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Accounting is a process. There’s an order to everything, from completing sales transactions to running financial reports and reconciliations.

 

Your First Time with QuickBooks Online is a series geared towards first-time QuickBooks users who want to get started bookkeeping right now. These articles cover all of the setup and accounting workflows you need to know for a comprehensive setup, guiding you from your initial sign up through your next financial quarter and beyond.

 

Each article provides step-by-step instructions based on where you are on your journey. We’ve included the essential tasks as well as recommended workflows and optimization practices you can easily integrate into your routineBy the end of the series, you’ll feel completely confident with your accounting in QuickBooks.

 

While we recommend specific time-frames for completing each task, always go at a comfortable pace - it's worth taking the time learning how to do things the right way. What's most important is following the steps and series in order. If you prefer a task-based or feature-specific approach, check out our series Setting up for Success with QuickBooks Online.

 

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Setting up for Successis a series of snack-sized summaries based around task-oriented video tutorials. Each set of videos is curated around specific accounting workflows and the fundamental concepts behind them.

 

Each article features three to five comprehensive tutorials and highlight summaries. While we've handpicked these tutorials for first time QuickBooks Online users, this series is an excellent resource for anyone needing a refresher on QuickBooks Online and accounting basics.

 

We recommend watching all of the videos, as a set and in order, so you can confidently complete the specified accounting tasks in QuickBooks Online. If you do decide to skip ahead to specific sections of the article, set aside time to go back and watch the videos in their entirety so you have a firm grasp of the process end-to-end. 

 


The Basics and Accounting Concepts

 

Transactions

 

Products and Services

 

Accounts and Reporting

 

Bookkeeping Best-Practices

 


 

FTU Am I ready

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When it comes to accounting, many believe it’s better to do things right than do them quickly. We’re here to show you how to accomplish both – simultaneously complete comprehensive tasks in the most efficient ways possible.   

Follow these guides, check off each step to review your progress, and move forward with complete confidence. We've included links to more in-depth articles throughout so you always have references.

 


  • Am I ready to reconcile my bank accounts? (Coming soon)
  • Am I ready to run Payroll? (Coming soon)

 

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These guides are the source of truth, the what, howand why behind every feature and function in QuickBooks Online. They provide facts, figures and detailed visual walkthroughs to help you do your QuickBooks accounting quickly and efficiently.

 

 

 Arrow Icon - Read.jpg Invoices and Sales Forms

 

Arrow Icon - Read.jpg Processing Transactions

 

 

Arrow Icon - Read.jpg Payments and Online Banking

 

 

Arrow Icon - Read.jpg Items (Products and Services, Customers, Vendors) and Lists

  • How to Create and Manage Lists in QuickBooks Online (coming soon)

 

 

Arrow Icon - Read.jpg Financial Reports

 

 

Arrow Icon - Read.jpgEmployees

 

 

Arrow Icon - Read.jpg Staying Organized

  • How to Set Reminders in QuickBooks Online (coming soon)

 


 

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Do more with QuickBooks by knowing exactly what each feature is and does. 
The QuickBooks Encyclopedia is designed for everyone -- those who are brand new to QuickBooks as well as those in need of a quick reference.

 

 

 

Note that accounting definitions, while precise, are not universally applicable in all cases. How and when to apply these concepts entirely depends on the context. As such, it's always wise to work with your accountant if you're going beyond the basics.

 

    Mobile ADD Icon.jpg  QuickBooks Encyclopedia - Essential QuickBooks Online Definitions

 

    Mobile ADD Icon.jpg  QuickBooks Encyclopedia – Basic Accounting Definitions

 


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Your First Time with QuickBooks Online is geared towards first-time QuickBooks users who want to get started bookkeeping right now. These articles cover all of the setup and accounting workflows you need to know for a comprehensive setup, guiding you from your initial sign up through your next financial quarter and beyond.

 

While we recommend specific time-frames for completing each task, always go at a comfortable pace - it's worth taking the time learning how to do things the right way. What's most important is following the steps and series in order. If you prefer a task-based or feature-specific approach, check out our series “Setting up for Success with QuickBooks Online."


 Welcome to QuickBooks Online!

 

We're going set your business up for acounting success from the start. Before you start sending invoices, however, there are a few decisions you'll need to make about your accounts and associated preferences. 

 


 

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Minute 1: What happens in QuickBooks Online should reflect real-life

 

 

This guidance comes right from our official trainers who have years of product and accounting experience - actions taken in QuickBooks Online should reflect actions taken in real-life.

 

This applies to everything, from transactions to recording sales to making bank deposits. While some accounting tasks start within QuickBooks, such as sending invoices (you can also accept payments in QuickBooks), much of what you will record reflects activities done outside of QuickBooks, such as making bank deposits.

 

In sum, QuickBooks records the accounting aspects of your business activities, but it does not always initiate the literal processes that run your operation. Whenever you process a credit card payment through your POS, pay your employees using QuickBooks Payroll Services, or take out a loan from the bank as a liability to your business, make sure your accounting reflects each step of each process as closely as possible. That means matching names, dates, payment methods, and totals against whatever is recorded on your actual bank or credit card statements. 

 

Keep this in mind going forward and you will have great accounting success!

 


 

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Minute 2: Enter your Company Information

 

 

(Gear Icon [Gear Icon.jpg] > Account and Settings > Company)

 

Before entering any transactions into QuickBooks, enter your complete company information. This information automatically populates on the Invoices and sales forms you send your customers, so accuracy is essential. In your Accounts and Settings menu, check the following: 

  • Company Name
  • Business Address (you can also add a PO Box as the “Customer Facing” address, as long as your legal business address is also in QuickBooks)
  • Email Address
  • Website
  • Phone Number

The first fifteen minutes company info.PNG

 

If you need to edit any of this information, click the Pencil Icon (Pencil.pngin the corner and click "Save" once you're done with a section. 

Next, ensure the designated company type and the tax form you plan to file at the end of the fiscal year are accurate.

 

Company type.PNG

 

You also need to include your Employer Identification Number (EIN) or Social Security Number. This is a legal requirement - if you need help determining which of these you need for your business, reach out to your accountant or the IRS.

 


 

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Minute 4: Designate your fiscal year start date

 

 

(Gear Icon [Gear Icon.jpg] > Account and Settings > Accounting)

 

Tell QuickBooks when your business’ fiscal year begins (and ends). For most businesses, January is the first month of the fiscal year (same as the start of the income tax year). You as the business owner should know your tax year schedule.

Start date.PNG

 

While you're here, you can also set a date 12 months from your start date to “close the books” for the fiscal year. This feature prevents anyone from tampering with your QuickBooks data as you prepare for tax filing, but you can set this later on.

 


 

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Minute 5: Choose your accounting method: cash or accrual

 

 

(Gear Icon [Gear Icon.jpg] > Account and Settings > Accounting)

 

From this same menu, tell QuickBooks if your business will use the cash or accrual method for reporting income. Many new businesses choose cash method accounting. Cash method is arguably easier since you only track income and expenses as they are received and paid, but there are advantages to both methods.

  

Cash or accrual.PNG

 
To learn more about accounting methods, check our entry in the QuickBooks EncyclopediaDeciding which accounting method is best for your business is a big decision. Once you start using one method, it’s difficult (but not impossible) to switch to another. If you want recommendations, ask others in the community or consult with your accountant.

 


 

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Minute 6: Select your accounting currency

 

 

How are you doing on time? There's a lot of information here. If you need to, take a step back or ask a question in the comment section below

 

(Gear Icon [Gear Icon.jpg] > Account and Settings > Advanced > Currency)

 

We’re almost done with settings. Ensure the selected home currency is the one you plan to use to accept payments from customers. Just as the name implies, multicurrency lets you track transactions in foreign currencies. You should only use this feature if you have bank accounts, customers, or vendors that don’t use your home currency.

 Set currency.PNG

 


(flags_example3.pngImportant - If you plan to use the Multicurrency feature, make sure you have your home currency is selected first. Once you've enabled the Multicurrency feature, you cannot turn off or change your home currency. As ProAdvisor and QuickBooks Online expert @vpcontroller notes,

In case you've already turned on the 'Multi-currency' feature, you can't change the home currency anymore. If that's the case, you have the option to wipe your company data, and redo the setup including the correct home currency. OR cancel the subscription and get a new subscription account.

 


 

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Minute 7: Select your company logo

 

 

(Dashboard or Gear Icon [Gear Icon.jpg] > Account and Settings > Company)

 

With all the essential administrative work out of the way, we can start personalizing your QuickBooks experience.

 

Your logo is your visual brand. It’s a statement about you that shows up on all your invoices, estimates and sales receipts you send to customers. Let’s make this professional statement as high-quality and eye-catching as possible:

 

Quick Tips: 

    • Square logos (or circular that fit within a square) render best – rectangular logos will stretch
    • Use a white background so it blends in smoothly with the sales form
    • File format should be .gif, .bmp, .png, .jpg, .jpe, or .jpeg file
    • Must be smaller than 1MB
    • Use the standard RGB color space (RGB) with a bit depth (or color depth) of 24-bits or less

 

We will go over invoice customization in greater detail during your first Hour with QuickBooks Online, but if you want to get a jump start on personalization, follow our guide "How to Customize Invoices in QuickBooks Online.

 


 

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Minute 8: Set your default "Net Payment" invoice terms

 

 

(Gear Icon [Gear Icon.jpg] > Account and Settings > Sales > Sales form content)

 

We’re gearing up to send your first Invoice. Let’s make sure your customers know when they have to pay youYou can set your default “net payment” invoice terms in the account and settings menu – which you’ve probably noticed is where you make most general changes to your account.

 

If you want to get paid right away, select “due on receipt.” Otherwise, select an appropriate timeframe from the drop-down. If you click “+ Add New” in the drop-down, you can create custom payment terms and even apply discounts for early payments (more on that later).

 

Payment Terms.png

 

The net payment terms you set in this menu will become the default, but you can always change the terms for individual Invoices directly on the form.

 

We will come back to the settings menu a little later, but feel free to explore a bit if you see something you want to enable.

 


 

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Minute 9: Set up Sales Tax

 

 

(Tax Tab)

 

If you’ll be selling products, you need to collect sales tax (in most states). Before going any further, make sure you have your accounting method set (steps above). The first time you set up your account and click the Tax Tab, you’ll be guided through a setup module asking about where you sell your products.

 

taxes ftu.PNG

 

This step is very important – currently, the Automated Sales Tax Center feature in QuickBooks Online only calculates based on the accrual method, regardless of company accounting preferences. If you are new to QuickBooks Online and you...

 

 

  • ... set your accounting method to Cash BEFORE setting up your Sales Tax Center, you will default to manual sales tax. To learn more, check here.

  • ... set your accounting method to Cash AFTER setting up the Sales Tax Center, QuickBooks will still automatically calculate your sales tax, but your Sales Tax Center will still display based on the accrual method. As a workaround, you can use Sales Tax Liability reports to determine the proper sales tax payments are recorded in QuickBooks Online.

 

 

Essentially, you'll need to decide whether you want QuickBooks to use the information you’ve provided to automatically determine your state tax agency and calculate sales tax. Once you input your tax period start date and filing frequency, this feature is permanently set.

 

You may prefer to do handle your sales tax manually, and that’s perfectly fine. If so, follow the steps in the box above. 

 


 

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Minute 12: Create an Invoice in QuickBooks Test Drive

 

  

(Global Create Button [Action Icon.PNG] > Invoice)

 

Let's put in a bit of practice before the big show. We highly recommend using QuickBooks Test Drive to familiarize yourself with the available Invoicing features. In fact, we recommend utilizing Test Drive frequently during your first few weeks with QuickBooks Oline, using the provided practice data, rather than your actual data, to learn the ins-and-outs. Do note - Test Drive emulates QuickBooks Online Plus. 

 

Once you're in Test Drive, click on the Global Create button Action Icon.PNG. This button/menu is where you initiate the majority of transactions in QuickBooks (learn more in "Setting Up for Success with QuickBooks Online – The Fundamentals").

 

Familiarize yourself with each of the highlighted sections below and the types of data that go into each data field - we will build these databases over the next hour. 

 

Setting up for Success in QuickBooks Online - Sales Forms and Lists.png

 

Why do we recommend Test Drive?

 

Having complete sample data gives you a comprehensive perspective of what your QuickBooks will look like in the next hour or so. This tool gives you the freedom to learn with confidence, knowing that changes made won't impacting your actual data. 

 

When you try creating an invoice using the actual customers, accounts, and product information you use for your business, you’ll notice immediately what information is missing. This will tell you what to prioritize when you start entering products, services, and customers over the next hour. 

 


 

 Time Bar.pngFinished!

 


 Take a moment to reflect …

 

Now that you have the essentials in place, consider this: what do you want to accomplish with your bookkeeping?

 

Certainly, you want to record all sales and expenses so you get an accurate picture of your businesses’ overall health. Enabling services like Online Banking and Payroll will also help streamline your accounting and keep you better organized.

 

But whether you choose to utilize some or all of the features in QuickBooks Online is up to you. You may only want to record daily sales transactions. You may want to only account for very large business assets and liabilities (though you should keep a record of what you omit somewhere). You may want to use Online Banking, but only automate certain accounts. It all depends on what information you want to track so you can make the smartest decisions for your business.

 

Set aside some time to write down your accounting goals. Once you commit to them, you’ll also know what areas of QuickBooks Online you’ll want to focus on most 


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Now that you’ve set up the foundations for success, let's move on to building lists, entering transactions and automating features like online banking in "Your first hour with QuickBooks Online."

 

 

 

> Want a broader overview? Start with the “Setting up for Success with QuickBooks Online

 

> Want to jump right in? Check out “How to Use Features and Functions in QuickBooks Online

   

 

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Setting up for Success” is a series of snack-sized summaries based around task-oriented video tutorials, curated around specific accounting workflows and the fundamental concepts behind them. Each article includes several brief video tutorials meant to be watched in successive order - utilize them as a whole or pick the specific areas you wanted to get started with. 


These videos cover the absolute fundamentals of QuickBooks Online: basic navigation, program structure, the importance of sales forms and lists in QuickBooks Online, online banking and how these all lead to what is likely your first task – sending an invoice.

 


How to Navigate QuickBooks Online 2018: Menus, Transactions & Setup

 

 

 

For the most part, you will use the Nav Bar on the left to access your lists, dashboards and historical data.

 

Setting up for Success in QuickBooks Online Navigation 1.PNG

 

 You can access deeper customer insights and transactions details by clicking on specific items from the tab “sub dashboards.”

 Setting up for Success in QuickBooks Online Navigation 2.png

 

 

Setting up for Success in QuickBooks Online Navigation 3.png

 

 

The Create Menu (accessed by clicking the [Action Icon.PNG] button from any page) is the quickest way to start transaction related actions, such as sending invoices and paying bills. You can also access these same basic functions from most sub-dashboards.

 

Setting up for Success in QuickBooks Online Navigation 4.PNG

 

 

The Gear Menu/Settings Menu (accessed by clicking the [Gear Icon.jpg]  button) is where you can customize features and lists, access your QuickBooks user account, start reconciliations, import/export data and adjust your QuickBooks Online preferences.

 

Setting up for Success in QuickBooks Online Navigation 5.PNG

 

Two more important navigation features are the magnifying glass and Help Center.

 

Setting up for Success in QuickBooks Online Navigation 6.PNG

 

The magnifying glass lets you search your historical transactions and the drop-down lists recent ones - - a very useful feature for quickly recalling recently finished work.

 

If you ever get stuck, click on the Help Center button or ask questions here in the community.

 


How to Use Sales Forms & Lists: QuickBooks Online 2018 Tutorial

 

 
 

This video is essential for understanding how sales forms (and lists) work in QuickBooks Online. Our instructor breaks down the various components and step-by-step workflows for Invoices and other sales forms.

 

Before you start entering transactions on your own, watch this video in its entirety and let it all soak in - - understanding QuickBooks Online's unique accounting process is key at this early stage. 

 

Take a moment to look at the highlight areas of the invoice - - each component is connected and builds on one another as parts of a whole

 

Setting up for Success in QuickBooks Online - Sales Forms and Lists.png

 

The video also introduces the concept of lists, and in this case, the customer and item lists (to learn more, check out “Adding Items to Lists in QuickBooks Online”).

 

Setting up for Success in QuickBooks Online - Sales Forms and Lists 2.png

 

When it comes to creating product and services and customer lists, you have a couple of workflow options:

 

  • Build-lists-as-you-goTo save time, you can create new items (products and services, customers, vendors and accounts) directly from forms as you process transactions by clicking + Add New from the drop-down menus. This keeps data-entry to a minimum since you only enter new list items as they are needed.

    Note that if you use this method to create new items, enter complete data at the time of the transaction. It’s best not to go back to finish this step later – in all the busyness of business, you may forget.

  • Build-lists-all-at-onceYou may prefer to build out your lists completely before entering transactions. You can always access lists from the sub-dashboards in the Nav Bar:
    • Customer List - (Sales Tab > Customers > New Customers)
    • Products and Services List - (Sales Tab > Products and Services > New)
    • Vendor List – (Expenses Tab > Vendors > New Vendor)
    • Employee List – (Workers Tab > Employees or Contractors > Add)

 

Personally, I prefer using the second method so I only have to focus on one task at a time, rather than try to juggle two activities at once. But do what makes the most sense to you.

 


 

How to Connect Banks & Credit Cards: QuickBooks Online 2018

 

 

 

Why did we include connecting bank accounts alongside other fundamental QuickBooks Online functions?

 

One of the many areas QuickBooks Online excels in is automation. You can connect your bank accounts to QuickBooks Online and the program automatically downloads the last 90 days of transactions. No more double data-entry on already processed credit card transactions (including systems like PayPal).

 

Setting up for Success in QuickBooks Online Online Banking.PNG

 

Making online banking a fundamental part of your workflow alleviates a huge amount of manual data entry –- and if you deal with hundreds of transactions every day, this saves a ton of time. Instead, you’re simply tasked with double-checking QuickBooks for occasional errors.

 

Letting the program do the heavy lifting also prevents potential data entry errors from by missed keystrokes which can quickly derail monthly bank reconciliations (matching the data in QuickBooks against bank statements).

 


How to Record Your Sales: Reports, Invoices, & More

 

 

Now you know the basic navigation and organization of QuickBooks and you’re ready to record a sale, right?

 

Well, almost. Memorize the workflow below (taken from the tutorial). This is the basic sales form workflow of QuickBooks Online.

Setting up for Success in QuickBooks Online Receive Payment.PNG

 

Pay close attention to the receive payment step. This is a unique function of the QuickBooks accounting workflow - you will see them throughout your journey. Learn them now and you’ll be successful in the long-run!

 


 

 

Set up for Success in QuickBooks Online

 

Check your progress

 

Learn everything you need to be successful in QuickBooks

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The dust has settled and you’ve successfully set up your QuickBooks Online in just 15 minutes. Now, let's start building a robust company file and ensure all the parts are aligned. By the end of the hour, you’ll have everything in place and ready to handle the fundamental account tasks for your business.

 

 

While we recommend certain time-frames, please go at a comfortable pace - - what's important is following the series in order. If you prefer an activity-based setup workflow, check out our series “Setting up for Success with QuickBooks Online."


 

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Minute 15: Customize your Invoices (and Sales Forms)

 

 

(Gear Icon [Gear Icon.jpg] > Custom Form Styles > New)

 

You can start sending invoices using the default template, but you should spend time designing and personalizing them. Even small changes can have a big impact. Sending your first invoice is a milestone for your business, so invest a few minutes towards making a good first impression.

 Your First Hour with QuickBooks Online Custom Invoice.png

 

The Custom Form Styles module is where you create and manage your invoice (and sales form) templates. There are lots of tools that will help you enhance different aspects of your invoice. You can make basic layout and design modifications from the "Design Tab." The "Content Tab" is where you can adjust column widths and data fields – not all data fields are enabled by default and there are some you may want to omit. You can also customize the message customers receive along with their invoice in the "Email Tab."

 

Once you’re done, save the template so you can use it again and again. You can create and save multiple templates for Invoices, Estimates and Sales Receipts. For the complete guide, check out “How to Customize Invoices in QuickBooks Online.”

 


 

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Minute 20: Decide how you want to get paid for Invoices

 

 

(Gear Icon [Gear Icon.jpg] > Custom Form Styles > New)

 

 

Don’t leave the Custom Form Styles module just yet. Out of the box, customers can’t pay you electronically for invoices until you enable QuickBooks Payments.

 

Your First Hour with QuickBooks Online Invoice Payments.PNG

 

QuickBooks Payments is the easiest way to accept invoice payments. Once a payment is received, the system will automatically update your books. While there are nominal fees for processing credit cards, consider signing up for the $0 “Pay as you go” plan so you can at least accept ACH Bank Transfers for free. If you already have a processing service you like and don't want to process credit cards through QuickBooks Payments, we encourage you to continue using it. 

 

To enable online payments, while you're still in the Custom Form Styles module, go to the "Payments Tab" and click the link at the bottom to complete your payments profile (you make changes to from Accounts and Settings > Payments) and follow the step-by-step guide. When you’re done, you’ll be able to select which payment methods you want available to your customers when you create templates in the Custom Form Styles module. This applies to all invoices using the specified template.

If you ever want to disable payment options for a particular customer, you can toggle them off as you’re creating the invoice.

 

Your First Hour with QuickBooks Online QuickBooks Payments Enable.jpg

 

This is what your customer will see when they receive your invoice:

 

Your First Hour with QuickBooks Online QuickBooks Payments Enable.png

 

 


 

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Minute 27: Learn about Receiving Payments and the "Undeposited Funds" Account

 

 

Learn more in The QuickBooks Encyclopedia

 

Take a minute to study the workflow below. In QuickBooks, there are a few types of sales formsInvoices, Sales Receipts, and Estimates. Which one you use to record payments depends on when your customer paid you.

 

  • You use invoices when you sell a product or service and expect to get paid in the future. Once the invoice is paid and the money is received (whether through QuickBooks Payments or some other means), you record the payment in QuickBooks.

