(2024) Billable Expenses: A Guide from Your QuickBooks Trainer
(Updated 2024) A lot of service professionals spend a lot of time and energy passing on expenses to their customers. Maybe you’re an interior designer and you buy furniture for your clients, then pass on a marked-up cost. Maybe you’re a painter and you buy the paint for your client. Maybe you’re an IT professional and you pay for various subscriptions for your clients. Whatever your job, it is common practice to purchase things on behalf of others and then pass those costs on later in an invoice, with or without markup. QuickBooks has a well-integrated method for making this process take no time at all and for ensuring that you don’t forget to invoice your clients for anything they should be paying for.
You can watch our YouTube video on this process here .
Billable Expenses: About
Whether you enter your expense into QuickBooks as a bill, check, or expense, you can mark it as billable. This means you will both enter the name of the customer that the expense will be paid for by, as well as check off the billable box. If you want to markup the cost you can enter the applicable percentage. When you save your transaction the expense gets recorded as usual, and a non-posting transaction is also recorded called a billable expense.
Create Billable Expenses
Above is a sample expense screen for some lights purchased from Dan’s Lighting that was for a project related to customer Diego Rodriquez. If you don’t see the billable, customer, and markup fields on your screen you may have to activate them first or upgrade to a higher level of QuickBooks Online.
Step 1 – Set Up
Make sure you are using QBO Plus or a higher version. To activate these options click the Gear icon in the upper right of QBO, then Account and Settings. Under the Expenses tab make sure the following two features are turned on: “track expenses and items by customer” and “make expenses and items billable.” Also, tick the box for “markup with a default rate of X%.” You can leave the default percent as 0.
Step 2 – Categorize the Expense
Then within the expense or bill screen, tick the box for billable and enter the customer name that pertains to the charge. You can also indicate a percent mark up if applicable. The description entered on the expense will flow through to the invoice, but can be edited later.
Step 3 – Send the Invoice
Next, within the invoicing module of QuickBooks as you go to create an invoice for Diego Rodriguez you will be reminded about your unbilled, billable expenses. Depending on the version of QuickBooks that you are using the reminder might be in the form of a pop-up or the expenses might just show off to the right side in a “drawer,” but either way QuickBooks is keeping track of the expenses you marked billable, but have yet to bill out to clients.
All you have to do is add the billable expense to your invoice. Whatever description you wrote on the expense will show on the invoice. If you have a markup, that will show as a separate line item, but not when sent to the customer or printed.
The other nice feature of billable expenses is that these items can post to a different income account called Billable Expense Income on the P&L which makes your reporting more informative.
Create Reoccurring Expenses
In the case of the IT Professional or anyone who sells the same thing at the same price to their client, there is even a faster way to do this.
Set up an item or product/service for the expense. Then every time you purchase the same item you can just type the name of the item and all associated information will pre-populate. If the purchase reoccurs on the same day each month you can even save it as a reoccurring or memorized transaction so it automatically posts. The memorized transaction will hold all the necessary information including expense account, amount, description, mark-up percentage, transaction amount, and the client responsible for the charge.
Part II: Going In-Depth
If you want to explore more in-depth how billable bills and expenses show on the Profit and Loss Statement of your financial reports, please continue on:
Reporting Billable Expense
The option underneath the red box in the above screenshot says “Track billable expense and items as income.” If this box is not ticked, creating a billable expense will create a positive entry to the selected expense account as well as a corresponding negative expense in the same account, in essence wiping the expense from your books. Your P&L Detail report would look like this. If this was the only transaction on your P&L your net income would be $0.
As you can see this places an invoice/income transaction type into an expense account. We feel this method portrays inaccurate financial statements. To fix this problem, we recommend you tick the box in Account and Settings > Expenses to tell QuickBooks to “track the expenses and items as income” instead.
Track Billable Bills and Expenses As Income
Once this box is ticked your Income Statement will show both an income amount and an expense amount. This also works if using a Cost of Goods Sold type account. With this additional setting enabled your P&L will now look like this.
Multiple Income Accounts
When turning on the feature to “track billable expense and items as income” there is one additional option for even more detailed reporting.
This is to track expenses in more than one account. As seen on the above Income Statement sample the income account holding the billable expense is called Billable Expense Income. While our example only contains one expense, if there were more, regardless of what type of expense they were, they would all post to that same account: Billable Expense Income.
If you want a bit more detail in your reporting ticking the box “in multiple accounts” will give you that option. Let’s say you want to have billable expense income for office supplies in the account called Billable Expense Income, but want to have billable expense income for repairs and maintenance in an account called Repairs Reimbursement.
