Book-keeping for Banking
Book-keeping isn't necessarily made easy
Many clients opt to try book-keeping themselves to try and save money. Whilst this can work, it isn't an easy process, but what also makes it even more complex are online softwares. So I thought I'd create a page to help process bank transactions in each of the softwares.
First Rule of Thumb:
Unless you have more than 200 transactions every month, our advice is that you don't use the banking connections with softwares. We have had multiple issues where the transactions sometimes are duplicated, or omitted when landing in an online software through a bank feed. This complicates matters.
2nd rule of thumb:
Someone needs to check all transactions from the Bank Statement to the bank report in the online software. Without this process your book-keeping is defunct.
3rd rule of thumb:
For any business open a new bank account that is completely separate and only for the business. This will help your 2nd Rule of Thumb!
Book-keeping in quickbooks
Already created a Sales Invoice?
If you have already raised a Sales Invoice, the easiest way of recording the money coming in is to locate the Invoice (Click Sales>Invoice). Then Locate the invoice and Click - "receive payment". In the Receive Payment screen, ensure the Date is the same as on the Bank Statement, Enter Payment Method = CARD, and then enter Deposit To as The business Bank account you have set up. Below it the transaction is already ticked. Once you click SAVE the entry will mean that the Invoice will be paid, and the money receipted will appear on your Bank Report within Quickbooks.
Haven't created A Sales Invoice
On this occasion there is no invoice to locate. Click "New" top left of screen then Click "Sales Receipt". Make sure you select the bank statement date for receipt date. And make sure you click the DEPOSIT to Bank account that you are using. On this occasion the double entry that is created is Dr Cash (money In), Cr Sales. (No need to pay off any invoice).
What about Purchases?
Its the same as above for purchases. Either Create a purchase invoice and then find the invoice under "Suppliers" and "Bills". Then within Bills, select the tab "Unpaid Bills". Then locate the supplier invoice, and click MARK As paid and follow the instructions remember to ensure you select the right date it appeared on your bank statement. If you haven't entered a supplier (which is quite usual) You simply Click "new" and then Under "Suppliers" click "Expense". Again follow the process to enter the expense directly. This way the double entry is Dr Expense (cost) Cr Bank.
So are we done book-keeping?
No - you need to check if you've done it right. You need to download your actual bank statement from your Bank and then check each transaction to the banking report in Quickbooks. To get the report from Quickbooks, Under "Your books", click Reports , and then select the bank. Once done you can select the time period that you are searching for. Then download this report into excel. Now match each item against the actual bank statement from your Bank. Anything that appears on your bank statement that is not in Quickbooks, will need to be entered using the above processes. If anything is unclear please call us.
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