What Is QuickBooks? Who Makes It, What It's Used For and How It Works

What Is QuickBooks? Who Makes It, What It's Used For and How It Works

QuickBooks is accounting software for small and medium-sized businesses. It keeps track of the money coming in and going out of a business, so owners can send invoices, pay bills, run payroll, see whether they're profitable and get their books ready for tax time.

Who Makes QuickBooks?

QuickBooks is made by Intuit Inc., a US software company based in Mountain View, California. Intuit also makes TurboTax, Credit Karma and Mailchimp. QuickBooks first came out in the early 1990s as desktop software and has since grown into a family of products, including the cloud-based QuickBooks Online.

What Is QuickBooks Used For?

• Creating and sending invoices and taking payments
• Recording expenses and receipts
• Connecting bank and credit card accounts to import transactions automatically
• Reconciling bank accounts so your books match your statements
• Paying bills and tracking what you owe suppliers
• Running payroll and paying contractors (with a payroll add-on)
• Tracking inventory and job or project costs
• Producing reports such as profit and loss, balance sheet and cash flow
• Preparing figures for sales tax and income tax returns

How Does QuickBooks Work?

QuickBooks uses double-entry accounting behind the scenes, but you don't need to know it to use the software. You do everyday tasks — create an invoice, record a bill, categorize a bank transaction — and QuickBooks posts each one to the right accounts in your chart of accounts. Those entries feed your reports automatically, so your profit and loss and balance sheet are always up to date.

Most of the work happens in a few places: the customer side (estimates, invoices, payments received), the vendor side (bills, expenses, payments made), banking (importing and matching transactions) and reports. Your accountant can log in, or receive a copy of your file, to review your books and prepare your tax return.

What Versions of QuickBooks Are There?

• QuickBooks Online — cloud-based, used in a web browser or mobile app, paid monthly
• QuickBooks Solopreneur — a simpler cloud product for freelancers and one-person businesses
• QuickBooks Desktop Pro Plus and Premier Plus — installed software for Windows small businesses
• QuickBooks Desktop Enterprise — installed software for larger businesses with more users and advanced inventory
• QuickBooks Desktop Mac Plus — the Mac edition of Desktop
• QuickBooks Online Accountant — a free tool for accountants who manage several clients

In short, QuickBooks is a way to keep your business finances organized without hiring a full-time bookkeeper. The version you choose depends on your team size, your industry and whether you prefer cloud or installed software.