To do this, go to your Chart of Accounts and find the repairs and maintenance account. Click the black arrow at the right of the row and select Edit. The account creation box appears, now with an additional option.
For our example you can see we selected the income account where we want such expenses to post when marked billable. In the new P&L screenshot below you can see the new repair expense is in a separate income account from the billable expense income related to office supplies.
If you need help customizing billable expenses to work for your business please reach out to our Cleveland-based accounting and bookkeeping team . We have experience customizing this and other QuickBooks features to many different industries. .
Cleveland’s Best QuickBooks ProAdvisor
The team at Szweda Consulting provides a wide variety of services from Quickbooks Training , system design, payroll , and more. If you are looking for a bookkeeper to help you have more time to spend on your business, give our team a call at (216) 509-1561 .
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Accounting | How To
How To Make a Journal Entry in QuickBooks Online
Published February 14, 2024
Published Feb 14, 2024
REVIEWED BY: Tim Yoder, Ph.D., CPA
WRITTEN BY: Mark Calatrava
This article is part of a larger series on Accounting Software .
- 1 How to Set Up QuickBooks Online
- How to Set Up Company Information
- How to Customize Invoices, Sales Receipts & Estimates
- How to Set Up Invoices, Sales Receipts & Estimates
- How to Set Up Products and Services
- How to Set Up Messages
- How to Set Up Statements
- How to Set Up Expenses
- How to Set Up Advanced Settings
- How to Import Bank Transactions
- How to Import Credit Card Transactions
- How to Set Up Multiple Users
- How to Set Up the Chart of Accounts
- How to Set Up the Products and Services List
- How to Set Up Customers
- How to Set Up Vendors
- How to Create Estimates (Quotes or Bids)
- How to Create and Send Invoices
- How to Receive Payments
- How to Create & Send Sales Receipts
- How to Write & Print Checks
- How to Enter Bills
- How to Pay Bills
- How to Enter Banking Transactions Manually
- How to Manage Downloaded Banking Transactions
- How to Record Bank Deposits
- How to Transfer Funds Between Bank Accounts
- How to Handle Bounced Checks From Customers
- How to Process Bank Reconciliation
- How to Enter Business Credit Card Transactions Manually
- How to Manage Downloaded Business Credit Card Transactions
- How to Enter a Credit Card Refund
- How to Reconcile Business Credit Card Accounts
- How to Manage Credit Card Sales With QuickBooks Payments
- How to Manage Credit Card Sales With a Third-party Credit Card Processor
- How Set Up and Run Payroll
- How to Manage Payroll Tax
- How to Add Historical Payroll Data
- How to Set Up Automatic Deposits
- How to Print Payroll Checks
- How to Run Payroll Reports
- How to Reconcile Payroll Liabilities
- How to Run a Profit and Loss Statement
- How to Run a Balance Sheet Report
- How to Run a Statement of Cash Flows
- How to Run an A/R Aging Report
- How to Run an A/P Aging Report
To create a journal entry in QuickBooks Online, you must complete the journal entry form. This involves selecting the date of the transaction or adjustment, selecting the accounts that are impacted, inputting debit and credit amounts, and including additional information, like description, class, and location if needed.
Journal entries should be very rare and must only be used for specific circumstances, such as adjusting entries at the end of the fiscal year and reporting depreciation expenses. You should use QuickBooks Online’s input screens to record most transactions, such as bills, expenses, and deposits.
This guide walks you through how to make a journal entry in QuickBooks Online. We’ll also cover how to edit, reverse, and delete a journal entry and make it recurring.
Step 1: Navigate to ‘Journal Entry’
Click on the +New button in the upper left corner of your QuickBooks Online dashboard, and then select Journal entry under the Other category.
Navigate to Journal entry in QuickBooks
Journal entries affect at least two accounts, with the total debits matching the total credits. If you want to learn more about journal entries, check out our guide to journal entries in accounting .
Step 2: Select the Date & Double Check the Journal Number
Select the date of the transaction or adjustment in the Journal date field at the top of the journal entry form. As for the journal no., QuickBooks Online will generate a number automatically, but it’s best to double-check to avoid duplicate numbers.
Entering the transaction date and double checking journal no. in QuickBooks
Step 3: Enter Debits and Credits
In the first entry line, select the appropriate account you need to debit (we selected “depreciation expense”). By debiting that account, we are recording a portion of the asset’s cost that has been depreciated during the year. Next, specify the amount in the Debits field and leave the Credits field blank. For instance, let’s assume our depreciation expense is $5,000.
