QuickBooks uses accounts to manage expense information about
your company. One transaction can affect multiple types of accounts. QuickBooks
uses expense accounts (you can think of these as folders) to categorize the
money going out of your company.
By managing your finances with the right accounts, you can prepare detailed
and accurate reports about your business. These reports let you see how and
why you are spending money—and give you insight into potential ways to
decrease your expenses and increase your profits.
Categorizing expenses correctly helps you get every
tax deduction that you're entitled to. When it's time to do your taxes,
QuickBooks shows you what your total expenses were for expenses that are tax
deductible—like mortgage interest or state taxes paid.
To allocate expenses to the correct accounts, each time you enter or import
a bill, you will be prompted to associate the charge with an expense account.
If you're familiar with Quicken, QuickBooks expense accounts work like
How does QuickBooks use accounts to categorize expenses?
After you create expense accounts, each time you receive a bill or other type
of expense, you'll either import it electronically or enter it manually into
When you enter a bill or other expense, you'll associate it with
an expense account to categorize the type of expense that it is.
Why should I use QuickBooks to track expenses?
You can get a clear picture of what you're spending money on. This is
especially helpful at tax time so you can claim the correct deductions.
Show me an example in QuickBooks
Each time you enter an expense or bill into QuickBooks...
... you will associate an expense account with the charge for tracking.
When you pay the bill...
...QuickBooks increases the expense account that corresponds to the bill paid.
Adding new accounts
Understanding income accounts