 QuickBooks Online 2024 reports for my accountant and reconciliations such as bank reconciliations and credit card reconciliations. Get ready and some trail mix because we're hiking on QuickBooks Online, our audit trail to success. First a word from our sponsor. Yeah actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us but but that's okay whatever because our merchandise is is better than their stupid stuff anyways like our trust me I'm an accountant product line yeah it's paramount that you let people know that you're an accountant because apparently we're among the only ones equipped with the number crunching skills to answer society's current deep complex and nuanced questions. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are online searching for QuickBooks Online test drive looking for the result that has into it.com and the url into it being the owner of QuickBooks selecting the United States version of the software and verifying that we're not a robot. Opening up the major financial statement reports like we do every time the report's on the left hand side we're in the favorites right clicking on that balance sheet open link in a new tab right clicking the profit and loss open link in a new tab let's go to that middle tab close up the hamburger and change the range back to 23 we're going from 010123 tab 123123 tab run it to refresh it then we will tab to the right same process hamburger close that hamburger because we want to eat it and then go from 010123 tab 123123 tab and run it to refresh it that's the setup process that we do every time balance sheet income statement the major two financial statement reports all other reports for the most part giving more information about one or multiple line items on one of these major two financial statement reports let's go back to the first tab now back into the reports on the left hand side and we're going to scroll all the way down to the section where we have the accountant section i'll close up the hamburger here we'll first just do a quick recap of the reports in this section and then we'll focus in on a few of them our major focus here is going to be the reconciliation reports so note that it's for my accountant so these are the reports that quickbooks is assuming that you're going to be needing to provide to the accountant so that means two things generally as i can tell her from what i can see one is going to be the reports that you might need to provide to the accountant possibly for tax preparation at the end of the year which of course includes balance sheet and income statement type reports which are kind of repetitive because those are the reports that we have up top the other types of reports down here are usually ones that are formatted in debit and credit format as opposed to the financial accounting equation format so in other words if i look at the balance sheet and the income statement you could see that it's in format of the accounting equation assets equal liabilities plus equity as opposed to being formatted in terms of debits and credits if you imagine the way the account is actually created what quickbooks is doing is you can imagine it actually doing transactions on the basis of debits and credits which are kind of equivalent to this concept of balancing with an equation assets equal liabilities plus equity and then and the debits and credits by the way are more efficient they're actually easier to use if you understand how to use them although they're kind of strange if you've never worked with them before but then you're going to take those debits and credits and create the equation format of assets equal liabilities plus equity so most people can read it without needing debits and credits even though the debits and credits are easier so you have assets equal liabilities plus equity how does the income statement fit into that well if you go into the income statement remember we have income cost to get sold which is a type of expense and expenses basically and then bottom line of the income statement is basically part of equity it's one year's worth of if you look at the income statement for a year of the activity that resulted in the net equity balance that's on the balance sheet that's the general idea so note that some of these reports if I go back to the first tab that are reported in terms of debits and credits in particular the trial balance for example I think are quite useful for bookkeepers internally even if you don't know debits and credits as well so we'll take a look at some of those in more detail but first let's just list them out so we've got the account list this is basically just the chart of accounts so we saw the chart of accounts that you can find up here in the cog or you can find it in the sales area here and in the uh I'm sorry not in the sales area in the transactions area and then in the chart of accounts so if we want to print that chart of accounts we can get a list of the chart of accounts let's go back down to the reports again close up the hamburger scroll down to the bottom so we're going to go all the way down to the bottom not that far here we go you've gone too far this time okay I scrolled back up I scrolled back up we have the balance sheet comparison that's just a normal balance sheet report to me it shouldn't be here because it's already in the favorites as well or you could put it in the favorites the balance sheet is in the favorites and it's already in the normal financial statement reports but I guess this is a reminder to tell you obviously when you're dealing with any kind of transmission of financial information the balance sheet would be a good thing that people will probably want you've got the general ledger report so let's open that one up I'm going to right click and open the general ledger report this is a common report that possibly uh if you're just use bookkeeping you might not be as familiar with as you would have been in the past because we have the transaction detail reports which are basically the same thing that we can kind of look at by account so let me show you what I mean if I change the range from 01010123 tab 123123 and run it so what do we have here we've got the accounts it's going to be balance sheet on top of the income statement type of accounts that's the order that they will be in starting of course with the checking account and then we have all the detail in it so this is the general ledger report what does it look like it looks like the transaction detail report that you might do if you went for example into the balance sheet and then clicked on the account drilling down from the end result the balance sheet which you can think of as the end result process of putting together all this financial information and then you drill down on the transaction report which is basically a