Updated July 20, 2018 04:41 PM - edited October 23, 2018 03:23 PM
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.
The Essentials The Nice-to-Haves
|Company Information||Customized Invoices|
|Sales Info||Product and Service Categories|
|Invoice Form||Online Banking|
|Products and Service List|
To check this, click Gear Icon [ ] > Account and Settings > Company. You will arrive on this page:
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:
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.
To check this, click Gear Icon [ ] > Account and Settings > Advanced > Accounting. You will arrive on this page:
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.
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.
To check this, click Gear Icon [ ] > Account and Settings > Sales > Sales form content. You will arrive on this page:
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.
To check this, click Gear Icon [ ] > Account and Settings > Advanced > Currency. You will arrive on this page:
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.”
To check this, go to the Tax Tab. You will arrive on this page:
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...
To start, click Gear Icon [ ] > Custom Form Styles > New and you will arrive on this page:
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 [ ] > 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.
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 ( ) that expands the section so you can make edits.
At a minimum, include the following:
To enable this, click Gear Icon [ ] > Custom Form Styles > New or Edit > Payments Tab. You will arrive on this page:
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.
To set this, click the Gear Icon [ ] > Invoice to start a new Invoice.
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.
Products and Services List
To start, click Sales Tab > Products and Services. You will arrive on this page:
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:
To start, click Sales Tab > Products and Services > Edit or New. See if you have the appropriate income accounts for your products and services.
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.
To check this, click Sales Tab > Customers. You will arrive on this page:
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.
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.
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.
Spend some time in the Custom form styles module (Gear Icon [ ] > 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.
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.
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.”
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.
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.
So, are you ready to send an Invoice?
Your First time with QuickBooks Online