Xero Fully Automatic Accounting vs QuickBooks – The Bad Old Days

Filed in Intuit QuickBooks, Xero by on June 6, 2012

It now seems like a terrible waste to work without Xero fully automatic accounting, vs QuickBooks. However, it was far worse when I began. Businesses still take each of the numbered steps below. However, we did not even know enough to realize these were the bad old days. Many modern small businesses stopped doing all the listed sub-steps since I began as an accountant. 

    1. Enter bills:

  • Get a vendor card for each vendor with a bill
  • Insert the card so it posts when you post a purchases journal
    (few small companies had bookkeeping machines, most use carbons)
  • Purchase journals columns: major expenses, other expenses and a total
  • Post each inventory item bought to an inventory card

    2. Invoice customers

  • Create customer invoices
  • Get a separate customer card for each sale
  • Post each invoice using this card and a separate sales journal
  • Sales journals had columns for sales, sales tax and a total
  • Post each inventory item sold to an inventory card

    3. Make deposits


  • Prepare a deposit slip
  • Get customer cards for applicable companies
  • Post each check in a receipts journal, using this customer card
  • Receipts journals had columns for discounts, credits and total receivables.

    4. Pay bills

  • Review open invoices to decide who to pay
  • Get vendor cards
  • Post the disbursements journal using these cards and carbonized checks
  • Disbursements journal had many columns
    (discounts, credits, expenses, total payables and items not entered as bills)

    5. Make general journal entries

6. Month end procedure

  • Add all columns of all five journals
  • Cross foot, to be sure the column totals equal
  • Post each total and other column item to the general ledger
  • Add up each general ledger account
  • Record account totals on a trial balance
  • Add up the trial balance to see if debits and credits are equal
    (trial balance errors mean journal or ledger footing or posting errors)
    (other CPAs sometime had me spend weeks finding these errors)
  • Reconcile bank accounts to the general ledger bank balance
  • Add up all customer and vendor cards
  • Post totals to a customer and vendor balance schedule
  • Add customer and vendor balance lists
  • Compare to general ledger receivable and payable balances
    (If multiple companies mixed cards, finding errors took months.)
  • Add inventory card entries (finding errors was all but impossible)
  • Prepare, price and total lists of inventory balances

    7. Prepare financial statements and reports

It is actually quite likely that I forgot many more steps, which we once did manually. For example, only the best CPAs occasionally converted accrual balances to the cash basis. QuickBooks now does this with one click or with appropriately saved reports.

Most small business people wrote checks manually and often entered check stubs inaccurately. Accountants and bookkeepers then made errors many errors reading stubs and entering them in disbursements journals, as we too had no computers. Banks made many more errors, due to the many hand written checks. That let me help many smaller businesses with carbonized checks. They were a major innovation long after I began, since clients no longer had to write check stubs and I no longer had to enter them in a disbursements journal. Once they got over the shock of this change, they were ready to learn about carbonized customer and vendor cards. Some even forgot the trauma of having to throw away regular checks and cards. That, however, was nothing compared to my shock and outrage when I found new time saving (and error reducing) carbonized and QuickBooks checks unused for months, while business used up old checks. I often tore up these checks once everyone left, leaving some with this note, “You will soon thank me for this.”

Today Xero fully automatic accounting vs QuickBooks is the same type of revolution that Quicken and QuickBooks began 28 years ago. Then as now, I was one of the few CPA to use new technology quickly. I soon felt that CPAs not using Quicken and QuickBooks were guilty of malpractice. Tomorrow I will explain why CPAs are now definitely guilty of malpractice if they do not use Xero fully automatic accounting vs QuickBooks.


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