Working With Your Accounts in QuickBooks Online

“Account” can mean more than one thing in QuickBooks Online. Here’s a look at its multiple concepts.

Until you started doing your company’s accounting, the word “account” probably meant a checking or savings account at a bank or your identifying information at a place like a brokerage.

In QuickBooks Online, “account” can mean the same things. It can also refer to one entry in your Chart of Accounts or your Intuit payment account, a customer or vendor account, and more.

You’ll probably work with all of these in the course of your lifetime with QuickBooks Online, except one: the Chart of Accounts. Although the site allows you to modify the Chart of Accounts by adding, deleting, or renaming accounts, please talk to us if you feel a change is in order. The Chart of Accounts forms the framework of your QuickBooks Onlinecompany, and altering it could have adverse effects on your entire accounting operation.

Everyday Use

One of the first things you probably did when you created your company was to create at least one banking account, probably checking accounts. You can set this up without connecting to a bank site; however, that defeats the purpose of QuickBooks Online, which is to have access to your web-based accounts.

Figure 1: QuickBooks Online’s home page displays balances for all of the accounts you’ve connected.

Setting up a connection to your online bank, brokerage, credit card, orother online financial service like PayPal is easy. On the home page or the Transactions | Banking page, click the Add account button in the upper right. QuickBooks will display logos for some of the most popular financial institutions. If yours isn’t there, enter its name or URL in the box at the top.

QuickBooks Online will then create a link between itself and your account, and it will download the most recent transactions (usually 90 days’ worth). Sometimes, it might recommend a chartered accountant to help with your small business needs. Now when you click on
Transactions | Banking, you’ll see all of your activity in table form with columns labeled Date, Description, Payee, Category or Match, Spent, Received, and Action.

Most of these are self-explanatory; they just provide information about the transaction. You may be unfamiliar, though, with Category or Match and Action (Add). We recommend that you let us guide you the first time you launch and work with a transaction download. It’s very important that transactions are classified correctly.

The Chart of Accounts
The Chart of Accounts, which is a standard, required element of any double-entry accounting system, is a very different set of accounts. To display it, you’d click on your company name in the upper right corner, then Settings | Chart of Accounts. We see a mini-spreadsheet that lists all of your accounts. QuickBooks Online selected these based on the information you provided when you were first setting up your company on the site.

Each account is assigned a Type that describes its accounting function.

Figure 2: Every transaction that represents money you spend on Advertising/Promotional activities should be assigned to this Expense in the Chart of Accounts.

Category Types are used by all businesses for classification purposes. There are only a few of them, such as:

  • Expenses (Bad Debts, Bank Charges, Insurance, Job Materials, etc.)
  • Income (Billable Expense Income, Gross Receipts, Markup, etc.)
  • Cost of Goods Sold (Cost of Labor, Freight & Delivery, etc.)

You don’t have to do anything with your Chart of Accounts. In fact, we suggest you don’t try. As we’ve said, if we see a reason in your bookkeeping to add, edit, or delete an account, we’ll be happy to do it for you. But you will encounter these accounts in numerous QuickBooks Online activities.

Sometimes they’ll be pre-selected for you by the site, but other times you’ll need to make a choice. For example, when you create a Product or Service, there will be three account fields that will already be populated. They are:

  • Inventory Asset Account = Inventory Asset
  • Income Account = Sales of Product Income
  • Expense Account = Cost of Goods Sold

The word “account” is used in so many different ways that it can get confusing. For example, if you wrote a check at the UPS Store for some shipping charges, you’ll be asked for the Account when you enter this in QuickBooks Online. It’s an Expense, but one of its more specific sub-categories.

Figure 3: QuickBooks Online provides the correct drop-down list in form and record fields.

QuickBooks Online takes care of a lot of the background work of double-entry accounting. But it necessarily exposes you to the concept of accounts. We’re here to help if this causes confusion in your daily bookkeeping.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Setting Up User Access in QuickBooks

Will multiple employees be working with your QuickBooks company file? You’ll need to define their permission levels.

If you ever did your bookkeeping manually, you probably didn’t allow every employee to see every sales form and account register and payroll stub. Most likely, you established a system that allowed staff to work only with information that related to their jobs. Even so, there may have been times when, for example, someone pulled the wrong file folder or was sent a report that he or she shouldn’t have seen.

QuickBooks helps prevent this by setting virtual boundaries. You can specify which features of the software can be accessed by employees who work with your accounting data. Each employee receives a unique username and password that unlocks only the areas he or she should be visiting.

To help minimize errors, maintain data integrity, and preserve confidentiality, QuickBooks lets you restrict users to designated areas in the software.

Here’s how you as the Administrator can define these roles. Open the Company menu and select Set Up Users and Passwords | Set Up Users. The User List window opens. You should see yourself signed up as the Admin. Click Add User and enter a User Name and Password for the employee you’re adding. Confirm the Password and check the box in front of Add this user to my QuickBooks license. Click Next.

