Checking Out Computerized Journal Records for Your Business

By Lita Epstein from Bookkeeping For Dummies

Although you don’t have to close out journal pages if you keep your books using a computerized accounting system, running a spot check (at the very least) of what you have in your paper records versus what you have on your computer is a smart move.

To make this comparison, simply run a series of reports using your computerized accounting system and then check to be sure that those computer records match what you have in your files.

Accounts Payable reports

In QuickBooks, go to the Report Navigator and click on Vendors & Payables. The first section of the navigator page, shown in the following figure, is called A/P Aging (due and overdue bills). This section offers three possible reports:

Summary, which shows how much is due for each vendor
Detail, which gives a list of bills due and overdue
Accounts Payable Graph, a chart that illustrates your outstanding bills

QuickBooks allows you to run a number of reports concerning vendors and payables.

The next figure shows you the kind of detail you get when you select the Detail report. The Detail report is divided into:

Current bills
Bills overdue by 1 to 30 days
Bills overdue by 31 to 60 days
Bills overdue by 61 to 90 days
Bills overdue by more than 90 days

Obviously, anything in the last two columns — overdue by more than 60 days — is bad news. You can expect a supplier or vendor whose bills appear in these columns to soon cut you off from additional credit until your account is up-to-date.

The Accounts Payable Detail report provides a listing of all outstanding bills, the dates the bills were received, and the dates they’re due.

You can also use the information in the Detail report to verify that the paper bills you have waiting to be paid in vendor files match what you have on your computer. You don’t need to check every bill, but it’s a good idea to do a spot-check of several bills. The goal is to verify the accuracy of your records as well as make sure that no one’s entering and paying duplicate or nonexistent bills.

When it comes to cash flow out of the business, keep tight controls on who can actually sign checks and how the information that explains those checks is recorded. It is important to separate duties to protect each aspect of your bookkeeping system from corruption.

Accounts Receivable reports

You can also run reports showing the information recorded in your Accounts Receivable account. The next figure shows you a list of possible reports to run from the Customers & Receivables page.

In QuickBooks, you can run a series of reports that summarize customer accounts.

In addition to the Summary, Detail, and Accounts Receivable Graph reports, you can also run a report for Open Invoices, which lists outstanding customer invoices or statements, and Collections, which lists not only overdue customers but also how much they owe and their contact information.

Again, running spot-checks on a few customer accounts to be sure your paper records of their accounts match the information in your computerized system is a good idea. There’s always a chance that a customer’s purchase was entered in error in the computer, and you could end up sending the bill to the wrong person.

Other computerized reports

In addition to keeping actual accounts, such as Accounts Payable or Accounts Receivable, your computerized accounting system keeps a journal of all your company’s transactions. This journal contain(s) details about all your transactions over a specified time period and the accounts that were impacted by each transaction. The following figure is a sample computerized journal page.

A computerized accounting system keeps a journal of all transactions, which you can review during the closing process.

If you need to be reminded of how you recorded a transaction into your computerized accounting system, run the Journal report by date, isolating all transactions that took place at a particular time. Running a report by date can be a helpful tool if you’re trying to locate the source of an error in your books; if you find a questionable transaction, you can open the detail of that transaction and see how it was entered and where you can find the original source material.