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QuickBooks Tips Blog

Video QuickBooks Tip: Using QuickBooks To Manage Cash Flow

Posted by Matt Roberge on Sep 19, 2012 7:28:00 AM

QuickBooks can be a valuable tool for any small business to help manage cash flow by customizing a few settings.  If you use QuickBooks to manage your cash flow you will not only know your current bank account balance, but you will also have a snapshot of what your bank balance looks like in the future.  Watch this video for some instructions on using QuickBooks to help manage your cash flow:

How to properly sort your QuickBooks accounts

The first thing you need to change in QuickBooks is how you sort your bank account.  Open your bank account register by double clicking on it from the account balances window on the right hand side of the home screen or from your chart of accounts.  In the lower left hand side you will see a box that says 'Sort by.'  From the drop down select the option 'Cleared status.'  This will sort the register by items you have marked as cleared the bank.  An item that is cleared in QuickBooks is marked with a check mark next to it in between the payment and deposit columns.  By sorting your QuickBooks bank account in this manner you should be able to see the last bank balance you reconciled to, but also all outstanding checks and deposits.  Essentially you are getting a look into the future of your bank account.

Manually clear and reconcile

You now can manually clear and reconcile transactions in QuickBooks.  You can put a check mark next to any transaction that has cleared since you last reconciled.  This is a great situation to use a dual monitor set up.  On one screen you should put your QuickBooks company file and on the other you can pull up your online banking information.  You can then reconcile your bank account to a current account balance.  

The importance of keeping QuickBooks updated


This method only works as well as you the user work.  That is in order for you to actually manage your cash flow using QuickBooks you need to update your financial records regularly.  You need to become dialed in from a bookkeeping standpoint.  Recording checks before they hit your account is a must.  Printing your checks directly from QuickBooks will ensure you have accounted for all outstanding checks.  If you hand write checks it just increases the chance of missing something.  Recording your deposits prior to bringing them to the bank will also help manage cash flow.  Taking advantage of QuickBooks memorized transactions to record any payments or deposits that automatically take place will also help you predict cash flow.

QuickBooks can be a major ally in helping you manage your business cash flow.  If you change the settings, use QuickBooks in the proper manner and keep your QuickBooks regularly updated with transaction information you will be able to manage your cash flow very effectively. 

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Topics: QuickBooks, QuickBooks Tips, QuickBooks Blog, QuickBooks Video Tips, QuickBooks advice, Cash Flow Management, QuickBooks Customization, cash flow forecasting, QuickBooks Consultant