Entering debits in the journal entry form in QuickBooks
In the next line, select the respective account that you want to credit (we selected “accumulated depreciation”). Leave the Debits field blank and enter the same amount you debited in the first line, which is $5,000 in our example.
Entering credits in the journal entry form in QuickBooks
Step 4: Provide Additional Information
You may include additional information in the Description field. You can also add classes and locations if you’re using these elements to track and categorize your transactions in QuickBooks Online.
Adding additional information to a journal entry in QuickBooks
Although very rare, if you’re making a journal entry to Accounts Payable or Accounts Receivable, you must select the customer or vendor name in the Name field.
Once done, click Save or Save and new at the bottom of the journal entry form. If you wish to stay in the journal entry form, choose Save.
Step 5: View the Transaction Journal
While you’re at the journal entry form, you can view the transaction journal by clicking on More at the bottom of the screen and then selecting Transaction journal . The bottom of the screen also includes buttons for deleting, reversing, and making a journal entry recurring, which will be discussed in the following sections.
Running a transaction journal in QuickBooks
QuickBooks will then generate a transaction journal showing details of the journal entry, including the account name, debit, and credit. You can also customize the columns so that the report shows only the information you want to see.
Sample transaction journal in QuickBooks
Opening an Existing Journal Entry
If you wish to view the journal entry later, you can do it either by running a Journal report or using the register.
Running a Journal Report
Click on Reports in the left-side menu, type “Journal” in the search bar, and then click on it. QuickBooks will generate a Journal report, showing a list of your transactions and the debits and credits associated with each entry. Transactions entered through the journal entry form have “Journal Entry” mentioned under the Type column.
Sample journal report in QuickBooks
Locate the journal entry and click on the Journal entry line under the Transaction type column to open the transaction.
Viewing a previous journal entry from the Journal report in QuickBooks
Using the Register
To view a previous journal entry from the register, click on Transactions in the left-side menu and then select Chart of accounts. Locate the account, such as accumulated depreciation, and scroll through the list of transactions to locate the journal entry. Click anywhere on the entry line and then tap the Edit button to open the journal entry.
In the screenshot below, we see the journal entry we just created. You’ll notice that it’s marked ‘Split’ under the Account column, and that’s because it involves two accounts.
Locating a journal entry from the Transactions list in QuickBooks
Editing a Journal Entry
If you need to make changes to an entry, simply open the journal entry form and make the necessary changes. Once done, click the Save or Save and new button.
Deleting a Journal Entry
If you made a journal entry by mistake, then you can permanently delete it by clicking More at the bottom of the form and selecting Delete .
Editing or deleting a journal entry from a prior period can change your prior-period income and create problems when it comes time to prepare your current period financial statements and tax return. Generally, it’s better to reverse a prior period journal entry than to delete it; you should only delete it if the amount is material enough for you to restate your financial statements and amend your tax return. Talk to your CPA/auditor or tax preparer before doing this.
Reversing a Journal Entry
If you made an error in the original entry, such as a misallocation of debits and credits, you can reverse the journal entry. To do this, you can either click on the report line in the journal report or click the Edit button in the Register. This will open up the original journal entry, and from here, click on Reverse at the bottom of the journal entry. Once done, click Save or Save and new .
Reversing the journal entry simply reverses the debits and credits, and it doesn’t delete your original entry. QuickBooks will create a new entry to reflect the changes, and the entry will have slightly different information.
For instance, the original journal entry number is retained but you’ll see an added “R,” meaning it’s reconciled. The date will also adjust to the first day of the month following the original entry date. The rest of the information, including the accounts, amounts, and description, will remain.
Making a Journal Entry Recurring
You can make a journal entry recurring if needed. Let’s say you have a fixed asset with a predictable depreciation pattern, such as the service van in our example with a fixed useful life. We can create recurring entries to automate the recording of depreciation.
To make a journal entry recurring, simply click on the Make recurring button at the bottom, set up schedules and intervals, and then save the template.
When To Make a Journal Entry in QuickBooks Online
While most transactions should be entered using QuickBooks Online’s input screens, there are a few reasons why you might need to create a journal entry:
- Entering the disposal of a fixed
- Adjusting for depreciation of fixed assets
- Entering journal entries provided to you by your certified public accountant (CPA) or tax professional
- Recording new loans or notes payable
- Recording new owner contributions to equity
Frequently Asked Questions (FAQs)
What is a journal entry in quickbooks online.
A journal entry in QuickBooks is a manual method of recording financial transactions that involves debiting and crediting the appropriate accounts to adjust account balances, record depreciation, or make corrections.
How can I create a journal entry in QuickBooks Online?
