With business bookkeeping and basic tax tips for new and old entrepenuers

Monday, September 6, 2010

Information to put on Checks

The information you record on checks is very important for future reference. The more information you put on the check the easier it is to classify what type of expense it is. Some of the problems I have seen when recording checks has to do with not putting enough information on the check. For example, it may seem a time saver to not put the name of a vendor on a check, which you are able to do, but later if you are looking for a particular check by vendor, then you have to review all the checks to find the right one. The same goes for not recording the expense account and using the Miscellaneous Expense account. That account should be rarely used. I often see this account used, maybe if the person is not sure what kind of expense it is and plans to go back and reclassify the check later. It is better to use the account called “Suspense” instead.
The vital information is the date of the check, generally the date you wrote it, the name of the vendor, the amount, and in the memo field, what the expense was for of if there is an invoice number, that is also usually good to note.

Next, the pros and cons of using the Accounts Payable System.
By Alamo Bookkeeping Associates

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