general ledger type of report so if I go back on over you could do that for any of the accounts on the balance sheet and the income statement the balance sheet and the income statement therefore is kind of like your list of accounts that have activity in it during the current period and you can go into basically the balance the gl for each of those those accounts by drilling down on the number that's why the actual general ledger isn't something that we often might need as we did in the past in the past before the time when like if you're using QuickBooks and you work with an accountant then you can give the accountant access to the QuickBooks file and if they have questions about a particular account they're probably going to go to the trial balance or balance sheet and income statement and drill down on the account to see the detail within the account which is basically the general ledger for that account recording transactions within it by date whereas before that time if and still today if you're in a situation where the accounting office is in one location and the account software is in another location and the accountant can't get access to the actual software then they need the activity which means that you might actually print out this entire general ledger so that they can actually physically go in there and and look at it so so it's going to just be all of the accounts with the list of transactions like a transaction uh detailed report is the general is the general idea of that one okay closing that one back up first tab we've got the journal report the journal report we'll talk about a little bit more in depth later it's it's going to give you all the activities in journal entry format the reason it's in the accountant section is one because it's this really detailed report that gives you all the detailed transaction and two because it's in format of the debits and credits so we'll take we'll take a look about at that a little bit later it's a great tool for internal users to understand how the forms work because you'll be able to see the debits and credits related to the forms then we have the profit and loss reports we have the profit loss comparison profit loss by tag profit and loss again these are financial statement reports the major profit and loss being in the the favorites tab as well as the financial reports so it's kind of repetitive i don't think it really should be down here but they put those down here as well anytime you give any financial statement reports to anybody you're probably going to be including the balance sheet and the income statement and then the question is what other reports do you need depending on who you're giving it to clearly these days however you might be able to give the person actual access to the software possibly limited access so that they can just view the financial statements possibly or give your accountant access as the accountant to the software which eliminates the need oftentimes to figure out which reports you need to be providing them you can give them the question now is what type of access you want to give them to your to your quickbooks possibly so they can drill down on what is needed depending on what they're doing for the cpa you want to give them possibly some access as an accountant to help you out with the accounting and so on tax preparation and whatnot and look up what they need for external users possibly even banks and whatnot at this time then maybe you give them access if you could just to the financial information so that they can drill down on the details a little bit and pick up the reports they need so recent automatic transactions so these would be transactions that have been set up to happen automatically and these are the ones that occurred recently recent transactions this is a nice report for if you're working real time and you want to look up the transactions that have happened recently or if someone else is working on something you know you want to review what they have done recently possibly you can go into the recent transactions here reconciliation reports i'm going to get back to this one in a second the major reconciliation report however being the bank reconciliation you can also have credit card reconciliation we got reoccurring uh recurring template lists so a list of the templates that could be used statement of cash flows this is the other major financial statement report which is basically repetitive here because we already saw it up in the financial area if you were giving reports to an external users the two main reports balance sheet income statement the other financial statement report that's kind of tagging along but really isn't as high in status as the balance sheet in the income statement is the statement of cash flows the statement of cash flows being created from if you were looking at the order of creation being created from the balance sheet in the income statement generally we got the transaction detail by account so this is going to be our give us our transactions by account kind of similar to the general ledger report we might take a look at that more detail in a future presentation this is the transaction list by date so these two are different right so now you have the gl that's listed by account and then the dates within or under the account same with the transaction detailed by account the transaction list by date however it's going to give you the list of transactions by date we'll take a look at that in more detail in future presentations as well that could be useful possibly even for billing purposes because now you're going to try to look at the transactions as they happen by date not by account the journal report I believe is also by date and then we've got the transaction list with splits so now you've got a transaction list that's going to give you more details with the splits the nice thing about the transaction list by date is it's going to be a little bit tighter a little bit more compact but the bad thing about that is it can only show two accounts impacted per line things like payroll for example are going to have way more than two accounts impacted or even an invoice often has more than two accounts impacted especially if you're dealing with sales tax and with inventory so so you're not going to get as much detail the journal report will give you more detail because it'll show the debits and credits of the transactions be a longer report however and the transaction list with splits will give you more detail so we'll take a look at those more in the future the trial balance is a report that basically takes the balance sheet and the income statement puts them on top of each other and eliminates all the subtotals reporting them not in debit and credit format or not in sorry accounting equation format not in the