What are the five basic functions of QuickBooks?

Cloud accounting is a way of providing accounting services. Accounting software has revolutionized the accounting industry. QuickBooks is one of the most popular and most used accounting software worldwide. QuickBooks offers a centralized solution that connects invoicing, payroll, reporting, and tax filing into one place. It reduces the need for manual spreadsheets or separate tools for each task.

Meru Accounting offers various specific solutions such as QuickBooks Online, QuickBooks Desktop, QuickBooks Payroll, and QuickBooks Time. The most recommended option for businesses is QuickBooks Online. With the growing trend of remote work and online collaboration, businesses prefer cloud-based systems for easier access and faster updates. QuickBooks Online supports this shift.

Let’s dig deep into the details.

What is QuickBooks and How Does it Work?

QuickBooks by Intuit is small business accounting software that helps to manage income and expenses and track the financial position. QuickBooks use for enables the user to invoice customers, pay bills, prepare taxes, and generate financial reports. It is known for its easy interface, strong integration, and detailed financial tracking. Users can connect QuickBooks with payment processors, banks, and even inventory apps.

The QuickBooks Features range includes various specific solution products, such as QuickBooks Online, QuickBooks Desktop, QuickBooks Payroll, and QuickBooks Time. The most recommended option for businesses is QuickBooks Online. Each product is designed to solve a specific set of tasks, from project tracking to team scheduling, or handling contractor payments and timesheets.

You can avail of a QB for the 30-day trial period and switch to the monthly/yearly subscriptions.

This gives new users enough time to explore the features before committing. The trial includes access to core tools such as invoicing, expense tracking, and bank syncing.

QuickBooks Cloud Accounting offers a lot of functionality to streamline the quickbooks accounting process. However, it doesn’t imply that you save time. This is because you must be through to the multiple functions and stay organized to utilize its full potential. You can seek the help of professional service providers like us.

An expert can set up automation, customize templates, and align reports to match your goals. This can make the workflow faster and reduce bookkeeping errors.

05 Basic Functions of QuickBooks

The five basic functions of QuickBooks Software can be categorized into Vendors, Customers, Employees, Company, and Banking. Basically, these heads are categorized as per the function and purpose it serves.

These core areas help manage day-to-day transactions and organize business data for better insights. Whether you are a freelancer or manage a small team, these tools cover all important financial actions.

1. Vendors

In the top left corner, Vendor is the first function. It enables the user to enter bills and use the pay bill function to initiate online payment along with the Vendor center. It also allows one to make purchase orders, record inventory, and enter bills to schedule supplier payments. It helps track upcoming payments. Thus, it automates the function associated with Accounts payables.

You can sort vendor bills by due dates or amounts, attach digital receipts, and even create recurring payments. It reduces delays and missed payments.

QuickBooks helps you track bills and work with vendors.
Main tasks:

• Add and schedule bill payments

• Make and track purchase orders

• Record bills and add receipt copies

• Set up repeat payments
• View reports for each vendor

2. Customers

It manages the Accounts Receivables process of the business. This function allows the user to create and print invoices and email them to the customers. You can track the AR by looking at the number of outstanding invoices. It runs an AR aging report to track the number of days the invoices are overdue. You can create an invoice from scratch or customize an existing invoice template.

This part helps you track income and unpaid bills.
Main tasks:

• Make and send invoices

• Email reminders for payments

• Check aging reports for overdue bills

• Accept payments online
• Use credits and give discounts

3. Employees

QuickBooks helps to maintain the timesheet of the employees. When you have consolidated employee details, it enables you to ensure timely payment to employees. It automatically calculates and runs payroll automatically when you need it. When you enter employee time, these hours automatically flow to invoices and payroll modules.
It supports different pay schedules, tax settings, and direct deposit options. Business owners can run payroll summaries and view reports on labor costs.

It is better to integrate QuickBooks Payroll with QuickBooks, you can also calculate and file payroll taxes and e-pay them. This simplifies year-end reporting, including forms like W2, 941, and 1099. It ensures payroll compliance with federal and state rules.

QuickBooks simplifies payroll and timesheets.

Key functions:

• Track employee hours

• Run payroll on set schedules

• Handle tax filings and payments

• Integrate with QuickBooks Payroll
• Generate W2, 941, and labor cost reports

4. Company

It helps to create and update the Chart of Accounts. It allows users to keep simple and organized Charts of Accounts to stay on top of their finances in the closing month. Items and services are keys for Customers as it contains all the details of information and helps in pre-sets to create bills. You can also set up departments or classes to break down income and expenses by business unit. This helps in generating more detailed reports.

This part helps you set up key tools and manage reports.
Main tasks:

• Set up and update the Chart of Accounts

• Sort items and services for billing

• Tag each transaction by class or place

• Edit report and invoice templates
• Keep full control of your business finances

5. Banking

The banking function helps to pay bills to customers. You can use the print check function to print bills. You can check the register to track the banking activity. You can pay online through bank transfer or check directly with just a few clicks and pay multiple bills at one go. You can also make payments to the supplier via credit cards in QBs. QuickBooks Software Online Bill Pay comes integrated with QBs Essential, Plus, and Advanced. QuickBooks handles bank tasks with speed and ease.

Main tasks:

• Link bank accounts to track money in real time
• Match each bank deal with your books
• Print checks or send online payments
• Pay vendors using credit cards
• Watch cash flow and mark odd entries

Meru Accounting is a well-known accounting service provider across the globe. Contact us today for all your accounting needs. We specialize in QuickBooks setup, training, data migration, and full-service bookkeeping. From one-time cleanup to ongoing accounting support, we offer reliable help.

Frequently Asked Questions (FAQs)

1. What are the benefits of using QuickBooks for small businesses?
   QuickBooks helps manage invoices, expenses, and payroll in one system. It improves accuracy, saves time, and gives clear financial reports.
2. Can QuickBooks be used for inventory tracking?
   Yes. You can track inventory items, set stock levels, and get alerts when inventory is low. It also supports purchase orders and cost tracking.
3. Is QuickBooks Online better than Desktop?
   QuickBooks Online is better for access from any device and real-time updates. The Desktop version is stronger in industry-specific features. The best option depends on your business needs.
4. Can I use QuickBooks without an accountant?
   Yes. You can use it on your own, but an accountant helps set up the system correctly and avoid mistakes in tax filing and reporting.
5. Does QuickBooks handle tax preparation?
   QuickBooks calculates sales tax and payroll tax. It also creates reports that help prepare your business taxes. With add-ons or accountant help, you can file directly.
6. Is QuickBooks secure for storing financial data?
   Yes. QuickBooks uses strong encryption and data backups. QuickBooks Online also includes bank-level security for online access.
7. Can QuickBooks generate financial reports?
   Yes. QuickBooks can generate profit and loss reports, balance sheets, cash flow statements, and more with just a few clicks.