Three Ways Using Quickbooks For Business Transactions Takes A Huge Load Off Your Busy Entrepreneur Brain

Nov 25

The best investment you can make this year into your small business (I’m not kidding): Subscribe to my weekly newsletter where you will receive bookkeeping and accounting tips and tricks weekly!

There’s a million reasons why taking this tiny first step will be such a gift to your future entrepreneurial self. Just a few are listed below.

HANDLE YOUR BUSINESS TRANSACTIONS THROUGH QUICKBOOKS, NOT VENMO

For starters, knowing how to confidently handle your business transactions through Quickbooks will keep you from trying to do all that on Venmo. AKA, will save you from yourself.

Y’all. Please don’t use your personal Venmo account to send or collect business payments.

I’m not trying to be anybody’s mom, but hear me out.

Venmo’s user agreement, which you totally signed without reading first (not judging, though, because so did I), states that personal Venmo accounts may be used to do things like:

Send payments between friends or family members
Buy things through an authorized merchant’s mobile website, app, or Venmo business profile

And, just FYI, your account is a personal Venmo account unless you received express written approval from PayPal, Inc. (parent company of Venmo) to open a Venmo business profile. You’d probably remember that happening.

Anyway, the distinction is important because there are fewer security parameters in place for Venmo personal accounts. AKA, if you’re conducting your business transactions through your personal Venmo account, Venmo will not have your back if you run into a problem.

How’s that?

Say, for instance, that you accidentally send money to the wrong person. Or that you become the target of a scam and, in your confusion, send money to a jerk you don’t know.

No matter the circumstances, you’re going to be held responsible for those displaced funds. And there’s not a whole lot your bank will be able to do to help you out.

That’s because when you send or receive money through Venmo, though the transaction appears to take place instantaneously, it actually takes at least 24 hours to clear the bank accounts involved. So, at the time of payment, Venmo actually steps in and fronts the money while funds get moved from one account to another.

So if you make a mistake, even if you immediately call your bank and ask them to stop the payment, Venmo is already going to be out of pocket for those funds. And guess who they’re going to turn to for repayment… You!

They may even go so far as to report you to a collection agency if you don’t reimburse them.

And the same thing applies if your personal Venmo account, or the personal Venmo account of someone you’ve paid, gets hacked! Even though Venmo’s lack of security surrounding personal Venmo accounts contributed to your getting hacked.

What a nightmare, am I right?

This is why personal Venmo accounts should only be used sparingly to send and receive small-ish amounts of money to/from people you know and trust.

I repeat: Please never use your personal Venmo account for business transactions.

Now, to be fair, some different standards do apply to Venmo business profiles, but they’re still far from awesome, in my humble opinion. There’s a lot of red tape involved.

With a Venmo business profile, you’re legally allowed to send and receive payments for goods and services that are within Venmo’s parameters for ‘acceptable use’. But, like I said before, not until you’ve been granted PayPal, Inc.’s express written approval.

Venmo business profiles are subject to approval based on the sole discretion of PayPal, Inc., and that approval can be revoked at any time.

Plus, your Venmo business profile activity may be suspended whenever it reaches ‘certain thresholds’. And Venmo debit card transactions can’t be funded by money kept in your Venmo business profile, but only by money kept in your personal Venmo account. What...?

Not great.

But all of those reasons aren’t the only ones why Venmo still isn’t the best choice for business transactions.

Another reason is your own sanity.

QUICKBOOKS ITEMIZED INVOICING IS YOUR FRIEND

Let’s circle back to Venmo’s transactional processes.

Let’s say that you handle your business transactions through Venmo without connecting your personal Venmo account to Quickbooks. Even though your bank account is linked to your personal Venmo account, when you get paid, the money doesn’t just automatically get deposited into said bank account. Your personal Venmo account holds it, and then you manually transfer it over to your bank account. Tracking?

Well, Venmo doesn’t automatically know how to itemize sources of income, services rendered, or goods sold. Which is not good for bookkeeping. It means that when you go to check your bank account, you’re just going to see evidence of funds transferred from, guess who: Venmo. And that’s it.

Which is fine, I guess, except for when it comes time to balance your books and pay your taxes. Big deal things! Or, even better, time to analyze your sales to find the best profit margins. Also a big deal!

