Introduction to QuickBooks Software

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What is QuickBooks Online?

QuickBooks Online is a cloud-based accounting software developed by Intuit, designed to manage your business finances from anywhere with an internet connection. Unlike the traditional desktop version, QBO requires no installation, and all your data is stored securely in the cloud, eliminating the need for manual backups.

Advantages of QBO:

Access from any device, anywhere
Easy sharing with accountants
Automatic updates and no annual upgrade cost
Multi-device and multi-OS support

Disadvantages of QBO:

Separate subscription needed for each company
Some advanced features only in desktop or higher-tier plans
Certain reports/features may be desktop-only

Security in QBO

Intuit employs advanced encryption and hourly backups on multiple drives to protect your data. While no online service can guarantee 100% security, Intuit restricts access to your login credentials—even their employees cannot access your passwords.

Subscription Plans Overview

Simple Start: Basic plan for tracking income/expenses, creating invoices/estimates, and syncing bank transactions. Single user only. No bill entry or recurring invoices.
Essentials: Adds bill entry/payment, recurring invoices, time tracking, and up to three users. No inventory/project tracking.
Plus: Adds inventory tracking, 1099 support, project profitability, more reports, and up to five users. Most popular plan.
Advanced: All features, up to 25 users, advanced support, and additional business tools. Higher cost.

Note: For this course, you will use the Test Drive site, which mimics the Plus plan features.

Using the QBO Test Drive Site

The Test Drive site lets you practice with a sample company, Craig’s Design and Landscaping, without risk. Any changes you make are not saved, so you can experiment freely. Each session resets when you log out or after inactivity.

How to Access the Test Drive Site

Open your browser and go to qbo.intuit.com/redir/testdrive.
Complete the security verification.
The Dashboard for the sample company will open.

Tip: If you have a paid QBO subscription, log out before using the Test Drive site to avoid interfering with real company data1.

Navigating QuickBooks Online

Dashboard

Central hub for navigation.
Interactive graphs and status bars for quick access to overdue invoices, expenses, and more.

Left Navigation Bar

Accounting > Chart of Accounts: Backbone of your accounting, listing all accounts to track money flow.
Sales > Customers: Manage customer information and transactions.
Dashboard: Always returns you to the main overview.

Top-Right Tools

+ New Button: Quickly create transactions like invoices, bills, and payments.
Magnifying Glass: Search tool for finding transactions by number, date, or amount. Includes advanced search and recent transactions.
Gear Icon: Access Account and Settings, lists, import/export tools, and more administrative features.
Question Mark: Access help and support resources.
My Experts: (Depending on plan) Connect with accountants or consultants.
Notification Bell: View important alerts (e.g., tax deadlines, payroll reminders)1.

Switching Views: Accountant vs. Business View

Accountant View: Default in Test Drive, gives access to all accounting features.
Business View: Simplifies navigation for users without accounting backgrounds.

How to Switch:

Click the Gear icon, then select "Switch to Business view" or "Switch to Accountant view" as needed. The left navigation bar and dashboard layout will change slightly, but your data remains unaffected1.

Privacy and Security Features

Privacy Toggle: Located at the top right of the Dashboard, this hides sensitive summary information from view—useful in public settings1.

Working with the Sample Company

Practice Freely: Any changes are temporary; the file resets after logout or inactivity.
Assignments & Quizzes: Each lesson includes practice tasks and quizzes. You can retry assignments and quizzes as many times as needed.
Dates: The sample company uses your system date. For practice, follow the lesson’s date instructions, even if they differ from the screenshots or videos1.

Troubleshooting Tips

If you encounter errors or issues:

Clear your browser cache (CTRL + SHIFT + DELETE).
Restart your browser or PC.
Try a different browser or open the site in a new window with no other tabs.
If the Test Drive site is down, wait and try again later—outages are usually brief1.

Summary: Key Takeaways

QBO is a flexible, cloud-based accounting solution with automatic updates and multi-device access.
The Test Drive site is a risk-free environment for learning and practice.
Navigation is intuitive, with a powerful dashboard, search, and administrative tools.
Security and privacy are prioritized by Intuit.
You can switch between Accountant and Business views based on your preference.
Practice is encouraged—mistakes are part of the learning process, and all changes in the Test Drive are temporary1.

You are now oriented to the essentials of QuickBooks Online and ready to begin exploring its features confidently.

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Generally Accepted Accounting Principles (GAAP)

GAAP is the standardized set of rules and guidelines that U.S. accountants follow to ensure financial information is reliable, relevant, and comparable across businesses.
The Financial Accounting Standards Board (FASB) is responsible for developing and revising GAAP.
GAAP's main goals are to provide a uniform system for preparing financial statements, building confidence for banks, investors, and other stakeholders in the accuracy and comparability of financial reports.
While GAAP is U.S.-specific, most other countries use International Financial Reporting Standards (IFRS), which are similar but have some differences in rules1.

Permanent vs. Temporary Accounts

Permanent Accounts: These carry their balances forward from one accounting period to the next. They include:

Assets (e.g., cash, inventory)

Liabilities (e.g., loans, accounts payable)

Owner’s Equity (e.g., retained earnings)

Temporary Accounts: These are reset to zero at the end of each period and include:

Revenues

Expenses

The closing process resets temporary accounts to zero so that each period’s revenues and expenses are reported separately.

The Basic Accounting Equation

Assets=Liabilities+Owner’s Equity

This equation must always balance and is the foundation of double-entry bookkeeping.
Example: If a business has $3,000 in assets and $2,200 in liabilities, owner’s equity is $800 (3,000−2,200=8003,000−2,200=800).
The equation ensures that what a company owns is always matched by claims from creditors and owners.

Income, Expenses, and Net Income

Revenues: Assets received for goods sold or services rendered, not always in cash (can be accounts receivable).
Expenses: Costs incurred to earn revenue; any necessary business cost.
Net Income Formula:

Net Income=Total Revenues−Total Expenses

Net Income or Loss is calculated for a defined period (monthly, quarterly, yearly), requiring temporary accounts to be reset after each period.

Accounting Methods: Cash vs. Accrual

The accrual method is required by GAAP, but small businesses may use cash basis if differences are immaterial.

Debits and Credits: Double-Entry Accounting

Every transaction involves at least two accounts: one debit and one credit, and the total debits must equal total credits.
Debits: Left side of an account
Credits: Right side of an account
Whether a debit or credit increases or decreases an account depends on the account type:

Memory tip: AE/LOR (Assets & Expenses increase with Debit; Liabilities, Owner’s Equity & Revenues increase with Credit)1.

Forms and Journal Entries in QuickBooks

QuickBooks uses forms (e.g., checks, invoices) for most entries, making it accessible for non-accountants.
Behind every form, QuickBooks creates the necessary debit and credit entries automatically.
Direct journal entries are used for complex or bank-independent transactions, but forms are preferred for most day-to-day entries.

