QuickBooks (Bookkeeping Tips) of Mistakes My Clients Have made
Not reconciling their bank statements – this error has left clients with overdrawn accounts because they thought they had more money in their bank account than they really did. At about $30 per bad check, this can add up quite quickly, not to mention you can mess up your credit rating. If all your checks and debit charges aren’t added to your bookkeeping system in a timely manner, you won’t know what your balance is. If you have duplicate deposits, your account balance will be overstated. By reconciling your bank statements every month, you will catch errors or omissions you have made. In a rare instance, you might catch errors the bank has made.
When using the bill payment feature of QuickBooks, make sure to pay the correct vendor. Double check who you are paying. By paying the wrong vendor, you will screw up you accounts payables balances and get in hot water with the vendor you didn’t pay.
If you use a bill payment feature, assuming your accounts payable balances are correct, don’t pay vendors with a regular check. If you do this as opposed to using a bill payment check, your payment won’t get applied to the vendor balance. This will result in the vendor payable balance being larger than it really is and you will eventually overpay the vendor in the future.
If your vendor accounts payable balance is different than they say it is, reconcile the account against the vendor’s invoices or latest statement. If your vendor accounts payable balance is larger than they say it is and you keep making bill payments, you will eventually overpay your vendor.
Undeposited Funds – If you invoice your customers/clients, you will have accounts receivables balances. As you process customer receipts, the money received will show up in an account called Undeposited Funds. When it’s time to process your deposits, make sure to check off which payments are to be applied in the Undeposited Funds account. This will keep your Undeposited Funds balance accurate.
- Debit charges – Although debit cards are used like credit cards, don’t set up debit charges as a separate credit card account. They are part of your checking account.
- Entering personal credit card accounts in QuickBooks – This shouldn’t be done especially if you have a corporation. You can’t co-mingle your funds. Furthermore, the credit card balance will show up on your balance sheet, which would effect your net equity.