Fix this First in QuickBooks

What Should You Fix First in QuickBooks?

In this episode of QuickBooks Mastery for Small Business Success, Lee Davis and Erica Northrup discuss one of the most common questions business owners ask when their books feel messy or overwhelming:

Where do I even begin?

When bookkeeping problems start piling up, it’s easy to feel stuck. But according to Erica and Lee, the best place to start is often the issue that’s causing the most stress or uncertainty.

Quickbooks Mastery for Small Business Success

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Start With What Feels Wrong

Many business owners first notice a problem when something obvious doesn’t look right—such as a checking account balance in the chart of accounts that seems completely off.

That discomfort is usually a signal that something needs attention.

Rather than ignoring it, start there.

Why Google Isn’t Always the Best Solution

When bookkeeping issues arise, many business owners immediately search online for answers.

While online resources can sometimes help, QuickBooks problems are often tied to the specific way your books were set up. Generic advice may not fully solve the issue—and in some cases can make things more confusing.

The key is understanding the why behind the problem, not just applying a quick fix.

1. Start With the Chart of Accounts

According to Erica and Lee, one of the first places to review is the Chart of Accounts.

If the structure of your accounts is incorrect, everything connected to those accounts can become inaccurate as well.

Common issues include:

Accounts classified incorrectly
Too many unnecessary accounts
Accounts that don’t fit the business properly

One practical tip is to use your Schedule C as a guide when cleaning up your chart of accounts.

Most importantly, your chart of accounts should be customized to your specific business—not copied from someone else’s setup.

2. Review the Bank Feed

The bank feed is another area where problems often begin.

Common mistakes include:

Duplicate transactions
Incorrect account assignments
Automatically accepting suggested categories without review

While automation can save time, it still requires oversight and accuracy checks.

3. Check Your Reconciliation

Reconciliation issues are another major source of frustration.

Often there are:

Transactions sitting unreconciled
Duplicate entries
Missing or incorrect transactions

When reconciliations are inaccurate, your reports become unreliable.

Reviewing and cleaning up reconciliation discrepancies can significantly improve confidence in your books.

4. Improve Categorization

Categorization mistakes can affect nearly every financial report in QuickBooks.

Erica and Lee recommend:

Using bank statements to verify transactions
Matching entries carefully
Categorizing transactions intentionally

One important reminder:
Don’t automatically trust QuickBooks’ suggested categories.

When setting up products and services, it’s also essential to connect them to the correct income accounts so sales are recorded properly.

How Do You Know the Cleanup Is Working?

Bookkeeping cleanup can feel overwhelming, so it’s important to recognize progress along the way.

According to Erica and Lee, once that first major issue is resolved, you’ll often feel like you’re finally moving in the right direction.

A good way to measure success is by reviewing:

Your Profit & Loss Statement
Your Balance Sheet

When those reports begin making sense and reflecting reality more accurately, you know the cleanup process is working.

Final Thoughts

Fixing your book is crucial to gaining control of your business. Lee has been in the business of cleaning up messy book for over 10 years, and entrepreneurs usually have similar problems.

You could hear it in the tone of his voice during the podcast – this is old hat to him. He has looked at enough books to instantly spot the problems. If you are needing help, don’t hesitate to reach out.

If you liked the podcast, you will like our training course. Click on the link below to join our upcoming course.

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Why is QuickBooks Confusing?

Why QuickBooks Feels So Confusing for Business Owners

In this episode of QuickBooks Mastery for Small Business Success, Lee Davis and Erica Northrup discuss a frustration shared by many business owners: why QuickBooks can feel so confusing.

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For many entrepreneurs, the challenge is not a lack of effort—it’s that QuickBooks combines software with accounting concepts that may already feel unfamiliar.

QuickBooks Is More Than Software

One of the biggest reasons QuickBooks feels difficult is that it’s built around the language of accounting.

