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275: Recording Questionable Transactions Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner



275:  Recording Questionable Transactions Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner, Or Self-Employed


When you are doing the bookkeeping for your business, or maybe you are doing bookkeeping for multiple clients, the one thing you don’t want to hold you back from moving forward is having a transaction that you are unsure about how to record.  If you are like most people, you’ll let this one transaction derail you and keep you stuck, especially if you are looking for a reason to stop doing your bookkeeping.  I get it. I know I love doing bookkeeping, but it isn’t everyone’s favorite.  What if I told you there is a simple way that you can record these questionable transactions and keep moving forward with recording the rest of your bookkeeping transactions?  It will even allow you to reconcile your accounts.  In today’s podcast episode, I’m revealing an account that you have available to you in QuickBooks Desktop and QuickBooks Online, or you could even utilize this strategy in any accounting software you might be using.  You can even use it if you are doing your bookkeeping manually.  Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA; make sure that you are aware of this simple hack you can utilize in your bookkeeping system to help make bookkeeping more manageable and keep you moving forward.  That’s right; after this podcast episode, you have no excuse to say you are stuck any longer.  These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…


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Show Notes:


When you are doing the bookkeeping for your business, or maybe you are doing bookkeeping for multiple clients, the one thing you don’t want to hold you back from moving forward is having a transaction that you are unsure about how to record.  If you are like most people, you’ll let this one transaction derail you and keep you stuck, especially if you are looking for a reason to stop doing your bookkeeping.  I get it. I know I love doing bookkeeping, but it isn’t everyone’s favorite.  What if I told you there is a simple way that you can record these questionable transactions and keep moving forward with recording the rest of your bookkeeping transactions?  It will even allow you to reconcile your accounts.  In today’s podcast episode, I’m revealing an account that you have available to you in QuickBooks Desktop and QuickBooks Online, or you could even utilize this strategy in any accounting software you might be using.  You can even use it if you are doing your bookkeeping manually.  Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA; make sure that you are aware of this simple hack you can utilize in your bookkeeping system to help make bookkeeping more manageable and keep you moving forward.  That’s right; after this podcast episode, you have no excuse to say you are stuck any longer.  These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…


Welcome Back…I know this is a busy time of the year for business owners and bookkeepers.  It’s time to make sure that you have all of your prior year’s data recorded and ready to go so that you can have an accurate set of financial statements to get your tax return prepared.  I’ve worked with business owners for over twenty years, and I’ve seen it all, but today I’m going to cover one of the biggest pitfalls I see when you are entering your transactions and you get stuck on a transaction you are unsure about how to enter.  Many will just stop recording their data, say they are stuck, and give up, but after you start utilizing this easy-to-implement solution, you’ll be able to move past that one transaction that would typically hold you back and continue recording your remaining transactions.  You’ll be able to reconcile your accounts, even if you are still unsure how to record the transaction that would have kept you stuck in the past.

 

If you are using one of the most popular accounting software systems like QuickBooks Desktop or QuickBooks Online, you might have already seen this solution and were unsure what it was for, so you may have never used it.  The solution I am talking about is the Ask My Accountant account.  This account is often automatically added to your chart of accounts, but if you don’t have this account already, you can easily add it by going to your chart of accounts and adding it as an account in the other expense category.

 

Whenever you have a transaction you need to record but you are unsure how it should be recorded, you can simply record it to your Ask My Accountant account.  This will allow you to keep moving forward with recording the rest of your transactions.  Since you can record all of your transactions, even if you are unsure which account they should go to, and you are not missing any transactions, you’ll also be able to reconcile your accounts so that you can make sure that you are capturing all your transactions and have accurate financial statements.  This feature is not only helpful for business owners who are doing the bookkeeping for their own business, but many bookkeepers will use this same process when they are doing bookkeeping for multiple clients and they run across a transaction they are unsure about.  By using the Ask My Accountant account, you are able to funnel all your questionable transactions into one place where you can then take the time to focus on getting the right answer.

 

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The most popular use of the Ask My Accountant account is when you are unsure which account to use.  Another instance when people use the Ask My Accountant account is if they are not sure if the transaction should be classified as a fixed asset or not.  There may also be times when someone on your team uses a credit card, check, or other transaction, and you are unsure about what that specific transaction is for, or maybe you are just waiting for another piece of information to be able to record your transaction.  Whatever your question is, if you are ever unsure, use the Ask My Accountant account.  When you are recording a transaction and you are using the Ask My Accountant account, enter your question in the memo field so that when you come back to this account, you remember why you classified the transaction as Ask My Accountant in the first place.  This will be helpful for you when you look back, but it is also beneficial for your accountant, bookkeeper, or tax preparer so they understand why you were questioning the transaction.

 

When you know you are recording all of your transactions properly, and you are using the Ask My Accountant account for anything you are unsure about, you can be confident knowing that all of your other transactions are accurate.  When you get all of your Ask My Accountant questions answered, your financial statements will be accurate as well.  The best part of using the Ask My Accountant account is that now all of your questions are in one spot.  You can easily see every transaction you have in this account by either going to your chart of accounts and viewing the register for your Ask My Accountant account, or you can generate a profit and loss report, and in the other expenses section, you’ll see your Ask My Accountant account with the total of all the transactions you have recorded in this account.  You can double-click on this number, which will create a transaction report with each transaction listed.  From here, you can start asking your accountant how you should record your transactions.  When you get the answer, you can double-click on the transaction and go to the original transaction that you entered, and replace the Ask My Accountant account with the correct account.  When you do this for each questionable transaction, your Ask My Accountant account will show a zero balance which means you have no other transactions in question.  If your accountant, bookkeeper, or tax preparer has access to your books, you can let them know that you are utilizing the Ask My Accountant account, and they can reclassify the transactions for you if you have enough information listed in the memo field.  If not, they may ask you more questions to make sure they classify the transaction to the correct account.  This is why it is essential to use the memo field to list why you have questions about the transaction or any helpful information.  If you have already reconciled your transactions, make sure that you don’t change the dollar amount of any transactions.  The only thing that should be changing in these transactions is the account.

 

Utilizing the Ask My Accountant account or any temporary holding account in your accounting software will help you to track transactions you are unsure about how to classify.  It will help you keep moving forward even when you are waiting for additional information to record in a transaction.  These temporary holding accounts are helpful if you are a business owner doing your own bookkeeping or you are a bookkeeper, accountant, or tax preparer doing the books for other business owners.  Most accountants are familiar with these accounts and know they need to reclassify the transactions in these accounts before the financial reports are accurate.  It is also useful when you are creating journal entries and you are still waiting for additional information.  The Ask My Accountant account is a powerful tool to help you maintain accurate and timely financial statements. This simple tip will help you stay on track with your bookkeeping.  There is really nothing that should stop you from moving forward now that you know you have a place you can record transactions you are unsure about.  If you still find that you have situations that are holding you back in your business or when it comes to Mastering Your Small Business Finances, I’m here to help.  Your potential is limitless, and you are capable of anything you put your mind to. 

 

And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.

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