Quickbooks Training - Making Quickbooks Numbers Reliable

Do the following simple review of just a few accounts on your financial statements to get a good reading.

First, print your Balance Sheet. Click Reports, then Company & Financial, choose Balance Sheet Standard. Click the Modify Report button and choose Report Basis - Accrual. Choose December 31, 2008 for the date. Finally, click OK (print or view on the screen).

Scan your Balance Sheet for the following accounts: Undeposited Funds, Accounts Receivable, and Accounts Payable. Do these account balances "look" right? Undeposited Funds should be the amount you have not yet moved to the bank account, maybe a week's worth of deposits. Accounts Receivable should be what your customers owed to you, in total, at December 31, 2008. And Accounts Payable should be what you owed to your vendors at December 31, 2008. In other words, Accounts Payable should be the bills you keyed that you had not paid yet at December 31.

Undeposited Funds

Accounts Receivable,

Accounts Payable

Also look at how you record business expenses paid from your personal funds or personal credit cards. If you are not recording these, you are most likely missing tax deductible business expenses. These expenses can be recorded in different ways, depending on your business structure, e.g., as a loan from you to the business. If you take out a personal loan from a bank and put the money into the business you need to record that also. It is not income. Ask an accounting professional how to record these transactions because the recording will differ depending on your business structure, etc.

Moreover, you need to record transactions if you pay personal bills from business funds. If you are a sole proprietor, for example, you can record these transactions as an Owner's Draw (found in the Equity section of the Balance Sheet). Here again, ask an accounting professional how to best record these transactions for your situation.

Finally, reconcile your bank statements in QuickBooks within a week or two of receiving them each month. Reconciling will ensure that at least the "cash" side of the entries you recorded are correct, i.e., checks you wrote and deposits you recorded. And, if you wait too long to discover a bank error or missing funds, you may not be able to correct the problem with the bank. Many banks give you just 30 days from the day you receive your bank statement to report a bank error or file a claim against a third party.

is the amount you key as Bills that you owe to your vendors. Accounts Payable (AP) will be larger than it should be if you are not using Pay Bills (under Vendors) to write checks to your vendors. The common mistake here: recording Bills and creating AP (this part is correct), but paying the bill using Write Checks and recording the expense again. This overstates your expenses and AP.typically the amount your customers owe you, can sometimes be a negative amount on the Balance Sheet. In this case, either you owe your customers, in total, more than they owe you (which is not likely), or you have recorded transaction(s) incorrectly. Conversely, the amount in Accounts Receivable (AR) can be much larger than the actual AR if you are creating Invoices in QuickBooks but not depositing the payments in Receive Payments (under Customers).is a QuickBooks generated account that shows up on the Balance Sheet as an Asset. The account is typically the default account where QuickBooks records your bank deposits until you go to Banking, Make Deposits to allocate the money to the appropriate bank account. If you have Undeposited Funds on your Balance Sheet and are not systematically moving the funds to your bank account, your Bank and Undeposited Funds accounts are both incorrect.


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