As Erica and Lee explain, it can feel like learning a foreign language:

Debits and credits
Assets and liabilities
Reconciliation and accrual accounting

Even simple tasks can become confusing if the underlying accounting concepts are unfamiliar.

Choosing the Right Version Matters

One of the first steps toward reducing confusion is selecting the right version of QuickBooks for your business.

Choosing software with features you don’t need can make the system feel unnecessarily complicated.

On the other hand, choosing a version that’s too limited can create workflow problems later.

Finding the right fit helps simplify the learning process from the beginning.

Many Business Owners Don’t Have an Accounting Background

Another major challenge is that many entrepreneurs are experts in their industry—not in bookkeeping or accounting.

They may be:

Great at sales
Skilled at operations
Strong leaders

But financial software requires a completely different skill set.

That disconnect often creates frustration and uncertainty.

“Limping Along” Creates Bigger Problems Later

According to Erica and Lee, many business owners try to push through without fully understanding the system.

They “limp along” by:

Avoiding bookkeeping tasks
Guessing at categorizations
Ignoring reports
Hoping everything works itself out by tax season

Unfortunately, these problems usually grow over time.

When tax season arrives, clean and accurate books become essential—and unresolved issues can create stress, delays, and costly mistakes.

Avoiding the Books Is Common

Many business owners begin avoiding their books altogether once the process feels overwhelming.

That avoidance can lead to:

Missed transactions
Inaccurate reports
Cash flow confusion
Increased anxiety around finances

The longer bookkeeping is ignored, the harder it becomes to regain control.

Start by Identifying the Problem

Rather than trying to fix everything at once, Erica and Lee recommend starting with a simple question:

What specifically are you struggling with?

It may be:

Bank feeds
Reconciliation
Invoicing
Reports
Categorization

Identifying the exact pain point makes it easier to find the right solution.

Professional Help Can Make a Difference

Getting professional support doesn’t just solve problems—it can also help business owners build confidence.

A knowledgeable advisor or trainer can:

Explain how QuickBooks works
Simplify accounting concepts
Create better systems and workflows
Help business owners feel more comfortable with their numbers

The goal isn’t just cleanup—it’s understanding.

It’s Not Just You

One of the most important takeaways from this episode is simple:

QuickBooks is not naturally intuitive for many people.

The frustration many business owners experience is common, especially without accounting training. The good news is that with the right support and education, it becomes much easier to manage.

Final Thoughts

You got into business not to do bookkeeping, but you ended up doing bookkeeping. Now you are in over your head and looking for help. Lee Davis and Company can help you with your book by training you or just by managing your books.

If you liked the podcast, you will like our training course. Click on the link below to join our upcoming course.

Join our Zoom Class

When you are Comfortable with your Numbers

What Happens When You Have Reliable Financial Numbers?

In this episode of QuickBooks Mastery for Small Business Success, Lee Davis and Erica Northrup discuss the transformation that happens when business owners finally have reliable financial numbers they can trust.

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For many businesses, the early stages of bookkeeping are focused on cleanup and correction. But once the numbers become accurate and consistent, business owners can shift from simply reacting to problems to making strategic decisions with confidence.

Moving Beyond Cleanup Mode

When financial records become reliable, businesses can begin focusing on growth rather than constantly fixing mistakes.

Instead of spending time:

Correcting transactions
Searching for missing information
Questioning financial reports

Business owners can begin fully using their financial statements to guide decisions.

This often leads to adopting additional tools and apps that improve workflow and efficiency.

Better Financial Statements Lead to Better Opportunities

Reliable financial reports open the door to opportunities that may have felt out of reach before.

For example, business owners may:

Refinance credit cards or loans
Build stronger banking relationships
Apply for financing with confidence

Banks want to see clean, accurate financial statements. When your reports are reliable, the lending process becomes much smoother.

Budgeting Becomes More Effective

Once you trust your numbers, creating and maintaining a budget becomes far more useful.