Sample Transactions

Paying Rent ($1,500):

Debit: Rent or Lease Expense (increases expense)

Credit: Cash/Checking (decreases asset)

Invoicing a Customer ($225):

Debit: Accounts Receivable (increases asset)

Credit: Design Income (increases revenue)

Receiving Payment on Invoice ($225):

Debit: Cash/Checking (increases asset)

Credit: Accounts Receivable (decreases asset)

If a customer does not pay, the uncollectible amount is written off as an expense1.

Financial Statements

Balance Sheet: Snapshot of assets, liabilities, and equity at a point in time. Based on the accounting equation.
Income Statement (Profit & Loss): Shows revenues, expenses, and net income over a period.
Statement of Owner’s Equity: Details changes in equity, often summarized in the balance sheet.
Statement of Cash Flows: Tracks cash inflows and outflows from operating, investing, and financing activities.

QuickBooks can generate these reports, and you can customize them as needed for your business or organization.

Key Takeaways

GAAP ensures consistency and comparability in financial reporting.
Understand the distinction between permanent and temporary accounts.
The accounting equation is the backbone of all financial reporting.
Accrual accounting provides a more accurate picture of business performance and is required under GAAP.
Double-entry accounting (debits and credits) is fundamental, and knowing which side increases each account type is crucial.
QuickBooks simplifies transaction entry but understanding the underlying accounting helps prevent errors.
Financial statements are the end product of all bookkeeping and are essential for evaluating business health.

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What is the Chart of Accounts?

The Chart of Accounts is a collection of all the accounts you use to track anything of financial value in your business, also known as the General Ledger.
It helps you monitor what your business owns (assets), owes (liabilities), earns (income), spends (expenses), and what is expected to be received or paid.
Think of it as the cast of characters in your business’s financial story—each account plays a specific role.

Examples of What You Track:

Book value of assets (equipment, vehicles, real estate)
Revenue and expenses
Cash on hand
Money owed by customers (Accounts Receivable)
Money owed to vendors (Accounts Payable)1

Navigating and Customizing the Chart of Accounts

QBO automatically creates some accounts based on your business info, but you’ll likely need to tailor this list.
The Chart of Accounts is also a navigation tool, letting you quickly move between accounts like checking, savings, credit cards, etc.
You can add, modify, or delete accounts as needed to fit your business1.

Using the Test Drive Sample Company

The QBO Test Drive (Craig’s Design and Landscaping Company) lets you practice without affecting real data.
Note: The test drive resets every time you reopen it—changes are not saved between sessions. Complete lessons in one sitting to avoid losing work1.

Activating and Using Account Numbers

Assigning account numbers helps differentiate similar-sounding accounts (e.g., Accounts Receivable vs. Accounts Payable).
To activate account numbers:

Click the gear icon (top-right).

Choose “Account and Settings.”

Click the “Advanced” tab.

Edit the Chart of Accounts section (pencil icon).

Enable “Account Numbers” and check “Show Account Numbers.”

Save and close settings

Account numbers are not required but are highly recommended for clarity and speed.

Standard Account Numbering System:

1: Assets
2: Liabilities
3: Equity
4: Revenues
5: Cost of Goods Sold
6: Expenses
You can use up to 7 digits; most small businesses use 3-4 digits.

Types of Accounts in QuickBooks Online

You can create the following account types:

Accounts Receivable
Other Current Asset
Bank
Fixed Asset
Other Asset
Accounts Payable
Credit Card
Other Current Liabilities
Long-term Liabilities
Equity
Income
Other Income
Cost of Goods Sold
Expenses
Other Expense

Each type determines how the account appears in reports and statements.

Adding a New Account

Steps to Add an Account:

Go to “Accounting” > “Chart of Accounts.”
Click “New.”
Choose the account type (e.g., Expenses).
Select the detail type (e.g., Utilities for Internet Access Charges).
Name the account (e.g., Internet Access Charges).
Assign an account number (e.g., 6050 for Expenses).
Add a description.
Click “Save.”

If account numbers don’t appear, ensure the feature is enabled. You may need to assign numbers to existing accounts as well.

Adding Sub-Accounts

Sub-accounts provide more detail and reporting flexibility.
For example, under an “Insurance” account, you can add “Property Insurance” as a sub-account.
Steps:

Indented accounts in the Chart of Accounts indicate sub-accounts.

Importing Data into QuickBooks Online

There are three main scenarios:

New Business, No Prior Records:

Simply add accounts, enter initial deposits, and start recording transactions.

2. Existing Business, Moving from QuickBooks Desktop:

Use the “Import Data” tool under the gear icon.

Follow prompts to upload your company file.

The original desktop file remains unaffected.

3. Existing Business, Moving from Other Software:

Use “Import Data” to bring in lists (customers, vendors, products) if they’re in an acceptable format (e.g., Excel).
Not all data may be importable; check instructions for each data type1.

Establishing Beginning Balances

If starting mid-year, you must enter existing balances.
Entering an opening balance directly in a new account creates an offsetting entry in “Opening Balance Equity.”
The best practice is to enter balances as of the end of the last fiscal year and record all transactions since the start of the current year for a complete history.
Consult with an accountant for complex situations1.

Handling Transactions Before Business Start Date

If you used personal funds before opening a business account:

Record these as equity investments or as liabilities (to be reimbursed).

This usually involves journal entries to increase both an expense and an equity account.

Consult with an accountant for the best approach.

Key Tips and Best Practices

Enable account numbers for clarity.
Use sub-accounts for detailed reporting.
Always back up your real company file before importing or converting data.
Complete each practice session in one sitting when using the Test Drive, as changes won’t be saved.
Keep the account type and numbering system consistent for easier management and reporting.
When in doubt, consult with an accountant, especially for opening balances and data conversions.

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Overview: Centers and Lists

Centers in QuickBooks Online are centralized hubs where you can view, access, and manage all information about your customers and vendors, such as unpaid bills, outstanding invoices, and balances.
Lists serve as digital card files, storing detailed information (addresses, phone numbers, emails) about customers and vendors, replacing the need for paper records.

Getting Started: Opening the Test Drive Sample Company

Open the QuickBooks Online test drive sample company as instructed.
The sample company resets each time you open it, so your changes will not be saved between sessions.
Try to complete lessons in one sitting to avoid timeouts and data loss1.

Navigating the Customer Center

Access via: Dashboard → Sales → Customers tab.
Use the Money bar to filter customers by open invoices or overdue balances.
Click on a customer or invoice to view details; use the X in the upper right to close windows.
To remove filters and see all customers, click Clear Filter/View All if visible1.

