Get started in Quickbooks

Getting Started in Quickbooks Online 

As the Vice President of Berkshire Hathaway Corporation Charlie Munger once said: “You have to know accounting. It’s the language of practical business life. It was a very useful thing to deliver to civilization. I’ve heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.”

Is it time to start a new Intuit Quickbooks Online subscription, or upgrade from your desktop version? There are 3 versions to Quickbooks Online to choose from: Simple Start, Essentials, and Plus. All versions allow you to track your income, send invoices, and record transactions online. Simple Start, however, doesn’t allow you to manage and pay bills. Also, both Simple Start and Essentials don’t allow you to record purchase orders. You can upgrade at any time, but downgrading requires cancelling your current subscription and starting a new one. Once you’ve decided on the version that meets your needs, keep our checklist handy to set up your company.

1.) Compatible Browsers

Quickbooks has four compatible browsers for Windows: Internet Explorer 10.0 or above, Mozilla Firefox 21 or above, the latest 2 Google Chrome releases, or Safari for Windows 5.1.7 or above. Google Chrome is the preferred browser. Make sure pop-ups are allowed for

2.) Cash-Basis versus Accrual-Basis

There are two basic accounting methods that your company may want to use to record payments and income. Decide before starting which method to use. Cash-basis accounting accounts for actual money in your possession. Any income generated is only when you receive the money, and expenses are when you actually pay the bill. Accrual-basis, on the other hand, uses accounts receivable accounts, and income is recorded when invoices are generated, whether the invoices have been paid or not. Expenses are recorded when the bill is received, no matter when the bill is actually paid. Both methods have their advantages, and an accountant may help you choose the best for your business.

3.) Menu Options

It’s best to become familiar with the navigation bars and menu options before taking on the task of entering your information. Along the top is a navigation bar that includes a magnifying glass (“Search”), a plus sign (“Quick Create”), and a gear symbol (“Tools”). You also have a left navigation bar that includes Banking, Invoicing, Expenses, Employees, Reports, Taxes, Accounting, Apps and Tools. And your “Dashboard” gives you a quick glance on your Profit & Loss Report, Expenses, Invoices and Bank Account. There are 3 Quickbooks Centers: Customers, Vendors, and Employees. Each give quick access to all of the contact information and transactions relevant to that category.

4.) Chart of Accounts

The first thing that you should do is turn on account numbers for your Chart of Accounts. Otherwise the order will be alphabetical, which may put unimportant or infrequently used accounts at the top. To turn these on, find the Tools menu, and go to Settings and Company Settings. Once there, find the Advanced menu option to find the Chart of Accounts menu, and click on Account Numbers. Next, set up your Chart of Accounts to fit your business. You can use the standard Quickbooks list and manually add accounts that you need, or you can completely recreate the list. Find a sample template in the Import Data menu under Tools and modify it to your needs. Subaccounts are particularly useful, because you can run reports by either individual subaccounts (like electricity, phone, gas), or by the parent account (like utilities).

5.) Company File Set Up

To set up your company file beyond the welcome screen, you need to gather some basic information. First, decide if you want to enter your historical transactions individually or by journal entry. If you enter by journal entry, you can combine totals for customers and vendors, but you won’t have past invoice numbers issued to them. You also need basic customer and vendor information to enter. In addition to this, you’ll have to gather your account balances, as it’s best to enter as a journal entry to the correct account rather than the opening balance displays. Any products and services data should also be on hand. Lastly, have your payroll information, including year-to-date (YTD) in front of you to set up the file.

6.) Entering Your Information

It’s best to enter your information in a particular order, since one account can affect the others. First, enter your bills, sales, invoices, and accounts receivable transactions. Next, enter your vendors and accounts payable transactions. Only then should you enter your payments and your bank transactions. If you chose to enter most of your historical transactions by journal entry, you may have a harder time matching to your bank transactions, so include as much detail as you can, such as dates or individual amounts.

Once you’ve properly set up your online Quickbooks, you’re now ready to start invoicing, paying bills, and entering payroll. If you need assistance in setting up your online Quickbooks accurately, contact us today.