QuickBooks Online Complete Tutorial: Setup, Chart of Accounts, and Banking

and I guess you are starting to use QuickBooks Online or thinking about setting yourself up in QuickBooks Online now this video will walk you through the entire account creation setup setup up a new account I'll explain some of the different options we'll talk about doing the initial configuration and preferences based on your industry and then we'll do a couple of exercises on transactions like downloading transactions from the bank creating invoices where I can sell in the bank and pulling financial statements if you already have a QuickBooks Online account setup you can fast-forward to the minute and seconds below to skip the entire new account setup process however if you're starting from scratch from zero I recommend you watch the entire video so I can walk you through setting up the account and also choosing the right version of QuickBooks Online does for you alright the first thing I recommend is you need to use Google Chrome as your browser don't use Firefox don't use Safari don't use internet explorer quickbooks online was actually designed to work best and optimized in google chrome and i'm through this video i'll explain some of the specific google chrome features that work best for quickbooks online the first thing i'm gonna recommend is you're gonna click on the top right of your google chrome browser and that may say person 1 or it may say your name in it or it may say something else but you want to click on that button and then click on where it says manage people basically what we're gonna do is we're going to create a user exclusively for quickbooks online so all the Preferences bookmarks passwords everything we do is only on that user so we're gonna click on add person on the bottom right then we're gonna call this one qbo user you can call it whatever you want I'm calling in qbo user and I'll use this Whitehead over here and click on save okay so perfect I got my Google Chrome user called qbo user which is designed just for quickbooks online and i recommend that you do your browsing and another chrome user and use quickbooks online on this one this will also keep your quickbooks online safest and on the logins and fastest because QuickBooks Online intends to do a couple of security checks and if you do a lot of logins and log outs of other websites QuickBooks Online tends to be a little bit slower to log in so if you have a dedicated chrome user for that you will see you will notice it will thank me later it is the best possible thing but the first thing I'm gonna recommend is if you don't have an account yet is to create an account using my link so my link is Hector Garcia comm /qb and once you go to Hector Garcia comm for /qb it will forward you to QuickBooks as purchase page now my link will give you a 30-day free trial and it will also give you a 50% discount if you sign up for the first year is the only link that I know that can do that so I would definitely recommend that if you're gonna get QuickBooks Online anyway now once you get to this page it will ask you for three choices do you want to go with QuickBooks Online simple start which is basically just for invoicing and banking and to have one user working on QuickBooks simultaneously then you have QuickBooks essentials which is this middle option that allows you to have three users working simultaneously plus two accountants and this will allow you to track invoices bills and recurring transactions which is a really valuable piece of of managing your books and lastly if you want to track inventory budgets job costing class location tracking and issued 1099 to contractors all those features are going to be inside of the plus Edition which also allows you to have five users working simultaneously so let's go ahead and choose the Edition that we're going to go with most people go with essentials and we'll click on start free trial then it's gonna ask you to enter an email phone number and password and then click on sign up with email and then it will create the account and get you started with the setup next question is what is the name of your business so I'm going to call this Hector's computer shop okay I know you put LOC Corp whatever it happens to be then it's gonna ask you how long have you been in business and this is only really contextual for QuickBooks to then guide you on whether or not you should be bringing all the opening balance is because your business has been open for more than a year and making the assumption that you do have a tax return or some sort of financial statements for the previous year and you're setting up QuickBooks and you may want to bring that old data in there somehow so by putting the number of years QuickBooks may guide you to that process I'm gonna put here that we've been in business for three years and then there's a little check mark that says I've been using QuickBooks desktop should quickbooks online walk me to that process so if you do have QuickBooks desktop and you want it to walk you to the process of getting the data from QuickBooks desktop into quickbooks online you will hit that check mark for this particular video we're gonna skip that piece you know take a look at my channel for other videos about desktop to online conversion we're gonna start brand new from scratch in quickbooks online so we're gonna go ahead and click on next and then it's asking you what would you like to do in quickbooks and really this is only for quickbooks to then send you some help or some pop-ups of videos and articles and how to do any of these things like creating invoices I like to skip them just because I know how to use QuickBooks really well and if you're watching this video you don't need QuickBooks to keep walking you through the process in this video we'll cover all these things so we're gonna click on all asset and the first thing you will notice you will notice up here where it says you have a 30-day trial you can click on subscribe now once you're ready to put your credit card and and and move forward with the account but you got a whole 30 days you don't even have to touch that piece where you can use QuickBooks Online now when you first set up QuickBooks Online there's absolutely nothing in there there's no customers no vendors no accounts nothing so in order to do that we're gonna have to go and create that database of customers vendors account items and products but the first thing we're gonna do is we're going to go through the preferences I think it's very important to go through their account settings and preferences to kind of get an idea for what the capabilities of QuickBooks are so we're gonna click on the gear button which is the little gear icon on the top right and then we're gonna click on where it says account and settings so I am recommending that that's the first place you go and on their accountant settings we can change the legal name of the camp we can put the tax ID we can click on this little pencil icon on the right to edit and we can say okay we are kerb our LLC it's a partnership and we can put here our industry so let's say we are in the computer industry so we can put computer and then we're gonna get all these different options so I'm gonna put here computer system designs and related so I'll click on that and then I click on save and this also allows QuickBooks to kind of know in which direction to go with the setup and you'll see us as we go you can add more things like your website your phone number your company address all that stuff is really relevant logo for invoicing what will go back to that now under building a subscription that's really when we we can cancel our free trial we can upgrade to the Plus version if you wanted a little bit more features and we can click on subscribe to enable payroll and we'll talk more about payroll a little bit later on for now this is just where you see your account settings and your company ID over here which is extremely important and valuable if you call QuickBooks Online tech support the fastest way for them to know what company they're talking about is that company ID so when tech support calls you when you call them and say hey I need any help with this I'm having issues with this give them that company ID and I'll go straight to your account let's click on sales and see what's in sales and the first couple of things I recommend is customizing your invoice because that's pretty much the number one reason why people get QuickBooks Online is to create a new invoice so we're gonna click on customize look-and-feel and from here we're gonna click on either edit the current style which is basically the template or we can create new ones let's just click on the the one that's default and then we can do a couple of things we can add a unique logo so I can click on add logo and I'm gonna go ahead and look for my company logo here and there it is I click on open and I will bring the logo in there what's really cool about it is once you bring the logo in there QuickBooks assumes that the color scheme from your logo is the same color scheme for your invoices and I'll detect the colors on that logo and that in you can also click on splash some color and you can change the color scheme if you want to you can click on the funds and you can change the font size or the font style if you want if you want bigger or a smaller fund that top that type of thing let's not get too deep into the invoice configuration I think adding a logo and the colors is pretty much the best way to get started so we're gonna click on done and that will be what we done with that so that's great we mean believe it or not we are very very far ahead on our setup let's go back on accountant settings and let's go through the other settings so I'm gonna click on sales and let's take a look at what we have here so we have preferred invoice terms so basically they're asking you when you create an invoice how many days do you want to give your customer until they pay you before they're officially laid before you charge you my late fee now you may not give any client credit you may want them to pay you immediately then in that case you click on doing receipt and every single invoice that will be the default option or you can leave it a net 30 which is what's there already now preferred delivery method is whether or not when you create a new invoice if you want QuickBooks to queue up a print list for me to print the invoices and mail them all in batch or if I want to queue up the email list because what I want to really do it's email my client invoice which in the year 2018 strongly recommend that you do that now you can turn on shipping which basically adds a little box for shipping so you can add some shipping options you can add some custom fields if you want to record additional information about the sale with your customers you can click on custom transaction numbers that's actually crucial custom transaction numbers means that instead of QuickBooks controlling the invoice numbers you can override and put whatever number you want for the invoice number typically I like to click on custom first I pick a big number or whatever number and one you know ten thousand and one and then turn it off and let QuickBooks follow its own numerical process you can add service state for example if you want to record in your QuickBooks the work separate than when you're invoicing and other things like this kind of deposit we'll skip them for now so we'll click on save here then we got on their products and services it says what you like to show a column for the products and services you want to show the actual item that you're selling your customer this could be a product or a service I absolutely like that I you know I work with items all the time I will explain what that is and that's open by default and also quantity and price and rate that's also enabled and again if you don't work with quantities and price and you just work with totals then you would just unclick that but I work with rate and quantity so I'm gonna enable that and those are pretty much the default settings I'll click on save everything else in there you can explore but it's not really that important I'm gonna click on expenses and the only option you really have here is the default payment terms this is you know how many days to your vendors give you to pay them similar than than the invoicing I'm gonna leave in a net 30 however you can change them in a vendor to vendor scenario and then from here you can turn on purchase orders but you will have to upgrade to that plus version or quick QuickBooks Online we're gonna stay on the essentials version I will do the walkthrough on that and then we'll once we're finished with that then we're gonna go and upgrade the plus and then talk about the things that are in plus not on their payments that's for you to enable the special service that QuickBooks has to give you the capacity to receive payments online to receive credit card payments online so if you want that you would have to go to this process click on learn more you have to put your as the owner you have to put a social security number your social security number you have to put the ein the tax ID from the business and you have to get approved now most people get approved unless they have some real big issues with their credit they get approved and within a couple of days you can start charging your customers I'm gonna weigh the credit card which is awesome and you get paid within a couple of days which is great and then