Episode Transcript
[00:00:00] Hello, welcome to another episode of financial Snickens. I'm your host, Alisa McCabe. And today we're going to talk about cleaning up your QuickBooks file. Everybody needs to have a clean set of financials for all different sorts of reasons. Look, QuickBooks Online can be a lifesaver to small business owners, but only if it's in good shape.
A messy QuickBooks file can lead to all sorts of problems, such as incorrect financial reports, missed tax deductions, and pissing off your CPA when he goes to do your taxes. So, How do you know if your QuickBooks file is a mess and more importantly, what can you do to clean it up? So these are some tips that I'm going to tell you Because lately we have had and typically this is the time of year where you want to check your QuickBooks file to make sure it's Clean so you can have that important [00:01:00] conversation with your CPA and she can talk to you about Tax planning, because right now is the time when you can take advantage of different advice from your tax planner about what to do to reduce your tax burden.
So, check out your QuickBooks online file. So, one of the things you want to look at is do you have duplicate transactions? Go into your transaction file. There is a transaction report. See if you have duplicates. You can see that there might be. Three of the same charge on the same day. They may not be accurate.
Also look at your financial reports, run your profit and loss, run your profit and loss by month and look at each month and make sure it makes sense. Most business owners know what their reports should be saying and if it doesn't investigate it further. [00:02:00] Another indicator that there's something wrong with your file is that you're having trouble reconciling the credit card or bank accounts.
The beginning balance is off. Something is not right. There's missing transactions. Something that's wrong. Another big indicator is that there's negative numbers on accounts. Recently, we just had a client come to us with this exact issue. They couldn't understand why their credit card bill in QuickBooks was negative.
They'd been paying it every month. They didn't know what the problem was. We looked at it and realized what had happened was they were actually putting into QuickBooks every time they paid it, adding that to the register for the credit card account. And then when it came to the bank, they were actually adding that also.
So they were recording the payment twice. It came in, fixed it, and it's all set now, but it allowed her to have clean books and to have an important [00:03:00] conversation with her CPA about what she's going to do to reduce her tax burden and also help her to run her business better. So look, if you're seeing any of these issues.
Take action. Waiting until next year can leave you with less options for the current year and can also cause huge problems later. Okay, so how do you clean this up? These are some ways that you can take on. If you do your own QuickBooks, this is a good way to do. So fix duplicate transactions. Make adjustments, but do not delete these transactions.
And I'll tell you why. This is from past experience. This leads me to number two. Don't delete anything. If a transaction looks like it shouldn't be there, void it. There's an option on every single transaction to go down. I believe it's at the bottom and it says delete or void, void all the transactions because this is from [00:04:00] experience.
When I first started using QuickBooks online, I deleted things and I, it caused me so many problems. So I'm telling you, don't delete it, void it. Because sometimes when you go to reconcile that account, you actually realize. That you did need that transaction, and maybe it was in the wrong account, but you, but that transaction was actually needed, and you can put it into the right account or make the adjustments that you needed, and it can be retrieved if it's voided.
If it's deleted, it's gone forever. The next thing to do is to reconcile your bank and credit card accounts. Some Sometimes the easiest way to know that something is wrong is to, is to reconcile your account. And if it's, if there's a problem where there's a transaction that is in QuickBooks, but it's not on your bank statement or your credit card statement, you need to investigate it further.
Also, is your beginning [00:05:00] balance off when you go to reconcile? If it is. This happens. I actually in, in this show notes, I'm going to show you a link that is to, um, actually it's from Intuit and it's how to fix beginning balance issues in QuickBooks Online. The next thing you can do to fix your books, update your turn of accounts.
Go in, look through your chart of accounts, and see if there's any duplicates there. You can merge accounts. You can, um, fix up any balances that are there. There is a way to click into the register to look at this. And also make sure your chart of accounts supports your reporting needs. Do you need help with this?
Head over to our website, First Steps Financial. Put time in my calendar. We can talk more about cleaning up your books, making sure that they are ready for your financial needs, as well as your CPA's preparation for your [00:06:00] taxes. And it's an important thing to do now before the end of the year. Looking forward to talking to you more about having good, clean financials.
