Bank reconciliation matches your book balance to the bank statement balance, line by line. It's the single best fraud-detection tool a bookkeeper has, and the QBO Reconcile workflow takes about an hour a month when the books are clean.
Bank fees and interest split into three accounts, not one: Bank Service Charges, Interest Expense, and Merchant Processing Fees. The biggest error is booking net Stripe deposits, which understates revenue every month.
SaaS goes in Software Subscriptions. Memberships and trade publications go in Dues & Subscriptions. Small one-off tools under $50/year go in Office Expenses. Three accounts, one decision tree, no more guessing where Slack goes.
Rent and utilities sit in two separate Operating Expense accounts. Home office allocation usually doesn't get its own COA line, security deposits hit Other Assets (not expense), and CAM charges roll into Rent, not Utilities.
Meals belong in a 50% deductible expense account. Entertainment belongs in a separate 0% deductible account. For TY2026, OBBBA eliminated employer-convenience meal deductions, so team meal categorization changed too.
Marketing and advertising costs go to Marketing & Advertising Expense, combined or split depending on volume.
Contractor payments go to Outside Services or Contract Labor, an Operating Expense account separate from W-2 payroll. The 2026 OBBBA rules raised the 1099-NEC threshold to $2,000, and credit-card payments don't count.
Business insurance goes to Insurance Expense, usually one parent account with optional sub-accounts by policy type. Annual premiums paid upfront sit in Prepaid Insurance and amortize monthly. S-corp owner health insurance follows special W-2 rules.
Routine attorney fees go to Legal Fees (a sub-account of Professional Fees). Acquisition, formation, real estate, and IP legal work gets capitalized instead. Plus the attorney 1099 exception every bookkeeper misses.
Cash accounting recognizes revenue and expenses when money moves. Accrual recognizes them when earned or incurred. Most small businesses run cash for tax and accrual for books. Here's why and how.
Accounts receivable is the money customers owe you for invoices already sent but not yet collected. It's a current asset on the balance sheet, not revenue. Here's how AR moves through the QBO Invoice/Customer workflow.
Accounts payable is the running tally of bills you owe vendors but haven't paid yet. It sits on the balance sheet as a current liability, not on the P&L as an expense. Here's how the AP workflow actually moves through QBO.
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