by Pennee Struckman

Created on: December 08, 2011

QuickBooks is integrated accounting software offering a range of products for use in desktop, server and on-line accounting environments. QuickBooks signature is its ease of use and behind the scenes accounting that occurs when users engage QuickBooks for accounts payable, sales and accounts receivable, payroll processing and inventory management. QuickBooks is a well designed user friendly accounting software package however there are flaws in the internal system controls that business owners should consider when using QuickBooks for their accounting software.

QuickBooks accounting software includes 65 industries (QuickBooks Online) to more than 150 industries (Enterprise) businesses may choose from when installing and setting up QuickBooks for the accounting operations. Installation is simple, walks the user through a series of questions, and prompts to ensure that the business accounting setup is tailored to the organization's individual needs.

QuickBooks allows a choice of a numeric or alpha chart of accounts to be assigned to customers, jobs, sales, inventory items and vendors during the master file set up for each. The individual accounting modules for accounts receivable, accounts payable, sales, purchasing, payroll, inventory and general ledger are integrated so that recording a transaction will update related accounting modules. However, QuickBooks relies on case sensitive wording so customers, vendors and the chart of accounts can be set up more than once.

The user-friendly design of QuickBooks accounting relies on external controls rather than internal system controls to prevent recording transactions in an incorrect month or year. There is no foolproof way to close an accounting period. In addition, QuickBooks allows general ledger account changes to transactions at any time, which can result in costs being reclassified to balance sheet accounts and profit being overstated.

Performing payroll in QuickBooks requires an additional purchase for the payroll tax files, The Payroll setup is cumbersome, requiring repetitive payroll tax and deductions be entered individually into each employee's record. However, payroll tax reporting is simple, using a series of prompts and error checks to ensure that the correct payroll taxes are recorded.

Importing cash receipts and vendor payments from the user's bank is time consuming and error prone. When using QuickBooks it is simpler to record the credit card transactions, customer receipts, deposits (in QuickBooks

• 1
• 2
• Next Page >>