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accounts306
Level 2

Accounts Categories

Hi all, so i've been using QB coming up 2 years and having trouble with reconciliation,

The balance if off by over £40k from the beginning at 0 balance to the current date.
I'm unsure why but have an idea potentially but need confirmation.
I think i'm selecting the wrong type of category for the expenses or just in general for all sorts of transactions.

I am an electrician and so there are so many categories that baffle me, all I'm after is an expense category such as purchases (purchase of materials, tools etc) but instead, when selecting the Purchases category, it comes under 'cost of sales' which i think is potentially where i'm going wrong? if this is the case then i need some help to maybe select the correct category or creating one because i cannot find a suitable one for my needs.
What would be great is for example,
Builders Merchant- XXX 

Category- Purchases/Expenses/Materials 

20% VAT

I hope this makes sense, obviously i'm not an accountant so these things are not straight forward to me!

Look forward to hearing from you

Solved
Best answer June 21, 2022

Accepted Solutions
emmam6
Moderator

Accounts Categories

Hello Accounts306, Thanks for contributing to the Community. In regards to which categories to use we need to advise that is best to consult with an accountant. Any further questions on this feel free to add to this thread.

View solution in original post

3 REPLIES 3
MaryLandT
Moderator

Accounts Categories

Let me help fix the incorrect balance when reconciling your bank account, accounts306.

 

Most beginning balance issues are caused by an incorrect opening balance. This is the account's starting point you set when you first created it in QuickBooks.

 

Also, if you have connected the bank for online banking, QuickBooks automatically creates an opening balance. If you've manually entered an opening balance when you create the account, make sure there's only one entry.

 

You can delete one of the entries if there are two opening balances. Simply go to your Chart of Accounts and make changes from there.

 

Here's how:

 

  1. Go to the Gear :gear: icon at the right top.
  2. Select Chart of Accounts under Your Company.
  3. Locate the account, then click Account history under Action.
  4. Find the opening balance.
  5. You can either delete or edit it.
  6. When you edit it, make sure to enter a zero amount to fix the opening balance.
  7. Click Save and close.

 

To ensure the opening balance is correct, you have to compare transactions from the bank statement with what's in QuickBooks. You can use these articles as a guide in correcting balances or previous and current reconciliations.

 

 

About categorizing expenses, I recommend consulting your account for specific instructions. This is to ensure your transactions have the correct categories.

 

Once the bank balances are correct, you can start reconciling your account

 

Keep me posted if there's anything else I can help you with reconciling your bank account. I'm always right here to guide you.

accounts306
Level 2

Accounts Categories

Hi, thank you for your response, I have learned something new from this which is good but am still struggling slightly.

What category would you recommend me put for a payment made for materials at a local electrical supplier?

Would it be raw materials? or stock maybe?

 

Thanks 

emmam6
Moderator

Accounts Categories

Hello Accounts306, Thanks for contributing to the Community. In regards to which categories to use we need to advise that is best to consult with an accountant. Any further questions on this feel free to add to this thread.

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