  • You use sales receipts when you sell a product or service and are paid at the time of sale. The payment will be recorded and accounted for in QuickBooks once you send the sales receipt since you’ve already received the payment. This means you don't have to complete the receive payment step. Your First Hour with QuickBooks Online QuickBooks Sales Forms.png

     

Upon receiving an invoice payment, process the invoice by clicking (Action Icon.PNG) and selecting “Receive payment.” From there, you'll receive the payments against the invoice and deposit those payments into your “Undeposited Funds” account. This is the default “deposit to” account for the Receive Payments feature. Once you receive the payment into the Undeposited Funds account, you need to use the “Bank Deposit" function to record these payments to the correct account in QuickBooks. 

 

You can also receive single payments and deposit them directly into a checking or savings, but there are advantages to following the Undeposited Funds workflow. We’ll cover all of this in the next article after you've received your first invoice payment. For now, we wanted to introduce this concept since this workflow is unique to QuickBooks. 

 


 

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Minute 33: Send your first Invoice

 

 

(Global Create [Action Icon.PNG]> Invoice)

 

 The foundations have been laid -- you're ready to send your very first invoice!

 

Click the Global Create (Action Icon.PNG) button to start an invoice. Right away, you’ll notice you don't have any customers or products and services to add from the drop-downs, though you do have several default accounts we can use when you begin creating these items. Let's go over each highlighted area of the invoice.

 

 

Your First Hour with QuickBooks Online QuickBooks Invoice Layout.PNG

 

 

You have two methods for how you build out your customer and products and services lists: build lists all at once or build them as you workWe go over both methods in detail in the QuickBooks Encyclopedia

 

For now, let’s get started the latter and create some items as we work. Eventually, you can decide which method you prefer.

 

(1) Let’s start from the top with your first customer. Since you have anyone in the system yet, click the drop-down and select “+Add New.”

 Your First Hour with QuickBooks Online QuickBooks Invoice 1.png

 

 You can simply add their name and click “save” to get rolling with your invoice, but we’re going to dive a bit deeper. Instead, click “+ Details” to bring up the complete customer profile module.

 Your First Hour with QuickBooks Online QuickBooks Invoice 2.png

 

 

 

Here’s an important tip - even if you decide to stick with this build -lists-as-you-work method, seize every opportunity to fill out the complete customer, vendor, and product and service information sooner rather than. A few extra minutes spent inputting accurate sales form data will save time in the long run and prevent potential, cascading errors. If you are in an absolute rush, write yourself a note to go back later.

 


 

Your First Hour with QuickBooks Online Invoice 3.png

 

(2) Head down to the product/service table to add your first product and service item. Again, since you don't have anything in QuickBooks yet, click the drop-down and select “+Add New.” The following module will appear:

 

Your First Hour with QuickBooks Online QuickBooks Invoice 3.PNG

 

If you have QuickBooks Online Plus, you can enable Inventory Tracking to track quantities and create purchase orders to send to Vendors from QuickBooks when your stock runs low. Setting up for Inventory is a fairly involved process that applies to specific users, so we will cover that in a different article.

 

For now, select either a non-inventory product or service your business offers. If you're curious, the bundle option combines multiple products and services into a single item. Depending on whether you selected non-inventory product or service, you’ll see one of two similar variations of the following:

 

Your First Hour with QuickBooks Online QuickBooks Invoice 5.png

 

Fill out as much information as you can for the product or service item. The same guidance for customers (and vendors) applies here as well – invest your time entering complete data now rather than later. This is especially important for products and services - - prices and sales tax errors are very difficult to correct after the fact. 

 

What data you enter for a product or service depends on what information you have on hand and what you’re planning to track (for instance, if you use SKUs). Here are some tips to keep in mind as you build your first product or service item:

 

  • It’s wise to add a brief item description so customers feel confident about what they’re purchasing.

 

  • Adding a picture will help you stay organized, but images aren't isn't customer facing.

 

  • The “I sell this product/service to my customers” box is automatically enabled when you create items from a sales form and cannot be turned off. When you create non-inventory items you want to track but don’t sell, you’ll have to create those from a different workflow.

  • Is taxable” is automatically enabled when creating a new item (which is why we already set up your Tax Center in the previous article). If you’re selling products, unless you’re selling to states that don’t require,  you’re probably going to charge sales tax. In most cases, you don’t charge sales tax for services, but it depends.

     

    Sales Tax can get complicated.  You probably already know the sales tax rules for your business or industry.  If so, proceed with confidence. If you aren’t familiar with sales tax codes, do some research online (state tax boards are a great place to start) and reach out to a tax professional.

     

 

  • You can create categories for items for better data tracking, but this feature isn't necessary. We will go over categories in more detail in a later article.

  • The Income Account you select determines how sales income is tracked once it's processed. Basically, this tells QuickBooks what money from the sale of this product or service is for and thus how it should be recorded. QuickBooks Online comes with several essential income accounts right out of the box and we will teach you how to create new ones in the next article.

    Initially, it's a good idea to create income accounts that are somewhat broad, but not as general as "products" or "services." 
    Was income related to your design work? A specific type of product? Create incomes accounts at the "category" level. 
    This is also where "sub-accounts" come in to help you stay organized. For instance, you may offer multiple "Design" services and want to track income for each service. You can create a "Design" parent account and sub-accounts for each specific design service you offer.

  • The sales price/rates you enter are applied every time you add an item to a sales form. You can adjust the rate directly from an invoice, but this change only applies to that specific invoice. If you plan to have special rates for certain customers, it’s best to create two separate items with differentiated prices.

 

That's all it takes to create a product or service in QuickBooks. Soon, this process will feel very second nature. Keep adding items to your Invoice until you’re finished.

 

Your First Hour with QuickBooks Online QuickBooks Invoice Layout.PNG

 

(3) Make sure your payment terms and due date are what you want to offer to with your customers. Learn more about Net Payment Terms

 

(4) Since we already set up your online payment options, you can enable them at the top for this invoice.

 

Tip - As a quick check, always check the “Balance due,” subtotal and sales tax total before hitting send. Ask yourself, do these numbers look right? Are taxable items being taxed? If something's off, these numbers will tell you immediately. 

 

(5) If you want to save and send this invoice later, check the box at the top. There’s another feature called Delayed Charge that saves anticipated charges so they can be added to future invoices so you don't have to create and hold several invoices for long periods of time.

(6) At the bottom, you can preview the invoice or print out a paper version to send. We highly recommend sending Invoices via email so you always have a digital record and can send reminders.

 

Click “Save and Send” and you’re done.

celebrate_what_matters_3.pngCongratulations, you’ve sent your first customer invoice in QuickBooks Online!

 


 

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Minute 41: Build your Products and Services List

 

 

(Sales > Products and Services > New)

 

The next two sections lead with the “build-lists-all-at-once” methodology, which we encourage you to spend the rest of your hour doing. If you want to skip ahead to the next concept at minute 52, please do so. 

From the left navigation bar, click on the Sales Tab. The proceeding dashboard is where you can see all of your invoices (including the one you just created). Click the Products and Services sub-tab to bring up the following screen:

 

Your First Hour with QuickBooks Online Products and Services.png

 

Click “New” and create a few more items. This is module is exactly the same as the one you used on your invoice. Spend a few minutes creating 5 or 10 more items from scratch, remembering to include the important information like sales tax and descriptions. With a bit of practice, this entire workflow will feel second nature.

 


 

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Minute 45: Create your Customer list

 

 

(Sales > Customers > New)

 

Let’s do the same process for your customer list. Click the Customer sub-tab at the top of the Sales Tab dashboard.

 

Your First Hour with QuickBooks Online Customer Page.PNG

 

You will see your solo customer on the list. You may also notice that you have 1 open invoice (in the grey box). This bar at the top shows all outstanding/open, overdue and paid invoices within the given time periods. Click on squares to sort the list for the segment you’re interested in.

 

When you click “New customer,” the same familiar module from the invoice will appear. Try adding a handful of your customers to get a solid grasp of the workflow.

 


 

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Minute 52: Decide if you want to track inventory sooner rather than later

 

 

(Gear Icon [Gear Icon.jpg]  > Accounts and Settings > Sales) or (Sales > Products and Services > New)

 

We're always talking about planning ahead. If you plan to track inventory quantities, now is the time to set this up. If you have QuickBooks Online Plus, go into Accounts and Settings (Gear Icon [Gear Icon.jpg]  > Accounts and Settings > Sales) and enable “Track quantity on hand.” We cover the whole inventory set up process here

 

Take some time to think about it. If you don’t use inventory now, will you need to track quantities on hand in the future? What about two years from now?

 

If the answer is yes, it’s best to start using the Inventory feature from the beginning. Going back to re-edit your entire list of products, not to mention the related vendor and expense accounts, is a heavy lift. Instead, save yourself the work and build your Products and Services list for inventory tracking. 

 


 

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Minute 53: Familiarize yourself with the Online Banking feature

 

 

(Banking > Add Account)

 

One the many areas QuickBooks Online shines is Online Banking. You don’t have to decide now, but consider whether or not you want to enable this feature sooner rather than later so you get in the habit. 

 

Your First Hour with QuickBooks Online Banking 1.jpg

 

If you connect your bank accounts to QuickBooks Online, the program will automatically import and create records for transactions recorded on your bank and credit card statements. You can always record individual transactions manually, but this saves a ton of time. This will encourage you to track all income and expenses for your business you have a complete perspective of your business’ overall health rather than specific streams of cash-flow. 

 

You can connect multiple bank accounts to QuickBooks (including credit card and PayPal) from the Banking Tab. Once you connect an account, QuickBooks will download all transactions from the last 90 days. Learn more about "How to Connect My Bank Account in QuickBooks Online."


 

 Time Bar.pngFinished!

 


 Take a moment to reflect …

 

As we build your QuickBooks accounts from the ground up, here are some key organizational and operational principles to keep in mind. These will help you feel confident with every decision going forward:

 

  • Everything is a process – this is true of most tasks in life, but it's especially true for accounting. Most activities in QuickBooks Online, from Invoicing to Payroll, follow a particular set of processes in very a particular order.

    There’s an assumption that QuickBooks has a learning curve. Learning how to do things right takes practice. The methods we recommend in the Getting Started series may not always be the fastest, but if you invest the time to learn these workflows and plan ahead, you will avoid many problems in the future.

  • Context Matters – accounting is contextual. Many accountants will tell you there’s a “right” way to do accounting. This is a true statement, but “right” is highly dependent on circumstances and industry. There is no single accounting method that will work for everyone. How you get to step 3 for your business depends entirely on how you did steps 1 and 2, information only you (and your accountant) will know.

  • Make everything simple, relevant and personal – there are names and data points (your Chart of Accounts, for instance) that should be kept fairly standard. At the same time, you have opportunities to personalize your accounting experience.  In general, feel free to give customers “nicknames” and rename non-standard accounts (like Undeposited Funds). as long as the names remain relevant and easy to understand for whoever does your bookkeeping. The little things do matter.

  • Less is more – time and time again, we hear professional accounts recommend the same advice: create fewer accounts and only enabling features/apps you really plan to use. You’re already busy running your business, so aim to make QuickBooks as manageable as possible.

 


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You’ve come a long way in one short hour. When you're ready, check out a few more lessons on the Getting Started with QuickBooks Home Page or see what we recommend for "Your first day with QuickBooks Online."

 

    < Setting up for Success: The Big Picture     

 

     Setting up for Success: Next >     

 

 

 

> Want a bigger overview? Start with the “Setting up for Success with QuickBooks Online” series

 

> Want to jump right in? Check out our “How to Use Basic Features and Functions in QuickBooks Online” series

 

 

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Setting up for Success in QuickBooks Online Banner.png

 

Setting up for Success” is a series of snack-sized, task-oriented articles curated around specific accounting workflows and the fundamental concepts behind them.

 

We recommend watching all of the videos in order as a set so you can confidently complete the specified tasks in QuickBooks Online. If you do decide to skip ahead to specific sections, set aside time to go back and read the article in its entirety so you have a firm grasp of the fundamental process end-to-end. 


For this set of videos, there are no exercises to follow along with. Instead, we insist you simply absorb the broader accounting and workflow concepts introduced in this article. Taking a few minutes to contextualize your business within the broader “how’s” and “why’s” of accounting will go a long way in preparing you for sustain success. So sit back, relax, and let it all sink in. 

 


 

How to Categorize Transactions: Types of Accounts & Fixing Errors | QuickBooks Online Tutorial 2018

 

 

Resist the urge to jump right into processing transactions. We know you’re excited, but be patient -- make sure you understand each step of the process end-to-end.

 

    • Every time you record a transaction, train yourself to double-check where money is coming from and where it's going (i.e. payor, payee, “deposit to” account, etc). Categorizing transactions correctly so they end up in the appropriate account is the only way to guarantee your sales and expense reports are accurate.

      Setting up for Success in QuickBooks Online Account Categorization.PNG

 

  • Sub-accounts are a great way to keep accounts organized and track income and expenses in greater detail. You can designate parent and sub-accounts in your Chart of Accounts (learn more in “Creating and Managing Accounts”). When you add transactions, make sure they're added to the sub-account and not the parent account, which is meant to aggregate the total of the subs.

  • The video makes a key distinction between assets and expenses:

    • Assets are tangible and intangible things you use for your business over and over again, such as computers, company cars and office furniture. While these items are initially a cost to your business, they have lasting value.

    • Expenses are things you spend money on for your business, but you aren’t able to use them over and over again. This includes things like rent and utilities. 

    • For more in-depth explanations of assets and expenses, check out our QuickBooks Encyclopedia – Basic Accounting Definitions.

  • Separating accounts not only provides accurate, detailed financial data, the practice helps you stay compliant in the case of an audit. 

    For instance, if you plan to work with Independent Contractors (classified as Vendors in QuickBooks), you need to create a specific expense account for their expenses. When it’s time to create  their1099s, you'll need to tell the IRS about those payments which should be kept completely separate from normal employee payments.

    Separating transactions now will save you a ton of time come tax season. To learn more (and stress less), check out “How to Add Independent Contractors in QuickBooks Online."

 


 

Accounting Terms You Need to Know | QuickBooks Online 2018

 

 

QuickBooks takes care of the complex accounting work that goes on behind-the-scenes so you don’t have to worry about T-accounts or double-entry accounting formulas.

However, everyone who does bookkeeping should learn the basics. You’ve probably heard of the two terms below. They both refer to transactions in-progress:

 

The next two are terms may sound familiar, but you may not know how they related to accounting. Debits and credits essentially describe how transactions impact an account – debits refer to money drawn from an account while credits refer to the opposite, money put into another. Luckily, you don’t have to know these because QuickBooks does all the heavy lifting for you.

 

If you want to learn more account terms, check out “QuickBooks Encyclopedia – Basic Accounting Definitions” and Understanding the Basic Accounting Formula with ProAdvisor Scott Meister (@ScottMeisterCPA).

 


 

Understanding the Chart of Accounts | QuickBooks Online Tutorial 2018

 

 

The Chart of Accounts (also referred to as the CoA) is a powerful tool  – it's essentially the database for all your accounts that dictates how transactions are categorized. This is where you organize existing accounts or create new ones.

 

As a first time user, you won’t have to do much work in the CoA since the default accounts in QuickBooks Online can handle most common transactions. While the CoA may seem like an accounting-heavy roadblock, once you understand how it works, you’ll feel confident making judicious changes when the occasion arises.

 

The tutorial does an excellent job of visualizing the complex accounting that goes on behind-the-scenes every time you process a transaction. You notice when the instructor enters the loan, the checking account increases (credit) by $15,000. Here’s the tricky part, the liability account also increases by $15,000 (credit). You might assume the number would be negative since you a liability means you owe money, but since the account is tracking your liability total, the number actually increases. 

The tutorial also demonstrates a very common use of the "Add New Deposits" feature on the bottom of the Bank Deposit module. This is where you enter transactions outside the daily norm of sales forms, such as business assets or loans. 

 

  • When you’re entering a new deposit, add a detailed description of what the transaction is while the information fresh in your mind - - where it came from and why you are putting it into this account. At the end of the year, these notes will help you and your accountant decide if you need to re-categorize transactions and catch ones that are out of place. 

 


 

Bookkeeping Best Practices: Tips & Tricks | QuickBooks Online Tutorial 2018

 

 

As our narrator notes, accounting is cyclical, meaning most tasks need to be completed on a regular basis (daily, weekly, monthly, quarterly and annually). You may want to do these more or less frequently depending on your business needs.

 

Keeping a regular cadence will make working with your accountant and reporting taxes much easier. Don’t let work pile up. Take out your calendar and set up reminders for these common bookkeeping tasks.

 

  • Daily Tasks: Entering transactions (Invoices and Expenses)

  • Weekly Tasks: Review Accounts Receivable and Accounts Payable [i.e. transactions in progress] and follow up with the appropriate parties

  • Monthly Tasks: Bank Reconciliations, run Profit and Loss Reports (also see Parkway Inc’s Monthly-Close checklist), review your Balance Sheet

  • Quarterly Tasks: Quarterly payroll taxes

  • Annual Tasks: create your budget, clean up lists and accounts in QuickBooks

 


 

 How to Use Reports: Understanding When to Use the 3 Types | QuickBooks Online Tutorial 2018

 

 

We cover financial reports in greater detail in “Setting Up for Success with QuickBooks Online – Financial Reports and Reporting Features,” but this video provides a great introduction.

 

  • Summary Reports – these provide a good amount of detail and basic analysis. The Balance Sheet and Profit and Loss Reports are the most common summary reports and the reports you will probably run the most.

  • List reports – these provide tons of raw data with little analysis. Essentially, they are a summary of your list databases (i.e. account list, customer list, invoice list, products and services list). They’re great for getting an overview but do little in the way of providing deep financial insight.

  • Detail Reports – as the name suggests, these are basically summary reports with additional details. A common detail report is the “Sales by Customer Detail” report, which the video briefly discusses. The primary benefit of detail reports is how they break out and organize the details, letting you quickly dive into the nitty-gritty.

  • You can also customize and save reports using various filters. While most reports use the same set of filters, certain customizations are limited to specific types of reports.

 

  < Setting up for Success:  The Fundamentals    

    Your First Hour with QuickBooks Online >    

 

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  QuickBooks Encyclopedia Header.PNG      QuickBooks Encyclopedia Product Functions.png

 

Do more with QuickBooks by knowing exactly what each feature is and does. The QuickBooks Online Encyclopedia is designed for everyone -- those who are brand new to QuickBooks as well as those needing a quick reference.

 

In this entry, we cover the essential features and workflows of QuickBooks Online. We also highlight functions that are unique to QuickBooks Online (designated by the [Mobile ADD Icon.jpg] symbol) so you can get the most out of your accounting tools.

 

To navigate this resource, click one of the alphabetical jump links below or hit Ctrl+F /Control+F in your browser to search for a specific term. For accounting definitions, check out "QuickBooks Encyclopedia – Basic Accounting Definitions." 

 

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

 

B

 

Connect an Online Bank Account

 

Simple Definition: If you connect your bank accounts in QuickBooks Online, the program will automatically download the last 90 days of transactions recorded by your bank. This feature ensures your accounts are always up-to-date so you don't have to do double data-entry.  

 

 

Textbook Definition: Connecting your accounts to QuickBooks Online is a great way to track your income and spending. Only recording sales forms while leaving out expenses gives an incomplete perspective of your business’ overall health, but entering all of your business expenses by hand can be very time-consuming. Let the Online Banking feature automate the work.  

 QuickBooks Encyclopedia Connect a Bank 1.PNG

 

You can connect multiple bank accounts (including credit cards and PayPal) to QuickBooks from the Banking Tab. Search for and choose the bank accounts you use for your business from the available list, tell QuickBooks the account type, and you’re ready to go.

 

QuickBooks Encyclopedia Connect a Bank 2.jpg

 

Once transactions are downloaded into QuickBooks, they appear in the Bank Feed in the Banking Tab. You’ll still need to categorize them so they're recorded to the correct accounts.

 

In the Banking Tab, go to the “For Review” sub-tab. You will see all the transactions that are recognized by the system and need to be categorized. The program will initially try to match transactions against existing invoices and expenses in QuickBooks (and use bank rules you’ve created). If you need to recategorize them, simply click the transaction and place it in the correct account.

 

QuickBooks Encyclopedia Connect a Bank 3.jpg

 

Entries marked with "Match" mean that QuickBooks has found a transaction (invoice, expense, etc) in the system that matches your bank records.

 

Entries marked with "Add" indicate that QuickBooks has not found an entry. In these cases, QuickBooks will create a new record and categorize it for you. You may need to recategorize these frequently in the beginning, but the more you use the feature, the better the system will get at predicting the correct category. After you click "Add," check the record (Sales Tab for Invoices and  Expense Tab for expenses) and make sure the information is correct. 

 

 

Term in use: My friend uses two different credit cards to pay for her business expenses. She connected each one in the Banking Tab and now has all her income and expense transactions in one place. This cuts her data entry in half since she can "match" many incoming transactions with existing records in QuickBooks and quickly the "add" remainder.  

 

For the full article, see “ How to Connect Bank Accounts to QuickBooks Online

 

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Create Bank Rules

 

Simple Definition: Bank rules automatically categorize transactions from your connected bank accounts based on your specified criteria.

 

 

Textbook Definition: For frequently downloaded transactions with the same payee, total, or written description (as written by the bank), bank rules can save you a lot of time.

 

You can create bank rules based on type, category, payee, class, and location and the system will automatically assign transactions to the appropriate accounts. QuickBooks only applies one rule at a time to transactions in the “For Review” tab in the Banking Feed, but you can prioritize your rules. 

 QuickBooks Encyclopedia Bank Rules 1.png

 

To reduce the need for multiple rules, create rules with “or clauses so transactions are edited once they meet any of the outlined conditions. To enable the “or function, change the drop-down so that it shows "When a transaction meets ANY of these conditions."

 

Transactions recognized by QuickBooks using your bank rules are marked with the “Rule” symbol. These are filtered into the "Recognized Tab" in the Bank Feed.

 

 

Term in use: I want to add a rule so my team’s fuel costs are always categorized into the same expense account. I go to Banking Tab > Bank Rules > New Rule.

