Let’s be honest—QuickBooks is a powerful tool, but if you're managing it solo as a small business owner, it can feel like a second job. And it’s probably not one you were ever trained for. You didn’t start your business to be a bookkeeper. Most people don’t go into entrepreneurship knowing how to manage a chart of accounts, reconcile bank statements, or set up vendor rules. And honestly—you shouldn’t be expected to.
I’ve been there. Back in the early days of running my apparel business, I managed our QuickBooks file myself. And if I looked at that file now, knowing what I know after years in the accounting industry? Let’s just say... I’d be appalled.
I made every single one of the mistakes below—not because I was careless, but because no one had ever shown me a better way. No one told me these were things I should even be watching for.
And that’s exactly why we’re sharing this list.
Most of these aren’t catastrophic errors, and they don’t mean your file is broken or that you’ve failed at bookkeeping. That said, some can impact your financials in ways that matter. They’re common, repeatable issues we see in nearly every DIY QuickBooks file—whether you're a one-person shop or running a $5 million operation. Getting these basics right won’t turn you into a bookkeeper overnight, but it will give you clearer reports, smoother tax prep, and a much better grip on your numbers.
Let’s take a look.
1. Posting to Parent Accounts Instead of Sub-Accounts
QuickBooks lets you organize your chart of accounts into “parent” and “sub” accounts. For example:
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- Parent: Professional Services
- Subs: Accounting & Bookkeeping, Legal, Recruiting, etc.
A common mistake? Posting expenses directly to the parent account instead of the right sub-account.
Why it matters:
If you sometimes code bookkeeping fees to “Accounting & Bookkeeping” and other times to “Professional Services,” your reporting is inconsistent. You’ll never get a clear picture of your actual spend in a particular category.
Best practice:
If you're not sure where a one-off transaction belongs, start with a quick web search or leave it in an “Uncategorized” account so you can review it later with your accounting team or tax preparer before filing taxes. To check if you have transactions posting to parent accounts, do a quick scan of the parent accounts on the P&L and Balance Sheet reports after adding transactions from the banking center.
2. Not Assigning Vendor or Customer Names to Transactions
Transactions without names are harder to track, search, and troubleshoot.
Why it matters:
If you miscode a tax payment as “Accounting & Bookkeeping” instead of “Tax,” but the transaction has no vendor name, it’s harder to catch that error later on.
Best practice:
Assign a name to every transaction, especially checks, bills, and expenses.
✅Pro Tip! Run a P&L or Balance Sheet Detail report and scan for blanks in the "Name" column.
3. Inconsistent Categorization
If you sometimes post your Amazon Prime subscription to “Dues & Subscriptions” and other times to “Memberships,” you’re creating a reporting headache.
Why it matters:
It becomes impossible to do accurate year-over-year comparisons when similar transactions are split across multiple accounts.
Best practice:
Simplify your chart of accounts to reduce overlap and pick one category per vendor whenever possible. To review previously categorized transactions, run a P&L or Balance Sheet report for a period of time (we recommend between 6-12 months) and display columns by month. Review accounts totals month over month for any unexpected fluctuations.
4. Letting QuickBooks Online (or Its Rules) Auto-Categorize Without Review
If you’re still entering transactions manually—please stop. The bank feeds feature in QuickBooks Online is super powerful and a total timesaver. But it’s only as smart as you make it.
Note! QuickBooks Desktop has a bank feeds feature too, but it functions a bit differently, so for today’s purpose we’re going to focus on QBO.
The issues we see:
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- Accepting QuickBooks' category or vendor suggestions without review
- Creating rules that auto-add transactions to the register (yikes!)
- Using rules that rely on the “description” field instead of the true bank text
Why it matters:
Auto-added transactions can skip your review entirely. And QuickBooks AI isn’t perfect—the restaurant “M.B. Post” in Manhattan Beach is typically mistaken for and categorized as “Manhattan Beach Post Office.” That $200 dinner was a very expensive shipment! 😉
Best practice:
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- Review every transaction in the For Review tab before adding it
- Review all rules under Transactions > Rules
- Avoid auto-add rules
- Set rules based on bank text, not the generic description field
5. Double-Recording Income or Expenses
This one is a biggie!
The scenario:
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- You invoice a client for $100.
- They pay you.
- The deposit hits your bank.
- Instead of applying the payment to the invoice, you record the deposit as income.
Now QuickBooks thinks you earned $200.
Same thing can happen with bills. If you enter a bill and then record the bank payment separately as an expense, you’ve just doubled your cost.
Best practice:
Match bank transactions to existing invoices and bills—not by creating a new income or expense entry. Review your Open Invoices and Unpaid Bills Report to ensure all received payments and bill payments were captured as anticipated.
✅Pro Tip! If a customer pays multiple invoices in one deposit (say, $200 total for two $100 invoices), make sure you record one combined payment. That way, the bank transaction in QuickBooks matches what actually hit your account—no mismatches, no unpaid invoice leftovers.
6. Not Using the Reconciliation Tool
Reconciling isn’t optional—it’s how you verify that the bank balance in QuickBooks reflects what’s actually in your bank account (like at the physical bank)!
Why it matters:
Skipping this step means you could have duplicates, missing transactions, or incorrect balances and not even know it.
Best practice:
Use the Reconcile tool monthly. If something doesn’t clear, investigate and verify it. For example, a check dated June 1 may not clear until July—so don’t include it in your June reconciliation, but in this case, don’t delete it either. You know that vendor will eventually deposit that check.
TL;DR: Best Practices for Managing Your QuickBooks File
✅ Post to sub-accounts (not parent) for accurate reporting
✅ Assign vendor/customer names to every transaction
✅ Use consistent categories—simplify your chart of accounts, if needed
✅ Turn off auto-add bank rules
✅ Match bank deposits and payments to existing invoices or bills
✅ Reconcile your accounts monthly
✅ Avoid double-posting income or expenses
✅ Use bank feeds thoughtfully—not blindly
One Final Thought
Getting these basics right won’t magically turn you into a bookkeeper, but it will give you a stronger financial foundation and make it easier on your accountant, tax preparer, or future bookkeeping team to support you. Trust me, it’s much easier (and less expensive) to get things set up right and create good habits from the get-go than to put it off and deal with a big, tangled mess later on.
And if you want a second set of eyes? We're always here to help, you know where to find us! 😉
Until next time, stay reconciled!
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