How to make a journal entry in QuickBooks Online: Pro tips for accurate bookkeeping

Keeping your books in order is essential for any business ownerbut it’s not just about plugging in numbers. 

Journal entries in QuickBooks help ensure your financials are correctorganizedand compliant — plusthey’re an essential tool for tracking every penny with pinpoint accuracy. 

In this articleyou’ll learn how to make a journal entry in QuickBooks Onlineincluding all the different journal entry types available and their common uses. Let’s get started!

Prerequisites for journal entries

Before diving into the steps for making a journal entrythere are a couple of things you need to know. Firstthere are a number of reasons that journal entries are key to maintaining accurate bookkeeping and reporting.

Learning how to make a journal entry in QuickBooks helps you:

• Capture all financial activity: Journal entries ensure every transaction — even those that don’t fit into standard categories (like income or expenses) — is properly recorded. This provides a complete picture of your finances.
• Ensure compliance: Correctly documented journal entries help your business meet accounting standards and regulatory requirementsmaking audits and tax filings smoother and more accurate.
• Track complex transactions: Some financial eventssuch as asset purchases or inventory adjustmentsrequire specific debits and credits that only journal entries can capture correctly.
• Support better decision-making: Accurate journal entries provide reliable data that’s crucial for informed business decisionssuch as forecasting or budgeting.
• Improve financial accuracy: Being able to make adjustments for things like depreciationprepaid expensesor accruals helps you keep your books accurate and prevent discrepancies that lead to reporting errors.
• Simplify financial reconciliation: Journal entries help reconcile your accounts with bank statements and other recordscatching any discrepancies that need correcting.
• Clarify financial statements: By categorizing and balancing all transactionsjournal entries ensure your financial statementssuch as balance sheets and income statementsare a true reflection of your business’ performance.

Another important note before you get started: in QuickBooks Onlineyou need the correct permissions to create journal entries. If you don’t see the option to enter onedouble-check your access permissions with your account administrator.

How to make a journal entry in QuickBooks Online

Ready to get started? Check out the video below to learn everything you need to know about making QuickBooks journal entries:

We’ve also written a step-by-step guide outlining how to make a journal entry in QuickBooks Online to make the process as easy as possible for you:

1. Head to the “+ New” menu and select “Journal Entry” from the dropdown menu.

Image credit: Intuit

2. Enter the transaction date for the entry. This should align with the actual transaction date or the end of a reporting period if it’s an adjustment.
3. Choose the accounts (at least two) impacted by this transaction and enter the respective debit or credit amounts. Rememberevery journal entry needs a balanced total: debits must equal credits.

Image credit: Intuit

4. Consider adding a memowhich can help you or your accountant remember the reason behind the entrymaking audits or reviews easier.
5. Double-check everything and hit either “Save and new” or “Save and close.”

Quick tip: For users who’ve switched from QuickBooks Desktopyou’ll notice slight layout differencesbut the entry process is similar. Online users may also find it easier to reference past entries on the go.

Common uses for journal entries in QuickBooks

Journal entries aren’t just for accountants; they’re tools for real-world bookkeeping needs. Here are a few examples of when you might need to make a journal entry:

• Adjusting income for errors.
• Depreciating assets.
• Making payroll corrections.
• Handling prepaid expenses.

Accuracy is the name of the game with these entries—otherwiseyou’ll have incorrect numbers impacting your financial statements.

Creating a journal entry template

If you have recurring transactions — like monthly rent or lease payments — you can save time by creating a reusable journal entry template in QuickBooks. Here’s how:

1. Follow the regular steps above that outline how to make a journal entry in QuickBooks Online. If you already have your journal entry readysimply open it up.
2. Once you’re in the entrychoose “Make Recurring” at the bottom of the journal entry form.
3. Select a frequencysuch as weekly or monthlyand confirm the details.
4. Click “Save.” QuickBooks will now automatically generate entries based on this template.

