Master VISUALLY QuickBooks 2005

Master VISUALLY QuickBooks 2005

by Elaine Marmel

"One picture is worth a thousand words." If you prefer instructions that show you how rather than tell you why, then this intermediate to advanced level reference is for you. Hundreds of succinctly captioned, step-by-step screen shots reveal how to accomplish more than 170 QuickBooks 2005 tasks, including:

• Choosing a company

See more details below


"One picture is worth a thousand words." If you prefer instructions that show you how rather than tell you why, then this intermediate to advanced level reference is for you. Hundreds of succinctly captioned, step-by-step screen shots reveal how to accomplish more than 170 QuickBooks 2005 tasks, including:

• Choosing a company identity

• Setting up sales tax

• Editing paycheck information

• Tracking employees' time records

• Creating invoices and estimates

• Paying online credit card bills

• Locating and printing reports

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Master VISUALLY QuickBooks 2005

By Elaine Marmel

John Wiley & Sons

ISBN: 0-7645-7727-1

Chapter One

Set Up Chart of Accounts and Start Dates

The chances are excellent that your company will have been operating, if only for a short time, prior to the time you start using QuickBooks. To produce accurate financial information, you must type historical information into QuickBooks to account for the activities of your business up to the point when you start using QuickBooks. For this reason, you need your company's most recent Chart of Accounts. After you obtain this, you must decide on what date to start using QuickBooks.

After QuickBooks is in place, you need to gather the history of your company's finances. For more on gathering this information, see the section "Gather Historical Information."

Chart of Accounts

Every business has a Chart of Accounts that helps organize accounting information so that you can track it effectively. Each account has a name and usually a number. When creating the Chart of Accounts, accountants often use a numbering scheme that makes identifying the type of account easy. For example, accounts with numbers starting with 10000 may represent assets, accounts with numbers starting with 20000 may represent liabilities, accounts with numbers starting with 30000 may represent equity, accounts with numbers starting with 40000 may represent income, accounts with numbers starting with 50000 may represent cost of goods sold, and accountswith numbers starting with 60000 or higher may represent expenses.

You need a copy of your company's Chart of Accounts as well as the balances in each asset, liability, equity, income, cost of goods sold, and expense account as of the day before you start using QuickBooks.

Select a Starting Date

For most of your accounts, you can type one number that represents your historical balance in that account on the day you start using QuickBooks. For some accounts, however, you need to supply more detail. For example, the Accounts Receivable account balance represents the total of all invoices that your customers have not yet paid. When you receive a customer payment, you apply it to an open invoice to close that invoice and reduce the Accounts Receivable balance. So, to start using QuickBooks, collect all unpaid customer invoices as of the day you start using QuickBooks.

Before you start gathering information, decide on the first date you intend to use QuickBooks to account for your company's transactions. The date you choose determines the "as of" date of the information you need to collect. You should try to start using QuickBooks on the first day of an accounting period - either on the first day of your company's fiscal year or on the first day of a month. If you start using QuickBooks on January 1, you do not need to supply any historical payroll information.

Gather Historical Information

After you have a Chart of Accounts and have determined when to start QuickBooks per the section "Set Up Chart of Accounts and Start Dates," you must then gather some critical information. Collect the following information as of the day before you start using QuickBooks:

Chart of Accounts Balances

First, you need the balances of all the accounts listed on your Chart of Accounts. Ask your accountant for a Trial Balance report as of the day before you intend to start using QuickBooks.

Employee Information

You need the names, addresses, and background information found on the W-4 form for your employees. You also need to make a list of the various payroll benefits offered and the payroll taxes paid by your company. See Chapter 4 for details on setting up payroll background information.

Vendor Information

Obtain the names, addresses, and background information, such as payment terms, for your customers and vendors. Also have available the sales tax information that your municipality requires you charge your customers. See Chapter 3 for information about setting up sales taxes and other items you need to prepare invoices in QuickBooks. See Chapter 5 for details on setting up customers and Chapter 6 for details on setting up vendors.

Inventory and Product Lists

You need a list of the items that you sell. See Chapter 7 for information on setting up inventory, noninventory, service, and other items.

Reconciled and Unreconciled Items

Obtain the reconciled balance of each checking account and a list of all unreconciled checks and deposits. See Chapter 2 for details on setting up an existing checking account.

Outstanding Customer Balances

Obtain the most recent list of outstanding customer balances along with the invoices that comprise those balances. You type those invoices in QuickBooks the same way that you type new invoices. See Chapter 11 for details on entering invoices.

Vendor Balances

You need the outstanding vendor balances along with the bills that comprise those balances. You enter those bills in QuickBooks the same way that you enter new bills. See Chapter 14 for details on entering bills.