Adding a New Customer

Click New Customer in the Customer Center.
Fill in relevant fields (e.g., First Name, Last Name, Company Name).
Choose how the customer should be displayed (by company or contact name).
Enter address, notes, and any attachments if needed.
Specify tax status and resale number if applicable.
Set payment preferences (method, delivery options, terms).
Enter contact details (email, phone).
Click Save to add the customer.
If the customer does not appear, clear any filters.

Importing Customer Information

You can import customers if your data is in a compatible format.
Access this via the arrow next to the New Customer button and select Import Customers.
Follow the prompts for file format and import process.

Finding and Sorting Customers

Use the search box below the Money bar to quickly locate customers.
Sort the list by clicking column headings (Company or Customer).
Toggle between A-Z and Z-A by clicking the same heading again.
Create sub-customers for project/job tracking; sub-customer balances roll up to the parent customer1.

Navigating the Vendor Center

Access via: Expenses → Vendors.
The Vendor Center is similar to the Customer Center but focuses on entities you pay.
The Money bar here tracks purchase orders and bills.
Filter vendors by open bills or overdue status; click to view bill details.

Adding a New Vendor

Click New Vendor.
Enter company and contact details (name, address, email).
Specify billing rate, terms, account number, and business ID if needed.
Mark Track payments for 1099 if the vendor is eligible.
Set a default expense account if desired.
Leave the opening balance blank unless transitioning from another system.
Click Save.

Editing and Deleting Vendors

To edit, select the vendor and click Edit, make changes, and save.
To make a vendor inactive (not delete), use the Action column dropdown and select Make Inactive.
To reactivate, show inactive vendors using the gear icon, then select Make Active for the desired vendor.

Merging Duplicate List Entries

If duplicates exist, edit one entry’s name to exactly match the other.
When prompted, confirm the merge.
This consolidates transactions under one entry and is irreversible.
The process is the same for customers and accounts.

Exporting and Importing Lists

QuickBooks allows exporting and importing lists (e.g., to/from Excel).
Use the appropriate menu options for these actions.

Form 1099-MISC and Vendor Tax Tracking

For U.S. businesses, collect vendor Tax ID (Business ID) using IRS Form W-9.
Mark eligible vendors for 1099 tracking.
Use the Prepare 1099s feature in the Vendor Center to process and file forms.
Follow the step-by-step process to review company info, select payment types, map accounts, and identify eligible vendors.
Distribute 1099 forms to vendors by January 31 each year.
E-filing is available for a fee; manual filing is also an option.

Best Practices and Tips

You do not need to fully populate lists before using QuickBooks; add details gradually as needed.
Consistency in naming and display conventions makes sorting and searching easier.
Use filters and search features to quickly locate records.
Making entries inactive rather than deleting preserves your transaction history for accurate reporting.
Merging is permanent—use with care.

Final Notes

Explore the Customer and Vendor Centers to become comfortable with navigation.
Use the test drive company for practice—no changes are permanent.
Refer to QuickBooks help resources for more advanced features like Projects or detailed 1099 rules.

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Overview

Setting up and managing bank accounts is foundational in QuickBooks Online, as nearly all business transactions eventually impact a bank account.
QuickBooks offers both manual and online banking workflows, each with specific advantages.
Security and data integrity are prioritized, with robust encryption and privacy measures in place.

1. Setting Up a Bank Account

A. Manual Setup

Open QuickBooks Online and access the test drive sample company for practice.
Navigate: Click Transactions on the left navigation bar, then Chart of Accounts.
Click the New button to add a new account.
Enter details:

Account Name: e.g., "Checking-4598" (including the last four digits of the bank account number is recommended for clarity).

Account Type: Select "Bank."

Detail Type: Choose "Checking."

Description: e.g., "Sun Reliable Bank-Checking."

Leave other fields blank unless you wish to assign an account number (optional, but must start with 1 for assets).
Click Save.

B. Entering Opening Balances

If this is a new account, enter the initial deposit as the opening balance.
For existing accounts, use the ending balance from your last reconciled bank statement.
Best practice: Enter the opening balance as of the start of your fiscal year (often January 1).
To enter the balance:

Click View Register next to the new account.

Use the dropdown next to "Add Check" to select Journal Entry.

Enter the date, reference number, memo ("Opening Balance"), deposit amount, and select "Retained Earnings" for the balancing account.

Save the entry.

Accounting Impact Example:

2. Connecting a Bank Account Online

Go to Transactions > Bank Transactions.
Click Link account.
Search for and select your bank (e.g., Wells Fargo).
Follow the prompts to securely connect your account. Intuit uses high-level encryption and does not store your bank credentials1.
If your bank is not supported, you can manually upload transactions via compatible files.

Benefits of Online Banking:

Reduces, but does not eliminate, manual data entry.
Improves accuracy and streamlines reconciliation.
Does not automatically record or reconcile all transactions—you must still review and categorize them.

3. Downloading and Managing Transactions

A. Updating Transactions

After connecting, click Update to download the latest transactions.
Alternatively, use Upload from file if your bank does not support direct connection.

B. Understanding the Bank and Credit Cards Window

Displays connected accounts at the top, showing both bank and QuickBooks balances.
The number next to the QuickBooks balance indicates how many downloaded transactions are pending review.

C. Matching Transactions

QuickBooks attempts to match downloaded transactions to those already entered based on date, payee, and amount.
If a match is found, confirm it by clicking Match.
If multiple matches are found, review and select the correct one.
Matching does not change balances; it simply confirms the transaction is already recorded, helping prevent errors.

D. Adding Transactions

If no match is found, review the transaction and add it manually:

Select payee/vendor.

Choose the appropriate account/category (e.g., Equipment Rental).

Add details and save

This action directly affects your account balances and the general ledger.

E. Excluding Transactions

If a transaction is a duplicate or already cleared, select and click Exclude. This moves it to the Excluded tab, preventing double entry.

4. Reconciling Bank Accounts

A. Why Reconcile?

Reconciliation ensures your QuickBooks records match your bank statements, catching errors, omissions, and duplicates.
It is best practice to reconcile every month, even if you regularly match transactions1.

B. Preparing for Reconciliation

Have your printed or digital bank statement ready, noting the ending balance and all transactions for the period.

C. Steps to Reconcile

Access Reconciliation:

Click Transactions > Bank Transactions, select the account, then Go to Bank Register.

Click Reconcile.

2. Enter Statement Details:

Input the statement ending date and ending balance as shown on your bank statement.
QuickBooks will auto-fill the beginning balance.

3. Start Reconciling:

In the Reconcile window, compare each transaction in QuickBooks to your bank statement.
Mark each as cleared by clicking the circle next to it.
The goal is for the difference at the top of the window to reach zero.

4. Handling Discrepancies:

If amounts differ, investigate and correct errors (e.g., data entry mistakes).
Add any missing transactions or adjust amounts as necessary.
If you need to pause, click Save for later.

D. Finalizing and Reporting

Once the difference is zero, click Finish now.
View and print the reconciliation report for your records—this is crucial for audits and documentation.

