The Three QuickBooks Workflows Every Business Owner Should Understand
In this episode of QuickBooks Mastery for Small Business Success, Lee Davis and Erica Northrup discuss three essential workflows that help keep your QuickBooks organized and accurate.
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According to Erica and Lee, one of the biggest reasons QuickBooks becomes messy is that people often learn bookkeeping processes incorrectly from others. Over time, those small misunderstandings create larger financial problems.
The key is finding a system that works—and using the correct forms consistently.
Why Workflows Matter
Your financial workflows determine how money moves through your business and how accurately that activity is reflected in your reports.
If workflows are inconsistent:
- Transactions get duplicated
- Reports become inaccurate
- Cash flow becomes harder to track
- Decision-making becomes more difficult
That’s why understanding the structure behind QuickBooks is so important.
1. The Money In Workflow
The first workflow focuses on money coming into your business.
This process includes:
- Invoices
- Sales receipts
- Customer payments
- Deposits
To manage this correctly, it’s important to use the proper QuickBooks forms throughout the process.
Common Mistake: Forgetting to Receive Payment
One issue Erica and Lee frequently see is business owners sending invoices but forgetting to properly record the customer payment afterward.
This creates:
- Outstanding invoices that appear unpaid
- Bank feed mismatches
- Confusion in accounts receivable
What a Clean Money In Workflow Looks Like
A clean workflow may involve several QuickBooks forms, including:
- Purchase orders
- Invoices
- Sales receipts
- Payment entries
- Deposits
Each form plays a role in ensuring the transaction flows correctly through the system.
Signs the Money In Workflow Is Broken
There are several warning signs that this workflow is not functioning properly:
- The bank feed doesn’t match correctly
- Payments appear duplicated or missing
- Transactions are incorrectly assigned to payroll expenses or other unrelated accounts
When the money in workflow breaks down, income reporting becomes unreliable.
2. The Money Out Workflow
The second workflow focuses on money leaving the business.
This involves understanding the difference between:
- Bills
- Checks
- Expenses
According to Erica and Lee, one of the biggest mistakes happens when users misunderstand how bills work in QuickBooks. Check out Episode 22 for more information on bills, checks and expenses.
A Common Problem With Bills
In QuickBooks:
- You enter the bill
- Then you pay the bill
However, many users:
- Enter the bill
- Then separately create a check instead of using the “Pay Bills” function
This duplicates the transaction and creates reporting issues.
Red Flags in the Money Out Workflow
One major warning sign is confusion between:
- An invoice (money owed to you)
- A bill (money you owe someone else)
When these forms are misunderstood, expense tracking and payables quickly become inaccurate.
3. The Month-End Process Workflow
The final workflow focuses on month-end financial review and reconciliation.
This process acts as the quality control system for your bookkeeping.
According to Erica and Lee, financial administrators need clear checks and balances to review financial information regularly.
Bank Reconciliation Matters
One of the most important month-end tasks is bank reconciliation.
Reconciliation helps identify:
- Missing transactions
- Duplicate entries
- Incorrect balances
Without reconciliation, it becomes difficult to trust your reports.
Reviewing Financial Reports
A strong month-end process should also include reviewing:
- Profit & Loss Statements
- Comparative reports from prior periods
- Cash Flow Reports
Erica and Lee emphasize that the Cash Flow Report may be one of the most valuable tools in QuickBooks—yet many business owners rarely use it.
Why These Workflows Work Together
These three workflows are interconnected.
If your:
- Money in workflow is inaccurate
or - Money out workflow is incomplete
Then your financial reports will also be inaccurate.
That’s why consistent systems and proper workflows are so important for maintaining reliable financial information.
Final Thoughts
At the end of the day, QuickBooks is an accounting software, so it is a foreign language to many business owners, but with the right training, these workflows will work for you.
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