Select the Correct Edition of QuickBooks

Because QuickBooks is available in five different editions, selecting the edition that best supports your needs is important. You can purchase QuickBooks Basic, QuickBooks Pro, QuickBooks Premier, QuickBooks Enterprise Solutions, and QuickBooks Online Edition. QuickBooks Basic, QuickBooks Pro, and QuickBooks Premier are all aimed at small- to medium-sized businesses with 20 employees or less. QuickBooks Basic is a good product to use if you have been tracking your company's business activities either on paper or using a spreadsheet and are just getting started with electronic accounting. QuickBooks Pro contains more tools than QuickBooks Basic and, for example, enables you to customize and e-mail forms and reports. QuickBooks Premier contains all the features in QuickBooks Basic and QuickBooks Pro, along with budgeting, forecasting, and business planning features and stronger inventory tracking capabilities. QuickBooks Enterprise has the same features you find in QuickBooks Premier, but QuickBooks Enterprise works best for businesses with more than 20 employees. QuickBooks Online works well when several people across several locations need access to your accounting data.

In addition, during installation, you have the choice of installing one of the industry-specific editions for accountants, construction, manufacturing, nonprofit, professional services, retailers, and wholesalers. Most people use QuickBooks Basic, QuickBooks Pro, or QuickBooks Premier; this book is based primarily on the non-industry-specific edition of QuickBooks Premier, which contains features not found in QuickBooks Basic or QuickBooks Pro. You can use this book with editions other than QuickBooks Premier, but the screens may differ or features may not be available.

The table below provides you with a general comparison of some of the features in the products.

QuickBooks Basic

Using QuickBooks Basic, you can print checks, pay bills, track expenses, invoice customers and track their payments, create purchase orders and track inventory, process payroll, and generate reports and graphs. However, QuickBooks Basic does not contain many of the features that you find in the other editions of QuickBooks. QuickBooks Basic is also the only edition of QuickBooks that you cannot use in a network environment or in multiple locations.

QuickBooks Pro

QuickBooks Pro contains all the features you find in QuickBooks Basic along with, for example, the features necessary for job costing and estimating, time tracking, customizing forms, printing shipping labels and packing slips, interfacing with applications such as Microsoft Excel, Word, and Outlook, and e-mailing forms. Although you can use QuickBooks Pro in a network, you cannot use it in multiple locations.

QuickBooks Premier

QuickBooks Premier contains all the features you find in QuickBooks Basic and QuickBooks Pro. In addition, you can use QuickBooks Premier to build and track inventory assemblies, generate purchase orders from sales orders, set price levels for each item, track comprehensive employee information, analyze your business, and access your data in an internal network or remotely over the Internet.

QuickBooks Enterprise Solutions

QuickBooks Enterprise Solutions contains all the features found in QuickBooks Premier, adds some new features, and then expands on other features. For example, you can use QuickBooks Enterprise Solutions to connect not only through an internal network but also across multiple locations; and simultaneous user performance is better in QuickBooks Enterprise Solutions than in the other network-enabled editions. In QuickBooks Enterprise Solutions, you can filter and search customer lists and combine reports from multiple company files through an automatic export to Microsoft Excel. You also can store up to 29,000 customers, vendors, and products; in the other editions of QuickBooks, you can only store up to 10,000.

QuickBooks Online Edition

QuickBooks Online Edition, a subscription service, is a Web-based application that works like the desktop editions of QuickBooks. Instead of buying and installing QuickBooks on an individual computer, users purchase a subscription and then access QuickBooks through the Internet. QuickBooks Online Edition contains many of the features you find in QuickBooks Pro, along with the ability to connect multiple geographic locations.

Start QuickBooks

You can start QuickBooks in several ways. You can use the Start menu, a desktop shortcut, or even the Windows Run command. When you open QuickBooks for the first time, you see the Welcome to QuickBooks window. When you work in QuickBooks, you create a data file, which QuickBooks calls a company file, in which you store the information specific to your business. From the Welcome to QuickBooks window, you can open an existing company, create a new company, convert a Quicken file, or open a sample company. If you have not previously used QuickBooks, you must create a new company. See the section "Create a New Company" for details.


I have previously used QuickBooks, but have installed it on a new computer. How do I access my company?

* On your old computer, back up your QuickBooks company to either floppy disk, CD, zip disk, or a network hard drive. On your new computer, open QuickBooks. When you see the Welcome to QuickBooks window, click File and then click Restore. See Chapter 25 for details on backing up and restoring.

Start QuickBooks

(1) Click Start.