under advanced we got a couple of really interesting things again crucial to the setup process you know are you a January through December of company or do you have a different fiscal year some companies or you lied through June you know they don't follow the fiscal the calendar year scenario I'm gonna start I'm gonna do January as the example but if this is a place what you want to change that this would be the place to change it now accounting method it tells you accrual or cash what's really cool about QuickBooks is it lets you swap back and forth so you're not really stuck with one method and this really has to do with like the way you file your taxes most small businesses do cash they file taxes on cash basis however because QuickBooks allows you to swap back and forth I actually wouldn't select cash even if my tax return is on cash I will follow the accrual method and that's because you want to manage your books in a cruel and because you want to know what's going on in terms of who owns your money and who you are money to regardless of how you file your taxes you can always switch it for the reporting purposes but you want by default manage it in a cooler basis and here's a place where you can close your books which is really just relevant to when you have your year closed your tax return file and you want to block those books so anything from the year pass people can't really change it including yourself protect yourself from having your QuickBooks be different than your tax return then we're gonna go to tax form and we already kind of change that we told it what tax form it is and obviously talk to your accountant if you don't know what tax form your business uses and if you don't have an accountant you got my email you can call me I'm taking your clients all the time especially if you use QuickBooks Online I like working with clients I use QuickBooks Online but your accountant or the help the person will help you set up the company in the first place should know what form your business should follow for taxes ok let's see what we got here chart of accounts enable account numbers you don't have to use account numbers but I certainly like using them that's to give your chart of accounts numbers as well as names so we're gonna turn that on here I like using that but you don't have to and you'll see what that looks like when I set that up let me click on save let's take a look at automate so we have prefilled forms with previously entered content I like this option because when you create a bill for let's say for Time Warner Comcast and you classify it as utilities the second time next time you create a bill for the same vendor it's gonna suggest the exact same account the only drawback with that option is that it also suggests the same dollar amount and if you're not careful you may by mistake start accepting transactions without really looking at that dollar amount so I I'm going to leave that on but just be extra careful to make sure you're always putting the correct dollar amounts and then we got this option here called copy estimates to invoices that's a crucial feature because I create a lot of estimates and once my customers or potential customers accept that estimate I want to just copy that estimate into an invoice so I don't have to recreate the transaction over again so definitely turn that one on and click on save and then let's see what else we got time tracking I'd feel service to timesheets won't worry about that for a minute we'll talk about that more on the plus side where we talk about job costing and timesheets make single time activity billable to customer let's turn that on for now leave that on we don't need to mess with that we'll talk more about the job costing and the billable time much later on as we get deeper into QuickBooks and then everything else is pretty much standard you know you're using multi currency what's your home dollar I mean home currency which is mostly dollar and then you know what's the date format number format oh this was good customer labels how do you call your customers what do you call your customers so if you think it's easier for you to call your customers clients or call your customers donors because you're a non-profit maybe or call your customers members or call your customers patients tenants or guests just to make it easier so when you're clicking on things in QuickBooks it's using your terminology you certainly may do that I'm gonna put clients cuz I call my customers clients click Save and then click done and that's and that's it for the for the overall look at the settings and I know that was a very long time to get to the software but you know when you have your QuickBooks set up correctly your experience is going to be much much better now the very next thing is gonna be your chart of accounts so to get to the chart of accounts we're gonna click on the gear menu up here in the top right then we're gonna click on chart of accounts now in the chart of accounts you're gonna see what QuickBooks set up for you at the beginning now this is gonna be a very basic chart of accounts it's gonna be very generic it may or may not contain all the accounts that you need actually for sure it won't contain all the accounts because you have to create your bank account your credit card account your loans all of that stuff so these are split into two categories you're gonna see all the accounts that have what's called a running balance or a QuickBooks balance so you will notice that there are some accounts that have a dollar amount associated with it at the moment it's a zero but all the things I have a dollar amount associated with it that they have a QuickBooks balance or iranian balance these are called balance sheet accounts balance sheet accounts are those categories you know those accounts those categories of value that are going to be in your balance sheet which is one of your two primary financial reports and then anything under that they're gonna be profit and loss or income statement accounts and these accounts will put together your profit and loss report or your income statement report that represents your sales your cost your expenses and your bottom line how profitable you were in your business you will notice that all the profit and loss accounts have a run report button on the right side and then all the balance sheet accounts have a view register button on the right side that's a also sort of another way to know whether it's a balance sheet account or a profit and loss account let's start by creating our bank account so we're gonna click on the top right we're gonna click on new your sell a drop down menu for import if you happen to have a chart of accounts in Excel you can do that we're not gonna go through that in this particular video but you could import them from Excel or of course if you're coming in from QuickBooks desktop is going to bring that chart comes with it but if you're starting from scratch you can have to create all these accounts one by one so we're gonna click on new on the top right and we're gonna start with our bank account so we're gonna click on bank and then I normally like to name this the name of the issuing bank and then the last for the use of the account number so we're gonna call this one chase I'm gonna call it Chase checking and I'll put the last four digits 1 1 2 2 so that's the last four digits of my bank account number not my debit card my bank account number and then here's a number that's actually the account number itself we'll get to that later on I'm gonna skip putting a number there for now you don't have to put anything there we'll just put here chase checking 1 1 2 2 we'll leave it as that now let's start let's assume I'm setting up my click books file for the first time in the year 2018 and I do want to bring an entire year's worth of data so when I close 2018 I have a four year so I can do my tax returns and have four years worth of accounting but if I have an account existing from before I had a running balance from before I gotta go get the bank statement that closed on 1231 2017 and I have to write down that ending balance in QuickBooks in order for that balance to come in correctly so I'm on the balance I'm gonna put whatever that opening balance is so let's start by setting up the bank so we're gonna click on a new on the top right and we're gonna select bank as our option so we're gonna click on bank and there's a couple of options here under detail type for the most part I don't get too stressed out about these if you get this wrong it's not gonna be a problem but QuickBooks does force you to select one of these so we're gonna select checking and then we're gonna give this a name we're gonna call this Chase checking just make it all caps I'll probably be better so chase checking and we'll give this last four integers of the account it's really important to bring in the last four digits of the account especially if you have multiple accounts going on then on their balance we're gonna literally grab the bank statement from the closing period from 1231 2017 and we're gonna bring that in because then we're gonna actually do the accounting and QuickBooks for all of 2018 so we're gonna open up the actual bank statement so I open the actual bank statement that I happen to have in my computer you may have it printed that's totally okay and we're noticing here that it is for the ending of the year and we're also gonna copy that ending balance obviously different banks have different ways of showing those bank statements so we put in the ending balance without the dollar sign and we'll put here 1231 2017 and then we click on save and close and and that's how we added our bank account now let's add all of our bank accounts if we happen to have multiple bank accounts multiple banks you want to bring all the stuff in with its beginning balance let's now bring your credit card so I'm gonna click on new on the category type I'm gonna go down to credit card and then under credit card type there isn't any other option so we'll leave that there I will call this one change visa and also put the last four digits of the credit card and we're gonna go to balance bring that balance over let me pull up my credit card balance okay and it looks that for this particular statement that closed on 12:26 2017 which is the closest statement I have for the ending of the year the balance is seven thousand and change here so I'm going to take that balance and put that on that that credit card that we're creating so bring that in I'm gonna paste that in there if I happen to copy and paste from another file or you just hand kid this one was twelve twenty six 2017 and we'll go ahead and click on save close and there we go we got our bank we got a credit card let me add a loan and I also happen to have a loan with that Bank so I'm gonna click on new and for a loan I'm gonna click category type click on the drop down and select long-term liability this particular loan is payable in five years so it's gonna be time but if you have anything that's line of credit or something that's payable within the year then you want to pick current as basically the current is we're gonna pay it off within the year and long-term it's gonna take us more than a year to pay that off so I'll pick a long time and then we'll call this one let me see what we got here let's call it a note payable that's right we'll call this one chase loan five year we'll call it that and then the unpaid balance for that loan let's pull that up okay and that's thirty two thousand seven fifty two so we're gonna put that in there and that was us of twelve seven twenty seventeen so thirty two thousand seven fifty two let's put that in there thirty two thousand seven fifty two and that's our self 1207 2017 not all statements are gonna have that pretty end of the end of the day and at the end of the month end of the year dating philosophy so you have to get the statement that is closest to the end of the end of the year but it doesn't cross to the beginning of the year because we want to get a complete set of financial statements for the current year so it's okay if we have something that's around December somewhere but the one that we have closest to the end of the year and we hit save and close and this is a moment that maybe is worth it for you to sit down with an accountant just because it's difficult for most folks to know what goes in the balance sheet you know what what balance is do we need to bring over most of the times we actually take the tax return from the previous year and hopefully the accountant put a balance sheet together we want to make sure we bring in all those balances if you don't have an accountant you know you have my email below you can hire me I certainly help a lot of people with their QuickBooks and under taxes but if you have your own accountant contact your accountant this is a great moment for your work with your accountant to get that chart of account started especially because you know bank credit card loan that was pretty easy but then one gets a little bit tricky is adding your assets and the accumulated depreciation and that sort of thing let me show you an example so I'm gonna click on new and let's say that I have two assets I have some Peter equipment and I have a truck so I have to create each asset I guess depreciated separately into the books so I'm going to click on fixed asset and this one's going to be let's see what options we have here fix us at computers ok that was the option and if you can't find what you want