Is Your QuickBooks Full of “Suspense”?Posted on April 3, 2015 by
It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.
Q: From time to time I have an entry that I really don’t know how to enter properly. It may be a deposit or a check and I don’t know where to either show the income or the expense. Where can I put this until I can find out from my CPA how to handle it?
A: Create an account named ‘SUSPENSE” and make the type of account a “Bank”. It will live on the balance sheet and will immediately get the attention of your CPA. If you use only this account for these types of entries you can eliminate the Miscellaneous, Uncategorized and Ask my Accountant accounts. Too often these types of accounts get used and the information is scattered across them instead of being in one single account. I usually delete these accounts after I have moved all the transactions to their proper place and then only have Suspense to work with.
Q: It takes me all day to reconcile my bank account. I thought it was supposed to be easy in QuickBooks. Every rent check I receive shows up as a separate deposit in my check register, but when I go to the bank I deposit several checks at a time in one deposit. Why doesn’t it show up the same in my register as on my bank statement?
A: If you did not turn on the “Undeposited Funds” feature in preferences then QuickBooks will put each received payment directly to the bank. You want the “Undeposited Funds” feature on so you can “collect” the checks you received together as one deposit duplicating what you actually take to the bank.
Q: I just started to use QuickBooks and when I look at my chart of accounts I found an account called “Opening Balance Equity”. I did not create this account. How did it get there and what is it used for?
A: The account “Opening Balance Equity” is not a General Accounting Practice account; it is an account that is generated by QuickBooks specifically for setting up specific accounts that will have a beginning balance. For instance: bank accounts, credit card accounts, mortgages and several other types of accounts. QuickBooks “assumes” that the brand new user may not know where to put the off-setting entry when setting up a bank account or other type of account with an existing beginning balance. It allows the user to get their accounts set up and begin using QuickBooks. Later, your CPA will come along and re-class those amounts to their proper place in your books. This account should always have a zero balance. You should never post anything directly to this account unless directed by the CPA or if setting up an account that will have a beginning balance.
Q: How can I compare my business P&L and Balance Sheet of this year to last years’ P&L and Balance Sheet?
A: When you run your P&L for the period you want to look at you can go up to the tab on that screen that says Modify – go to bottom of screen and choose box that is Last Period Comparison and you can also choose % if you want then you will have a side by side report for the same period last year. You can do the same for the Balance Sheet. Do be aware of running the report in Cash or Accrual – depends on what you want to know or the purpose of the report as how you would run it.
If you have any questions on QuickBooks® 2015 or to help you decide if you need to upgrade, please feel free to call 770-356-1234 and ask for Karen.