The QuickBooks Desktop Client Data Review offers a variety of tools to assist you in your periodic review of a client's data. One of the tools, Troubleshoot Prior Account Balances is especially beneficial in helping you identify balances that are different in the client's books from your own records for the client from your last review.
This feature, which displays the differences in the balances, also suggests adjusting entries to correct the opening balances. The feature is available for accountants and ProAdvisors in their QuickBooks Desktop Accountant and QuickBooks Enterprise Accountant versions.
Let's look at how easily this tool can assist you in troubleshooting prior account balances.
Entering the Review Period
The process begins by entering the from and to dates, and the basis for the prior review period in the boxes at the top of Troubleshoot Prior Account Balances tool. Typically, the prior review period ends one day before the current review period starts.
The prior review period does not have to be the same length as the current period; however, the ending date must be current. This tool can be used for annual reviews, semi-annual reviews, quarterly reviews and even monthly reviews.
Beginning Balances
When using this tool the first time for a review, there will be no Balances in the Accountant's Records for a prior review period. You must enter these balances using information you have from your last review.
After the first review using this tool, the balances are saved as part of completing the review. Going forward, you won't need to enter any balances manually.
The accounts are listed from the current chart of accounts.
During the first review done with this tool, you can either enter the balances manually or have the tool copy all the balances from the Balances from Client's File columns into the Balances in Accountant's Records columns.
But if you are questioning balances, notice balances don't conform with your own prior balances or that balances are missing, enter the amount from your prior review in either the debit or credit column, as appropriate.
If you elect to copy the balances, the tool prompts you about copying the balances, and you only have to select Yes after message appears. If you let the tool copy the balances, it is very important to correct any of the prior balances that do not match your records.
If you previously completed a review for a prior period with this tool, both sets of balances display automatically. There is no automatic display of the Last Review Balances until at least one set of prior balances has been entered manually.
Review Differences Using the Tool
After the Accountant Balances are present (or entered/corrected), the differences appear in the Debit and Credit difference columns automatically.
To make review of these differences easier, you can option to view only the accounts with differences by checking the "Only show accounts with different balances" check-box at the bottom of the window.
The Difference columns show the total of the differences between the Balances in Accountant's Records and the Balances in Client's File by account. You can Quick Zoom on an entry in the difference column to see all the transactions for an account or select the View Changed Transactions button.
Make Adjustments to Accounts with Differences
Obviously, you can make manual adjustments to the individual balances using one-on-one journal entries, or by making corrections to any erroneous transactions themselves. But for significant differences, you can allow the Troubleshoot Account Balance Tool to create an adjusting entry to correct the differences.
Select the View Suggested Adjustment button to see an adjusting entry that contains line items for each entry in the differences columns.
Note: Because our example included both Accounts Receivable and Accounts Payable problems, we could not make a single Adjusting entry to resolve those starting balances. Accordingly, the totals reflected above do not match the totals of the adjustments required in our example.
Typically, you will want to make adjustments to A/R and A/P with specific references to the appropriate customers and vendors. You typically must make multiple adjusting entries, if there are balance differences in both A/R and A/P.
Many times, it will be necessary to make more than one adjusting entry to correct the balances. If you make an adjusting entry that adjusts a portion of the balances, the differences columns will reflect only the accounts that remain different. You then can make an additional adjusting entry to correct the remainder of the accounts.
As soon as you adjust the balances, the difference columns are recalculated. Once you have corrected all the balances, the difference column should be zero. Seeing zero balances in the difference columns verifies that the opening balances for the review period are now correct with your opening balances.
The CDR Troubleshoot Opening Account Balances tool is a great feature that streamlines the problems you often encounter when performing reviews and finding client balances that don't match your prior work. It not only quickly identifies those problems, but also makes it so easy to correct them.
Disclosures
Adapted from Intuit QuickBooks Desktop Accountant Help content and related source materials. Source content materials were adapted by Insightful Accountant solely for educational purposes.
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