Common bookkeeping mistakes
In my many years of working with clients I have witnessed a variety of mistakes, many of which are common. Here are a few:
1.Booking payroll as the net value of the paychecks.
Your payroll expense is the GROSS payroll plus your company tax liability. Your employee's tax liabilities are a liability to you that is zeroed out upon payment to the IRS or other tax agency. Let us help you create a journal entry that will book this correctly!
2.Making a bill payment when you should have just written a check.
If you are "paying a bill" in Quickbooks then you need to have first entered the bill for payment. Often times a client is simply writing a check to pay a bill they have received but instead of entering a check, they enter a "bill payment". This results in your A/P balances being incorrect. We can help clean up old unapplied payments and show you how to book them correctly in the future.
3.Expensing annual premiums to one month.
If you are paying your liability insurance premium for a year at a time you can expense it evenly over 12 months instead of taking the hit all in one month. Let us show you how to set that up to automatically book each month.
4. Booking loan payments to only principle.
Most loan payments are combination of interest and principle. When you book the payment (or receive the detailed information) you need to split the payment between the asset account for the principle and the expense account for the interest. This way your balances should always be accurate.