QUICKBOOKS 2022
FOR BEGINNERS
COMPLETE BEGINNER TO EXPERT GUIDE TO
GAIN MASTERY OF QUICKBOOKS ONLINE AND
DESKTOP
JOE WEBINAR
Copyright © 2022 Joe Webinar
All Rights Reserved
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The author and publisher of this book and the
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representation or warranties with respect to the
accuracy, applicability, fitness, or completeness of the
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you wish to apply the ideas contained in this book, you
are taking full responsibility for your actions.
Printed in the United States of America
CONTENTS
INTRODUCTION
CHAPTER ONE
PRINCIPLES OF ACCOUNTING
THE ACCOUNTING PROCESS
FINANCIAL ACCOUNTING
FINANCIAL STATEMENTS
SUMMARY
ELEMENTS OF FINANCIAL ACCOUNTING
LIMITATIONS IN ACCOUNTING INFORMATION
ACCOUNTING CONCEPTS AND PRINCIPLES
THE PURPOSE OF ACCOUNTING
TAX ACCOUNTING
CHAPTER TWO
DOUBLE-ENTRY BOOKKEEPING
WHAT DOUBLE-ENTRY BOOKKEEPING IS ALL ABOUT
THE ACCOUNTING EQUATION
THE DOUBLE-ENTRY PRINCIPLE
RECORDING REVENUE AND EXPENSES
SOME PRACTICAL EXAMPLES
CHAPTER THREE
CHALLENGES IN ACCOUNTING
COMBINING BUSINESS AND PERSONAL EXPENSES
CHAPTER FOUR
GETTING STARTED WITH QUICKBOOKS
INTRODUCTION TO QUICKBOOKS
QUICKBOOKS ONLINE
HOW IT WORKS
QUICKBOOKS DESKTOP
CHOOSING THE RIGHT VERSION
QUICKBOOKS 2022: WHAT IS NEW?
THINGS TO NOTE
CHAPTER FIVE
SETUP AND CONFIGURATION
HOW TO DOWNLOAD AND INSTALL QUICKBOOKS
CHAPTER SIX
SETTING UP QUICKBOOKS
SETTING UP CHART OF ACCOUNTS
CREATING A NEW COMPANY FILE AND IMPORT LISTS
SALES TAX SET-UP
SETTING UP ITEMS LIST
SETTING UP AND USING THE PRICE LEVEL LIST
SETTING UP EMPLOYEES
PAYING EMPLOYEES
SETTING UP CUSTOMERS LIST
SETTING UP VENDORS LIST
SETTING UP FIXED ASSETS LIST
CHAPTER SEVEN
SETTING THE ACCOUNT PREFERENCES
ACCOUNTING PREFERENCES
GENERAL PREFERENCES
ITEMS AND INVENTORY
JOBS AND ESTIMATES
PAYMENTS
PAYROLL AND EMPLOYEES
REMINDERS
REPORTS AND GRAPHS
SALES AND CUSTOMERS
SALES TAX
SEND FORM
SPELLING
TIME AND EXPENSES
CONCLUSION
CHAPTER EIGHT
BOOKKEEPING BASICS OF QUICKBOOKS
INVOICING CUSTOMERS
RECEIVING PAYMENTS
PAYING VENDORS
RECONCILING YOUR ACCOUNTS
MANAGING INVENTORY
CHAPTER NINE
ACCOUNTING BASICS
PREPARING FINANCIAL STATEMENTS
PREPARING A BUDGET
AN OVERVIEW OF JOB COSTING SYSTEMS
CHAPTER TEN
PROTECTING YOUR DATA
CREATING A BACK-UP FILE
RESTORING YOUR DATA
HOW TO CONDENSE YOUR DATA FILE
CHAPTER ELEVEN
TROUBLESHOOTING
INTRODUCTION
If you own or run a business, offering bookkeeping services or
you are into accounting, this book is for you. It contains a
special tool that will make your work easier, save time and
help you keep tabs on how your business is going. This special
tool is QuickBooks.
This book is divided into sections and each section gives you
detailed information on what you need to know about
QuickBooks and how to make it work for you. The first
section refreshes your mind on the basics and the other
sections give you further details.
I recommend you go through this book as outlined. Do not
skip a section for another for better understanding.
CHAPTER ONE
PRINCIPLES OF ACCOUNTING
The Accounting Process
There are a lot of definitions for accounting and the one which
captures most of it is that Accounting is the process of
identifying, measuring, and communicating economic
information about an entity to a variety of users for decisionmaking purposes. This means there is a process of collating
information together, mainly economic information, and
though there are lots of other types of information which is
useful for decision-makers and stakeholders in an entity,
accounting focuses very much on economic information.
A key part of what accounting is about is that it is for decisionmaking; People have to do something with it as it is not just a
matter of collecting, collating, and storing it on a shelf
somewhere. It is useful for people to make decisions with.
There are limitations to this but the idea is that people can do
something with this information.
There is an important element to having a level of subjectivity
and the ability for entities to make decisions following some
circumstances because each entity is different and the
circumstances around each entity are different. So, it is really
important that judgment is being made properly.
Perception vs Reality
If you look at the bottom right-hand side, economic activities
are happening, people are working, companies are buying
products, the manufacturers are producing and selling
products, people are borrowing money. Generally, people are
doing a whole range of things every single day and the idea is
on how to take that economic activity and convey that to the
users and in some way this is useful. That is not an easy
process necessarily and from there, people make decisions
with this information.
What sort of people? There are both internal and external
users. At the top, we talk about Financial and management
accounting, they are internal users. When we look at external
users, this is the financial reporting function. So, this is when
you are asked to provide financial statements. These are
general purpose financial statements that are read and to be
used by a wide variety of people, whether they be
shareholders, customers, employees, the government, or
suppliers. If you look at suppliers, for example, they supply
goods and services to a particular organization, and if whoever
they are supplying to runs into financial difficulty and leaves
the market or collapses for some reason, that’s potentially
going to put that supplier at risk.
Financial Accounting
Financial Accounting is about the preparation and presentation
of financial statements. So a company provides information to
a market, these are the financial statements that we see and it
allows people external to the business to make decisions about
the entity.
Financial Statements
These are a set of statements directed towards the common
information needs of a wide range of users. No individual user,
certainly not small shareholders or non-shareholders, has the
power to compel companies to provide this information to
them. So there is a requirement where companies have a
mandatory disclosure of these statements.
Financial statements are a record of financial activities that
have happened over a period.
There are five statements within this: the Income Statement,
Balance sheet, Statement of cash flows, Statement of Other
Comprehensive Income (OCI), and the statement of equity.
The Income Statement
This is simply your revenue minus expenses. What that means
is that revenue and all the money that your organization brings
in, less the expenses they incurred, to arrive at Net Income.
The net income statement can be expanded a little more such
as
➔
The revenue
➔
Minus the cost of goods sold (variable costs). This is
the cost of the product or services that they are selling, to
arrive at the gross profit or contribution number.
➔
Minus the fixed expenses or the rest of the operating
expenses, to arrive at the operating income.
➔
And then you finally subtract your interest and income
taxes, to arrive at your Net Income.
So, if you are running a cloth stand, You have your revenue
from selling clothes minus the cost of the clothes, to give the
gross profit, minus the fixed expenses (which could be those
things you had to buy such as table or decoration items) to
come up with the operating income, minus the income taxes to
arrive at the net income.
The income statement is temporary. What this means is that it
runs for a while and then it is usually set to zero. So, you have
an income statement for a month, quarter, or year, and it
measures the revenue and expenses for that time after which it
is reset to zero.
It is quite common for companies to use different
terminologies for Income statements. Sometimes they call it
Statement of Operations, Statement of OPS., Profit-Loss
Statement (P&L) orBudgets.
Balance Sheet
The layout of the balance sheet is Assets= Liabilities +
Equity.
The balance sheet is a financial statement that shows that an
asset, which is what a company has at hand, is equal to what
they borrowed or what people put into the company. Some
examples of assets are cash, inventory, buildings, or lands.
Liabilities may be money borrowed from the bank or what
they borrowed from different vendors. Equity is the amount
that the owners have contributed.
The balance sheet is a permanent financial statement, it never
goes away but it is presented at a certain date. So usually, you
will see the balance sheet as at a certain date that just keeps
going, but it changes every day as different transactions occur.
An example of a Balance sheet is seen below.
Your Balance Sheet must always balance. This means that
Assets must always equal liability plus equity, right after your
Net Income is being posted for the period.
Cash Flow Statement
The cash flow statement helps reconcile your net income to
cash because even though some companies may produce
income, they spend all their cash or they run out of cash. This
helps you understand the cash flow of a company.
An example of a Cash flow statement is seen below.
Statement of Shareholder’s Equity
This is simply the Beginning Retained Earnings +/- Equity
adjustments = Earned Retained Earnings.
This is a statement showing the capital investments that have
been made by shareholders of a company and the retained
earnings of the company and as the Balance Sheet, this
statement is also presented at a certain date.
The Statement of equity helps analyze the different entries and
adjustments that are going on in the space of Shareholder’s
equity.
An example of a Statement of equity is seen below.
Statement Of Other Comprehensive Income
To balance the accounts of a company, the recorded assets
should be equal to the total liability plus contributed capital
from shareholders and retained earnings. For each period the
company brings in more income which is an asset, part of the
net income is paid out to shareholders. Therefore, we would
exchange that change in retained earnings for a period to be
equal to Net Income minus the dividends paid out. However,
there are times when this is not the case. This is because there
were certain items of revenue and expenses that were excluded
from the Income Statement. These excluded items are known
as Other Comprehensive Income (OCI).
If you take the Net Income minus the Dividends paid out Plus
other Comprehensive Income, you should have the total
comprehensive Income that accounts for the change in
Retained Earnings for the period.
There are four (4) main types of items that are considered
Other Comprehensive Income:
● Foreign currency translation gains and losses.
● Adjustments for minimum pension liability.
●
Unrealized gains and losses from cash flow hedging
derivatives.