here just click on other fixed asset in this case there was something that made sense there and we'll call this one computer equipment and let's say that this I think I misspelled this computer equipment and then let's say that I originally paid fifty six hundred dollars for that computer equipment and I'm gonna put there as a 12 31 2017 because that was the value at the end of the year now that doesn't include depreciation depreciation would be another thing there's a little checkbox that says track depreciation for this asset and then I can actually bring in my depreciation and again that's where an accountant helps to kind of help you figure out what this number comes from but normally you copy that or you take that from your tax return if your accountant does depreciation calculation so let's say what we have depreciated so far is 3,200 12 21 2017 and then I click on save and close and QuickBooks will actually create my asset for fifty six hundred and then we'll both create what's called my counter asset or my contra asset which is a depreciation that gives me the net value of the equipment let me do the same thing with my truck I'm gonna click on new click on my drop-down and then look for a fixed asset and then let's see what options we have here we should have something here for vehicles I'll be here called as perfect so we'll pick vehicle is the last one and we'll call this one Toyota truck and I'll give it the year so the size of 2015 and the original cost for the truck was thirty six thousand eight ninety typically that will be in your fixed asset report so put 12 31 2017 I'll click on track depreciation for this asset and let's say that we have we have depreciated in two years that says twelve thousand nine hundred and fifty dollars and we'll put 31 2017 again that's the pattern we're doing accounting for the whole 2018 year and we're bringing in these assets and this liabilities from the previous year let's say I also have a loan from Toyota so I'm gonna click on new and then I'll create another long-term liability so click the drop down and I'll click on let's say long-term liability and we'll call this one that's fine it's a note payable that's right we'll call this one Toyota finance loan and let's say that what I owe in this loan is twenty one thousand five sixty and that's also as of 1221 2017 so notice I'm putting the cost of my vehicle I also put a depreciation and I'm also taking into account the loan what I owe to the bank because I didn't buy that truck outright and there's other elements in the balance sheet the UMaine again may need an accounting professional to walk through it with you if you don't have an accounting professional and again and this is confusing for you you can skip it but at some point in time you are gonna have to enter those balances because if not your books are just not gonna be correct now after my child of accounts has done at least a balance sheet portion we can pull a report and we can see what that's gonna look like at the end of the day so we're gonna click on reports we're gonna click on balance sheet run and then normally what I do is I'll run a balance sheet for last year so with the last last year here under the report period section and I'll click on run report and we're gonna see what that looks like so we're gonna notice that our balance sheet now hopefully matches our tax return our other balance sheet that we've done for the previous year we should have our banking and in balance or assets and our depreciation so we have our total assets then we should have our credit cards the credit card balance we should have our car loans or other loans so we have to construct our entire balance sheet so that's great let's go back to the chart of accounts and let's now take a look at our profit and loss report our profit and loss accounts so once we scroll down to all the accounts that have a running balance you want to make sure that you also create your equity accounts I don't want to get too much into that but you want to create your equity accounts if you have multiple partners you may want to make sure that you do create each partners account because each partner has the capital they put in and the capital they take out the distributions they take out it is a sole owner then you can just have one account called owners capital owners pay whatever but if you have multiple owners and you want to make sure that each owner has its own capital account and typically this opening balance equity you see here this fifty thousand eight hundred that is going to then be divided across all the partners and that's how the balance sheet balances lets the Skip balance sheet stuff so we don't get too much into the weeds on the accounting or the accounting elements of this let's go now down to the profit and loss so we currently have five income categories that QuickBooks created for me billable expenses income sales sales of product shipping income on categorized income you may want to think about whether or not you want to use those you want to delete some of them let's say for example this sells a product income I don't care about so I can click on the drop down and click on delete and hit yes and I will get rid of it so then I don't I don't need that category anymore let's say shipping income let's say I don't charge income so I can just click on delete and I can start getting rid of them some of them it won't let you do it because you've enabled certain options remember when we when we were in the settings we click enable shipping that account cannot be deleted because the shipping line is gonna go there so that makes sense on categorized income let's say I want to delete that hit yes it doesn't let me delete it because that's a default category that QuickBooks uses when you don't know what to do with a piece of income and let's see if I can delete billable expensing come click yes ok it did let me delete that I assume that if I turn on billable expenses for customers again it won't it won't let me delete that so now we're done with three sales I means income categories now let's take this one call sales and let's edit it and I'm gonna click on edit and then I'm gonna call this one computer let's say that my company sells computers sells training and it also sells parts so we're gonna call this computer sales okay so we have one income category called computer sales I'm gonna click on new and then we're gonna go to category type and select on income and then under detail type if you can't really figure out what works best here pick the one that works best again this detail type is confusing don't worry about it being right around half the time it doesn't matter anyway so we're gonna call this one trading income okay that's another category of income that we have and then we said the other one was parts just miscellaneous part so we go down into a category type select income and detail type to other primary income of all call it parts sales perfect so let's see what we got here in our income category so now we have computer sales part sales shipping income training income on categorized income okay so let's say on the cost of goods sold side which are direct expenses let's say that we all want to create a three categories we're gonna have computer cost part cost we're gonna have shipping expenses and then we're gonna have subcontracted trainers so I'm gonna click up here to new and let's start with category type I'll pick cost of goods sold and we'll start with let's see cost of labor okay constantly it was fine we'll call this one sub contract trainers okay that's when we used third-party trainers to to do some of the training for our computer work let's go to a new and let's create a another cost of good sold category again cost of goods sold is my direct expenses and see what we got here let's see supply some materials and we'll call this one cost of computers sold so that's whenever we sell a computer the cost element of that we go that account and then we click on new and then we go to category type or the cost of goods sold and the other one was a cost of parts cost of parts salt or I didn't select the detail type this was a supplies and materials and unfortunately when you change the detail type it renames it up there for you so you have to redo it so cost of parts sold and one thing that you I don't know if you noticed but profit and loss accounts or income expense categories don't ask me to enter beginning balances beginning balances are only for balance sheet type of accounts so we click on save and close and we now we have a pretty nice setting here for all my income accounts I have all my cost of goods sold accounts this generate cost of goods sold one I can try to delete let's see if it lets me and yes it did alright so we want to get rid of all the accounts that we don't want to use to avoid any confusion I think I forgot one more I think it was shipping cost it's got a new let's go to category type cost of goods sold and we'll do shipping free delivery we'll call this one shipping costs okay and what was nice about having your own terminology your own names in the chart of accounts is because you don't want to really just get stuck with whatever QuickBooks gives you you want to use stuff that make sense to you that makes sense to your business that ties to the activities of your business ok so that we got income and cost of goods so let's take a look at our expense category so we have advertising and marketing that's good we have asked my accountant that's when you really don't know what to do with a particular category and you just send it there because you mean to ask your accountant at some point bank service and charges car and truck we're good so far contractors let's say we're not gonna have contractors in here somebody click on delete because our contractors are going to be under that other category we created which was subcontracted trainer so again I'm starting to clean up and delete things I don't need job supplies ok let's say that find legal and professional fees travel and meet meals and entertainment office supplies actually meals and timing shouldn't exist let's change that let's go to edit because in the 2018 US tax law they killed entertainment entertainment is not not even a deductible expense anymore so we're just gonna call it minerals with sculling meals with customers okay the way we have probably a little bit better terminology that makes more sense to most to most people so you got meals with customers where are my office supplies and software other business expenses as kind of a miscellaneous category reimbursable expenses let's delete that let's say we don't need that so again I'm trying to clean my chart of accounts make it as easy and friendly to use as possible okay let's say we what else we got rental lease that's good repair some maintenance tax and licenses travel on categorize utilities and depreciation so let's say that's that's a good set of accounts let's say that I wanted to create some sub accounts so under travel I wanted to create some sub categories so if you click the drop-down menu here it gives you the option to edit or delete so let's say I like travel as a generic category so I'm not gonna edit or delete it but I'm gonna create some sub accounts under it so let me scroll up let me click on new on the top right we'll click on the category expenses and under detailed type we'll go down to travel and again if if you can't get detailed type just pick other or something like that it's not a big deal so I'll pick travel and then we're gonna call this one airfare again let's say I do want to keep details of that some of the airfare sub-account off travel there we go and then down here instead of clicking save a new I'm gonna click save it instead of clicking save and close I'm gonna click on save and new and we'll do the next one category type expenses detailed type where are you travel and the next one was going to be lodging lodging which is basically hotels Airbnb hostiles that type of thing and that's gonna be a subcategory of travel notice that I'm creating the new account which is an expense category and I'm making it a sub-account of travel save a new so we got airfare lodging those two expenses select here travel what else we got this to transportation and that would be like taxi over subway bus all that stuff so we got transportation under travel perfect say my new and I am I forgetting one I got airfare transportation I got lodging let's do just one for miscellaneous travel so let's go to expenses let's select travel again and let's call it miscellaneous travel also under the Travel category okay perfect and then we hit save and close and now we're gonna scroll down and notice that I got my travel category and then I have a little indentation letting me know that these are subcategories or sub accounts so now be able to not just put stuff on the travel I can put it under its subcategories another popular to do is for car and truck so I'm going to edit current truck actually don't like the word car and truck because it gets confused confuse things I'm gonna change this to vehicle we've got expenses okay and I'll click on save and close and then I'll create some of the sub-account so let's start with new and that's called a category type expenses detail type we got vehicle or current truck if our oh there you go and then this we're gonna call this one gas okay this is just for like fuel gas that type of stuff little gas large fuel just in case I happen to type fuel in there instead of gas hit