As I was driving to class the other night, I was mentally reviewing the topics that we were going to be covering and I suddenly had an epiphany about the way that I’ve been teaching QuickBooks for all these years.  I’ve always been a firm believer that in order to really master QuickBooks and bookkeeping in general, you have to have a solid understanding of accounting.  I’ve seen too many bookkeepers make a total mess of QuickBooks, not realizing that their account balances didn’t make any sense at all and that they’ve been posting things incorrectly for months, and I blamed all of that on their lack of accounting knowledge.

But as I was thinking about how to explain the accounts payable process in QuickBooks, it hit me from out of nowhere – if you use QuickBooks correctly then you really shouldn’t need to know the accounting that is going on behind the scenes.  Let me rephrase that – if you ALWAYS use QuickBooks correctly (100% of the time) then you really shouldn’t need to understand the accounting that is going on behind the scenes.

The problem isn’t that the bookkeepers didn’t understand accounting (although if they did, they would have realized that they weren’t doing something right), the problem is that they didn’t understand how to use QuickBooks properly!

This caused me to rethink my whole teaching style – I’ve always tried to explain the concepts behind why you do things a certain way in the software.  I like to show people the accounting effects of recording certain transactions and make them see the debits and credits in action.  In the past when I’ve shown people this level of detail, it’s about a 50/50 split.  Half of them totally get it and understand what I’m saying (or at least they seem to understand it) and the other half totally don’t get it at all.  Their eyes start to glaze over and they go into an accounting coma.

I’ve finally realized that if I just focus on the QuickBooks processes themselves, that should be enough for most people.  QuickBooks is designed for non-accountants and has always been marketed as user friendly and easy to use.  “If you can write a check, you can use QuickBooks!” was the old advertising slogan!

There are easy ways to check your work without going down to the general ledger detail level.  For instance, if you want to know if you applied a customer’s payment properly, it’s simple to pull up a Customer Balance Detail report, double-click on the payment in question and trace it’s history to see how it was applied.  Also, if the customer’s accounts receivable balance (as seen on the Open Invoices report) agrees to what you think it should be, then you are probably OK.  All without analyzing any debits or credits!  There are similar built-in reports for almost every area of the program that allow you to review your work and see if you’ve made any mistakes.

So the bottom line is this – you don’t need to be an accounting whiz to be good at using QuickBooks.  You do need to have a solid understanding of the correct way of recording transactions in the software.  In some cases, there are 3 ways to record an entry – the right way, the wrong way, and the QuickBooks way!  If you can make all of your entries properly, QuickBooks will take care of the accounting without you ever knowing about it.  This is all dependent on the software being set up properly though.  If your chart of accounts or items aren’t set up the right way to begin with your accounting will never be correct.  That’s why you should always work with a QuickBooks ProAdvisor to get your company file set up right the first time!

From now on, I’m going to concentrate on the mechanics of using QuickBooks (how to fill out an invoice or bill correctly, how to apply payments, post adjustments, etc.) and not worry so much about teaching hardcore accounting.  I think most of my students will be grateful!  Of course, if you do want to learn the nitty-gritty accounting concepts don’t worry – we’re going to cover that here too!

This post was written by Michael Debyah.