Yearly Reconciliations & Adjustments

Hi Christine!

Since I am always thinking with my payroll brain, let me give you advice about payroll and adjusting entries. I know how important it is for liabilities to balance out at the end of the year, but it's really important to not do adjusting entries on Payroll Liabilities if the account shows a balance that shouldn't be there. Showing balances after all taxes and other liabilities have been paid could mean there's a problem with the way a Payroll Item is setup or with how other payments have been classified. Doing adjusting entries to fix the problem now will not fix the root cause of the problem and you may see the same issue happen over and over. My advice is to attempt to find what caused the problem in the first place and correct it. Not only does that fix your liability balances, but it keeps the same problem from happening again! By the way, our payroll support agents are really good at helping to troubleshoot those types of issues and are happy to help if you ever need it!

As for yearly reconciliation, I think it's always a good idea to archive and condense (called "Clean Up Company Data" in QuickBooks) yearly as well. Doing this helps keep your client's file at a working size with current customer and vendor information and the process has you make a backup. So if you or your clients ever need that info again...it's there...just restore the backup!

Speaking of backups...remind your clients to backup often. One of the calls we see most often comes from companies who have experienced a system or computer crash with a total loss of data. Many of these companies either never made a backup of QuickBooks or never put their backup on a disc or flash drive so it would be there if their whole system crashed. That's always so important!

I hope I've given you some helpful information. Add a comment if you have further questions or mark your questions as Solved or Helpful. Thanks again for visiting the forum!