Account for outstanding bank account transactions
If you’re having a problem reconciling your latest bank statement, the problem might be with outstanding bank account transactions. If there was any lag time between the date of your statement and your start date in QuickBooks, make sure that you also entered any checks or deposits that happened in between.
Pay bills in two steps
For most users, paying bills in QuickBooks is a two-step process. First, when you receive a bill, enter it into the Enter Bills window (in the Vendor navigator and menu), so you can track how much money you owe. Second, when you’re ready to pay bills, indicate which one you want to pay using the Pay Bills window (also in the Vendor navigator and menu).
From the Pay Bills window, you can tell QuickBooks that you want to pay by check, and to put it into your print queue.
If you don’t track your accounts payable, you can reduce your steps to one, and simply use the Write Checks and Enter Credit Card Charges windows to pay your bills.
Don’t deposit your money twice
Many users group their payments to deposit them all at once through the “Undeposited Funds” account. A mistake that some users make is that they also enter each payment as a single deposit. The result is two deposits for one payment.
When you use the Sales Receipt or Receive Payments forms to track money coming in to your business, you have the option to put payment into the “Undeposited Funds” account, which is like a cash drawer where you keep checks and currency in between trips to the bank. If you select this option on either form, QuickBooks won’t recognize the money into your bank account until you tell it that you’ve actually taken your money to the bank.
When you do go to the bank, tell QuickBooks by using the Make Deposits window, and select the payments you’ve just deposited. Do not enter a separate deposit into your bank account register to show this money.
Don’t enter a credit card charge and a bill for the same expense
Do not enter a bill or write a check to Capital One Credit Card for your credit card charges. Instead, go to Banking> Enter Credit Card Charges. Choose the correct credit card and enter all your charges (and any credits if you have them) here. When you are done, select Save & Close. Then go to Reconcile. Once again choose the correct credit card. Reconcile just like you do your bank. When you are done it will ask you if you want to pay the amount now or enter a bill for payment later. ALWAYS pay the bill now even if you can only pay $50 on a $6,000 credit card bill. If you don’t it will put it into your A/P and a Credit Card is a liability not an A/P.
When entering your charges from the statement add up all the Fuel and make one entry called Fuel. Do the same for Meals and Travel if you travel a lot. The will save you a ton of time.
Pay your payroll taxes with the Pay Liabilities window
When you create paychecks for your employees, use the Pay Liabilities window to pay your payroll taxes. Don’t use the Write Checks window. When you process payroll QuickBooksook keeps a tally of how much payroll tax you owe, and records it in your Payroll Liabilities account. When you use the Pay Liabilities window to pay your payrtaxQuickBooks will decrease the balance of the liability account accordingly.
Use Sub-Items and Sub-Accounts
If an account or item has sub accounts or items, don’t assign your transactions to the parent item or account if you can help it. Always use the sub- items and accounts to increase your knowledge of your business. Sub-accounts and sub-items will show up QuickBooks reports as separate items, but will still be grouped together.
Be Careful with Reconciliation Adjustments
QuickBooks won’t usually make reconciliation adjustments automatically. However, if you’re out of balance in the Reconciliation screen and you select to reconcile anyway QuickBooks will make the adjustment, and post the positive or negative amount to Bank Reconciliation account.
Do not let QuickBooks do this! The right thing to do with small differences you find when reconciling is to enter a check or a deposit for the amount, using the bank statement date for the transaction date and put it to an appropriate account based upon your best guess of where the difference arose. You can then mark that transaction as cleared and proceed with reconciling.
When creating loan payments we often enter the monthly loan amount as a Bill. Here is how you should process loan payments: Set up a Fixed Asset with sub accounts for the Cost and Accumulated Depreciation. Then, set up a liability account with the loan balance. Go to Banking> Loan Manager>Set Up New Loan. Follow the directions, then click the Set up payment. QuickBooks will then enter the monthly payment automatically and keep track of the interest and principle. Do not just write a check or enter a bill for the month payment amount.