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The QuickBooks Phenomenon

First of all, I hope this posting finds everyone doing well as it has been several weeks since my last post. I also hope everyone had a great Easter!

Before I get into the "meat & potatoes" of this post, I want to be clear that I am a huge supporter of the QuickBooks platform and will recommend a QuickBooks solution to most small and medium sized business (in some cases even larger companies). I believe QuickBooks is often under-utilized and is not supported with sufficient add-ons or schedules to get the maximum value from the platform. I have seen this under-utilization in not only inexperienced users but also users who are well versed with the platform. This leads into what I call the "QuickBooks Phenomenon."


The QuickBooks Phenomenon is when a user or company gets so comfortable / experienced with a platform they start forcing business processes to fit the software. Based on this definition QuickBooks is not the only platform I see this happen on, but it is the one where I see it occur the most. This is attributable to the ease of use of QuickBooks and the training which is available either via community forums or formal training. It is relatively easy for a user to become an "expert" in QuickBooks. However, being an expert user does not translate into being an expert managerial accountant (an accountant working within a business vs tax or audit preparation).


The job of the lead accounting person in any company is to help develop accounting systems which provide management with the information needed to help insure goals and objectives are met. The common misconception about accounting systems is they are the accounting software. An accounting system includes the accounting software but also includes items such as, how information is captured, what information is captured, and who is capturing the info.

When accounting systems only consider the software, historical information such as the financial statements are correctly kept but do not add any additional value into operations or forward looking trends. The other issue is the "neglected" items of a proper accounting system are often forced to conform to the accounting software. This leads to the under-utilization mentioned earlier which puts constraints on the info management receives. These constraints typically cause management to track the info they need by some other means (typically a spreadsheet) or to accept they will not get this info.

The design of an accounting system should start with the goals and objectives of management. The pieces should then be built around these objectives, not the other way around.


The best way to avoid the problems arising from the QuickBooks Phenomenon is communication (and listening). The accounting function of an organization must understand what the goals and information needs of management are. Then a system needs to be developed / modified to meet these goals. This includes creating new processes or using different software which could require additional training. Management must also provide feedback to the accounting function regarding the information reported and if any informational needs have changed.

As a closing thought, it is better to know what you are missing, than to think you have what you need.

Please email if you would like additional information or have any questions.

#Tips #Accoutning #QuickBooks


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