Using journal entries in a QBO cleanup without messing up the books

Do you know when you should be using journal entries in a QuickBooks Online cleanup? I'll share with you when you should be using journal entries so that you don't mess up the books.
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[@kimberlysanchez6276]

After pulling my hair for several hours and researching many questions, this video helped resolve most of the problems and questions I was having. THANK YOU. The concepts were broken down beautifully for a visual learner.

[@5MinuteBookkeeping]

You're welcome, Kimberly!

[@cindygranger9087]

Thank you so much for your videos... I find that you are a trustworthy source of information on using Quickbooks online. There is a lot of misinformation out there so its great to find someone I can trust. I am subscribed as well!

[@5MinuteBookkeeping]

Happy to help! Thanks for subscribing, Cindy.

[@danielm.wekesa809]

Wow, very marvelous! This is superb advice, as usual, Veronica Wasek never disappoints! I'm already subscribed to all! Thanks a lot.

[@5MinuteBookkeeping]

Thanks for subscribing, Daniel.

[@Calibri57]

So Awesome! I have been seeking this information! Thank you! I am SUBSCRIBED!

[@5MinuteBookkeeping]

Thanks for subscribing Kellye!

[@artesani]

Great post, Veronica! Super important if you prepare 1099s too. I have seen the tax preparers make journal entry adjustments that can affect subcontractor totals. The client had duplicated entries using the bank feed and bill/bill payments for the contractor and the tax (who was the person doing the book)s adjusted the duplicate payment with a journal entry. That did not correct the issue when it came to the 2 payments to the contractor. Remember any journaled entry is not shown when processing 1099s too.

[@5MinuteBookkeeping]

Thank you Linda. That's a great point. I wasn't aware that QBO doesn't pick up JE's when processing 1099's.

[@analovesgarfleld]

Awesome! Thanks!

[@5MinuteBookkeeping]

You're welcome Ana!

[@DreamFirms]

Another great content from your channel!

[@5MinuteBookkeeping]

Much appreciated!

[@financialhorizon8924]

Very informative video. Would you please make a video on journal entries in qb. I mean, uses of journal entries like purchase of fixed asset on credit. Transactions which cannot be recorded in other centres of QB, should be recorded in general journal.

[@5MinuteBookkeeping]

Great idea! I'll add that to my list.

[@danielm.wekesa809]

Very handy tips & guidelines on the use of Journal Entries, you are a worthy mentor to us! How can I access the summarised PDF copy of "Making Corrections in QBO"? Thanks a lot, looking forward to viewing your next post.

[@5MinuteBookkeeping]

Glat it was helpful. I don't have a PDF for "making corrections in QBO" but feel free to access all my free training on this channel and also on my online academy for virtual bookkeepers at 5mbacademy.com

[@danielm.wekesa809]

@@5MinuteBookkeeping Thanks, Veronica.

[@robinolvera4693]

Thank you for your informative videos. Very helpful. I do have a question. At year end, my client is now using Synder for her ecommerce connection with Shopify to QBO. We did have PP bank but have since opened a new account for PP connecting synder for PP downloads. I am reconciling the account but the beginning balance is zero and I want the beginning balance to be the old accounts ending balance. How do I accomplish this. I did make a journal entry to account for the change but this doesn't affect my beginning balance. I am a bit confused how to accomplish a correct recon

[@5MinuteBookkeeping]

You can make a journal entry to reclassify the balance. You would then have to mark it as "reconciled" in the bank reconciliation for it to affect the opening balance in the bank reconciliation.

[@chytealthedeal]

Last year previous Accountant added a Long term Liability for a loan of $10,000. They added it with a Dr & Cr. I found out it was actually income for the company. The books are closed for the previous year. Can I remove this COA with a JE?

[@5MinuteBookkeeping]

You would need to confirm with your client and their tax preparer. But assuming that it was OK to adjust the account, you would need to figure out what type of income it was and whether it was customer income. If so, you would not use a JE to record customer income . You would use an invoice and a customer payment.

[@chytealthedeal]

@@5MinuteBookkeeping Would using invoice and customer payment clear that COA it is on from previous periods? And then I could just make the COA inactive? What would happen if I just changed the COA detail? Would that mess up the previous books?