Open the new journal entry form by clicking on + New in your dashboard and selecting Journal entry under the Other column. Next, complete the journal entry form by providing the necessary details, like the impacted accounts, credit and debit amounts, and descriptions. Once done, click Save or Save and new .
Can I edit or delete a journal entry in QuickBooks Online?
Yes, you can. You can also reverse a journal entry or make it recurring if needed.
Should I use journal entries for everyday transactions?
No, we recommend using standard forms, such as invoices, bills, and checks, for most transactions.
You’ve just learned how to make journal entries in QuickBooks Online. However, note that it should be very rare and you should always use the standard forms when recording routine transactions, like bills, invoices, and deposits.
If you’re new to QuickBooks Online, check out our other free QuickBooks Online tutorials .
About the Author
Find Mark On LinkedIn
Mark Calatrava is an accounting expert for Fit Small Business. He has covered more than 50 accounting software for small businesses and niche industries and has developed an in-depth knowledge of the important features of accounting software, including how the importance of these features vary by business. As a QuickBooks ProAdvisor, Mark has extensive knowledge of QuickBooks products, allowing him to create valuable content that educates businesses on maximizing the benefits of the software.
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How to Record Journal Entries in QuickBooks
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Accounting transactions can get entered incorrectly into an accounting system, or perhaps a transaction should have been split into two different general ledger accounts, for example.
Either way, when this happens you have to make changes to your original transaction after it's been recorded, and you can do this easily in QuickBooks accounting software by making a journal entry.
You can make journal entries in QuickBooks to adjust or correct transactions and post entries that cannot be performed in other ways, such as adjustments to profit or loss.
The journal entry process is fairly straightforward, but you can only make a journal entry for one customer or vendor at a time. If you want to correct multiple customer or vendor balances this way, you'll have to post separate entries.
What Is a Journal Entry?
A general journal entry is an accounting transaction that is entered, or posted, directly to the general ledger . A company's general ledger acts as its main group of accounts used to record balance sheet and income statement transactions.
For example, you may have entered the monthly $100 utility bill into your company's insurance expense account by accident. You can post an adjusting journal entry to reduce, or credit the insurance expense account by $100 and increase, or debit the utility expense account by $100 to correct your mistake. All your accounts would then be in proper order, and you wouldn't have to change the amount owed by your vendor because that portion of the transaction was recorded properly.
Journal Entries for Year-End Activities
Your certified public accountant or bookkeeper might want to make journal entries to complete year-end activities, such as posting tax adjustments to your books, recording depreciation expense or reclassifying revenues and expenses. Your accounting professional can provide you with specific information if you want to post the journal entries yourself at year's end, along with explanations for why the entries were necessary for your particular situation.
How to Make General Journal Entries in QuickBooks
You can make general journal entries in QuickBooks by following these step-by-step instructions:
- Go to Company > Make General Journal Entries from the menu at the top of the screen.
- Change the Date field, if necessary, in the Make General Journal Entries window. QuickBooks will default to the current date so if you want to post an entry for a previous month or year, be sure to change it so that your entry gets recorded in the proper financial time period.
- Enter a number for your journal entry in the Entry No. field. QuickBooks will automatically number subsequent journal entries sequentially.
- Enter the general ledger account number In the Account column. You can also select the first account from a drop-down menu in the Account column.
- Enter the debit or credit amount for the account you've selected into the Debit or Credit columns. The debits and credits must be equal to make the entry balanced and allow QuickBooks to post the entry.
- Enter a descriptive memo in the Memo Column. It will be displayed on reports that include this journal entry. This step is optional, but it's recommended so that you'll remember later why the entry was made.
- Repeat Steps 4 through 6 until the entries completely offset each other and the transaction reaches a zero balance. Your total in the Debit column should equal the total in the Credit column, and the journal entry will then be properly balanced.
- Click Save & Close to save the journal entry and close the window, or click Save & New to save the journal entry and open a new window.
You can make most general journal entries in QuickBooks using these steps, but if you want to make journal entries that affect a particular customer’s account receivable or a vendor’s accounts payable, you'll have to put the customer or vendor on the first line of the entry.
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QuickBooks Journal Entry: Overview, FAQs, and How-To Guide
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In construction, efficient financial management is pivotal to the success of your business. The QuickBooks journal entry tool can help – it lets you precisely move money between accounts and ensure that your books are perfectly balanced.
But why are journal entries in QuickBooks important?
Journal entries allow you to manually record debits and credits. Sometimes, your business must manually shift money between income and expense accounts or move funds from asset, liability, or equity accounts to income or expense accounts. Journal entries enable you to make these transfers with precision.