Image credit: Firm of the Future

Using templates can speed up your process and reduce the chance of human error in repeated entries. It’s a win-win.

Types of journal entries you should know

Journal entries come in all shapes and sizeseach serving a unique purpose. Here are a few you might encounter:

Reversing journal entry

These are entries that “reverse” an existing transactionusually made at the start of a new accounting period. For instanceif you accrued an expense in December but paid it off in Januarya reversing entry in January would balance out the initial accrual.

Your reversing journal entry reversal might look something like this:

• December 31: Accrue $1,000 expense.
• January 1: Reverse $1,000 expense.

Adjusting journal entry

Adjusting entries ensure your books accurately reflect your financials at the end of a period. They’re commonly used for items like accrued expenses or revenue adjustments.

How to make an adjusting entry

1. Create a new journal entry and select the accounts needing adjustment.
2. Enter the adjusting amounts as a debit or credit.
3. Save the entry to update your balances.

Payroll journal entry

Payroll entries help you document wagestaxesand benefits accurately. Here’s a simple setup:

• Wages expense: Debit
• Payroll tax expense: Debit
• Cash: Credit (for the total)

Recording payroll correctly ensures your expenses match your actual payoutkeeping your financials in line.

Recurring journal entry

When you have regular expenses like utility bills or rentsetting up a recurring journal entry is a great idea. This keeps your accounts up to date without the extra manual effort every month.

Accrual journal entry

Accrual entries account for transactions when they occureven if cash hasn’t changed hands yet. For examplean accrual entry would record revenue that’s been earned but not yet paid.

Your accrual journal entry might look something like this:

• Accounts receivable: Debit
• Revenue: Credit

Using accruals gives you a more accurate picture of your financial healthespecially in businesses where services are provided before payment.

Cash disbursements journal

A cash disbursements journal is a record of all cash outflowslike expenses and payments. To manage it in QuickBooks:

1. Log each payment transaction.
2. Include transaction detailslike dateamountand payee.
3. Review regularly to keep tabs on your cash flow.

Best practices for journal entries

Consistentaccurate entries are critical to avoid the hassle of financial discrepancies later. Here are a few best practices to keep in mind:

• Regularly reconcile your entries with bank statements and other financial records.
• Record transactions as soon as they happen to prevent backlogs and errors.
• When possibleadd memos with clear descriptions to explain the entry’s purpose.
• Always double-check and verify that debits match credits in every entry.

Key takeaways

To wrap uphere are the essential points to remember now that you know how to make journal entries in QuickBooks Online:

• Mastering journal entries ensures accurate financial records and better decision-making.
• Templates and recurring entries save time and reduce mistakes.
• Different types of entries — like reversingadjustingand payroll entries — serve specific purposes.
• Following best practices keeps your books reliable and ready for audits or analysis.

With these pro tips and a little practiceyou’ll be handling QuickBooks Online journal entries like a pro in no time. Keep your entries timely and accurateand you’ll have a solid foundation for all your financial data.

If you’re tired of repetitive data entry and manual bookkeeping adjustments in QuickBooksconsider trying out Method CRM. Method is the best CRM for QuickBookssimplifying processes like customer managementcommunicationsand invoicing — all in one place. Rather than bouncing between platforms and duplicating dataMethod syncs with QuickBooks in real timeso every update you make on one platform is instantly reflected in the other.

Explore how Method enhances your QuickBooks experience with your 14-day free trial.

How to make a journal entry in QuickBooks FAQs

Can I import a journal entry into QuickBooks?

YesQuickBooks allows you to import journal entries from external sourceslike Excel. You’ll need to map your data to match QuickBooks’ fields for a smooth import.

When should I use journal entries in QuickBooks?

Journal entries are ideal for correcting errorsrecording depreciationand handling non-standard transactions not covered by QuickBooks’ default forms.

Does QuickBooks automatically handle journal entries?

QuickBooks handles certain transactions automatically as journal entrieslike bank account transfers. Howeveradjustments or specialized entries usually require manual input.