[@florencemarcelin7068]

nice very informative

[@5MinuteBookkeeping]

Glad it was helpful!

[@tammymartin7842]

Thank you for your videos very helpful.....I do have a questions for you. I was told that when your pay bill such as Public Service, internet bill, car insurance bill etc you enter them as a bill then you do Bill Pmt-Check (in our case we do ACH) for these transactions. But now I'm being told to enter them in the journal entries . Which is the right way to enter. Also CC charges I would do the same thing, but again I was told to use journal entries. Which is correct? Thank you for the help.

[@5MinuteBookkeeping]

No. Do not use journal entries to enter transactions. You are correct to use a Vendor Bill and then enter a bill payment. QuickBooks Online is designed to be used at a "transactional level" and does not work well if you use journal entries for most types of transactions.

[@tammymartin7842]

Thank you so much for the help a few weeks ago. Another question for you please. When processing a Simple IRA check to the vendor, how do you list the liabilities account at the bottom of the check i.e employee contributions vs the company match contributions? Am I doing this correctly. Employees under Payroll Liabilities/company contribution simple/other current liabilities. Employer Company contribution simple/Expense?

[@5MinuteBookkeeping]

Hi Tammy. I don't have enough information about how you process payroll to be able to answer your question. Generally speaking, amounts deducted from employees are recorded as liabilities. Employer matching is an expense.

[@hayleekelsey4023]

Hello. Thanks for the information. In the start-up process of my business, I had service payments that never touched a bank, and the money was just used when needed/paid to myself. I was told to enter these as journal entries; draw (debit) and sales (credit). If I do this, can I then delete the old invoices I have in place for those?

[@5MinuteBookkeeping]

Hi Haylee. Typically you would use the draw account to record business transactions that went through your personal bank account. I'm not sure what you entered using invoices since that wouldn't be the right way to do it.

[@kipfinancialconsultancypvt3140]

How can we make it a nonjournal entry? So payments made can be applied?

[@5MinuteBookkeeping]

Hi. There is no such thing as a nonjournal entry in QBO. You can enter customer payments in QBO by going to the + sign under customers. Or, if you are referring to vendor payments, you can also go to the + sign in QBO and enter a Check, Expense, or Bill Payment.

[@cynthiaescudero3984]

Can you use journal entries to reconcile bank accounts if they haven’t been reconcile for 3yrs in QBO?

[@5MinuteBookkeeping]

It would depend on what you are adjusting and how you will record the adjustment. We sometimes use JE's to adjust old uncleared transactions in the current period.

[@aprilcanady3246]

Where can I get that chart?

[@5MinuteBookkeeping]

Hi. The full chart is available in my online course, Complete QBO Cleanup System. You can also get screenshots from this video.

[@lacichung3517]

What if you have old uncleared payroll transactions? I just took over a clients books and they have several uncleared payroll checks from 3 and 4 years ago. Would you use journal entries for these?

[@5MinuteBookkeeping]

Typically, for old uncleared payroll checks, the funds should be escheated to the state (in the US). If that is the case, you could use a journal entry.

[@axtonjax3700]

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[@kaydenrylan9558]

@Axton Jax Instablaster :)

[@axtonjax3700]

@Kayden Rylan I really appreciate your reply. I found the site thru google and I'm trying it out atm. Takes quite some time so I will reply here later with my results.

[@axtonjax3700]

@Kayden Rylan It worked and I now got access to my account again. I am so happy! Thank you so much you saved my ass!

[@maimiyai4390]

You do not mention how to make journal entry

[@5MinuteBookkeeping]

Hi. Thanks for the feedback. You're correct, I did not show how to make a journal entry in QBO since that wasn't the focus of my video.

[@Zzz-ci6xd]

literally 8 minutes of someone saying "Don't use journal entries".. lol

[@5MinuteBookkeeping]

That's right, because you can't use journal entries for the areas in QBO that I mentioned. :)

[@mz.loquacious]

​@@5MinuteBookkeeping​​Hello, I wanted to know how can I take customers payments in group them into a jounral entry vs holding them in undeposited under received payments?