You can gain greater control over your financial data when you correctly understand how to use journal entries.
While QuickBooks Online simplifies many aspects of financial management, its streamlining and automation can’t substitute for understanding accounting fundamentals.
Journal entries require a solid grasp of accounting principles, debits, credits, and the intricacies of financial transactions.
In this blog post, you’ll learn:
- The basics and importance of journal entries in QuickBooks.
- A step-by-step guide on creating a journal entry in QuickBooks.
- Common mistakes to avoid.
- Best best practices for creating journal entries.
Let’s dive in.
Understanding Journal Entries in QuickBooks
Journal entries, as the name suggests, are recorded entries in a business’ journal or ledger. They’re financial transactions expressed in the form of debits and credits.
These entries document the movement of money and assets within a company’s financial structure, creating a comprehensive record of every financial event.
The Purpose of Journal Entries
The purpose of journal entries is to maintain accurate and organized financial records. This accuracy serves several critical functions.
Recording Financial Transactions
Journal entries are the medium through which all financial transactions are captured. Each event finds its place in the journal, whether it’s a purchase, sale, expense, or revenue.
Journal entries help categorize transactions into their respective accounts. This categorization is essential for creating financial statements, preparing tax returns, and assessing the business’s financial health.
Journal entries ensure that the accounting equation ( Assets = Liabilities + Equity ) remains balanced. Every debit entry must have an equal and opposite credit entry. This fundamental principle of double-entry accounting safeguards against errors and fraud.
Providing a Clear Audit Trail
Journal entries create a clear and chronological audit trail. This trail helps track the money flow and facilitates compliance with regulatory requirements.
The Role of Journal Entries in Accounting and Financial Management
Journal entries are the lifeblood of accounting and financial management. They play several pivotal roles in these domains.
Accurate Financial Reporting
Journal entries are the foundation upon which financial statements are built. They provide the raw data for generating income statements, balance sheets, and cash flow statements.
Financial data from journal entries empower decision-makers with insights into the organization’s financial health. They help make informed choices regarding investments, expenses, and strategies for growth.
Journal entries are critical to an organization’s internal control system. By requiring systematic documentation and verification of every transaction, they reduce the risk of financial mismanagement and fraud.
Auditing and Compliance
Regarding audits, journal entries serve as the primary source of evidence. They demonstrate that financial records have been maintained accurately and in compliance with applicable regulations.
Uses of Journal Entries in QuickBooks
Now that we’ve established the broader role of journal entries, let’s dive into their specific applications within QuickBooks.
Construction Cost Tracking
For construction business owners, journal entries are your trusty tool for tracking project costs. Every material purchase, subcontractor payment, or equipment expense can be recorded through journal entries. This level of detail ensures that you’re not just building structures but also building accurate financial records.
Managing payroll is complex, but QuickBooks makes it more manageable. Journal entries are pivotal in recording employee salaries, taxes, and deductions. With QuickBooks, you can automate much of this process, saving you time and reducing the risk of errors.
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Reconciliation with bank statements.
Reconciling your QuickBooks records with your bank statements is essential for catching discrepancies and ensuring your financial records match reality. Journal entries help you do this by clearly recording all financial transactions.
Generating Financial Reports
Need to whip up a profit and loss statement or a balance sheet? Journal entries are the raw materials that financial reports are built upon. They allow QuickBooks to crunch the numbers and present you with comprehensive reports that reflect your business’s financial status.
Step-by-Step Guide to Creating a Journal Entry in QuickBooks
In this section, we’ll take you through a step-by-step guide to creating a journal entry in QuickBooks.
Step 1: Access the Journal Entry
- Select + New.
- From the dropdown menu, choose Journal Entry.
Step 2: Select Accounts and Enter Amounts
On the first line, you’ll see the Account field. Select the appropriate account from the dropdown menu. This selection depends on whether you need to debit or credit the account.
If you selected a debit or credit for the first account, enter the corresponding amount in the correct column (Debit or Credit). QuickBooks will automatically balance the journal entry.
Move to the next line, where you’ll select the other account involved in the transaction. Again, enter the amount in the opposite column to maintain the balance.
Step 3: Verify Balance
It’s crucial to check the amounts. You should have the same amount in the Credit column on one line and the Debit column on the other. This ensures that the journal entry is balanced.
Step 4: Add Memo Information
In the Memo section, briefly describe why you are making this journal entry. This memo will help you and others understand the purpose of the entry when reviewing your records in the future.
Step 5: Save and Complete
Once you’ve reviewed and verified all the details, you have two options:
- Save and new: This option allows you to save the current journal entry and immediately start a new one. It’s useful when you have multiple entries to make.
