Adjusting Journal entries and audit trail in QuickBooks

Two great questions arrived at the castle this week: how to get rid of renegade adjusting journal entries and how can I know if changes have been made to my QuickBooks company file?

 The first one is from the south from Davis at  “Highness, is there any way to remove clean-up genrnl’s from QB Premier?  The books are closed for prior years, so the genrnl’s are nuisances.”

 Yes, they are a nuisance aren’t they?  If adjusting journal entries are made in accounts receivable, accounts payable, sales tax, or payroll in QuickBooks – they will remain as entries but will do nothing to make adjustments in these “serious” areas of QuickBooks.  If you make an adjusting journal entry in QB, and credit a cash account and debit an expense account, it will work precisely.  If you make an adjusting journal entry that affects account receivable, for example, it will make the entry for the dollars but it will not “relieve” the accounts receivable outstanding invoice properly from the adjustment and the adjusting journal entry will remain on your Accounts Receivable aging forever.  To resolve the issue, one must “unravel” the thread of the knot, trace back to the original entry, correct it and then reconcile.  And Davis, if you tell me where you are seeing these renegade journal entries, we can go to the next step to correct it.

The other question came from the east coast from Jim C. who is working on a project with a legal case in which the company file in QuickBooks is legal evidence in a court case.  He wants to know if one can tell if a QuickBooks file has been altered. 

As part of the software, QuickBooks contains an “audit trail” function which tracks every transaction by user in the company file.  This report of the audit trail can be used to audit what each user does in a certain time period.  It would be possible from this report to see who (by each user) did what on a particular date in the file.  If the company file was handed off and then changes made to it after the handoff, it will be reflected in the audit trail.  Earlier versions of QuickBooks enabled users to “turn off” the audit trail.  If you are using QuickBooks 2008 forward (all versions: Pro, Premier or Enterprise), then the audit trail cannot be turned off. 

This is a good reason to create users in your company file.  Even if you are the only person using the company file, my recommendation is to setup a password for the Admin account, setup a user for Bookkeeper or the person’s name, and only use the Admin log on when doing specific required by QB Admin tasks.  In this way, you will be able to properly track all changes by each user.  This is a good feature to use when training a new accounts payable person, for instance.  They can work away on their tasks, and then at the end of the day, you can review what they worked on and make sure they are doing it correctly.

Speak Your Mind