January 25, 2022
Start The New Year Fresh With A Clean QuickBooks
Every year, January is a month of transition, such as trying to complete all the tasks that were left undone in QuickBooks during a chaotic December. Simultaneously, you have to dive into the new year while resuming your regular work schedule. Even though it can get confusing at times, such as figuring out which year you are working on.
Keep QuickBooks in mind as you catch up for the year 2021 and prepare for 2022. You certainly are not looking forward to adding another task on your to-do list, but it will definitely payoff by acting now to prepare the program for the new year. As soon as you begin to record transactions and place those orders, while greeting new customers, it will be very helpful to have a clean book and start fresh.
Here are a few suggestions for achieving most of the work you began in 2021:
Generate 4 Key Reports:
Bills can slip through the cracks and go by without being paid in December because so much is happening. That goes as well for you as your customers.
You need to know what is owed to you and vice versa, and the easiest way to do this is by generating these four following reports in QuickBooks:
- A/R Aging Detail. Which of your customers is behind on payments? What do they owe you, and when should the money have been paid?
- Open Invoices. What bills are still outstanding? While some duplicates might be found on the A/R Aging Details, this report only isolates outstanding transactions.
- A/P Aging Detail. Do you get caught up with what you owe to other people and businesses? You will know from this report.
- Unpaid Bill Details. As with open invoices, this report distinguishes only those invoices that have outstanding balances.
Run Statements For Delinquent Clients.
Figure 1: Sending statements is a method of collection that you can use in QuickBooks if you do not want to contact late clients directly.
Even though the year is still early, you will need to decide to what extent you want to count on customers who are behind in their payments of your bills. Surely, if some clients are over 60 days overdue (30 days if they have significant balances), you could consider contacting them over the phone directly or send an individualized email requesting them to meet their responsibilities to the least.
Yet, you also have the option of sending statements. These reports provide details about the financial activities between you and your clients for a specific period. Go to the “Customers” menu, check the boxes of customers that need a statement, click on “Batch action” button, and select “Create Statements”. Review all the options in the opening window and specify your preferences. If there is no response to your statements from customers within 10 days, the time may be right to make a phone call.
Carefully Review Your Inventory.
Maybe it has been some time since you performed this, but it is essential to do it on a regular basis – particularly after having a hectic holiday. First, make sure you have turned on both Track quantity and price/rate and Track inventory quantity on hand by going to Settings, and select Account and settings.
Then, to start the process, the best method is going to the “Sales” menu, and select “Products and Services” tab.
Figure 2: You may find a lot of details about your selling products in QuickBooks’ “Products and Services” page with their SKU, quantities on hand, cost, sales price, and reorder point.
Tip: If adjustments of quantity you have on hand are needed, click on “Edit” on the right. Then, in the new open window, click on “Quantity” next to Adjust, under the “Quantity on Hand” section.
To run a report of your inventory, go to “Reports” menu on the left, scroll down to the “Sales and Customers” section, and click on “Inventory Valuation Detail”.
Figure 2: Detailed information about your inventory is listed in this report for each item.
Connect Your Financial Institutions to QuickBooks Online
Furthermore, January is a perfect time to think about how you can improve your use of QuickBooks in 2022. Very often, we have the tendency to learn how to use the needed tools and not go to a deeper level while utilizing some type of software. But with a huge program such as QuickBooks, that is justified.
Although, a couple of tools may have an enormous effect on your day-to-day workflow, allowing you to be paid faster by clients and knowing where your business financials stand daily. Which are:
- Online Banking. Are you aware that you have the possibility to have your financial institutions connected to QuickBooks with your daily transactions imported automatically? It is called the “Bank Feeds” center. If you decide to use this feature, you won’t need to wait to receive your statements each month to know what transactions went through.
- Online Payments. If you are being paid by your customers only by checks, then you are likely receiving your payments much later than your liking. To set up the Online payments feature, go to “Settings”, select “Account and Settings”, then click on “Payments” tab and follow the instructions by entering your bank account information for your “Deposit accounts”. Make sure to select the method of payments that you can accept to receive from your customers, such as ACH payments, eChecks and credit cards.
If you need help with your bookkeeping and accounting, don’t hesitate to schedule a consultation with us!
Even though we are based in Albany, NY, we offer our expertise in business accounting, bookkeeping, and tax preparation all across the United States.
