Now that your data has moved into QuickBooks Online, it’s time to review your QuickBooks Online account. We have created a review checklist to get you started using QuickBooks Online for your business. Here we go over what you need to do before you start making changes to the data or begin entering new transactions.
Note: Because not every business is registered for GST, the step to clean up your GST might not apply to you. Skip these steps if your business is not registered.
Step 1 - Verify your data
This is an important step to verify the data conversion to make it consistent with your old accounting system. These are the three areas to check.
First thing you need to verify is your accounting method. Follow these steps to make sure your accounting method has been set up correctly/
- Select Settings ⚙, then select Account and Settings.
- Go to the Advanced tab.
- In the Accounting section, select the Edit ✎ icon.
- Choose the Accounting method.
- Select Save, then Done.
Check the account balances
Compare the balances between your prior accounting system and your new QuickBooks Online subscription by comparing the below reports across the two systems. Ensure your reports are being viewed in accruals basis.
- Trial Balance
- General Ledger
- Balance Sheet
- Profit and Loss report (income statement)
- Accounts Payable ageing summary
- Accounts Receivable ageing summary
Checking outstanding supplier and customer balances
The outstanding balances of suppliers and customers in your old software should line up with the new balances in your Quickbooks Online account. You can check this at random for around 5-10 customers and suppliers to make sure there are no discrepancies. Also, check the historical account payable (A/P) and account receivable (A/R) on some random dates.
Note: There might be some discrepancies due to credits notes. In some accounting systems, you can specify a due date for a adjustment note, which is not available in Quickbooks Online. This might cause amounts appearing in the wrong column.
Step 2 - Configure your QuickBooks Online account
The first step is to set up your QuickBooks Online account after moving your data. This will make sure your file is correctly set up so you can start using the benefit straight away.
- Select Settings ⚙️
- Select Account and Settings.
- Select each tab from the left menu and update information.
- Select Done when you finish
Note: It’s important to select the correct first month of the financial year under Advanced settings. For details visit How do I set my advanced account settings
It’s important that QuickBooks Online is set up with the correct ABN and lodging frequency before you and your client start using it. You can skip this step if your business isn’t registered for GST. Please use steps below to make sure GST has been set up correctly.
- Select to GST from the left menu
- Select Settings dropdown
- Select Tax Settings.
- Check the Accounting method is correct and change the Lodging frequency if required.
- Select Save.
Step 3: Match the unmatched entries
Note: We strongly recommend you complete the below process in order to ensure your Invoices/Bills and their associated payments are clearly linked (matched) in your new QuickBooks Online subscription.
Note: This step is more effective if performed in your source system, before moving your data. All payments should be linked to the relevant invoice or bill in the source system. MMC will move over these payments, however, in some cases, they might not recognise the link between the payment and the source invoice or bill. The below steps are how to tidy this up in QuickBooks Online.
For every customer or supplier follow these steps:
- Select the customer or supplier
- If the open amount does not equal the overdue amount, go to step 3, otherwise, go to the next supplier
- Select New cheque
- Select Add All
- Quickbooks will automatically make a payment linking the journal entries and the bills (amount paid should be 0.00)
- Click Save and close
Step 4 - Reconcile your Bank Accounts
After the data conversion, all bank accounts are unreconciled, you will need to reconcile them before you start using Quickbooks Online. For each bank account follow these steps:
Before you start:
- Last statement ending date: Make sure your bank statement starts the day after your last reconciliation.
- Beginning balance: Make sure the beginning balance in QuickBooks matches the one on your bank statement. This is the account's balance at the beginning of the time period you're reconciling. Here’s what to do if they don't match.
- Select to Accounting from the left menu
- Select the Reconcile tab
- From the Account ▼ drop-down menu, select the account you want to reconcile
- Enter the Ending balance and Ending date as it shows on your exported reports or previous accounting system
- When you're ready, select Start reconciling.
- Select all transactions for reconciliation
- Select Finish now, then Done.
If you need further help with reconciliation or have a unique situation, please visit reconcile an account in QuickBooks Online
Note: We bring over the main types for chart of accounts, but not the specific types (subtypes) if those exist in your previous accounting system. You are free to change the nominal codes types after the conversion to something you see better fitting.
Step 5: BAS and IAS lodgement (Optional)
It is important to check if your tax lodgement is matching with the previous accounting system. You will need to include all converted data into a single period and mark it BAS as lodged in QuickBooks Online.
Note: You may find that the amount of GST outstanding looks incorrect, even though the GST Account shows the correct figure. Since this will be the first time you are lodging a BAS using Quickbooks Online, it assumes that all GST figures ever recorded are now due.
- From the left menu, select GST, then choose Prepare BAS.
- Select the Beginning Date as far back as you can to make sure it includes all historical data.
- Select the End Date to match what was lodged in the previous accounting system.
- Review your GST obligations. QuickBooks will display the total sales (including GST), total purchases, GST collected on sales, and GST paid on purchases, then click Next.
- Manually input or review the Income Tax instalment amount being paid with this lodgement**.
- If your instalment amount needs to be changed, tick I need to adjust the instalment amount and adjust accordingly, then click Next.
- After reviewing the complete activity statement, click Mark as lodged to close the tax period in QuickBooks.