Understanding QuickBooks: What Is QuickBooks and Its Uses?

Summary:

• QuickBooks is a widely used, user-friendly accounting software designed for small businesses, freelancers, and nonprofits.
• QuickBooks helps automate and streamline financial management through built-in reporting tools and third-party integrations.
• QuickBooks supports core accounting tasks such as invoicing, expense tracking, payroll, tax preparation, and bank account syncing.
• Using QuickBooks reduces manual data entry and improves accuracy, saving time and minimizing financial errors.
• QuickBooks makes complex financial tasks easier for non-experts, allowing users without accounting backgrounds to manage their finances confidently.
• QuickBooks provides data-driven insights that help business owners make more informed financial decisions.
• Learning QuickBooks is a valuable, marketable skill for individuals pursuing careers in accounting, bookkeeping, or financial management.

What Is QuickBooks?

As their businesses start to grow, freelancers, entrepreneurs, and small business owners inevitably seek ways to streamline accounting, most likely leading to a quick Google search asking, “What is QuickBooks?”

In short, QuickBooks is an accounting software developed to make financial management more accessible. The software itself is incredibly popular: As of 2023, 10 million small businesses and self-employed customers use QuickBooks¹. Understanding how to use QuickBooks—its use cases, essential tools, and more—can help companies of all sizes simplify their financial processes, leaving more room to focus on growing and nurturing their businesses. 

Ahead, we’ll dive deeper, answering the question what is QuickBooks used for, exploring how to use QuickBooks, and discussing who can benefit from QuickBooks.

What Is QuickBooks Used For?

At its core, QuickBooks is a comprehensive accounting software that simplifies financial management for businesses, from small startups to larger enterprises. And thanks to QuickBooks’ intuitive interface, users can manage financial tasks without needing extensive accounting knowledge. 

Accounting software like QuickBooks automates routine tasks, from data entry and payroll management to invoice creation and cash flow monitoring. Compared to manually tracking the ins and outs of a business’s finances, accounting software comes with a couple of key benefits, including: 

• Automation and efficiency. Accounting software automates day-to-day tasks like bookkeeping, tax payments, and payroll, saving time and allowing businesses to focus on higher-value tasks. 
• Data-backed insights. QuickBooks and other accounting software help users dig deep, with custom reports and key metrics that provide visibility into things like revenue, inventory, and more. This helps businesses gain greater accuracy, enabling informed decision-making.
• Extensive integrations. QuickBooks integrates with hundreds of business tools, including Bill.com, PayPal, Gusto, and more. These integrations sync data from each platform, offering users a complete picture of financial health.
• User-friendliness. Another major benefit? You don’t need to be an expert to know how to use QuickBooks. The software’s interface is user-friendly enough that a person without an accounting or financial background can use it. In this way, QuickBooks makes financial management accessible, especially so for entrepreneurs and small businesses. 

Key Features: How to Use QuickBooks Effectively

Learning how to use QuickBooks effectively comes down to understanding the software’s key features. 

Invoicing and billing. One of QuickBooks’ main features is its automated invoicing system, which allows businesses to easily manage their money flow. Users can create and customize invoices, both one-time and recurring, and send them directly to clients. QuickBooks also offers invoice status updates: Users are quickly able to see whether an invoice is outstanding or paid, and QuickBooks automatically follows up with clients whose invoices are due.

Expense tracking and management. QuickBooks automatically imports and categorizes expenses, enabling users to track costs, access and share expense reports, and manage cash flow. This essentially simplifies financial management by reducing manual data entry (and the number of loose receipts businesses may or may not have lying around). 

Tax preparation. QuickBooks also helps streamline tax preparation and compliance. Day-to-day, the software automatically calculates sales tax and generates tax reports. Year-to-year, QuickBooks generates a tax summary before you file your taxes, allowing for an easy export of necessary tax information.

Practical Guidance: How to Use QuickBooks for Your Business

Understanding how to use QuickBooks for your business starts with understanding the software’s interface. Here are a few of the most practical features businesses can use.

User interface and navigation. When you first log in, you'll see a dashboard that provides a quick overview of your company's performance, including income, expenses, and profits at a glance. Because the interface itself is fairly user-friendly, it’s pretty easy to navigate on your own from there. 

Data entry and transaction recording. Another essential feature is the ability to record transactions. With QuickBooks, data entry is straightforward: Users can log income and expenses, input details like amounts and categories, and batch-enter multiple transactions at once. This level of organization keeps your records accurate and your financial decisions informed.

Integrating bank accounts and financial institutions. An especially powerful feature is QuickBooks’ bank integration. By connecting your bank accounts to QuickBooks, transactions automatically download and sync to your account. Most major banks integrate with QuickBooks, and the software automatically matches transactions based on information already in your ledger, keeping your financials up-to-date.

Who Benefits from QuickBooks: Exploring QuickBooks Jobs

Now that we have a better understanding of how to use QuickBooks, let’s explore QuickBooks jobs—that is, who benefits the most from the software. Though businesses of all sizes can utilize QuickBooks’ tools, we’ll focus on three main groups: small business owners and entrepreneurs; freelancers and independent contractors; and nonprofit organizations. 

For small business owners and entrepreneurs, QuickBooks can be indispensable—especially so when it comes to day-to-day financial management. From invoicing and expense tracking to financial reporting, the software automates a lot of more time-consuming tasks. That means small businesses can free up time to focus on what matters most: growing their business.

Freelancers and independent contractors also benefit significantly. Managing multiple clients and multiple projects is much more manageable with QuickBooks’ automations: Freelancers and contractors can track clients separately, create professional invoices instantaneously, and automatically categorize expenses as they go. This ease of use is especially a boon come tax season. 

Nonprofit organizations tend to have unique accounting needs. But once a nonprofit understands how to use QuickBooks, it’s better able to track how money is being spent. In practice, QuickBooks makes it easy for nonprofits to allocate revenue and expenditures to specific funds or programs. And features like class tracking help separate transactions by program, grant, or funding source, ensuring transparency and accountability, which is crucial to maintaining donor trust and meeting regulatory requirements.

For those considering working in accounting, mastering QuickBooks may open the door to a lucrative career path. Businesses across industries need skilled professionals who can manage their financial systems, whether as in-house accountants, freelance bookkeepers, or financial consultants. Ultimately, understanding how to use QuickBooks is a marketable skill that can lead to diverse opportunities in the financial management space.