the sub category and this will be a category of vehicle expenses there we go saying thing click the drop-down save a new category type expenses you'll get used to it it's a lot of work you get used to it but you know once you you you get the hang of it you get it right every single time so we got fuel let's do parking and tolls also make the subcategory of vehicle and then click Save and new and let's do another expense category under auto and let's do the car payment car lease payment so let's say for example we have a car that we are leasing for the for the company and we're doing a car lease payment now if you're if you're not doing a car lease if the car was actually purchased it gets a little bit more complicated than that I don't have time to get through it on this video but for a an actual purchase vehicle you would have to have a portion of a payment going to interest and the portion goes to pay off the loan like to pay off the Toyota loan that we created so you only have an expense category for cars when is a lease when is a purchase you have to split it between the principal which goes to pay off the loan and interest okay let's do a save a new and what else am I forgetting for auto let's do expenses so we got the fuel is to artless with the insurance so as to auto insurance okay let's type the whole thing up out of insurance and just to say we have expense and let's do one more saving you and we'll pick expenses pick auto let's do it auto maintenance / other okay other Auto a miscellaneous auto that's on the vehicle perfect and say close perfect so now I got a real nice chart of accounts I got some I got my balances bank credit card loans I got the appreciation of some of my assets my income categories the way I want them I have my cost of goods sold categories that I want them my expense categories hopefully the way I want them I got even got some subcategories and I know it took a long time to get here but I set up nice chart of accounts good preferences gives you a real real positive experience right from the get-go so let's now go into banking so we're gonna completely kind of switch gears we already done with most of the basic configuration now we're going to connect our bank into QuickBooks so we can download those transactions so we're gonna click on connect and we're gonna select the bank that we want to connect now that's different from setting up the bank in the chart of accounts when I set up the bank and the chart of accounts I was bringing in those opening balances by doing the actual connection I'm gonna bring in transaction by transaction so I'm gonna go ahead and log in and then once you connect the bank you're probably gonna have a whole bunch of things showing up in your connection depending on how many accounts you have associated with that login I happen to have some personal accounts associated with that some additional loans some other business accounts so you want to make sure you select the correct ones that have to do with the actual account you're connecting so we'll go ahead and select my checking account match it with the checking account that my bank detect it with my login and then I'm going to select my credit card account my credit card then select my credit card that they're logging matched with with the bank and select that and then once I have both my bank and my credit card selected I click on connect and normally what that will do is it's going to bring 90 days worth of transactions so if you actually happen to be sitting exactly on April 1st of 2018 and you're downloading these you're gonna get a perfect January 1st to March 31st number of transactions but if you're not exactly sitting on April 1st gonna get too many transactions if if you're doing this earlier before April first or you can not get enough transactions if you do this at some other point later on after April first so if you are in the particular case where you got too many transactions then what you have to do is you have to delete the ones that you don't want so let me show you how to do that someone I click on review your transactions and I'm gonna take a look at every transaction that I don't want so let's say I don't want anything that's dated 2017 so I picked the first one that I don't want scroll all the way down hold the shift key select a very last one that's in the list and then go all the way up and then go to the batch actions and click on exclude select it that's going to delete or get rid of all the things that I don't want there are before that January 1st 2018 deadline and if there's more there let me select them as well select all the 2017 transactions batch actions and exclude selected and I see if there's any more ok there's a couple of more there select that and select that and exclude those as well and I'm gonna do the same thing with my credit card account if you remember my credit card account the closing date was December 26 so I want to delete everything before December 26 right because everything after December 26 I want to bring in because that was the last balance that we brought in so let me exclude that and that's perfect now if you happen to be in a different situation where you did this after April 1st and you need more than 90 days worth of transactions keep in mind QuickBooks is still stuck and limit it to those 90 days so you actually have to go into your bank login you have to download a manual quickbooks online a download file is called a qbo file or some cases it's called a web connect file you download that manually for whatever period you want and you click on this little drop down menu that's here in the top right click on file upload and you're going to browse the file so I'm we're in your computer selected click upload and then that's going to bring those transactions so with the direct connection what will you just put a login information of the bank it's limited to those 90 days if you're gonna need more than that you have to download it manually through the bank and you may need to watch a different video for that guy that's another process or if you brought in more than what you wanted you can exclude them or delete them the way I showed you how to do that now I'm not gonna get into the online banking in this particular video I'll put some links below to a deep dive into online banking just because there's a lot of things going on with banking and I don't want to you know make it fall short so I just wanted to get you to that process where we actually connect the banks and get that stuff connected now let's talk about creating some transactions so when you first set up your QuickBooks Online when you the first thing you want to do is create your invoices create your bills from your vendors but at first you don't have any customers so let's create some customers first we're gonna click on the sales tab on the sales menu on the left side of the screen and then we're going to click on clients remember we change the terminology from customers to clients and then the first screen is always going to look like this is sort of a very simple simplistic screen I'm gonna put here Maria Lopez let's say choose my first customer and I click on add client it adds it to our database now my customer center looks or my client center looks that way it's going to look moving forward to add a new client I click on the top right new client and then I get the screen the way it's supposed to look let's say one of my client names is XY see health Corp and I'm gonna put the address okay optionally I can put a phone number their website I definitely want to put an email if if I'm gonna send them an invoice so let's call this payables at xyz.com let's say these are the folks that that are going to receive invoices that we send them you can also add a different shipping address if you want to you can add some additional notes you can add tax info which is basically their tax ID number if you're not going to charge sales tax payment and billing info this would be to override the default so let's say that these people we're gonna give them 15 days to pay instead of some other amount and also they usually pay us via check or we always send them a printed invoice so those settings you can change different than the default there's also attachments if you want to attach a client contract or something related some document related to a customer you can attach it there and always make reference to it in the in the future so I'm gonna click on save and then that's how we create new customers so now I have to cut two new customers let me click on this button here and click on clients so I got two customers in there so we're good to go with the least our initial customers now let's click on expenses so we can create some vendors we're gonna click on expenses and then we're going to click on vendors we're gonna click on add vendor and let's add here Comcast and I'll click on save and there you go there's my vendor created I can also kind of go the long route click on new vendor and let's say this is an individual that we pay for professional services so put here Carlos Smith and we'll put here how you want the check to look if it's going to be looking like his name let's say I don't want to email them some information so we'll put his email here Carlos gmail.com and we can put his phone number ok and address as well if I'm gonna actually gonna print the check it's important that I have an address in there so if I'm gonna print them a check let me put his address first Avenue floor 3 3 3 3 1 I can also add some notes I can click on track payments as 1099 and if I'm gonna pay him as a subcontractor and give him a ten a nine form in the future so I could click on that and put xav not all vendors are gonna apply for that 1099 but you can and I click on save and then let me create one more vendor let's say we're gonna create a supplier that we buy products from so let's say we're gonna buy from Dell Corp and we'll put their address here perfect click Save and that's basically how we create vendors you can create them with a full information address or you can just create them by just typing their name and that will be your vendor database which is important for you to create your bills and your expenses now there's a tab here called Workers which is going to be both for employees and you would have to enable payroll payroll a separate service is between 25 and 40 dollars a month plus a monthly additional per employee in the year 2018 they're changing the price structure a little bit so it is possible that when you actually watch this video the payroll service has a different price but when you turn it on and I'll just pick on one of these here let's say and it's gonna give me the two options here it's gonna have I want to do payroll myself and here's the fee so according to this is $39 a month and there's some discount and then there's also full service which basically moves the responsibility completely to QuickBooks to Intuit for paying and filing taxes and that's $99 a month again depending on when you watch this may see a different price structure but that's what was available now so $40.00 a month full payroll you can create your forms pay your taxes but you're responsible as the business owner or a hundred bucks a month and into it we'll take all the responsibility so you have to enable that service as extra you have to enable that service if you want to process payroll through QuickBooks there's also another tab here called contractors which is gonna include all the vendors remember we create vendors just now that are marked with a little check mark that says this vendor is a 1099 so any vendors that are also marked as a track as tenant they're gonna come in this group called contractors and we're gonna create an entirely different video to can explain the 1099 preparation process so we're not gonna do it in this particular video but it's gonna be a separate video just to explain that because that's gonna have its own steps and its own sort of workflow so that's how we created customers inside of sales and this customers clients tab and then we created vendors inside of expenses and in this vendor tab so you want to create the chart of accounts the customers the vendors try to create those right off the bat now what are the common questions we have is you know what if these vendors have a running balance you know let's we started our books this year in 2018 what a company has been open from before and we owe some of this vendors money for opening balances so you have a couple of choices one is if you have some open bills for vendors you can create those bills in the past that way you you have them there and then you pay them in the future or two when you actually create the vendor so let's say we're gonna create Microsoft as a vendor let's say we buy software from them we'll create them with a opening balance so let's say we owed them twelve thousand dollars at the beginning of the year so I put 12 31 2017 and that one ends up happening is when we create this vendor I'm gonna click on save you're going to notice that the vendor is created and it also has a running balance and it gives me the capacity to make up a payment so QuickBooks automatically created a bill dated 12 31 2017 to let us know that we may have one or multiple bills open from that vendor same thing with customers when I click on sales and I click on customers or clients if I have an open balance with any of these customers I can manually create invoice my invoice for all the invoice that they owe me from the