Quick Periodic Review in QuickBooks

Setting aside time to review your accounting records and activity in QuickBooks is a vital step in producing accurate financial information. Accurate financial information is fundamental to assessing current performance, making accurate comparisons to past performance, budgeting for future periods, and creating projections of how you want your business to develop and grow.

But where should you start?

Here are some key steps for a quick and effective periodic accounting review which will help you identify errors and assess the completeness of your accounting records.

1. Reconcile each bank account. Using the Reconcile feature in QuickBooks, reconcile the activity entered in QuickBooks with the bank statements. Review and resolve any errors and differences between the bank statement and the detail in bank register in QuickBooks.
2. Review the Accounts Receivable Aging Detail report. Confirm accuracy of outstanding customer balances and determine how to resolve any old outstanding receivables.
3. Review the Accounts Payable Aging Detail report. Confirm that all vendor bills have been entered and that all expected vendor bills have been received. Investigate any old items on the payables aging to determine whether they are still outstanding. 
4. Review the Profit & Loss report. The Profit & Loss summarizes performance over a period of time. Are the balances of the revenue and expense accounts what you expect? Compare current period balances with prior period balances. Are the differences reasonable or what you expect? If not, review the details in each amount to determine if there have been errors or unexpected events.
5. Review the Balance Sheet report. The Balance Sheet states the value of your assets and liabilities at a point in time. Review the balance of each balance sheet account. Do the balances reflect the correct value? For example, do loan balances at the current point in time match the lender’s balance? Have accruals been adjusted? A couple of common examples are accrued wages and sales taxes. Assess in more detail any significant changes in long-term liabilities or major asset accounts for accuracy and completeness. 
6. Review the Statement of Cash Flows report. The Statement of Cash Flows can help you understand the relationship between net income and cash flow. Learning how to read and assess the statement of cash flows can help your current and future cash needs.