QuickBooks Essential Workflows

This is your go-to guide on features in QuickBooks Online and what they do. We’ll also walk you through the workflows that set you up for success in your account. This guide is designed for everyone -- those who are brand new to QuickBooks as well as those needing a quick reference.

B

Bank Deposits 

What it is: 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 create a bank deposit in QuickBooks.

Why you should use it: You want your books to stay accurate and account for money in your Undeposited funds account when you get paid. There are a few different Bank Deposit features available in QuickBooks Online depending on how you enter transactions.

If you receive 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 you 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. 

Click the Plus Icon and select Bank Deposit. Select the account you want to deposit payments into at the top. Look at your payments, double-check for accuracy and check each payment and deposit them as a group payment (or check one and save to record each individually).

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.

Bank Feeds

What it is: Connecting your bank accounts to QuickBooks Online automatically downloads the last 90 days of transactions recorded by your bank.  

Why you should use it: This feature ensures your accounts are always up-to-date so you don't have to do double data entry. It’s a great way to track your income and spending. Only recording sales forms while leaving out expenses gives an incomplete perspective of your business’s overall health. Let the Online Banking feature automate the work and save you time.

You can connect multiple bank accounts (including credit cards and PayPal) to QuickBooks from the Banking Tab. Have multiple accounts? Easy, once you have entered your bank login information just choose the bank account you want to use for your business.  Then tell QuickBooks the account type, and you’re ready to go.

While in the Banking window, 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.

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

Check out this article for more information: Connect and Review Your Banking in QuickBooks Online.

Let me give you an example. My “Fuel Rule” has a few conditions: the transaction must contain the word “Tony” and equal $20 because I limit drivers to a $20 fill up. The payee is Tony’s Gas Station (vendor) since our team always fills up at the same station down the road.

To reduce the need for multiple rules, create different clauses so transactions are found that meet more than one of the outlined conditions. Simply change the drop-down so that it shows and include the following: Any. 

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

C

Categories

What it is: Product Categories (and subcategories) are used to organize and track related products and services you sell.

Why you should use it: 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.

Product and service items can only have one categorization. However, subcategories are placed under the parent category. When you create your structure, think of top-level and immediate-level categorizations concurrently. Do you only want to separate products by type? Or type and brand? 

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

Note: 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).

Take a look at this article for more: Group your products and services into different categories.

Checks

What it is: You can use QuickBooks Online to record handwritten checks and even print the ones you enter. This feature covers checks for paying expenses, not Payroll checks.

Why you should use it: 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. 

To enter a check you’ve already written, click the + New Icon and select Print Check>> Add Check. Enter the information, reference number, and select your checking account. Then choose Save and Close.

If you want to create a new paper check from an entry in QuickBooks, follow the same process and when you’re ready to print, go to Preview and print. This feature is designed to work with Intuit checks. Always print a check on normal paper first to check if it’s aligned correctly. If it isn't, choose Print setup along the bottom.  Use the four-step module to choose your layout, update your PDF reader as needed, and make adjustments to the alignment.

Not looking quite right yet? Continue to edit by clicking on No, continue set up. Now you can use our fine-tune alignment to get things just right.

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

I

Invoices

Well, technically Invoices and Sales Receipts (and when to use each).

What they are: Use 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.

Why you should use them: Invoices 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. 

For immediate payments, use Sales Receipts.

L

Lists (Customer, Vendor, Products and Services)

What they are: Lists are what QuickBooks uses to organize and structure your data, especially for sales forms.

Why you should use them: Lists serve both user-facing and behind-the-scenes functions. Lists are composed of items (customers, vendors, products and services). These items are what populate the data fields on sales forms. 

In addition to historical transactions, the dashboards on the Invoicing 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 Accounts (i.e. the list of your accounts), Payment Methods, and Attachments by clicking the Gear Icon >> All Lists.

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

Building your lists in this way is easier than creating them as you go. This method gives you the time to add the key details all at once. Seeing your items side-by-side on lists also helps with strategizing your organization. 

You can always create new items and add them to lists as you work on forms, etc. 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. 

Check out more here: Adding Products And Services, Customers, and Vendors in QuickBooks Online. 

P

Payment Terms

What it is: the “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 with your customers.

Why you should use it: “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).

You can adjust default payment terms for invoices by going to Gear Icon  > Account and Settings > Sales > Sales form content. Once that setting is saved, the new settings are automatically applied to all invoices going forward, not retroactively.

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

Of course, I have an article for you with the full details: How to Adjust Invoice Payment Terms in QuickBooks Online.

Payroll tab (formerly Workers tab)

What it is: This is where you manage information for your regular employees and independent contractors.

Why you should use it: You 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.

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.

While you can add new independent contractors and prepare 1099s from the Payroll 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.

Learn more about vendors/contractors here: How to Add Independent Contractors and track them in QuickBooks Online 

R

Recurring transactions

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

Why you should use it: This feature helps to automate transactions. You can set the time interval, create reminders, and schedule forms to send automatically. This feature is perfect 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 > 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.

Important: Changes to recurring templates are not retroactive. If you make edits to product or service items (adjust the description, rate, account, etc) 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 only applies the changes moving 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.

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

U

Undeposited Funds

What it is: This is a special temporary account that QuickBooks uses to hold received payments before they are deposited in the bank.

Why you should use it: Undeposited Funds is an internal “Other 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.

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 process 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. 

For the full articles click here:  Using Undeposited Funds in QuickBooks Online and How to Make a Bank Deposit in QuickBooks Online.