past or when I create a new vendor same process as vendors let me see I have ABC Contractors LLC let's say this is one of our customers it's a corporation and they owe us money so we're gonna click on where is my opening balance but maybe payment and billing there it is inside payment and billing and we're gonna let's say that they always fifty six hundred dollars and we put their 1231 2017 and then click on save and QuickBooks will automatically create one open invoice dated 12 31 2017 representing the entire open balance that we have from that customer from previous periods again if you're starting your started your business from zero you don't have to worry about opening balances you probably also don't have to worry about opening balances in the chart of accounts but this is mostly for the folks that are starting a business and that are setting up QuickBooks for my business has already been started from before now let's go on to creating our products and services which is another crucial piece of the setup process so we're gonna click on the gear box top top right and we're gonna click on products and services so once we go into products and services the button is gonna say add product or service I can click on that and it gives me three choices a non inventory a service or a bundle and a bundles ready to group more than one product together let's start with service and let's create our hourly training service and we'll call this one level one and this one we charge $75 an hour for on description we're gonna put our early training with level one tech okay so that's the description and you're gonna notice that when we create the invoice we're gonna skip putting a picture on that or a category for the time being we're gonna click Save and close and now we visually have our products and services quickbooks by default creates this one called hours and sales we can make these ones inactive let's say if it lets us do that by actions make it active because we're really not gonna use them just make them inactive for now actually doesn't let me doing so by default there's one called hours and sales that they have to be there you can turn them off what can you do leave them there no big deal this one called hourly training services I can go back and click on edit if I want to change it I can click on the drop down make it active or duplicate I like duplicating because I don't have to create them over and over so I'm gonna click on duplicate and we'll call this one hourly training service level two and we'll make this a hundred and fifty dollars an hour and what called will do the description and call it level 2 tech beautiful and then on their income account I didn't mention this last time I want to make sure they have the correct category that matches that item so this one's going to be training income so I made a mistake on the last item and I didn't put the correct income account so let me click on save and close and let's go to the other one and edit it and change that income account so let's do training income and then we'll click on save and close perfect now let's create a an item for our products that we sell so let me click on new and then we're gonna click on none inventory part and the reason why inventory part which is one of the options it's not enabled is because we're working of QuickBooks essentials which is a version of ulsan manage inventory so on their name we'll put here we'll call it Dell laptop b52 and on the SKU number this could be like a technical number right so so di p 5 - 0 0 - 9 8 P so this is like sort of like the code or the internal code and this is more of a descriptive name for it and then we can have a full description like you know their laptop model 52 you know type B whatever it is you know i7 processor 16 gigabytes of RAM whatever you want to put in there and then we're gonna put our sales price so let's say for this product we sell it for $6.99 and the income account would be computer sales so it looks like we're good there will hit save and close and there is our product created let's say we also have some miscellaneous cables that we create so we got a new and we'll do non inventory part and we'll call this one miscellaneous cables okay and then we won't even give a SKU number and let's say we will put it for ten bucks and we'll change the category here not to be computer sales that's gonna be part sales okay that's perfect part sales save and close and let's create one more for like shipping expense so let's go into a service and we'll call this one shipping and we'll send this one into our shipping category so basically and let's say we'll leave this one at zero so we change the price each time so now we got a couple of items set up and with our items set up we we are now ready to create some invoices so let's go back into the dashboard here and as of now all we've done is configuration we created some old invoices from opening balances we created some old bills from vendors and ODIs money we created some accounts with opening balances some accounts there were P&L accounts profit and loss accounts that didn't have any balances we created a contractor I mean we we created a part of services we did a lot of setup at this point let's now start transacting let's create some transactions so let's click on the create a quick way button on the top right which is a plus sign plus sign inside of a circle and then we're gonna click on invoice but before we do the invoice let's do what usually happens which is we create an estimate first so we'll click on estimate and then we'll select the customer that we're giving the quote or estimate to so we're going to select ABC contractors and then we're gonna give this estimate number let's say I want to start all my estimates with let's say three so although three zero zero one zero one so that would be my first estimate number and then QuickBooks naturally will take the next number one by one will always let you change it because we in the preferences we actually gave it the option to turn that box on if I didn't put custom transaction numbers in the settings box you wouldn't even see that box and QuickBooks would automatically give that a number so let's say we gave this estimate on Tuesday January 2nd and let's say we are going to expire the estimate on January 31st pretty much letting them know that beyond that that price is still not valid let's say that we're promising to ship the product somewhere around let's say February 14th and no tracking number for now because we just don't we haven't sold a unit and let's say we're planning to do this via FedEx that's up to you you don't have to use those shipping boxes that's really up to you now on the product and service I'm gonna start putting what we're gonna sell this client so let's say we're gonna sell this client to laptops so we select from our drop-down menu our product which is going to come in with a product name and description in the settings somewhere you can actually add that's Q column there if you want to have the SKU number as well but for now we have it hidden and they say we're selling them to laptops and we're also gonna sell them some parts so let's do miscellaneous cables and we'll call this one you know extra charger or something like that whatever is and we're gonna sell them let's say one extra charger for $85 and that's at one more line for shipping and again that's because I created the shipping line because I want to have it up there I can try to say $25 for shipping but if you don't want to create a line you can delete that and since I enable the shipping feature I can just put it down here on the total it would actually be the exact same effect I'm I like itemizing it this week this is a lot more clear or some people like to see it right there on the on the on on the subtotal so we'll click on save and close and that will be it if we have this little box as I send later it won't let you save it until put an email address you're basically saying that we are going to queue this to email this estimate later on in the future so let's say we're going to go to ABC gmail.com and then we'll click Save and close that's it our estimate is done now what are the things I like to do every time I create a transaction I like to look at my reports related to my transaction so I'm gonna click on this little magnifying glass appear and then I'm gonna type here estimates and I can see my we have a report transaction this estimate we can see this estimate report so we can click on that and it will give me a report of all my estimate so that's actually great I get a transaction list I see my report let me go back into the dashboard and let's see how we will find that transaction and a different way of doing it is by clicking on the magnifying glass on the top right and then this will give me a history of all my recent transactions so I have my journal entries from all those beginning balances we have that invoice from the customer that had an opening balance from last year and a bill from that vendor that had an opening balance from last year as well so I can click on any of these and go back into the transaction I was working on the other thing I can do is I'm gonna click X here on the top right I can click on the quick create button and then go back into estimates which is gonna create a brand new blank estimate but here on the top left you're gonna see this little like clock watch type of icon when you click on that it will show me a history only off my estimate so I can click on that estimate and it will pull it right up now I like working with estimates first before invoices just because it gives me good control of what prices I'm giving out there but some folks go straight to create invoice now from here what's nice is I can now mark the estimate from pending into accepted and I can also record like who accept there so let's say you know Jane accepted it and I can put the date that she accepted it on the fourth of 2018 okay so that allows me to kind of record the fact that the estimate is not open its accepted so that's actually nice like in the friendship between open estimates and except estimates and I can click on save on the bottom and then I can click on next to the dollar amount I can click on create invoice and what's nice about this is is going to basically copy the entire contents of that estimate and create an invoice from it now at this point I can select the invoice let's say stated on Monday the 8th 2018 I can maybe even change times if i want to so put net 15 and then now that I have a tracking number I can put my tracking number up here again that's only assuming that you do ship the product that doesn't necessarily mean that you have to do any shipping now on the invoice number same thing let's say I want to have all my invoice numbers topped with one so I'm going to put one zero zero one or one and then that's I want to give it the first invoice number and then I want QuickBooks to manually give a sign that number afterwards now let's say during the sales process with we renegotiated the price at 675 I can just simply modify it on invoice I don't need to go back into the estimate like I modified on the invoice and then I'm all set now from here I can click on print preview or print or preview click on that and then click on print or preview and you can see exactly what that invoice is going to look like before you ship it notice it has my logo that I added from before all the colors that I wanted my company name my phone number my email the date invoice numbers got all the stuff here and the subtotal so it's actually a super fast quick way of cleaning your invoice at this point you can print there I can just click on X and I can also email them straight from here so I can go into top bottom on the bottom all the way in the bottom right you're gonna see where it says a save and send I can actually click on the drop down and just save and close or I can click save and share a link which basically gives me a link that I can manually put on an email saying hey click here to view your invoice and pay your invoice but if you're doing your losing using the email straight from QuickBooks there's no need to do that so we'll click on the drop down and click on save sin it will send you to the preview screen letting you know what this is gonna look like on a PDF when you email it you can actually change the text that that gets on the body of email notice that the subject itself has invoice number it has the company name that is sending it from if you want to accept the credit card payment you hit that check box that says accept a credit card payment or a bank transfer and you would have to have that payments account set up to be able to do that I talked about that earlier when we were discussing the setup process so at this point we just click send and close and then that customer will get via email that invoice and then at that point they'll send you a check whatever it happens to be so now I can just click Save and close on the bottom right and then I'm done with my estimate creation and invoice creation process again I can click on the magnifying glass and I can click on invoices I can type invoices and I'll tell me all the reports that have the word invoice on it so I can click on reports invoice list and then notice that let me to date all so it shows all the dates and you will notice that all the invoices old and new are showing on this report so I really like having you know checking what's going on there with the reports because it kind of