Instead of guessing, you can:

Forecast more accurately
Monitor spending intentionally
Plan for future growth

A strong budget gives business owners more control over both short-term operations and long-term planning.

Better Decisions About Cash and Pricing

Reliable numbers also improve day-to-day decision-making.

Business owners can:

Understand where cash is going
Make smarter spending decisions
Price products and services more accurately

Knowing your true costs is essential when setting prices. Without accurate numbers, it’s easy to underprice services and reduce profitability without realizing it.

Hiring Decisions Become Clearer

Financial clarity also impacts hiring.

When payroll expenses are included in a realistic budget, business owners can:

Understand whether they can afford additional staff
Plan hiring strategically
Avoid overextending the business financially

Reliable reports help remove uncertainty from these decisions.

Avoiding Surprise Taxes

One of the biggest benefits of clean financials is avoiding unexpected tax problems.

When records are current and accurate:

Tax obligations become more predictable
Business owners can plan ahead
Stress during tax season is reduced

There are fewer surprises because the numbers are being reviewed consistently throughout the year.

Understanding the Numbers Matters Too

According to Erica and Lee, it’s not enough to simply have reliable numbers—you also need to understand them.

Financial reports are most valuable when business owners feel comfortable reading and using them.

That confidence comes from:

Understanding how QuickBooks works
Reviewing reports regularly
Creating systems that improve clarity

Improving Invoicing Creates Clarity

One practical step business owners can take is improving how invoices are managed.

A smoother invoicing process helps:

Improve cash flow
Reduce confusion
Create more reliable reporting

The more organized your invoicing system becomes, the easier it is to trust the financial picture behind it.

Final Thoughts

Better numbers opens up new possibilities for your business. You have the clarity that you need to make better decisions and explore new paths to success. Don’t hesitate to reach out if you need that clarity.

If you liked the podcast, you will like our training course. Click on the link below to join our upcoming course.

Join our Zoom Class

Five Important Financial Numbers

Five Financial Numbers Every Business Owner Needs to Know

In this episode of QuickBooks Mastery for Small Business Success, Lee Davis and Erica Northrup discuss five key financial numbers every business owner should understand.

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At the center of all of these numbers is one critical issue: cash flow.

Business owners need to know where their money is coming from, where it’s going, and whether the business is financially healthy enough to support growth and long-term success.

Two reports play a major role in understanding these numbers:

The Cash Flow Statement
The Profit & Loss Statement

Together, these reports provide the visibility needed to make informed business decisions.

1. Revenue

The first number every business owner should track is revenue.

Revenue tells you how much money is coming into the business—but it also raises an important question:

Are you missing revenue opportunities?

According to Erica and Lee, many businesses unintentionally lose revenue because:

Invoicing is delayed
Billing processes are inconsistent
Follow-up systems are weak

Improving invoicing alone can often increase revenue and improve cash flow.

2. Net Sales

Net sales go beyond top-line revenue and help business owners understand profitability more clearly.

One major factor impacting net sales is the cost of employees and operations.

Timely invoicing is especially important here. If sales are not billed promptly, it becomes difficult to accurately measure performance and profitability.

This number also helps business owners better understand their profit margins.

3. Net Profit

Revenue alone does not determine whether a business is healthy. Net profit reveals whether the business is truly sustainable.

Your profit must be strong enough to:

Support operations
Cover expenses
Reinvest into growth
Support owner compensation

Erica and Lee also point out that many businesses overlook indirect expenses, such as depreciation, when evaluating profitability.

Ignoring these costs can create a misleading picture of financial performance.

4. Debt-to-Income Ratio

Another important number is your debt-to-income ratio.

This is calculated by comparing:

Total monthly debt payments
to
Total monthly income

Banks generally prefer to see a debt-to-income ratio around 35%.

Why does this matter?

If too much of your income is going toward debt payments, it may indicate deeper financial issues within the business.