- Save and close: Select this option when you've completed the journal entry and want to return to your main QuickBooks screen.
Tips for Accurate Journal Entries
- Maintain a clear system for documenting your journal entries. Consistency is key to easily tracking your financial transactions.
- Periodically review your journal entries to catch any errors or discrepancies. Timely corrections prevent financial inaccuracies from snowballing.
- Use the memo section to provide context for each journal entry. This helps with transparency and auditing.
- If you're unsure about a journal entry, don't hesitate to seek advice from an accountant or financial professional. It's better to get it right from the start.
Common Mistakes to Avoid
Even the most experienced QuickBooks users can make mistakes when creating journal entries. So, in this section, we’ll shine a light on the most common slip-ups and provide you with the tools to avoid them.
Overview of Typical Errors When Creating Journal Entries
Mistake 1: mixing up debits and credits.
One of the most fundamental errors is confusing debits and credits. Remember, every transaction has both a debit and a credit side. Mixing them up can lead to a financial maze that’s tough to untangle.
Mistake 2: Using Incorrect Dates
Accuracy in recording dates is paramount. Using the wrong date can throw off your financial records and cause headaches when you’re trying to reconcile accounts.
Mistake 3: Omitting Descriptions
Leaving out descriptions in your journal entries might save you a few seconds, but it can cost you dearly in the long run. Descriptions provide crucial context for transactions and make it easier for anyone reviewing your entries to understand them.
Mistake 4: Not Reconciling Regularly
Failure to reconcile your QuickBooks records with your bank statements can lead to discrepancies and confusion.
Mistake 5: Neglecting to Classify Transactions Properly
QuickBooks allows you to classify transactions by type or category. Neglecting to do this can make it harder to generate meaningful reports and gain insights into your business’s financial health.
How to Avoid or Correct These Mistakes
Now that you know these common pitfalls, let’s explore how to avoid them or correct them if they’ve already snuck into your records.
Training and Education
Invest time in learning the ins and outs of QuickBooks. QuickBooks offers a treasure trove of resources, from tutorials to webinars. Knowledge is your best defense against mistakes.
Before you save that journal entry, take a moment to double-check all the details. Ensure that debits and credits match, dates are accurate, descriptions are included, and classifications are right on the money.
Set Reminders for Reconciliation
Don’t let reconciliation slip through the cracks. Set regular reminders to reconcile your QuickBooks records with your bank statements. It’s a small effort that can prevent big problems.
QuickBooks offers automation features that can reduce the risk of human error. Automate recurring transactions and let QuickBooks do the heavy lifting.
Review and Adjust
If you’ve already made a mistake, don’t panic. Review the erroneous entry, identify the error, and make adjustments. QuickBooks makes it easy to edit or delete entries.
Best Practices for Journal Entries in QuickBooks
In this section, we’ll dive into some best practices to help you maintain accuracy and streamline your financial management processes.
Tips for Maintaining Accuracy and Consistency
Tip 1: establish a naming convention.
Consistency is your ally. Create a naming convention for your accounts and stick to it. This ensures that similar transactions are categorized consistently, making your financial records cleaner and more manageable.
Tip 2: Use Subaccounts Wisely
QuickBooks allows you to create subaccounts under your main accounts. Utilize this feature to add granularity to your financial reporting. For example, you can have a main account for “Income” and subaccounts for different revenue sources.
Tip 3: Regularly Reconcile Your Accounts
We’ve mentioned this before, but it’s worth repeating. Regularly reconciling your QuickBooks records with your bank statements is a powerful tool for spotting errors and discrepancies early on.
Tip 4: Keep a Paper Trail
Document everything. Maintain a paper trail of receipts, invoices, and other financial documents. This helps with accuracy and comes in handy during audits or tax season.
Regular Journal Entry Review Improves Financial Management
Regularly reviewing your journal entries ensures that they accurately reflect your business’s financial transactions. This is crucial for making informed decisions and keeping your financial statements reliable.
Spotting Trends and Anomalies
You can identify financial trends or anomalies by routinely examining your journal entries. For instance, you might notice a consistent increase in a particular expense category. This insight can lead to cost-saving strategies.
Improving Budgeting and Forecasting
Accurate journal entries are the building blocks of effective budgeting and forecasting. When your financial records are precise, you can create realistic budgets and make more accurate predictions about your business’s future financial health.
Advanced Tips and Tricks
Now that you’ve got the basics down and have explored some best practices, it’s time to dive deeper into QuickBooks journal entries. This section will provide advanced tips and tricks to help you become a QuickBooks pro.