gives me instant feedback of what's going on so that's how I create an invoice now let's say that I am now gonna pay someone a bill like I owe a vendor some money let's say for the purchase of those two Dell computers so I'm gonna click on the quick read button on the top right and then I'm gonna click on Bill this is where I create my accounts payable my bill when I create them bill and let's say that the product arrived from Dell so I select my vendor and let's say they give me 60 days to pay and the product arrived on let's say the fifth and that's that equals to the bill date so automatically will take the 60 days add it up on the due date but I can also manually change if I want to now under bill number that's going to be the actual number from the vendor the vendor will send me an invoice I'm gonna transcribe the vendors invoice and here so right here under account this is the category in which I want that expenditure to go to so that would be cost of computer sold perfect and let's say that my cost for those computers that were sold was I'd say 1250 and I also paid for some shipping so we got shipping cost let's say I paid $15 for the shipping on that okay now notice that I'm not it's not asking me for the actual name of the product the actual product or service is asking me for the account from the chart of accounts and the reason for that is because we have an enabled inventory portion where our purchase orders our bills contain the actual product that we're buying so I'm going to show you that in the Preferences in a second so I'm gonna click on save and close and let's say that I finally finished and entered the bill from our vendor now I'm gonna click on no things here because I don't know what they're selling me and let's go and check out what's going on now so I'm gonna quickly click on reports I'm gonna click on profit and loss click on run and then under date on the top left usually you have your date period so I'm going to click this year and then click on run report we kind of see what's going on so I have my sales right here 1460 my sales my part sales my shipping income then I have my cost the cost of my computer cost of shipping right and then I have my profit 195 again I like to pull this reports as I go because it gives me a really good understanding of exactly what's going on as I create all these transactions right you want to know what's going on with your reports the other report would be the balance sheet so I click on reports then I'll click on balance sheet and I'll click on run and then it's to period this year so it contains all the transactions from this year click on run and I have my bank account at that exact same dollar amount that I started with but accounts receivable is seven thousand sixty which is basically I'm going to click on that it's basically all of the open invoices that I have so once I click on that it gives me a detail let me go to all dates and click on run report and I should give me a good detail let me zoom out that gives me a detail all my open invoices so I got my old open invoice from before fifty six hundred and then my new open invoice fourteen sixty so that should be very clear of what is happening to my books as I create all these transactions now let's move on to receiving a payment for the invoice and then making the payment for that bill so let's click on the quick create button the top on the top right and then we're gonna click on their clients click on receive payment so we click on receive payment and let's say that our customer that paedos was a BC contractors and let's say they're paid owes us let's say six thousand dollars flat they paid us our old invoice and also part of the new one so let's say they paid owes on Monday the 8th and the dollar amount was six thousand dollars flat automatically QuickBooks will apply the total dollar amount to the old invoice and then the balance to the current invoice so that's actually pretty neat how QuickBooks start up but I could actually uncheck this if I want to manually uncheck these if I want to and then select manual amount so let's say if I wanted to select 1462 completely go to the new invoice and then the balance of the six dollars and I can put it in here and I can leave the old invoice partially open so I actually have full control over how I want to apply those payments I'm gonna try it again through six thousand and then that QuickBooks applied automatically just because it's simpler and easier but just know you have control over that and let's say they paid us with a check and the number was five five nine six and then under the pass it to you can go straight into the bank assuming that when they paid you the money went straight into the bank that is a category of of type of transaction but what I always recommend to do is to click on add new new again and then under account type we're gonna click on other current assets and then under detail type we're gonna go down to undeposited funds you always want to create an account code on the positive funds just because assume that you get paid by to customers three customers in one week and you want to group those two passes together and go to the bank all in one shot and that's a very common thing because when we go to the bank and deposit multiple checks our banks in our bank statements never really separate those payments and a clearly identifying in your in your statement who paid you what normally is that lump-sum deposit that all gets bundled together so in order to emulate that same thing that happens you want to receive your payments into that on the positive funds account and then as you receive other payments and you group them together and you make one lump sum deposit your bank statement looks exactly like your QuickBooks so let's do that example let me click on save and close and let's see make sure that I have correctly applied all these payments this was four hundred over here in order to get the six thousand yeah it's to save my clothes perfect I received that payment let's say that I have another client that walked into my office and bought something let's say for four hundred dollars so I'm gonna click on quickly button this time around I'm not gonna do invoice receive payment as two separate transactions just because it happened pretty much all at once that walked in I saw them the product they paid me so I'm gonna go to sales receipt instead our sales receipt is an invoice that has a payment built into so let's say that was my customer Maria Lopez who walked in and that happened on let's say Tuesday the 9th and we sold them some miscellaneous parts and it was $400 so let's put here $400 and notice how QuickBooks automatically gives the sales receipt number in continuation from the invoice and the pasta - as I mentioned before we're gonna go into undeposited funds and I said she also paid us with a check and the check number will type it here and I will click Save and close let me uncheck this send later box that way it doesn't force me to have their email in there and then click on save and close so we basically received two payments one $6,000 payment from an invoice and one $400 payment from a sales receipt but I'd say when I go into the bank I make one deposit for sixty four hundred dollars so when I when I want to record that I'm gonna click on the quick create button and then I'm gonna click on bank deposit and then on the bank deposit window I will select both of my customer payments ABC contractor and Maria Lopez which adds up to six thousand and four hundred and it is sixty four hundred which happened to be the exact same dollar amount that we deposited on Wednesday the 10th and we want to match that bank deposit with that lump-sum deposit that contained multiple customer payments so we're gonna go ahead and click Save and close and that's how you record a deposit using on the positive funds when you have multiple payments in a single deposit now if that wasn't the case you don't have to go into on the positive funds you can simply just go to receive payment let's say that my customer ABC contractors paid me my balance of a thousand and sixty I can just put here thousand and sixty and let's say they paid us in cash and I can go straight into the bank that's assuming that I'm not grouping that deposit with any other customer check so you could also do that you don't have to complicate yourself using on the positive funds if you ever happen to be working with a company or is your own business and you bundle the passes group them together you're gonna have to use that sort of clearing temporary account to be able to group them together and match it with your bank statement so we're gonna click on save and close and that takes care of that so you can go either way now I'm gonna click on banking real quick just so we can kind of see what's going on here we're gonna click on banking and then we're gonna click on go to register we happen to be on that checking chase checking account we're gonna click on go to register and then we're gonna see a check register that contains the entire history of what's going on we're gonna see our opening balance that started a 86,000 then we're gonna see it posted for sixty four hundred another passer for a thousand and sixty so notice how my bank balance goes up because I'm receiving payments from my customers now let's move on to making payments of bills so when I click on the quick create button we create a bill earlier let's now pay that bill by clicking on pay bills once I click on pay bills I select the bank account that I'm paying from you could also pay a bill from a credit card that's totally feasible and let's say we're gonna pay Microsoft eight check for let's say four thousand dollars we don't have the whole amount to pay him yet and then we're also gonna pay dell corp and we're gonna pay him the whole thing now under starting check number if you're gonna print the checks you're gonna put the check number that's on top of all the pre printable checks so when you print he goes in sequence if you don't print them just put any any number here that pertains to your manual check number and you're gonna pick this up from your actual checkbook and then we're gonna click on save save or save and close and this will assign to one check check number five five six five eight and to the next check it will assign check five five six five nine so make sure that all that stuff matches so once I click Save and close the bills are marked as paid I can click on know things whatever the pop-up and then I can take a look at in my check register how these checks were assigned check numbers I want to double check with my paper check book to make sure that those bills that I'm paying actually match those those numbers now that's assuming that I'm paying multiple bills at once I can simply just go to the quick create button and click on pay bills and just pay one at a time so I can select my Microsoft and then I can pick the actual check number and I don't have to really worry about the check number sequence you could also go that route you could pay one check at a time if you want to and just put the actual real check number in there the thing is that in the year 2008 18 most people print the checks at least print the checks for actual checks or pay electronically with a credit card or some other bill payment system so that takes care of paying bills that have already been created in the system there's also two other transactions are really interesting which is this one called expense and this one called cheque when I click on expense it gives me the ability to pick two potential sources I can pay an expense from a bank account or I can pay an expense from a credit card account if I pick a credit card account I'm actually recording a charge that's being paid with one of my credit cards now my bank debit card my bank debit card would be my actual checking account we're talking about the actual you know credit card that carries over a balance so I'm gonna pick the credit card I'll pick the vendor that I'm paying let's say this is Comcast and I'll select my category utilities I'll select the date that the charge went through it and say it was Monday the first and then under payment method I can just put credit card and let's say the dollar amount was 396 point 52 and if the happens to be a reference number recorded if there isn't one don't record it let me click on save and close and we're outside of the expense transaction now the expense transaction does not affect my bank register but it will affect my credit card register that's going to my credit card appear and you will notice how we have my opening balance and then the 396 52 let me go back into the quick create button and click on expense again and let's say I'm going to put a charge that came out of my bank directly or paid with a debit card so let's say I paid we're gonna add new and let's say I paid McDonald's okay and I went to McDonald's I ate there and it's with a client will call this meals with a customer and they say that happened on the 3rd and I use my my business debit card so I picked my my actual checking account and let's say that was $26.95 and if there's no reference number now I need to put it payment method I can put a credit card but I could also leave it blank or I can go to add new and create one called debit card whatever is easier easiest for you you can pick whatever you want or leave a blank that's actually not an important box at all I find that it's way too time-consuming so I'm gonna click Save and close