Lee also emphasizes an important point:
The best time to secure a line of credit is before you actually need it.

5. Owner Pay

Owner compensation is often more complicated than business owners realize.

Depending on your business structure, owner pay may be handled differently:

LLCs → Typically use owner draws
S-Corporations → Typically use payroll

In addition, business owners often receive indirect financial benefits through the business, such as vehicle payments or other company-covered expenses.

Understanding how owner compensation fits into the overall financial picture is essential.

Using Your Profit & Loss Statement Effectively

If you want a clearer understanding of your business finances, Erica and Lee recommend regularly reviewing your Profit & Loss Statement.

In particular:

Compare reports month-to-month
Look for trends over time
Monitor changes in revenue, expenses, and profitability

Consistent review helps business owners stay proactive instead of reactive.

Final Thoughts

Your cash is your business’s score card. You really want to know the story, so you can make good choices. Without accurate information, your business could be running in a wrong direction. If you need help cleaning up your books to get more clarity, contact Lee at [email protected].

If you liked the podcast, you will like our training course. Click on the link below to join our upcoming course.

Join our Zoom Class

Why “Good Enough” QuickBooks is not Enough

Why “Good Enough” QuickBooks May Be Holding Your Business Back

In this episode of QuickBooks Mastery for Small Business Success, Erica Northrup and Lee Davis discuss a common situation many business owners find themselves in: their QuickBooks isn’t completely broken—but it isn’t working as well as it could either.

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There may not be obvious red flags or major accounting disasters. On the surface, everything may seem “good enough.” But beneath that, there are often missed opportunities, inefficiencies, and unnecessary stress.

The Hidden Cost of “Good Enough”

One of the biggest concerns with incomplete or inconsistent bookkeeping is that you may not be maximizing your tax deductions.

If your records aren’t fully accurate or your transactions aren’t categorized properly, you could be:

Missing valuable write-offs
Overlooking deductible expenses
Making decisions based on incomplete financial data

Even small inaccuracies can add up over time.

Busy Doesn’t Mean It’s Working

Many business owners know their QuickBooks setup could be better, but they’re simply too busy running their business to address it.

That’s understandable—but as Erica and Lee point out, it’s important to make the best long-term decision for your business rather than settling for what feels manageable in the moment.

From Spreadsheets to Systems

Lee shared the example of a church that was relying heavily on spreadsheets instead of fully utilizing QuickBooks.

After working with Lee Davis and Company, they were able to create more efficient processes and gain better financial visibility.

The right systems don’t just save time—they improve confidence and decision-making.

Efficiency Impacts Cash Flow

When QuickBooks is used properly, it can streamline everyday business operations.

For example:

Improving invoicing workflows
Collecting payment at the time of service
Tracking customer balances more effectively

These small improvements can have a major impact on cash flow and operational efficiency.

Using QuickBooks to Understand Your Business

QuickBooks offers tools that help business owners move beyond simple bookkeeping.

Using reports and statements allows you to:

Understand where your money is going
Analyze pricing strategies
Track product or service performance

Lee shared the example of a well company that sells pumps. With proper tracking in QuickBooks, the business can monitor those sales and better understand profitability.

Trusting Your Numbers Matters

At the heart of it all is confidence.

If you don’t trust your numbers, it becomes difficult to:

Make informed business decisions
Plan for growth
Confidently collect outstanding invoices
Feel at peace financially

Clean, reliable financial data gives business owners clarity—and peace of mind.

Don’t Avoid Asking for Help

Many business owners delay getting professional help because they feel embarrassed or think they should “have it all together” first.

But waiting often makes things more stressful.

As Erica and Lee emphasize, there’s real value in getting support. The goal isn’t perfection—it’s creating systems that help your business run more smoothly and give you confidence in your financial future.

If you liked the podcast, you will like our training course. Click on the link below to join our upcoming course.

Join our Zoom Class

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