form of assets equal liabilities plus equity but instead in debit and credit format this is actually a really useful report even if you don't fully understand debits and credits because it's an easy report to have all of your accounts listed which have activity in it to use as a source to drill down on allowing you to have not two reports open as you do your data input but solely one report that you can then refer to and check the accounts on both the balance sheet and income statement side it'll also be a shorter report we'll go into that one and a lot more detail in future presentations okay our major focus now is on the reconciliation reports i'm going to right click on this and open in a new tab so when i open it in a new tab you can see it actually bounced me over here to the transactions and in the reconcile area now this actual sample company file doesn't have a lot of information with the bank reconciliation yet at this point in time so i'm just going to touch in on what the bank reconciliation are and how they're a little bit different than the other than other reports and then we'll get into more detail how to do them in a future course or section where we'll actually do the bank reconciliation as part of a practice problem uh but note there's some confusion about the bank reconciliation because of the bank feeds these days so some people will say well there's bank feeds now so you don't need a bank reconciliation which isn't really exactly correct although the bank reconciliation may be more or less simplified given how you're using the bank feeds and that will be dependent on the type of industry that you're in so first just just a quick recap on just a quick look on what the bank reconciliations do note that if i go to the balance sheet over here the cash account is clearly what we are focused mainly on when we're thinking about the bank reconciliations so a lot of people think of the bank reconciliations as solely a double check to cash but that's not exactly the only thing that we're looking for remember that cash is the lifeblood of every other transaction so if I go into the cash account in other words you can see that it has more different types of transaction types than any other account that's because it's interwoven in every cycle purchase a cycle the revenue cycle and the payroll cycle for example and and therefore if you can verify not just the ending balance of cash but all the transaction all the details that have gone through cash then you are actually giving verification not only just to the cash account but to all of the other accounts as well so in other words you might think that the reconciliation is not necessary these days because you can check your checking account real time and if your cash account is close to the checking account then it might just be a few timing differences that it's off and you feel fairly confident that your checking account is okay possibly and maybe you maybe you're thinking well that's good enough because it's only about the checking account but that's not the point the point is that you want to not just make sure that the ending balance in the checking account is okay but that all the transactions that are flowing through the checking account are correct because all the other side of those transactions are what are creating say the income statement for example so if you can check all the transactions then the other side of your your your equations will be correct which is basically creating the mainly like the profit and loss over here so also note that the bank reconciliation is a little bit different because it's not a report that's being created as we do data input so as I go into these forms as we enter invoices as we enter expense forms bills and so on payroll we're not creating the bank reconciliation as we are creating the balance sheet income statement and related reports that's what typically the process is the bank reconciliation is an internal controlled report so the idea the bank reconciliation is that we're going to take the our books which usually from a from a full service bookkeeping system would be completely independent in creation from the bank account and then what we want to do is take the third party bank and look at their cash and all the detail in their cash and match it to what we have in our system and if we can match out exactly what they have to our system then we have confidence that we've double checked our numbers by a third party the bank and therefore we have a lot more confidence over the transactions in our system now note that in a full service accounting system your checking account balance will typically not match exactly what is in the bank as of any given time such as december 31st 2023 if i look at the bank statement as of december 31st 2023 oftentimes our checking account in our system will not match the bank does that mean we made an error possibly but not necessarily because there could be timing differences if we're doing a full service bookkeeping system then we're going to record the deposits when i actually made the deposit not when they clear the bank therefore we have access to knowledge timing knowledge before the bank does so if we did everything right we could still have a difference due to a timing difference because we know something the bank does not yet know and on the expense side of things especially classically if you have checks then you can have a huge time lag between when you write the check which means you know that the checking account is decreased at that time but it hasn't cleared the bank the bank does not know so those differences have been reduced these days because most of the stuff is being electronically transferred for many businesses now and and so that's great because that'll make the timing difference a lot less and a lot more likely that our balance will match what's on the bank at any given time because the transaction times are going to be a lot less but we still could have those timing differences if there are timing differences if we can reconcile and know exactly the exact difference between the checks that are outstanding and the deposits that are outstanding the stuff that we have in our system that the bank does not have then we can have a lot more assurance not just that the ending balance is correct but again that all of the transactions that have been entered in the system are correct if we cannot reconcile exactly the difference due to timing differences then we've lost a huge internal control because you might say well the the checking account is only off by like five dollars well that's fine for the checking account but if it's off by five dollars that could mean that there's 20 checks that are outstanding and five deposits that that have not been recorded properly that are netting out