Automate Routine Transactions
QuickBooks allows you to create recurring journal entries for regular transactions. This feature is a time-saver for repetitive tasks like monthly rent payments, loan interest accruals, or depreciation entries. Setting up recurring entries ensures accuracy and consistency without manual effort.
Create Custom Templates
Did you know you can create custom journal entry templates in QuickBooks? This feature is especially handy for businesses with specific reporting needs. You can design templates tailored to your industry or unique requirements, making data entry more efficient.
Reconcile with Journal Entries
While bank reconciliation is typically done through the reconciliation module, advanced users can reconcile accounts using journal entries. This method offers more control over the reconciliation process and is useful for businesses with complex banking needs.
QuickBooks supports cash and accrual accounting methods. Utilize journal entries to accrue and defer expenses and revenues based on your chosen accounting method. Accrual accounting can provide a more accurate picture of your business’s financial health.
Correct Historical Entries
Mistakes happen, and sometimes they’re discovered months or even years later. QuickBooks allows you to adjust historical journal entries. Just be sure to follow proper accounting practices and maintain a clear audit trail.
Record Fixed Asset Transactions
For businesses with significant investments in assets like equipment or real estate, journal entries are crucial for recording depreciation, asset acquisition, or disposal. This helps you track the value of your assets over time and ensures compliance with tax regulations.
Generate Custom Reports
By utilizing journal entries effectively, you can create custom reports tailored to your business’s specific needs. This can include detailed financial analysis, departmental breakdowns, or project-specific reporting. Customization allows you to extract maximum insights from your data.
- QuickBooks journal entries are the backbone of your financial management.
- Every transaction involves both a debit and a credit account.
- The more you practice, the more confident you'll become.
- Regularly review your journal entries to spot errors, identify trends, and make informed financial decisions.
- QuickBooks offers advanced features like recurring entries, custom templates, and in-depth reporting capabilities.
- Mistakes are part of the learning process. When you make errors in your journal entries, don't panic; review and correct them promptly.
Now that you’ve become a QuickBooks journal entry pro, you might be hungry for more financial knowledge. If that’s the case, we’ve got a smorgasbord of related topics waiting for you.
📖 Further Reading
Quickbooks Desktop vs Online: Which Is Best for Construction?
Quickbooks Bill Pay Guide: Setup, Optimization, Integrations, and More
Quickbooks Job Costing Guide: Setup, Optimization, Integrations, and More
A Better Financial Future Awaits
Your journey into the world of QuickBooks journal entries has equipped you with valuable skills for managing your business’s finances. Remember that financial management is an ongoing process; there’s always more to explore and learn.
We encourage you to continue your financial education and utilize the many resources available. Whether mastering advanced QuickBooks techniques, diving into financial analysis, or optimizing your tax strategy, the world of financial management is vast and exciting.
Perhaps just as important as optimizing QuickBooks’ built-in functionality is knowing whether or not it presents the best solution for your business’ needs. QuickBooks products tend to be built for the broadest possible audience, meaning they may lack specific features for construction companies.
Ultimately, it’s all about getting the job done right and on time while ensuring “on time” is tracked properly for every employee and every input (equipment, materials, etc.) is accurately counted for billing purposes. Tools like QuickBooks can help – but they’re not the only tools available to construction companies.
Workyard was built from the ground up to support construction companies. With Workyard, it’s easy to manage the schedules of dozens or even hundreds (or more) of employees while accurately tracking their time on the job with our mobile app’s industry-leading GPS and geofencing capabilities.
Experience the difference Workyard can bring to your employee time-tracking efforts. Sign up for a free trial today or contact (650) 332-8623 for more details.
Did you find this post helpful? Please rate it!
Quickbooks. “ Apply a journal entry credit to an invoice in QuickBooks Online. ” Accessed November 29th, 2023.
Quickbooks. “ Create a journal entry in QuickBooks Desktop for Windows or Mac ” Accessed November 29th, 2023.
Quickbooks. “ Create journal entries in QuickBooks Online ” Accessed November 29th, 2023.
Quickbooks. “ Debit vs. credit accounting: The ultimate guide ” Accessed November 29th, 2023.
Quickbooks. “ Use journal entries to adjust your client’s books ” Accessed November 29th, 2023.
YouTube. “ How to use journal entries in QuickBooks Online ” Accessed November 29th, 2023.
YouTube. “ QuickBooks: General Journal Entries ” Accessed November 29th, 2023.
QuickBooks Desktop vs Online: Which Is Best for Construction?