 

QuickBooks Encyclopedia Bank Rules 3.PNG

 

My “Fuel Rule” has a few conditions: it only applies to our company Master Card, the transaction must contain the word “Chin” and equal $20 because I limit drivers to a $20 fill up. The payee is Chin’s Gas (vendor) since our team always fills up at the same station down the road.

 

QuickBooks Encyclopedia Bank Rules 2.png

 

Now, each time one of our team members fills up, the transaction is automatically categorized in the Bank Feed.

 

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Make Bank Deposits

 

Simple Definition: After you’ve sent your invoices and received the payments into your Undeposited Funds Account (also see the "Undeposited Funds" entry below), you need to do a bank deposit in QuickBooks.

 

QuickBooks Encyclopedia Receive Payment and Undeposited Funds Workflow.png1. Send Invoice                2. Receive Payment into         3. Bank Deposit

“Undeposited funds”

 

Textbook DefinitionThere are a few different Bank Deposit features available in QuickBooks Online depending on how you enter transactions.

 

If you used the workflow above and received invoice payments into your Undeposited Funds account, the payments will show up in the “Select the payments included in this deposit” section of the Bank Deposit screen. Payments will only appear if you’ve chosen Undeposited Funds as the “deposit to” account when receiving payments.

 

  • The key rule for Bank Deposits is to match the amounts as they were recorded by your bank. If received one payment from a customer for two invoices and deposited it into the bank as a single payment, you can receive those funds into the Undeposited Funds account and group those payments as a single deposit in QuickBooks so your records match. 

  • If you use this workflow to deposit single payments received for single transactions to your Undeposited Funds account, deposit each transaction in the Bank Deposit feature one at a time. This way, you do not group them. 

 

Select the account you want to deposit payments into at the top, double check the information, and submit your deposit to close the loop. 

 

QuickBooks Encyclopedia Bank Deposit 1.PNG

 

 

Important - Before you can make a Bank Deposit, you need to process the payment. If you haven't yet received payment for a sale, create and process a new invoice. Make sure you select Undeposited Funds in the “Deposit to” field when you receive the payment. If already received payment at the time of the sale, create a sales receipt.

 


Using"Add funds to this Deposit"
: the "Add funds to this deposit" feature is for manually adding funds to an account from sources not processed through sales forms, invoices, or bills. This how you account for items like assets, loans, and equity into your accounts. 

 

If you’ve already started the invoice creation process, finish the workflow by receiving the payment directly into your Checking account or into Undeposited Funds. Do not jump ahead and add an invoice payment using the "Add funds" feature. If you enter it here and later deposit a payment to close the open-invoice, you will double count your income.

 

If you use QuickBooks Payments: The QuickBooks Payments section only appears if you are using QuickBooks Payments and you are waiting for a customer payment to settle. This section shows pending payments. These will be deposited automatically once the payment is received. 

 

 

Term in use: I have three paid invoices for coffee wholesale orders. I click the Plus Icon (Action Icon.PNG) and select “Receive payment” to deposit these payments to my Undeposited Funds account. I also have one sales receipt for $75 since I was paid by the customer at the time of sale - I don’t have to receive payments for sales receipts.

 

Now that all the payments are recorded in QuickBooks, I’m ready to make a Bank Deposit. I click the Plus Icon (Action Icon.PNG) again and select "Bank Deposit." I see my three invoice payments and the sales receipt (all with the correct payment amounts) already there, ready to be deposited. Actually received payment for two of the invoices as a single check payment, so I will click those two invoices and deposit them as a group payment. I will click and deposit the other two individually. 

 

For the full article, see “ How to Record a Bank Deposit in QuickBooks Online” 

 

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C

 

Product Categories

 

Simple Definition: Product Categories (and subcategories) are used to organize and track related products and services you sell.

 QuickBooks Encyclopedia Product Category 1.PNG

 

Textbook Definition: Product Categories are a method of classifying products and services in QuickBooks Online. Categorizing what you sell helps you better understand sales volume and trends. Categories also allow you to quickly analyze your product sales performance with minimal effort. 

Additionally, categories save time when completing transaction forms since you can search for items by category. Finally, categories make sales reports easier to understand since items are separated into their respective hierarchies.

 

QuickBooks Encyclopedia Product Category 2.PNG

  

Product and service items can only have one categorization. However, products placed in subcategories “live” under the parent category. When you create your structure, think top-level and immediate-level categorizations concurrently - do you only want to separate products by type or type and brand or type and brand and seasonality. 

 

If you remove a category (or subcategory), items within the category will either move up one category level or be reclassified as “Uncategorized.” 

 

If you are migrating from QuickBooks Desktop Pro/Premier, items or sub-items that have child items will be converted into categories (and will maintain the hierarchy).

 

 

Term in use: I want to track all my products and services related to landscaping. So, I created a “Landscaping” Product Category and “Sprinklers" sub-category to track items specifically related to installing and selling sprinkler parts. Keeping the top level parent category broad lets me easily add multiple subcategories moving forward. 

 

QuickBooks Encyclopedia Product Category 3.PNG

 

For the full article, see “ How to use Product Categories in QuickBooks Online ”

 

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Print Checks

 

Simple Definition: You can use QuickBooks Online to record handwritten checks and even print the ones you enter. Note that check printing is separate from the Pay Bills function. This definition covers checks for [aying expenses, not Payroll checks.

 

 

Textbook Definition: Whether or not you use QuickBooks to print and generate checks, whenever you write physical checks to pay for business expenses, you need to enter the financial information into QuickBooks so you have accurate data. 

 

QuickBooks Encyclopedia Print Checks.jpg

 

To enter a check you’ve already written, click the Global Create Icon  (Action Icon.PNG) and select “Check.” Enter the information, reference number and select your checking account.

 

If you want to create a new paper check from an entry in QuickBooks, follow the same process (Global Create Icon > Check). When you’re ready to print, go to Expenses Tab > Print Checks. This feature is designed to work with Intuit checks. Use the four-step module to choose your layout, update your PDF reader as needed, and make adjustments to the alignment.


QuickBooks Encyclopedia Print Checks 2.jpg

 

 

QuickBooks Encyclopedia Print Checks 3.jpg

 For the full article, see“ How to Print Checks in QuickBooks Online

 

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E

 

Employees 

 

See – Workers Tab

 

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I

 Invoices and Sales Receipts (and when to use each)

 

Simple DefinitionUse invoices when you sell a product or service and expect to get paid in the future. Once the invoice is paid, you receive the payment in QuickBooks.  

 

Use sales receipts when you sell a product or service and are paid at the time of sale. Since you’ve already been paid, you can skip the "receive payment" step.

QuickBooks Online Invoice Workflow.png

 

Textbook DefinitionInvoices and Sales Receipts are the two basic sales forms you use in QuickBooks Online. Depending on how you are paid for the sale, there are two ways to record sales transactions.

 

For deferred payments, use Invoices and once you're paid, receive the payment. Think of each transaction as a two-step process. First, you create the Invoice and thus a record of the sale. When your customer pays, you receive the payment against the invoice. At this point, you either deposit the money into your checking account or the Undeposited Funds account and then make a Bank Deposit. 

 

QuickBooks Encyclopedia Receive Payment and Undeposited Funds Workflow.png1. Send Invoice                2. Receive Payment into         3. Bank Deposit

“Undeposited funds”

 

 For immediate payments, use Sales Receipts.
QuickBooks Encyclopedia Sales Receipt Workflow.png

 

1. You’ve been paid            2. Create a Sales Receipt         3. Deposit into an account or use the Bank Deposit feature 

 

Term in useI sell flowers to a kiosk at a local hospital. Generally, I send Invoices and the owner pays me at the end of the month. Last week, the owner paid me in-full with cash since it was a smaller order. When I got back to my computer, instead of generating an invoice in QuickBooks Online as I normally would, I created a Sales Receipt.

 

 

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L

 

Mobile ADD Icon.jpg  Lists (Customer, Vendor, Products and Services)

 

Simple DefinitionLists are what QuickBooks uses to organize and structure your data, especially for sales forms.

 

 

Textbook Definition: Lists serve both user-facing and behind-the-scenes functions. Lists are comprised of items (customers, vendors, products and services). These items are what populate the data fields on sales forms. 

 

In addition to historical transactionsthe dashboards on the Sales and Expense Tabs display your lists for all customers, vendors, products and services. You can access other less commonly used lists, such as the Chart of Account (i.e. the list of your accounts), Payment Methods, and Attachments by clicking the Gear Icon (Gear Icon.jpg) > All lists.

 

Term in use: There are two primary methods for adding items to lists: 

 

Build lists all at once

 

The easiest way to create items from scratch is to navigate to the appropriate tab (customer, vendor, products and services) and click “New” or “Add New” on the respective list page. You can edit items you’ve already created by selecting them on the list.

 

  • Add a new Product or Service – Sales Tab > Products and Services > New
  • Add a new Customer – Sales Tab > Customers > New customer
  • Add a new Vendor- Expenses Tab > Vendors > New vendor
  • Add a new Account – Accounting Tab > Chart of Accounts > New

 

QuickBooks Encyclopedia Lists 1.png

 

This "build-lists-all-at-once" method is arguably the better method since you take the time to add the key details all at once. Seeing your items side-by-side on lists also helps with strategizing your organization. 


QuickBooks Encyclopedia Lists 2.png

 

 

Build lists as you work

 

You can always new create new items and add them to lists as you work. Just be sure to go back to add the details later on. Most data fields have an “Add New” option that lets you create individual items (customers, vendors products and services) directly from sales forms. Note that clicking “Add New” from a sales form takes to the same item builder module.

 

QuickBooks Encyclopedia Lists 3.png

 

Make it a habit to update your lists on a regular basis, either monthly or quarterly. Consistent upkeep will save time in the long run. 

 

For the full article, see Setting up for Success - Adding Products and Services, Customers, and Vendors to Lists

 

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P

 

Payment Terms

 

Simple Definitionthe “net” in net payment terms refers to the number of days before a payment is due. Payment terms are as much an agreement as they are a set of expectations established between buyers and sellers. Payment terms should be adjusted based on the pace of your industry and your relationship to your customers.

 

 

Textbook Definition: “Net” payment terms define the period of time a buyer has to settle an outstanding invoice balance and acceptable methods of restitution (i.e. forms of payment).

 

QuickBooks Encyclopedia Payment Terms 4.png

 

As the owner of a small business, you not only have to choose and define payment terms for your clients, you must also adhere to the terms outlined by your vendors and suppliers.

 

 

Term in useI initially set my Net payment terms to "Net 30," but decided to switch to Net 15 so I can get paid sooner. I emailed all my customers two weeks before I made the change to provide ample notice.

 

I can adjust default payment terms for invoices by going to Gear Icon (Gear Icon.jpg)  > Account and Settings > Sales > Sales form content. Once I've made changes, the new settings are automatically applied to all invoices going forward, not retroactively.

 

QuickBooks Encyclopedia Payment Terms.png

 

You can adjust payment terms for individual invoices directly on the forms – however, this change only affects the specific invoice.

 

QuickBooks Encyclopedia Payment Terms 2.png

 

I can even create custom payment terms and even add a discount for early invoice payments by going to Gear Icon (Gear Icon.jpg)  > Account and Settings > Sales > Sales form content and selecting “Add New” from the drop-down. Note, however, that discounts are not automatically applied to qualified invoices. Discounts need to be added manually and should be calculated for the original balance due, not including tax - learn more

 

QuickBooks Encyclopedia Payment Terms 3.png

 

For the full article, see “ How to Adjust Your Invoice Payment Terms in QuickBooks Online” 

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Q

 

QuickBooks Payments

 

See - "QuickBooks Payments Home Page"

 

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R

 

Recurring transactions

 

Simple Definition: Invoices and bills sent to the same customer or vendor with the same transactions can be set up as recurring transactions.

 

Textbook Definition: To an extent, this feature helps to automate transactions. You can set the time interval, create reminders, and schedule forms to send automatically. This feature is useful for invoicing customers with standing orders or recurring expenses with set amounts, such as rent.

 

The easiest way to create a recurring transaction is to take an existing form, scroll to the bottom, and select "Make recurring." 

 

To manage your recurring transactions, click the Gear Icon (Gear Icon.jpg)  > All Lists > Recurring transactions. This dashboard is also where you can set reminders and create new recurring transaction templates from scratch rather than from an existing form.

 

QuickBooks Encyclopedia Recurring Transactions 1.PNG

 

 

Important: Changes to recurring templates are not retroactive. If you make edits to product or service items (adjust the description, rate, taxability or income account) or customers (address, shipping address, taxable status, etc) that appears on a Recurring Template, you'll see the message “The matching Recurring Templates will be updated with your changes.” This applies the changes going forward. 

 

When you edit certain fields in Company Settings, QuickBooks Online updates recurring templates accordingly. Unlike items or customers, you won't see a warning message when making settings changes.

 

Also Important: When you turn on your Sales Tax preference, a dialogue box appears to ask if you want to make all items taxable. Even if you say "Yes," QuickBooks Online will not update recurring templates with these new tax settings

 

 

Term in useLet’s say you have a customer you provide breakfast pastries for every Friday. It’s always the same order on the same day. This is a perfect use for the recurring invoice feature. You want to automatically invoice your customers every Monday for $200 for an indefinite period of time. You create an invoice, make it recurring, and enable the following settings: 

 

QuickBooks Encyclopedia Recurring Transactions 2.PNG

 

QuickBooks Encyclopedia Recurring Transactions 3.png

 

As long as the actual items ordered on the invoice don't change, you can maintain this recurring invoice indefinitely.

 

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S

 

Sales Forms

 

Simple DefinitionIn QuickBooks Online, this typically referrers to Invoices, Sales Receipts and Estimates

 

See – "When to use Invoices and Sales Receipts"

 

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U

 

Mobile ADD Icon.jpg Undeposited Funds

 

Simple Definition: This is a special temporary account that QuickBooks uses to hold received payments before they are deposited in the bank (see Bank Deposits).

QuickBooks Encyclopedia Receive Payment and Undeposited Funds Workflow.png                                                                                                                       1. Send Invoice                2. Receive Payment into         3. Bank Deposit

                                                                                                                                                                      “Undeposited funds”

 

Textbook Definition: Undeposited Funds is an internalOther Current Asset” account created by QuickBooks to hold funds until you are ready to deposit them. It serves as the default "deposit to" account when you receive invoice payments, use a payment item on an invoice, or enter a Sales Receipt.

 

QuickBooks Encyclopedia Undeposited Funds Account 1.png

 

You can think of the Undeposited Funds account as an envelope where you keep checks until you're ready to take them to the bank. Essentially, it holds onto payments until you are ready to processes and finish them by recording them to the correct accounts in QuickBooks.

 

The Undeposited Funds account also allows you to group multiple payments into a single transaction. If your bank (or third party payment processor) recorded payments from multiple payments or invoices as a single record, you'll want to do the same in QuickBooks and combine whatever payments are needed to mirror this process. This will streamline bank reconciliations since you're actively making the records match.

 

You can change where you want received payment money to go before making a bank deposit by selecting a different "deposit to" account from the drop-down menu -- these payments will not show up on the Bank Deposit page (see "Bank Deposits")

 

 

Term in useWhen you receive an invoice payment, your default “deposit to” account is Undeposited Funds. If you need to, you can batch deposit multiple payments when you make a bank deposit. 

 

QuickBooks Encyclopedia Bank Deposits 3.PNG

 

For the full article, see How to Use the Undeposited Funds Account in QuickBooks Onlineand "How to Make a Bank Deposit in QuickBooks Online"

 

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W

 

Mobile ADD Icon.jpg Workers Tab (formally the Employee Tab)

 

Simple Definition: This is where you manage information for your regular employees and independent contractors.

 

Textbook DefinitionYou can update everything from an employees’ hire date to how their name displays on checks from the Workers Tab. This is also where you run Payroll if you have those services enabled.

 

QuickBooks Encyclopedia Workers Tab 1.png

 

There are separate tabs for employees and independent contractors (who are categorized as vendors in QuickBooks). It’s important to separate these groups (and separate their expenses). This is due to their working relationship with your business.


QuickBooks Encyclopedia Workers Tab 3.png

 

While you can add new independent contractors and prepare 1099s from the Workers Tab, you can also designate an existing vendor as an independent contractor by going to Expenses Tab > Vendor, editing their profile, and enabling the tracking option from their profile.


QuickBooks Encyclopedia Workers Tab 4.png

 

Term in useI want to enter a new employee and two independent contractors into QuickBooks. One of the contractors already has a vendor profile and the other does not.

 

To add my employee, I simply go to the Workers Tab and enter their information. Now to add the independent contractors (who are not my employees). I start with the independent contractor who isn’t in my system. I go Workers Tab > Contractors > Add a Contractor and see the following:

 

QuickBooks Encyclopedia Workers Tab 5.png

 

If you plan to use this method and request their information via email, make sure you double-check whatever they provide. Since you're filing their 1099-MISCs, you're responsible for this information. 

 

In certain cases, I prefer to add their information myself. So instead of going to the Workers Tab, I go to Expenses > Vendors and add a new Vendor. I fill out their information and check the “Track payments for 1099” box. While I am still in the Expenses Tab, I find the second contractor who already has a vendor profile in my system. I click on their name and “edit” their profile. All I have to do is check the “Track payments for 1099” box.

 

When I go back to the Contractor Tab, I see all of my independent contractors on the list.

 

QuickBooks Encyclopedia Workers Tab 2.png

 

For the two contractors, I also need to make sure their expenses are tied to a special account so I can report my taxes accurately -- be sure to read the full article, How to Track Contractors for 1099 Payments in QuickBooks Online.”

 

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FTU Setting up for Success

 

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Am I ready to send 1.jpg

 

Every feature in QuickBooks Online depends on other features. Even common tasks like invoicing rely on other pieces fitting in the right place. 

 

We’re here to help you make sure each piece fits and everything is set up correctly so you can send your first invoice with confidence. Use the checklists found throughout this article to double-check your progress. After completing each task, check it off and move on.

 

Am I ready 2.png


The Essentials                              The Nice-to-Haves

 


  The Essentials    

 

Am I ready 4.png

 

 

 

  Company Information

 

 

    Complete your Company Profile

To check this, click Gear Icon [Gear Icon.jpg] > Account and Settings > Company. You will arrive on this page:

 

Am I ready 5.png

 

As we mentioned in “Your First 15 Minutes with QuickBooks Online,” before sending any invoices or sales, make sure your company profile is complete. The information you provide automatically ports over into sales forms, so you want to make sure the following is accurate:

  • Company Name
  • Business Address (you can also add a PO Box as the “Customer Facing” address, as long as your legal business address is also in QuickBooks)
  • Email Address
  • Website
  • Phone Number


Also make sure you’ve designated your EIN, company type and the tax form you plan to file at the end of the fiscal year. You entered most of this information during your initial QuickBooks Online set up, but it’s good to double-check.

 

Am I ready 7.png 

 

Done  

 

 

 

 

 

    Choose an Accounting Method

To check this, click Gear Icon [Gear Icon.jpg] > Account and Settings > Advanced > Accounting. You will arrive on this page:

 

Am I ready 8.png

 

Knowing which accounting method you’re using essential for accurately tracking outstanding income and expenses.

 

When you start your business, you must choose how your business will report income based on either the cash or Accrual method. This is very important since this directly impacts income reports and your taxes. Accrual method reports income when you bill a customer or have outstanding yet-to-be-paid expenses. This means accounting for Accounts Payable and Accounts Receivable. Cash method only reports income when you actually receive money from a customer and expenses when they are paid.

 

 

FTU Ask a Question
 

 

If you choose accrual method and send an invoice now, that income will appear on your Profit and Loss Report. If you choose cash method, you won’t see that income on a report until the money is received.

 

Done   

 

 


 

Am I ready 4.png

 

 

 

 

 Sales Info

 

  Set Net Payment Terms

To check this, click Gear Icon [Gear Icon.jpg]  > Account and Settings > Sales > Sales form content. You will arrive on this page:

 Am I ready to send an Invoice 8.png

 

Default Net Payment Terms (i.e. the number of days a customer has to pay an outstanding invoice) can be adjusted in your settings menu and changed for individual invoices directly from the form. It’s important to know your Net Payment terms because they are a commitment all parties agree to – if your terms are “Net 30” and your customer pays you on Day 29 at 11:59 pm, the payment is still considered “on time.”

 

Set a reasonable timeline for your customers to settle their outstanding debt. Being flexible may garner loyal customers for life.

 

Done  
 

 

 

 

  Set your Home Currency

To check this, click Gear Icon [Gear Icon.jpg]  > Account and Settings > Advanced > Currency. You will arrive on this page:

 Am I ready to send an Invoice 9.png

 

What currency do you plan to receive from customers? Make sure this is set as your home currency. Multicurrency lets you track transactions in foreign currencies, but you should only use it if you have bank accounts, customers, or vendors that don’t use your home currency.

 

Important   

If you plan to use the “Multicurrency mode, make sure you have your home currency selected before you enable the feature. You cannot turn off or change your home currency once you’ve enabled the feature. As ProAdvisor and QuickBooks Expert  @vpcontroller notes, “In case you've already turned on the "Multi-currency" feature, you can't change the home currency anymore. If that's the case, you have the option to wipe your company data, and redo the setup including the correct home currency. OR cancel the subscription and get a new subscription account.”

 

 

Done  

 

 

  Track Sales Tax

To check this, go to the Tax Tab. You will arrive on this page:

 

Am I ready to send an Invoice 10.png

 

If you send invoices to sell products, you’re most likely going to be collecting taxes on what you sell.

 

Important - Currently, Automated Sales Tax in QuickBooks Online only calculates based on accrual method, regardless of your company accounting preferences setting. If you are new to QuickBooks Online and...

 

  • ...you set your accounting method to Cash method AFTER setting up the Sales Tax Center, QuickBooks will still automatically calculate your sales tax but your Sales Tax Center will still display based on Accrual method. As a workaround, you can use Sales Tax Liability reports to determine the proper Sales Tax payments recorded in QuickBooks Online.