and that's how I record expenses that are electronic payments debit card transactions or credit card transactions if it's going to be an actual check we click on the quick create button and then click on check and then we'll select the vendor that were paying so I'd say we're paying Carlos Smith and this is a subcontractor trainer category and again knowing or memorizing that chart of accounts becomes really valuable we'll select the check number here and then we'll put $5,000 whatever is it that we are paying them we'll put the date of the check ok this could be I checked out a print so I can click on print check on the bottom of the screen or I check that I handwrite that I'm basically just entering in QuickBooks manually and then I click on save and close and that will be it but just remember that if you're gonna pay a check that that that comes from a bill you know I use the write checks function you want to use the pay bills function so for example let me go to enter bills I'm going to create a bill and I'll create a bill for the same vendor Carlos Smith let's - here subcontracted trainer let's say that this bill came in on the 3rd of January put it put a bill number there and let's say this was for $2,600 ok I'm gonna go ahead and click Save and close and there's a bill created if I try to pay him with a check and not use pay bills so I'm gonna click on check and I select my vendor so Carlos Smith notice that I'll get a little drawer show up from the right letting me know that hey maybe you're trying to pay a bill instead of writing a check and it that's the case then we click here on add and I will now convert this into a bill payment instead of a write check and then it will be entered in the system as a bill payment that's actually attached or applying to an active open bill so I'll click on save and close and that's the difference between writing a check out right and using pay bills now if I click the drop down menu and go back into my Chace checking I'm in the register screen I can actually see all the debits and all the credits affecting my bank balance it's actually really nice thing so that's what you start seeing things that make sense so so far we've created an estimate a sales receipt we received a payment we've done an invoice we haven't done credit memos we found receipts we'll leave that for a different video we've also done expense without check we don't bill we don't bill payments we have a non purchase orders yet because this is not the correct version of QuickBooks I can do that we talked about payroll briefly we'll skip that we'll do a different video for that with the bank deposits we haven't done transfers journal entries and statements so let's go ahead and do that so let's start with a transfer and a transfer is simply to record a balance sheet to balance sheet transfer of funds so let's say for example that I'm gonna pay off my credit card balance with my bank account so I'm gonna go to Chase Bank that's the from account and then I'm gonna go to transfer funds to when I go into my [Music] credit card chase visa and let's say I'm paying off a balance of $5,000 I was really cool about this is once you type $5,000 in there you're gonna see how these balances shift right are you gonna see the $73,000 code down by 5,000 and you're gonna see my credit card go down by 3,000 let's say that payment happened on January the 8th and what click on save and close and now if I go back to my bank register which by the way we click on banking and then we click on go to register that's one way of going into the bank register you can also click on the quick the Settings button in the top and then I can click on chart of accounts and then I can click on any of my bank accounts where it says if you register now that's another way to get into the register screen so you always want to look at the register screen take a look at all the deposits payments that are affecting your bank balance right where's my $5,000 to my credit card there it is if I switch over to my credit card let's go to the visa there is I should see the couple of charges that we entered the Comcast charge and then I can see the the balance of five thousand dollars being paid down and that effectively lowers my bank balance on my credit card my credit card balance so what this shows you is how you do things in QuickBooks to run your business run your customers run your bills your accounts payable accounts receivable and also always ties down to the bank and you want your QuickBooks balance to match your real bank balance so that's essentially what accounting it's all about now once I I do that I want to essentially at some point reconcile my bank so when January comes in and I close the month I'm gonna click on the Settings button on the top right on the gear icon and then I'm gonna click on reconcile and then I'm gonna click on reconcile account I'm gonna select my bank account that I want to reconcile so let's say I want to reconcile the checking account I'm gonna pick the the ending balance on let's say the 31st of January I'm actually gonna grab that bank statement just like I did with opening balance and I'm gonna enter now the ending balance of my January so let's say that's sixty-five thousand whatever happens to be then I click on start reconciling and what I'm actually going to do is I'm gonna pick up my my statement my paper statement and I'm gonna check off in my paper statement one by one as I see things that are in QuickBooks that match my paper statement so let's say for example this check cleared and this McDonald's charge cleared and this checked cleared and let's say this check didn't clear so we'll skip that and then we keep going and we'll see every check that clears every deposit that clears and at the end of the day this difference should amount to zero if you're doing the reconciliation correctly that difference should amount to zero I welcome to check out YouTube for other in deaf bank reconciliation videos because that this is another area that just requires a lot of moving parts and trying to make this video of an hour tops and possibly even more but maybe not more than two hours limits the time that I can go deep into reconciliation so you want to search QuickBooks for QuickBooks Online reconciliation or how to reconcile to go deep inside this particular screen but the concepts are exactly as I as I explained them let's talk about reconciling the credit card is going to be the same exact concept so we're gonna click on reconcile and then we're gonna change the account from the chase checking into the credit card and yes you want to reconcile your bank account and reconcile your credit cards because if you are putting a beginning balance in there from you know from what we're doing the child of accounts and then you're gonna enter every one of the individual transactions you have to reconcile it to make sure that it's complete so let's say this one closes on January 24th and the ending balance is 3,500 we click on start reconciling and then we're gonna do the same thing we're gonna mark off any payments and any charges there are other paper statement and once we're done the difference should be zero okay let's get out of that and that covers reconciliation let's see what else we haven't covered yet we didn't cover journal entry so let's do it you're into real quick and again that's this is one particular section where maybe you want to get some help with an accountant most small business owners never have to do any journal entries at all this is more of a sort of an accountant type of transaction screen but if you wanted to for example record something you can only do it through a journal entry like the depreciation of your vehicle for the month you would do it through here so you select the month that you want to record that I'll put here my appreciation for my Toyota and then that would be the actual asset account that we're reducing and then we're gonna go into our depreciation expense and we recorded here so let's say the depreciation for the month it's five sixty and I just put five sixty debit five sixty credit why is credit why is debit I recommend that you learn accounting or take some sort of accounting course that's actually a very in-depth explanation but this all I wanted to cover is how to do a journal entry which means you select the two accounts that you want to make adjustments for and you select the dollar amount one debit one credit in each to balance and then we click on save and close again if you're a small business owner or non accountant you probably feel and have to worry about recording depreciation in the first place but journal entries are essential for adjusting balances on any type of account in QuickBooks and that's essentially what journal entries are and lastly on this side we have our statements and we click on statements and that's for me to send a list of invoices and payments that are inside the history of a customer so I'm going to click on customer balance status click on all and another ending date up pick the 31st of January and then I'll click on print and preview see what that looks like and basically what a statement is is a list of open invoices payments open invoice payments and that's how you explain the running balance of a customer with a statement that contains the totality invoices and payments pretty much transactions that effect your customer balance so that is statements in a nutshell now from this screen really nothing else I want to talk about inventory of purchase orders but that's gonna require me to upgrade my QuickBooks to the plus Edition and on the gear menu we covered a calendar settings we've covered chart of accounts we covered configuring the invoices at the beginning we covered products and services we haven't covered importing any data we covered reconciling and that's really all we've covered and that's what we're going to cover on this video up to that let me go into my settings and upgrade my account to the plus Edition so we can cover the extra features at the plus Edition house I'm gonna click on building a subscription and I'm gonna click on upgrade here and then the upgrade will give me basically one choice to go from essentials to plus so I'll click on upgrade and that is us of the data this video of $50.00 a month versus $35 a month I'm gonna click on submit and I'm still on the 30 day trial so it doesn't really matter that I'm doing this it's not charging my credit card or anything like that because I'm still doing this from a 30-day trial so I'll click on done and now we're gonna see some new features so the first new feature that we're gonna see it's gonna be inventory so when I click on the quick create button we're not gonna see the purchase order when I click on purchase order it's gonna be a new transaction let me click on refresh because I just did the upgrade so we probably have to refresh the screen so we'll let QuickBooks kind of logout look like in to recognize that we are on the plus Edition okay so yeah now that's gonna work so I'm gonna click on purchase order and now I'm gonna see a new transaction let me it tells you that it's turned off so let me turn that on in the settings and where are your purchase orders perfect so let's turn purchase orders on click on save and also where it says bills and expenses we want to click on where it says track expenses and items by client that's actually really powerful setting we'll click on save on that I think it's not maybe under sales oh there it is products and services and then now we have inventory tracking on hand that's new so look like on save so that's perfect so let's close that and now let's go into quick create purchase order okay that's a new screen we haven't seen this before now the purchase order is for us to enter purchases of inventory that we plan to purchase in the future that when we get them we'll turn that into a bill so we'll do an example of that but let me first create some inventory items so let me click on the quick create not only quick create on the Settings button click on products and services and let's create some inventory part so once I click on new now I have inventory as an option click on inventory now let's say we're gonna put here Dell server model t1 and we'll put a model number SKU number here whatever it happens to be the technical number I'm not gonna put any initial inventory because we just turned on inventory for the first time let's say we sell this server for $3500 the income account is now going to be computer sales because that's one of our hard and let's say we pay for this $2,700 and we'll put here cost of computer so so now I'm creating an inventory part something that I'm gonna buy for twenty seven hundred and then eventually sell for 3500 and I usually stay away from this initial quantity on hand because that's creating new inventory opening balance of inventory so unless I'm doing opening balances I want to ignore that completely now the other point I like that's how many I like to have at all times in stock so I'm going to put there five so it tells me more or less that that's what I want I want to have five at the most part so I'm gonna click on save and close and I'll put zero as of today you always have to put let's say what's today's date zero one zero five 2018 you always have to start with zero and hit save and close so there's my inventory part my server now I have zero on hand and my reorder point is five that pretty much means that I should have five at all times so let's do a purchase order click