The biggest or most common Quickbooks mistake that I see in my practice is not using Undeposited Funds.
I have to admit, when I first started using Quickbooks in 2006, I found the idea a bit ludicrous. Initially, I saw no reason why deposits shouldn’t be entered straight into the bank account. I saw Undeposited Funds as a design flaw in Quickbooks, because I thought deposits didn’t need to be a two-step process.
But after thinking about it, I realized I was wrong. Undeposited Funds is actually essential to maintaining accurate customer records in Quickbooks. Here’s why. Deposits will not always consist of single payments from a single customer. Therefore, in order to track a single customer’s payments, you must first enter those payments into the customer record in any accounting program, including Quickbooks. Posting those payments to Undeposited Funds then allows you to group payments from different customers together into the deposit you actually made before posting it to the bank account.
Of course, there’s nothing that <em><strong>requires</strong></em> you to use Undeposited Funds. And maybe at the present time, for some reason, you don’t need to maintain accurate customer payment records in Quickbooks. But that could change in the future. For this reason, and because it is the Quickbooks-recommended best practice, I encourage all my clients to use Undeposited Funds.