- October 23, 2024
- Posted by: TheQBC
- Category: QuickBooks Desktop
Bank account reconciliation is no fun, but it keeps your balances accurate. Here’s how QuickBooks can help you get ready.
If you had to make a list of your five least favorite financial chores, bank account reconciliation would undoubtedly be on it. No one likes reconciling. But what good does it do to have QuickBooks tell you your account balances if there’s a chance they’re not accurate?
QuickBooks’ ability to import your bank account transactions makes this process easier than the old checkbook register and calculator method. Because you can see transactions once your bank has cleared them, you can actually do some of your prep work on an almost daily basis, rather than having to do everything at the end of the month.
Why Reconcile?
We strongly advise you to use QuickBooks’ reconciliation tools, for a variety of reasons. Besides knowing that your QuickBooks balance is accurate, there are numerous other benefits. For example, you can:
- Monitor your accounts for unauthorized access,
- Ensure that your bill payments have cleared,
- Match invoices to payments, and,
- Find errors before they can cause significant problems.
But before you begin the actual reconciliation process in QuickBooks, there are steps you should take so your work session goes as smoothly as possible. Here are six tips.
Make sure you have QuickBooks accounts set up for all of your real-life bank accounts.
The Chart of Accounts can be intimidating, and we try not to send you there unless it’s absolutely necessary. If you’re at all nervous about modifying the backbone of your QuickBooks company file, we can walk you through this.
Open the Company menu and select Chart of Accounts. Click the down arrow next to Account in the lower left corner and select New to open a window that looks like this:
One of the ways you can take your company’s temperature is by making some comparisons to last year’s numbers.
A/R Aging Detail (Customers & Receivables)
This report tells you how much each customer owes and how much of the balance is overdue. It’s a report you should be running regularly, but certainly now when you can still do something about it before the end of the year.
Open Invoices (Customers & Receivables)
Which invoice charges haven’t been paid yet and when are they due? We’ve written columns before about what you can do when customers are chronically slow to pay. Some of the things we’ve suggested include:
- Making it easier to pay by accepting credit cards and bank payments,
- Assessing finance charges on late payments (QuickBooks can do this), and,
- Making sure invoices go out immediately after a sale and are designed to make the due dates and amount due very clear.
Unbilled Costs by Job (Jobs, Time & Mileage)
If you track Jobs in QuickBooks, you know you have to stay on top of them so you don’t miss billing customers for work. This report is one of the ways QuickBooks helps ensure that you’re getting paid for everything you spend and do for specific Jobs.
A/P Aging Detail (Vendors & Payables)
Just as you want to be sure your customers are paying you for products and services provided to them, you need to know that your own financial obligations to individuals and other businesses are being met. This report will tell you that.
Unpaid Bills Detail (Vendors & Payables)
How much money does your business owe each vendor, and are any payments overdue? Can you afford to pay early on some bills? Your vendor will be busy in December, too, and you can’t count on your payments necessarily being posted on time. Unless, of course, you’re paying electronically. We can tell you about QuickBooks’ online bill-paying tools.
Sales By Item Detail (Sales)
How well are individual items selling, broken down by transaction? This report should give you a good idea of which of your products are selling well and which aren’t. If some items just aren’t bringing in enough buyers, you might consider having an end-of-year sale and discounting them.
Inventory Stock Status by Item (Inventory)
An item record in QuickBooks showing a stock level
You can always access individual inventory item records to see how much is on hand. But this report gives you a sweeping but detailed look at the stock status of all of your products.
Missing Checks (Banking)
This would be a good time to track down forms and transactions that might be missing. Checks are a good example. This report lists all checks that have been written on a specific account, so you can look for missing or duplicate check numbers.
Budget vs. Actual (Budgets & Forecasts)
If you’ve created a budget for 2024 in QuickBooks, this is another report you should be consulting frequently. Are you going to make your budget numbers for this year? Can you take any action before the end of the year to try to meet the numbers?
Other Almost-Year-End Tasks
There are other things we suggest you try to get to this month, including:
- Catch up on your account reconciliation,
- Send statements (Customers | Create statements) to customers who are behind on payments, and,
- Look at your Undeposited Funds Account (Company | Chart of Accounts) to see if you need to make deposits.
You might also consider asking us to create and analyze your standard financial reports, like Trial Balance and General Ledger. You can run some of these from QuickBooks (Reports | Accountant & Taxes), but it may be difficult for you to understand them fully enough to know what they’re saying about your company’s financial state. Let us know if you want us to take them on, or if you have other issues with closing out 2024 in QuickBooks.