●
Unrealized gains and losses from available-for-sale
securities. These are investment securities that are not
expected to be held to maturity or sold in the near term.
These are not reported in the Income statement but are
reported directly in stockholders’ equity as a component
of Other Comprehensive Income.
Summary
The Financial Statements gives you an overview of the health
of a company. The income statement tells you how profitable
they are for the said period and how well the company is
running its operations. The Balance Sheet tells how much cash
they have on hand and how healthy they are financially. The
cash flow statement shows the amount of cash and where it
went for the year, that is, how the cash was spent. The
statement of Equity helps you understand the changes of
equity position throughout the given period.
Elements Of Financial Accounting
The first three elements are assets, liabilities, and equity.
Assets
An asset is a present economic resource controlled by the
entity as a result of past events. The key things to note here
include:
●
It is a present resource so you currently have that
resource. That means you have something right now
which is a benefit to you.
●
You control it. Not all ownership is about control, you
can have something which you control but do not own
and you can also have something which you own but not
control. A common example where an entity has control
and has an asset but doesn’t own it is airlines with the
aircraft. A lot of aircrafts are not technically owned by
the airlines but they are still controlled by the airlines so
they get counted as an asset. So, if you want to get a new
car, that new car is not an asset because it hasn’t
happened yet. It has to have happened for you to control
it.
Liabilities
A liability is a present obligation of the entity to transfer an
economic resource as a result of past events. Using the car
example again, if you intend to buy a car and you haven’t done
it yet, you do not have a liability to the car dealers and because
there has not been a deposit made, you do not currently owe
them anything. When you buy the car and still owe them,
that’s different as you now have a liability.
Equity
Equity is just what is left over. It is the residual interest in the
assets of an entity after deducting its liabilities. Simply put, it
is assets minus liabilities.
Other elements include Income and expenses.
Income
This is the increase in assets or decrease in liabilities that often
increases in equity, other than those relating to contribution
from equity claims. So, in a simple illustration, if you buy a
car and you give the dealer an amount of money, the dealer
now has more; that is an increase in assets for the dealer and
income for the dealer. But importantly, you are not an owner in
that deal and you are only contributing money to the business,
so that’s an increase in assets for the dealer but nothing to do
with the holder of equity, so it increases the equity of the deal
they now have. If you are an owner of a business and you put
more cash into that business, that means assets increase and
because it is coming from the holder of equity claim, it is not
counted as income.
Expenses
This is just the opposite of income. Expenses are decreases in
assets or increases in liabilities that result in decreases in
equity other than those relating to distributions to holders of
equity claims.
using the car example again, as the dealer gives you the car,
they had an asset, that means they had that car and it was
counted as an asset for them, now they don’t have that car
anymore, so there’s a decrease in assets. Another way to look
at this is when companies pay out dividends. That is a
decrease in assets and specifically, these get paid out in cash,
cash goes down but they go out to the distribution of holders
of equity claims and so it is not an expense, just a reduction in
equity.
Limitations in Accounting Information
As you already know, accounting is great but it is important to
recognize your limitations.
Firstly, there is a significant delay between year-end and
information release. Most commonly there are about 2-3
months between when the financial year ends and the annual
report comes out.
Secondly, information on financial past transactions does not
provide forecast financial information. To an extent, a lot of
information is historical and this means that there are items
that their values would move in line with whatever they can be
valued at and shares are a good example of this, so if you are
an entity that own shares in other entities and those are listed
on the market, it is quite easy to get current valuations of those
assets and you are required to show those at whatever current
level it is.
Also, there is substantial subjectivity in accounting standards.
It allows for companies to make judgments and this is
necessary because they need to understand the situation and it
is important to have a level of control about what they present
because every entity is different. This causes a bit of difficulty
because it gives a means to companies to misrepresent what
they are doing but it is not always so. For example, banks have
to make allowances for their losses and banks’ logbooks are
generally quite large. This is not an easy thing to do and
whatever percentage is involved, those are quite subjective
decisions.
There are also costs involved in preparing the information for
financial statements. So, if you’ve got a business with lots of
stores in different locations and multiple currencies involved,
it takes a lot to pull all this information together and it is
expensive to do.
Lastly, if a company is too specific with how it discloses its
sales and cost of sales, potentially that gives competitors an
idea about its margins and that could assist them in terms of
how they price what they do. This concerns how information
is being provided to the market because it could undermine
what you are trying to do.
Accounting Concepts and Principles
In the study of accounting, concepts are assumptions that are
important in the preparation of financial statements. They are
the foundation of generally accepted accounting principles as
without them, there will be no uniformity in the practice of
Accounting and financial statements will be meaningless.
There are several Assumptions considered to be the guides in
the preparation of Financial Statements. These are Accounting
Entity, Going-concern, Time-period, Unit of Measure, and
Accrual Basis of Accounting.
Accounting Entity Concept
This is also known as the Separate Entity Concept or Business
Entity Concept. The essence of an Accounting Entity is the
separation of the business from the owner or management. It
simply means that everything the owner or management does
is distinct and separate from the transactions of the business.
Since there are a lot of transactions done in business, it is
important to understand that those transactions need to be
separated properly and that only business transactions are
recorded in the books of the business. Simply put: Business is
business; Personal is Personal. So personal and family
expenses of the owner should be separate from the expenses of
the business.
Going-Concern Concept
This is also called the Continuity Concept. This assumption
simply tells us that the business is assumed to continue
operating over an indefinite period. However, if there is
concrete evidence, then the business can no longer continue.
Time-Period Concept
This simply means that the life of the business is divided into
equal reporting periods and at the end of each period,
Financial Statements are prepared. Periods can either be
monthly, quarterly, semi-annually or annually. In this concept,
we also need to understand the difference between the
Calendar year and the Fiscal year. The Calendar year is the
accounting period that starts from January 1st to 31st
December, while the Fiscal year on the other hand is the
reporting period that starts with any month other than January
1.
Stable Monetary Concept
This is otherwise known as the unit of measure. This tells us
that the purchasing power of a currency is steady, regardless of
inflation rates. This also means that the function of accounting
is to account for the currency only and not for the change in its
purchasing power.
Accrual Basis Concept
This means that income is recognized when earned, not when
received. This means that a Company can already record an
income once it delivers a product or service even if it hasn’t
received any cash yet.
Expenses on the other hand are recognized when incurred, not
when paid. This means that the company has to record an
expense once they can use something or receive service even
if they haven’t paid for it yet.
This is the opposite of the Cash Basis where a company
recognizes Income when money is received and expenses
when money is paid.
The Generally Accepted Accounting Principles (GAAP) talks
about the Uniform set of accounting rules, procedures,
practices, and standards that are followed in preparing
financial statements. They are seen as ground rules that guide
accounting practitioners in recording, measuring, and
reporting the financial information of the business entity.
For the principle to be generally accepted, it must follow these
criteria:
● Relevance: this means it should be useful in making a
decision.
●
Objective: this means that it is not influenced by
personal bias.
● Feasible: This means that it can be implemented without
complexity or cost.
The generally accepted accounting principles include:
Cost Principle
This requires that assets should be recorded at their original or
acquisition cost. This means if a company purchases a
property for 3 million today and three years after the cost of
the property is already at 10 million, it will still be recorded at
the cost of 3 million.
Objectivity Principle
This simply requires that accounting records should be based
on reliable and verifiable data as evidence of transactions. To
obtain reliability and verifiability, every transaction needs to
be with evidence. For example, purchases should be evident
by official receipts.
Materiality principle.
This means that determining the valuation of an item should
be practicable when making financial statements.
Matching Principle
This requires that revenue and expense should be recognized
in the same period. This means that if you are going to
recognize revenue for that period, you should also recognize
the corresponding expense associated with it. So, when you
recognize sales revenue, you should also recognize the
corresponding cost of sales.
Consistency Principle
This states that accounting methods and procedures should be
applied on a uniform basis from period to period. So, if you
applied straight-line depreciation last year for your fixed
assets, you should also use the same method this year.
Adequate Disclosure principle
This states that financial statements should be free from
material misstatement. Therefore, reports to be repaired should
be complete.
The Purpose of Accounting
You may be wondering why an organization should take
accounting. The following reasons explain why.
Recording Transactions
Accounting is a great way to record transactions. It helps you
record the invoices you send out as customers come to your
business and you can record the expenditures or money you
pay out in your organization.
Business Management
It also helps with the management of your business. It enables
you to plan, monitor your performance or progress, control the
running of your business and also try certain strategies to
make things work effectively.
Compliance with the law
It helps you comply with legislation. This helps you prevent
fraud and also ensures you are not involved in an illegal act
that could get your organization into trouble.
Performance Monitor
It helps you to review your performance over time and come
up with strategies that you can implement that enhance the
business overall.
Control
It enables you to keep track of people you pay and those you
owe. It gives you a form of control which is useful because
your business could suffer from liquidity problems if it has
poor forms of financial control.
Tax Accounting
As part of modern accounting, Tax Accounting is as
significant as Financial and Management Accounting. It is the
process of preparing tax returns and planning for the future
taxable years of an entity.
The main difference between Financial Accounting and tax
Accounting is that Financial Accounting includes all the
financial transactions of an entity while Tax Accounting only
focuses on transactions that can or may affect the tax charge of
an entity. It also looks at how the transactions relate to
accurate tax calculation and document preparation.
Tax accounting involves the accounting methods that
concentrate on taxes rather than how financial statements look
to the users.
It is important to note that tax laws vary among different cities
and countries, and taxation principles usually differ from
accounting principles or standards (GAAP).
CHAPTER TWO
DOUBLE-ENTRY BOOKKEEPING
What Double-Entry Bookkeeping is all About
This is a term that seems confusing to a lot of people. What it
means is that when you make a sale, record a bill, or any other
type of transaction in your business, your accounting system
will record two entries, one on the right side and the other on
the left side of an account.
The left side is called debit and the right side is called credit.
This means when a sale is being made, if the person is paid on
the spot, it will be recorded in the cash account and if it was a
credit sale, it will be recorded in another account; the
Accounts Receivable.
