QuickBooks is a great business tool and Intuit continues to streamline their product offerings by making things "easier" for their small to medium sized business customers. While the look of QuickBooks has changed the mechanics underneath stay pretty much the same since the inception of QuickBooks.
However, even with all the tools available business owners do not understand what is going on in the background: namely the "accounting". The Balance Sheet can be especially confusing. And business owners/bookkeepers usually don't understand why their Profit and Loss has negative balances or fewer sales than expected, etc.
Intuit is getting better about explaining what the workflow should be, but I believe users still need assistance in understanding what goes on in the background of this very powerful business tool.
QuickBooks Software is form driven. For example, creating a vendor bill or customer invoices/sales receipts are forms within QuickBooks.
Sales/Accounts Receivable
For example if you create a customer invoice/sales receipt in QuickBooksthe software sets up an Accounts Receivable entry (creates the customer balance) and credits sales income. (Hint: when looking at P&L or Balance Sheet make note if the report is Cash/Accrual: the sale will not be shown on a cash basis report until the money is received).
The mistake happens when the money is received. Business owner/bookkeeper deposits money directly into the bank account. This causes the Accounts Receivable and the customer balance to never change. The correct way is to "receive payments" on the home page or from the customer menu on top. Select the customer, enter the amount paid, date, check number etc.; then select the invoice the money is to be applied to. (Another hint: You can set preferences to have QuickBooks auto apply the money to the invoice) Now when you run a cash basis Profit and Loss the sale shows up and the customer balance has changed.
Accounts Payable
A further example is entering vendor bills for payment. When you create a bill in the software QuickBooks sets up the liability Accounts Payable (creates a vendor balance) and debits expense. (Same hint different scenario: when looking at P&L or Balance Sheet make note if the report is Cash/Accrual: the expense will not be shown on a cash basis report until the money is paid out). The mistake is made when the business owner/bookkeeper writes a check out of the checking account. The correct procedure is to go to the "pay bills" window. Select the bill and pay it by either check or credit card. After paying the bill, the expense will show up on the cash basis P&L report and the vendor balance is reduced.
Other examples include Sales Tax and Payroll liabilities if using Intuit Payroll services.