  • ... you set your accounting method to Cash method BEFORE setting up your Sales Tax Center, you will default to manual sales tax. 

    Learn more about sale tax and QuickBooks Online

 

Done  
  

 


  

  Am I Ready in QuickBooks Online Header.png

 

 

 

  Invoice Form

 

 

  The bare essentials 

To start, click Gear Icon [Gear Icon.jpg] > Custom Form Styles > New and you will arrive on this page:

 

Am I ready to send an Invoice 19.PNG

 

The first Invoice template you create will become your default. There’s a lot you can do to enhance your invoices, but at this point, we’re only going to make sure you have the essentials. If you want to do a more full-fledged customization, start with our "How to Customize Invoices" guide. 

 

You can apply edits and customizations to your invoice templates from the Custom Form Styles Module (Gear Icon [Gear Icon.jpg] > Custom Form Styles > Edit or New)At the very least, you need to include your logo, company name, and payment terms on your standard invoice form. You can access these data fields from the “Design” and “Content” Tabs of the Custom Form Styles module. 

 

Am I ready to send an Invoice 12.PNG

 

Let's dig a bit deeper. Head over to the “Content” Tab. In the top corner of each section, you will see the Pencil Icon (Pencil.png) that expands the section so you can make edits.

 

Am I ready to send an Invoice 13.png

 

At a minimum, include the following:

  • Header (top section)
    • Business name, address, number and email address
    • Payment terms and due date
    • Any “custom fields” you might need

  • Table (middle section)
    • Date
    • Product and Service + Description
    • Quantity and Rate
    • Amount
    • Any “custom fields” you might need
    • Note - click the “Edit Labels and Widths” title across from “Columns” to edit the names and width of each column. We go over this in more detail in “How to adjust your Invoice Columns in QuickBooks Online

  • Footer (bottom section)
    • Any personal message you want to send to your customers

 

Done  

 

 

 

  Enable Online Invoice Payments (if applicable)

To enable this, click Gear Icon [Gear Icon.jpg] > Custom Form Styles > New or Edit > Payments Tab. You will arrive on this page:

 

Am I ready to send an Invoice 14.png

 

If you enable QuickBooks payments, customers can pay their outstanding invoices online via ACH Bank Transfer or credit card.

 

Online invoice payments are not enabled by default.  While you do not need this feature turned on to send invoices if you receive payments outside of QuickBooks, but it does make money-in tracking much easier. You can always accept checks, cash or payment through a third-party processing service and enter invoice payments manually. It’s up to you to decide which method works best for you and your business, but do keep in mind that the "Pay as you go" plan is free and lets you accept ACH Bank Transfers for free as well. 

 

 

 

 

  Choose a delivery method – email or print

To set this, click the Gear Icon [Gear Icon.jpg]  > Invoice to start a new Invoice.

Am I ready to Send an Invoice 16.png

 

While we always recommend sending digital invoices via email, if your customer prefers carbon copies, you can print a paper invoice by clicking the button at the bottom of the form. Follow the instructions to print in the pop-up menu. If you don’t want to also send a digital copy, be sure to click “Save and Close” when you're finished. 

   

 


  

Am I Ready in QuickBooks Online Header.png 

 

 

 

  Products and Services List

 

 

  Add Item Details

To start, click Sales Tab > Products and Services. You will arrive on this page:


Am I ready to send an Invoice 20.png

 

We introduced two methods, the build-lists-as-you-go and build-complete-lists-all-once methods in our “Your First Hour with QuickBooks Online." Both workflows lead to robust Products and Services lists, so choose the one that best works for you. Whichever method you choose, remember to include the following for all products and services:

 

  • Sales Info/Item Descriptions – so customers know what they’re getting
  • Taxable – make sure this is this enabled (or disabled) when appropriate (learn more)
  • Pricing – make sure prices and rates accurate. Editing item prices directly on an Invoice form only will apply the changes locally (i.e. to the form you’re working on). To make permanent changes to an item, go to Sales Tab > Products and Services, find the item, and click “edit." 
  • If you’re tracking inventory, do a physical inventory and match the starting quantities-on-hand in QuickBooks.

Am I ready to send an Invoice 18.png

 

 

 

 

  Create Income Accounts for Tracking Sales

To start, click Sales Tab > Products and Services > Edit or New. See if you have the appropriate income accounts for your products and services. 

 

Am I ready to send an Invoice 17.png

 

Check that you’re recording income from products and services into the correct income account.  If you need to create more income accounts, here's a guide for creating and managing accounts in QuickBooks Online. It’s critical that you capture sales income in adequate detail so your financial reports are accurate and tax compliant.

 

We'll go over “product categories” in the nice-to-have-section.

 

 

 


 

Am I Ready in QuickBooks Online Header.png

 

 

 

 

   Verify customer Information

To check this, click Sales Tab > Customers. You will arrive on this page:

 

Am I ready to send an Invoice 28.PNG

 

Comb through your customer list and see if you have the information needed to send them an invoice, namely their current email address or mailing address if you intend to send printed invoices.

 

Click on individual customer lines and select “edit” from the arrow icon on the right to see your customer’s current information.

 

Am I ready to send an Invoice 21.png

 

Just like items, you can add customers as-you-go directly from Invoice forms or build-out your list all at once. While we recommend going into the Sales Tab and entering complete product and service data one item at a time, you have a bit more flexibility with customers. Adding them directly from sales forms is a huge time saver.

 

Am I ready to send an Invoice 22.png

 

 

 


The Nice-to-Haves

 

Am I Ready in QuickBooks Online Header.png

 

 

 

 

  Customize your Invoices 

As we mentioned earlier, there are countless enhancements you can apply to sales forms. You can change the layout, modify the color-scheme, add custom data fields, and rename and resize columns. 

 

Am I ready to send an Invoice 24.PNG

 

Spend some time in the Custom form styles module (Gear Icon [Gear Icon.jpg]  > Custom Form Styles) and make your invoices looks professional. You may even want to add extras like Social Media links in Invoice emails to maximize the marketing mileage of every sales form.

 

You can also import Invoice Templates from Microsoft Word Documents if you want to get really hardcore.

 


 

Am I Ready in QuickBooks Online Header.png

 

 

 

 

  Set up Online Banking

We cover online banking in greater detail in “How to Connect Bank Accounts to QuickBooks Online,” and while this is not an essential feature for recording invoice and expense payments, it's an incredibly useful feature that can save you hours of work.

Am I ready to send an Invoice 26.png

 

When you connect your checking or credit card accounts (including PayPal), the program will automatically match existing sales forms or generate new transactions with pre-filled data based on your bank records! Instead of creating Sales Receipts retrospectively for transactions recorded outside of QuickBooks, your job will be to simply match existing forms in your system or edit the new records.

 

To learn more, check out “How to Connect Online Bank Accounts to QuickBooks Online.”

 


 

 Am I Ready in QuickBooks Online Header.png

 

 

 

  Products and Services Categories

QuickBooks Online allows you to track greater product details through the use of Product Categories. These are incredibly useful for keeping organized and minimizing the number of accounts you need. 

 

Am I ready to send an Invoice 23.png

 

Using categories saves time since you can keyword search items by category. Categories also make sales reports easier to comprehend since they logically separate items into their respective hierarchies.

 

Am I ready to send an Invoice 25.png

 

 


 

So, are you ready to send an Invoice?

 

Yes!          Let me check again  

 


Your First time with QuickBooks Online

 

What’s Next?

 

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How to Customize Invoices in QuickBooks Online.png

 

What impression do you want your invoices to leave on your customers?

 

A customized invoice, even semi-stylized ones, is an opportunity to enhance the perception of your business. The Custom Form Styles module in QuickBooks Online lets you edit the layout, design, and data fields that appear on your invoices.

 

There’s nothing wrong with plain invoices. Customers aren’t going to abandon your brand because you use generic sales forms. Invoices do, however, make them think something.

 

How to Customize Invoices in QuickBooks Online 1.png

 

Unlike other branding solutions, this one requires very little effort and has no added cost. You don’t need an MFA to create an eye-catching invoice template. Anyone with QuickBooks Online Essentials and QuickBooks Online Plus can use the Custom Form Styles module to create an attractive, professional-looking invoice.  

 


Why do I need to customize my invoices (and other sales forms)?

 

Customizing invoices give your communications a bit of texture. Simple changes, such as layout and logo location, can make the difference between staying top-of-mind or getting lost in the noise of email inboxes. 

 

As ProAdvisor and ParkWay Inc. CTO Matthew Fulton reminds us, “It can be easy to forget that to someone else, your invoice is no different than the other 9 forms in front of them.”

 

You also need to provide customers with the right information. Consider those on the receiving end of an invoice - at a minimum, customers deserve an invoice with relevant information presented in a clear format. 

 


Get started creating customized invoices

 

 

Invoice-Gif.gif

 

 

To begin, click the Gear Icon (Gear Icon.jpg) and then select Custom Form Styles. From the Custom Form Styles dashboard, you can manage and edit templates for Invoices, Estimates, and Sales Receipts.

 

While you can create multiple iterations of a form from a master, you can only apply one template at a time.

 

How to customize an invoice 2.PNG

 

Let's create a new template from scratch. Click the New Style button and select “Invoice” from the drop-down. 


There are four sections of the customization module: Design, Content, Emails, and Payments. You’ll spend the majority of your time in the Design and Content sections.

 

The Design Tab

  •  This is where you choose fonts, color-schemes, and your logo. This is also where you can adjust the overall template layout.

    How to customize an invoice 3.PNG

 

 

 The Content tab

  • Your company information automatically appears in this tab, but you can decide what you want (or don’t want) displayed on the final form. 

  • This is also where you modify data fields (more on that below) and adjust the width of columns.

    How to customize an invoice 4.PNG

     

 The Emails tab

  • You can create a unique invoice email message if you don’t want to use the default.

 

 

The Payments tab

  • This tab is simple but very important if you want customers to pay you electronically directly from the form. If you’re using QuickBooks Payments, QuickBooks Online will automatically update sales information once the payment is processed.

 

How to customize an invoice 5.PNG

 

When you’re done editing the template, you can click Preview PDF or Save and Exit to return to the Custom Form Styles dashboard.

 

The first invoice template you create will become your master default template. To change the default form, click the Arrow Icon (Arrow Icon.jpg) next to the form you want to designate and select “Make Default."

 


Designing Custom Invoice Templates

 

When designing your invoice, ask yourself the following:

 

  • Appearance – Do you want your brand to appear everywhere on your invoices, or do you prefer a more subtle approach? Try to match your existing marketing efforts to create a sense of uniformity.
  • Data-fields – What information matters most to your customers? How much information is too much? Do you provide clients with specific units of measurement? How about tracking information, like drivers’ names, to add peace of mind? These can always be updated later on.
  • Format – Are your invoices easy to read? Where does the most important information appear on your forms? Which data fields are absolutely necessary? Do your customers prefer larger fonts for improved readability? Start with the basics, then add icing to the cake.
  • Personality and Tone – Is being approachable important to your business? Do you want to sound casual or official? Design accordingly.

 

Creating a custom logo

 

When you first create your QuickBooks Online company file, you can add your business logo. This same logo will appear on all of your invoices and sales forms, so take pride in its design and presentation.

 

Logo edits should be made outside the program before uploading the image. Note that square and circular logos with white backgrounds tend to look the best on invoices. Logos files have a few technical requirements:

  • Must be one of the following formats: .gif, .bmp, .jpg, .jpe, or .jpeg
  • Be smaller than 1MB (this helps with loading speed)
  • Have a bit-depth (aka color-depth) of 24-bits or less and use standard sRGB


Customizing data fields

 

You can add, remove, or rename certain data fields from the Content Tab. To edit a section, click on the pencil icon  (Pencil.png) on the preview form. Each section has its own set of customization features.

 

How to customize an invoice 6.PNG

 

There are numerous available customization options. We won’t go over everything, but we will highlight a few important areas:

 

  • In the “Header” section (top section), you can add up to three custom fields by clicking “+ Custom Field” 

  • In the data table section (middle section), you can edit, remove, or rearrange the item description, quantity, and rate data fields.

    Click the blue “Edit Labels and Widths” title at the top to enable the column and data field editor. There’s underlying flexibility in this particular module – for instance, if you prefer to display unit quantities in “lbs,” “grams,” or “boxes,” simply enter the unit of measure into the text box.

 How to customize an invoice 4.PNG

 

  • To change the order of the columns, grab the square icon and drag it until the solid line becomes dotted.

  • Use the slider bar to adjust the width of each column. Column width is relative and finite – you may need to narrow columns that are taking up space before you can adjust others.

 

The “Products/service” line in the data table section includes item categories by default. You can turn these off, but product categories provide customers with more information and you get better data (learn more about item categories – Introduction to Categories in Products and Services).

 


Any other tips I should keep in mind to be successful?

 

  • Let your invoices portray you and your brand in the best light. Treat them you would any other type of communication, be it email, phone call, or face-to-face meeting. Keep them simple but impactful. 

 


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How to adjust your payment terms in QuickBooks Online 1.png

 

 

How soon do you want to get paid after sending an invoice? How long do you want to give customers to pay their outstanding invoices?

 

Invoice payment terms are an agreement between you and your customers regarding when invoice payments are due. “Net” refers to the number of days before the expected payment. Adjust your payment terms to fit the pace of your business, industry, and your relationship with your customers. Even simple things, like net payment terms, set expectations and tone for all parties involved.

How to adjust your payment terms in QuickBooks Online 2.png

 


Why should I adjust my Invoice Payment Terms?

 

As the business owner, it’s imperative to strike a balance – you want to get paid in a timely manner, but you also want to establish reasonable payment terms for customers. Consider the long and short game. Getting paid now means dollars in your pocket. On the other hand, flexibility always pays dividends in customer loyalty. 

 

If you have a high volume of customers with relatively low-cost invoices, consider shorter payment terms. However, if you frequently send high-cost invoices or know your customers generally have difficulty making payments before the end of the month, go with “Net 45” (or higher) to provide them with an ample opportunity to settle their outstanding balances.

 

Additionally, think about the payment methods you want available. If you don’t know which method your customers prefer, ask them. Again, don’t take the economics at face value. If they prefer the convenience of credit cards, the upfront service fees your business absorbs can be justified in the name of satisfied customers. At the same time, you may want to only accept checks or ACH payments to avoid fees entirely. Communicate with your customers so they understand these limitations. 

 


Get started adjusting Invoice Payment Terms

 

There are a few ways to set  Invoice Payment Terms, depending on which segment of customers you want them applied to.

 

Scenario 1: Set default payment terms for all customer invoices

  • We recommend setting default payment terms and making adjustments for special cases. You can use your default as the “benchmark” and make due date adjustments for particular customer segments to learn which works best.

  • From any page, click the Gear Icon (Gear Icon.jpg) and select Accounts and Settings (or Company Settings).

  • Click the “Sales” tab on the left and then click the pencil icon (Pencil.png) for “Sales form content.”

 How to adjust your payment terms in QuickBooks Online 3.png

 

  • Once you make a selection, your “preferred invoice terms” are automatically applied to all invoices going forward (not retroactively).

  • Don’t forget to click “save” in the box below before clicking “done.”

 

 

Scenario 2: Set payment terms for particular invoices

  • The easiest way to adjust invoice payment terms is right on the invoice form itself. This only applies changes locally to this specific invoice – you’d need to go into settings to change the default.

  

How to adjust your payment terms in QuickBooks Online 4.png

 

 


Show me why I should adjust my Invoice payment terms

 

I initially set my default payment terms to “Net 30.” Last month, I decided to switch to “Net 15” so I could receive payments sooner. Before making the change, I sent all of my clients an email notify them of the change well in advance. I went to the Sales Tab and then the Customers Sub-Tab, checked the box next to the customers I want to contact, and then selected "email" from the “Batch Action” button. 

 

A month later, I noticed the percentage of customers who paid on time went down. So, I called a few of my favorite customers and asked why they were having trouble making payments. Turns out many of them found it inconvenient to send a check within 15 days.
 

So, I set my payment terms to a customized “Net 35” and enabled ACH Bank Transfers from the Custom Form Styles module. To further incentivize early payments, I looked into the early invoice payment discount feature (Gear Icon > Account and Settings > Sales > Sales form content > “+Add New”).

 

How to adjust your payment terms in QuickBooks Online 5.png

 

I considered offering a 2% discount for invoices paid within 10 days and 1% if paid within 15. I even created messaging for the memo section of my invoice emails clearly stating the timetable started the moment I sent the invoice.

 

However, after reading more about the discount feature, I realized the process is manual and isn’t automatically applied to qualifying invoices. In the future when I am more confident with QuickBooks, I will take the time to calculate discounts balances, but for now, I will leave the feature alone. 

 


 Any other tips I should keep in mind to be successful?

 

  • Payment terms are about more than getting paid – they set a tone for your business. Establish them based on what is reasonable for both you and your customers.

  • We recommend adjusting your payment terms concurrently with the growth of your business. If customers aren’t paying outstanding invoices fast enough, you shorten the payment period. At the same time, don't assume they’ve skirted their responsibilities – if your payment terms offer flexibility, customers will act accordingly. Set expectations early, communicate clearly and give ample notice if you plan to make changes.

 

  • Make your payment terms clear and easy to find on every invoice. If you commit to "Net 60” payment terms, customers have 60 days to pay you. Even if customers pay at 11:59 pm on day 59, it’s still on time. You can’t apply new payment terms retroactively, you can only set new expectations going forward.

  • Provide ample notice if you ever plan to change your payment terms, especially if you decide invoices are “Due on Receipt.” 

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How to add social media links to invoices in QuickBooks Online 1.png

 

Social media is a great way to grow your business' online footprint and requires minimal input. The simple addition of social links can greatly increase awareness of your brand online and offline, which in turn can lead to boosted sales.

 

In QuickBooks Online, rather than embedding social media buttons in the body of sales forms, you can add clickable hyperlinks to the email message portion of invoices, estimates, and sales receipts. 

How to add social media links to invoices in QuickBooks Online 2.png


 

Why should I add social media links to my Invoices and Sales Form emails?

 

Adding clickable “like us on Facebook” or “follow our Instagram” hyperlinks to invoice email messages is a simple way to stay connected with your customers, enabling you to broaden your brand’s reach without additional (or costly) marketing efforts. This approach separates

branding and business so the prior doesn’t get lost amongst line items and figures (or vice versa). In short, keep the actual invoice form focused on business. 

 

You should add whatever social channels resonate with your brand. Add your most popular channels, but also consider boosting your newer or less popular outlets if their growth will benefit your long-term strategy. Be sure to add personalized "call to action" messaging to go along with. 

 

Using this creative opportunity to make your brand stand out may have a very positive effect on your bottom line.

 


Get started adding clickable social media links to Invoice and Sales Form email messages

 

There are two ways to edit the messages you send to customers when they receive an invoice. From the start, decide whether you want your branded messaging to be part of your default message or a custom template you only send to certain segments of your customer base.

 

Add social media links for all sales forms (i.e. your default message)

  • Starting from any page, click the Gear Icon (Gear Icon.jpg) and select Accounts and Settings (or Company Settings).

  • Click the “Sales” tab on the left and scroll down until you see the “Message” section. Click the pencil icon (Pencil.png) to edit the default email message.

     

How to add social media links to invoices in QuickBooks Online 3.png

 

  • Now, add an enticing “call to action” message and include the full hyperlink for your social media channel with the "http://" or "https://" prefix.

Tip - While you might want to add an eye-catching subject line, don't let that eclipse the purpose of the invoice email. Customers need to know first and foremost that this is an email for a sales form. Strike a balance and don't add unwanted noise to the sales process. 

 

Add-Social-Media-Links-to-Invoices.gif

 

  • Important - The hyperlink won’t appear clickable while you’re editing the message but don't worry, your customers will be able to click the link once the invoice reaches their inbox. You can always email yourself a copy to confirm it looks perfect.

 

  • Click Save and you’re done.

 

 

Create a custom template with specific social links for segmented customers

 

  • You know your clientele better than anyone else. If you believe certain clients would benefit from connecting over certain social media channels, create a custom form linked to those specific channels. 

 

  • From any page, click the Gear Icon (Gear Icon.jpg)  and select Custom Form Styles. You can either edit an existing invoice template or create a brand new one for this modest branding campaign.

 

  • Go immediately to the “Emails” tab of the Custom Form Styles Module. Write a simple yet compelling “call to action” and add the full hyperlink, including the "http://" or "https://" prefix.

How to add social media links to invoices in QuickBooks Online 4.png

 

  • Again, the clickable hyperlink won't appear while you are editing the template or if you go back into the form to make edits. 

 

  • We recommend trying out a few variations of your template to see which has the biggest impact. Subtle changes to the "call to action"  wording, layout, and format can make a significant difference.

 


Show me why I should add clickable social media links to Invoice and Sales Form emails

 

My business Facebook account has quite a few followers and I want to grow my Instagram following since it has proven to be a great lead-generation channel. Now, every time I send invoices or sales receipt to customers, there’s a new opportunity to attract more business through branding.

 

How to add social media links to invoices in QuickBooks Online 2.png

 

While I have other social media channels, I only want to add ones I want to grow and know will have the biggest impact. Adding too many links will clutter up the email and my customers' inboxes. 

 

Know your audience and match their expectations – if you sell art or photo products, lead with a visually-driven channel like Instagram; if you make instructional videos for the items or services you sell, add a link to your YouTube Channel.  

 


 

Any other tips I should keep in mind to be successful?

 

  • Keep it simple. Less is more. 

  • Make sure you start hyperlinks with "http://" or "https://" or else they will not be clickable.

 

  • You can add a URL to the memo section of an invoice or sales receipt, but it will not be a clickable link. In any case, it's best not to mingle marketing and sales information. Keep this type of branding off sales forms. 

 


 

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How to do Online Banking 20.PNG

 

Connecting your bank and credit card accounts to QuickBooks Online is a great way to track your income and spending without having to manually enter every transaction. Only recording your income through sales forms while leaving out your expenses provides an incomplete perspective of your business’ overall health, but creating records for every transaction can be a huge task. 