create button and then click on purchase order and then let's go to Dell Corp and then under parts and service notice that I have accounts where I can pick like something from my chart of accounts and I have my items and I always because I'm doing inventory I always want to do items so we'll click on the drop down menu select the only product that's you know that should be in a purchase order which is my inventory parts and I let's say I'm gonna buy five of these okay thirteen thousand five hundred and then I click on save and close so our purchase order is not an actual liability it's not a accounts payable it's not that it's not a transaction it's just letting me know that I expect to sell this in the future I expect to receive them at some point I don't I don't owe any money to my vendor yet until I actually receive them this is why when the product comes in we're gonna click on the quick read button and then we're gonna click on bill and with the bill we're gonna be able to receive them so when I click on my drop-down menu and select Dell Corp I'm gonna have a drawer here on the right-hand side letting me know that hey maybe this bill contains items from this purchase order and then I will click on add and I will bring all the information in there now earlier in the settings we talked about QuickBooks automatically remember the last transaction and this is a part of confusion to a lot of folks QuickBooks automatically did the same thing with it last time or we created a bill from that vendor so we can have to delete those two lines because QuickBooks enter that automatically and this bill is specifically only for this purchase order but let's also add our shipping expense that's not here this area up here from the shipping cost and let's say we paid $100 for that and then we'll put the bill number from Microsoft our vendor and then we click Save and close now that we've done a bill now we owe the vendor some money now we have an actual accounts payable if I go into my expenses and then vendors tab I'm gonna see that Microsoft has a balance I mean Dell has a balance of thirteen thousand six hundred if I click on Dell Corp I'm gonna see all the transactions associated with Dell Corp including this purchase order and the bill that I have created now the only one I can make payments against is the bill itself and then the payment process is exactly the same the payment process is exactly the same I can just click on make payment here and it will take me into the pay bill screen which is the same thing as me clicking on the quick create button clicking on pay bills and selecting the bank account and the vendor I want to pay from the difference is that this paid bill section allows me to pay multiple bills at once but in contrast if I go into my expenses vendors and click on the actual vendor and see the bill and I click on make payment it's the same screen but it's slightly different because it's just to pay that one bill so there's actually two ways to pay the bill one is you'll find the bill and pay it directly from there or two you click on the pay bills window that allows you to pay multiple bills at once and the process of paying a bill that's inventory from a purchase order is the exact same way as paying any other bill now how this changes or accounting is the following when I go to the reports menu and I click on profit and loss and I click on this year and click run report here under customer saw section I'm not gonna see that $13,000 purchase because I was inventory that is sitting in my balance sheet so when I click on their reports and then I click on balance sheet run I'm actually going to now see an inventory asset of thirteen thousand five hundred and that's not going to move away from my balance sheet until I actually sell the product that's how inventory works now what I'm gonna do is I'm gonna leave this balance sheet up and then I'm gonna right click up here on the tab in my chrome I'm gonna right click on that and click on duplicate and this goes back at the very beginning when I said you should use Chrome it's because of this feature so I'm gonna click on duplicate and I have two tabs I have one tab in which I'm gonna have my balance sheet I'm gonna click on zoom' so it looks a little bit closer and then on the next tab I'm gonna do a profit and loss report so I'm gonna click on reports and then click on profit & loss and we'll have that up there so now we have my profit & loss in one tab I have my balance sheet in another tab perfect let me right click up here and click on duplicate and then I'm gonna go into [Music] create an invoice and how this is gonna be different now what I'm going to show you is let me close that what I'm going to show you is the effects of inventory when I Cree an invoice so right now I have in my balance sheet as of the six which is today state that I'm recording this I have thirteen thousand dollars in inventory and then on my income statement or in my profit and loss I don't have any large sales in here I mean I have the sales that I have before but I don't have the sales of that inventory yet so I'm gonna come in in invoice and I'm gonna create a transaction on the six and let's say I'm gonna sell three of those servers to XYZ health Corp so i selling that customer i'm gonna select the product down here select the server i'm gonna sell them three of them and this is a ten thousand dollar sale and i'm gonna click on well actually before i do that real quick back in the income statement i don't have any sales between January 1st and the six notice enough zero sales some cost but no sales right so I'm running at a big negative here and if I go in my balance sheet I have thirteen thousand five hundred dollars in inventory so I want to go back into my invoice and then I'm gonna click on save and close so I made the sale so now that I go back into my profit and loss report notice that my sales are ten thousand five hundred when I go into my balance sheet noticed that let me run report and refresh that notice that my inventory is down now to fifty four hundred and that's how inventory works when you buy it he goes in the balance sheet and it waits for you to sell it and once you sell it you're gonna see it in your profit and loss report as both a sale and a cost okay and then now I'm I'm not as bad and negative as I was before after that sale so that's why I wanted to show you on the inventory part an inventory is a very important piece of accounting if your company manages inventory and that's one of the major features that quickbooks online plus has that more expensive edition has now let's talk about budgets real quick i'm gonna click on the gear menu on the top right and I'm going to click on budgeting as I mentioned before this is only on that plus edition so inventory and budgeting those two main features are on the plus addition I'm going to click on add budget and we're gonna create a budget for for 2018 let's call this one 2018 budget and we'll do interval let's say monthly that's good prefilled data now let's do know they're in no subdivision okay so let's say that our budget for January ok that's good let's click on next so I bought the for January on computer sales was let's say 15,000 on part sales was 2,000 on shipping it was 100 on training it was let's say 2,500 and nothing else on the income side let's take a look at the cost side so let's say on the computer sold our budget was 10,000 is an expense side on parts let's say it was 500 and shipping it was 50 I don't subcontractor trainers let's say it was 1250 perfect let's scroll down let's say for advertising or marketing our budget was a thousand for bank fees was a hundred for insurance was 500 for this course it is faster and it's called down to utilities was 300 ok that's not a full budget but I just want to kind of show you illustrate what's going on so I click on save here and I'll close that and then I'm gonna go into reports and do budget versus actual and it's actually pretty neat it's one of the most essential things of managing a business let me do it just for this month so we'll just select January only that way we can kind of see what's going on in January and we click on run report perfect so now we see that our budget for sales was 11 thousand of this category sorry I was 15,000 and we did 11 thousand so we are you know 79% from hidden budget we are three thousand dollars in this case over budget like we haven't solved enough so we're negative over budget in this case so this tells me exactly what's going on in terms of what my target was versus what where I'm actually are and obviously I'm halfway through the month so hopefully by the end of the month I hit that target and you can actually set a target or a budget for every income every expense category and compare him on the screen extremely powerful report extremely powerful practice to do budgeting for your business now let's do a couple of more expenses and let's talk about matching expenses with customers or projects or job costing so let's say for example I'm gonna I paid with with an expense I pay with a credit card some parts for a project so let's say I went to Amazon and I bought some let's say some some parts for projects I went to Amazon and then on the account type let's say I used this was some job supplies and then down here where it says client this is one of those other major features that quickbooks online plus has that third level at third edition i'm gonna say that you know i spent one hundred and fifty dollars on job supplies specifically for xyc health court and i'll show you why this is important i'm gonna hit save and close and then i'm gonna run the profit and loss by client so I'm gonna click on reports I'm gonna click on let's see profit and loss by client there it is I can search it in there and notice that I have my sales for Health Corp I have my cost of goods sold and I also have my job supplies so if you want to do budgets if you want to manage inventory if you want to manage or see reports of expenses by customer or a job then you definitely want to take a look at that third version of QuickBooks that the plus Edition but if you don't need any of those three I think I think the essentials will work for you I'm gonna click back in dashboard and I think that was you know if I wanted to make kind of a comprehensive complete walkthrough I know I left out payroll okay I would definitely tell you what watch a different video for that I left out sales tax definitely watch a different video for that and I left out online banking those three are sort of their own mini world and you want to watch a completely different video for that but this entire video you saw should be pretty complete and get you up and running now the last piece is get your accountant involved very important if you have an accountant if you're a business owner and you have an accounting professional and you work hand in hand get your accountant involved if you click on the my accountant tab on the left side of the screen it will actually recommend you to either search for an accountant so you can click here where it says find a pro for help and you can put your zip code whatever it happens to be let's say your zip code is three three three three one that's where I am and you're gonna see a list of all certified QuickBooks Pro advisors some some of us are CPAs some are not you're gonna see a whole bunch of people and you know you wanna you want to contact that accountant you know call them email them see if they're the right fit for your business and then once you have an accountant that uses QuickBooks Online let me click back in in my accountant here and I'm gonna add them into their account so we're gonna do it Hector at qbk accounting comm and I'm gonna go ahead and invite my accountant that way so if you actually put your accountants email the same email your accountant uses for quickbooks online and you click on invite your accountant will now get an email invitation and then once they accept it they can actually see everything you're seeing so if they support you with QuickBooks they can see if you're doing it right doing it wrong hopefully your accountant does training as well again if you don't have an accountant or someone to help you with your QuickBooks that's what I'm here for this is why I started here and made such a long video for you you know to gain trust on someone to to hire to help you alongside with this and this video is also being posted in my in my course page so if you're watching this because you bought a course trying to sell your my accounting services I'm just just saying if you're a small business owner you want to have an accountant by your side one the knows QuickBooks one that the loves QuickBooks Online as much as I do to help you be successful so I hope this long video was good if you if you watched the whole thing I certainly appreciate it and then check out the channel for other videos similar to this thank you

Channel: Hector Garcia CPA

Views: 596,060

Rating: 4.8986807 out of 5

Keywords: quickbooks training, quickbooks tutorial, quickbooks online, quickbooks online 2019, qbo tutorial, quickbooks online 2019 tutorial, quickbooks online training, 2018, 2019, QuickBooks Online 2019 Complete Tutorial: Setup, Chart of Accounts, and Banking, quickbooks online tutorial, quickbooks online complete tutorial, quickbooks online 2020 tutorial, quickbooks online 2020, quickbooks online 2019 complete tutorial, 2020

Id: Oejy3YTVTdQ

Length: 117min 53sec (7073 seconds)

Published: Thu Jan 31 2019