to a difference of five dollars ending balance being pretty close in that case but the fact that we haven't recorded all those transactions mean that the income statement might be wildly off right in terms of what actually happened so we want to get those that those timing differences basically exact now how does the bank how does the the bank feeds fit into this if I go into the bank feeds over here and we go into our transactions and we look at our at our at our bank transactions then this bank feeds means that we're connected to the bank now so if I look at my checking account this is like a mock bank statement so what is the what does the bank know on their system well the bank has beginning balances additions subtractions and then the ending balance and then here's the detail they have the deposits and the date of the deposit and then they have the checks and electronic transfers the decreases and then information related to that now if we just look at the deposits first note that if you deposit money physically into the bank and it was like cash that you deposited into the bank then it only knows the dollar amount that you deposited into the bank at that time and the date that it was deposited if those cash deposits were combining sales of multiple customers it's not going to know that obviously all that's going to go through the bank is the fact that you deposited some lump sum on a particular date it also in that case will not have the customer information because it wasn't an electronic transfer so so in that case we would have to add more information if it was an electronic transfer then it's more likely that the bank feeds will be more useful to give us all the information we need possibly because then it's going to have the date it's going to have the amount and it might have the memo which can help us to derive or think about who the person was that gave us that that gave us the money right we can see who it came from possibly and we can also then determine what account it should go to which is going to be usually an income type of account on on the decrease side of things what does the bank know well it knows that the decrease that happened and it only knows the date that the decrease happened now if it was a check the date of the decrease might be a lot further or later in time than the time that we actually wrote the check that's where you're going to get this big timing difference if it's an electronic transfer however then you're going to lower the timing difference a lot right because then it's going to know the date that the transaction happened it's going to know the amount that it happened and possibly it'll give you a memo that can give you some idea of who the vendor is and the vendor information could give you some idea of what account should be impacted so we'll talk about the bank feeds at a future presentation but just realize that that if you're building your books from the bank feeds it doesn't eliminate the need for a bank reconciliation but it could make the bank reconciliation easier and there's some systems where the bank reconciliation will be very easy and other systems it'll still take some work because we're relying more and more on the bank to actually create the financial statements as opposed to using the bank as a third-party check let me show you what I mean with a flow chart so this is a flow chart this is the QuickBooks desktop home page we're using QuickBooks online this is just for example purposes so let's imagine that we can think about the flow on both the vendor side and the revenue side if we were on the vendor side of things money is going out eventually for the purchase of goods and services the easiest format that we can have would be that we're going to actually make all payments electronically as opposed to using physical checks and we're going to actually do the electronic payment and because the timing difference is very small we're going to just wait till it clears the bank and then record the transaction when it clears the bank notice that that's not a full service accounting system generally because the proper way to do it if you want the internal control check is to record the transaction when you make the transaction the electronic transaction and then double check it verified to the third-party bank that means two people have recorded the transaction separately and you've double checked it but because we're becoming so much more confident in the bank fee transactions and because the timing differences are so small we can we can eliminate that and now we're kind of eliminating an internal control but it might be worthwhile to do that because it's so much easier to just say i'm going to make the electronic transfer verify the transaction happened almost real time and then just record it when it clears the bank with the use of the bank feeds so that's going to be the easiest system to use because you're not going to have any timing difference due to the fact that you've recorded the transaction not on your own but skipped that part and just recorded it when it cleared the bank so so however if you have to do an accrual thing such as enter a bill first which is going to go into accounts payable then it's going to be a little bit more difficult because you're going to have to enter the bill and then you're going to have to pay the bill with with a check form which you still might do with an electronic transfer when when you basically pay the bill but that could make the the whole bank fee process a little bit more complicated when you have an accrual component to it now the other way you might do it is you might still be physically writing checks if you're physically writing checks then you almost have to enter the check into the system before it clears the bank because the whole point is that you want to track the unclear transactions that you know about so that you don't overdraw your account but the bank doesn't know about until the check clears on the revenue side of things the easiest type of system would be like a gig work type of system where you just get paid by a platform like youtube or whatever and then you just wait till it clears the bank and record revenue with a deposit form if you do that again you're kind of skipping a step because normally you would get the money and then you would make the deposit into the accounting system and physically into the bank and then after that happens the bank feed would come through with the deposit like three days later or something like that and then you would match it however because it's an electronic transfer and it's happening so much closer in time we can basically make the deposit we can depend on the bank feed to actually record the transaction so in that case the reconciliation will be very easy because you're not actually