Wednesday, September 14, 2011

Quickbook - Bank Reconciliation - 4 places to look for errors

It is quite easy to spot where errors come from if you can't reconcile:

Look at these 4 numbers at the bottom left of the reconciliation window and compare to your bank statement to zero-in on where error(s) come from:
- beginning balance
- ending balance
- total deposits
- total withdrawals

If you found that error(s) is on total withdrawals side, you just need to focus on finding the error(s) there.

Tuesday, September 13, 2011

Quickbooks - workflow

Before you can reconcile to bank statement; you should do these first:

First, take care of A/R (accounts receivable).
In this order:
Enter invoice - process payment - move deposit into bank a/c.
(These deposits should agree with amounts as stated on bank statements.)

Second, take care of A/P (accounts payable).
In this order:
Enter bill - pay bill

Third, when reconciling to bank statement.
If you see other deposits and debit charges on bank statement, post the entries to the check register.

If you have problem reconciling; look at these 4 numbers to find where the error(s) are:
beginning balance, total deposit, total withdrawals, and ending balance.

Quickbooks / Bookkeeping Procedures

Your main data source is bank and credit card statements -- a high 80 to 90% of the data came from these 2 places. So, if you have captured all the data from these 2 places, you have captured most of data.

The workflow is always:

- Enter data

- Reconcile to monthly statement.
By reconciling, you verify that all data been entered and is correct.
If there are errors or omissions, they would be detected and entered/corrected in this step.

- Review financial reports.

The owner runs his business. He has the "reality check". If numbers don't look right, the owner should know it better than an outside contractor. Good financial is a team effort between the owner and the accountant/bookkeeper.