5. Troubleshooting Reconciliation Errors

Error of Overachievement: Marked a transaction as cleared that hasn’t cleared the bank; unmark it.
Error of Omission: Forgot to enter a transaction; add it and return to reconciliation.
Typographical Error: Entered the wrong amount; correct it in the register.
Incorrect Ending Balance: Edit the ending balance at the start of the reconciliation process if needed.

6. Best Practices and Reminders

Enter transactions as they occur for accuracy.
Regularly match downloaded transactions to avoid errors.
Always reconcile monthly, regardless of online banking use.
Print and save reconciliation reports with your bank statements.
Consult with your accountant when setting up new accounts or handling complex transactions.

Conclusion

By following these detailed steps, you will be able to confidently set up, manage, and reconcile bank accounts in QuickBooks Online, ensuring the accuracy and integrity of your business’s financial records from start to finish.

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Overview

Entering payments (checks, debit, credit, online, cash) to vendors
Tracking reimbursable (billable) expenses
Using the Test Drive Sample Company for practice
Entering and viewing check transactions
Recording bank transfers
Entering expense transactions (including billable and online payments)
Using recurring transaction templates
Understanding the accounting entries behind each transaction

Entering Check Transactions

When to Use: Write a check to pay a vendor (e.g., a contractor who does not accept cards).

Steps:

Open the Test Drive Sample Company (Craig's Design and Landscaping).
Click the + New button (top left navigation).
Select Check under the Vendors column.
In the Payee field, use Add New to create a new vendor (e.g., "Jay's Painting").
Leave other fields blank unless you expect to use the vendor again.
Select the Checking account at the top.
Enter the Payment date (e.g., 3/28/22). You can use the calendar icon or type the date (QuickBooks auto-formats).
Ensure the Check number matches your physical check.
In the Category Details area:

Select the appropriate account (e.g., "Building Repairs" under Maintenance and Repair).

Enter a description (e.g., "Office Painting").

Enter the amount (e.g., 350.00).

10. Leave Billable, Tax, and Customer fields blank unless needed.

11. Click Save and New (or Save and Close).

Additional Features:

Item Details: For inventory purchases.
Memo: Add extra notes.
Attachments: Attach invoices or documents to the transaction.

Accounting Impact:

The expense account increases (debit), and the checking account decreases (credit)1.

Viewing the Transaction:

Go to Banking > Banking tab > Checking account > Go to Bank Register.
Find and review or edit the transaction as needed.

Recording Bank Transfers

When to Use: Transferring funds between bank accounts (e.g., Checking to Savings).

Steps:

Click + New > Transfer (under Other).
Select the source account (e.g., Checking) and destination account (e.g., Savings).
Enter the amount (e.g., 125.00) and date.
Add a memo if desired (e.g., "Bank Transfer").
Click Save and Close.

Accounting Impact:

The destination account increases (debit), and the source account decreases (credit)1.

Viewing Transfers:

Use account registers in the Bank and Credit Cards window to verify updated balances.

Entering Expense Transactions

When to Use: Any payment that reduces a bank account and increases an expense account, except for physical checks (use Expense window for online, debit, cash, or credit card payments).

Scenario 1: Billable Expense with Markup

Example: Buy airfare for a client project, to be reimbursed with a markup.

Preparation:

Set company settings for billable expenses:

Go to Gear icon > Account and Settings > Expenses tab.

Edit "Bills and expenses" to enable "Make expenses and items billable" and set a default markup rate (e.g., 5%).

Save settings.

Steps:

Click + New > Expense (under Vendors).
Add a new payee (e.g., United Airlines).
Select the payment account (e.g., Checking).
Enter the payment date.
In Payment method, add "Debit card" if needed.
In Category details:

Category: "Travel"

Description: "Airfare cost"

Amount: 375.00

Check the Billable box (markup auto-applies).

Select the customer (e.g., Mark Cho).

7. Add a memo if needed.

8. Click Save and Close.

Accounting Impact:

Travel expense increases (debit), checking account decreases (credit).

Note: To bill the customer, ensure the expense is marked billable and the customer is selected. Later, create an invoice to pass the cost plus markup to the customer.

Scenario 2: Online Expense Payment

Example: Pay a utility bill through your bank's online site.

Steps:

Click + New > Expense.
Select payee (e.g., Cal Telephone).
Choose Checking as the bank account.
Enter payment date.
Add "EFT" as a payment method if needed.
Reference number (optional).
In Category details:

Category: "Telephone" (sub-account of Utilities)

Description: "April phone bill"

Amount: 45.00

8. Do not check Billable.

9. Click Save and Close.

Accounting Impact:

Scenario 3: Cash Transaction

Withdraw cash from ATM and pay a business expense.
Use the Expense window, select the correct bank account, and set payment method to "ATM".
If cash is used for personal reasons, consult your accountant about posting to equity accounts.

Recurring Transactions

When to Use:

For repetitive expenses (e.g., monthly copier rent).

Steps:

Go to Gear icon > Recurring Transactions.
Click New.
Select transaction type (e.g., Check).
Name the template (e.g., Copier Rent).
Set Type:

Scheduled: Auto-creates on schedule.

Reminder: Reminds you to enter.

Unscheduled: Saves details for manual entry.

6. Set interval (e.g., monthly on 10th).

7. Select Payee, Account, Category, Description, and Amount.

8. Save the template.

Note: The template will auto-create the transaction on schedule. You can match it to bank updates if accounts are connected online.

Key Tips and Best Practices

Enter transactions as they occur (do not wait for bank feeds to update) to ensure timely and accurate accounting, especially for checks which may take time to clear1.
Use the correct window: Checks for physical checks, Expense for all other payments.
Always review account registers after entering transactions to ensure balances are accurate.
Consult your accountant for transactions involving owner draws or personal/business cash use.
Recurring transactions save time and reduce manual entry for regular expenses.

Summary Table: When to Use Each Window

Understanding the Accounting

Every transaction in QuickBooks affects at least two accounts (double-entry accounting):

Expenses increase the relevant expense account (debit) and decrease the payment account (credit).
Transfers move funds between asset accounts (debit one, credit the other).
Billable expenses are tracked for later invoicing to customers, including any markup.

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1. Why Track Bills in QuickBooks?

Accounts Payable (A/P): This account tracks all short-term liabilities—bills your business owes, such as utilities, rent, professional fees, and more.
Importance: Without an organized system, bills can be overlooked, leading to late fees and credit issues. QuickBooks helps you monitor who you owe, how much, and when payments are due, ensuring timely payments and healthy vendor relationships.

2. Cash vs. Accrual Accounting

Cash Method

You record income when you receive it and expenses when you pay them.
Simple and intuitive, but doesn’t track what’s owed or owing.

