Wow, sorry that I have been so neglectful in my blogging lately.  You see, I have been busy helping a number of people with emergency checkbook reconciliations.  Funny how more than one person has had the need for my talents in this area lately but they hit a point where they couldn’t understand why their checkbook was overdrawn.

From these disasters, each one of my clients has learned a valuable lesson – always balance your checkbook each month or it will sneak up and bite you in the butt.  You see, the cause of the overdrafts was rooted way back in time – we’re talking years.  But, if you know you have thousands of dollars in the bank and aren’t alerted by the dreaded overdraft; you would never know you had a problem unless you reconcile each month.

Quickbooks Tool #1

Using Quickbooks to keep track of everything and make sure both your transactions and the banks transactions are correct is so easy – especially if you use their online bill paying feature.  With the online bill paying feature, you never forget to enter transactions into your checkbook register because they automatically get recorded when you pay the bills.  Deposits, on the other hand are another animal.

Always be sure that when you record a payment in Quickbooks that it is held in the “Undeposited Funds” account.  This is a preference that can be set through the Edit menu by selecting Preferences.  (See left)

With this preference set correctly, all payments or sales receipts recorded will sit in the Undeposited Funds account, just like the checks sit in your desk drawer until you go to the bank.  Now, when you are ready to pull out those checks and take them to the bank, click on the Make Deposits button in Quickbooks and the Undeposited Funds window opens.  Just select the checks you are depositing, hit ok and the deposit slip that appears on the screen should be identical to the handwritten one you just filled out.  Now, when your bank statement arrives, your deposit amount will be the same in your checkbook register!  Easy reconciliation – less than 5 minutes if you are diligent about entering the transactions in the first place.

Quickbooks Tool #2

Another way that I like to use Quickbooks is to track my and my client’s credit card accounts.    This account will be even easier to keep up to date than the checkbook account because every credit card company offers access to your account via the Internet.  Go ahead, get your latest statement, and I’ll walk you through setting this up.

Navigate to the credit cards website and create yourself an online account in order to access your transactions.  (Remember to record your login information.) Now, go Quickbooks:

• Set up a new general ledger account and choose Credit Card for the type
• Enter the closing date of the credit card statement you have in your hand
• Enter the ending balance from the statement
• Click OK

Now, open the register up for the account you just created and click the “Download Card Charges” button at the top: 

The first time you do this, you will need to choose your Credit Card company from the drop-down menu.  Quickbooks will ask you also for your pin number – this is the password only that you used to sign into your credit card website.

Quickbooks will connect to the credit card site and download all the transaction that are available.  You are able to indicate which date forward you want to download.  Use the day after the closing date of the credit card statement.  This way, you only get new, recent transactions.

Now, next time your credit card bill comes; go online, download the transactions and then click on Banking, Reconcile Credit Card.  Reconcile this account just like you would your checkbook.  When you are finished, Quickbooks will ask if you want to pay the balance in full or create a bill in accounts payable to be paid at a later date.

Without the ease of use of these two tools, accounting using Quickbooks would not be very easy.  Happy reconciling!