Note: You can have as many as five people working in your QuickBooks company file at the same time, depending on how many user licenses you’ve purchased. Not sure? Press F2 and look in the upper left corner. If you need more than five user licenses, talk to us about upgrading to QuickBooks Enterprise Solutions.

In the next window that opens (see above screen), you’ll be given three options. Probably you’ll most often select the second option, which lets you specify the screens this user can see and what he or she can do there. The first-All areas of QuickBooks-would seldom be granted. And the third allows us to come in and do whatever tasks have been outlined in our work relationship (troubleshooting, monitoring, creating and analyzing reports, etc.).

Click the button in front of Selected areas of QuickBooks and then Next. You’ll see the first in a series of screens that deal with the software’s functional areas: Sales and Accounts Receivable, Purchases and Accounts Payable, Checking and Credit Cards, Inventory, Time Tracking, Payroll and Employees, Sensitive Accounting Activities (funds transfers, online banking, etc.), Sensitive Financial Reporting, and Changing or Deleting Transactions.

When you give employees Selective Access in a particular area, you can further define their roles there.

The Sales and Accounts Receivable screen is a good example. You can see the options offered in the above image. By clicking on the buttons pictured, you’re giving this employee permission to both create and print transactions. Below these options, you’ll be able to keep him or her from seeing customers’ credit card numbers in their entirety by clicking in the small box. When you’re finished, click Next.

Keep clicking Next and proceed through the rest of the screens. Your choices will be similar on each. But be sure to read all of the descriptive text very carefully. Keep in mind the importance of confidentiality issues and security as you go along.

The ninth screen, Changing or Deleting Transactions, deserves special attention. First, should this employee be able to change or delete transactions in his or her assigned area(s)? Even though you trusted these employees to work with finances when you hired them, consider this question carefully. Depending on the volume of transactions processed every day, you may want to reserve this ability for yourself.

We may or may not have established and password-protected a Closing Date for your company file. This is the date when the books for a specific time frame have been “closed,” meaning that transactions should not be entered, added, or deleted prior to it. We can talk with you about the pros and cons of such an action.

A summary of user access rights

Here and on every other screen in this multi-step wizard, you can always click the Back button if you want to return to a previous window. When you’re finished, you’ll see a screen like the one in the above image that summarizes the choices you have just made.

If you’re feeling any uncertainty or confusion about the whole issue of access rights, we’ll be happy to go over your options with you. These are important decisions. You’ll want to stress to your employees that restricting their permissions does not signal a lack of your trust in them. Rather, QuickBooks provides these tools to protect everyone who uses the software as well as any external individuals and companies that might be affected.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Better Budgeting Using QuickBooks Online Plus

Everyone groans when budget time rolls around. QuickBooks Online Plus offers tools that simplify the process.

Budget. The word evokes a sense of dread in most small business managers’ minds. Large corporations have entire teams of accountants Gympie that work on this critical element of financial planning. You, on the other hand, must go it alone – or with the assistance of an external company, such as Phoenix Accountants and Advisors, or with the help of other staff if your company is big enough.

Why is this chore so difficult? Several reasons. The biggest stumbling block is probably the sense of uncertainty. How do you know what your income and expenses will be for the coming year?

QuickBooks Online Plus can’t tell you how to plan the next year in terms of numbers, but its tools can make the mechanics of building a budget easier.

Your Fiscal Year Start

Finding the start of your fiscal year in QuickBooks Online Plus

Do you know exactly when your fiscal year starts? You’ll need this information before you can get started on your budget and there is no better place to get it that from professional financial advisor services. Click the gear icon in the upper right next to your company name, and then select Account and Settings | Advanced. The first entry here tells you what the First month of fiscal year is.

Creating a Framework

To get started building your budget, click the gear icon again and select Tools | Budgeting. Click New Budget to open the mini-interview wizard (if it didn’t open automatically). QuickBooks Online Plus creates what are called Profit and Loss Budgets. This kind of budget tracks the numbers in your income and expense accounts.
There are three ways to create one, as you’ll see when you click Next on the first page of the interview. You can:

  • Work from historical amounts by copying last year’s data into the spreadsheet,
  • Start from scratch, or
  • Copy data from an existing budget.
You can choose from these three options to create your budget in QuickBooks Online Plus.

Click in the button in front of No amounts. Create budget from scratch, and then click Next. QuickBooks Online Plus’s budgets consist of a table divided into months (columns) and accounts (rows). You can break this down into even greater detail by subdividing your budget and tracking accounts separated by Territories, Classes, or Customers if this kind of information is important to you. For now, click the button in front of Don’t subdivide.

When you click Next, you’ll be asked to select the fiscal year for your budget. Click the down arrow to the right of Select fiscal year and choose the appropriate year. Type an easy-to-remember name for your budget in the box below and click Finish. The mini-interview will close, and your budget spreadsheet will open.

