“Ask My Accountant” and Uncategorized Expenses in QuickBooks: What They Mean
Open your Profit and Loss in QuickBooks and look near the bottom.
Do you see an account called “Ask My Accountant”? Or “Uncategorized Expense” or “Uncategorized Income”?
If those accounts have big numbers in them, your reports aren’t telling you the full story. Here’s what the QuickBooks “Ask My Accountant” account means, and what to do about it.
What Does “Ask My Accountant” Mean in QuickBooks?
“Ask My Accountant” is an account QuickBooks uses as a temporary holding spot.
When you or someone on your team isn’t sure where a transaction belongs, it gets parked there. The idea is that your accountant or bookkeeper will review it later and move it to the right account.
That works when it’s used for a few transactions and cleared out regularly. The problem starts when it becomes a permanent home.
What Are Uncategorized Expenses and Income?
Uncategorized Expense and Uncategorized Income are similar holding accounts.
QuickBooks often uses them automatically when:
- Transactions come in through the bank feed without a category
- Transactions are imported from a file
- Someone accepts transactions without choosing a category
Like “Ask My Accountant”, they’re meant to be temporary.
Why These Accounts Are a Problem
When money sits in these accounts, your reports can’t show you what’s really happening.
- Your profit may be wrong. Income or expenses could be counted in the wrong place.
- You can’t see your real costs. If $8,000 of expenses are uncategorized, you don’t know if it’s supplies, marketing, rent or personal spending.
- You might miss tax deductions. Your CPA can’t deduct what they can’t identify.
- Tax prep takes longer. Your CPA has to stop and ask about each transaction, which costs time and often money.
- Decisions get harder. You can’t tell if a cost is growing if you can’t see it.
How to Clear Out “Ask My Accountant” and Uncategorized Accounts
- Run a report. Open your Profit and Loss, click on the “Ask My Accountant” or uncategorized amount, and look at the list of transactions.
- Start with the biggest ones. Large transactions have the most impact on your reports.
- Find out what each one was. Check receipts, invoices, bank statements or your email.
- Move each one to the right account. Change the category so it shows up correctly on your reports.
- Watch for personal expenses. If a business account paid for something personal, it should be recorded as an owner draw, not a business expense.
- Create bank rules carefully. For transactions that repeat, a bank rule can categorize them automatically. Just make sure the rule is right, because a wrong rule repeats the same mistake every time.
- Make it a habit. Review these accounts at least once a month so they never pile up again.
What If There Are Hundreds of Transactions?
If these accounts have months or years of transactions in them, clearing them out can be a big job.
That’s often a sign your books need a cleanup. We covered what that involves in How Much Does a QuickBooks Cleanup Cost, and What Do You Actually Get?.
Frequently Asked Questions
Should “Ask My Accountant” ever have a balance?
Only for a short time. At the end of every month, it should be close to zero. At year-end, it should be empty before your books go to your CPA.
Why does QuickBooks keep creating uncategorized transactions?
Usually because transactions are coming in from the bank feed and being accepted without a category. Reviewing bank feed transactions before accepting them fixes most of this.
Can I just delete these transactions?
No. They’re real money that came in or went out. Deleting them makes your books match your bank even less. They need to be moved to the right account, not removed.
The Bottom Line
“Ask My Accountant” and uncategorized accounts are meant to be temporary. When they fill up, your reports stop telling the truth, your CPA’s job gets harder and you might miss deductions.
If your QuickBooks has a long list of transactions waiting for answers, The Tounsley Group can clear them out and keep your books clean every month. Reach out for a free consultation.
Ready to talk?
Call us: 657-650-8758