By James Shaw, COO
We were about forty minutes into a data-definitions call, the boring kind where you're just agreeing on what a word means before you build anything on top of it, when the woman who handles a lot of the day-to-day at our CPA firm — we'll call her Paula in this telling — stopped and asked me something that clearly wasn't in her notes.
"James, are you telling me you're not going to look at your QuickBooks Online reports anymore? Is that what you're telling your CPA?"
I hadn't been dodging the question, so much as it hadn't come up before. So I just told her the truth.
"I never, ever have looked at my QuickBooks Online reports. It's pointless. They're three months old."
She went quiet for a second, and I felt a bit bad about it, honestly, because I could hear it genuinely troubled her. Not the reassuring thing to hear from a client, I'm sure. But it's true, and I'd sooner say it than have her find out some other way. QuickBooks does one job in our business, and it's not telling me how we're doing.
"You literally only do it for the tax man, not for me."
That's not a knock on QuickBooks, right? It's good at what it's for. It keeps the books reconciled and gives the accountant a defensible number in April. That's the job, and it does the job fine. Where owners get themselves in trouble is treating that same report as the thing that tells them whether today was a good day. It can't. It was never built to.
So what do I actually look at, if not that? Same thing every day, and it starts at the timesheet, not the month-end close. Everyone on the team bills their hours, and from there the system just walks the number forward: hours billed, minus the direct cost of delivering that work, gives you gross profit. Take away the overhead, office, admin, all of it, and you're at net profit. It's the same math your accountant does eventually. The only difference is when you get the answer.
I've said this to people on calls and they look at me funny. I'm like,
"We could definitely never use QuickBooks, because it's six weeks behind... I want to know what our revenue and net profit is every day, not six weeks from now."
And six weeks is just the normal case. That's the mechanics of month-end close. Time gets entered late, right? Invoices go out whenever they go out. Nobody's doing a bad job — it's just how the design works. A report that's accurate isn't the same thing as a report that's current. QuickBooks will get you an accurate number. It just won't get you a current one. It's like checking the rearview mirror to figure out how fast you're going right now — accurate for where you were, useless for where you are. By the time it's final, the business it's describing doesn't exist anymore.
I'm not an accountant, to be clear. I've got people for that. But I don't need to be one to know I'd rather see today's number today, wrong by a little, than April's number in April, wrong by nothing and useless by then anyway.
Anyway, then we started digging through Paula's own numbers as part of getting our data definitions straight for a project we were doing together, and it stopped being a theory about my company. I kept finding things that didn't add up. Nothing dramatic, no fraud — just mismatches, numbers that should have reconciled and didn't. And when I asked her about a few of them, she could untangle every one, but each answer meant decoding a naming convention that lived mostly in her head, and by her own account, when she asks somebody else at the firm about those codes, they don't know. She's clearly good at her job. The system she was running on just doesn't surface that kind of thing until it's already old news, if it surfaces it at all.
That's really the whole argument. QuickBooks isn't wrong, and running a business on historical records isn't some rare mistake a handful of owners make. It's just the default outcome of trusting a report that's structurally always behind. You find out you weren't profitable the same way everyone finds out, months later, at tax time, staring at a number you can't do anything about anymore. It happened to Paula's own firm and she does this for a living.
I'd rather know today. Even if today's number is bad. Honestly, mostly when today's number is bad, because that's the one I can still do something about. Tomorrow's version of that same problem is a lot more expensive to fix than today's.
None of this means throw QuickBooks out, and I'd never tell Paula that. Keep it, reconcile it, hand it to the tax man every year like clockwork. Just don't mistake it for the dashboard you run the company on, because it was never trying to be that, and expecting it to be is how a business ends up finding out how it did three months after the fact instead of finding out today.
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