The action of recording things that happen in a business is
called bookkeeping. Doing two entries is called double-entry.
Putting them together, you have double-entry bookkeeping.
There are two entries because it helps keep your record more
accurate and balances it. Without double-entry, there will be
errors that won’t be easily detected and missing explanations
for these errors.
The Accounting equation
This states that the resources in the business equal the
resources supplied by the owner(s). The resources in the
business refer to things the business owns while the resources
supplied by the owner(s) refer to the resources that the owner
has put into the business.
Capital: This is the number of resources supplied by the
owner.
Assets: These are the actual resources that are in the business.
This means that Assets=Capital
Liabilities: This is the amount the business is owing to people
other than the owners in relation to the supply of assets.
The Accounting equation can be simplified as
Assets=capital + liabilities
There are two aspects to every transaction and after a
transaction, the equation must balance. To do this, we need a
double-entry bookkeeping system.
The Double-entry Principle
This states that every business transaction has a two-fold
aspect and both sides of the account must be recorded. The
double-entry system has an account for every asset, liability,
and capital. The account I mean here is a ledger account.
This means that when there is a transaction, you must consider
the two ledger accounts involved, after which you decide
which of the ledger accounts you get to debit and credit. And
if you put a transaction on the debit side of one account, you
must put the transaction on the credit side of the other account.
So you need to make two accounts where you debit one and
credit the other. Usually, identifying which of the two
accounts is relatively straightforward but deciding which one
to debit and which one to credit can be tricky.
To decide which account to credit and debit, you have to
follow these rules.
●
If you are adding an account that is an asset and you
want to record an increase in that asset account, you will
put the transaction on the debit side of that account. If
you want to record a decrease to the asset, you will put it
on the credit side of that account.
●
Liabilities and capital, in terms of debit and credit,
operate the same way. To record an increase in a
Liability or capital account, you will put it on the credit
side of the account. If you want to record a decrease in a
liability or capital account, you will put the transaction
on the debit side of the liability or capital account.
● A handy rule for remembering double-entry is that you
debit the receiver and credit the giver. In other words,
the account that receives and manages the actions is
recorded on the debit side and the account through which
the benefit came, is recorded on the credit side.
In summary, a debit (Dr) represents an asset while a credit (Cr)
represents a liability or capital.
Recording Revenue and Expenses
When you are going to buy furniture for your business, what
happens is that you are going to spend cash and because you
are spending cash, it means you are to credit the cash account
and the corresponding account for the furniture that you buy is
to be debited. In other words, when you purchase an asset, the
asset you are purchasing is supposed to be paid for. Because of
this, you are to debit the asset account, and the corresponding
double-entry is made on the credit side of the cash account
because cash is reducing.
So, anything that requires spending money, whether you are
buying an asset or purchasing goods in your business for
resale, you are to always credit the cash account (because cash
is reducing). However, the corresponding debit entry is made
to the respective asset account or the purchases account.
The same concept works for expenses. Because expenses are
supposed to be paid for, it means that the cash account would
be credited. So if you create the cash account after paying for
expenses, it means that the respective expense account has to
be debited. In other words, increases in expenses are debited.
This could be rent expense, commission expense, insurance
expense, and other types of expenses.
In summary, you debit the expense account because expenses
are to be paid for as seen in the asset account when purchasing
an asset or making other purchases. The reverse is true for
revenues. Revenue accounts are credited, as seen in sales
accounts.
Profits belong to the owners. Revenues increase profits, so
they increase capital and that makes them credited. Expenses
decrease profits, so they reduce capital and that makes them
debited.
Some Practical Examples
Below, you will see some worked examples that illustrate the
double-entry records relating to revenues and expenses.
Recording rent expense
As you pay your rent using cash, the amount of cash in your
business reduces, and the value of your rent expense increases.
The double-entry associated with this is that the cash account
is credited while the corresponding rent expense account is
debited.
Recording expense paid by cheque
The accounts affected are the bank accounts which reduced
and the Motor expense account which increased. The bank
account which is an asset is credited and the double-entry is
completed by debiting the Motor expense account.
Recording Commission earned by the business
This is revenue coming in for the business. The accounts
affected here are the cash account which is to be debited and
the commission revenue account is credited.
Recording payments of goods by cash
The accounts affected here are the cash accounts and
corresponding goods accounts. The double-entry associated
with these two is that the decrease in cash leads to the
crediting of the cash account while the corresponding goods
account is debited.
Recording rent received in cash
When you receive rent, this indicates revenue. The accounts
affected are the cash account which has increased and the rent
revenue account which has also increased. To complete the
double-entry, the cash account is debited and the rent revenue
account is credited.
Recording payment of Insurance by cheque
Insurance is an expense and was paid by cheque so the
accounts affected are the bank account (in which money has
been reduced) and the insurance expense (which has
increased). The bank is an asset, so you credit the bank
account and debit the respective expense account.
The T-Account
A T-Account is used by accountants for analysis purposes. It is
a visual representation used to learn about debits and credits.
This account looks like the letter “T”, consisting of the left
side which represents the debit side, and the right side which
represents the credit side.
Analyzing the Accounting equation:
● Assets increase with debits and decrease with credits.
● Liabilities increase with credit and decrease with debit.
● Equity increases with credit and decreases with debits.
Analyzing Equity
Partnerships:
accounts
for
sole
proprietors
and
● The capital account and revenue accounts increase equity
while the withdrawal and expense accounts decrease
equity.
● Hence, capital and revenue increase with a credit, while
withdrawal and expense increase with a debit.
Analyzing Equity accounts for Corporations:
● The common stock and revenue accounts increase equity
while the expense and dividend accounts decrease
equity.
●
Hence, common stock and revenue increase with a
credit, while expense and dividends increase with debit.
CHAPTER THREE
CHALLENGES IN ACCOUNTING
Sometimes problems occur when reporting financial
information. Some of the common problems that occur in the
reporting process are discussed in this chapter. You will also
get to know how these problems affect your business if not
taken care of and some ways in which you can manage these
problems for better running of your business.
Combining Business and Personal Expenses
Many business owners, especially those running smaller
businesses, often use personal finances for business purchases
and this is more likely to happen when they are first starting,
to get things going. After a while, they end up using their
business finances for personal purchases, especially when they
had spent a lot of personal finances to figure things out in their
business. It is not advisable to combine personal and business
funds. This makes it difficult to keep track of your actual
business expenses including the actual profits and losses made.
Also, sorting out and verifying transactions becomes difficult
and this, in turn, leads to errors in bookkeeping. To avoid these
issues, open a business account mainly for the business and
ensure that all business transactions are made with this
account.
Account Receivable and collections
Most businesses do not have a standard process for generating
invoices and following up till complete payment is made.
Having invoices created and sent when goods are bought and
services are provided will ensure a proper record of every
income and revenue being made. Sometimes businesses fail to
follow up with customers after sending invoices and this leads
to improper cash flow. A better way to do this is to implement
an automated process that not only creates invoices but also
sends out email reminders automatically to those who are yet
to pay. This will ensure that customers pay up quickly and
bring in more cash to the business.
Managing cash flow
Poor cash flow can affect the functioning of a business. A
business needs to be able to come up with activities that will
help raise funds and also put in place effective strategies for
managing debts. However, not all businesses can do so and
this is where a bookkeeper comes in. A bookkeeper makes this
a lot easier by ensuring that non-productive activities of a
business are replaced with productive ones, therefore ensuring
cash glow.
Ignorance of Tax Rules
Not being aware of tax rules and government policies can lead
to losses in a business. Some tax concessions apply to
businesses in a country and they depend on the legal structure
of the organization. To enjoy the privileges available to your
organization you must be watchful of tax reforms and the
entitlements available to your organization.
Failure To Reconcile Account Statements
Generating financial statements monthly, quarterly, and
annually helps you keep track of your business earnings and
expenses. So, if you do not update your financial statements,
chances are that you may forget to update your income
statement and it could negatively affect your business. To
prevent this from happening, ensure to work on reconciliation
when you receive your bank statements because the longer you
take to reconcile, the more complicated it will take.
Managing Payroll
Paying staff is one of the obligations of an organization or
entity. It does not only involve paying wages to staff, it also
involves incentives, tax liabilities, benefits, and other aspects.
While Managing payroll is a complicated process, a
professional bookkeeper can take care of this task, with the
help of payroll management software and there are lower
chances of making errors.
Reporting Errors
These are errors that occur from miscalculations or incorrect
input of numbers. Sometimes a business or organization can
become so overwhelmed with activities that they end up
inputting wrong and inaccurate figures. This would, in the
long run, affect the financial statement of such an organization
and discredit them before investors.
To avoid this, each organization should ensure that an expert is
assigned to manage the financial matters of the organization
and a specific time is allocated to review and reconcile these
financial statements.
Acquiring Funds
Getting funds is often a big challenge, especially for small to
medium businesses and non-profit organizations. However,
this shouldn’t be an issue in most cases because various
governmental bodies have put in place some means to help out
by giving out loans and grants. Now, most of these businesses
miss out on these privileges due to tax issues or not getting the
appropriate information on time. A bookkeeper can help out
by giving you financial information and advice, on whether
your organization is eligible for an available loan or grant and
preparing an application for government grants.
Not Keeping Proper Records and Documentation
Every purchase made by your business must be properly
documented in terms of the date the purchase was made, what
was purchased, the means through which the purchase was
made, and how payment was made. An effective way of doing
this is by keeping track of receipts. Sadly, most businesses do
not pay attention to this aspect and just toss out their receipts
after purchases have been made. Even though they seem to
occupy space, it is still necessary to have this paperwork
documented by simply organizing them properly and keeping
them somewhere safe. Another effective way to organize your
paperwork is by storing the data in a cloud account, simply by
scanning these documents and saving them in this account;
this is a better way and increases the safety of these
documents.
Accounting software is also of great help here.
With proper documentation of your expenses, you will get an
accurate view of your expenses and it will greatly help with
your tax justification.
