This is part two of a five part series by Kevin J. Harris, the founder of QuickSolvers Inc, which provides accounting, consulting, and QuickBooks training to small businesses.
How do you keep your credit card transactions updated on your books? Do you manually enter in every single expense at the point of purchase? Or do you wait until the end of the month to enter in the items?
The average bookkeeper waits for that credit card statement to come in the mail, then either chooses to “Write Checks” or “Enter Bills”, and itemizes the entire statement within one single transaction. At the end of the day the accounting is not incorrect, as you have your credit to cash (write checks) or payables (enter bills) and your debit to the various expense accounts. But the accounting is only correct at the end of the month.
So what happens when you need to produce a balance sheet mid-month? Clearly, any credit card balances will be non-existent until that monthly statement hits your mailbox. And what about reports by vendor? You cannot specify a vendor on the split lines of a transaction in QuickBooks, therefore none of your credit card charges will have vendor names attached.
Waiting until the credit card statement arrives in your mailbox can cause serious short-term cash projections, amongst other problems, and leaves you to the risky practice of operating under a cash flow assumption.
One of the best ways to solve this problem is to use ProOnGo Expense’s American Express integration. Every transaction on the AmEx card will instantly be updated on the ProOnGo Expense mobile app, as well as ProOnGo’s Web Portal. As soon as the transaction is recorded into ProOnGo, the app updates your QuickBooks Online account with the transaction info, including the vendor.
To enter in QuickBooks Pro, use “Enter Credit Card Charges” and you can create individual line items for every credit card transaction. Then, at the end of the month, immediately “Reconcile” with your end of the month statement.
So now you’ll have your balance sheet up-to-date at every point in the month, leaving you with better visibility and clarity into your accounting.
***QuickTip to Save Time***
If you haven’t already, start making use of the Online Banking feature in QuickBooks… stay tuned for a future blog entry on how to set it up and use it efficiently