on July 20, 2018 03:37 PM - edited on March 20, 2019 01:34 PM by KimberlyT
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."
Minute 15: Customize your Invoices (and Sales Forms)
|(Gear Icon [ ] > 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.
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.”
Minute 20: Decide how you want to get paid for Invoices
|(Gear Icon [ ] > 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.
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.
This is what your customer will see when they receive your invoice:
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 forms: Invoices, Sales Receipts, and Estimates. Which one you use to record payments depends on when your customer paid you.
Upon receiving an invoice payment, process the invoice by clicking ( ) 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.
Minute 33: Send your first Invoice
|(Global Create [ ]> Invoice)|
The foundations have been laid -- you're ready to send your very first invoice!
Click the Global Create ( ) 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.
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 work. We 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.”
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.
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.
(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:
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:
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:
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.
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.
(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.
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:
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.
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.
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.
Minute 52: Decide if you want to track inventory sooner rather than later
|(Gear Icon [ ] > 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 [ ] > 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.
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.
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."
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.
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."
> 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