Process for Simplicity

Accounting is not hard in principle, but without discipline and diligence, even simple things can quickly compound into complexity!

Daily/Weekly Processes

Expenses

  • use the reciept, or invoice (print it if it’s an online purchase) and enter the transaction into QuickBooks Online (QBO) as an expense or bill (if it’s going to be paid later)
  • annotate printed invoice/receipt with “Entered”
  • If on Visa, pay off purchase via online banking
  • annotate inovoice/receipt with “Paid”
  • put it in that months financial records folder

For Visa Purchases

  • 1-2 Days Later bill payment will appear in the banking section of QBO
  • change the transaction type to transfer. Destination account should be the Visa account in QBO

Note - The above is for a Visa card that does not provide a means to download a record of transactions. If you can download your Visa transactions, you should be able to import them and then match the bill payments from your bank account to the payments on the Visa account.

Income

All income (sales, services, rentals, etc) should have an invoice created in QBO. We’ll print them when they’re paid, for archival purposes.

Monthly Process

Easiest if this is triggered when the Visa statement arrives.

Expenses

  • reconcile the Visa statement
    • find, print, enter into QBO, and pay the missed expenses
  • Go to the Expenses section of QBO
  • Repeat: Filter the list of expenses by each transaction type, status, and date range (ie expense, bill (status=paid), …)

QBO Transaction Filter

  • export the list of transactions to your spreadsheet app

QBO Export Transactions

  • change the “attachment” column to be “in envelope”
  • add a final row with a =counta() to count the number of transactions. It should match the number of invoices/paid bills/receipts in the envelope.
  • Also add a sum() in the final row to calculate the total value of expenses paid this month. This should match the actual outgoing cash this month.
  • print this spreadsheet
  • take each of the expense reciepts, invoices, check stubs, etc and put them in a (new) envelope. Mark each receipt filed in the envelope in the matching “in envelope” blank box of the printed spreadsheet
  • find or note any missing items
    • put an asterisk by any bank charges and note that they’re listed on that months bank statement(s)
  • staple the spreadsheet to the month’s expenses envelope and file it in the folder for that month.

Income

  • go to “sales” -> “all sales”
  • Filter on “money received” and set the date range
  • export the list to your spreadsheet app
  • modify the “attachments” column to be “in envelope”
  • add an “invoice/sale” column to the spreadsheet
  • add an extra, final row to the spreadsheet
  • in this new row insert a cell which adds a =counta() of all the transactions. This number should match the number of invoices/sales slips in the envelope.
  • in this new row insert a cell =sum(). This should be the actual cash recieved for the month
  • get a new envelope
  • in QBO, click on each Payment, find the invoice/sale it’s applied to
  • add the invoice/sale number to the spreadsheet
  • print the invoice/sales receipt (including partial payments!)
  • print this spreadsheet
  • mark of income invoices, sales, etc on the spreadsheet as you put them in the envelope
  • staple the spreadsheet to the months income envelope and file it in the folder for that month

Note

There a subtle difference between filtering on “money recieved” and specific transaction type and status for the month of interest. Filtering on “money received” will include payments for invoices issued in previous months!

For example, filtering on “invoices” that were paid in July won’t show any invoices from June, May, … that were also paid in July. Whereas filtering on “money recieved” will let you see all invoices that payments are against, independant of when they were issued.

Result

Each month ends up with an archival copy of all funds recieved and paid that month.

They’ve been verified, and the total on the summary sheet has been calculated outside of QBO as an extra check.

Notes

The data in QBO is acrual based. That is the values recorded may not match the actual monies recieved.

The archival paperwork is cash based: ie an invoice only appears in one months archive folder, the month the funds where spent/recieved.

eg an invoice issued in June but paid in July appears only in the July archive as thats when it was paid/the funds were received.

If the archives where acrual based, the (unpaid) invoice would be in the June archive, and the payment/reprint (marked as paid) would be in the July archive. That could be nearly 2x more peices of paper to generate, sort, and store!

Exception: Partial payments. Then the invoice will appear in multiple months records- until it is completely paid.