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A Few Possible Reasons Why Your Accounting Balances Aren’t Correct

Ron Cluff

By Ron Cluff, Director of Training

October 2016

One of the things we hope the most for you is that you’re running your business by the numbers.  You’ve probably heard that phrase before, but are you doing it?  Not just the number many people think of first (the one that begins with “checkbook” and ends with “balance”), but the numbers in your financial statements.  Of course, in order to make decisions about your company based on your financials, your financials must be accurate.  Unfortunately, we speak with many customers whose aren’t.

If you’re looking at inaccurate financials in QFloors, here are some possible reasons why, and what to do about it.  Please email or call us with any questions.

Some key procedures in this discussion are A) entering into QFloors your ending general ledger balances from your previous system, and B) closing your general journal monthly (or at least annually).  

Keep in mind that you must do our End of Period Procedures before attempting to clean up your financials.  That document is found on our website - after logging in, use the Search Bar at the top of the page to find it.  (I’ll be posting an updated version of that document on our website by the end of October.)

You haven’t entered the ending balances from your previous system into QFloors.

When you first started using QFloors, you went through the “Getting Started Checklist” and the “General Ledger Conversion” steps in our Quick Start Manual.  One of the last steps in the General Ledger Conversion (or “GL” conversion) is to enter your accounting balances.  If you purchased a full onsite training, we do that entry for you.  If for some reason that entry has never been done, you have a few options, based on when you purchased QFloors, and the date of the most recent income tax return that was filed for your business.

If you purchased QFloors in 2016, then just do that entry.  You’ll need to do it before you can provide accurate financials to your accountant so they can prepare your 2016 income tax return.

If you purchased QFloors prior to 2016, and an income tax return was filed for a tax year in which you used QFloors, then you’ll do a GL conversion using your accountant’s financials for that tax year.  For example, if you had purchased QFloors in 2013, had never done a GL conversion entry, and your income tax returns were filed for 2014 but not for 2015, you would need to do a GL conversion using your accountant’s 2014 financial statements.

You’re not closing the general journal monthly, and maybe not even annually.

Perhaps you did enter your previous system’s ending balances into QFloors, but if you didn’t close that period, it’s very likely that the balances for that period no longer match the balances that came from your previous system. Someone probably changed something in that period, or added a transaction to it.

Or perhaps you did close your journal for that period, but didn’t close it for a subsequent fiscal year end, and your income tax return was filed for that year.  It’s very likely that the balances for that year are no longer correct, and you’ll need to do a GL conversion for that tax year, using financial statements from your accountant.

See the “Close the General Journal” section in the End of Period Procedures for details.

You haven’t entered your accountant’s end-of-year adjustments.

After you printed financials and submitted them to your accountant so they could prepare your income tax return, did they provide you with a list of adjustments for that year?  Did you enter those adjustments into QFloors?  If not, your financials are inaccurate.

As soon as you print financials for your accountant, close the journal for that fiscal year.  When they provide your completed tax return to you, make sure they also provide you with adjusting entries for that year.  Then be sure to enter those adjustments into QFloors.  See the Knowledge Base article on our website, How to Create a Journal Entry - after logging in, use the Search Bar at the top of the page to find it.

Ron Cluff

About the Author

Ron Cluff - Director of Training

Ron's careful attention to detail coupled with 15 years of working with QFloors ensures that software support and training is comprehensive and effective.