*Close of Month Overview
The objective of the close of month process is to reconcile your bank account statement with the bank ledger in QuickBooks® and reconcile your customer balances between HawkSoft and QuickBooks on a monthly basis. This process includes transferring funds from your Trust account to the Operating account as needed to record income. Reconciling your bank account helps ensure that everything is accounted for in your QuickBooks company file, ensuring that your financial records are accurate.
The Bookkeeper, Owner/Administrator, or Manager typically performs the close of month process for the previous month after receiving the bank statement.
The Close of Month process involves the following procedures:
Reviewing the HawkSoft Trust Accounting Report
Before recording the deposit in QuickBooks, run the Trust Accounting Report for the time-frame in which receipts for the payments were created. When you review a Trust Accounting Report, compare the day's deposit total with the information on the report. This should account for all cash, check and credit transactions.
Review Trust Accounting Report
Reconciling the Trust Account in QuickBooks
Reconciling your accounts in QuickBooks® is a key step to ensure the accuracy of your accounting records. As you write checks, withdraw money, make deposits, and incur bank charges, it is best to record each of these transactions in QuickBooks, and then reconcile them with the bank's records.
Reconciling the Trust Bank Account in QuickBooks
Waiving Balances for Unmatched Transactions
When reconciling the bank account in QuickBooks, you may find transaction amounts that do not match your bank statement because the payment received was less than the balance due on the invoice.
Waiving Balances for Unmatched Transactions
Comparing Customer Balances in HawkSoft and QuickBooks
HawkSoft enables you to generate a Customer Balance Summary Report for the purpose of comparing customer balances in HawkSoft and QuickBooks after transactions have been transferred from HawkSoft to QuickBooks®.
You can review the Trust Accounting Report in HawkSoft to verify that all transactions have been exported.
This report helps identify any missing items or conflicting information between HawkSoft and QuickBooks and verifies that all transactions for the month have been exported correctly.
Comparing Customer Balances in HawkSoft and QuickBooks
The following Accounting reports will help you compare your balances and troubleshoot inconsistencies.
Video: Agency Revenue Reports
Transferring Funds in QuickBooks (Agency Revenue)
Any collected funds (including agency fees and/or retained commissions) deposited into your agency's Trust account can be transferred to the Operating account. While these funds sit in the Trust account, they are listed as a liability and are not included in the agency's financial reports. In order for these funds to be recorded as an income or expense, they must be transferred from the Trust account to the Operating account, and recorded as such.
This article explains how to transfer fees and retained commissions from the Trust bank account to the Operating bank account and record them properly as agency income or expense, as well as record any balances waived. This article also explains how to create a Journal Entry that records the income for agencies who have a combined Trust and Operating account.