 

If you connect your online bank accounts in QuickBooks Online, the program will automatically download the last 90 days of transactions recorded by your bank. The program will match existing entries already in QuickBooks online and add new records for incoming transactions without a matching entry. This feature ensures your accounts are always up-to-date and drastically reduces the amount of data-entry you need to do on a daily basis. 


  

Why should I connect my online bank accounts?

 

Connecting your bank accounts to QuickBooks Online and automatically importing transactions recorded by your bank saves a lot of time. Adding invoices and sales receipts takes effort - as your business scales, these tasks will increase accordingly. Using the Online Banking feature to supplement your efforts ensures all of your income and expenses get into QuickBooks so you have comprehensive financial reports and thus a comprehensive perspective of your business’ performance. 

 

This automation also prevents data entry errors that occasionally occur with manual data entry, giving you peace of mind and freeing your day to get more done.   

  


Get started connecting your online bank accounts

 

You can connect and manage multiple bank accounts (including credit cards and PayPal) from the Banking Tab.

 

  • To start, select “Add Account” in the Banking Tab and search for your bank on the list. If you don’t already use separate checking and credit card accounts for your business, you may want to consider opening separate right away - - and you’ll soon see why.

 

How to do Online Banking 21.png

 

  • Choose the bank account you use for your business from the list and tell QuickBooks what kind of accounts they are. Remember to use the same login credentials for when you visit your bank online.

How to do Online Banking 10.png

 

  • It may take a few minutes to establish a secure connection. Now is as good a time as any to browse a few of our other "How to" articles. 

  • Once the secure link is established, you will see all of your available accounts listed. Select the appropriate type and QuickBooks will begin pulling the last 90 days of transactions.

How to do Online Banking 22.png

 

 

 

Navigating the Bank Feed

 

This is what your typical Bank Feed will look like: your various accounts are separated in the header and historical transactions are listed below.

 How to do Online Banking 1.5.PNG

 

 You can filter for each account (and see their totals) by clicking on the blue boxes in the header.

 

How to do Online Banking 2.PNG

 

At the top of the columns above the transactions, you will see “All” and “Recognized.” Clicking “All” will display all the transactions for the selected account while “Recognized” filters for transactions that have a match (more on that in a minute).

 

How to do Online Banking 3.PNG

 

Finally, at the very top are “Bank Rules” and the Update button, the latter of which you can use to manually update your Bank Feed with new transactions from the bank.

 

How to do Online Banking 6.PNG

 

 

Importing bank transactions

 

QuickBooks will download all of your bank transactions from the last 90 days into the Bank Feed. However, these transactions aren’t in QuickBooks just yet. Once they’re in the Bank Feed, you’ll still need to categorize these imported transactions so they're recorded to the correct accounts.

 

How to do Online Banking 1.PNG

 

  • Begin with the “For Review" Tab to see all of your uncategorized transactions. Work your way down the list from your most recent transactions since these are freshest in your mind. You can always sort the list columns by category, payee, and payment amount by clicking the top bar. 

 

 

Matching transactions

 

  • You can start with either the "All" or "Recognized" list in the Bank Feed. The (#) next to the column title indicates how many transactions are in the specified category - we find it best to start with whichever has with the least amount of transactions. 

  • If you aren't sure where to start, go for the “Recognized” tab. Finishing the list should be a breeze.  When transactions appear on this list, it means QuickBooks has found a matching invoice or expense form in the system, a bank rule has been applied, and/or a category used for related transactions in the past has been applied. 
  • The “records found” means QuickBooks has a match. If more than one transaction matches a bank record, you will see a number next to the green “records found” in the feed. Match criteria are based on the amount and payee. 

 How to do Online Banking 12.png

  • Most of these will have a perfect match. All you have to do is verify that the bank record matches what's already identified in QuickBooks and click the “match" button to connect the imported transaction. 

    Online-Banking-Dropdown.gif
  • We recommend going through the Bank Feed line-by-line and review whether the record truly matches what the system recognized. To do so, click the transaction to expand the line and bring up this menu:

 

How to do Online Banking 4.PNG

 

  • From here, you can click the link to bring up the Sales Form QuickBooks is trying to match. If there is more than one match, all of the options will appear under "Records found." Select the appropriate invoice or expense and click "Match." If the match isn’t correct but you know the record exists in QuickBooks, click the “Find other records” button to search for a match.

 

Online-Banking-Overview.gif 

 

Important  if you know a transaction already exists in QuickBooks (income, expenses, or otherwise), it’s very important that you use the match feature. Don’t "add" a new transaction from the Bank Feed without a match – this could result in double-counting your income or expenses since you’re essentially generating a duplicate transaction. 

 

 

How to do Online Banking 13.PNG

 

  • Once you're done matching, you can review or undo matches by clicking the “In QuickBooks” tab. This tab shows all recently matched transactions.

  • As you create Bank Rules and QuickBooks learns about your preferences, more and more transactions will be automatically matched, saving you even more time. 

 

 

Adding transactions (not already in QuickBooks)

 

The Online Banking feature also semi-automates record creation. For imported transactions that do not have a match, QuickBooks will generate a new record and attempt to categorize the transaction into the correct account. 

 

  • If you see the “add” button next to a transaction, it means the transaction was imported from the bank, but still needs to be created and properly categorized. Clicking “add” generates a transaction in the QuickBooks register. This transaction will be added to the Sales Tab (for invoices) or Expense Tab (for expenses). 

  • QuickBooks Online will attempt to add the payee, date, amount, and account automatically when it updates the Bank Feed. 

  • Before you click “add,” make sure the correct “category” (account) is selected so QuickBooks records the transaction accurately. The system is fairly good at guessing, but you can always change the category from the drop-down menu.

 

  • The “add” function also allows you to split transactions into different accounts.

 

How to do Online Banking 15.png

 

  • When you add the transaction, QuickBooks will only record the information provided on this line. Once you click "add," go into the Sales or Expense Tab to review the new record and add any additional details. 

 

 

Important – We want to emphasize again: go into the Sales or Expense tabs and fill out the rest of the information for the transaction right after you add it to the register. Bank records can only provide so much information to QuickBooks. You need accurate details for every record of income and expenses.

 



How to do Online Banking 11.PNG
As you can see from the example above, in my haste I added this expense without entering any details -- and the record is missing a lot of information. If I walked away from my computer and came back the next day, I may completely forget about adding the details. Even if I do remember to finish the job, I will probably forget the details.

 

Recording bank transfers

 

  • You may have moved money to another account, such as moving funds from a checking account to a savings account. You need to record this transaction as a transfer so it's not reported as income.

  • Find the transaction under the For Review tab, select Record transfer, then select the account the money was transferred to or from. Add any notes or extra details and select the Record transfer button to add it to your books. 

  • There will be two transactions under the For Review tab for any transfer you make: one transaction for money moving in and another for money moving out. Make sure you record both transactions as part of the transfer to keep your books accurate.

 bank_transfer_qbo

 

Splitting transactions

 

  • You may want to add more than one category for a transaction, such as a mortgage transaction split between a business expense (work from home) and a personal expense. 

  • Select the transaction, then Split, then enter the amounts for each category.

  • You can edit the details of a split transaction under the Reviewed tab just like any other transaction.

split_transaction_qbo

 

If you can’t find a matching transaction…

 

If you know the transaction is in QuickBooks, always look for the match. If for some reason QuickBooks can’t find a match for an invoice or expense you know for certain you’ve entered

 

  • ... and you're are in the “All” tab, click the imported transaction on the list. You can toggle from “Add” to “Match” to pull up the Match Transactions window.

    How to do Online Banking 17.png
    This list contains all transactions recognized by QuickBooks. Search the list and put a check mark next to the transaction you want to match
    . Be sure the total amount of the match record on the list is equal to the total amount of the imported transaction.

     

How to do Online Banking 16.png

 

  • ...and you're on the “Recognized” tab looking at matched transactions, click the “Find other records” button to pull up the Match Transactions window.

    How to do Online Banking 18.PNG
    From here, you can search for specific criteria, such as the payor/payee name, amount, etc, to locate the transaction.

 

How to do Online Banking 16.png

 

  • If the transaction you need to match is outside the date range at the top of the Match Transactions window, change the dates. When you find the appropriate transaction, check the box. If the total is the same as the imported transaction total, select "Save" and match the two. 

    If the totals are different or you know multiple transactions are attached to the imported record, you can match multiple transactions or select Resolve Difference until the difference is equal to zero.
     


Any other tips I should keep in mind to be successful?

 

  • Use the descriptions from the imported bank records as clues to help you categorize transactions.

  • If QuickBooks Online can’t recognize a category, the program may try to put transactions into Uncategorized Income or Expenses. It’s best not to leave transactions in these accounts. Instead, create new accounts in your Chart of Accounts to make sure money is categorized correctly the first time.

  • Attaching receipts to bank transactions in the Bank Feed can help you keep records organized.

  • If you don’t select or add a name for a vendor or customer when matching or adding records, QuickBooks Online adds these transactions to the register without one. We highly recommend never adding transactions without a vendor or customer name. 

  • QuickBooks Online will not attempt to match any transactions that are more than 180 days old.

  • For more details and troubleshooting tips, check "How QuickBooks Online handles downloaded banking transactions."

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How to use the Undeposited Funds Account in QuickBooks Online 1.png1. Send Invoice          2. Receive Payment into       3. Bank Deposit

 "Undeposited funds”

  

 

The Undeposited Funds account in QuickBooks Online serves a special function – it’s a special temporary account that QuickBooks uses to hold payments received from invoices before you deposit them into in the bank. This workflow is especially important for QuickBooks users who don't process transactions through QuickBooks Payments and import payment data from external processing services.

 

How to use the Undeposited Funds Account in QuickBooks Online 2.png

 


Why should I use the Undeposited Funds Account?

The Undeposited Funds Account is an internal “other current asset account” created by QuickBooks to hold funds until you are ready to deposit them. Imagine the Undeposited Funds account as the lockbox or safe  (or drawer) where you keep payments until you are ready to take them to the bank.

 

The Undeposited Funds account serves as the default "deposit to" account when you receive payments from Invoices, use a payment item on an invoice or enter a Sales Receipt. It's designed to work with the receive payments and bank deposit features to complete the invoicing process. You can use this workflow for single and group payments - what's key is matching what happened in real life inside QuickBooks. This means if your bank recorded a group of payments as a single deposit, you should do the same in QuickBooks. 

  

The Undeposited Funds Workflow

How to use the Undeposited Funds Account in QuickBooks Online 1.png   1Send Invoice          2. Receive Payment into       3. Bank Deposit

  "Undeposited funds”

 

With single invoice payments (step 2 in the graphic above), you can skip the Undeposited Funds process and deposit received payments directly into your checking (savings, or even credit card) accounts as long this is how the processed payment will show up on your bank statements. While skipping the intermediary step saves you a few extra clicks, knowing how and when to use each workflow can get confusing - - it might be easier to memorize a single workflow and use the Undeposited Funds process every time. It might be a few extra clicks, but you'll know you're always "doing it right." Taking a few moments to track payments through the Undeposited Funds account will prevent major headaches during your monthly reconciliation when the details of each transaction are no longer fresh in your mind. 

 

 

Grouped Payments 

 

When it comes to dealing with grouped payments, using the Undeposited Funds account to receive payments makes it much easier to manage transactions.

 

Let's say you had three separate invoices that were paid all at once from a customer. Your "real life" bank that handles your checking account recognized all three payments as a single deposit. When you enter these into QuickBooks, you'd want to mimic the bank and combine the deposit into your QuickBooks checking account. But how do you group them? 


This is where "Undeposited funds" comes in. In the case below, I received multiple payments from invoices and sales receipts from the same customer into my Undeposited Funds account.

 

 

undeposited 2.PNG

 

 

When it's time to make my Bank Deposit, all three payments are waiting in the "Select the payments included in this deposit" section that's hard-wired to Undeposited Funds Account. I select all three and group them into a single deposit. When I reconcile my QuickBooks accounts against my bank statements at the end of the month, the transaction amount on my bank statement will match the amount in QuickBooks exactly. 


Undeposited 2.PNG

 

If you ever need to make edits to a bank deposit (and send a payment back to Undeposited Funds), just click edit to go back and redistribute out the deposits. 

 

Undeposited 2.5.PNG

 

This is just for demonstration, but I clicked edit on the reconciliation and eliminated one of the three payments. Once I click save, I see the new correct amount. 

 

Undeposited 10.png


Get started using your Undeposited Funds account

 

Your Undeposited Funds account is set as your defaultdeposit to” account when you receive your first invoice payment or enter a sales receipt.

 

 

Always take a moment to double-check the "deposit to" account before completing any transaction. 

 

Once you’ve been paid for an invoice and are receiving the payment, click the Global Create Button (Action Icon.PNG) and select Receive Payment. The Undeposited Funds account is pre-selected.

 

How to use the Undeposited Funds Account in QuickBooks Online 2.png

 

Select the customer from the drop-down menu - their open invoiced will automatically populate on the list below. Choose a payment method and verify the amount received. You can change where you want this money to "deposit to" before making a bank deposited by selecting a different account from the drop-down menu, but remember this is by design to work with the Bank Deposit feature. If you decide to deposit a single payment directly into your checking account, your job is done and the invoice is processed. 

 

 

How-to-use-the-Undeposited-Funds-Account.gif

 

After receiving a payment into the Undeposited Funds account (or after entering a sales receipt in situations where you’ve already been paid) your next step is to deposit the money in the bank and close out the invoice, which we go over in “How to make a Bank Deposit in QuickBooks Online.”


Show me why I should use the Undeposited Fund workflow (above)

 

I have one invoice I sent out to Amy’s Bird Sanctuary last night and was just got a notification that Amy paid me via Visa.

Instead of depositing the payment right away, I receive the payment in QuickBooks Online against the invoice.

 

How to use the Undeposited Funds Account in QuickBooks Online 3.png

 

Now that all my payments for the day are in QuickBooks, I am ready to make a Bank Deposit. My checking account is already selected at the top, I can see the $239.00 payment from Amy I received into the Undeposited Funds account and two additional sales receipts (deposited to the Undeposited Funds Account) I entered earlier this morning. I do not want to group these together, so I deposit them one-by-one. I click save and done to finish.

 
How to use the Undeposited Funds Account in QuickBooks Online 4.png

 

 

 

 

I can always go into my checking account in the Chart of Accounts to verify that the payment was correctly received.


 

Any other tips I should keep in mind to be successful?

 

  • This workflow is unique to QuickBooks and it’s important to follow each step. While you may feel tempted to skip using the Undeposited Funds account, we highly recommend following the workflow to make sure you never accidentally double-count income or leave open invoices in your system.

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1. Send Invoice            2. Receive Payment into       3. Bank Deposit

"Undeposited funds”

 

After you’ve sent an Invoice and received the payment into your Undeposited Funds account, you need to deposit these payments into an account in QuickBooks (typically into your savings or checking account), just like you would when you visit the bank at the end of the workday. Remember, transactions in QuickBooks should reflect real life - if money is in the actual bank, this should be reflected in QuickBooks.

 

The Bank Deposit feature serves two functions. If payments are received into the Undeposited Funds account, you can group payments and deposit them as a single record into an account. This feature is also where you record items that aren't typically captured on invoices or bills, such as assets and loans. 


 

Why do I add need to use the Bank Deposit feature in QuickBooks Online?

 

As we mentioned in How to Use the Undeposited Funds Account in QuickBooks, the Bank Deposit Workflow is unique to QuickBooks. It's the final step to ensure the money you receive from payments is accurately recorded.

 

As a general rule, depositing money into an account in QuickBooks using the Bank Deposit feature should reflect your real life financial processes; if you received a payment into your savings account, for instance, do the same in QuickBooks.

 

This is also the case for grouped payments; if your bank recognized several payments as a single deposit, you should mirror this process in QuickBooks. Receive those payments into your Undeposited Funds Account so you can group them into a single Bank Deposit. 

 


 

Get started making bank deposits

 

There are a few bank deposit methods available in QuickBooks Online and which one you will use depends on how your original transactions were entered. 

 

Receiving payments against an Invoice (most common)

 

How to make Bank Deposits in QuickBooks Online 1.png1. Send Invoice            2. Receive Payment into       3. Bank Deposit

     “Undeposited funds”

 

After you’ve sent your invoice and received the payments into your Undeposited funds account or recorded a sales receipt for a sale (all accessible from the Global Create Menu [Action Icon.PNG]), click the Global Create Button (Action Icon.PNG) and select Bank Deposit

 

Let's follow the whole process end-to-end with Invoice 1038.

  

How-to-Make-a-Bank-Deposit.gif

 

After we received payments from an invoice the Undeposited Funds account, the transactions automatically populate in the “select the payments included in this deposit” section at the top of the Bank Deposit screen. This is by design and why using the above workflow is so crucial for speedy, efficient bookkeeping. 

 

Deposit the payments on the Bank Deposit screen exactly as they appear on your bank records - if you have one payment to deposit, deposit only that payment; if you deposited a group of payments as a single deposit into your bank, select each one and deposit them as a group

 How to make Bank Deposits in QuickBooks Online 3.png

 

If you aren’t seeing what you expect on this screen, take a step back and think about how you entered the transaction. The order of events matters.

Remember,
 if you haven't yet received payment, create and process a new invoice. You can deposit single payments directly into your "checking" account when you first receive a payment for an invoice, but we recommend following the Undeposited Funds workflow and select the Undeposited Funds as the default "deposit to" account when you record payments. Click the link to the article to learn more. 

 

 

Adding assets, loan liabilities, and equity

 

You can manually add funds to deposits in the bottom section of the Bank Deposit screen. This is how you add assets, liabilities and equity to accounts since these don't use or come from sales forms. 

 How to make Bank Deposits in QuickBooks Online 4.png

 

Important - Invoices are not how you add items that you'd enter with the "add funds to this deposit" feature. If you’ve already created an invoice for a sale, finish the workflow by receiving the payment directly into your Checking account or into Undeposited FundsDo not jump ahead and add the invoice payment using the "Add funds" feature. If you enter it here and later deposit a payment to close the open-invoice, you will double count your income.

 

FTU Ask a Question

 

 

 

What about recording Bank Fees?

 

Some banks (but not all) and services like PayPal charge small fees for processing transactions. Why is $.15 an issue? When it's time to do your monthly bank reconciliation, you may find that what you entered into QuickBooks Online doesn't match external records -  the original invoice was entered for $1000.00, but the same transaction with the applied fee is recorded as $999.85 on your bank statement.

 

No worries, there's an easy fix. Process the whole amount as a normal invoice or sales receipt. When you're on the Bank Deposit Screen, go down to the "Add funds to this deposit" section. If you don't have one already, create an expense account and call it something easy to remember, like "Bank Fee."

 

Bank Deposit.PNG

 

Enter the bank fee as a line item in the "Adds fund to this deposit" section, select your new Bank Fee expense account and enter a negative value that reflects the bank fee amount. 

 

Bank Deposit 2.png

 

   Here's a cool tip - if I know the fee is 1% of the total, enter -1000* .01 and hit the tab key to quickly calculate the fee.   

 

 

 

Adding Bank Deposits from QuickBooks Payments

 

The QuickBooks Payments section only appears if you are using QuickBooks Payments and you are waiting for customer payments to settle. You won’t need to do anything with these payments - your accounts are automatically updated once the payments clear. 

 


Show me how Bank Deposits work

 

I have three invoices for coffee wholesale that have been paid and one sales receipt I entered because I received payment at the time of sale. I don’t have to receive payments for a sales receipt since I’ve already been paid. I click the Global Create Button (Action Icon.PNG) and select “receive payment” for the three invoices into my Undeposited Funds account.

 

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Now that all the payments are recorded in QuickBooks, I am ready to make a few bank deposits. I click the Global Create Button (Action Icon.PNG) again and select Bank Deposit. I see that my sales receipt and three invoice payments (and the correct amounts) are all there, ready to be deposited. Depending on whether I deposited these payments into my actual single or grouped transactions, I can click the box next to the transactions and add as many as I need to the deposit. If payment was deposited as a single transaction, I should deposit them one at a time

 

Be careful - do not batch deposit unrelated transactions unless they weren't deposited in your actual bank the same way.

 

For instance, I have two payments to deposit from unrelated sources and each was processed separately via a 3rd party payment processor. If I select and deposit both using the Bank Deposit feature in QuickBooks, the system will recognize them as a single deposit (see below). 

 

Bank Deposit 3.PNG

 

When I reconcile my accounts at the end of the month, my statement from the 3rd party payment processor will show two separate transactions, one for $100 and one for $387. However, I will only see the $487 deposit in QuickBooks. 

 


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The following tutorials focus on the items you add to lists and use on sales formsproducts and services, customers, and vendors. 

 

Every time you create a new customer, vendor, or product and service, you’re adding an item to a list. QuickBooks uses these structured data points to organize all of your transactions and accounts.

 

There are a few ways to create new customers, vendors, and products and services. We introduced what we’re calling the build-as-you-work (adding items directly from sales forms) and the build-all-at-once (creating items from scratch from list menus) methods in our introductory article, “Your first 15 minutes with QuickBooks.” Seeing them in action will help you decide how you want to build and organize your personal QuickBooks Online workflow.

 


 

How to Set Up Products & Services: Organize & List | QuickBooks Online Tutorial 2018

 

 

QuickBooks Online has two basic sales items: products and services. Both represent something you sell to customers. Both are created using nearly identical workflows.

 

When you create a new product or service item, you have four types to choose from: non-inventory, service, bundle, and inventory. Unless you plan to track inventory quantities, you can create lists using non-inventory and service items.

 

Bundles and inventory tracking are available for the QuickBooks Online Plus. Bundles let you package and sell multiple items as a single product or service. Inventory tracking, as the name implies, tracks exact quantities of products on-hand.

 

While these advanced features can help you better manage your stock, they aren’t required for a basic set up. You can absolutely use non-inventory items for product sales, just know that QuickBooks will not track quantities. If you decide to enable inventory at a later date, you will have to reclassify qualified non-inventory items. 

 

  • To create a new product or service item, navigate to the Sales Tab, go to the Products and Services sub-tab and select “New.” Alternatively, you can select “Add new” from a sales form. This will take you to the same module.

