IS
YOUR BOOKKEEPING FACT OR FICTION?
Here are a few tips that may help you.
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RECONCILE
You should use this QuickBooks feature for bank accounts, as well as credit cards and other
liability accounts. I love to teach this feature because the software does the calculating.
When you "Write Checks" or "Make Deposits", the statement will tell you if they have been
entered correctly. This is good information. Plus it will show any automatic payments, service
charges or interest earned that need to be entered.
CREDIT CARDS
For credit card accounts, use "Enter Credit Card Charges" for charges and credits.
This way you can track business expenses for the date they occur. When you make a payment
on the account, use the name of the credit card account (the liability) in the expense field.
This reduces your balance. Use the reconcile feature to make sure you expense the finance
charge for your business credit card accounts.
CHART OF ACCOUNTS AND ITEMS
Keep your chart of accounts as clean as possible, with 70 or fewer accounts. You don't need
to have a lot of detail showing here. Use the items for the most of that. The items feed
directly into the chart of accounts and offer detailed reports when set up correctly. You will
need to use them if you are entering "Cash Sales" or "Invoices" anyway. For expenses and
purchases, notice the "Items" tab in "Write Checks" and "Enter Bills". If you enter a cost
in the item set-up, QuickBooks will do the calculation for you.
PAYROLL LIABILITIES
If you are running your own payroll, you will want to use the "Pay Liabilities" feature to issue
checks for federal and state tax liability payments. It's a great idea to print a payroll summary
report first, so you can compare the amounts of the liabilities in each situation. They should
be equal. If they are different, you may want to see more detail to research and correct the
discrepancy. This could save you some scrambling at year end, when it's time to issue
the W-2s.
WAGE GARNISHMENTS
If you have child support or other wage garnishments to withhold and pay out, you should
consider separate liability accounts for each one. You could "Memorize" a payment, when you
first make it, and have a reminder come up each time it is due. These can be a pain
to keep track of, and setting up a system to deal with them can ease the pain a bit.
SUSPENSE
I like to use an account called "Suspense" when I'm working away and I can't figure out
how to expense a check payment. This way I won't have to lose my momentum. I memorize
a suspense report and generate that report later to do my research all at one time.
PRE-PRINTED CHECKS
Printing checks is a great time saver. Definitely worth the price.
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