Intuit QuickBooks is one of the most popular tools for managing accounting, payroll, time-tracking, invoicing, taxes, and more. Many business owners and self-employed individuals rely on QuickBooks products for their bookkeeping needs. However, as with any software, you can expect issues to arise from time to time.
These issues can be frustrating to encounter, especially when you’re trying to update your books or reconcile your accounts. Below are some of the most common technical and usage-related QuickBooks problems and how to resolve them.
Technical QuickBooks problems and solutions
These are some of the most common technical issues QuickBooks users encounter, along with troubleshooting solutions from the QuickBooks support library.
Lost connection to data files
QuickBooks sometimes has trouble connecting with networks, often resulting in lost connection to data files. Even a minor issue in your network can cause you to lose connection entirely, which may be a major issue if you’re trying to send invoices or payments.
To troubleshoot, ensure your firewall and antivirus programs are not blocking the connection; then, use the QuickBooks Connection Diagnostic Tool to identify and help solve the issue.
Slow connection
If you’re experiencing a slow connection, particularly in multi-user mode, it’s often a hardware issue. You might consider increasing the random access memory (RAM) and hard disk space so you can improve performance and include more users at once without a compromised connection.
However, if hardware is not the concern, there might be issues with the data file itself. In this case, you can use the Cleanup Company Data tool (which is found in the Utilities file). If the connection speeds up, you’ve likely found the culprit. If not, try turning off the Audit Trail feature.
Outdated, unreadable company data files
If you’ve recently upgraded your QuickBooks to a newer version, you may find that data from the previous version can no longer be read. Since you might have crucial information stored here, you’ll need to update your QuickBooks company file if you want to access it in your newer version.
After running a backup, you can update the data file itself. You’ll also might run a verification on the file before uninstalling the old version or installing the new version, or you might choose to run both side by side.
Lost administrator password
Although it’s not ideal to lose or forget a password, it does happen from time to time. Should you need administrative access to QuickBooks and can’t locate your password, you can use the Automated Password Reset tool to easily resolve this issue.
Locked data files when moving to another location
If you’re moving or copying a QuickBooks data file to an external hard drive or other removable device (usually for backup purposes), you may discover that the QuickBooks Server Manager and Directory Monitor has locked down the file. The common error message says that the file cannot be opened, and instructs you to ensure it is not in use by another program.
In this situation, Intuit first recommends ensuring that your QuickBooks software is up to date, then restarting your computer and selecting “Run as the Administrator” when you restart the program.
[Read more: Which Type of Accounting Service Do You Need?]
Keeping copies of receipts for expenses in QuickBooks is the best way to "audit-proof" your tax return.
Gary Massey, Managing Director at Massey and Company CPA
Usage-related QuickBooks problems and solutions
According to accounting and financial experts, these common QuickBooks issues are less about technical glitches and more about using the software properly to get the most out of its capabilities.
Misclassified transactions
One of the most common issues is misclassifying transactions, such as categorizing transfers as deposits or withdrawals. This can lead to inaccurate financial reports and headaches down the line.
“Using one of the preset charts of accounts that includes descriptions of the contents of the account … [can] ensure that the recorded transactions are correct and can be used as a template going forward,” said Anna Cox, Owner of Cox Accounting and Analytics, LLC.
Incorrect auto-categorization of expenses
Like many accounting programs, QuickBooks can automatically tag your synced transactions based on what it thinks is the most likely category, such as “software,” “office supplies,” or “meals and entertainment.” However, if you don’t correct and train QuickBooks when the automation gets it wrong, you’ll end up with incorrect categorizations.
Li Han Tan, Co-founder and Principal Consultant of Accounting and Tax Advisory firm W.L.P. Group, said the best way to troubleshoot this is to set up and review your chart of accounts regularly to ensure the categories align with your business activities.
“Using QuickBooks’ built-in tutorials or consulting an accountant when setting up the software can also prevent costly errors,” he added.
Subscription ownership issues
Kathy Gilchrist, Founder and CFO of Cardinal Bookkeeping & Advisory, said she’s seen small business clients run into access issues if their QuickBooks subscription was set up and controlled by an accountant or bookkeeper who parted ways with the company.
“It makes the transition much easier when the software subscription ownership is in the business owner’s name,” said Gilchrist. “[This] also avoids a situation where an accountant who was let go could hold the company’s financial data ‘hostage.’”
Lack of receipt documentation
Although you can configure QuickBooks to sync with all your business account transactions, you still need copies of your receipts to correspond with those business expenses.
“Keeping copies of receipts for expenses in QuickBooks is the best way to ‘audit-proof’ your tax return,” said Gary Massey, Managing Director at Massey and Company CPA. “A copy of a receipt, whether electronic or on paper, will almost always satisfy the IRS and bring an audit to a quick conclusion.”
General lack of accounting knowledge
For many small business owners, the biggest hurdle isn’t the software itself but a lack of understanding of basic financial accounting principles.
“Most business owners are not familiar with the basics of financial accounting, especially when it comes to how it works within their business,” said Christian Maldonado, Founder and COO of TaxAdvisor365. “Classifying transactions such as expenses is just not something they’re very well-versed [in] unless they hear certain things along their journey, such as ‘make sure you keep your receipts for that write-off.’”
The best way to avoid these and other common accounting software issues is to outsource your accounting to a financial professional, whether you hire someone in-house or work with a CPA firm.
[Read more: 17 Accounting Terms Every Small Business Owner Needs To Know]
Want to compare accounting software programs before investing in QuickBooks? Check out our buyers' guide to help you choose the right one.
Sean Peek also contributed to this article.
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