I felt like I was in more control.
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We had different profit levels on different parts, labors, and whole jobs. What I learned to pay attention to was the overall gross profit of the business. It was very easy for me due to learning accounting through an early SMS I invested in named Digitree out of Colorado. They were eventually bought out by Mitchell and Mitchell quit supporting the repair shop version and only supported the body shop version. Later, I eventually went to a transmission shop-only software program called TransShop 1-2-3 by Larry Kuperman. (now retired) He stole the idea from Lotus 1-2-3.
I learned a lot of easy management tricks through DigitTree. At the end of the week report, I would also print (remember dot-matrix printers?) out checks for that week’s sales tax and 941 tax. At the end of the month, I would pay my 941 with 4 checks. We paid sales tax quarterly and I would pay that with 12-13 checks. That kept our bank balance from looking overly inflated giving me a false sense of security. Even worse, I wouldn’t spend the money on something non-essential.
It simply blows me away at the number of small business owners who don’t know accounting. Reminds me of a young rebuilder I hired (early 30s) who had been building transmissions for about 10 years. Depending on the year model of a certain transmission, the steel plates and friction plates were of different thicknesses. I told him to measure the old ones to know which ones to use. I then learned he couldn’t read a mic. I asked him how he could go so long not being able to read a mic. He said his old boss had a digital read-out mike, dial calipers, and a dial indicator. He had never learned to read a mic the old fashion, but standard, way. That young builder reminded me of small business owners who don’t know accounting nor do any in-house accounting. Many have an accountant for all of that and the P&L and balance sheets they get from their accountant are basically an obituary as to their financial picture. They are often a month, a quarter, or heaven forbid, a year old.
There are plenty of ways to learn accounting. Online, books, and even YouTube can all teach standard accounting principles and practices. It’s not that hard and definitely not rocket science. Even the numbering of groups of accounts is standardized. For our members who don’t, I would strongly suggest bringing all accounting in-house and only using an accountant, or CPA like we did, only annually.
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