    Setting up for success products and services 4.png

     

  • If you create new items directly from sales forms (i.e. the build-as-you-work method), go beyond the essentials. Enter all necessary information into QuickBooks before you start adding them to invoices.

    Not everything on the creation module is an internal data point. Take extra care when crafting the customer-facing sections, such as the Sales Information. Including a detailed yet concise product/service description will make a great impression on your customers.

Setting up for success products and services 1.PNG

 

  • If you charge a variable rate for services, you can leave the sales price/rate data field blank and add the negotiated amount when you fill out the invoice.

  • Also, pay extra attention to the Income Account.  The account you select is what QuickBooks will use to categorize income once a sale is complete.

Setting up for success products and services 11.PNG

 

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  • Plan ahead with how you want to organize your various streams of income. A well-structured set of accounts and sub-accounts will make analyzing and extracting useful information from financial reports far easier and dare I say, enjoyable. To learn more about creating and organizing accounts, check out “Setting up for Success – Creating and Managing Accounts.”

 


 

How to Add, Edit & Manage Your Customers List | QuickBooks Online Tutorial 2018

  

Creating and organizing your customer list is a very similar process. Moreover, just like creating product and service items, the information from customer profiles will automatically populate the data fields on invoices and sales forms.

In line with the build-as-you-work method, you can add customers directly from sales forms. When you use this method, we highly recommend clicking the (+ Details) button and filling out their complete customer profile before sending.

 

Setting up for success products and services 10.png

 

The Customer List in the Sales Tab has a few unique and useful features that can help you manage sales and historical data. When you land on Customer List, you will see all of your customers you've recently sold products and services to. Additionally, you can use the colorful boxes on the top to filter customers based on where they are in the sales cycle.

Setting up for success products and services 6.png

 

For instance, if I click on the orange and grey center section, I see a list of all my customers with open invoices. I can even receive payments from them (once I’ve been paid) directly from this page. I can also see that 10 of those 20 invoices are overdue - - might be time to send a reminder!

 

To learn more about open invoice and payment tracking, see "How to Review Open Invoices and Send Payment Reminders and Balance forward Statements in QuickBooks ...."

 

Setting up for success products and services 9.png When you’re ready to create a new customer, click “New Customer” from the Customer List page. Here a few key points to keep in mind:


Setting up for success - Customers 1.png

 

  • This "create a new customer" pop-up is exactly the same screen you see when you edit an existing customer profile to update their information.

  • You can personalize the Display name that appears on customer sales forms and emails. Utilizing this adds a personal touch to your business communications.

  • The “sub-customer” option is a less common but convenient feature that lets you invoice a customer with multiple businesses. This allows you to track income collectively and for specific businesses or locations, for instance, a particular store within a local chain (the chain becomes the parent account).

  • The tabs in the bottom left corner lend themselves to all sorts of great personalization. Besides the address, you can include notes about your customer, any attachments you’ve sent them, and tax information if they qualify for exemptions. You can also set custom sales terms and specify prefered invoice delivery and payment methods for specific customers, allowing you to further personalize the experience.  These features help you take care of specific customers with particular requests, such as who still enjoy receiving physical paper invoices in the mail.   

  • If you stop selling to a customer and don't want them to appear on the Customer List, you can go to their profile and select the “Make Inactive” button at the bottom of the screen. If you need to reactivate a customer account, simply click the small gear icon at the top of the Customer List, click "Include inactive," go back into the customer's profile and follow the above steps in reverse. 

 

Setting up for success - Customers 2.png

 

  • If you click on a customer from the Customer List page, you can see all of their historical transactions. Pay extra attention to the “status” column to see that you’ve sent and settled invoices and payments as needed.


Setting up for success products and services 8.png

 


How to Manage Your Vendors List: Adding, Editing, & Removing | QuickBooks Online Tutorial 2018

  

 

By now, you’re an expert at managing lists. Once you have the process down, adding new customers, vendors, and products & services will feel second nature.

 

The Vendors List is virtually identical to the Customer List in basic functionality, so most of what you learned in the section above will apply here as well. You add new vendors and manage lists the same way you do for customers, directly on expense forms or from the Vendors sub-tab in the Expenses Tab. We’d also recommend checking you owe to vendors by using the Open Balance bar at the top of the Vendor list.

 

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There is one very important distinction between the customer and vendor lists: you can elect to track a vendor for 1099s if they work for you as an independent contractor. This can be enabled when you create a new vendor account or edit an existing one.

 

Vendors 2.png

If and when you decide to designate a vendor as an independent contractor for whom you plan to file a 1099-MISC, you’ll need to create a separate expense account to track payments associated with that labor. This is so you can clearly distinguish their expenses from your regular employees. This has important compliance implications, so when you’re ready to take this step, please read “How to Track a Vendor for 1099s in QuickBooks." 

 

It’s important to briefly mention that a name can only appear once on any list. If you have a customer who is also a vendorwe have a few tricks for how to use their legal name on both accounts, stay compliant, and easily distinguish one account from the other at a glance. 

 


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FTU Setting up for Success

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This set of videos focuses on QuickBooks Online Inventory, which is available for QuickBooks Online Plus. The inventory tool offers basic quantity-on-hand tracking and reporting features.

While adding and managing basic products and services is a fairly straightforward process, the full inventory experience is quite a bit more involved and requires regular upkeep.

It’s best to start with inventory as you set up your product list, but you don’t need a clean slate to get set up (just know it will require some extra work). If you are converting from QuickBooks Desktop with existing inventory, there is a different workflow (found here). Note that inventory should be set up immediately after conversion, not later.


 

How to Create an Inventory Product | QuickBooks Online Tutorial 2018

 

 

After enabling inventory tracking (Gear Icon [ Gear Icon.jpg ] > Account and Settings > Sales > Products and Services > Track Inventory Quantity on Hand), you will use the same basic workflow to create inventory items as non-inventory and service Items.

Setting Up for Success - Inventory 2.png

 

For the most part, creating an inventory item will feel very familiar. You're already well aware of how to enter information for sales price/rate, sales tax, and income accounts (if you need a refresher, review "Setting up for Success - Adding Products and Services, Customers, and Vendors"). There are, however, a few key differences and new data fields that now appear in this module.

 

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Initial Quantity on Hand – this should be the number you have in stock right now, at this very moment. Now might be a great time to do a physical inventory of your storeroom, just to make sure. This is important to get this right because going forward, any time you sell or purchase more of an inventory item, this number will change.

 

Reorder point – set this to whatever feels comfortable to you. There are a number of factors to consider: the size of your storeroom, the frequency of sales (this is where reports come in handy), and how quickly your vendors can send new shipments. You will know best.

 

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Inventory Asset Account – this is an “Other Current Assets” account created by QuickBooks to record the current value of your inventory assets.

 

Purchasing information – add whatever information your vendor typically provides when you place an order (i.e. model number, part/item name or SKU shows up on the invoice you receive). Also, enter the price you pay.

Expense Account - the chosen Expense account will be the Cost of Goods Sold account which will now appear on your Profit and Loss Statements. QuickBooks will calculate the cost of purchasing these inventory items after you sell it against the revenue from said item.

 

Setting up for Success - Inventory 12.png

 

Inventory products will now display with this additional information on your Products and Services screen.

 


 

How to Record Sales of Inventory Products | QuickBooks Online Tutorial 2018

 

 

Recording the sale of inventory products is identical to how you'd record sales of any non-inventory product …

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… save the addition of the quantity field. You can mouse-over the quantity field to see the remaining quantity on hand. Also, be very cognizant of what you put in the quantity field as this will automatically deduct from your standing inventory.

 

Setting up for Success - Inventory 11.png

 ∨

 

Setting up for Success - Inventory 12.png 


 

How to Track What You've Sold: Inventory, Summary Reports, & More | QuickBooks Online Tutorial 2018

 

 

The Sales by Product/Service Summary Report is the same report you’d typically run to track your overall sales, but the Cost of Goods Sold and Gross Margin columns only apply to your inventory items. You will see the average sales price alongside the COGS figure. The Gross Margin is the revenue made from the sale of the product minus the COGS expense.

 

QuickBooks Online uses the First-in-First-Out (FIFO) method to average the purchasing costs for COGS when the price of an inventory item is variable. Sound complicated? Don’t worry, QuickBooks calculates those price variations for you. If you're curious about the details on how this works, check out this article.

 

Keep an eye on your Costs of Goods Sold numbers and the profit margin from those inventory items – make sure what you’re selling makes financial sense to your business.

 


 

How to Enter Purchase Orders: Recording, Tracking & More | QuickBooks Online Tutorial 2018

 

The easiest way to track which items need reordering (based on the quantity you set) is to keep tabs on the stock bar at the top of the Products and Services list. Make it a habit to check every time you navigate to this menu.
 

When you use purchase orders to reorder goods from vendors through QuickBooks Online,  the program will automatically update and accurately track quantities.

 

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It’s also wise to use stock numbers as a reminder to do physical inventory – any time you see a low stock notification, set aside time to look over your stock room to make sure nothing else potentially needs reordering or quantity adjusting in QuickBooks.

 

Remember, purchase orders are your intent to purchase inventory products. No inventory will be received or processed at that point.

 

When you're are ready to place an order for more inventory, create a purchase order (Create button [Action Icon.PNG] > Purchase Order). You can pull in existing vendor information, designate a shipping address, and even send purchased items directly to customers when they become available.

 

You can save customized Open Purchase Order Detail Reports and help your team stay on top of open orders by scheduling them to be emailed on a weekly basis (set for “All Dates” and called something like “Our weekly open purchase orders”). Learn more about customizing and scheduling reports

 

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How to Handle Inventory From a Vendor: Expenses & Backorders | QuickBooks Online Tutorial 2018

 

Once you (or your customer) receives the inventory from the purchase order, process the open Purchase Order (PO). Select either an expense, check, or bill (review the expense workflow if you’re unsure) depending on when and how you pay your vendor. For all three options, all open purchase orders for the specified vendor will appear on the right after you select the vendor. You can add the transaction to the form or open it to make sure it’s the correct one.

 

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If any numbers were different between the PO and the bill/expense, such as the quantity or amount due, adjust them now. Using this workflow closes the open PO (unless you only received a partial order). Whatever adjustment numbers you entered will be used going forward.

 


 

How to Make Adjustments to Your Inventory Levels | QuickBooks Online Tutorial 2018

 

 

Use the inventory adjustment tool very, very sparingly. 

 

Life happens. Items get lost. Accidents occur. Food spoils. There are a host of use-cases adjusting inventory, but try not to make it a habit. The more changes you make, the more complicated your accounting and explanation of your business’ assets will become.

 

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If you’re constantly finding misalignments between your physical inventory and what’s recorded in QuickBooks, identify the source of the problem and shore it up early. If items are consistently damaged or going missing, work with your team towards operational solutions.

 

As the narrator notes, QuickBooks will already have Inventory Shrinkage (Cost of Goods or Expense Account) and Charitable Contributions (Expense) Accounts created for you. You can use these accounts for inventory adjustments, but you can also create your own account in the Chart of Accounts  (learn more). Quantity adjustments show up on your Inventory Valuation Detail Report (below) alongside other changes that impact inventory quantities.

 

We’d also recommend utilizing the memo section to write notes detailing the reasons for the adjustment, written so anyone on your team can comprehend the notation.


 

How to Use Inventory Reports: Tracking, Maintaining, & More | QuickBooks Online Tutorial 2018

 

 

Inventory Valuation Summary Report – a “status check” of your current inventory with the calculated average cost per inventory product (based on FIFO).

 

Physical Inventory Worksheet – hand this to your team when they do a physical count of your stockroom.

 

Inventory Valuation Detail Report – think of this as a line-by-line history of your inventory products and any changes (i.e. start, bills, purchase orders, and transactions that diminish quantity on hand) that affect them.

 


 
 
 
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This series, the QuickBooks Encyclopedia, is designed for everyone -- those who are brand new to QuickBooks as well as those needing a quick reference.

 

Here we cover basic accounting terms and when they're used in QuickBooks. Luckily, QuickBooks doesn’t require you to know complex accounting concepts. At the same time, it's good to have a basic understanding of what goes on during the bookkeeping process.

 

Accounting terms, while precise in their meaning, are not universally applicable in all cases. How and when to apply these principles depends on the context. As such, it's always wise to reach out to your accountant if you're going beyond the basics.

 

To navigate this resource, click one of the alphabetical jump links below or hit Ctrl+F /Control+F in your browser to search for a specific term. For QuickBooks feature and function definitions, check out "QuickBooks Encyclopedia - Essential QuickBooks Online Definitions."  

 

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

  

A

 

Accrual Method Accounting

 

The Simple Definition: An accounting method that reports money from completed transactions and in progress, yet-to-be-completed transactions.

 

*When you first start your business, you pick an accounting method and stick with it – changing methods generally requires help from an accounting professional.

 

 

Textbook Definition: With the accrual method, income and expenses are recorded and reported when they’re billed and earned, regardless of whether or not the money has been received. This includes accounts payable and accounts receivable transactions (as opposed to the cash method).

 

The upside to using the accrual method is it gives small business owners a more realistic idea of their income and expenses during a given period of time. This can provide a better overall picture of how your business is doing and where it’s headed in the future.

 

One drawback to the accrual method is that it can factor income you don’t actually have, on hand or in the bank – your books may report large amounts of revenue based on several in-progress invoices, even if your bank account is empty.

 

 

Term in use: My business is set up for Accrual Method accounting. I just received $100 from an invoice payment, but I haven’t deposited it into the bank. I also have $100 in unpaid invoices.

If I run a Profit and Loss Report, I am will see all $200 - the money I’ve received and anticipate receiving.

 

(Also see Cash Method Accounting

 

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Accounts Receivable (A/R)

 

The Simple Definition: Income owed to your business, but has not yet been received. Accounts Receivable is referred to as A/R. 

 

 

Textbook Definition: Accounts Receivable is the record of money owed to your business for goods or services. Generally, this refers to open invoices you haven't received payment for, yet. Even though the word "accounts" is plural, QuickBooks uses a single Accounts Receivable account in the Chart of Accounts to track all outstanding payments.

 

 

Term in use: I sent 10 invoices last week. Folks owe me money! These transactions are still pending. If I were to enter these transactions into QuickBooks, they'd be part of my Accounts Receivable.

 

(Also see Accounts Payable (A/P)

 

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Accounts Payable (A/P)

 

The Simple Definition: Expenses that you owe, but have not yet paid. Accounts Payable is often referred to as A/P.

 

 

Textbook Definition: Accounts Payable is the record of your business' pending/outstanding bills, essentially, the money you owe your vendors for goods or services. The Accounts Payable account tracks how much money you still owe your vendors. It's used whenever you generate a bill or vendor/supplier credit transaction. 

 

 

Term in use: Last month, I purchased three tons of unroasted coffee beans for my shop and now have several unpaid bills sitting in my office. These transactions are still pending. If I were to enter these expenses into QuickBooks, they’d be part of my Accounts Payable.

(Also see Accounts Receivable (A/R)

 

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Assets

 

The Simple Definition: Assets are tangible and intangible items you own and use for business that can be converted into cash. Assets are generally divided up into fixed (long-term use) and current (short-term use) assets.

 

 

Textbook Definition: An asset is a tangible resource that belongs to your business that retains value after a year or more. In terms of categorizing assets into accounts...

  • Fixed assets (e.g. tangible assets, property, equipment) – these are assets held with the intention of being used for the purpose of producing or providing goods or services. Fixed assets are not held for sale in the normal course of business. A fixed asset account is used to track purchases of tangible, depreciable property that will have a useful life longer than one year, such as equipment or furniture.

  • Current asset (a.k.a other current assets) - these are assets that are likely to be converted to cash or used up within one year. This includes assets like petty cash, notes receivable due within a year, prepaid expenses (prepayments), and security deposits. The QuickBooks Inventory Asset and the Undeposited Funds account are examples of Current Asset accounts. 

  • Other assets (non-current asset) - these are intangible assets that have a life of more than one year. Assets that are not fixed or current, such as long-term notes receivable, belong in this category. 

 

 

Term in use: My business just bought a new pizza delivery truck for work. The truck is a fixed asset. What about the dough tossing machine used to make the pizza dough? This is also a fixed asset. The cash stuffed in the desk drawer to help pay for one-off expenses (i.e. petty cash)? That’s a current asset.

 

(Also see Liabilities

 

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C

 

Cash Flow

 

The Simple Definition: The movement of cash in and out of your business.

 

 

Textbook Definition: Cash inflows are your sources of income while cash outflows are your expenses. For small businesses, positive cash flow is the goal. You want to generate more money than you’re spending. Many businesses will go through periods of negative cash flow due to seasonality or early investment in assets for the business.

 

 

Term in use: You own a pie shop (yum). Income from the sale of pies is cash inflow. When you buy ingredients to make the pies, these expenses create a cash outflow.

 

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Cash on Hand/Petty Cash

 

The Simple Definition: Cash you use for small, “one-off” purchases for your business.

 

 

Textbook Definition: Petty cash is the convenient supply of cash you use to make immediate payments for goods and services. For example, instead of writing a check for a small $1.50 purchase for postage, you can pay the postman directly with your petty cash box.

 

You should designate one person at your business to control and track your petty cash. In QuickBooks, you have to “deposit” funds into your Petty Cash/Cash on Hand account before you can make a withdrawal so the account balances to $0. 

 

 

Term in use: The cash reserve I keep in the safe to pay for printer paper purchased outside our normal ordering cycle is considered Petty Cash/ Cash on Hand.

 

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Cash Method Accounting

 

The Simple Definition: An accounting method that only reports money you’ve actually received or expenses you’ve already paid. This method does not report transactions in-progress (income or expenses).

 

*When you first start your business, you pick an accounting method and stick with it – changing methods generally requires help from an accounting professional.

 

 

Textbook Definition: With the cash basis of accounting, you record income as it’s received and expenses as they’re paid. This method does not take into account any accounts receivable or accounts payable.

 

Many small business owners choose cash method accounting because it’s a simpler bookkeeping process. It’s easier to track money as it moves in and out of your bank accounts and there’s no need to record receivables or payables. 

 

One downside to the cash method is its limited view of your overall finances. Since it doesn’t account for incoming revenue or outgoing expenses, it can lead you to believe you’re having a very high or low cash-flow month.  In reality, high cash flow may be the result of last month’s work

 

 

Term in use: My business is set up for Cash Method accounting. I just received $100 from an invoice that I deposited into the bank. I have $100 worth of unpaid invoices. If I run a Profit and Loss Report, I will only see the $100 payment I received and deposited, not the pending payment. 

 

(Also see Accrual Method Accounting

 

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Cost of Goods Sold (aka COGS, Cost of Sales, or COS)

 

The Simple Definition: The costs associated with producing a good or service.

 

 

Textbook Definition: Costs directly related to producing a good or service for sale. There’s a direct relationship between these costs and your revenue. If your company sells a product, your cost of goods sold includes the materials, labor, and other expenses incurred to make and sell the product.

 

By contrast, while they may facilitate the production of a good or service, expenses such as rent, marketing, or advertising are considered indirect and should not be posted to the Cost of Goods Sold account.

 

 

Term in use: If you sell a ceramic cup for $5 and it costs you $2 to produce (materials and labor), the cost of goods sold is $2

(i.e. [Revenue from the sale of the cup] – [Cost to produce the cup/COGS] = actual revenue) 

 

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D

 

Depreciation

 

The Simple Definition: The declining loss of value to an asset resulting from various factors such as normal wear and tear and the length of ownership.

 

 

Textbook Definition: Most businesses rely on physical assets to stay operational. Computers, cars, office equipment, and machinery all eventually lose value over time. Quantifying that loss is known as depreciation, the portion of an asset’s cost that is “consumed.” This attributes a portion of the profits from the physical asset to the lost value due to use if the asset were to be sold.

 

When calculating depreciation, there are many factors that must be taken into consideration, such as the current trade-in value, any down payment or outstanding fees, and so on. You'll need to consult with your accountant on how to account for these variables.

 

 

Term in use: My guitar has seen better days. I bought it 5 years ago for my side-gig playing music at a local lounge. Its value has declined significantly and I could never sell it back for the purchase price – that loss is its depreciation.

 

(Also see Assets

 

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E

 

Equity

 

The Simple Definition: The total value of your business after you’ve subtracted what you owe [“liabilities”] from what you own [“assets”].

 

 

Textbook Definition: Equity is the net worth of a business. It represents the difference between your liabilities and assets. If you sold all your assets today and paid off all outstanding liabilities with the money received from the sale of your assets, the remaining money is your equity. Of course, you don't need to actually sell your assets to have equity. Your equity represents the value of your business, and thus its health.

 

Equity comes from two primary sources: (1) money invested in your company and (2) profits and losses from the business.

 

An Owner's Equity account includes capital investments and drawings. An owner can also take money out of the business. Such withdrawals, called Owner's Draws, reduce the company's overall equity.

 

 

Term in use: I have $5000 worth of assets (my equipment and everything else I use for my business) and a $2000 loan from the bank. This month I have no A/R or A/P and I’ve made $1000 in income. Right now, my total current equity is $4000 ($5000 – 2000 + 1000 = $4000). 

 

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Expense

 

The Simple Definition: Costs associated with business operations, like bills and utilities.

 

 

Textbook Definition: Expense accounts are used to track and categorize what your company is spending. An "Other Expense" account is used for money spent on things outside normal business operations, such as corporate income taxes.

 

 

Term in use: The money you paid for your new Google Pixel (for work, of course) is an asset, but the phone bill and energy utility used to charge the phone are expenses to your business.

 

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I

 

Income (Revenue)

 

The Simple Definition: Money you earn from sales. 

 

 

Textbook Definition: Money earned from the sale of your products or services is recorded as income.  You track this money using income accountsYour company may have one or several income accounts depending on the financial data you need to track and analyze. 

 

Another category of income is "Other Income," or income generated from the sale of a product or service outside your normal operations. Interest Income is an example of an Other Income account type.