doing a full service accounting system which is fine because it's easier to do it that way and it's it's being safer because the transactions are so close in time so that means that you're actually building your books from the bank account instead of double checking but if you have a cash register type situation then you're gonna have and you have credit cards or cash payments you're gonna have to collect the money then deposit it into the bank usually you want to do it on your side normally and then double check it to the bank because that's going to be part of your internal controls so in that case it's going to be a little bit more difficult but you're still going to have to do like a reconciliation component if that's the case the same might be the case if you have invoices because you're going to have to invoice the client and then you're going to have to receive the payment and then you're probably going to want to make the deposit on your end and then match it to the to the bank which means you're using a matching process that's going to help you with the bank reconciliation and then if you have payroll if you're running payroll through QuickBooks you have a similar issue because you're going to have to actually process the payroll checks yourself you can't wait till the payroll check clears the bank and then process the payroll check unless you're on a cash-based system in which you're using a third-party payroll to help you process the paychecks right if you're processing the paychecks within the system you have an accrual component to it it's going to complicate the bank feeds you're not going to be building your books from the bank feeds but rather using the bank fees to double check helping you with the reconciliation so we'll talk more about this in a in a future presentation when we get to bank feeds and we and when we get to the bank reconciliation but if I just take a look at the transactions in the bank account here note that that a lot of the transactions you might be able to record see what is included this is the description they didn't really give us a vendor here but we might be able to use that description to put a vendor in place and once I know the vendor then I can put the account category basically in place if I already entered the transaction such as the deposit then what it's doing is it's matching the transaction so in that case when you're using this matching system it's not actually recording anything new it's just doing part of your bank reconciliation for you it's matching your transaction that you entered to the bank making the bank reconciliation easier now if you created your entire books from the bank from the bank account from the bank feeds because you have a pretty simple accounting structure you don't have many accrual things happening it's all cashed based system like a gig work system or something like that then you still probably want to do the reconciliations but the reconciliations will be very easy because you will have no timing differences you should be able to just reconcile and say what you're really checking in that case is to make sure that no transactions got duplicated somehow and no transactions got skipped they didn't come through the bank feeds for some reason that's what the bank reconciliation is going to help you to do and in that case your ending balance will match exactly what's on the bank account at any given time you typically want to do the reconciliations at the end of the month however because that gives you a clear cutoff date but if you have something else going on accrual components and especially if you're writing checks you're going to have a timing difference and you still need to reconcile for sure in that case and so the the reconciliation process if we go into reconcile over here just note you can get started with the reconciliation i'm going to close this here's the checking account we can also reconcile credit card accounts by the way with a similar process because they're financial transactions those should be very easy because the credit card accounts are all electronic transfers therefore most likely you're building your your financial statements from the bank feeds in those case and then the ending balance you would put the ending balance here let's just imagine it was 10 000 and the ending date let's say we'll just say the end of january and we start the reconciliation so now you're back you're basically doing your your reconciliation uh up top to tie out what's in your books to what's on the bank books and then you're trying to say anything that you do not check off down below is going to be the the reconciling component in other words if something's on the bank account it should be in your books if it's not you're going to have to add it to your books unless the bank is wrong which isn't normally the case if something's on your books but it's not in the bank account then you could be wrong and you'd have to deal with that or it could be that the bank doesn't know about it yet such as a check that you wrote that has not yet cleared therefore you're just going to take and tie off everything on the bank account to your side giving that third party outside verification internal control over your system and anything that you don't check off should be then a a transaction that's going to be outstanding like a check that has not yet cleared this process by the way is not the reconciliation this is the process of reconciliating and then when you finalize this you'll end up with a bank reconciliation report which will basically give you your checking account balance in this case the differences outstanding checks outstanding deposits and the end and it'll tie tie in the reconciliation to the ending balance on the bank statement that's what the actual report is if an auditor came and asked you for the bank reconciliation what they want is the report so they don't want to see that you did this process that i mean they want to know that you did the process but they want to know it not by this screen they want to see the reconciliation report which is tying the bank balance to the book balance looking at the exact difference which should be a list of outstanding checks and outstanding deposits which they can verify that have been cleared in future periods if they have cleared then we have confidence not only about the checking account balance at any given time but also all the transactions that are going through the checking account and that gives us more verification about the whole accounting system including much of the income statement given the fact that cash is the lifeblood of the company and every transaction has two accounts at least that are impacted therefore the other side of the transactions that are going through cash we have much more confidence in