Quickly entering transactions for cash basis reports in QuickBooks

I created a podcast today where I explained a method I developed for quickly entering transactions in QuickBooks. Listen here.

The method I explain in the podcast is a very efficient way to get a lot of transactions inputted quickly. I honestly believe it is faster than relying on downloads in many cases. It uses a single window, the General Journal, to enter every transaction for a statement for the month. I am not using multiple windows here; I use one window for all transactions for that month for one statement. This method is very appropriate in the following circumstances:

  • Cash basis reporting is used on an annual basis; the firm does not need or want accrual
  • Periodic inventory is used. This method will NOT work if perpetual inventory is used. Periodic means that the inventory must be physically counted at the end of the year, at a bare minimum. This counting will allow cost of goods sold to be calculated, which is the write-off taken for sold inventory.
  • I excluded payroll entries here since they require additional steps. However, in principle it is possible to enter payroll checks and payroll tax payments still using this method. I may write a blog in the future describing how to do this.
  • Important: the transactions have not been entered already using some other method. If they have, this method will double-count them on the books.
  • Works for both QuickBooks Online and QuickBooks Desktop.

First, I would request from the client all of the statements for the time period, such as checking, savings, and credit cards. I would print them because I like having the information in that format. Then I would open the General Journal. The date on the General Journal would be the ending date of the statement. I am very careful about the following:

  • The statement ending data is not is NOT the payment due date. I use the statement ending date.
  • The statement ending date might be in the middle of the month, or some date that is not the end of the month. This means that January and December statements will need to have two journal entries each (split as of 12/31) so that the transactions are posted in the correct year.

The tables below are set up to reflect the structure of the General Journal, except for the first column. See where it says Account, Debit, Credit, Memo, Name? That is the order in which those columns appear in the General Journal.

I enter all of the same Transaction Types one by one until all of that type has been entered, then I go to the next Type. I do not save the entry until all transactions have been entered. I use the Tab key to do most of the navigation in this window. It is a lot faster than using the mouse.

The first one is for a checking account statement. The second one is for a credit card statement. COA stands for Chart of Accounts.

Checking account statement

checking acct inputs

Credit card account statement

credit card account inputs

For somebody still learning debits and credits, this might seem confusing. Remember that the particular debit or credit on each line goes to the account selected on that line. It doesn’t go to the Checking account or the Credit card account. This process nets all of the transactions, and posts that net amount to the checking account or the credit card account (on the final line of the journal entry). The registers for those accounts won’t have each individual transaction in them. They will, however, have the net amount of those transactions, which has the same result on the account’s balance as if we had entered each individual transaction into the register. This bookkeeping process, when used correctly, makes the reconciliation process go very smoothly.

IMPORTANT: these are not complete instructions for doing all of the bookkeeping for the year. They do, however, cover quite a bit of ground for very small businesses that only need cash basis reports. Some examples of work that may still need to be done:

  • Using the cogs equation to calculate cost of goods sold
  • Entering payroll
  • Making sure vehicle and other loan payments are entered correctly
  • Reconciling all of the accounts in the COA
  • Making depreciation entries
  • Making other adjusting entries, as needed

 

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