$0.01 differences

FCMemorials · ‎November 06, 2023

Hello,

I started working for a company that primarily uses a paper contracting system. The math for their orders is still done by hand on a calculator, and then after the sale, I input the information into their Quickbooks- Desktop. Due to rounding differences between the calculators and QBs, I end up with a lot of customers who look their owe or are owed $0.01.

This is not a situation where the customer would receive a refund, nor would they need a credit as they are charged based on what our calculators say, not what QB says.

Previous to my employment, their bookkeeper had been using GJEs to adjust the "penny differences" as they called it.

Is this the most appropriate way to handle fixing these differences? I thought that it was recommended not to use JEs for Accounts Receivable. I need our income to accurately reflect that these pennies are not owed, and are not part of our income. If I try to adjust the totals on the invoice, it often doesn't work out the way I need it to with the tax.

If there is a better way to take care of this issue, can I fix the JEs from this year or should I leave those alone?

Thank you for your help and time!

ZackE · ‎November 06, 2023

Welcome to the Community, FCMemorials.

To properly identify how you should adjust your penny differences, whether you should or shouldn't make changes to certain journal entries, etc., I'd recommend working with an accounting professional.

If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

Go to our Find a ProAdvisor page.
Use the City or ZIP search field to specify a location.
Select Find a ProAdvisor.
Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

Once you've found an accountant, they can be contacted through their Send a message form:

Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
Hit Send message.

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

If there's any additional questions, I'm just a post away. Have an awesome day!

Rainflurry · ‎November 06, 2023

@FCMemorials

Try creating a non-taxable service item called "Rounding Adjustment" or something similar and assign it to an expense account called "Cash Over/Short" (set one up if you don't have one). Then, you can add this item to invoices and, since it is non-taxable, you should be able to accurately change the invoice amount to match the payment received. Then, at the end of each month, you can create a single journal entry to close out the Cash Over/Short expense account. If Cash Over/Short is positive, debit an appropriate income account and credit Cash Over/Short for the balance. If Cash Over/Short is negative, debit Cash Over/Short and credit an appropriate income account. Those journal entries will zero out the Cash Over/Short expense account and adjust income accordingly.

FCMemorials · ‎November 07, 2023

Thank you for your reply and your suggestion, I will give that a try!

~Kind regards

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