 

 

Term in use: The money you collect from selling food and catering services (via invoices or sales receipts) is considered income.

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L

 

Liabilities

 

The Simple Definition: The money you currently owe to others – i.e. debts.

 

 

Textbook Definition: Liabilities are your company's debts. In a sense, they represent the credit extended to your business. Liabilities include bills you've received, the money you owe on credit cards, sales tax you owe the government, employee withholdings, and both short-term and long-term loans. QuickBooks Online distinguishes between two types of liabilities:

 

  • Current liabilities (Creditors in France) - Debts your company expects to pay within a year, such as bills, sales tax, payroll taxes, accrued or deferred salaries, and short-term loans.

  • Long-term liabilities (Non-current liability, Long-term creditors) - Debts that your company expects to pay off in more than one year, such as long-term loans and mortgages

 

 

Term in use: I took out a $5,000 loan to pay for new camera equipment which I use exclusively for my wedding photography gig. The loan represents a liability for my business (while camera equipment itself is an asset).

 

(Also see Assets

 

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O

 

Owner’s Equity

 

The Simple Definition: The cash and other assets an owner(s) has invested in their business.

 

 

Textbook Definition: Depending on the type of ownership (sole proprietor, partnership, LLC, S-corp or C-Corp), you must account for this type of equity in very specific ways. Learn more about the different types of owners equity on the QuickBooks Resource Center.

 

 

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This article is all about reports and financial reporting tools available in QuickBooks Online. Reports really are the core of your accounting. They frame all of your sales, expenses and everything in-between to tell you about the health of your business.

 

Of course, reports are only useful if you’ve entered complete data, so make sure you’ve entered all of your business income, expenses assets and liabilities entered into QuickBooks so you get a comprehensive, accurate snapshot of your business every time you run a report.


 How to Use Reports Center: Categories, Insights & Information | QuickBooks Online Tutorial 2018

 

Reports appear on the Reports Tab Dashboard list (Reports Center), or you can search for something specific from the search field at the top. There are tons of reports available. Most will follow this titling convention: 

(What you want to know) by (the criteria specified)

Some have very specific use-cases, giving you lots of options. There are common reports you’ll want to run on a daily or weekly basis such as:

 

  • Balance Sheet (which follows the Balance Sheet Equation) – tracks assets, liabilities and equity of your business – what you “own” and “owe” within a given time period.
    • Assets - Make sure you understand the difference between current assets (plan to sell within 1 year) and fixed assets (large purchases you plan to use over the course of several years).

    • Liabilities – again, know the difference between a current and long-term liability so you know how to enter things like open bills and loans appropriately. Note that while liabilities are what you owe and you’d assume this should be a negative number, it’s represented as a positive value here.

    • Equity  the value of your business from the perspective of the owner (including their contributions, owner’s draw and net income [activity from income and expense accounts]).

  • Profit & Loss Statement - tracks your income and compares it against the cost of running your business (i.e. expenses).
     
    • This is the most common report you’re likely to run. It’s essentially a summary of your income and expenses so you can see your cash flow.

    • Net Income is your profit after your total income, expenses and Cost of Goods Sold have been factored in. This line shows up at the bottom of your Balance Sheet under Equity (above).

  •  Sales by Product/Service Report – the easiest way to track your sales that can be customized to show varying levels of detail. 

 

How to Use Reports: Understanding When to Use the 3 Types | QuickBooks Online Tutorial 2018

 

 There are three primary types of reports and each has their uses.

  • Summary Reports – for pulling “overview” data with some applied analysis, which is what you will probably use most often or on a recurring basis.
  • List reports – for pulling broad data, such as all your existing accounts or products and services.
  • Detail reports – for pulling “by-line” datasets within a specified date range, such as looking at your sales by customer.

 

How to Use Summary Reports: Summaries & Information | QuickBooks Online Tutorial 2018

 

Summary Reports focus in on specific data points (such as you’re A/P or A/R or total income by accounts) without getting too lost in the line-by-line details. Instead, get a mid-ranged overview of your accounts.

Setting up for Success - Reports 7.PNG

 

These types of reports are particularly useful for looking at long-range trends between specified periods of time.

 


 

How to Use Detail Reports: Transactions, Expenses, & More | QuickBooks Online Tutorial 2018

 

Detail Reports are for when you want to get into the nitty-gritty of your accounts.

Setting up for Success - Reports 8.PNG

 

These provide account summaries as well as individual line-by-line transaction details. “Customer Balance Detail” and “Sales by Customer Detail” Reports are common and useful for zeroing in on very narrow information or identifying a specific set of transactions.

 

The “group” function is also a great way to identify trends while having the specific details displayed side-by-side on the same page.


 

How to Use List Reports: Looking Up Customers, Vendors

 

List Reports are useful for looking at everything in your QuickBooks system, from Products and Services to Employee information to Payment Methods used by your company. Most are broad, but some can get fairly narrow -- want to see all the bills you’ve paid in QuickBooks over the last 3 months? There’s a report for that.

 

Want to hand your team a list of contact emails but not their phone numbers? Run a Customer List Report and customize with the phone number column removed.

 

Another use for List Reports is to clean up your data. Let’s say you want to remove inactive customers from your books but you have a large sales team: pull a CSV for (or print) a Customer List Report, sharing around your team to identify who is no longer a customer and hand it back to a single team member to make those customers inactive.

 


 

How to Customize Reports: Basics, Sorting & Date Ranges | QuickBooks Online Tutorial 2018

 


Running custom reports in QuickBooks lets you narrow in on the data that matters, render the data in ways that make sense to you and eliminate extraneous details so you can easily zero-in on account specifics. Moreover, going narrow with reports means knowing more about how each part of your business impacts its overall health, which ultimately helps you make more informed financial decisions. 

 

Custom reports offer a lot of flexibility: you can apply various filters, sorting tools and ranges to pull very specific data sets.  But some custom reports need not be complicated – a Profit and Loss Report scheduled to be run and emailed on a Monthly basis is a simple one with powerful insights about the trajectory of your business.

 

You can apply these customizations at the top of the form in these two areas:

 

Setting up for Success - Reports 6.png

 

Depending on the report you use, different customization options will be available – not all reports have the same sets of filters, but most do. Don’t forget to hit “Run Report” to apply your customizations. Customizing also enables some other cool features which we will go into later in the article.

 


 

How to Filter Reports: Customers, Vendors, & Products | QuickBooks Online Tutorial 2018

 

Customizing reports with “filters” brings you down to the ground from a high-altitude view of your business. Clicking “Customize” from either the report page or the vertical ellipses tool next to the report on the list gives you access to a number of filters for both row and column report data.

 

Rather than browsing at the enormously diverse array of customizations available to build a report, ask yourself “what data am I really interested in?” Use that answer to find the necessary filters to arrive at your answer - through this process you, will learn what is available.

 


 

How to Add Columns to Reports: Comparing Customers & Time Periods, | QuickBooks Online Tutorial 2018

 

Customizing reports by adding, removing or reordering columns is another great to render the data in ways that make sense to you and eliminating information that is not as useful or potentially distracting, getting you to the insights you need most with the least amount of friction.

 

Displaying figures as percentages, rather than raw figures, is just one compelling reason to dive into the reporting features. 

 


 

How to Save Customized Reports | QuickBooks Online Tutorial 2018

 

Once you find the perfect set customizations, rather than reenter the same set every time you want this data, you can save a customization. Give saved reports a unique name to distinguish them and click “save customization” at the top of the report page.

 

Here are a few custom reports you might want to create and have on hand at all times:

 

  • Monthly Balance Sheet

Filters applied: (“All Dates,” “Date-you-opened” to “1/1/2020,” Display columns by “Months”)

 

Setting up for Success - Reports 2.PNG
 

  • Sales by Customer Detail Report for a high-value customer John Freeman

Filters applied: (“All Dates,” Customize - Filter “Customer - by “Freeman Sporting Goods”)Setting up for Success - Reports 1.PNG

 

 

  • Profit and Loss Report for only Landscaping Installation Income (Service)

 Filters applied: (“All Dates” Display columns by “Months,” Customize – Filter Products/Service “Landscaping Installation”)

 

Setting up for Success - Reports 5.png

 

  • Profit and Loss Report for weekly utility expenses

Filters applied P and L report: (“All Dates,” Display columns by “week” – Customize – Filters Distribution Account “Gas and Electric” and “Telephone”)

 

Setting up for Success - Reports 4.png

 

Saving reports also allows you to group them so you can set permission for who can access and view the data – which might be important if you’re working with sensitive information across a wide team.

 

Remember too that reports automatically update with fresh data every time you run them.

 


 

How to Automatically Email Reports | QuickBooks Online Tutorial 2018

 

The more features you can set on auto, the more time you will have to focus on more important business matters.

 

There are cyclical reports you can schedule right away that coincide with financial periods, such as a monthly Profit and Loss Report or a weekly Balance Sheet. Remember, custom reports don’t have to be complex and the interval may be enough to put it on this “recurring” email basis. 

 

If there are custom reports you run regularly or you want constant updates on a particular report, consider scheduling them. At first, schedule them to send more often than you’d think you need and adjust from there – it’s better to get more information ahead of time than too little information too late.  

 

To email reports, click on the Reports Tab and then the “Custom Reports” sub-tab. Select the report you want to modify, click “edit” and you can enable permissions for the report – which is separate from who will receive the email. Once you turn on “set email schedule,” you can designate the date, time interval and even set an end-date (or “none” for indefinite sending).

 


 

How to Create a Management Report: Different Kinds, Editing & More | QuickBooks Online Tutorial 2018

 

These are stylized “presentation-worthy” versions of reports that allow you to include notes. You can also export these into PDF or DocX files and even edit them to have a table of contents. Your team may prefer the standard format, but management reports are a great way to send a professional-looking PDF to share good news around to the team. 


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Use custom reports to get the data that matters most to you. 

 

While general reports in QuickBooks provide tons of actionable financial data, custom reports let you pull the exact data you need to dive into the nitty-gritty details of your business. This depth of understanding leads to better insights. Better insights lead to better decision-making and actionable outcomes. 


 

Why do I need to customize financial reports?

 

Foremost, customize your reports so the data makes sense to you. At the end of the day, a report is only useful if you understand what the data is telling you. The filters in the customization module can be used to eliminate extraneous details or pull additional data points so you can easily zero-in on account specifics.

 

Moreover, narrowing the scope of reports helps you learn more about how each part of your business impacts its overall health. These insights empower you to make more informed financial decisions. 

 


 

Get started customizing financial reports

 

Most reports can be customized using a consistent set of filters and display settings. These are particularly useful for narrowing the scope of the data in order to simplify your analysis.

 

Start from the Reports Tab. Select the “All” sub-tab to browse through the complete list of reports in QuickBooks Online, or use the search bar to find a specific report.

 

There are two ways to customize reports and both paths lead to the same customization modal:

  • Method one: click the (Vertical Elipses.PNG) next to a report on the list and select “customize.”  

    How to Customize Reports in QuickBooks Online 1.PNG

     

  • Method two: if you’re already viewing a report, click the  Customize Button.PNG button to apply customizations.
     

How to Customize Reports in QuickBooks Online 2.PNG

 

Before going deep into the customization modal, all reports have a basic set of filters at the top of the page. These let you adjust the report period and toggle between cash and accrual calculation of the report.

 

Once you click customize, a variation of following modal will appear (the filters available vary from report to report):

How to Customize Reports in QuickBooks Online 3.PNG

 

Use the expand arrows (Arrow Icon.jpg) to bring up the nearly limitless customization options. It’s up to you to figure out which filters and display options work best for your needs. 

  • Rows/Columns- lets you modify which columns and rows display on reports. 
  • Filter- lets you select the specific accounts, sub-accounts, customers, vendors, and items that appear on reports. 
  • Header/Footer- lets you toggle data tables and other information that appears reports, such as date and time prepared. 

Remember - your ultimate goal is generating data that informs your financial and operational decisions. The data is only useful if you know how to interpret it.

 

 


Show me why I should run a custom report

 

Let’s customize a Profit and Loss Report so it’s easier to understand. QuickBooks has a number of semi-customized reports available. Personally, I prefer using the “Profit and Loss Report by % of Total Income Report” over the standard Profit and Loss Report because I can easily distil my business’ performance at a glance - it breathes life into what are otherwise flat numbers.

 

How to Customize Reports in QuickBooks Online 4.PNG

I also prefer percentages over raw numbers because I don’t have to do any calculations to understand the relative significance of particular income and expense categories.

 

For this Profit and Loss Report by % of Total Income Report, I applied the following customizations: 

 

  • Items as% of income - so I can quickly see which areas of my business are having the biggest impact on my bottom line ( Customize > Rows/Columns
  • Columns by month- so I can compare performance trends month-over-month ( Customize > Rows/Columns ) 
  • Negative numbers in red- so I can see where I’m taking the biggest hit 
     ( Customize > General
  • Removed the company name- so there are fewer words on the page ( Customize > Header/Footer

 

I made one additional customization that’s visible when I expand the report - Items as a % of Row ( Customize > Rows/Columns )This lets me see which items brought in the majority of my income for the month and which month had the most sales for each item.

 

How to Customize Reports in QuickBooks Online 5.PNG

 

 

In a few seconds, I know that Fountain and Garden Lights sold well in January, Plants and Soil has brought in the most income to-date, and my combined Landscaping Sales account for roughly 44% of my total sales income in December. February wasn’t such a good month. Maybe it was the season?

 

Thanks to customization, I know Spring is an opportunity to rally.

 


 

Any other tips I should keep in mind to be successful?

 

  • If you want to email, print or export your report, click the icons at the top of the report page. This is the easiest way to share data with your team. Don’t forget to provide a brief summary of your findings.

    How to Customize Reports in QuickBooks Online 7.PNG

     

  • Once you’ve found your perfect set of filters, you can save your customizations by clicking the “Save Customization” button at the top of the report. Give your custom report an accurate yet catchy name so it's easy to remember.

    If you create a report group, you can choose who can access these custom reports. You can even schedule reports to run and be sent out automatically via email (with the option to attach it as an excel file).

 How to Customize Reports in QuickBooks Online 8.PNG

 

 


 
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Being proactive means keeping a close eye on open invoices. Knowing what customers owe you, developing clear policies, and planning accordingly are incredibly for sustaining your business.

 

In QuickBooks Online, there are a few tools and simple review techniques you can incorporate into your workflow that will help you professionally manage open and overdue payments.


Why do I need to review open invoices?

 

The primary benefit is obvious – you want to get paid. But managing pending payments isn't only about keeping the lights on. If overdue payments pile up, they can become an avalanche that spills over into the rest of your business, stopping your operation dead in its track.

 

Be proactive with your accounts receivable and get ahead of issues before they impact your cash flow. Designate an individual on your team to handle this process. Establish a regular review process and set policies for how to handle late payment using the available tools in QuickBooks.


Get started reviewing open and overdue invoices

 

You can view all open invoice activity in the “All Sales” section of the Sales tab. The total number of open invoices and total amount owed to you are displayed in the orange and grey header boxes.

 How to review open invoices in QuickBooks Online 3.png

 

You can also chronologically sort invoices by “Status” from the “Invoices” tab.

 

How to review open invoices in QuickBooks Online.PNG

 

There’s also a report for reviewing open invoices. Go to the Reports tab and search for “Open Invoice Report.” Set the report to criteria to “All Dates” and “Current” so you see all current outstanding invoice.

How to review open invoices in QuickBooks Online 2.PNG

 

This report is effective because you get the data you need (invoice number, due date, and net terms by customer ) in a very clean format. You can save the report as a PDF (click the small gear icon in the corner) and send it to the member(s) on your team who need this information to follow up.

 

You can even schedule this report to go out on a regular basis. Start by emailing yourself a copy once a week and adjust as needed so you’re always on top of your accounts receivable. To schedule the report, click the “save customization” button in the corner.

 

How to review open invoices in QuickBooks Online 5.PNG

 

Give the report a name (in this case, I went with something simple: “Open Invoices Weekly Report”) and decide who gets access to the data.

 

How to review open invoices in QuickBooks Online 6.png

 

Go back to the Reports Tab and open your Custom Reports sub-tab. Your new report will be at the top of the list. Click the edit button next to the report to pull up this screen:

 

How to review open invoices in QuickBooks Online 4.png

 

Enable the “Set email schedule” option and set the recurrence for how often you’d like this report emailed to you and your team.

 

 

By the way, you can use this workflow to schedule any report in QuickBooks Online. 

 

 


 

Send Payment Reminders and Balance Forward statements as Batch Actions

 

Now you know how to stay on top of open invoices. What can you do to gently remind customers with outstanding balances?

 

There’s no single way to manage this process, but a rule of thumb is to practice restraint. Be firm but empathetic. Maintaining a positive relationship with your customers is arguably more valuable to your long-term success than the dollar amount you’d get from playing debt collector.

 

  • Start with an email. While you’re on the Customers sub-tab, sort the list by clicking the orange “Overdue” or grey “Open Invoice” boxes in the header. This filters for customers with open or overdue invoices. Check the boxes next to each customer you want to contact, click the Batch Action drop-down at the top, and select “Email.”

 

How to review open invoices in QuickBooks Online 7.png

 

  • Craft your email with care. If you’re sending anticipatory emails for soon-to-be-overdue invoices, be polite and remember that they have until the deadline (Net Payment terms) to pay. If you’re writing about recently overdue invoices, be professional but firm. Add the word “Overdue” somewhere in the subject line.

  • If you want to go straight to Reminder Messages, that’s another good option. Though less personal, they are a more efficient (and direct) way to tap your clients. You can edit your default email reminder message by clicking the Gear Icon (Gear Icon.jpg), selecting Accounts and Settings, the “Sales” Tab and then scrolling down to “Reminders.”

    To send this default reminder message, go back to the Customers Tab and again filter the list for “Overdue/Open Invoice.” On each customer line, you will see a “Send Reminder” action. Do this for every customer with an overdue invoice.

 

How to review open invoices in QuickBooks Online 8.png

 

  • If these go unanswered, you can send a stronger message – Balance Forward We definitely recommend trying the first two before moving onto this option.

    Go to the Customers sub-tab. You can either click the drop-down arrow on each customer line to create a single Balance Forward statement or check the box next to each customer and select “Create Statements” from the Batch Action menu.

    Choose “Balance Forward” from the drop-down menu. Customers with open or overdue balances will appear in the recipients list at the bottom. To learn more about creating balance forward statements, check out How do I create a single open item or balance forward statement.

Any other tips I should keep in mind to be successful?

 

  • Integrating regular reviews into your operations will prevent work from piling up. The payment process doesn’t always go smoothly, but you have the tools and techniques to make it less of a hassle.

  • If you’re at a point where you're dedicating large chunks of time managing your accounts payable, step back and evaluate your current procedures. What’s your relationship like with your clients? Is there an obvious reason why some customers aren’t paying on time? Do you make paying for invoices easy? How have you managed overdue invoices in the past? Is this the best practice going forward?

Check your Progress

 

What’s Next?

 

 

FTU Setting up for Success

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When you’re new to QuickBooks Online, you have an opportunity to learn and incorporate new workflows into your daily routine - seize it.

 

Today, we’re bringing you tips and tricks to help you process transactions faster and more efficiently. While some of these shortcuts are merely for added convenience, others can drastically reduce the time it takes you to complete tasks in QuickBooks Online.


 How to Use Shortcuts: QuickMath, Keyboard Shortcuts, & More | QuickBooks Online Tutorial 2018

 


There’s nothing wrong with mouse navigation, but QuickBooks veterans swear by hotkeys and prefer them over any other method.

 

To bring up the comprehensive list of shortcuts (and to get your company ID), press [CTRL] + [Alt/Option] + [? ]on your keyboard. The subsequent operations all begin with [CTRL] + [Alt/Option] + [the associated operation].

 

Setting up for success in QuickBooks Online - Hot Key 1.PNG

 

The hotkeys on the left let you create new transactions or sales forms from any dashboard or tab page. The ones on the right are used on transaction pages for faster task completion.

 

There are also “jump-to-date” hotkeys for sales form data-fields that, once mastered, will have you flying through your calendar in fractions of seconds.

 

You can even perform basic arithmetic calculations in sales form data and quantity fields by entering the mathematical formula and pressing the tab key.

 


 

Tips & Tricks: Online Banking | QuickBooks Online Tutorial 2018

 

 


Once you’ve set up online banking, take advantage of the split function to divide transactions into multiple accounts. 

 

Setting up for success in QuickBooks Online - Online banking edit and add attachment.PNG

 

You can split single transactions into separate accounts for specified amounts or assign multiple itemized transactions to separate accounts. A real-world use-case is when you have a receipt that contains items that need to be tracked in separate expense accounts.

 

Batch actions is another useful feature. The more you use the Online Banking feature, the faster QuickBooks Online will begin to recognize your categorization patterns. Soon, all you will have to do is check the boxes next to each item and "match" them all as a batch action.

 

Use the Recognized transactions tab to quickly sort out transactions you’ve already entered into QuickBooks that "match" imported bank transactions. 

 

Learn more about how to set up Online Banking in QuickBooks Online

 


 

How to Set Up Reminders: Recording Transactions

 


 If you’re like me, you prefer focusing your energy on doing creative tasks, not remembering that you have to do actually them. In-product reminders are a great way to ensure you never miss an important task or payment.

 

Recurring Transactions are a powerful automation feature, but sometimes you want a bit more control over exactly how or when invoices and expenses are processed. Instead of letting QuickBooks take the wheel, you can set reminders to complete these tasks yourself (Gear Icon > All Lists > Recurring Transactions > New > Transaction type > Reminder). Unlike recurring transactions, reminders make it easy to change transaction details on the fly since they aren't permanently set. Afford yourself a reasonable amount of time to complete these tasks before they're due - otherwise, you may have the urge to continuously roll incomeplete tasks. 

 

Setting up for success in QuickBooks Online - Set Reminders.png

 

If you want to let reminders run indefinitely, leave the end criteria set to “none.” You can also select “after” and designate reminders based on a set number of occurrences – for instance, if you have a yearly rental lease and pay monthly, set twelve occurrences and an additional reminder at the end, just in case you need to change your rental rate.

