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whaywood1
September 5, 2024
Question

Balance sheet - best practices

  • September 5, 2024
  • 1 reply
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Hi all, I'm new to Quickbooks and enjoying the experience, but have a couple of more technical issues I'd like support with. Apologies if these are relatively simple, but I haven't been able to find these answers elsewhere, or with the intro video consultation. Any help is much appreciated! 1. What is the best practice to booking in liabilities than are not accounts payable (e.g. accruals). I have seen that posting "bills" only really works for accounts payable, so is there another way to post any other types of liabilities? Do all of these need to simply be posted as manual journals, with all adjustments then also subsequently posted with manual journals? 2. The same applies to booking inventory. Do inventory bookings need to be posted with manual journals, or is there a better approach? I am only using Quickbooks essentials for the moment. Thanks for any help!

    1 reply

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    RogelioL
    September 5, 2024

    I'm glad to hear that you're having a positive experience with QuickBooks, @whaywood1. Allow me to share what to do with your liabilities and inventory.

     

    Firstly, for Liabilities that are not Accounts Payable, such as Accruals, the best practice in QuickBooks Online (QBO) is indeed to use manual Journal Entries. We should also make any adjustments to these liabilities through manual journal entries.

     

    In terms of utilizing Journal Entries and making any adjustments, I recommend consulting with an accountant to ensure accuracy and proper tracking.

     

    Second, QuickBooks Online Plus and Advanced offer specific features for Inventory tracking that automate many processes, reducing the need for manual entries and minimizing errors.

     

    However, since you're using QuickBooks Online Essentials, we can only track the value of your Inventory Assets manually. For further information and detailed guidance, please refer to this article: Track inventory manually in QuickBooks Online.

     

    Additionally, you can check out this article to learn how to set up and add accounts to your Chart of Accounts: Add an account to your chart of accounts in QuickBooks Online.

     

    You can always post here in the Community if you have more concerns about utilizing journal entries to track liabilities and inventory. Keep safe.

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    whaywood1Author
    September 5, 2024

    Hi @RogelioL 

     
    Thanks so much! Really appreciate it. I have 1 more question which I'll ask on here please so as to not open a new thread. This one relates to bank reconciliation:
     
    We have a number of transactions (approx. €2.6k) which we've posted over the last 1.5 months, but on our personal bank accounts. We have just set up a company bank account, and injected €3k, booking Dr cash, Cr share capital.
     
    The company bank balance is currently still €3k, and the cash balance is €400 (€3k minus the €2.6k paid with other accounts).
     
    I accidentally "reconciled" the account yesterday, stating that €3k is the opening balance, and wanted to ask how to change this. The €2.6k are currently showing up as "rec" items, but they are not "incorrect" due to me putting in €3k as the starting balance. I have seen on other forums a "opening equity balance" should be available under "Memo" in the cash and cash equivalents history, but I don't have that for some reason.
     
    Can you please advise me on how to fix this? I'm happy to send over pictures if necessary. Thanks a lot!
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    Rea_M
    September 5, 2024

    Yes, sharing screenshots will provide us with great help in resolving this reconciliation issue, whaywood1. I'm here to guide you through the process of updating your opening balance to ensure the accuracy of your financial data.

     

    When you reconcile, you can only state or indicate your account's ending balance. The absence of the Opening balance equity entry means that you're unable to input an Opening balance while setting up the account. With this, you'll have to create a journal entry to add an opening balance. Here's how:

     

    1. Go to the + New button.
    2. Select Journal entry.
    3. Enter a date that comes before the oldest transaction in the account. This will be the opening balance date.
    4. On the first row of the Account column, select the dropdown menu to choose the account you want to enter the opening balance.
    5. Add a note in the Description field so you know what the journal entry is for.
    6. On the second row of the Account column, click the drop-down and choose Opening Balance Equity.
    7. Use your bank statements to enter the balance of your real-life account on the date you picked as the opening balance. You'll need to enter both a debit and a credit to keep things accurate. Enter the debits and credits based on the type of account you entered on the first row.
    8. Click Save and close.

     

    After that, mark the journal entry as reconciled. For the step-by-step guide, refer to Step 3 in this article: What to do if you didn't enter an opening balance in QuickBooks Online.

     

    Moreover, QuickBooks automatically generates a report whenever you complete a reconciliation. If you wish to view, print, or export it, check out this article for the complete guide: Reconciliation report in QuickBooks Online.

     

    If you have other reconciliation concerns or need assistance with anything else in QuickBooks, please update me by clicking the Reply button below. I'll be more than happy to help.

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