Note that it is possible to connect your personal Venmo account to Quickbooks so that individual Venmo transactions become visible in your Quickbooks records. But in order to break everything down for analysis that’s truly informative, like I described above, and even to tell the difference between personal transactions and actual business transactions, you’re going to need to list lots of detail every single time you complete a business transaction through your personal Venmo account.

So, if you’re using a personal Venmo account to conduct your business transactions, I hope you’re taking lots of good notes. You’re gonna need them.

And that’s why I so strongly recommend using Quickbooks invoicing! Because I’m not into the whole ‘having to panic and then hardcore investigate my every money move later’ thing.

Let me explain.

When you invoice your clients/customers through Quickbooks, rather than charging them through your personal Venmo account, beautiful things happen.

The most important of those things in my opinion: Quickbooks itemized invoicing.

Meaning, each invoice gets attributed to a particular client/customer, so you know where the money is coming from, first of all. But then you can also split a single invoice between charges for separate services/items.

So you can look back later and know exactly which clients/customers and services/items are bringing in that cash money. Which means you can figure out how to organize your efforts around your biggest profit opportunities. Which means, already, you can increase your business earnings just by using Quickbooks invoicing. Amazing.

THERE’S MORE! QUICKBOOKS BILLS AND RULES FOR RECURRING EXPENSES!

But don’t just invoice through Quickbooks. Make your life even easier by entering your own recurring business expenses for monthly bills ahead of time through Quickbooks! Doing this will benefit you in a couple big ways.

First, even before you’ve been charged, you’ll be able to look ahead and know how much of your available cash is already spoken for. So as you proceed through the month, you can operate your business from a place of real-time awareness and keep your cash flow situation under control. Which is always good.

Second, you’ll be setting up a template for Quickbooks to reference for every future record of that recurring expense! When prompted by Quickbooks, if a particular recurring expense should be categorized the same way every time, you can click to make those record details into a rule. You’ll literally be teaching the software how to keep your books, which will save you so much time and headache along the way. Future you will be pleased. Trust me.

MOVES THAT INCREASE THE HEALTH OF YOUR BUSINESS

Combine all that good stuff and you get the Balance Sheets and Profit and Loss Statements that dreams are made of. Seriously.

You get, for example, an AT&T bill, filed under Monthly Expenses and broken apart into separate phone and Internet charges, that you recorded well ahead of time, so were prepared to pay, and tracked to completion.

You also get, for example, an invoice paid by your client and broken apart into an itemized list reflecting both the, let’s say, custom brand strategy and custom web design work that you did. So you can see exactly what you’ve been paid for and by whom.

These things’ presence on your financial statements tells you where you are growth- and profit-wise. And it helps you strategize for the months to come. Not to mention cuts hours out of preparation for tax time.

Not only is that stuff super important, but having it all set up to run efficiently and uniformly will take a huge load off your busy entrepreneur brain so you can focus on all the other things it takes to keep your business thriving.

And I would say that, as an accountant, that’s my main passion--helping entrepreneurs create and maintain helpful systems that serve them from behind the scenes and keep their businesses moving in the right direction.

I want to be there for you every step of the way. Which is why I’ve put together an entire digital Quickbooks Masterclass that breaks down insider bookkeeping information into bitesize, manageable chunks that you can immediately apply toward increasing the health of your business.

If you’ve ever felt like you can’t get your hands around the ins and outs of business transactions, I’ve designed my Quickbooks Masterclass with you in mind. It’s made specifically for business owners who are new to this stuff.

I only release my Quickbooks Masterclass for purchase a few times a year. And, in the past, spots have filled up quickly.

But you can make sure you’re the first to know the next time it opens by subscribing to my newsletter!

The other day, the BusinessMindset101 community shared that, “Sometimes the smallest step in the right direction ends up being the biggest step of your life. Tip toe if you must, but take the step.”

Taking this tiny step to make sure you’re prepared for the next release of my Quickbooks Masterclass will be the best investment you make into your business all year (other than purchasing the class, of course). I really believe that.

Because my Quickbooks Masterclass will teach you:

How to properly maintain your books
How to fully understand and then act on the valuable information in your financial statements
How to organize your efforts around your biggest profit opportunities

So get on it! Click HERE to subscribe to my weekly newsletter. Catch ya later in your inbox!