Why You Shouldn’t Use Journal Entries in QuickBooks

Why You Shouldn’t Use Journal Entries in QuickBooks

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QuickBooks Journal EntryBoth QuickBooks Desktop Versions, and QuickBooks online give you the ability to post transactions via Journal Entry.  Most pieces of true accounting software will.  That means that rather than creating an invoice, or entering a bill, you can just post the bare bones of the transaction into your software, assuming you know your debits and credits.  However, just because you can, doesn’t mean that you should.

QuickBooks is a very powerful piece of software for the price point, and can provide you with a whole host of information about your business if you use it properly.  Although posting your transactions by journal entry will give you an accurate income statement and balance sheet, that is pretty much all you will get.

Within QuickBooks there are modules – the Accounts Payable module to record your purchases and payments to your suppliers; the Accounts Receivable module to record your customer invoices and payments, Payroll module to track your employee payments and of course the Sales Tax Module.  All of these modules interact with each other, and give you the ability to create meaningful and important information about your business.

Who is your best customer?

How long does it take you to get paid by your best customer? By your worst customer?

How much did you sell of Widget A last year?

Which Vendor do you do the most business with that you can negotiate a volume discount?

These are just a few of the examples of the kind of information that you can get when you use the QuickBooks module.  None of that information can be obtained if you use journal entries.

If you want to get more out of your financial information than just your Balance Sheet and Income Statement, close that Journal Entry screen, and start using the modules within QuickBooks to get you the most valuable information out of your entries.

Juliet Aurora

About The Author

Juliet Aurora is the CEO of AIS Solutions and Co-Founder of Kninja Knetwork. Through both of these businesses she fulfills her mission to Educate and Empower those around her. In 2017, her firm was named Intuit's Global Firm of the Future, the first time the title has ever been awarded to any firm outside of the US. She has also has been named as one of the Top 50 Women in Accounting, one of the Top 50 Cloud Accountants and one of the Top 10 Canadian Influencers in the Bookkeeping Industry. Her passion for education is channeled through the Intuit Trainer Writer Network, hosting Kninja Knowledge Webinars and most recently, developing a Cloud Accounting Course for the next generation of accounting professionals.

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