- July 27, 2019
- Posted by: Marisa Palmieri Shugrue
- Category: Accounting Advice, Accounts Payable
Most pest management firms are already using QuickBooks as their accounting software system of choice, but not all of them are using it optimally, according to PCO Bookkeepers partner Anthony Pepe. I talked with Anthony to get his take on what mistakes pest management professionals are making when it comes to QuickBooks, and how they can use it better. Here, he offers three tips for pest control operators to improve their use of this powerful recording and reporting tool.
1. Remember accounting best practices.
AP: “The biggest thing when we bring on a new client is they are often doing their books on a cash basis for reporting purposes. That’s a big mistake. Our goal is to get them to do their books on an accrual basis, meaning booking revenue when the job is completed. From a management standpoint, doing your books on a cash basis is giving you inaccurate information because the expenses are not lining up with the revenue.
The other big mistake we see is companies are not using a proper chart of accounts for pest management. They may be using a very basic template chart of accounts that QuickBooks provided for them, but it doesn’t necessarily fit this industry and fit this business. It doesn’t give you the breakdowns or key performance indicators you need to determine if you’re being successful.
Another mistake we see is companies that are not consistently keeping up with their bank reconciliations in QuickBooks. If you’re writing checks, it’s extremely important to know if they have cleared. You need to know if a check gets lost in the mail or the bank deposited the money incorrectly – maybe they deposited it for a different amount than what you posted it for or intended the amount to be. It happens all the time. A bank rec catches that. We require that we do the bank recs for our clients. We do it because we know it’s going to be done correctly, and from an auditing standpoint, you want to have a third-party doing your bank rec. You don’t want the same person putting the deposits into the software, putting in the checks and doing the bank rec as well. It’s an opportunity for fraud.”
2. Use QuickBooks online.
AP: “A lot of pest control companies are still using the desktop version of QuickBooks, but we push everybody to use the online version of QuickBooks. I don’t know what Intuit’s plans are, but I would imagine at some point they’re going to phase out the desktop version. They’re putting very little effort or investment into supporting QuickBooks desktop – all of their resources are going into online because that is the future of QuickBooks.
I think some pest management professionals are scared to move online or just don’t know how the process works. They need somebody to walk them through the process of converting from desktop to QuickBooks, and that’s what we do when we bring on a new client. We do the whole conversion for them.
The big benefit of going to the online version is you’re no longer responsible for your own (data) backups. Online, it’s included in your subscription, so you don’t need to do any of the backups or updates. They are automatic. You’re basically paying for Intuit to professionally manage your data.”
3. Leverage apps and integrations.
AP: “There are a ton of third-party apps and integrations that sync with QuickBooks that people are not using, like Bill.com and Receipt Bank. And a lot of clients are not utilizing the integration with their banks and credit card companies. I think people may get scared to put their banking information into a third-party software, but QuickBooks online uses the same security that any major bank uses out there so security is not an issue.
Bill.com is great because, again, it all goes back to fraud. If you’re not using a software like Bill.com you’re either writing checks manually in your office or you’re printing them from QuickBooks. The reason that’s an issue is you now have blank check stock floating around your office. And if it’s not stored securely, there’s nothing stopping an employee from taking one of those blank checks and writing and cashing a fraudulent check. So Bill.com securely pulls the money for the checks from your bank account, and they’re taking on the fraud risk.
Another benefit of Bill.com is a multilevel approval process. Let’s say you have a warehouse manager who is in charge of purchasing chemicals. You can get that person involved in the payable process and have them electronically sign off on or electronically approve these transactions.
Receipt Bank is a receipt-tracking program where employees submit their receipts and expenses and the program will automate the posting into QuickBooks. The idea behind it is there’s zero data entry.
All of these apps that integrate with each other are what we in the accounting industry call your ‘accounting ecosystem,’ and they will save so much time. Plus, you can have other people in your business get involved in the accounting process but not necessarily have access to your sensitive data. They can do a very specific function you assign them to but they don’t need full access to QuickBooks.
Additionally, these integrations allow you to get real-time bank balances. Instead of waiting for your bank statement to come in at the end of the month, you can catch any discrepancies right away versus catching it when you get your bank statement at the end of the month.”