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Complete your company setup

After you complete the Easy Step Interview and QuickBooks Setup, you can start using QuickBooks. However, for a completely accurate picture of your business, you should complete a few more steps. Specifically, you should

  • Continue setting up lists, for example, adding accounts your accountant suggests

  • Enter opening balances, for example, the value of what you own, what you're owed, and what you owe

  • Set up payroll, if you have employees you pay

  • Enter transaction history, that is, the transactions that occurred since your company file start date

  • Check your setup by running some reports

  • Customize QuickBooks to fit your business (you could even begin here)

If you've been in business a while, ideally you want your QuickBooks records to match your accountant's or tax records, but entering all this information can seem overwhelming. Don't worry. You don't need to complete everything now. You can start using QuickBooks with a minimum amount of information. In most cases, if QuickBooks needs any additional information, it asks for it while you work. Many businesses use QuickBooks successfully, even though their company data doesn't match their accountant's records exactly.

The sections below tell you the basics you need to get started now and what you need to get the most out of QuickBooks later.

Set up lists

QuickBooks uses lists to store information you use over and over. Once you enter something on a list, you don't have to enter it again. To get started, you will need to set up some basic lists.

Basic setup

  • Enter information about the people you do business with, including customers, vendors, and employees. You probably did this during QuickBooks Setup. If not, you can add and edit multiple customers, vendors, and items.

  • Enter products and services you sell as "items." Again, you probably did this during QuickBooks Setup.

  • Enter sales tax items if you charge sales tax.

Complete setup

  • Complete the tasks in Basic setup.

  • Add accounts that QuickBooks might not have suggested (learn how)

  • Add account numbers to your accounts (ask your accountant if this is necessary) (learn how)

  • Create customer types to categorize your customers in meaningful ways to your business (learn how)

  • Create vendor types to categorize your vendors in meaningful ways to your business (learn how)

  • Create job types to categorize your jobs on reports (learn how)

  • Create terms to clarify the agreement you have with customers and vendors about when payment is due (learn how)

  • Create customer messages that you can display at the bottom of printed sales forms (learn how)

Enter opening balances

Ideally, QuickBooks needs to know where your company stands as of the start date (when you start using QuickBooks). In accounting terms, you need to tell QuickBooks what assets your company has, its liabilities, and its equity (net worth). This information comes from a balance sheet, if you have one. If you, your accountant, or tax preparer created a balance sheet for your company, you can enter this information in QuickBooks.

However, you don't need a complete balance sheet to begin using QuickBooks. To get started, just enter a few key opening balances, however you've been keeping track of them. If the start date of your company file is after the beginning of your fiscal year, you also have to tell QuickBooks how your company has performed from the beginning of the fiscal year up to the start date. You do this later when you enter transaction history. This step is important to ensure accurate reports.

Basic setup

You need opening balances for certain accounts before you can enter specific transactions. For example, if a customer pays you money, you need to know how much they owe. The amount they owe would be the opening balance for that customer.

You may need to know some balances to start using QuickBooks (these will vary depending on your business):

  • Bank balances (possibly entered during QuickBooks Setup)

  • How much money owed to you from

  • How much you owe for

    • Bills (money you owe vendors, which you possibly entered during QuickBooks Setup)

    • Credit cards (learn how)

    • Loans (mortgages, cars, and so on, if you make regular payments) (learn how)

    • Sales tax (learn how)

    • Payroll tax, if you have employees you pay (learn about this in Set up payroll below)

Complete setup

In addition to the tasks from Basic setup, you can add more complex accounting information such as aging details and other balance sheet information. You're likely to need an accounting professional for help with this.

For example, when you add customers or vendors during QuickBooks Setup, you enter opening balances for these list entries as a lump sum. In other words, you enter 1 balance, even if that balance is made up of 5 open invoices.

If you enter an opening balance as a lump sum, you lose aging information and detail such as invoice or bill numbers. For example, if a customer sends you payment for a specific invoice, you won't have that specific invoice in QuickBooks. If you don't need to track this detail, then entering the lump sum is fine (use QuickBooks Setup). If you've already entered lump sums in QuickBooks Setup but now want to enter more detail to track aging information, you would have to delete the lump sums. Again, this can be complicated, so we recommend that only accounting professionals attempt this.

Entering opening balances with aging information requires good knowledge of accounting and QuickBooks. You have to create an opening balance item that points to an equity account and use this item on all open invoices and bills from the prior fiscal year. If you don't have an accounting background, we recommend that you consult your accounting professional for help.

You also need to enter the rest of the balances from your balance sheet (for example, vehicles you own, office equipment, and so on). This is usually done with journal entries and is only recommended for accounting professionals.

Set up payroll

If you have employees, it's important to set up payroll correctly because it affects employees and government agencies. To help you avoid errors, QuickBooks offers a number of payroll services that make setting up and running payroll in QuickBooks quick and easy.

For more information, see Use QuickBooks to manage your payroll.

Enter transactions history

If you set up your company file after the beginning of a fiscal year, you should enter the transactions that already occurred during that fiscal year. For example, if your company file start date is March 31, and your fiscal year starts on January 31, you should enter transactions that occurred during January, February and March. It's important to enter historical transactions in progressive order. For example, you must enter an invoice before you enter the customer's payment. Save entering bank account transactions for last because other transactions can affect your bank balance. When you finish entering all of your historical transactions, your check register should be up to date.

If you don't have time to enter your history but want to start using QuickBooks, you can enter current transactions as they occur so you don't fall behind. Then you can enter historical transactions when time permits. However, your account balances will be incorrect (and your reports may be wrong) until you enter all the transaction history.

Enter your transactions in the following order:

  1. Sales and accounts receivable transactions (invoices, statement charges, sales receipts, returns, payments, deposits, sales tax payments)

  2. Vendor and accounts payable transactions (bills, credits from vendors, payments)

  3. Summarized payroll amounts for this year to date

  4. Historical bank and credit card transactions (checks, deposits, fees, transfers)

Finally, after entering all historical transactions, reconcile your bank account.

Check your setup

Run some basic reports to make sure you set up QuickBooks correctly.

At the minimum, you should run these basic reports:

Balance Sheet

If your company is new, this doesn't apply to you. However, if your company did business last fiscal year, you or your accountant should have a balance sheet dated from the end of the last accounting period. When you finish your QuickBooks setup, the balance sheet in QuickBooks should match this balance sheet. If it doesn't, consult your accountant. To open this report, choose Reports > Company & Financial > Balance Sheet Standard.

Customer Balance Summary

This report lists the customers who owe you money. This total should match the Accounts Receivable total on the balance sheet from the last fiscal period (unless this is a new company). It should also match any list you might have of customers who owe you money. To open this report, choose Reports > Customers & Receivables > Customer Balance Summary.

Vendor Balance Summary

This report lists the vendors you owe money. This total should match the Accounts Payable total on the balance sheet from the last fiscal period (unless this is a new company). It should also match any list you might have of vendors you owe money. To open this report, choose Reports > Vendors & Payables > Vendor Balance Summary.

Note: If you entered detailed balances for customers and vendors, you could also run accounts receivable or accounts payable aging reports.

Customize QuickBooks to fit your business

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