Entering the Numbers

QuickBooks Online Plus defaults to a monthly view when you first open it, but you can change this at any time to Quarter or Year by clicking the arrow in the field next to View by in the upper right corner.

If you had copied income and expense data from the previous year, or from an existing budget, those numbers would appear in the corresponding cells and could be changed to create a new budget. You opted to start from scratch, so the table is empty. You can just start entering individual numbers – not within the spreadsheet cells themselves, though.

Look down to the bottom left corner of the screen. If you’ve highlighted Discounts given, for example, by clicking on that label in the spreadsheet column, you’ll see a line directly below that last row that reads Edit – Discounts given.

This area is where you’ll do your actual data entry. If the drop-down list to the right of Enter by is set to Month, you’ll see 12 boxes below labeled with the months of the year. If you anticipate that every month will contain a different figure, enter the numbers in the correct boxes and click Save & Next. QuickBooks Online Plus will copy your numbers into the actual budget spreadsheet.

If the number will remain the same for each month, you can enter it in the Jan box and click Copy Across, then Save & Next (click this button after every row change). Your cells for that account will be automatically populated.

Entering quarterly budget data

If you think more in terms of quarterly income and expenses, you can highlight the correct account and select Quarter from the drop-down box next to Enter by (see above image). Fill in your quarterly totals, and QuickBooks Online Plus will divide those evenly between each set of three-month periods. The result would look like this:

QuickBooks Online Plus can divide quarterly totals into monthly budget numbers.

And of course, if you select Enter by: Year, you’ll only enter one number that QuickBooks Online Plus will divide evenly into 12 months.

When you’re done with your budget, click Finish.

This is a lot of information to absorb all at once, and we imagine you may have some questions on budget projections and on the actual mechanics of creating a budget using QuickBooks Online Plus. As always, we’re happy to hear from you.

.…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Make QuickBooks Your Own: Specify Your Preferences

Your business is unique. Make sure that QuickBooks knows how you operate.

QuickBooks was designed to be used by millions of businesses. In fact, it’s possible to install it, answer a few questions about your company, and start working right away.
However, we strongly suggest you take the time to specify yourPreferences. QuickBooks devotes a whole screen to this customization process. You can find it by opening the Edit menu and selectingPreferences.

This is the screen you’ll see when you go to Edit | Preferences in QuickBooks. You can turn features off and on, and customize the software in numerous other ways.

Let’s look at some examples of what you can do on this page. In the image above, Accounting is highlighted. You can see that QuickBooks makes it easy for you to specify your preferences. You simply click in boxes to check or uncheck them. Sometimes, you’ll click on the desired button in front of a list item. Other times, you’ll be asked to enter numbers and text.

Tip: When you click on a tab in the left navigation pane of the Preferences window, you’ll notice that there are two tabs in the larger pane on the right. If My Preferences is highlighted and there are no options on that screen, click on Company Preferences.

Some of the screens here, like Accounting, contain complex concepts. Do you know, for example, why you would or wouldn’t want to Use account numbers? What Retained Earnings are?

Warning: While the mechanics of this process are simple, there may be times when you don’t understand what’s being asked because you’re either not familiar with the terms  or you don’t know which option you should choose. Rather than guessing, please connect with us to set up a to go over all of the content in the Preferences window.

Some preferences are easier to define. Let’s look at one of these.

The Time & Expenses window in QuickBooks’ Preferences

The image above is a partial snapshot of the screen that opens when you select Time & Expenses from the left vertical tab in the Preferences window.

Tip: If you start making changes and decide you’d like to return to the options selected before you started, click the Default tab in the upper right.

Your options here are very simple:

  • Do you want to use the time-tracking features in QuickBooks?
  • On what day does your work week start?
  • Does all of the employee time worked and recorded get billed back to the appropriate customer? (You can change this manually on each time entry by checking or unchecking the box in front of Billable.)

When you create an invoice for a customer who has outstanding time charges, do you want to be able to select those from a list?

If you check the box in front of Create invoices from a list of time and expenses, this box will appear when you open the Create Invoices window and select a customer who needs to be billed for time:

If you are creating an invoice for a customer who has received services but who has not been billed for them yet, you can opt to have those charges added to the invoice.

You’ll notice that there’s a box in the lower left corner labeled Save this as a preference. While QuickBooks allows you to specify preferences in countless areas in the Preferences window, you will often have the opportunity to make an exception for a particular action as you’re working on transactions. Also, as shown here, you can sometimes turn on specific preferences once you’ve already started a task.

You’re not required to go through all of the entries in the Preferences window before you start working. You can always go there to see if there’s a setting you can change if an element of QuickBooks isn’t performing the way you expected.

But we think it’s a good idea to learn about all of your options in the software before you get started. If you let us go through this process with you, you’ll learn not only about the customization allowed, but you’ll also get a good introduction to all of the things that QuickBooks can do. You’ll also discover where your knowledge of accounting may be lacking. And we’ll learn more about your business and its needs. Contact us and we’ll help you get going.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).