Accrual Method

Revenue is recorded when earned, and expenses when incurred, regardless of payment.
Requires entering bills as soon as you receive them, increasing A/P until paid.
Provides a clearer financial picture and is often required for formal financial statements.
QuickBooks supports both methods and allows you to switch report views between cash and accrual.

3. Entering a Bill in QuickBooks

Scenario Example

You receive a bill from a vendor (e.g., Susan Perez, $325 for accounting services, due in 30 days).

Steps

Open the Bill Window: Click + New > Bill under Vendors.
Vendor Selection: Add/select the vendor (e.g., Susan Perez).
Terms & Dates: Enter payment terms (e.g., Net 30), bill date, and QuickBooks will auto-calculate the due date.
Bill Number: Enter the invoice number (e.g., 1025).
Tags: Optionally, add tags (e.g., "Tax Planning") for later reporting.
Category Details: Choose the correct expense account (e.g., Accounting under Legal & Professional Fees), add a description, and enter the amount.
Billable/Tax: Leave unchecked unless passing the cost to a customer.
Attachments: Optionally, attach a scanned copy of the bill.
Save: Click Save and Close.

Result: The bill increases A/P (liability) and the relevant expense account. The bill remains unpaid until you process payment.

4. Viewing and Editing Bills

View Impact: Use the Chart of Accounts to see how the bill affects A/P and expense accounts. QuickReports allow you to see all transactions for a specific account.
Edit a Bill: If you make a mistake (e.g., wrong amount), open the bill from the A/P register, edit, and save. QuickBooks will adjust the accounts accordingly. For significant or old errors, consult your accountant about making journal entries.

5. Paying Bills

Critical Rule

Always use the Pay Bills window to pay bills entered via the Bill window. Do not use Check or Expense windows for these payments, or your records will not be accurate1.

Steps

Click + New > Pay Bills under Vendors.
Select the payment account (e.g., Checking).
Enter the payment date.
Optionally, check "Print later" if you want to print the check in a batch.
Select the bill(s) to pay (e.g., Susan Perez).
QuickBooks auto-fills the payment amount. You can adjust for partial payments if needed.
Click Save and Close.

Result: Reduces A/P and the payment account (e.g., Checking). The bill is marked as paid. If printing checks, use the Print Checks workflow.

6. Printing Checks

Setup: Use QuickBooks-compatible checks. Go through the Print Checks setup to align your printouts.
Batch Printing: Accumulate checks and print in batches for efficiency.
Process: Select checks to print, enter starting check number, preview, and print. Confirm successful printing in QuickBooks1.

7. Vendor Credits

Scenario

You receive damaged goods and the vendor offers a credit (e.g., $90).

Steps to Enter a Vendor Credit

Click + New > Vendor Credit.
Select the vendor (e.g., Hicks Hardware).
Enter the date and relevant details.
In Category details, select the same expense account as the original bill.
Enter description and amount.
Save and Close.

Result: Reduces A/P and the expense account. The credit is available to apply to future bill payments.

Applying Vendor Credits

When paying a bill, QuickBooks will automatically suggest applying available credits. You can apply all or part of the credit. The remaining balance will be tracked for future use1.

8. Vendor Refunds

If a vendor issues a refund (not a credit), deposit the check and code the deposit to the same expense account as the original bill. This reduces the expense account by the refund amount. No need to enter a vendor credit in this case1.

9. Partial Bill Payments

In the Pay Bills window, you can pay less than the full amount. QuickBooks will track the remaining balance and keep the bill open until fully paid1.

10. Troubleshooting and Reporting

Use the Vendor Balance Detail report to review all transactions by vendor.
Double-click entries in reports to view or edit transactions.
For errors, minor corrections can be made by editing transactions. Major or old errors may require journal entries—consult an accountant as needed1.

11. Key Best Practices

Always use the correct workflow: Enter bills as soon as received, pay them via the Pay Bills window, and print checks through the Print Checks process.
Maintain accrual accounting: This ensures accurate financial reporting and compliance with most external requirements.
Use tags and descriptions: For better tracking and reporting.
Review reports regularly: To monitor outstanding bills, credits, and vendor balances1.

Summary Table: Key Workflows

Final Notes

Do not skip steps: Each workflow builds on the previous. Enter bills as soon as received, pay them through the correct window, and always use the correct accounts.
QuickBooks flexibility: You can switch between cash and accrual reports, edit transactions, and handle credits and refunds efficiently.
Consult your accountant: For complex corrections, closed periods, or unfamiliar workflows.

N00007

1. Understanding Credit Card Accounts in QuickBooks

Credit Card accounts are liability accounts, similar to loans, because the balance due represents money your business owes. However, unlike a traditional loan (which is usually a lump sum repaid over time), credit card balances fluctuate as you make charges and payments throughout the month1.
Location in Chart of Accounts: Credit Card accounts appear near other liability accounts, just above "Other Current Liabilities" in the Chart of Accounts1.
Online Connection: A double-headed arrow next to a credit card account indicates it is linked to online banking, allowing you to download transactions directly into QuickBooks1.

2. Creating a New Credit Card Account

Steps:

Go to Accounting > Chart of Accounts.
Click the New button (not the arrow).
Select Credit Cards as the account type.
Enter details:
Click Save1.

Adding an Account Number:

Enable account numbers in Company Settings > Advanced > Chart of Accounts.
Edit the new credit card account and add a number (e.g., 2100; credit card accounts typically start with "2" for liabilities)1.
Save your changes.

Note: Do not enter an opening balance unless you are setting up an existing card with a prior balance. Entering a balance here creates an offsetting entry to Opening Balance Equity, which is generally not recommended1.

3. Connecting a Credit Card Account Online

Optional but recommended: Linking your credit card account online allows QuickBooks to download and match transactions automatically, improving accuracy and saving time.
Steps:

4. Recording Credit Card Charges

Key details to record for each charge:

Vendor Name
Date
Amount
Expense Account1

Steps to Record a Credit Card Charge:

Click + New > Expense.
Select the appropriate Payee (e.g., Bob's Burger Joint).
Set Payment account to the credit card (e.g., American Express).
Enter Payment Date.
Choose Payment Method (label only).
In Category details, select the relevant expense account (e.g., Meals and Entertainment).
Fill in Description, Amount, and other optional fields (e.g., Billable, Customer, Memo).
Click Save and Close1.

Behind the scenes: QuickBooks debits the expense account and credits the credit card liability account, increasing both the expense and the card balance1.

Practice Example:

Payee: Mahoney Mugs
Account: American Express
Date: 5/8/2022
Category: Advertising expense
Amount: $85.00
Memo: Promotional items for customers1

5. Viewing Credit Card Charges

Go to Chart of Accounts, find the credit card account, and click View Register to see all charges and payments1.

