QuickBooks Common Mistakes

#1
Using the Bill / Pay Bill functions unnecessarily.
Sometimes people think that because a feature exists they should use it. The bill feature of QuickBooks should only be used if you will actually use the Accounts Payable report because of the volume of bills or for cash flow management purposes. Many clients simply pay bills as they arrive or have a small stack of bills that they pay at various times, but don’t actually need the bill feature. You may also benefit from using this feature to manage cash flow.

#2
Setting the Statement Closing Date when Reconciling
This is not a crucial issue, but can be inconvenient when using a reconciliation report at tax time. The mistake is made after the reconciliation is completed. A small screen comes up which asks you to indicate what type of report you would like. At the bottom of that screen is where you are asked to enter the statement closing date. Unfortunately, it always defaults to today’s date, so people ignore it. What you end up with is a December reconciliation report that is actually reconciled to January 10th if today was January 10th.

#3
Credit Card Charges
A lot of business credit card users don’t like to enter each charge in QuickBooks. What they will do is simply create a check to pay the bill and enter all the expenses for one billing period on the check. This works except at year-end. If they use this method, expenses that were incurred in December will not hit the P&L until January of the next year, because that is when they are writing the check. For this reason it is beneficial to always use the credit card charge function, but at the very least to use it for December charges. (Assuming a calendar year end)

#4
Not Using the Special Liability payment function for certain checks
Checks to pay certain liabilities must be created using their own special function. They cannot be created like other, standard checks. These checks include: Payroll Liabilities, Sales Tax Liability and Accounts Payable.

#5
The errors occur when clients forget to use the special function, and create a regular check.
In the case of payroll and sales tax liabilities, QuickBooks has a warning that you should use the special screen, but many people ignore these warnings. The problem can be fixed by writing down the details of the check (number, date, amount) deleting the check, and then recreating it correctly. Watch out whenever you delete checks that if you get message saying, “Are you sure you want to delete this reconciled transaction?” you must indicate that the new check you create is reconciled. This is done by going in to the register and putting a check mark in the reconciled column.

#6
Affecting the prior years’ transactions
Often Clients will edit transactions from the prior year, after the tax return has been completed. The best way to avoid this is by having the client set the closing date. Sometimes, a check written in a prior year will need to be voided. The way to do this is by recording a deposit in the current year, using the same amount and account as the old check you are voiding. Then, the next time the client reconciles the account; they simply clear both offsetting transactions.

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