Where is the Money?
Posted on May 2, 2014 byIt 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: I printed out my P&L from QuickBooks® and it shows that the bottom line Net Income is $30,000.00 but, my bank account does not have that much in it. Where is this money?
A: Every month you should be printing out the P&L (Income Statement) AND your Balance Sheet. Each of these reports is only one half the picture, you need both together to know and understand your finances. Look on the Balance Sheet in a couple of areas: The Equity section may show where you took money from the business and spent it on personal items; or, you may have mortgages/loans for properties that you are paying every month in the Liability section. Most likely this is where the money is that is not showing up in the bank.
Q: How can I see if my company is going up or down over the previous year?
A: You can run both the P&L (Income Statement) and the Balance Sheet with a previous year/period comparison. Set your report up for the current period you want to look at, then go to customize report tab at the top of the report and near the bottom of that window there is a box to click for previous period. It allows you to see last year, month or whatever period you want to compare.
Q: I need to segment my balance sheet AND income statement into three departments (classes). Which version of QuickBooks can provide me with this capability?
A: The lowest edition you can use to have classes on both the balance sheet and the income statement is the QuickBooks Premier.
Karen Bershad is The Small Business Advisor. Most small business owners have a challenge handling all the different areas of running a business. The accounting can be a challenge, particularly if the software seems overwhelming. The Small Business Advisor is what you may need to get you to the next level of your business. We work at your office or provide off site assistance in getting things under control by providing a wide variety of services that are specifically for the small business.