 

When you have five minutes to spare, get out a pen and write out a list of your daily, weekly, monthly and yearly bookkeeping tasks. Here are a few reminders we’d recommend entering into QuickBooks Online right now:

 

  • Monthly rent – set to a monthly interval, 5 days before it’s due
  • Close your books (with a password) for the year – set to a yearly interval, 10 days before it’s due (the date will depend on your business’ fiscal year)
  • Bi-weekly bank reconciliations – set to a weekly interval every 2 weeks, 3 days before it’s due; the first reminder is to prepare and precheck your transactions, the second will be the actual reconciliation once you have your bank statements in-hand
  • Weekly inventory review – set to a weekly interval, 1 day before it’s due

Bookkeeping Best Practices: Tips & Tricks | QuickBooks Online Tutorial 2018

 


These are bookkeeping best practices that come straight from the pros at Real World Training.

 

Know your daily, weekly and monthly tasks and commit to a schedule

Whether you’re bookkeeping for a business or yourself, there are common tasks everyone should do on a regular basis. There are, of course, some that will be specific to your business or industry. Set aside half an hour to write down a comprehensive list of tasks you need to complete throughout the year. Put them on your calendar and create reminders for each (above).

Here are just a few tasks you’ll need to do (or at least check) on a regular basis:

  • Daily
    • Enter all money-in and money-out transactions (invoices, expenses, etc)
    • Send estimates and other sales forms to clients
    • Enter any new assets and liabilities such as loans (as needed)
    • Check incoming bank transactions

 

  • Weekly
    • Keep an eye on unpaid invoices and unpaid bills (A/R and A/P) in the Sales and Vendor Tabs
    • Add and edit vendor and customer profiles (as needed)
    • Add and edit Product and Service items (as needed)
    • Keep an eye on your Bank Feed

 

Create an “Ask my Accountant” account whenever you get stuck.

Don’t let a single, challenging transaction derail your accounting flow. By the same token, don’t ignore problems until they’re too late to fix.

 

Create an “Ask my Accountant” account as an Other Expense account to record transactions you just don’t know what to do with. This "do it later" approach will help you maintain your pace if you ever get stumped, but use it judiciously. Use this to make the most of your time with your account and take the opportunity to ask questions. 

You can name this account whatever you’d like. Create this account by going to Accounting Tab > Chart of Accounts > New > Other Expenses (Account Type) > Other Miscellaneous Expenses (Detail Type)

 Setting up for Success - Ask my Accountant.PNG

 

If you are connected to a ProAdvisor, you can invite them to access your QuickBooks Online Account at your leisure. Direct them to this "ask my accountant" account and send them your questions to get the ball rolling again. If you need to get even more specific about certain types of transactions, create sub-accounts to separate them thematically. 

 


 

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How to add 1099 Independent Contractors in QuickBooks Online.png

 

Many small businesses hire short-term or bring on independent contractors to complete projects. Properly accounting for expenses associated with their work is mission critical.

 

You can track these expenses and file 1099-MISCs for your independent contractors directly from QuickBooks. It’s essential that you follow the process outlined in this article, not only for good accounting but legal reasons as well. There are also hired-wired 1099 features that only work up if you utilize these workflows.

 

How to add 1099 Independent Contractors in QuickBooks Online 1.png

 


Why do I need to track 1099 independent contractor payments separately?

 

The very simple answer: separating regular employee payments from independent contractor payments is crucial due to the nature of their work and their relationship to your business.

 

Independent contractors, on-demand or self-employed workers, and freelancers are individuals who do work for you but are not your official employees. As such, you need to report independent contractors’ “non-employee” compensation on the 1099-MISC. Thus, from financial and legal standpoints, the difference needs to be made abundantly clear.

 

There are additional stipulations for what constitutes as non-employee compensation. Moreover, knowing whether someone who works for you should (or should not) be classified as an independent contractor can be tricky. If you are unsure, reach out to a tax professional or refer to the legal source of truth on the matter, the IRS website.

 

Intuit regularly updates this handy 1099 or W-2 Calculator (a W-2 is the tax form you file for your regular employees). This tool does not constitute true legal advice, but it will give you a rough idea of what differentiates these two types of workers.

 


Get started adding 1099 contract workers and tracking their expenses

 

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The Workers Tab is where you create and manage records for your regular employees and independent contractors.  In QuickBooks Online, independent contractors are categorized as Vendors. While this might seem odd at first, just like a product vendor, they are individuals you owe money to. There are two ways to add independent contractors:

 

 

Add an independent contractor as a Vendor

 

This is the “old method.” It works well if prefer manually adding tax information on behalf of your independent contractors (instead of sending a request asking them to fill out their tax information). This is also the method you’d use if you need to start tracking a vendor with an existing account as an independent contractor.

 

Let’s assume we’re creating a brand new record for the contractor. To start, go to the Expenses tab, click the Vendors sub-tab and click New Vendor.

 

How to add 1099 Independent Contractors in QuickBooks Online 3.png

 

You’re probably quite familiar with this screen, so proceed with filling out their financial information per the usual method. At the bottom of the screen, if you know the contractor’s Employer Identification Number (EIN), enter it on the Business ID No. line. Without this number, they won’t show up on the 1099 module. You can add this number later, just remember to do so before it’s time to file. Check the box that says “Track payments for 1099” and QuickBooks will add the independent contractor to the tax filing module.

 

When you go back to the Workers Tab and click the Contractors sub-tab, you will see your new independent contractor on the list.

 

How to add 1099 Independent Contractors in QuickBooks Online 4.png

 

Before going any further, click on your new contractor’s name and make sure all the information is correct, most importantly their EIN and email address if you plan to send their 1099-MISC electronically.

 

How to add 1099 Independent Contractors in QuickBooks Online 5.png

 

 If you need to make any edits, click the Pencil Icon.

 How to add 1099 Independent Contractors in QuickBooks Online 6.png

 

 

 

Important - You can use this exact same process to track an existing vendor for a 1099-MISC. Instead of creating a new account, edit their profile, but keep in mind that you will have separate the expenses associated with products and services you buy from the vendor from the expenses related to their contract labor.

 

This will mean being very deliberate about which account you map expenses to on Expense forms.

 

 

 

Add an independent contractor from the Workers Tab

 

This new workflow was introduced alongside the Workers Tab and offers a key benefit – you don’t have to collect tax information from your independent contractors beforehand. Instead, they can provide their EIN, SSN, and other pertinent information to you via secure message.

 

Head over to the Workers Tab and the Contractors sub-tab. Click Add a Contractor and you will see the prompt below:

 

How to add 1099 Independent Contractors in QuickBooks Online 7.png

 

Fill out the form and send the request. When your contractor has completed the form, their profile will update automatically.

 

Important - If you plan to add contractors with this method, double-check the information they provide. Since you’re filing their 1099-MISC, you’re responsible for managing this information. Make requests sooner rather than later so you have enough time to go over what’s on file with your contractors.

 


 

Set up a new Expense Account to track Independent Contractor Expenses

 

Now we create an expense account for payments made to independent contractors. This step is especially important for vendors you also buy products and services from. Expenses for products and services need to be clearly differentiated from the work they do as an independent contractor.

 

Open from the Accounting tab and go to your Chart of Accounts. Create a new account like the one pictured below:

 

  • Name the account “Independent Contractor Labor” or something that makes sense to you and is easy to remember

  • Select “Expenses” as the Account Type and “Cost of Labor” as the Detail Type

 

How to add 1099 Independent Contractors in QuickBooks Online 8.png

 

From now on, every time you enter an expense or pay a check to your independent contractors, map those transactions to this new Expense account.

 

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This is how you separate transactions related to independent contractors from other sources/types of expenses.

 


Show me why I should track Independent Contractors this way

 

I want to add two independent contractors, one who already has a Vendor profile and one who does not. I start with the independent contractor who isn’t in my system. I go Workers Tab > Contractors > Add a Contractor and see the message below:

 

How to add 1099 Independent Contractors in QuickBooks Online 10.png

 

If I use this method to add contractors, I need to set a reminder to double-check what they entered later on.

 

In this scenario, I prefer to add their information myself. I go to Expenses > Vendors > New Vendor, fill out their information and check the “Track payments for 1099” box.

 

From the same tab, I find the second contractor who already has a Vendor profile. I click on their name and “edit” their profile page. All I have to do is check the “Track payments for 1099” box. When I go back to the Contractor Tab, I see both entries.

 

How to add 1099 Independent Contractors in QuickBooks Online 11.png

 

To finish up, I make sure all of their labor costs are mapped to my “Independent Contractor Labor” Expense account so I am ready to input this data when I prepare their 1099-MISCs.

 


 

Preparing 1099-MISCs for Independent Contractors

 

At the end of the year, these independent contractors will automatically show up on the Prepare 1099s module (accessible from the Vendors and Contractors sub-tabs). Moreover, since I’ve been tracking their payments exclusively with the “Independent Contractor Labor” Expense account, filing the 1099-MISCs will be a breeze.


On Step 2 of the Prepare 1099s module, select Box 7: Nonemployee Compensation. Choose the account you used to pay your contractors (in the example case, the account is called “Contractor Payments”). This tells the IRS what money was used for non-employee compensation.

 

How to add 1099 Independent Contractors in QuickBooks Online 12.png

 

On Step 3, the Vendors you started tracking will automatically appear on the list. If you don’t see one of your contractors, simply edit their profile using the steps above. Complete the module and you’re ready to send out 1099-MISCs to your independent contractors.


Any other tips I should keep in mind to be successful?

 

  • Always be cognizant of which Expense account you’re using when you enter expenses related to independent contractors.

 

  • Use the memo and description fields to further document what these types of expenses are for so you won’t have to guess during the rush of tax season.

 

 

  • If you already entered labor expenses for a Vendor into a different expense account before going through this process, go back and recategorize those transactions into the new “Independent Contractor Labor” account.

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Setting up for Success in QuickBooks Online Banner.png

 

We see lots of questions on QBCommunity about how to handle scenarios where the owner either puts money towards their business out of personal funds or uses business funds to pay for personal expenses.

 

These are both common scenarios and for more than financial reasons, it’s imperative to account for these types of transactions properly.

 

This will reapply some of the techniques we learned from the “Creating and Managing Accounts” tutorials as you may need to create some new accounts. For the workflows below, it’s very important to follow them in order and exactly as directed so your accounts remain accurate.

 


 

How to Record Business Expenses: Paying with Owner Funds | QuickBooks Online Tutorial 2018

 

Let’s start with a scenario where you, as the owner, paid for an expense for the business out of your own pocket. Create an “Owner’s Contributionsequity account (Accounting > Chart of Accounts > New Account) that you will use going forward.

Setting up for success - Owner 1.PNG

 

 

Now, enter the Expense the same way you'd record a typical expense transaction, entering the date of the purchase and the payment method. In the line item section, enter the expense and then add an additional line item posted to your new Owners Contribution account for the same amount as a negative value. This effectively “zeros-out” the expense. By doing this, your checking account (or whatever account you are paying from) records remain accurate - - you can track what you as the owner have contributed without impacting those numbers.

 

Setting up for success - Owner 4.PNG

 

It’s also wise to utilize the memo section if you want to add an explanation for why personal funds were used – the more documentation you have, the easier tax season will be. You can even create sub-accounts of Owner’s Equity if you want to separate one-off payments from other types of purchases, like assets.

 

We recommend checking your Owner’s Equity Account in the CoA (click “view register” for more details) and your Profit and Loss Statement after entering an Owner’s Contribution. A quick review shouldn’t take more than a few seconds.

Setting up for success - Owner 5.PNG

 

Give it a try - simulate a few of your recent purchases as if you, as the owner, had paid for business expenses out of your own pocket in Quick Books Online Test Drive.

 

FTU Test Drive

 

 


How to Enter Personal Expenses: Paying with Company Funds | QuickBooks Online Tutorial 2018

 

 

 

Now, let’s look at the opposite scenario when business funds are used to pay for an owner's personal expenses. Create an “Owner’s Personal Purchases/Owner's Drawequity account (Accounting > Chart of Accounts > New Account) that you will use going forward.

Setting up for success - Owner 2.PNG

 

The detail type can also be “Personal Expenses” if you want to further differentiate this account from the Owner’s Contribution account you just created (note that the Category and Detail Type can be exactly the same, but the name distinguishes the two).

Setting up for success - Owner 3.png

 

Enter the expense (in the case of the tutorial, a meal) and use your new Owner’s Draw account. When you go into your Balance Sheet or CoA, you will see the company payment method you used when you entered the expense has been reduced and your Owner’s Draw Account now has a negative balance.


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Setting up for Success in QuickBooks Online Banner.png

 

This entry focuses primarily on the Chart of Accounts and associated reporting tools that pull information from those accounts. Most of the time, you create accounts as you work, such as when you first create a new product or service, log an expense or connect a bank account. If you need to modify an existing account or create new ones from scratch, you’d do so from the Chart of Accounts. This is essentially a list of your accounts that determines how transactions are categorized and interpreted (i.e. whether a transaction adds or deducts from an account).

 

Setting Up for success - Accounts 3.png

 

We generally recommend not making too many changes to the Chart of Accounts (referred to as CoA from here on) – it's complicated territory that should be explored once you’re completely confident using QuickBooks. However, we also believe every user should have a basic understanding of what the CoA is, how it organizes your finances and when to go in and make adjustments.

 

Here are some quick tips:


 

Understanding the Chart of Accounts | QuickBooks Online Tutorial 2018

 

The narrator uses the term “posting transaction” to describe transactions that impact your accounts - - which is most of them. There are non-posting transactions in QuickBooks Online that don’t affect your accounts in any way, such as Estimates, Delayed Charges or Delayed Credit, because those may or may not be processed.

 

Notice how a single transaction impacts a number of accounts. When the narrator makes a bank deposit for a single loan, both the checking and liability account increase for the $15,000 amount. By creating and categorizing accounts, QuickBooks automatically manages and runs the calculations.

 

FTU Test Drive

 

Why don't you try creating a few transactions in Test Drive (above) and poke around the COA to see the results - - you may be surprised just how many calculations occur during a single transaction. 

 


 

How to Set Up Your Chart of Accounts: Understanding the Basics | QuickBooks Online Tutorial 2018

 

This video is very important, so you may want to watch it a few times. We recommend creating new accounts sparingly. QuickBooks Online already provides you with most standard accounts and creates new ones when you do activities like connecting a bank account. Less is more - - meaning more time and less to manage.

 

If there’s one key take away from this video, think broadly about your account organization and structure them in ways that make sense to you and your accountant. A second and equally important point is the available types in the CoA:

 

  • Category type – determines if the accounts on the Balance Sheet or Profit and Loss Sheet. This is the more important of the two because the category type determines how transactions hit your books.
  • Type detail – doesn’t determine how an account is used, it’s there for detail and tracking purposes. Think of it like a secondary description that will help you quickly distil lines on a report.
  • If you need a refresher on reports and how these types impact them, click here.

 

Our trainer makes key distinctions between accounts that show up on your Balance Sheet vs. the Profit & Loss Report. You’re probably familiar with the Profit and Loss Report, which looks at all of your Income and Expense accounts, but you may not recognize some of the heavier accounting terms tied to the Balance Sheet. Essentially, the Balance Sheet shows your asset (what you own), liability (what you owe) and equity accounts (income and expenses).

 

Sub-accounts are a critical organizational feature for the CoA. Instead of having separate expense accounts for various utilities, you can create a “Utilities” parent account and separate “gas and electric” and “telephone” sub-accounts. You can go four levels deep with sub-accounts so you can break this down even further by different cell carriers if you wanted to.

 

Setting Up for success - Accounts 5.png

 

 

Important - Going forward, remember to add transactions to the appropriate sub-accounts and not the parent account (in the case above, in either “gas and electric” or “telephone,” not “utilities”) which becomes the aggregate for the child accounts.

 

Opening balances, as the video explains, are typically added when you have an existing account outside of QuickBooks that you’re recording for going forward with funds already in it, such as a bank checking account or an asset account.

 


 

How to Use Journal Entries | QuickBooks Online 2018

 

Journal Entries are tricky business. While par-for-the-course for accounting professionals, they should be a “last resort” for entering transactions. They follow strict accounting rules that may seem simple on the surface but can have a drastic impact on your accounts.

 

When transactions involve customers or vendors, use the standard transaction process. Journal Entries are generally used for making adjustments or obscure entries that aren’t part of your normal workflow. You would typically use Journal Entries for entering things like Depreciation. 

 

Setting Up for success - Accounts 6.png

 

 

Immediately, you’ll notice the terms “debits” and “credits” used, which we went over briefly in the QuickBooks Encyclopedia. The Journal Entry process (often referred to as JE) draws from one account and adds to another in order to keep everything balanced, a process that may not be familiar to non-accountants.

 

These types of entries are complicated. If you’re at this level of complexity in your accounting, make sure you connect with your accountant for best practices.  


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Are you thinking about converting from QuickBooks Desktop to QuickBooks Online? Wondering if this is right for your business? 

 

More than anything, we want folks to find the right accounting software that fulfils their specific needs. The QuickBooks Guide to Converting QuickBooks Desktop to QuickBooks Online is a full-service hand-book for anyone converting from QuickBooks Desktop (Pro or Premier) to QuickBooks Online. If you're still deciding and just need a quick reference, download our Quick Conversion Reference (attached to this article) and use this lean version of the guide to help you decide if converting is right for you (or your client).

 

The Quick Conversion Reference briefly outlines the features and benefits available for the QuickBooks Online and QuickBooks Desktop product lines. Identify which tasks and features you need for your business from the left-hand column and see whether it can be done in either Online or Desktop on the right.

Converting From QuickBooks Desktop to QuickBooks Online - Quick Conversion Reference (Version 8.18).png

 


 

> Want a bigger overview? Start with the “Setting up for Success with QuickBooks Online” series

 

> Want to jump right in? Check out our “How to Use Basic Features and Functions in QuickBooks Online” series

   

 

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 compare_QBO_to_desktop.png

 

 

This guide is for anyone converting from QuickBooks Desktop (Pro or Premier) to QuickBooks Online. Each section offers step-by-step guidance and includes visuals, tips and hyperlinks to important resources. Start your conversion from the "Before you Start" section or use the links below to jump to specific points in the conversion process if you've already started. 

 

You can also download the complete QuickBooks Guide to Converting QuickBooks Desktop to QuickBooks Online from the right-hand column. 

 

If you want the Quick Conversion Reference instead, follow the link. 


 

monitor_1.png Before You Start

 

 

import_data.png

 

The Conversion Process

 

CRM_1.png What's next after converting from QuickBooks Desktop 

 

 

Are you a QuickBooks Desktop Enterprise user? Do you have a complex inventory? We generally encourage Enterprise users to stay with their Enterprise software if you need its advanced features. If you need the online functionality of QBO, qualified Intuit Hosting Services can link multiple devices to your Enterprise software.

 

 

 

   For those switching from QuickBooks Mac or Desktop editions older than 2011, head to the appendix.   

 

 

 

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How to print paper invoices 1.png

 

While many businesses send digital invoices via email, some customers still prefer carbon copies. If records are stored digitally, they're easy to access and organize. Creating, sending, and managing paper records in QuickBooks requires a bit more planning and forethought. Do what makes sense for your operation, but always consider your customers' preferences. 

 


Why should I send a paper Invoice?  

 

Let’s reframe the question: if customers request a carbon copy, can you encourage them to go digital?

 

The advantage of digital Invoices is you can never really lose them. A deleted Invoice can always be recovered from an email trashcan, and in extreme cases, you can instantly send them another copy. There’s also virtually no wait time and thus no additional delays in payments. This a huge plus for busy buyers and sellers. If customers absolutely need a carbon copy for their records or simply prefers sticking to their routine, they can always print out the emailed version.

 

Then again, going the extra mile and sending them a printed copy may pay dividends in customer satisfaction.


Get started sending paper invoices

 

To create a paper version, follow the normal Invoice creation process (if you need a refresher, check out “Your First Hour with QuickBooks Online”): add your customer’s contact information, the items being purchased, and check the tax and totals.

 

When you’re ready to print the Invoice, scroll to the bottom and click Print or Preview.

 

How to print paper invoices 2.png

 

You’ll see a PDF preview of what the Invoice will look. Decide if you need to make any adjustments and if everything looks good, click Print.

 

How to print paper invoices.png

 

Once you have the paper copy in hand, close the preview and go back to the Invoice. To record the Invoice, go down to the bottom of the form but instead of clicking Save and Send, click the arrow and select Save and Close.

How to print paper invoices 3.png

 

By clicking Save and Close, the transaction gets recorded into QuickBooks but the digital form isn’t sent to your customer’s email, thus avoiding the confusion of receiving multiple copies. When you receive the payment against the paper invoice, you would follow the same process as a digital invoice and continue to digitally record the accounting. 

 


Any other tips I should keep in mind to be successful?

 

  • While you may be tempted to send customers digital and paper versions of the Invoice, to avoid confusion, it’s best to stick with only one method. If you really want to send both, write “void” or “this is a copy” somewhere on the printed form so customers don’t accidentally pay you twice. Unless your customers are exceedingly organized, sending multiple copies complicates the process unnecessarily.

 


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Account reconciliation is the process of matching transactions entered into QuickBooks Online against your bank or credit card statements. This review should be done on a regular basis, once a month at the very least when you receive your statements.

 

The process itself can be done fairly quickly if you connect your online bank accounts to QuickBooks Online and perform regular upkeep throughout the month. It's also important to learn how to use the Undeposited Funds account so transactions in QuickBooks match what's recorded on your bank and credit card statements. 


Why do I need to reconcile my bank accounts in QuickBooks Online? 

 

The balances in QuickBooks Online need to match your bank and credit card records so you have accurate financial data. Naturally, financial reports are only valuable if the base information is precise.

 

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Moreover, your records need to be accurate when its time to file your taxes. By compiling and maintaining your account data throughout the year, you'll be well ahead for your next filing. 

 

There are other underlying benefits as well. If you regularly reconcile your accounts, you'll know exactly how much money your business has in the bank and that you're always working with accurate data. Equipped with this know