1st Question - My business has been up and running for about 4 months now. I opened a Bank Checking Account and a Business Credit Card Account. The credit card has a Main Account and 2 cards under/sub accounts. All my expenses are flowing in properly. However, I have made 3 credit card payments. When I run reports, the payments are showing up as a Negative Equity Amount in my Balance Sheet and trial balance. I guess how I would expect the accounting flow to work is a Payable against the credit card account vs expense as the monthly transaction flow and then a reduction of the payable when the cash is sent out the door to pay the bill. What am I doing wrong?
2nd Question - What is the typical monthly order of operations in terms of booking expense, tagging receipts and running the reconciliation reports? I suspect I clicked the reconcile button on one the accounts and I think that is what created the negative equity. So perhaps I am doing something out of order. I have chosen not to reconcile anything since. My flows are pretty simple, all expense are on Credit card or through online banking so I rarely issue a stand alone check that would be outstanding.
A negative balance in Credit Card account can be caused by incorrect opening balance or transactions that are older than the opening balance. Also, missing or duplicate transactions, and the opening balance QuickBooks enter when you connect your credit card accounts online.
To fix this, let's start by reviewing the opening balance entry in the Chart of Accounts. Here's how:
Select theAccountingmenu, then selectChart of Accounts.
Find the account on the list.
SelectView registerto get more details.
Search for the opening balance entry. It should have Opening Balance Equity in the Account column.
Make a note of the date and balance.
If you forgot to enter an opening balance, but, you're already tracking transactions in the account, you can enter the opening balance manually so your accounts stay balanced.
Then, compare the balance on your bank records to what you entered as the opening balance in QuickBooks. If the amount doesn't match your statement, edit it:
Go back to your bank register.
Select the opening balance entry to expand the view.
In theDepositcolumn, edit the balance so it matches your bank records.
However, if you recently entered older transactions that come before your opening balance, please refer to the article below to reconcile them: Reconcile Older Transactions.
Meanwhile, when creating transactions from the credit cards you'll need to select the correct Expense accounts or Accounts Payable if there's a bill.
Additionally, when downloading bank transactions, QuickBooks Online recognizes a match if they have the same transaction date, total amount, or description. To avoid duplicates, check this additional reference to categorize downloaded transactions: Match and categorize your downloaded bank transactions.
For more information and QuickBooks reconciliation workflow, please check this article: Reconcile Hub.
If I can be of any additional assistance, please don't hesitate to let me know. Have a good one.
Thanks, I will have a look at your suggestions. The interesting part is once I opened my accounts, I also started quick books, so my beginning balances should all be 0. I'll reply with what I find after I read your suggestions more thoroughly. Thanks!