I finally took the time to complete my QuickBooks Desktop 2017 Recertification exam, something I like to do each year as a QuickBooks Certified Pro Advisor. Boy am I glad I did! I learned about a feature which surprised me and made me think twice about my own best practices: using a word in the check number field.
Normally, when training clients new to QuickBooks, and when doing any of my own data entry, if a checking/debit transaction is being posted, I discourage entering “EFT,” “Debit” or any other word in the check number (Ref. No.) field. My reasoning for this is when it comes time for the bank reconciliation of checking accounts, I want all checks to appear in numerical order on the bank rec screen. If a word such as “EFT” is entered in the check number field, when you sort the transactions on the rec screen by check number, which is the procedure I normally recommend, the order of the debit transactions is alphabetical. So checks with no check number will appear at the top, in date order, and all checks with a check number follow, in numerical order.
If you add a word to the mix, the order becomes:
Date order, for checks with blank check number fields,
Alphabetical order, for any checks with a word in the check number field, regardless of check date,
Check number order, at bottom, for all checks written.
Personally, I find it is less efficient to reconcile a statement which is ordered by blank numbers, then “Debit,” then “EFT,” etc., then by check number order. That makes for a lot of scrolling up and down, particularly when reconciling a long statement.
“Write Check” 1099 Feature So what’s the feature? I learned if you enter the following words in the check number field in QB Desktop, QB will automatically exclude the payment from 1099 amounts:
Debit Debitcar DBT DBT card DCard Debit cd Visa Masterc MC MCard Chase Discover Diners PayPal
Wait, what?!? That’s a real shocker! It has to do with the changes in 1099 regulations a few years back, with the introduction of the 1099-K. We no longer report the 1099 payments made to vendors by credit card, debit card, or PayPal. Now QB will recognize those payments from a Checking account, if you put the right word in the Ref. No. field, and exclude them from 1099 reporting. No more mathematical gymnastics in Excel! No more running multiple cross checks to ensure we are not reporting a payment which should be excluded!
A colleague advised me that this feature has been available in QB Destkop for several years, which I admit to being unawares. That being said, when I search online for more information about this feature, I find no references. If you find something, please post a link in the Comments below.
So where did I find this? In the “Supplemental Guide – QuickBooks Desktop 2017 Certification Course” .pdf document (Page 11), which is only available to members of the Pro Advisor program.
Advisory: Remember that the discussion above concerns the “Write Check” feature in QB Desktop; QuickBooks Online behaves differently.
Closing Comments Check it out, test it and use it. While this new feature might make reconciliation a bit more difficult, due to the sorting issue mentioned above, it will increase confidence in correct 1099 amounts for vendors that may have been paid both by check and by debit card or PayPal, which is a big win. Feel free to share your thoughts on this feature!
Jody Linick is an AIPB Certified Bookkeeper and a QuickBooks® Certified Pro Advisor. Her company, Linick Consulting, specializes in remote bookkeeping services using hosted QuickBooks and QuickBooks Online. You can find her series of Blog posts here.
Jody Linick, an AIPB Certified Bookkeeper, QuickBooks Certified Pro Advisor and member of the Intuit Trainer/Write Network, heads up FitBooksPro which specializes in helping professional services providers set business goals, and using the tools available in QuickBooks Online, to manage...