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Extreme Makeover - Financial Recordkeeping with Quickbooks

Are you a Financial Data Spewer? Is your Quickbooks data the result of inaccurate and inconsistent spewed financial transaction postings that you've posted? Do you try to prepare your taxes with incorrect data from your recordkeeping software?

Spewing is a technique used by writers to get their thoughts into print before they lose the train of their thoughts. It means to just put the information into print as quickly as possible without regard to completely perfect form or perfect flow. The idea is to document the data and to revisit it later to tweak and correct and perfect accuracy of facts and flow of thoughts and words. In writing spewing is a good thing.

But what about when it comes to financial recordkeeping, are you a spewer and is it a good thing? Do you spew inaccurate information into your software package? Over the years Iíve worked with various software packages for tracking financial data for personal and/or business information. Quickbooks by Intuit is the package that is my preference but no matter what software you use if you are a spewer of information and you spew inaccurate information as your input your results will not be accurate and if you give that data to your Tax Preparer or you use that data to prepare your own returns, your returns will be WRONG.

But you ask what if I donít really know what account I should post a transaction to or what if I use the receivables and payables modules inconsistently? Isnít it better to just spew the data into the program even if itís posted incorrectly so as not to lose the data?

Thatís one of those questions with both a yes and a no answer. Yes you should put the data into the system but I recommend you post the transaction to an account that you have set up named Uncategorized or Unsure or I Donít Know so that it is easy for your accountant or tax preparer to revisit the questionable transactions and to reclassify them accurately. No, you should not just guess and post a transaction based on your best guess because itís much harder to find an item that has been incorrectly posted than to just analyze one Uncategorized account and reclassify the data.

Given these problems does it make sense for Mr. or Mrs. IímNotABookkeeper to track their transactions in Quickbooks or another package? Yes, it does. It is convenient, keeps your data in a searchable database for easy reference and does accumulate your information for tax purposes and other financial purposes. It is also possible to transfer your data to your professional preparer electronically and then even when itís incorrectly posted they have the data available to analyze on their computer which is much easier than analyzing on a stack of papers especially if you have set-up your Uncategorized account.

So, what is the answer to the big question - to spew or not to spew your data into your Quickbooks or other financial software Ė that is the question. This is of course another ambiguous answer. I think that you should spew so as not to lose the data but spew with finesse and logic. The beginning of a year or a quarter or a month is a great time to set-up a financial recordkeeping package, so if youíve been thinking about it, go ahead, get started. Just donít forget to set-up an uncategorized account, consult with a professional if you have questions you canít resolve on your own and then proceed with caution as you spew your data with finesse.

I hope you're enjoying Tax Facts on the Taxing Subject of Taxes!

Editors Choice For Your Financial Recordkeeping Needs -Quickbooks 2008


Content of this site is not intended to replace professional consultation.

Any U.S. tax advice contained in this electronic communication was not intended or written to be used, nor can be used, by any recipient of this communication for the purpose of avoiding penalties that might be imposed pursuant to the Internal Revenue Code or U.S. Treasury Regulations, or any other state or local law or regulation.




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