Preparing for Year End in QuickBooks
QuickBooks company file for problems and making
corrections will help you avoid problems in the future
plus reduce the time required to prepare business tax
returns at year end.
- Run an
updated general ledger report and display on screen so
it can be checked for errors. Start your review on the last page and
work your way to page one. Reviewing income and
expense accounts is easier to understand than
reviewing balance sheet accounts so begin at the end
of the report.
You will find most mistakes occurring in the
income and expense
section. Specifically, look for transactions that are
coded to wrong accounts and make corrections. Look for
consistency in the way you code transactions. For
example, if you are paying a monthly loan, determine
that all 12 payments show up in the same account.
- Run the
accounts receivable aging summary report. Using a
12/31 date, write off
transactions that have been paid but still show up as
unpaid, remove credit
amounts that are erroneous, write off
transactions that are bad debts. To
see the details of all customer balances,
double click on the grand total amount (bottom right
total of report). You can read more about what causes errors on
this report and how to correct them in the next
- Run the
accounts payable aging summary report. If this report
shows vendor bills that have already been paid, or
will not be paid determine why they still appear on
the report and enter appropriate adjusting
transactions as of 12/31. If you see negative amounts on
this report that are not valid vendor credits,
determine why they exist and enter appropriate
- From your
bank reconciliation window. See what old
transactions have not yet cleared the bank.
Determine why they have not cleared. You can void
transactions that you know will never clear only if they
are not in a closed period. The period is closed
when your accountant has already reviewed the
financial activity or you have prepared financial
reports for banks and board members for that time
transactions in closed periods that still appear uncleared by the bank
use the following procedures to adjust your books:
- Check that has
still not cleared the bank - use the
'make deposit' activity window to reverse this amount off your
books. Enter today's date, use the same account that was used
on the original check/bill, and enter the amount
of the check, . In the memo field put
the check number and payee and any other information
you may have.
- Deposit that has
still not cleared, do the
research to discover why this is the case, and use the
'write check' activity window to reverse this amount off your
books. Enter today's date, the amount of the
deposit, enter an income account, and in the
memo field describe the deposit and enter any
- On your next bank reconciliation, clear both the
original transactions and the reversing transactions created.
making these corrections will help you avoid errors in
the future. We can help you with this task, provide
you with the supervision and training needed to locate
and make corrections. We come on-site or work
through remote access to demonstrate corrections, guide
you step by step in the review of your file, and
provide explanations along the way. One step
at a time, at a pace that is matched to your level
of experience, we help you understand your books. Call and ask for Linda Saltz,
Certified QuickBooks Pro Advisor, for more information.
Year end topics and facts for the small business
limits, Mileage Rates, Pension limits
How to print W-2's in QuickBooks
How to print 1099's in QuickBooks
Checklists for in-house payrolls at yearend
(W-2, 940, NJ927, and more)
How long to keep business records
S Corp owners -
Reasonable wages and distributions Read More
Wonder why negative amounts show up on the accounts receivable
aging report ?
are a few causes of negative numbers:
- Customer overpaid.
- The payment from the customer
was entered into QuickBooks before the invoice or
- A credit memo was issued to the
customer, but the customer never took advantage of the
- An invoice transaction was never
created in QuickBooks.
- A sales receipt transaction was
created for the sale, and a receive payment
transaction was entered to show the payment.
- Payment was applied on account
to the wrong customer account.
- A receive payment transaction
was entered two times on the customer account.
- To link the
customer payment to the invoice, you correctly used a receive payment transaction.
In the next activity window, 'make deposits', the
account should read 'undeposited funds'. If it
was changed to accounts receivable, this error would
show up as a negative amount on your open invoice
Each of these problems require
several steps to make corrections. Over the next few
newsletters we will address how to make
corrections. Before you can make corrections, you
need to identify the source of the problem.
If you find this page helpful:
please click on the plus one button in the top right
corner of this page
Facebook users -
tell your friends
Bloggers - link back!
Call us when you are ready to buy QuickBooks Enterprise
and other software, QuickBooks Support, QuickBooks
Checks & Forms.