Using QuickBooks - Tips to remember at year end
“CLOSE” YOUR YEAR END – With or without a password you can set your software to recognize that the current year end has changed. That way, QuickBooks will warn you if you make an entry that would affect the prior year. It’s often easy to post your transactions to the wrong period if this safety warning feature isn’t turned on.
DON'T VOID CHECKS in versions prior to 2006 without calling us for specific tips. QuickBooks has fixed how the software handles voided checks in the 2006 version (good news for all of us). But voiding checks in prior versions of the software can affect prior year totals in ways that we don’t want. Think carefully about the date of the check in question to see if it was deducted in a prior year before you hit the Void command.
We recommend that you UPDATE YOUR SOFTWARE ANNUALLY to stay current with improvements to QuickBooks and to qualify for technical support. The cost of the upgrade may seem steep, but in relation to your other business costs it’s minimal to keep the best performance for the important function of running your business!
CHANGE THE PAYROLL TAX TABLE RATES prior to the first payroll of the year. As you know the payroll tax percentages can vary from year to year. In order to calculate the proper withholding, you can download the current version of the tax table from QuickBooks using the Auto Update feature and be sure to manually update the SUI rate for 2006. We all know it’s a lot easier to do payroll right the first time rather than trying to fix it later in the quarter.
Especially at the beginning of the year, WATCH THE DATES you are inputting into the system to make sure you’re putting them in the proper year. Usually in January and February you may be making some entries that need to change the prior year, and others that you want to effect the current year. Just slow down a bit to make sure it’s going to the right period.
MAKE SURE ALL YOUR DEPOSITS ARE CODED TO THE RIGHT CATEGORY. For instance, if you have deposited personal funds in the business account, make sure you record that as a contribution or a loan to the business rather than business income. Otherwise you’ll be paying tax on more income than you should.
WHEN PERFORMING YOUR BANK RECONCILIATION, look to see if there are outstanding checks or deposits that have never cleared the bank. This would be a clue that entries made in deposits or checks might be incorrect and need to be adjusted.
If you’ve bought NEW EQUIPMENT OR OTHER ITEMS that should be capitalized, check to see that you’ve coded them to Fixed Assets rather than to expenses in the Profit and Loss statement. That way, we’ll make sure to get them recorded properly on your depreciation schedules as we do your tax return.