Getting Started with QuickBooks Online

QuickBooks is the most popular accounting software for small businesses. The desktop version has been around for more than 25 years, and the online version for more than 10 years. It is affordable, easily accessible, and ideal for non-accountants. Before diving into the nuts and bolts of setting up QuickBooks for your business, you should understand what QuickBooks is and what your options are when it comes to using it. Once you know what your options are, you will be in a better position to choose the version of QuickBooks that will best suit your business needs. We will then show you how to create a QuickBooks Online (QBO) account and how to navigate in QBO.

If you don’t have previous experience as a bookkeeper, then you will need to know a few bookkeeping basics before you get started. In the Small-business bookkeeping 101 section, we will cover five key areas in terms of recording transactions in your business: money coming in...

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QuickBooks is the most popular accounting software for small businesses. The desktop version has been around for more than 25 years, and the online version for more than 10 years. It is affordable, easily accessible, and ideal for non-accountants. Before diving into the nuts and bolts of setting up QuickBooks for your business, you should understand what QuickBooks is and what your options are when it comes to using it. Once you know what your options are, you will be in a better position to choose the version of QuickBooks that will best suit your business needs. We will then show you how to create a QuickBooks Online (QBO) account and how to navigate in QBO.If you don’t have previous experience as a bookkeeper, then you will need to know a few bookkeeping basics before you get started. In the Small-business bookkeeping 101 section, we cover five key areas in terms of recording transactions in your business...

What is QuickBooks?

QuickBooks is an accounting software program that allows you to track your financial transactions such as income and expenses for your business. One of the benefits of using QuickBooks is having access to key financial reports (such as the balance sheet report) so that you can see the overall health of your business at any time. Having access to these reports makes filing your taxes a lot easier. QuickBooks has been around for almost three decades and is the accounting software used by millions of small businesses around the globe.QuickBooks comes in two formats: software that you can install or download on a desktop computer, and a cloud-based program that is accessible from any mobile device or desktop computer with an internet connection.The cloud-based version, QuickBooks Online (QBO), is available in four editions: Simple Start, Essentials, Plus, and Advanced. The desktop version, QuickBooks Desktop (QBD), also comes in four editions: QuickBooks Mac, Pro, Premier...

Exploring QBO editions

QBO comes in four editions:

• Simple Start
• Essentials
• Plus
• Advanced

Each edition varies in terms of the price, the number of users to which you can give access, and the features included.The following figure gives a summary of QBO pricing and features for each edition of QBO at the time of writing:

...

	Simple Start	Essentials	Plus	Advanced
Cost	$30	$60	$90	$200
Maximum number of users	1	3	5	25
Accountant users included	2	2	2	3
Track income and expenses
Invoice and payments (known as accounts receivable , or A/R )
Tax deductions
Reports	General	Enhanced	Comprehensive	Powerful
Receipt capture
Mileage tracking
Cash flow
Track sales and sales tax
Estimates
Pay 1099 contractors
Maximum number of sales channels	1	3	Unlimited	Unlimited
Bill management (accounts payable)
Time tracking
Inventory tracking
Project profitability
Data sync with Excel
Track employee expenses

Choosing the right QBO edition

Depending on the QBO edition QBO can be ideal for anyone from solopreneurs and freelancers all the way to mid- to large-sized businesses. If you tend to hire 1099 contractors, also known as independent contractors QBO can help you keep track of payments made to contractors throughout the year. Since contractors are not employees of the business, you must provide a 1099 form at the end of the year to any contractor you have paid $600 or more in the calendar year.The needs of your business will determine which edition of QBO is ideal for you. The following provides some additional insight into the ideal edition of QBO for different types of businesses.

When you purchase a QBO subscription, you can track business finances for one business entity. If you need to track more than one business, you will need to purchase a QBO subscription for each business entity that you have. In general, any business with a unique tax ID number will need their own set of books...

Creating a QBO account

The first step to setting up your business in QBO is to create a QBO account.In this section, we will create a QBO account for Small Business Builders, LLC, a fictitious business we will use to demonstrate features and explain concepts taught throughout this book. Small Business Builders is owned by a partnership that provides consulting services in business plans, marketing plans, bookkeeping, tax planning, and website development to small businesses. Small Business Builders is in its first year of business and has no employees. However, the partners do hire a few contractors to help meet the demand during the peak months of the year.To create a QBO account, go to the Intuit website and select a QBO subscription plan.Follow these steps to create a QBO account:

1. Open your web browser and go to the Intuit website: www.intuit.com.

2. Click on Products and select QuickBooks Online, as shown in Figure 1.1:

   

   Figure 1.1: Navigating to QuickBooks

3. Click on Plans & Pricing...

Navigating in QBO

The QBO user interface is currently undergoing several changes as of the writing of this book. This means that screenshots in this section might vary slightly from what you see when you log in to your QBO account. There are a variety of ways you can navigate within the program, including via the following:

• Dashboards
• Left navigation menu
• The Quick actions section in the Get things done tab
• Gear menu
• Quick Create menu

Let’s look at the dashboards and left navigation menu first.

QBO dashboards and left navigation menu

To explore what the QBO dashboards look like, we will use our sample company, Small Business Builders, LLC:

Figure 1.23: QBO dashboards

There are four dashboards that can be accessed from the Dashboards tab located on the left menu bar: Get things done, Business overview, Cash flow, and Planner. The following is a brief explanation of what you can find on each dashboard along with some snapshots:

• Get things done: When you access QBO for the...

Small-business bookkeeping 101

If you are an Enrolled Agent (EA), Certified Public Accountant (CPA), or aspiring bookkeeper or accountant, the concepts that we cover in this section will be familiar to you. However, if you are brand new to bookkeeping, make sure you grab a notepad to take notes, and a cup of coffee to stay alert.One of the benefits of using QuickBooks to manage your books is that you don’t need an accounting degree to learn how to use the software. However, you should have a basic understanding of how bookkeeping works and what’s happening behind the scenes in QuickBooks when you record transactions.The key aspects of small-business bookkeeping are the following:

• Money coming in to your business (sales)
• Money going out of your business (expenses)
• Inventory and fixed asset purchases
• Tracking the money you owe (liabilities)
• Using the chart of accounts to properly track everything
• Accounting methods – cash versus accrual
• Double-entry bookkeeping

Let...