 QuickBooks Online 2024, Bank Reconciliation Myth Busting. Get ready and some coffee because we're going to be able to generate financials on call with QuickBooks Online 2024. Here we are in our gig, Gregatars 2024. QuickBooks Online Sample Company 5. We set up in a prior presentation, opening up the major financial statement reports like we do every time. The reports on the left-hand side within the favorites, right-clicking on the balance sheet to open a link in a new tab, right-clicking on the profit and loss to open a link in a new tab, doing the same for the trustee trial balance. Then we will tab to the right, closing the hamburger, changing that range, going from 010124 tab, 022924 tab would like to see it on a month-by-month breakout and then run the report, tabbing to the right, repeating the process, hamburger, closing it. Ranges, changing them, 010124 tab, 022924 tab, dropping down to the months and running to refresh, tabbing to the right one more time, hamburger, closing. The ranges, they are changing, 010124 tab, 022924 tab, dropping down to the months and running that one. Let's go back to the balance sheet. We're now thinking about the bank reconciliation process, a very important process. Number two, internal control to make sure the financial statements are recorded correctly, only second to the double-entry accounting system itself. Now there's a couple things that I think are like misconceptions about the bank reconciliation process do import to some of the new technology, for example, the bank feeds kind of confuse the process in some ways, possibly making the bank reconciliation easier, but also kind of confusing the idea of what the bank reconciliations are, how they are performed, and what the importance of them will be to the bookkeeping process. There's another misconception about basically what the bank reconciliation is in terms of is it a report or a process? And really when we're talking about a bank reconciliation, we're talking about a report that's reconciling the checking account balance to what is on the bank statement at any point in time. But to get that report, we're going to go through the process of reconciling. And so that's what we'll do as the bookkeeper. We'll do the bank reconciling process so that we can generate that report in the event that we need to in an audit. And by doing that, we're also going to be providing assurance not only over the checking account, but over the entire bookkeeping system to some degree. Now, the first big internal control that we have to get our bookkeeping correct is the software itself, because the software forces us to have a double entry accounting system, meaning assets equal liabilities plus equity. That is a huge internal control that we can use to better make sure our bookkeeping is accurate. Now, the software forces us to do that. So oftentimes when people use QuickBooks, they get upset at certain things that QuickBooks will not let them do because QuickBooks is actually trying to do a favor and say, well, if you do that, you're going to throw out the double entry accounting system so they won't let you do it. So if you're able to kind of see how QuickBooks works and then put the data into QuickBooks, my level as an accountant of someone's bookkeeping, meaning if they gave me their bookkeeping and it was done by hand, for example, they gave me just an income statement that I'm going to upload into the tax software, for example, for United States income taxes. I don't have a whole lot of confidence that their bookkeeping is actually accurate. That might be a system that you have to use, but you probably have errors from year to year just due to the fact that you're not using a double entry accounting system. And these days, of course, the software, you don't even have to know what double entry accounting system is. If you use some kind of software, it'll basically force you to be using a double entry accounting system. So me, as an accountant, if someone gives me their bookkeeping and it's at least in accounting software, then I have a lot more faith in the financial statements than if they just gave me like an income statement. So again, you've got to do what you have to do to get the taxes done at the end of the year. But if you want to be more accurate over time, using some kind of software is a huge way to be more accurate over time because it gives you a balance sheet and it gives you the double entry accounting system. Okay, then the second big internal control is the bank reconciliation. And the bank reconciliation will give you assurance not just over cash, but also over the entire bookkeeping process. And this is kind of important to be able to explain to people because a lot of people are going to say, they'll say, hey, look, I know that my cash balance is fine because I check it every single day. I have online banking and I can see what's in the cash balance. And my balance over here in QuickBooks is pretty close to that. So I feel pretty confident that cash is okay, but that's not really what we're trying to do here. We're trying to reconcile the entire bookkeeping process. So in other words, if I look at the flow chart, this is a desktop flow chart we're using for online purposes just to look at the flow of the forms. We have been breaking out the flow of the accounting process into different cycles. So the entire accounting process is one big cycle that you can think repeating in essence on a monthly basis and then on a yearly basis. And then the cycles within a cycle, we have the vendor cycle, the customer cycle and the employee cycle. So the vendor cycle, at the end of it, we expect money to be going out for goods and services that we purchase. And of course, you'll note that cash will be involved. Money is going out. Money is part of that cycle. It's part of the lifeblood of the entire business. It's the blood in the veins of the body of the financials behind the business. And then on the customer side, we expect money to be eventually coming in for goods and services that we provide to customers. So again, the money is circulating through the system. It's part of the whole process. And then on the employee side or payroll, we know that of course money is going out for specifically payroll purposes. So that means if I can verify not just the balance of money, but every single transaction, if I have more confidence about each of the actual individual cash transactions, I have more confidence over the entire accounting system. So if I go back on over here, then the idea isn't to say, well, cash is pretty close to what's on the bank balance. So I feel pretty good that no one robbed me for cash.