The general ledger is the master record of every transaction posted to every account. It feeds the trial balance, which feeds the financial statements. Here's how the GL actually works in QBO and why bookkeepers care about it.
Employee benefits go to Employee Benefits Expense, but the employer portion and employee portion hit different accounts. The employer match is expense; the employee deferral is a liability. S-corp owner-employees follow special rules.
Double-entry bookkeeping records every transaction with two equal sides (debits and credits) that must always balance.
Bank reconciliation matches your book balance to the bank statement balance, line by line. It's the single best fraud-detection tool a bookkeeper has, and the QBO Reconcile workflow takes about an hour a month when the books are clean.
Bank fees and interest split into three accounts, not one: Bank Service Charges, Interest Expense, and Merchant Processing Fees. The biggest error is booking net Stripe deposits, which understates revenue every month.
SaaS goes in Software Subscriptions. Memberships and trade publications go in Dues & Subscriptions. Small one-off tools under $50/year go in Office Expenses. Three accounts, one decision tree, no more guessing where Slack goes.
Rent and utilities sit in two separate Operating Expense accounts. Home office allocation usually doesn't get its own COA line, security deposits hit Other Assets (not expense), and CAM charges roll into Rent, not Utilities.
Meals belong in a 50% deductible expense account. Entertainment belongs in a separate 0% deductible account. For TY2026, OBBBA eliminated employer-convenience meal deductions, so team meal categorization changed too.
Marketing and advertising costs go to Marketing & Advertising Expense, combined or split depending on volume.
Contractor payments go to Outside Services or Contract Labor, an Operating Expense account separate from W-2 payroll. The 2026 OBBBA rules raised the 1099-NEC threshold to $2,000, and credit-card payments don't count.
Business insurance goes to Insurance Expense, usually one parent account with optional sub-accounts by policy type. Annual premiums paid upfront sit in Prepaid Insurance and amortize monthly. S-corp owner health insurance follows special W-2 rules.
Routine attorney fees go to Legal Fees (a sub-account of Professional Fees). Acquisition, formation, real estate, and IP legal work gets capitalized instead. Plus the attorney 1099 exception every bookkeeper misses.
See Growthy on a sample book. Read-only bank access.
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