Many businesses are faced with the challenge of properly
storing their documents and tracking receipts, and a quality
cloud-based accounting software program that can help you
keep your financial documents secure and accessible is the
QuickBooks. With QuickBooks, your business can track
expenses, create invoices and manage cash flow. This is a
great way for businesses to save time on bookkeeping and is a
useful tool for any business.
In the next book, you will learn about QuickBooks, why you
need it for your business and what you are missing if you are
not using it.
CHAPTER FOUR
GETTING STARTED WITH
QUICKBOOKS
INTRODUCTION TO QUICKBOOKS
QuickBooks is the most commonly used small business
Accounting Software. It was created by a company called
Intuit, they work very well with accountants and provide great
tools for accounting; which is why they came up with this
software.
To use QuickBooks, you can either install QuickBooks
Desktop on your computer or you can also host it virtually on
a remote server. A lot of the time when people think they are
using QuickBooks Online they are using QuickBooks Desktop
hosted on a remote computer.
QuickBooks Online
This is a popular accounting software that is specifically
designed for small businesses. It lets you record, store and sort
all your business transactions in one place.
On the QuickBooks online interface, to the left, you have
different options with the “new” button right at the top. This is
where we do most of our daily tasks. In the top right corner,
you have other options such as “my experts”, help, search,
notification bell, settings, and a link to your Intuit account.
To the right, you have your business overview where you can
see summaries of your invoices, expenses, profit and loss,
sales, and bank balances. This data can be sensitive, so you
can use the privacy button at the top to hide it from prying
eyes.
How it works
My Experts
If you want to invite your accountant, then you can click on
the “my experts” button. If you don’t have one, you can search
for one using the button in that regard, but if you are doing it
yourself, you can ignore this entirely.
Help
The help button brings up the QuickBooks Assistant board,
which can help with some of your basic questions. You can
also use this to reach a human or have a look at the frequently
asked questions.
Search
When you click on the search button, you will see a list of
your most recent transactions. You can also find your older
ones here as well and make changes to them if you need to.
Settings
Settings are very important. If you are using QuickBooks for
the first time, this is where you should go to set things up.
There are three main columns: “Your Company”, List and
tools.
Your Company
Under “your company” you can find your account and
settings. Here, you can do things like add a logo and change
your company name. You can also add your Employer
Identification Number (EIN) or Social Security Number (SSN)
for taxes, and below that, you can pick a tax form based on
your company type and choose an industry. Then fill in your
business and customer details. To the left, you can check your
usage limits, customize your sales and expenses, and fiddle
with your advanced settings.
Back in “settings”, click on “manage users” if you want to add
people to your QuickBooks account. The different user types
give different levels of access. Your “Chart of accounts”
brings up a complete list of all your business accounts. Please
be careful with this one because these accounts should be
tailored to your business. If you are getting started and you are
new to bookkeeping, then I would recommend you get some
help from an accountant.
If you want to turn on the dark mode, you can access it from
QuickBooks labs.
Lists
In the “List” column, you can manage all the products and
services that you sell. You can also check your current
transactions to see what is being scheduled to be paid each
month.
Tools
In the “Tools” menu, you can order business checks, import
data into QuickBooks from Excel or Google sheets or you can
bring in your QuickBooks Desktop data if you’re making a
switch. There is also an option to reconcile your accounts, add
a budget and see the audit log. Then there’s “smart look”
which enables you to share a code with other users to let them
see your screen and “Resolution center”.
Moving onto the left, you click the “new” button when you
want to create things for customers, vendors, employees, and
do other things.
For example, if you sell something to a customer, you need to
create an invoice so that they can pay you. Add a new
customer or pick one of your old customers in the drop-down
menu, select what you sold to them, pick a quantity, add in a
sales tax or discount if you need to, save and send.
QuickBooks would generate the invoice for you and email it
directly to your customer.
You sell things to customers and buy things from vendors.
There are two ways to record purchases; you can use
“expenses” or “bills”. If you’ve already paid for goods or
services, then enter that transaction into the “expenses” option.
Simply enter the amount, what you paid with, attach the
receipt to keep things organized, and save. Alternatively, if
you want to save time, you can snap your receipt on your
phone, instead of using the QuickBooks App and it will scan it
straight into the system. “Bills” are for situations where you
buy something and haven’t made payment yet. The formula is
very similar to that of “expenses”, but this time you need to
enter the terms and due date. Besides that, it’s the same
process.
On the “Employees” column, you can manage your payroll
and fill out the timesheets.
In the “Other” column, you can post journal entries. These are
a bit technical and you have to know how accounting works to
be able to use it so you don’t create mistakes.
Below the new button, we have the dashboard button,
followed by the banking tab.
This is where you link your business’ bank accounts and credit
cards to QuickBooks. This is one of the first things you should
do when getting started with QuickBooks. Every day
QuickBooks would automatically and securely pull in all your
transactions. It would then try to match them to your invoices,
bills, and expenses that you entered using the “new” button. If
it has done this correctly, then all you would need to do is to
click “match” to confirm.
Next on the left bar is “sales”.
This section is all about your income and invoices. At the top,
you will find a graph of your business’ income over time. If
you want to look at a different period, then you can change it
in the top corner. Below is a summary of your invoices. At a
glance, you can see what’s been paid and what hasn’t been
paid yet. If you move through these tabs, you can see your
sales transactions and invoices which have been nicely
arranged by urgency. If an invoice is overdue, you can click on
the “receive payment” tab on that particular invoice to email a
reminder. Also, you can manage your list of customers, your
products, and your services.
Next, we have “expenses”.
This is all about the money flowing out of your business.
You’ve got a complete list of all your bills and expenses. In
the “vendors” tab, you can see all your suppliers along with
the summary of what you owe.
The “payroll” option helps you to manage all your employees
and contractors.
The “Reports” tab is where you run all your financial
statements such as your income statements, balance sheet, and
cash flow statements.
In your “taxes” tab, you can manage your sales tax if you are
registered for that, monitor your mileage in your “Mileage”
tab which you can track using the QuickBooks Online App.
There’s the “Accounting” tab where you can find your Chart
of Accounts and your Bank Reconciliation; this enables you to
record all your transactions between QuickBooks and your
bank account. I recommend you do this at the end of every
month to keep things in order.
Finally,
“My Accountant” is a place where you connect with your
accountants and invite them to look at your books.
QuickBooks Desktop
QuickBooks Desktop has the well-known flowchart-style
home screen where it shows how different transactions flow
through the accounting system. Usually, QuickBooks Desktop
is on a Windows computer but there is a Mac version as well.
QuickBooks Desktop comes in three different editions: Pro,
Premier, and Enterprise. QuickBooks Pro is limited and is
mainly for the smallest companies. The Mac version of
QuickBooks is similar to QuickBooks Pro. In general, if a
company can be using QuickBooks pro, it is better off using
QuickBooks Online. QuickBooks Premier, the most common
version, has a lot more inventory functionality and allows
more users and transactions. QuickBooks Enterprise is for
larger companies or manufacturers who have complex
inventory needs. It has a lot more features and add-ons around
inventory tracking, costing, and advanced pricing features.
Almost every year, a new edition of QuickBooks is released.
So you might see a QuickBooks Premier 2019 or QuickBooks
Pro 2018. In general, this is usually an update to a few things
like added features or changes in the look of some features. On
the bright side, this is nice because you don’t have to relearn
the software every year.
Choosing The Right Version
Now you know of the QuickBooks Desktop and QuickBooks
Online versions, the next question you may be asking is, ‘who
should use which version?’
For bookkeepers, it depends on whether you are starting your
own bookkeeping business and wanting to work with clients,
maybe you want to work from home or you are looking for
employment as a bookkeeper in a company. If you are looking
to start your bookkeeping business, I would recommend
QuickBooks Online. If you are looking for a job as a
bookkeeper in a company, I would suggest you either learn
both or first learn QuickBooks Desktop. This is because small
businesses that require their bookkeepers to be at the office
mostly use the desktop version. Many businesses are moving
to QuickBooks online, so it’s good to learn both. If you learn
both platforms you are maximizing your opportunity to find a
job with a company out there that is looking for someone with
QuickBooks knowledge.
For businesses, those that do not have more advanced
inventory tracking and costing means like those needs that
manufacturers have can use QuickBooks Online, as this is a
great solution for most small businesses. Since it is cloudbased, you can access your books from anywhere and you
don’t have to back up your data, whereas for QuickBooks
Desktop you have to make sure that your data is backed up,
otherwise you risk losing it.
For companies with heavier inventory costing means,
QuickBooks Desktop might be a better option for you.
QuickBooks 2022: What is New?
Subscription
QuickBooks desktop 2022 will only be sold as a subscription
product and it is an annual subscription. So now you must pay
annually for a QuickBooks desktop. It works the same way as
before. It is still desktop-based which you would have to
download and install, you still need a Local Area Network
(LAN) for users or a hosting service if you want to work
remotely. No other thing has changed.
The good news here is that you are paying annually for the
software or the user, you’re not paying per company. So, it’s
still of much better value compared to online, because with
QuickBooks online, especially if you manage multiple entities
or businesses, you’re going to be paying for your subscriptions
per entity while with QuickBooks desktop, you have unlimited
companies that you can manage with one license.
Because the annual subscription is required, if a customer stop
paying, the software stops working. That means you still own
and can control the data. The QuickBooks database will be on
your computer and you will be able to transfer to your
accountant or give it to someone else but to open it, look at it
and run reports, you need to have an active subscription.
However, QuickBooks does have a 30-day free trial, to help
you keep your database so whenever you need them, you can
be able to pull them.
Other than the software, the annual subscription includes the
following:
●
Free annual updates, so anytime there is an update or
upgrade on the software.
● Unlimited customer support
● Intuit data protect, which is a PC version App that can do
a backup of the QuickBooks data file and upload it to a
backend server. So, if your data or computer, you will be
able to restore your data fairly quickly with this service.
●
QuickBooks Desktop Mobile App for receipt
management, uploading bills, and other attachments.
This Mobile App is available for Android and iPhone.
