Note that the account type and sub accounts also need to be the same.Ħ. QuickBooks will prompt you to merge the two. Advanced tip: You can merge two accounts in the chart of accounts by changing the name on one of them to the exact name of the other. Tip: Determine how much detail you need to keep an eye on your revenue and expenses and use only those accounts. It’s really hard to glean the important information on an income statement with that many accounts. We did a cleanup project for a client once that had 20 different accounts just for office expenses. Your chart of accounts is a list of all of the categories that will show up on your financial statements: assets, liabilities & equity on your balance sheet and revenue & expenses on your income statement. Too many accounts and sub-accounts in the chart of accounts. Tip: Don’t trust QuickBooks to apply the payments correctly review them first before applying to the customer by clicking on the detail which often includes the payee name.ĥ. The last thing you want to do is contact the wrong client about a past due invoice. If you accept it without confirming the correct client, the payment will be applied to the wrong client. When the deposits come through the bank feed, QuickBooks guesses which client paid it. Suppose you sell a service for $950 and you have several clients with outstanding invoices for the same amount. They may need to be deleted or reissued.Ĥ. Tip: Review your bank reconciliation for any deposits or payments that are outstanding. If the duplicate isn’t deleted, both your cash and your revenue will be overstated. One gets cleared (checked off) but the duplicate is just listed as outstanding. For example, you accidentally record a deposit twice. This can happen because duplicate or erroneous entries simply aren’t checked off, but the bank account still balances because QuickBooks recognizes them as outstanding. Reconciling bank statements allows you to catch errors, but often these errors are ignored. Kudos if you reconcile your bank account on a regular basis. Not clearing out old items when reconciling bank accounts. And don’t use checks! it’s the 21st century, after all.ģ. Tip: Reconcile all payroll and other liability accounts on a regular basis. When we took them on as a client, we noticed the oversight when reconciling the 401(k)-withholding liability account and made the correction. One company wrote a check for the employee 401(k) contributions which got lost in the mail and it went undetected. Holding on to your employees’ money that belongs in the 401(k) plan comes with harsh penalties. Not reconciling employee payroll withholdings. Tip: Review all items in the bank feed before accepting by clicking on the item to view the bank detail attached to the transaction, and use the Rules feature for items that don’t change like your Starbucks purchase.Ģ. What if you had a charge to Amazon? It could be computer expense, office supplies, or even an accidental charge on your company credit card (oops, I didn’t mean to charge that $42 hairspray on the company credit card). However, we like to say that you’re smarter than QuickBooks. The AI feature of QBO memorizes your transactions so it remembers, for instance, that the last time you had a charge from Starbucks on your credit card it was coded to meals expense. Previously, accountants had to manually add transactions to QuickBooks (Quick aside: Some of us old timers also had to walk uphill to school – both ways). One of the best improvements to QuickBooks in the past 10 years is the bank feed that automatically pulls in transactions from bank accounts and credit cards. Here are the most common mistakes we see and some easy fixes:ġ. The Juna team has cleaned up many QuickBooks messes left behind by non-accountants. In fact, it’s also easy to make a complete mess that your tax accountant can’t decipher, leaving you with inaccurate information to run your business. But simply having a QuickBooks Online (QBO) subscription isn’t foolproof. QuickBooks was built with non-accountant users in mind so it’s relatively easy to figure out how to create invoices, pay bills and run reports. When Intuit launched QuickBooks in 1998, it gave small business owners user-friendly software to manage their business operations.
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