(2) Click All Programs.

(3) Click QuickBooks.

(4) Click QuickBooks Premier Edition 2005.

Note: If you are using a different edition, click the name of that edition.

QuickBooks opens.

The Automatic Update screen appears, explaining that the Automatic Update feature is turned on.

(5) Click OK.

The Welcome to QuickBooks window appears.

Create a New Company

To use QuickBooks, you must create a company data file to store information about your business. QuickBooks attempts to simplify this process with the EasyStep Interview Wizard, which walks you through the process of creating everything you need to use QuickBooks - a chart of accounts, all of your customers, vendors, employees, payroll information, inventory items, sales tax codes - and sets up opening balances for everything. In addition, you set preferences for all areas of QuickBooks in the EasyStep Interview Wizard.

Although being prompted for this information can ensure that you do not miss anything, you rarely have time to enter all of that information at one time. Although you can leave and restart the wizard, most people find it easiest to manually create a company file and set up QuickBooks at their leisure. In this section, you create a company data file manually.

To create a company data file, QuickBooks requires only two pieces of information: your company name and a business type. QuickBooks uses the other information you supply - legal name, address, phone numbers, and e-mail address - on reports and forms that you print and send to customers and vendors.

A fiscal year is an accounting period of 12 months. For most small businesses, the fiscal year runs from January 1 to December 31 - the calendar year. However, a fiscal year may be any 12-month period.

QuickBooks uses the fiscal year you supply to set the default date range for year-to-date reports that you print. Similarly, QuickBooks uses the tax year you supply to set the default date range for income tax summary and detail reports. You can, of course, change the date range on any report at any time.

If you select a tax form while creating your company, QuickBooks associates accounts listed on your Chart of Accounts with the appropriate lines on the tax form you select. This feature is most useful if you use Turbo Tax - a tax preparation software package sold by Intuit, the makers of QuickBooks - to prepare your business taxes.


If I do not have time to complete the EasyStep Interview Wizard in one sitting, how can I restart the Wizard?

* Click File and then click EasyStep Interview.

Create a New Company

(1) Open QuickBooks.

Note: See the section "Start QuickBooks" to open QuickBooks.

(2) Click the Create a new company file icon.

The EasyStep Interview Wizard starts.

(3) Click Next three times to walk through the wizard until you see the Setting up a new QuickBooks company page.

(4) Click Skip Interview.

The first page of the Creating New Company Wizard appears.

(5) Type your Company Name.

The rest of the information is optional.

(6) Click Next.

The second page of the Creating New Company Wizard appears.

(7) Select your type of business.

The proposed accounts for your Chart of Accounts appear.

Note: Select your business type carefully; you cannot change it later.

(8) Click Next.

The Filename for New Company dialog box appears.

(9) Type a filename for your company.

(10) Click Save.

QuickBooks displays the QuickBooks Learning Center window.

If you do not want to view the QuickBooks Learning Center each time you open your company file, deselect the Show this window at startup option (

  • changes to ).

    (11) Click Begin Using QuickBooks.

    QuickBooks creates your company file and displays your company onscreen.


    If I create my company file manually, do I need to follow a specific order to set up customers, vendors, and so on?

    * QuickBooks does not require you to perform setup activities in any order, but the order you follow affects efficiency. First, create your Chart of Accounts. If you intend to use payroll features, set up payroll items - which are items you assign to employees - next and then create employees. You can assign sales representatives to customers, so, if employees do not act as sales representatives, set up sales representatives and then set up customers. Follow Chapters 1 to 7 sequentially to efficiently set up QuickBooks.

    Can I create a new company file without any accounts in the Chart of Accounts?

    * Yes. On the second page of the Creating New Company Wizard, select (No Type) from the list on the left.

    Do you have any advice for the filename I supply?

    * Yes. Using a filename that reflects your company name is a good idea. That way, if you start another business, you can easily distinguish one company file from another.

    Understanding the QuickBooks Window

    The QuickBooks window contains several features that help you work efficiently while creating and editing projects.

    (A) Title Bar

    Displays the name of the program and the current company.

    (B) Menu Bar

    Lists the menu names.

    (C) Icon Bar

    Contains buttons to help you select common commands, such as creating an invoice or opening the Item List window.

    (D) Open Windows List

    Provides an easy way to display a navigator or switch between open windows. Just click an entry in either list.

    (E) Main Work Area

    Open windows in QuickBooks appear in this area. If you change preferences to display multiple windows, you can move windows to any part of the screen.


    Excerpted from Master VISUALLY QuickBooks 2005 by Elaine Marmel Excerpted by permission.
    All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
    Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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