The newer features available for Android only include:
Upload bills into receipt Management, upload an
attachment from the app to be attached to a transaction
inside
QuickBooks
Desktop,
and
Warehouse
management which performs pick/pack/ship functions
for the Inventory or Sales Order Fulfilment process.
Please note that the Subscription option is not new as
QuickBooks has been offering subscription options for a
while. It’s just that in the 2022 version, it won’t be an option
anymore; everybody has to go through a subscription or not
use the newer versions of QuickBooks.
The annual subscription Pricing for the desktop version is seen
below:
Improvement in the Mac Version
QuickBooks Desktop for Mac is greatly improved. This
features an Improved bank feed where they added “Intuit
categorization Service”. This enables QuickBooks to do
automatic categorization or suggestion of bank transactions.
They added Receipt management which is also available for
QuickBooks Windows but they didn’t add the mobile
functionality.
They also added the ability to automate customer statements
so every month you can send those statement reminders.
This Mac version uses the latest Apple silicon processor-based
Macs that make QuickBooks impressively fast on mac.
Another new feature that exists is creating customer groups.
This is also available for the PC version. Here you can group
your customers based on customer type, location, and balance,
and based on those groupings you can automate email
reminders, invoice reminders, or statements.
You can also choose from multiple email contacts. This means
that if you have multiple emails for a customer, you can pick
the email that is going to get the document when it is sent.
They also added the ability to export your register with the
reconciliation status. This is not available in the desktop
version.
QuickBooks Desktop
QuickBooks desktop was completely revamped to work on a
64-bit platform, and this means it is now about thirty-eight
percent faster. For some it might be 100% faster while for
others it might be 30% faster, it depends on the company size
of your current configuration.
Things to note
Because of the subscription concept, you must now log in to
an Intuit Account. This is a web-based account that requires a
username and password for your QuickBooks to work and this
notifies QuickBooks Desktop that you have an active
subscription. Your Intuit account login is not the same as your
Desktop login details. This would probably be confusing for
some users. So it is important to note that your Intuit account
is one thing and the QuickBooks database user account is an
entirely different thing and you have to be able to differentiate
them as resetting your Intuit password is not the same thing as
resetting your QuickBooks Desktop file password.
CHAPTER FIVE
SETUP AND CONFIGURATION
This chapter will cover the installation, setup, and use of
QuickBooks that will provide you with a good background for
your business accounting. Although QuickBooks cover all
aspects of your business accounting, each business is different
and may require some customization, providing the best
support for your specific needs.
How To Download and Install QuickBooks
To get the QuickBooks Desktop program up and running, you
have to get the software running on your computer from the
Intuit website, which is the official website and owner of
QuickBooks. You can do that either through the free 30day
trial version or by purchasing the software.
The next step is running the installer. When you double-click
on the installer, this would open up to the InstallShield Wizard,
as seen below.
Click next to continue. You will be taken to another screen
where you have to accept the terms to continue.
Please note that for a smooth installation, it is advisable to
close any open programs, especially anti-virus programs.
Next, enter your license and product numbers in the spaces
provided.
To get these numbers, go to your intuit account and you can
find your license number. You can request your license and
product number via email and Intuit will send that across to
you, which you will need to complete this process.
Next, choose your installation type.
The “Express”, installs using the default settings and that is
what most people use. This is typically the best option.
Next, you wait for the installation process to complete. This
will take some time. Once it is done, you will see the screen
which says the installation process is complete.
After you do the installation, what you will get is a shortcut
icon representing the fact that the software has been installed.
This would then be the icon that you would be using to run the
program in similar ways you might have used in the past to
run other programs.
CHAPTER SIX
SETTING UP QUICKBOOKS
When you think about the terminologies in accounting, just
like any field, some terminologies are different and even more
specialized in some ways for people that use the QuickBooks
software which you want to understand to communicate better
with people that are using QuickBooks. “Lists” is one of those
items that are more likely to be used by people that are using
the QuickBooks software, referring to certain items as lists.
The most common two items referred to as “lists” are the
Chart of Accounts and the Items List. These items are located
under the “Lists” dropdown.
In this chapter, I will talk about these lists and the processes
involved in setting them up for use. There are other items that
I will talk about, which are found in the flow chart of the home
page and these are not items that you would be doing daily but
rather, items that you need to do in the set-up process to put
the company files together.
Setting Up Chart of Accounts
The Chart of Accounts is the list of all the company’s accounts
and their balances. In QuickBooks, these accounts are used to
categorize every single financial transaction.
You can access the Chart of Accounts by clicking on
“Accounting” from the navigation bar as discussed earlier. The
order of accounts that appear on the Chart of Accounts is
determined by the account type. The type of account
determines which type of financial statement it appears on and
how you use it on transactions. The accounts are arranged in
order of asset accounts, liability accounts, equity accounts,
income, cost of sale, and expense accounts.
To create a new account, scroll to the top of the chart of
accounts or just right-click and choose new or use the shortcut,
Ctrl l+ N.
Next, choose what type of account you want to add. Click
continue, and then type the account name. The other
information is optional. Click “Save & close” or “save &
new”.
There are also other places in QuickBooks where you can also
add accounts. If you are writing a check in the checks window
and it is not yet in the Chart of Accounts, once you click the
drop-down arrow, there is an option to add a new expense. Or
if you are creating a journal entry, and you want to add an
expense, there is also the add new button where you put in the
type of account you are adding. So, you don’t have to go back
to the home page and click the chart of accounts to add
accounts.
To delete an account, just highlight the account, right-click and
click “delete account”. But if you are going to delete an
account that has already been used in a transaction, you won’t
be able to delete it because it will mess up your balances but
you can make it inactive. Simply right-click the account and
click “make the account inactive”. To make it active again,
click include inactive” and click on the “x” mark right at the
top.
If you would like to activate the account numbers, just click
“edit”, “preferences”, “accounting”, “company preferences”
and then “use account numbers”. So anytime you add a new
account, when you right-click to add a new account, it will
now ask you for the account number.
If you double click on a balance sheet account, from bank to
equity, it will give you a register. But if you double click on
income or expense account, it will automatically give you the
report. So, if you would like to generate a report on the
balance sheet account, just right-click, then click “quick
report”.
You can also sort the chart of accounts by clicking on the
headers. You can sort it by name, type, or balance total, but the
default is sorting by the type.
Creating A New Company File and Import Lists
If you already have a company file and you want to create a
new one, you want to have the same list and you don’t want to
start totally from scratch, I will show you how to export your
list and then import them into a new file.
The first step is to go on the “file”, go to the “utilities” and
then “export”, “list to IIF files” and you can choose exactly
which list you want to import to. You can choose whether you
want to do your chart of accounts, customer list, vendor list,
employee list, customer types, class list, item list, payment list,
or anything you may like to change. You can import it, go in
and edit it or you can export it and open it up in excel, edit it
and then import the newly changed file. After determining the
list, you want to use, click “ok” and you choose where you
want to save it. Save it somewhere that you will find it easily.
Next, what you will do is to create your new company file.
You can also do it to an existing company file as well. To
create a new one, click “File”, “new company”, do an express
start, go in, create a name, enter the other details and then go
ahead and create your new company file. Once your company
file is created, to import our list, you can go under “file”,
“utilities”, “import”, you export it into Excel where you can
customize it, otherwise if you just want the exact list you can
click on “IIF Files”, find the files you created and click
“open”.
Remember, you brought the list over but not your transactions.
If you go over to Chart of Accounts, you will see the chart of
accounts brought over and all other things you selected.
Sales Tax Set-Up
To set up the sales tax, go to the “edit” drop down,
“preferences”, turn on the sales tax and add in the items there
or in the items list which will then give the items the back up
for the sales tax to be applied out for invoices or sales receipts
as you make sales. To set up the sales tax in those areas,
remember that the sales tax is a state and local tax, and you
might be subject to multiple states and local taxes, depending
on your circumstances and this can complicate the setup
process.
Once that is set up, you have less difficulty applying the sales
tax to the applicable items that you would be selling. Usually,
that is going to be some inventory items.
If you go to the “Lists” drop-down and the “Item list”, you
will see the sales tax items. If you hit the drop-down “sales tax
items” you also have the “sales tax group”. Within the group,
you can then select multiple items that add up to the sales tax
item that you would be subject to in your particular locality.
That group then is the actual thing that will be applied out to
your invoice. Make sure that you set the proper item or group
as the default setting. Within the items list, you will see which
one of these is subject to the sales tax.
Setting Up Items List
The item lists are foundational tools that would be used to
make some of the data input forms. These forms create
financial transactions such as the invoice, the sales receipts,
and sometimes the bills would be driven to make more input if
the Items are set up properly such that when you populate the
items it would then calculate the proper amounts and record
them in the financial statements in the proper way. The two
types of Items are the Service items which involve rendering
service and the inventory.
To set up the items list, go to the “Items” drop-down below,
then click on “New”.
Next set up the type, whether you want to set it as a service or
inventory item, and your item name.
And then you have your rate, this is what will be showing up
on the invoice when you charge for it. This is going to show
whether it will be taxable or non-taxable with regards to sales
tax, in other words, when you create a sales receipt or an
invoice, do you have to charge for sales tax or not? Service
items typically do not have sales tax in the United States, so
you choose the applicable portion. Next, you have to choose
the type of account that will be hit when you record it.
The inventory item looks complex to set up.
You have to enter the name, subitem, Manufacturer’s part
number if applicable, and then you have the description (these
are the descriptions that will be on the purchasing forms or
purchase order that you create when you create the inventory),
cost(how much you purchase it), account (the cost of goods
sold), preferred vendor, Sales price (include a sales price here
if it is a fixed one, otherwise, you can choose not to add it here
and add manually as you make sales), tax(you determine if it
is going to be taxable or not, and as an inventory item, it is
subject to sales tax), Income account(this will be effective as
you enter transactions). After correctly filling in these details,
save and close and your items list is ready.
Setting Up and using The Price Level List
You can set up different price levels for different customers.
This means that if you have commercial or retail customers,
you can set up different price levels to give certain discounts.
So, once you set up the item and you put in a certain price,
when you create a price level, there will be a fixed percent
discount.
