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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




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.

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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. 



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 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 



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.





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 >    


Setting up for Success in 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




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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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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See – Workers Tab


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 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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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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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


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

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QuickBooks Payments


See - "QuickBooks Payments Home Page"


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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.


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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: 


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


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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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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. 


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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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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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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.


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The Essentials                              The Nice-to-Haves


  The Essentials    


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  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:


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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.


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    Choose an Accounting Method

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


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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.



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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.






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 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.






  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.



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.”






  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...


  • 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





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  Invoice Form



  The bare essentials 

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


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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. 


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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






  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. 




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  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.





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   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.


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The Nice-to-Haves


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  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.



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  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.

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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.”



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  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. 


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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.


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So, are you ready to send an Invoice?


Yes!          Let me check again  


Your First time with QuickBooks Online


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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.


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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






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.


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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.


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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.


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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 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.

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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.


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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”).


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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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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. 

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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.


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  • 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. 




  • 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.

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  • 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.


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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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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.


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  • 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.

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  • 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.

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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.

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


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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).


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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.


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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.


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  • 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. 

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  • 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. 

  • 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:


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  • 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.




Important  if you know a transaction already exists in QuickBooks (income, expenses, or otherwise), it’s very important that you us