Dealing with Uncategorized Transactions
Almost every time I work at monthly or quarterly cash and credit reconciliations, there are inevitably transactions that I will have questions on and therefore need to obtain further clarification before booking to the appropriate account in the client’s financial database.
I always like to book transactions to relevant accounts that have a useful purpose; thus, I never create an account called “miscellaneous” or something equivalent where a hodgepodge of transactions can be thrown in here, depending on the bookkeeper’s interpretation of “miscellaneous”.
So, when dealing with Uncategorized Transactions (including ones deemed “miscellaneous”), I always like to create a temporary holding account called “Ask Susie” or “Ask Brian” or whomever is the go-to person to typically ask to clarify the business financial activity. Then when all of the cash and credit reconciliations are complete for that time period, say for the month, I can simply handle the transactions booked to this account by using one of the following methods:
- Inform this go-to person (usually the client CFO/CEO/Owner) of the new transactions in this account and thus this person can login and clear these out themselves.
- Download the transactions in this account to a spreadsheet and email to the client asking to enter some notes next to each transaction in the spreadsheet. The explanatory notes they enter usually can just be five words or less per item.
- Any of a combination of the above two methods.
It is always a best practice to clear out these uncategorized transactions as soon as is possible and thus don’t let them build up over a period of a year or longer; otherwise the person (such as a sales/marketing employee living in a different state) who was actually responsible for the original transaction may forget what it was all about.
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