To get started, go to your list drop-down menu, click on the
price level list. Right-click and click “New”. Enter the details
by adding a name, price level type (you can choose if give a
fixed percent or per item), decrease or increase item prices by
the percentage you want, and look at the other options
available.
To apply to a customer, locate the customer in the customer
lists, go to “edit”, payment settings and you will see an option
for the price level. So, you can pick which price level you
want. You can set up different price levels for different
customers or jobs. As create an invoice for that customer, you
will notice that it has automatically applied the discount, so
you have to be careful to check that pricing so you don’t give
discounts to people that are not supposed to be getting a
discount.
Setting Up Payroll and Managing Your Payroll
Payroll is not free in QuickBooks; you do have to sign up with
one of the available subscription services. If you’ve never
signed up with a payroll subscription, you will probably only
see these icons: Enter time and the payroll center. On the Intuit
website, you can compare the different subscriptions that are
offered and decide which one works best for you or your
business.
To set up your payroll, go to “Edit”, “Preferences”, click on
“payroll and employees” and then you can go to the Company
Preferences tab and start turning some of the options on. You
will turn on “full payroll” and if you want to do it manually
you can, but keep in mind that if you do this manually,
QuickBooks will not give you the correct tax table deductions.
You do have some options over to the right for payment
voucher printing (that is after you do your payroll), workers
compensation options, and second vacation options. If you are
working with a class feature, you can choose to apply a class
for an employees’ entire paycheck or you can apply a class
based on their earnings item. This means if they did framing,
for example, it might be applied to one class, whereas if they
did some service work, it might be applied to a different class.
You can display your employees by first name or last name
and you will see some other options below as well which you
can go through and set up. Based on what you’ve set up, it is
going to start creating some icons so you can go through the
payroll process.
Next, I will talk about setting up payroll items. Payroll items
are things that you add to or deduct from an employee’s
paycheck. QuickBooks would have some of these set up for
you automatically but a lot of these you will have to add on
your own. I advise you to set up your payroll items before you
set up your employees so that when you go to set up your
employees you can take those items and put them into the
employees set up.
To set up your payroll items, go to “Employees”, “Manage
payroll items” and click “New”. You have the option to go
through an easy setup or a custom setup. I suggest you go
through the custom setup because it asks you a few more
questions and sets things up the correct way. Click “Next” and
the first thing QuickBooks wants to know is the type of payroll
check, next, enter the name of the deduction, the name of the
agency to which the liability is paid, keeping in mind to pick
the correct liability account. If there are taxes that would be
affected by this payroll item you check this off as you proceed.
Fill in the other options and finish when done. If you need to
edit it, right-click to edit and you can go back through and set
up anything you missed the first time.
Setting Up Employees
As I stated earlier, you have to set up the payroll items first so
that when you are to set up the employees, you can tell
QuickBooks which payroll items apply to this employee.
This looks similar to the customer or vendor center. If you
click on an employee, you will see the information about the
employee in the top left corner, and on the top right corner,
you can run some reports based on the employee. You are
going to see any transactions for the employee below and most
of these would be paychecks. Some of these employees are
salaried employees while some are hourly employees.
To get started, click on “Employees”. When you are setting up
an employee, you are to put in their personal information and
other details using the tabs provided. In the earnings area, you
will see a list of the payroll items you had entered. You will
also get to indicate if the employee is salaried or hourly. If the
employee is salaried, you will put in the annual rate, and if on
hourly pay, you will put the hourly rate. You will also need to
fill in the direct deposit, taxes, and sick/vacation options.
Now that you have your payroll and Employees set up, you
can start running payroll.
Paying Employees
When you get ready to run payroll, just click on pay
employees. At the top of the screen, you are going to see any
payroll schedule that you had already created and if there
happens to be an overdue, you will get to see it. A payroll
schedule means that you have a group of employees different
from another group of employees. One group might be paid
weekly and another group might be paid monthly. If you want
to create a payroll schedule, click “New” in the drop-down
payroll schedule and set it up by filling in the details you see.
If you start a payroll schedule it knows which employees are
already in that group and will pay only those employees.
At the bottom, you will see new or recent payrolls. There is
also a lot of help regarding payroll below.
Setting Up Customers List
There are two different places you can enter customer
information. You can go to “sales”, make sure you are in
“customer” and then “new customer”. Here, you have all the
customer information you need to enter.
Another place to do this is in the Invoices. So under “sales”, in
“invoices”, go to “create Invoice”. You can start by entering a
name, and if that name is not already a customer, you can then
add it as a new customer. Here, you have details that bring you
to the same screen that can be accessed through the customers’
dashboard.
If you are transferring customers from previous software, you
will have the customers list in an Excel or CSV file after
which you can easily import them into QuickBooks.
Just go to “sales”, “customers”, but instead of “new
customers” click on “import customers”. This gives you an
option that allows you to select your excel or CSV file, map
the data from your excel file to the appropriate QuickBooks
variables and then complete the import. If you download the
sample file provided, you will see what the Excel file should
look like, as a guide.
Browse the file to upload it to QuickBooks. You can also do
this from Google sheets. Proceed by clicking “next” to map
your data. It automatically tries to map your data; however,
you can change it if you want to do so. If your spreadsheet
does not match the fields in QuickBooks, this is the screen
where you do the mapping so they can match the variables.
Once you get that done, click “next”. This opens up all the
customer information that you are importing, giving you a
chance to make adjustments. When you are satisfied with the
data, click “import”, it will go through the process and when it
is done, you now have your customers list updated to
QuickBooks.
Setting Up Vendors List
To manually import your vendors, go to “Expenses” in your
left menu bar and then “vendors”. This lists all your current
vendors. To add a new vendor, click on “new Vendor”. Most
of the details on the screen are self-explanatory, so you just fill
in the appropriate details.
To import vendors, instead of clicking “new Vendor”, click
“import vendors”. This will bring up a wizard that will help
you import either the CSC, Excel file or from a google sheet.
Browse and select the sheet, hit “next, and it will bring you to
the mapping screen. If your names did not map perfectly, you
can go through them here and make changes. After everything
is mapped, go to the next step and this gives you a final chance
to go through your work for any mistake and make
corrections. If there are any vendors in your list which you do
not want to import for some reason, you can deselect them on
this screen. When you are satisfied with the list, click “import”
and you have your vendors list added to QuickBooks.
Setting up Fixed Assets List
Fixed Asset is something of significant value that is necessary
for the operation of your business-like computers and some
other equipment. They are not for immediate sale but they are
of value. since they are useful for a long time, you don’t
completely charge their entire cost for the year which you
purchased them. Instead, you spread the cost over several
years: this is called the Useful Life of Asset. However, over
time their value declines constantly from the day you
purchased them; this is called depreciation.
This method lets you see each asset cost and its accumulated
depreciation separately in your balance sheet. To do this,
create a primary fixed asset account for each asset and then
track its depreciation with QuickBooks Online which then
creates two subaccounts for each primary fixed asset account;
one for its original cost and one for its depreciation.
To create a primary fixed asset account, Go to the Chart of
Accounts, then click the “new” button to open the accounts
window. From the account type drop-down, select the fixed
assets, then select the correct detail type for the fixed asset
from the following drop-down. Ensure that the description of
the detail type appears in the box under it. Then fill in the
other details. Then check the “track depreciation” of this asset
checkbox to automatically create the two sub-accounts for the
original cost and depreciation. Doing this shows four more
fields in the accounts window; the original cost, its “as of”
field, the depreciation, and its “as of” field. If you are creating
an account for a new fixed asset, you should leave these fields
blank. This is because the value of the asset comes from the
value of the transactions you still need to enter, like the loan
you received or checks you wrote to buy the new fixed asset.
New fixed assets also wouldn’t have any depreciation to enter
yet. You only use these fields to record existing fixed asset
values when you are initially creating a company file.
However, to record the values for existing assets you’ve
already purchased, enter the original cost of the asset into the
“original cost” field and the day you purchased the asset into
the “as of” field. In the depreciation, enter the accumulated
depreciation of the asset as of the day you are entering it into
your company file and the date as of which the depreciation
amount is considered current in the “as of” field. To save the
account when finished, click the “save and close” button. You
can see your fixed assets list in your Chart of Accounts.
CHAPTER SEVEN
SETTING THE ACCOUNT
PREFERENCES
Many of the preferences are going to be most applicable when
you first set up the company file and some of those
preferences you may have to change as you go into a company
file that already has its preferences set up.
To get into the preferences, go to the Edit drop-down and you
will find it at the bottom.
The way the preferences window works, you’ll notice there
are groupings on the left and when you come in, for each of
these groupings, there are two tabs at the top for “my
preferences” and the “company preferences”.
In this chapter, I will go into detail on these preferences and
how they work.
Accounting Preferences
Here, if you click on the “my preferences” tab you will see
that there are no options. If you click on the company
preferences tab you will see some options. If you go to your
Chart of Accounts, you will notice that they are arranged
alphabetically by type. In the company preferences tab under
the Accounting grouping on the left, if you check “use account
numbers” when you go back to the Chart of Accounts, you
will notice it now has general ledger numbers on the left. So
now they are sorted by type, but this is now done numerically
instead of alphabetically.
While running reports for your company, you can break down
your company into smaller sections. For example, if you have
a business that has multiple locations, if you turn on the “class
list” and every transaction you create will have a drop-down
where you can pick one of the different locations that the
transaction is for. If you do that consistently, you can run a
report for the entire company, but you can also run the same
report per location. This is called class tracking and it is very
good for options like locations or if you want to break down
the company into departments.
General Preferences
In the “my preferences” tab, there are a few options you would
need to turn on. Starting with the very first one, “pressing
enter to move between fields”, if you don’t have this checked,
what will happen is that if you are typing in a form, let’s say
you are typing in an invoice for example and you hit the enter
key, thinking you are going to move on to the next field, what
it would do is save and close that invoice which you may not
realize and you will enter a second one. If you check this box,
you can use the enter key or the tab key at any time to move
back and forth between your fields.
There are a lot of other little options in this window as well.
