Best Business Practices for Photographers [99]
However, here is why I do a Statement Breakdown as well as a Payment Breakdown. On occasion, I may not pay off an entire credit card bill in one month. Consider that for this $2,476.30 bill, on January 21st I make just a $1,000 credit card payment, and on February 14th I make a second payment for $1,476.30 (that is, the balance due).
While the Statement Breakdown would remain the same, Figure 11.16 shows the Payment Breakdown for the January 21st payment of $1,000 when $2,476.30 is the amount actually due.
Figure 11.13
Statement Breakdown spreadsheet for the statement.
Figure 11.14
Payment Breakdown spreadsheet.
Figure 11.15
The Splits field in QuickBooks for this payment.
Accompanying that Payment Breakdown Excel spreadsheet would be an entry of those categories into QuickBooks on that same date that would look similar to the one in Figure 11.15. The only difference would be that I might use the Memo field adjacent to the amount to indicate that it was a split with another payment, as I do in the spreadsheet that prints out.
On February 14th, when I make a payment to the credit card company for the balance due of $1,476.30, Figure 11.17 shows what the Excel spreadsheet would look like for that payment.
There is something important to note here. Take a look at the recording of the account category 1000-30. In order to reach the round number of $1,000 for the first partial payment, I simply divided up (or split) one of the charges, applying $89.20 of that $210.80 payment to a portion of that charge, and the balance of that charge gets paid by the second payment amount. I notate that with an entry in the cell next to it (or if there's no room there, outside the box) just for clarity, and I also add in a note at the bottom of the spreadsheet. Also note that in the first Payment Breakdown, a No is entered into the field Is This a Full Payment of Amount Due?, and in the second, the field entry is Yes. Lastly, you may wonder why I organize these Statement and Payment Breakdowns by the last four digits of the credit card account. I do so because in the event a credit card is lost or stolen and I get a new account number, that number changes in these Breakdowns, and in the Notes section, I would indicate something like, "This is the new credit card, which was a replacement for the card I received when the credit card company contacted me because of a fraud warning."
A few notes about the Excel spreadsheets I use. One of the great things about Excel is that you can have multiple sheets in a single Excel document, as shown in Figure 11.18. Sheet 1 in the document has been relabeled Tax Categories, so as I am looking at expenses, if there are any questions about a specific category and account code, a swift click over to that tab gives me the answer. Sheet 2 has been relabeled Cheat Sheet, which is where I store recurring charge types, so, for example, a charge for Comcast High Speed Internet is properly categorized as 1200-01 – Online Services. Sheet 3 is relabeled January (S), where the S refers to the Statement Breakdown, and Sheet 4 is labeled January (P) for the January Payment Breakdown. So, too, with a February (P) we have saved the Breakdown for the February payment, since there were two payments that paid off the January statement.
Figure 11.16
Payment Breakdown for the January 21st payment.
Figure 11.17
Excel spreadsheet for the February 14th payment.
Figure 11.18
Multiple sheets in a single Excel document.
Further, by using Excel, it will automatically calculate all the totals in each of the category columns for you, as well as add all the different category totals together at the bottom, so you can be assured that your totals all match. When I used to do this by hand, I would find myself $0.06 off or $1.12 off, and it would take forever to figure out where I had made my math error(s). If you don't have a large number of charges each month, it may be easier for you to do things by hand, and I have kept the Payment Breakdown and