6. Recording Interest Charges

Steps:

Create a new expense account named "Interest Paid" under Other Expenses1.
Record the interest charge as an expense:

Accounting: Debits Interest Paid (expense), credits the credit card liability account1.

7. Paying a Credit Card Balance

A. Paying by Check

Click + New > Check.
Payee: Credit card company (e.g., American Express).
Payment account: Checking.
Date: Payment date.
In Category Details, select the credit card account (not an expense account).
Enter amount and memo (e.g., "Monthly payment").
Save and Close1.

Accounting: Debits the credit card liability, credits checking (reduces both)1.

B. Paying Online (Pay Down Credit Card)

Click + New > Pay down credit card.
Select the credit card account and payee.
Enter payment amount, date, and bank account used.
Save and Close1.

Result: The credit card liability is reduced, and the checking account is decreased accordingly1.

8. Verifying Payments and Balances

After making payments, check the credit card account balance in the Chart of Accounts to ensure accuracy (should reflect reductions after each payment)1.
When the balance reaches zero, your liability is cleared for that card1.

9. Additional Features and Tips

Automatic Downloads: Connecting your card online enables automatic transaction downloads and easier reconciliation.
Attachments: You can attach receipts or documents to each credit card charge for recordkeeping.
Reconciliation: Credit card accounts can be reconciled monthly, just like bank accounts, using your statement1.

10. Recording Other Loans (e.g., Equipment Financing)

Scenario: Purchase a $3,000 trailer, pay $600 down, finance $2,400.

Steps:

Create a new Fixed Asset account for the trailer.
Create a new Long Term Liability account for the loan.
Record the purchase using a Journal Entry:

Explanation: This records the asset, reduces cash for the down payment, and creates a liability for the financed portion1.

Loan Payments: When making payments, split between principal (loan account) and interest (Interest Expense account). QuickBooks does not calculate loan amortization, so you must determine principal and interest portions outside the software1.

Summary Table: Key Actions and Their Effects

Final Notes

Always use the correct account types to ensure accurate financial reporting.
Enter charges and payments promptly for up-to-date records.
Use attachments for receipts and documentation.
Reconcile your accounts regularly to match your statements.
For loan payments, manually split between principal and interest as needed.

N00008Z

1. Overview: Why Track Products and Services?

QuickBooks Online enables you not only to record customer and sales information but also to track exactly what you’re selling. By entering detailed product and service items into the Products and Services list, you can generate reports that show how your business earns revenue. This structured approach is crucial for organized accounting and accurate financial reporting1.

2. Setting Up the Products and Services List

Before creating sales entries, you must inform QuickBooks about what you sell or provide. The Products and Services list holds this information.

How to Access:

Click the gear (wheel) icon in the upper toolbar.
Select “Products and Services” from the Lists column.

Types of Items:

Inventory items: Track quantity on hand and value (requires a higher subscription tier).
Service items: Track non-inventory services provided.
Each item is linked to an income account, ensuring sales are properly categorized1.

3. Adding a Service Item

Steps:

In the Products and Services window, click “New.”
Select “Service.”
Enter the name (e.g., “Sod Preparation”).
Add a description (e.g., “Preparation for new sod installation”).
Set the sales price/rate (e.g., 35.00).
Link to the appropriate income account (e.g., Installation under Labor).
Skip Sales Tax for now.
Save and Close1.

Note: SKU numbers and categories can be added for organization, but are optional for services.

4. Organizing Items with Categories

Categories help structure your list, especially if you offer both products and services.
You can assign or edit categories at any time.
Example: A landscaping business might have “Residential Services” with subcategories for “Lawn Mowing” and “Sprinkler Repairs.”1

5. Setting Up an Inventory Item

Steps:

Click “New” and select “Inventory.”
Enter the name (e.g., “Maple Tree-65 Gallons”).
Add SKU (e.g., 65123).
Set initial quantity on hand and as-of date.
Confirm the Inventory Asset account.
Add a description (e.g., “Maple Shade Tree-Medium”).
Enter sales price (e.g., 275.00).
Confirm the income account (e.g., Sales of Product Income).
Enter purchasing information: description, cost (e.g., 150.00), and expense account (e.g., Cost of Goods Sold).
Save and Close1.

Important: Initial inventory entries affect both the Inventory Asset and Opening Balance Equity accounts. Consult your accountant before making large changes.

6. Importing Inventory Items

If you have many items, you can import them via CSV or Excel.
Go to the gear icon > Import Data > Products and Services, and follow the instructions.
Data can also be imported from some QuickBooks desktop products, but transactional data import is limited1.

7. Creating Sales Receipts

Sales Receipts are used when you receive immediate payment for goods or services.

Steps:

Click “+ New” > Sales Receipt.
Select the customer (e.g., Travis Waldron).
Fill in details: email, date, tags (e.g., “Residential”), payment method (e.g., Check), reference number, deposit to “Undeposited Funds.”
Select the product/service (e.g., “Sod Preparation”), enter quantity (e.g., 3 hours).
Remove sales tax for services if not applicable.
Apply a discount if needed (e.g., 10%).
Save and Send (or Save and Close)1.

Behind the Scenes:

Income is credited to the linked account (e.g., Labor: Installation).
Discounts are tracked separately in “Discounts Given.”
The Undeposited Funds account is debited until you make a bank deposit1.

Example Accounting Entry:

8. Practice: Additional Sales Receipt

Repeat the steps for another customer (e.g., John Melton for “Maintenance & Repair,” 2 hours at $40/hour, total $80).

Accounting Entry:

9. Making a Bank Deposit

Once you have checks in Undeposited Funds, you need to record the actual bank deposit.

Steps:

Click “+ New” > Bank Deposit.
Select the bank account (e.g., Checking), date, and check off the payments to deposit.
Save and Close

Accounting Entry:

10. Sales Receipts in Retail Businesses

For high-volume environments (e.g., stores), enter daily summaries rather than individual sales.
Set up a “Daily Sales” customer and create items for each payment method (cash, credit cards, etc.).
At day’s end, enter Sales Receipts by payment type and deposit accordingly for easier reconciliation.

11. Key Tips and Best Practices

Always ensure your deposits in QuickBooks match your bank statement for easy reconciliation.
Use categories and SKUs for better organization, especially as your item list grows.
Consult your accountant before major inventory adjustments or imports.
Practice in the sample company environment before making changes to your live data.
Use tags to help with reporting and organization, especially for customer types or transaction tracking.

N00009Z

1. Estimates: Creating and Managing Quotes

Purpose: Estimates (or quotes) are optional, non-posting entries used to provide customers with a price proposal before work begins or products are delivered.

How to Create an Estimate:

Click the + New button on the left navigation bar, select Estimate under the Customers column.
In the Customer field, select Add New if needed and enter customer details.
Enter the customer’s email and billing address.
Set the Estimate date (usually today) and an Expiration date (typically 30 days out).
Add items/services to the estimate (e.g., Rock Fountain, Pump, Installation), specifying quantities and prices.
Add a message for the customer if desired.
Verify the total and click Save and Send to email the estimate, or just Save to record it.