When you check on the option that says “automatically recall
the last transaction for this name”, the next time you pay an
order using the same vendor name, it prepopulates the latest
check for you and you just go ahead to change the amount.
This will keep your accounting consistent and a lot less typing
for you.
Items And Inventory
In this case, you will have to click on company preferences. If
you went through the easy step interview and indicated that
you do not track inventory, then this would not be checked. If
you want to now track inventory you can come in and make
sure it is now checked.
The other thing is that if you see the “you do not have the
purchase order” option on your home screen, it is again
because this is not checked.
Jobs And Estimates
If you are doing job costing in QuickBooks which means that
for every transaction you create, you are going to choose
which jobs it applies to, you might want to look at some of
these options.
Where you are asked if you create estimates, if you said in the
easy step interview that you do, but maybe you forgot to do
the progress invoicing, you can turn it on or off here.
Payments
There are a lot of options for you if you go to the company
preferences.
If you check the box that says “use undeposited funds as a
default deposit to accounts” what that means is once you start
invoices and then you start receiving payments it will put that
payment in your Chart of Accounts, in an account called
Undeposited funds.
You can also set up online payments. You can email an invoice
to customers. If you want the customers to be able to click on
an invoice and pay you right there with a credit card or using a
bank transfer option, then you can check this right here. You
would have to go and set this up with Intuit.
There is also an option to send payment reminders to your
customers. QuickBooks will prompt you to send these
reminders at the time you had indicated.
Payroll And Employees
When you went through the easy step interview one of the
questions you were asked was if you wanted to use the payroll
feature. If you had said no, you would have a single icon on
your home screen to set it up if you changed your mind. You
would need to come in here and choose “full payroll” to see
that icon. There would be some preferences for payroll that
you could use. You can go ahead and look at some options for
pay stubs, workers’ compensation, and sick/vacation.
There are other options you can explore as well such as
recalling some actions that are on previous paychecks and
sorting your list of employee names.
Reminders
These are things you can have QuickBooks remind you, that
you have to take care of. It might be that you have checks to
print, some overdue invoices, there might be some to-dos you
had created. You can have QuickBooks show you those in a
summary or on a list. This means if you have several checks to
print, it will just give you the total of those checks and if you
choose the list option, it will show you each check
individually. Also, for some of these, you can have it remind
you earlier than the due dates if you want and you can put in
the number of days right at the boxes.
You will notice that the reminders do not automatically pop up
on your screen to remind you that you have t take care of these
things. The only time you see the reminders is when you first
open the company files as there will be a white window there
that will list all of these things and you won’t see it again once
you close that window.
The other thing is that under the tab that says “my
preferences”, you need to have this checked because if you
don’t, you will not see the reminder windows at all.
Reports And Graphs
There are some reports that you need to modify the options
before opening. You can check the box in the “my preference”
tab and it will prompt you for things like that.
There are also some options under the company preferences
that you should know about. One of these is that when you run
reports in QuickBooks, they are automatically on Accrual
Basis and you may want to run them on a cash basis. Though
you can change that on each report, you can also change it
right here so they are automatically on a cash basis.
Sales And Customers
Under the “my preferences” tab there is an option called
time/costs. What that allows you to do is that if you incur any
expenses that you need to turn around the invoice of the
customer for, then you can pull those onto an invoice. You can
have it prompt to automatically add those when you pull in a
specific customer or job or you can have it ask you what you
would like to do.
In the company preference, there is a couple of things you
might want to know about. For example, if you have a
particular shipping method that you use, you can have that
pulled in automatically but if you are not shipping anything,
none of these would apply to you.
Sales Tax
One of the questions in the easy step interview was if you
charged sales tax. If you said no initially and later changed
your mind, you can come here and say yes.
It is also going to ask you to set up your most common sales
item. You usually have to go out of the preferences window to
do this and you will have to go under “Items and Services” to
set that common sales tax and then you come back here and
choose it from the list. You can also indicate if most of your
items are taxable or not and there are other options about
paying sales tax which you can set up as well.
Send Form
Remember that in QuickBooks you can send invoices,
purchase orders, and things like that through email directly
from QuickBooks. If you do, then there’s going to be a cover
sheet that goes with it. If you go to “Edit”, you will see a
template of this sheet. You can change this to whatever you
would like or you just create your own if you do not want to
use the basic one.
Spelling
If you are under the “my preferences” tab, you can check or
uncheck the “Always check spelling before printing” option.
This is a great feature to help your spellings check before
sending out invoices.
Time And Expenses
In the company preferences tab, you can turn the time tracking
on or off. You can also specify the first day of your workweek.
There at the bottom, you also have some invoicing options
which you can use to track your reimbursed expenses as
income and mark all expenses as billable.
Conclusion
After setting your preferences, you might see that some new
icons have appeared on your home screen and these are
because you turned these options on or of.
CHAPTER EIGHT
BOOKKEEPING BASICS OF
QUICKBOOKS
In this chapter, you will learn the bookkeeping basics of
QuickBooks. A bookkeeper can carry out the following
operations with QuickBooks: Invoice customers, pay vendors
and track inventory. I will show you the steps involved to
ensure the seamless and accurate running of QuickBooks as a
bookkeeper.
Invoicing Customers
An invoice is a document that provides a detailed description
of the products and services you have provided to customers
and their respective prices. If customers do not pay you at the
time of the sale, then you need to keep track of what they owe
you so you can ensure that payment is made in the future, so
invoices help you manage your account receivable. Invoices
are therefore used for sales made on a credit or part payment.
In the previous chapters, I had talked about creating estimates
and then creating invoices based on those estimates. If your
business does not use the estimate feature, just start with
“create invoices”.
In the invoice window, you will be asked to enter your
customer or job and this information will appear based on how
you had set up your customer. Next, will also be required to
enter the class you would like to associate this invoice with.
After that, you will the template list. In QuickBooks, you will
have several predefined templates for invoices. You do have
the ability to customize these or create your own. You will also
have to enter the due date for this invoice as other options such
as the date of invoice, invoice number and terms would have
already been provided by QuickBooks based on your previous
settings.
At the bottom of the invoice, you will be required to enter
some details. Under “items”, there’s a drop-down arrow where
you can see the list of items available to use. Other details to
include here are description, quantity, unit of measurement, tax
and you will also notice that QuickBooks would calculate the
quantity times the rate to give you the amount.
Below your items, you will see your Customer message
window. Here, you can include an appreciation note to your
customers. To the right, you will see the sales tax rate that this
particular customer is charged. So you will notice it tells you
the actual rate and the amount of sales tax being charged on
the total invoice. Below this, you will see the total amount of
the invoice itself.
Below the invoice on the right, you will see a couple of
checkboxes, “to be printed” and “to be emailed”. If you would
like to print and email a batch of invoices, you could certainly
do that and email or print them all at once.
Receiving Payments
After creating an invoice, you will want to get paid and you
can do this with QuickBooks. This is important because you
need to make sure you are not working for free and secondly,
you need to reconcile your bank statements with QuickBooks.
To receive payments, you can go in two ways. You can use the
desktop Icon that says “receive Payments” or you can go into
the top menu that says “customers”, click on it and select
“receive payments”.
Enter the details in the appropriate boxes. These include the
customer you are receiving from, payment amount, payment
method. Make sure the date matches your bank statements so
you do not have issues when reconciling these transactions.
When you are done entering all this information, you need to
confirm that you have selected the correct invoice that you are
getting paid for and that the amount you are receiving is
correct. If everything is entered correctly, you can go ahead
and complete your journal entry by clicking “save and close or
save and new”.
To keep track, I suggest you check your accounts receivable
reports at least once a week.
Paying Vendors
There are two options you can use to pay bills. On the home
screen of the QuickBooks desktop, you can simply click the
“pay bills” button or click the vendor drop-down menu at the
top of the screen and pay bills. Either way, it will take you to
the same place.
When you proceed to pay bills, it brings up the screen with all
the bills that have been entered for the company file. You can
do certain things on this screen.
At the top of the screen, you have the option to show all bills
or shows bills due on or before a certain date. You can choose
to pay all bills or pay some selected bills. Also, if you want to
make a partial payment, you simply highlight and enter the
amount you are ready to pay, and below it, QuickBook will
indicate that you still have an amount due to this company.
Below the bills tab, you will see a couple of other things. It’s
going to show if you have discounts that can be used, if you
have credits with this vendor you can set the credits against the
bills you are paying. The payment method is very important,
so you need to set up your payments. You need to make sure
your payment is coming out of the right account. So if you are
paying by cheque, make sure it is coming from your cheque
account. So whether you pay through cheque, credit cards, or
online payment, after picking the payment method, click “pay
selected bills”, a screen will pop up for more details after
which you are done.
Reconciling Your Accounts
Before we get started, I want to refresh your memory with the
checking account register and you will remember I told you
that some of these transactions already have check marks on
them. This means that those transactions have been reconciled.
Be careful not to uncheck these and not to put a checkmark on
those that are yet to be checked because this would affect the
reconciliation.
On the home screen of your Desktop, click on “reconcile”.
The first thing you are going to do is tell QuickBooks which
account you are trying to reconcile and then make sure your
statement date matches the date on your bank statement. You
will also notice that you cannot change the number in the
beginning balance box. If you reconciled last month, then last
month’s ending number is this month’s beginning number. If
you know you reconciled last month and this is different when
you come in to do this month, then you should locate your
discrepancies below. This runs and reports and shows you
anything you changed since you last reconciled. What may
have happened is that you’ve unchecked something in the
register or you deleted a transaction that you already
reconciled.
If you have a service charge make sure to plug that in and
choose the correct account, in the account section. If you have
any earned interest, make sure to create an account called
interest income. If you are using the class feature, make sure
you are choosing the right class.
When you hit continue, it will open up another window. The
way this window is laid out, you will notice on the left, is
anything that came out of the bank account, and on the right is
anything that went into the bank account. Your job is to look at
the bank statement. If it is on the statement, check it off, if not,
do not check it off. This is a great way to see if you missed
entering something or if you entered something twice or if you
even put in the wrong amount. To make any changes, just
double-click the transaction, after which you save it.
