Question about QuickBooks and Downloading Transactions from Bank
 

Thanks in advance for any and all advice!

I have a new client that I am doing the accounting for - I'm not the CPA, just doing the day-to-day accounting for this company.

Some background: The company's books are throughly goofed up and the bank statement had not ever been reconciled (in over 8 years). In fact, the prior tax return was done by a CPA who did not even use the company's books to do the tax return. This CPA is currently being investigated for fraud. The company is small but not tiny and has annual sales of about $3mil. As a result of improper (or lack of) recording of a whole lot of things, the book balance of cash vs bank is off by about $1mil.

I'm now working for the new CPA and I was asked to create a completely new QB file with just 2009 transactions & forward. After doing this, we discovered that about 40% of all checks written as well as wire transfer payments to vendors were never recorded in the original QB file. In fact, the existing bookkeeper was entering purchase orders for all wire transfers - thinking that this was recording the cash out (in reality, it's just creating an order to send to a vendor and has no effect on the books at all).

So, I'm not at the point where I need to get all of the missing transactions recorded and the CPA & I have come to a fes possible solutions: a) enter all of the missing transactions (which could take a fair amount of time) b) start an entirely new file (again) and import all transactions using the online bank download feature. Or, c) do a QB bank download and only keep the transactions that we want (ie., the missing transactions) and use to fill in our existing QB file. The CPA seems to feel that a completely new file is the best route and download everything from the bank.

In all cases listed above, it is highly likely that QB bank download will be missing pieces of a transaction (for example, the bank may know the check # and who written to, but will not know the proper G/L expense coding). There is going to be a lot of manual input no matter what we do.

I'm just wondering if any of the accountants on the board have ever used the bank download feature and do you have any advice. I've not used the feature but I have reviewed the QB tutorials and it looks like a pretty slick system and I'm looking forward to diggin in as I may be able to use this with some of my other clients.

I'm using QB Premier 2010 Accountants Version.

Thanks in advance..........Vern

I agree with the CPA (FYI - I do bookkeeping and QB work, but have a BA in business, not accounting + used to work for a CPA).

Start a new file for 2010. The challenge is going to be the balance sheet. If it were correct, you could just make one JE dated 12.31.09 to bring it all in. However, it sounds like some major adjustments are going to be in order - probably generated by the CPA. I had a client with a very similar situation and the CPA really wanted to go back and clean up the prior periods and amend the tax returns. The client didn't want to be bothered and gave up a significant refund.

A download from the bank is going to include date, payee, and amount. You'll still have to code everything, but QB will learn the coding after you've entered it a few times. Different banks have different limits on how long transactions are available for downloading, so you may have to enter some manually. Assuming they're dealing with the same payees month to month, eventually, you'll hit "Add multiple to register" button and watch it all happen automagically.

For me the hardest part about dealing with a client like this is that once everything is cleaned up they usually go back to their old ways. I'm about to drop two clients because I'm tired of not hearing from them for months and then suddenly they'll call and want it all caught up again.

Do they have credit cards? IF they were correctly entered you should be able to export the register to Excel then import to the new company.

We're running 2009, but I'll have the wifey look at the question and see if she can come up with a better answer. She was reconciling on a yearly basis, now she's reconciling on a monthly basis...

Thanks!

As far as the balance sheet; there's nothing correct except fixed assets. Deposits were also entered incorrectly & randomly so the A/R is way out of whack.

I'm going to develop some formal procedures that they will have to follow. I believe the current, inhouse bookkeeper and do it correctly but nobody has ever taught her the correct way so she's been winging it. After all the cleanup, I will continue to reconcile their accounts and produce monthly financial reports.

This is new teritory for me. I worked for a large public company for 21 years and it's hard for me to believe that this client has never seen a financial statement. On the brighter side, I don't have as ridged of deadlines, like the good old days; work till midnight every month-end only to hear complaints when profits were down & forecasts wern't rosy enough.

2009 & 2010 Premier are very similar but 2010 has some new features that are primarily for the CPA and client review.

Thanks again :)

I'd go through it line by line. Every messed up set of books I've ever seen had a balance sheet that was a bunch of random numbers. Yeah, they're numbers, but if you drill down to see where they came from you'll find they're not GOOD numbers.