Key Points:

Estimates are non-posting: No accounting entries are made; they do not affect your financials until converted to invoices.
Status tracking: Estimates can be marked as Pending, Accepted, Closed, or Rejected.
Editing: You can reopen and edit estimates as needed before converting to invoices.

2. Converting Estimates to Invoices

When to Convert: Once the customer accepts the estimate and the work is completed or the product delivered, convert the estimate to an invoice to request payment.

How to Convert:

Click + New > Invoice.
Select the customer (e.g., Don Wesser). If there’s a pending estimate, QuickBooks will prompt you to add it to the invoice.
Choose the appropriate payment terms (e.g., Net 30).
Set the Invoice Date (should be after the estimate date but before the expiration date).
Click Add to transfer estimate details to the invoice.
Review the invoice and click Save and Close.

Accounting Impact:

Accounts Receivable increases (debit): The customer now owes you money.
Income accounts increase (credit): Revenue is recognized for the products/services delivered.
Sales Tax Liability increases (credit): If applicable, the collected sales tax is recorded as a liability to be paid to the tax authority.

3. Creating Invoices Directly (Without Estimates)

When to Use: For regular or recurring services/products where an estimate isn’t required (e.g., monthly gardening service).

Steps:

Click + New > Invoice.
Select the customer (e.g., Diego Rodriguez).
Set payment terms (e.g., 5/10, N/30 for a 5% discount if paid within 10 days, net due in 30 days).
Enter the invoice date and due date.
Add products/services, quantities, and rates.
Save and send the invoice.

Accounting Impact: Same as above—Accounts Receivable and income accounts increase.

4. Applying Discounts and Editing Invoices

Scenario: Customer pays early and qualifies for a discount (e.g., Diego pays within 10 days for a 5% discount).

Steps:

Find the customer and open the outstanding invoice.
Enter the discount percentage in the Discount percent box.
QuickBooks recalculates the balance due and applies the discount.

Accounting Impact:

Discounts Given (a contra-income account) increases (debit).
Accounts Receivable decreases (credit).

5. Recording Customer Payments

Purpose: To clear the customer’s outstanding balance and track incoming funds.

Steps:

Click + New > Receive Payment.
Select the customer and the relevant invoice(s).
Enter payment details (date, method, reference number, amount received).
Ensure Undeposited Funds is selected in the Deposit to field (this is a holding account).
Save and close.

Key Points:

Do not deposit directly to the bank account unless you are depositing a single payment. Grouping payments in Undeposited Funds helps match your bank statement and simplifies reconciliation.

Accounting Impact:

Undeposited Funds increases (debit).
Accounts Receivable decreases (credit).

6. Depositing Customer Payments

Purpose: To move funds from Undeposited Funds to your bank account, matching the actual deposit made at the bank.

Steps:

Click + New > Bank Deposit.
Select the bank account and date.
Check off the payments included in the deposit (e.g., Diego’s $114.00 and Don’s $413.20).
Verify the total matches the actual bank deposit.
Save and close.

Accounting Impact:

Checking (Bank) account increases (debit).
Undeposited Funds decreases (credit).

7. Reviewing Account Registers

Use the Chart of Accounts to view detailed registers for Accounts Receivable, Discounts Given, Undeposited Funds, and Checking.
This helps verify transactions, track payments, and reconcile accounts.

8. Frequently Asked Questions

Q: Can you invoice only part of an estimate? Yes, QuickBooks allows you to invoice for a portion of the estimate and track the remaining amount to be billed.

Q: Does QuickBooks use the invoice date or deposit date for income recognition? QuickBooks recognizes income based on the invoice date, not the deposit date. This aligns with accrual accounting principles, recording revenue when earned, not when cash is received.

Summary Table: Workflow Overview

Best Practices

Always use the Receive Payment window for customer payments—never record payments directly as deposits unless it is a single, isolated payment.
Group multiple customer payments into a single deposit if they are deposited together at the bank.
Regularly review your account registers for accuracy.
Use invoice dates for revenue recognition to comply with accounting standards.

N0010Z

1. Overview: Why These Transactions Matter

While daily transaction entry is crucial in QuickBooks, handling occasional but significant transactions—like billable expenses, customer credits, and refunds—is equally important. These ensure accurate records, proper customer billing, and clear financial reporting.

2. Billing for Reimbursement (Billable Expenses)

Scenario Example

Suppose a customer (Diego Rodriguez) asks you to perform work that requires travel. You agree to be reimbursed for hotel costs plus a 10% markup.

Adjusting Account Settings for Billable Expenses

Before entering such expenses:

Go to Account and Settings (gear icon).
Under Expenses, edit the Bills and Expenses section:
Under Advanced, set the Markup Income Account and Billable Expense Income Account to “Billable Expense Income.”
Save changes and close settings.

This setup ensures both the reimbursed expense and the markup appear in the income section of your Profit & Loss statement, while the original expense is recorded under expenses.

Entering a Billable Expense

+ New → Expense (under Vendors).
Add the hotel as a new vendor (e.g., Pine Hills Lodge).
Payment Account: Select “Visa.”
Payment Date: Enter the transaction date.
Category: Choose “Travel expense.”
Description: E.g., “Hotel stay for Rodriguez job.”
Amount: Enter the total (e.g., $375.00).
Mark as “Billable” and select the customer (Diego Rodriguez). The markup will be noted but not applied until invoicing.
Save and Close.

Accounting Entry:

Debit Travel Expense $375
Credit Visa Credit Card $375

Creating an Invoice with Billable Expense

+ New → Invoice (under Customers).
Select the customer (Diego Rodriguez). QuickBooks will prompt you to add the billable expense.
Click “Add” to include both the expense and the markup.
Add any additional services (e.g., Design, Installation).
Review and save the invoice.

Accounting Entry:

Debit Accounts Receivable (total invoice)
Credit Billable Expense Income (expense + markup)
Credit other income accounts as appropriate (e.g., Design Income, Installation Income)

Reviewing on Profit & Loss Statement

Run the Profit & Loss report.
The reimbursed amount plus markup appears under “Billable Expense Income.”
The original expense appears under “Travel.”
The expense and reimbursement offset; the markup increases net income.

3. Issuing and Applying Customer Credits

Credit Memos

Used when a customer returns goods or you need to reduce their balance.

Example: Customer returns three bags of rocks.

+ New → Credit Memo (under Customers).
Select customer (e.g., Paulsen Medical Supplies).
Enter date, product/service, quantity, rate, and description.
Save and Send (email to customer).

Accounting Entry:

Debit linked income account (e.g., Fountain and Garden Lighting) for the credit amount.
Credit Accounts Receivable for the same amount.

