Tips – Entering Historical Bank and Related Transactions
Entering Historical Bank and Related Transactions
This topic was written to help you understand how to enter old checks and other banking related transactions into Total Office Manager. This work will help assure that Total Office Manager’s balance sheet and income statements are up-to-date and current as of your company’s start date.
When you enter A/P , sales , and payroll transactions, Total Office Manager automatically records the following checking transactions:
Checks you wrote to vendors to pay bills
Deposits of customer invoice payments
Deposits of sales receipts
Paychecks you wrote to employees
Payments you made for payroll taxes and other payroll liabilities
After you’ve entered all of the sales related transactions (covered earlier) along with the remaining checks, deposits, fees, and other bank transactions from your start date to today, you can reconcile your bank statements against your Total Office Manager bank account , and the following data will be accurate:
Balance in your Total Office Manager bank account
Profit and loss statement for this year to date
Balance sheet for this year to date
All checks and other payments written between your start date and today
List of employees with all payroll related information
Payroll checks written to all employees
Record of deposits you made during that same period
Bank statements showing fees and other charges during that same period
Credit card statements showing charges and payments made between your start date and today
Enter your historical bank transactions using the date each transaction actually occurred. It doesn’t matter whether you enter checks before or after you enter deposits. Enter the following transactions:
In the Write Checks form, enter all miscellaneous checks written between your start date and today. Do not duplicate bill payments or payroll checks Total Office Manager has already entered. Enter the actual check number in the No. field, and clear the “To be printed” checkbox.
If the check is for an expense, enter the expense account in the Account field in the detail area. If it is a payment for a liability you track (for example, a loan), enter the liability account in the Account field in the detail area. If you track inventory and the check is for the purchase of items on your Items list, enter the item name in the Item field of the Items tab.
If the check is for sales tax, you must use the Pay Sales Tax Liability form. If you don’t pay sales tax through this form first, your sales tax liabilities will be incorrect.
If you want to be able to reconcile your account, and your bank account opening balance is from the statement prior to your start date, you probably have checks and deposits for the period between that statement date and your start date. Be sure to enter them so that your bank account balance will be correct.
If you do the payroll instead of using an outside payroll service, you’ll need to know everything about each employee: social security number, all the information that goes into determining tax status (federal, state, and local), and which deductions are taken for health or pension.
If your employees are on salary, you’ve probably been repeating the check information every payday, with no need to look up these items. Get the W-4 forms and all your notes about who’s on what deduction plan.
You also need to know which payroll items you have to track: salary, wages, federal deductions, state deductions (tax, SUI, SDI), local income tax deductions, benefits, pension, and any other deductions (garnishments, for example). And that’s not all-you also have to know the name of the vendor to whom these withholding amounts are remitted (government tax agencies, insurance companies, and so on).
Don’t enter a year-to-date amount for your payroll as of your Total Office Manager start date. This is one place where you should go back to the beginning of the year and enter each check or each quarterly total. If you enter one total amount for each payroll item, and your starting date is July, what will you do when somebody asks “Can I see your third quarter totals”? If the “somebody” is the IRS, they like a quick accurate answer.
Using the Make Deposits form, enter all remaining deposits made between your start date and today. Do not duplicate sales deposits Total Office Manager has already entered.
Fees and Transfers
Using a Journal Entry, enter any other fees or charges from your bank statement. Also enter any transfers between bank accounts.
Credit Card Transactions
There are two ways you can enter historical credit card transactions:
If you pay your balance in full each month, you can simply record a check for each payment.
If you entered a balance for your credit card account as of your start date, the first check should pay off that balance. In the Account field of the check, enter the name of the credit card account.
For checks written to cover credit card charges made between your start date and today, split the amount of the payment among the various expense accounts it covers.
If you don’t pay in full each month, or if you know of charges that have not yet appeared on your statement, use the Enter Credit Card Charges form to enter individual charges.
When you write a check to cover charges already entered in your credit card account (or for the opening balance of that account), enter the name of the credit card account in the Account field of the check. Don’t enter the expense accounts, because you are already tracking expenses in the Enter Credit Card Charges window .
If needed, you can enter interest and other fees directly in the credit card account through a Journal Entry.