This chapter is from the book
This chapter is from the book
This chapter is from the book
Finding Item Errors in QuickBooks
Want to quickly fix some of the most common errors in QuickBooks? Reviewing and correcting items in QuickBooks can be the best and easiest way to repair a company's data file. The most common reason for misstatement on a company's financials is often traced to incorrectly set up items.
Often, it is easy to tell that the items were set up incorrectly. Some indicators of this might be understated revenue, negative costs, or just an overall lack of confidence in the financials.
To help you in those instances where incorrectly set up items might not be so apparent, the following sections offer a few methods for reviewing the item list.
Reviewing Accounts Assigned to Items
Adding and removing columns you view in the Item List dialog can help you notice any setup errors that exist. To customize the Item List Lookup dialog for items, do the following:
- Click Lists, Items and while highlighting any list item right-click it and click Customize Columns, as shown in Figure 3.5.
Figure 3.5 Customizing columns on the item list can help you see item errors easily.
- In the dialog box that appears, add the COGS Account by highlighting it in the Available Columns pane as you see in Figure 3.6, and clicking Add to include the account in the Chosen Columns pane on the right. Add or remove from the Chosen Columns pane those fields that you want or don't want to see when viewing the Item List Lookup dialog.
Figure 3.6 Choose the available columns you want to view in the Item List Lookup dialog.
- Click the Move Up or Move Down buttons in the center of the dialog box to customize the order in which you want to view the columns (see Figure 3.6), and then click OK.
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Now you can conveniently review the list for those items that do not have a Cost of Goods Sold or expense account assigned. Not having an expense account assigned becomes problematic when the item is both purchased and sold; both types of transactions will report only to the single account selected.
See the "Fixing Item Errors in QuickBooks" section of this chapter for a more detailed discussion of how to properly fix one-sided items.
Item Listing Report
Another method to review the item list setup is the Item Listing report (click Reports, Lists and select the Item Listing report). Click Modify on the report, and in the dialog box that appears click the Display tab to select the columns to view. Useful columns include Item, Description, Type, Account, Asset Account (for inventory items only), COGS Account, and Sales Tax Code, as shown in Figure 3.7. These columns define where your purchase or income transactions are reported to on your financials.
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Figure 3.7 Modifying a report to display specific detail.
What exactly are you to look for on the list item report as shown in Figure 3.8? One thing you are looking for are items that you use on both purchase and sales forms but that have only the Account column details. If you collect sales tax, be sure the correct sales tax code is selected. For a more detailed discussion of sales tax in QuickBooks see Chapter 12, "Reviewing and Correcting Sales Tax Errors."
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Figure 3.8 Modify the Item Listing report to review your item setup.
Profit & Loss Summary Report
If you suspect errors with your financials, drilling down on the Total Income, Cost of Goods Sold, or Expense detail from a Profit & Loss Standard Report might provide clues to the mistakes. To generate this report, follow these steps:
- Click Reports, Company & Financial, and select the Profit & Loss Standard report.
- On the Profit & Loss Standard report double-click the Total Income column total, as shown in Figure 3.9. A Transaction Detail by Account report appears, showing each line of detail that makes up the amount you viewed on the original Profit & Loss Standard report.
Figure 3.9 Review your Profit & Loss Standard Total Income.
- On the Transaction Detail by Account report click Modify Report. In the dialog box that appears, click the Filters tab. In the Choose Filter pane select Transaction Type.
- In the Transaction Type drop-down menu, select Multiple Transaction Types, as shown in Figure 3.10. The Select Transaction Type dialog appears. Click to place a check mark next to each transaction type that normally would not be reported to an income account, and click OK.
Figure 3.10 Modifying the detail of Total Income from the Profit & Loss statement helps review whether items were set up correctly.
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The resulting report now shows all purchase type transactions (or whatever transaction types you selected) that were recorded to income accounts. In the example shown in Figure 3.11, a vendor check transaction type appears in the totals for income. This is because on the vendor check an item was used that only had an income account assigned. After you determine that you have these types of errors in posting, you should review your item list for any one-sided items. This topic is discussed in this chapter, in the section titled, "Fixing Item Errors in QuickBooks."
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Figure 3.11 The Modified Transaction Detail report shows an expense type transaction reporting to revenue.