Use this guide to understand the key differences between QuickBooks Desktop vs Online. Discover key features, pros, and cons to choose the right edition for your business.
QuickBooks Bill Pay Guide: Setup, Optimization, Integrations, and More
In this article, we'll take a deep dive into QuickBooks’ bill pay features to help you do more with it, or integrate it with other bill-pay apps.
QuickBooks Job Costing Guide: Setup, Optimization, Integrations, and More
In this article, we'll take a deep dive into QuickBooks’ job costing features, and we’ll suggest job costing apps you can integrate with QuickBooks.
Workyard provides leading workforce management solutions to construction, service, and property maintenance companies of all sizes.
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QuickBooks Desktop: Manage billable expenses
Apr 6, 2023 • knowledge, article detail.
When using BILL's sync with QuickBooks Desktop, an expense line item on a bill can be tagged as billable in BILL, and it will sync to QuickBooks as an open billable expense. From there, a customer invoice can be created in QuickBooks, and then that open invoice will sync back to BILL.
The first thing to do to get this setup is turning on Use Customers/Jobs in Payables in BILL:
- Select Settings
- Select Preferences under Accounting
- Select the Edit icon
- Select Yes for Use Customers/Jobs in Payables
- Select Save
Now when creating new vendor bills, check the billable box for any line items to mark them as billable. When saved the bill will sync to QuickBooks as normal, but now the sync will also create the billable item.
Note: the sync will not create the actual invoice for the billable item. In QuickBooks, create the invoice from the billable item. Once the invoice is created in QuickBooks, it will sync back to BILL as normal, and can be processed as desired.
Things to know
For the Billable item to sync:
- Jobs must be enabled
- A valid customer is selected
- The chart of account type is expense
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*2024 - quickbooks desktop certification.
Quickbooks is the most widely used accounting software in Canadian businesses. It is used by small and medium businesses.
Select date and time
- Saturday March 23 6:00 AM
- Saturday April 6 6:00 AM
- Saturday April 13 6:00 AM
- Saturday April 20 6:00 AM
- Saturday April 27 6:00 AM
About this event, quickbook desktop training, course description:.
QuickBooks is the most widely used accounting software in Canadian businesses. You will learn the different uses for each module and journal, be able to set up a company from a template of accounts, and print, and understand the various reporting features of Quickbooks. This course will take you through advanced features of the latest version of QuickBooks Desktop Premier 2021.
- Company/Partnership/Sole trader set up in QuickBooks
- Getting around the home page drop down menus, icon toolbar and navigator windows
- Transaction entries (cash sales, cheques, invoices)
- Setting up customers and suppliers (A/R and A/P)
- Bank reconciliations
- Chart of accounts, journal entries
- Trial balance, income statements and balance sheets
- Accounting for GST/HST
- Running payroll on QuickBooks
- Inventory set-up
- Backing up and restoring data
- Setting QuickBooks preferences
- Overview of the Report Centre
QuickBooks Desktop Certification:
The QuickBooks Desktop certificate will be issued by Skills for Change. Skills for Change (Career Skills) is a recognized training institution by the Ministry of Colleges and Universities.
Skills for Change offers tax receipts for your tax returns. The Canadian government may refund you for all or part of the course payment when you file your taxes.
Location : Zoom
Enrollment Process :
You will be sent a welcome email and Zoom link to the course before the first class.
If you require any accessbility accommodations while taking this course, please contact our administrative team at: [email protected].
Frequently asked questions
There are no strict prerequisites. We recommend reviewing the course details for specific requirements. Completion of our Accounting Essentials course is an asset.
• Once you are on the registration page, click on tickets, navigate to the checkout, then provide your name, add your contact information, and make the payment. Credit card, debit card, or PayPal are welcome methods of payment. We do not accept cash or cheque payments.
Unfortunately, we do not offer financial support through this program. The fees are paid by the client. If you are receiving Ontario Works or social assistance, please talk to your case worker to see what you may be eligible for.
Yes, participants who successfully complete the course requirements will receive a certificate of completion. This certificate can be a valuable addition to your professional credentials. All certificates are issued by Skills for Change. Skills for Change Career Skills is a recognized training i
Yes, we issue tax receipts for your tax return. The government could refund you for all or part of the course payment when you file your taxes.
No, all classes will be held remotely.
We provide various support channels including email support an, in some cases, live phone support. Our goal is to ensure that participants have the assistance they need throughout the learning process.
We understand that financial considerations are important. Unfortunately, we do not offer installment payments for this program. The fees are paid by the client. If you are receiving Ontario Works or social assistance, please talk to your case worker to see what you could be eligible for.
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