One of the most important things that all business owners should be paying attention to is their cash flow: money in, money out, and the timing of it all. But here’s what most people don’t realize, and more importantly, don’t know how to fix. They’re watching their live bank balance like it’s the truth, when it’s actually the number most likely to mislead them. 

Live Bank Balance is just what the bank says you have right now (a look in the rear-view mirror at what’s already happened). It has no idea about the checks still floating out there or the payments you’ve already committed to. 

Available Cash is the only number that matters, because it accounts for everything spoken for but not yet cleared: uncashed checks, scheduled credit card payments, upcoming payroll tax payments and monthly recurring auto-debits. The moment you commit to any of those, that money is gone and no longer available for other purposes.  Your live bank balance doesn’t reflect any of that activity. 

Continuing to focus on the wrong number, you’re making decisions on an incomplete picture, one that might tell you that you have more room to spend or invest than you actually do. 

Here are some ways to get your available balance out of QuickBooks:

• Enter checks as they are written or issued.  This is the #1 thing most QuickBooks users aren’t doing.  They are too reliant on the Bank Feed which means they have no record of which checks are still uncashed.
• Order QuickBooks compatible check stock and stop hand-writing checks. Once you’re printing checks from QBO, every check is in your register automatically, no manual entry after the fact.
• Create Recurring Transactions for monthly auto-debits (not available with Simple Start).  If you have a $345.17 loan payment coming out on the 7th every month, set the recurring transaction to post on the 7th, but show up in your register 7 days early.  That gives you an early warning before it hits.
• Enter credit card payments when they are scheduled or initiated.
• Upload Receipts into QBO to enter debit transactions before they post.  This is very helpful for catching transactions that clear for a different amount than expected.  

Once you follow the processes above, you’ll start seeing more MATCHes in your bank feed, decreasing your time spent hunting down the details and doing the data entry. You’ll also be able to sort your checking register by Reconcile Status to get the entire picture of your upcoming cash flow.  By sorting the register, you can easily identify the last reconciled transaction (marked with an R), the transactions that have cleared your bank (marked with a C) and then all the uncleared activity affecting your available balance.  

That’s the real payoff of good reconciliation habits. It’s not just about confirming your balances once a month, it’s about having a checking register you can actually trust, day to day, to tell you what’s really available. If you’ve made it through this whole series and you’re ready to put these habits into practice but want a hand getting your register organized, an Ask Dena Anything! session is a great place to start.