When you look down at the bottom, it will tell you the total of
your check and you should make sure that is the same number
on your bank statement. If these two numbers match your bank
statement, it is balanced. If you see that the difference is zero,
that’s what you want. If it is anything other than zero, you are
not balanced.
When you are done, you may be prompted to run
reconciliation reports and you can decide to print or not.
Make sure to reconcile all your bank accounts, credit cards,
and other accounts to make sure you are in balance.
Managing Inventory
You can also use QuickBooks to manage your inventory. This
means you will be able to track the number of items you have
in stock, the value of your inventory after every purchase and
sale. As you order inventory items, you will receive the items
and then you’ll later sell the items from the inventory app.
QuickBooks would help you track each inventory-related
transaction and you’ll notice that as you do this, you will have
a more accurate picture of your business assets.
To track inventory in your QuickBooks Desktop, you’ll have
to open your QuickBooks Desktop company file and make
sure you are logged in as the admin user.
The first thing you will need to do is go to the edit menu and
choose preferences. Then you can select “Items and
Inventory” and go to the company preferences tab and make
sure that inventory and purchase orders are active.
The next thing you are going to do is to create a product that
you want to track the inventory. To do so, go to the vendor’s
tab and select the item list. To add or manage your inventory,
visit the previous chapters.
When you receive new items and need to add them to your
inventory, simply go to the vendor’s tab and “receive items”.
Fill in the details in the appropriate boxes, then go ahead and
save. So, if you go to the Item list, you will see that the total
quantity for that item has now increased.
When you create an invoice, QuickBooks takes those items
out of your inventory and moves them to your customer sales
accounts. This means it has also moved the cost of those goods
down to your profit and loss to offset some of the income
you’ve received. This way you can track your margins better,
on your profit and loss statements.
CHAPTER NINE
ACCOUNTING BASICS
This chapter covers the Accounting operations with
QuickBooks such as preparing financial statements, preparing
a budget, and a basic knowledge of Job costing systems. Read
on for more details.
Preparing Financial Statements
After entering all the data relating to your bank statements,
including the deposits and checks into the system, the next
step is to do the bank reconciliation after which you can go
over to look at the reports.
To do that, go to the Reports drop-down, financial statements
and then you proceed with anyone you would like to view,
though most persons would often start with the balance sheet.
You can change the date range so that when you look at the
data, you can see more information rather than just one date.
So, you simply go to customize reports and change the date
range.
To view other reports such as profit and loss, follow the same
step above, making sure to click on the report you want to see.
Preparing A Budget
Budgets give you an additional function called the
Performance Report that allows you to also compare your
Year-to-date performance.
To set up a budget, go to the Company menu, Planning, and
Budgeting, and click on “Set up budgets”. By default, if you
had created a budget. There will be a pop-up of the last budget
that was created. To create a new budget, click on the
appropriate tab at the top right corner. Next, you will choose
the year you want to create the budget for and you get to
choose the budget type. You will come across other options as
you proceed and when you finish, QuickBooks would
automatically create a budget based on your previous data.
QuickBooks budgets run monthly. It is important to know this
before creating a budget.
In the budget screen, you have the option to adjust your
amounts or clear your budget.
At this point, you may be wondering what to do with this
budget. Well, you can do a couple of things. Simply go to
“Reports”, “Budgets & Forecasts” and there are three choices
for budgets. These include Budget Overview, Budget vs
Actual and Budget performance.
The Budget Overview is just a report that shows your budget.
There’s neither a comparison with sales or performance data.
You can view it on a quarterly, weekly, daily, or monthly basis.
The Budget vs Actual is the most commonly used one. It
shows four columns: the actual numbers (which is the one that
contains the month), Budget (which shows the budgeted
amount), dollar over budget (shows how much you are in
terms of getting close to your budget), and the percentage of
the budget. You can take off the dollar over budget and
percentage budget by ticking them on in the “customize” tab.
So, you are left with the budget and the actual number.
The Profit & Loss Budget Performance is similar. However, it
adds another column and this is useful whenever you are
comparing a month or quarter only.
Another feature I want to briefly discuss is Forecast. This is
identical to budgets; however, you can’t break it down by
class, or customer, you do not get a Year-to-day report and you
cannot be exported or imported by IIF, unlike the budget. It is
a lighter version of the budget. So, I suggest you focus on
working with the budget.
An Overview Of Job Costing Systems
Job costing helps you to track and compare the expenses for a
job with your revenue. This is useful for constructing
businesses, landscaping businesses, or any businesses that do
services by the job, and they can track their job profitability
and see how they are doing each job. This is a tool that is used
by contractors
In the contractor edition, there are two tools that people often
do not use. The Job costing center is one of them. In the Job
costing center, you will see highlights of some areas and
reports related to Job costing. One of them is the top three
most profitable jobs and it gives you a quick graph in terms of
revenues and cost. You will also see a link that gives you a
shortcut to all the expenses you may have forgotten to assign
to job costs.
The Work In Progress (WIP) summary report is extremely
important because it helps you to report revenues in a true cost
of completion way and after a job you get a summary report
for a specific job. To avoid errors with this system you need
to have in-depth knowledge about how it works or have an
expert run the system for you.
CHAPTER TEN
PROTECTING YOUR DATA
In this chapter, I would be sharing the different ways in which
you can protect your data in QuickBooks, how to back up and
restore your files and keep your financial data secure.
Creating A Back-Up File
The making of a backup file is a very easy thing to do. You
can do it at the end of your work session or you can do it daily.
To do this, it will create another company file so we will
review what would happen when we make up the backup file
and what it looks like as compared to the normal QuickBooks
file.
After you are done with the data entry at the end of the day,
you go to the File drop-down, and then you go to “back up
company” and “create local backup”. This means you will be
backing up to a local area, such as something connected to
your computer which could be a “c” drive or an external drive
connected to your computer.
If you want to set up online backups, then simply click the
appropriate option for that.
If you proceed to create a local backup, you will see a pop
window with further instructions on how to go about it. While
doing a local backup, it is recommended to add the date and
time of the backup to the file name. This is because if you are
backing up the same company file, then everything is going to
be the same and the only distinction would be when you did
the backup. So if you run into data that was messed up, you
can go back to the previous period in that static backup file
before it got messed up to see what happened from that point
forward.
The goal for creating a backup file is that you have your most
current data there and the other reason is that in case there is
an error, you would want to go back before the error happened
to figure out what happened.
I also suggest you put in a reminder as to how often you want
to do your backup. This can be checked in the options when
creating your backup.
Restoring Your Data
To restore your company to the previous date and time, go to
the settings menu and select “backup company”, select
“restore” and then “new restore”. Choose the date and time
you want your company to go back to. Then select “create
restore”.
The process to restore your company data can take up to thirty
minutes but it usually takes less time than that. The more data
a company has, the longer the process takes. It is important to
note that you shouldn’t do anything in your company while
QuickBooks restores your data. You will know your data when
you see a checkmark under the status.
You can always select “restore” to look at past restores or
check in the ones in progress.
How To Condense Your Data File
If you are in a scenario that says you have reached about
fourteen thousand, five hundred list elements, your files are
getting bigger and slow or you want to convert to QuickBooks
Online as a Desktop user, then you may need to condense your
file.
Go to the File menu, “utilities” and then “condense data”. In
the next window, you will have to make some decisions
regarding the transactions you want to remove, how you want
your transactions to be summarized, how you want your
inventory to be condensed, a list of transactions you may want
to remove, what you want to do with your unused lists and
then it begins to condense your files. During this process, it
creates a copy of the file for you. This could take a while,
depending on the size of your data file. These are essentially
the steps involved in condensing in QuickBooks.
CHAPTER ELEVEN
TROUBLESHOOTING
In this chapter, you will learn how to troubleshoot common
issues with QuickBooks.
The first I want to talk about is the common issue where you
can’t open the file. So what you do is that when you sign in,
you just select the “stay signed in” box and after a while, your
QuickBooks will come up. This may no longer be an issue
because, with the recent editions, QuickBook has fixed some
of these bugs.
What happens if you can’t even open the app? What you need
to do is to reset the app by holding down the shift key while
opening the program and continue to hold down this key until
the program opens up. If this still doesn’t work, then you have
to uninstall and reinstall the app.
What do you do if you notice some sort of white screen after
you sign in? If that’s the case, you need to refresh the page. So
you go to the File menu and refresh it. If after doing this
you’re still getting the white screen, go to the Help menu and
Reset App Data and this would solve the issue.
If you need to repair your QuickBooks company data file, it
could be because you are receiving errors while you are
working with QuickBooks or when you try to open a particular
company file, there are some ways to accomplish the repair.
● If you can open the company file, go ahead and click on
the file menu, “utilities” and then “rebuild data”. Next,
you will see a prompt that will guide you on how to go
about this process, and when you are done, you will be
notified.
● If you can’t open the file at all because it is corrupt, go
ahead and close QuickBooks. Open a web browser and
search for QuickBooks file repair. What we’re focused
on is the QuickBooks File Doctor from Intuit. Click on
the link from the QuickBooks support page, download,
Install and run the file. Next, browse to locate the
corrupt company files and this depends on where you
saved your company data. Once you have selected the
file, it’s going to ask you to diagnose the file. Here, you
will enter your sign-in details. This may take a while to
log in to the file. This will give you a report afterward. If
you are still having difficulty opening the file, you can
then proceed to restore from a backup file, if you have
one. Otherwise, you will get a notification that the
repair was successful. You can then go ahead to
QuickBooks and open the repaired file.
● If these don’t work, you should check if you are using an
older version of QuickBooks and if yes, upgrading to a
newer version automatically repairs your files when you
transfer them.
Conclusion
QuickBooks is an amazing tool if you know how to use it
effectively. As seen in this Book, it makes bookkeeping and
accounting a lot easier and saves time, giving you the room to
focus on other productive strategies for your business. This
book is also of great help to bookkeepers and accountants,
giving you the knowledge to work effectively in your field of
specialization.