Applying Credits to Payments

When recording a customer payment, QuickBooks automatically applies available credits to outstanding invoices, reducing the amount due.

Example:

Invoice: $954.75
Credit Memo: $67.50
Payment needed: $887.25

Accounting Entry (when payment is received):

Debit Undeposited Funds (or bank account) for payment amount.
Credit Accounts Receivable.

Creating Customer Statements

Go to Customers list.
Select the customer, click the action arrow, and choose “Create Statement.”
Choose statement type, set date range, and print or preview.

4. Delayed Credits

Used when you promise a customer a future credit but haven’t yet created the related invoice.

Example: Promise Diego Rodriguez a $25 credit for a missed service.

+ New → Delayed Credit (under Customers).
Select customer, date, product/service, description, amount.
Save and Close.

Note: No accounting entry is made until the delayed credit is applied to an invoice.

Applying a Delayed Credit:

Create the invoice for the customer.
QuickBooks will prompt you to add the delayed credit.
Add it, adjust descriptions, and save.

Accounting Entry (when invoice is saved):

Debit Accounts Receivable (for net invoice amount)
Credit appropriate income account

Recurring Credits: Use the “Make Recurring” option if you need to apply the same credit regularly.

5. Delayed Charges

Similar to delayed credits but used to schedule future charges to a customer. Enter as needed; QuickBooks will remind you to add them to future invoices.

6. Customer Refunds

When you need to return money to a customer (e.g., project canceled).

Example: Refund to Dylan Sollfrank for design work.

+ New → Refund Receipt (under Customers).
Select customer, date, payment method, refund from account.
Enter product/service, quantity, rate, and description.
Save and Close.

Accounting Entry:

Debit linked income account (reducing income)
Credit Checking (or refund account) for the refund amount

Refunds can be issued via check, cash, or credit, depending on the payment method chosen.

Summary Table: QuickBooks Customer Transactions

N0011Z

1. Introduction to QuickBooks Reports

QuickBooks Online offers a wide variety of preset reports to help you organize, summarize, and analyze your business transactions.
The primary goal of any accounting system is to produce financial statements suitable for external parties, but QuickBooks also supports many other business needs through its reporting features.
If a specific report isn’t available, you can often customize an existing one to fit your needs. However, reports can only reflect data already entered into QuickBooks—missing data means missing reports.

2. Sales Tax Management

Understanding Sales Tax

Most U.S. businesses must collect and remit sales tax, with rates and rules varying by state and locality.
It’s crucial to research and understand your local sales tax requirements. Consult your local tax agency or accountant if unsure1.

Setting Up Sales Tax in QuickBooks Online

Enable Sales Tax:

Go to the Taxes section via the left navigation bar and select the Sales Tax tab.

Click “Get Started” to begin setup.

2. Verify Business Address:

Double-check your business address for accurate tax rates and reporting.

3. Connect Tax Agencies:

Assign the correct agencies to each tax rate (e.g., California Department of Tax and Fee Administration for California sales).

4. Select Applicable Tax Rates:

Check the tax rates relevant to your business locations (e.g., California, Arizona).

Assign each rate to the appropriate agency.

5. Review and Activate Rates:

Review the selected rates and agencies.

Click “Save” to activate them in your file.

6. Set Filing Frequency:

Filing frequency depends on your state’s rules (e.g., monthly, quarterly).
Select the appropriate frequency for each agency and save your settings1.

Sales Tax Center

The Sales Tax Center is your hub for viewing tax returns, recording payments, and editing tax rates as needed.
If a tax rate changes, edit it in the Sales Tax Settings. New rates apply only to future transactions1.

3. Assigning Tax Rates to Customers

You can assign specific tax rates to individual customers for accuracy in sales transactions.
Use the Customer Contact List report to view and edit customer tax statuses and rates.
Customizing the report to show “Taxable” and “Tax Rate” columns helps manage this process efficiently.
Changes to a customer’s tax status only affect future transactions1.

4. Paying Sales Tax

Tracking and Remitting Sales Tax

QuickBooks tracks collected sales tax in a liability account.
When it’s time to pay, use the Sales Tax Center to view due amounts and file returns.

Making a Payment

Select the relevant tax agency in the Sales Tax Center.
Click “View Tax Return” for the period with an amount due.
Review the return, print forms if needed, and record the payment in QuickBooks.
Choose the payment date, bank account, and whether to print a check.
Record the payment; QuickBooks updates your accounts accordingly1.

Accounting Entries

Paying sales tax creates a debit to Sales Tax Payable (reducing the liability) and a credit to Checking (reducing cash)1.

5. Accessing and Using Reports

Dashboard Access

The Dashboard offers interactive charts (e.g., Expenses) that you can click to view detailed transaction reports.
Use the QuickZoom feature to drill down into report details for troubleshooting or analysis1.

Preset Reports Overview

Access all preset reports via the Reports section on the left navigation bar.
Reports are organized by category:

Favorites

Business Overview (includes financial statements)

Who Owes You (customer receivables)

Sales and Customers

What You Owe (vendor payables)

Expenses and Vendors

Sales Tax

Employees

For My Accountant

Payroll

Key Financial Statements

Profit and Loss Statement: Shows income vs. expenses for a period.
Balance Sheet: Displays assets, liabilities, and equity at a point in time.
Statement of Cash Flows: Tracks cash inflows and outflows.
Statement of Owner’s Equity: Not a preset report, but equity details can be found in the Balance Sheet.

Other Useful Reports

Audit Log: Tracks user activity and changes, useful for multi-user environments and troubleshooting.
General Ledger and Journal Reports: Found under “For My Accountant,” these are essential for accountants and advanced users.
Customer/Vendor Balance Details: Found under “Who Owes You” and “What You Owe,” these reports help manage receivables and payables.

6. Customizing Reports

How to Customize

Open a preset report (e.g., Profit and Loss).
Use the “Customize” button to:

Change headers/footers

Add or remove columns (e.g., % of Income)

Adjust date ranges, accounting method (Accrual/Cash), and formatting (e.g., show negatives in red)

Filter data as needed

Saving Custom Reports

After customizing, click “Save Customization.”
Name your report and optionally group or share it with other users.
Access saved custom reports under the “Custom Reports” tab for future use.

Exporting and Emailing Reports

Export reports to PDF or Excel for further analysis or sharing outside QuickBooks.
Email reports directly from QuickBooks (if not in a test environment).

7. Summary and Best Practices

QuickBooks Online’s reporting and sales tax features are robust and essential for business management.
Always ensure your data is accurate and complete for reliable reports.
Use the Sales Tax Center for all tax-related activities to keep your accounts in order.
Explore and experiment with preset and custom reports to find the best fit for your business needs.
Save customizations to avoid redoing work and to streamline recurring reporting tasks.
Consult with your accountant or tax advisor for complex situations or compliance questions.