Mastering QuickBooks 2020: The ultimate guide to bookkeeping and QuickBooks Online

Mastering QuickBooks 2020

The ultimate guide to bookkeeping and QuickBooks Online

Crystalynn Shelton, CPA

BIRMINGHAM - MUMBAI

Mastering QuickBooks 2020

Copyright © 2019 Packt Publishing

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Every effort has been made in the preparation of this book to ensure the accuracy of the information presented. However, the information contained in this book is sold without warranty, either express or implied. Neither the author, nor Packt Publishing or its dealers and distributors, will be held liable for any damages caused or alleged to have been caused directly or indirectly by this book.

Packt Publishing has endeavored to provide trademark information about all of the companies and products mentioned in this book by the appropriate use of capitals. However, Packt Publishing cannot guarantee the accuracy of this information.

Commissioning Editor: Pavan Ramchandani

Acquisition Editor: Karan Gupta

Content Development Editor: Aamir Ahmed

Senior Editor: Hayden Edwards

Technical Editor: Jinesh Topiwala

Copy Editor: Safis Editing

Project Coordinator: Kinjal Bari

Proofreader: Safis Editing

Indexer: Pratik Shirodkar

Production Designer: Aparna Bhagat

First published: December 2019

Production reference: 2070520

Published by Packt Publishing Ltd.

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ISBN 978-1-78995-510-1

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To my mother, Mary A. Moore, who exemplifies the Golden Rule:

Do unto others as you would have them do unto you.

To my husband, Charles, for always being loving and supportive

throughout our joint life journey.

To my fellow accountants, bookkeepers, and tax professionals who spend countless hours

doing their part to help small businesses succeed – I salute you.

– Crystalynn Shelton, CPA

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Contributors

About the author

Crystalynn Shelton is a licensed CPA in California. She earned an accounting degree from the University of Texas, Arlington, and has held numerous management roles in the oil and gas, entertainment, education, and retail grocery industries. She ran her own bookkeeping practice for 3 years and worked for Intuit (QuickBooks) for 3 years as a senior learning specialist. Crystalynn is currently a content strategist for Technical Learning Resources and an Adjunct Instructor at UCLA Extension, where she teaches accounting, bookkeeping, and QuickBooks to hundreds of small business owners and accounting students each year. Crystalynn is also an Advanced certified QuickBooks Online ProAdvisor and has been certified in QuickBooks for more than 10 years. When she is not working, Crystalynn enjoys reading a good book and rollerblading in Venice Beach, California.

To the editors, proofreaders, and technical writers at Packt, thank you for all of your hard work to help make this book possible.

To the folks at FitSmallBusiness.com for your part in making me the writer I am today.

About the reviewer

Steven A. Windsor is a chartered certified accountant with almost 20 years' experience and currently works as a business advisory manager for Pascoe Partners Accountants in West Perth, Western Australia, helping small-to-medium businesses grow and meet the dreams and goals of their owners.

He is a big fan of QuickBooks, which he has been using for approximately 18 years (both the desktop and online versions), and has completed the QuickBooks Online Advanced Certification course. Steven is passionate about training people in bookkeeping and finds QuickBooks Online to be one of the most intuitive cloud software packages available.

This is Steven's first book review and he hopes readers will find it as useful and informative as he did.

Ryan Blair is a graduate of the Business Administration-Accounting program at St. Lawrence College in Kingston, Ontario, Canada. He is currently a QuickBooks ProAdvisor, helping small businesses with their bookkeeping needs, as well as offering audit, advisory, and tax services. Ryan has many years of experience in the food and beverage industry and uses that knowledge of operations with his accounting expertise to help clients who are part of that sector. Ryan enjoys reading about different areas of accounting and finance, such as investments, to broaden his knowledge of his field. He is a strong supporter of continuous education and is pursuing advanced certifications in accounting and finance.

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Table of Contents

Title Page

Copyright and Credits

Mastering QuickBooks 2020

Dedication

About Packt

Why subscribe?

Contributors

About the author

About the reviewer

Packt is searching for authors like you

Preface

Who this book is for

What this book covers

To get the most out of this book

Download the example code files

Conventions used

Get in touch

Reviews

Getting Started with QuickBooks Online

What is QuickBooks?

QBO editions

Choosing the right QBO edition

QBO Simple Start

QBO Essentials

QBO Plus

QBO Advanced

QBD product line

Choosing the right QBD version

QuickBooks Mac

QuickBooks Pro

QuickBooks Premier

QuickBooks Enterprise

New features in QBD 2019 and 2020

New features in QBD 2019

New features in QBD 2020 

Introduction to small business bookkeeping

Money in (sales)

Money out (expenses)

Inventory and fixed asset purchases

Liabilities

Chart of accounts

Accounting methods

Double-entry bookkeeping

Summary

Company File Setup

Creating a QuickBooks Online account

Navigating in QuickBooks Online

QuickBooks Online dashboard

QuickBooks Online icons

QuickBooks Online menus

Setting up company preferences in QuickBooks Online

Company

Billing and subscription

Usage

Sales

Expenses

Payments

Advanced

Summary

Migrating to QuickBooks Online

Key information and documents required to convert to QuickBooks Online

Questions to ask yourself in preparation for data conversion

Choosing your QuickBooks start date

Converting from another accounting software or Excel to QuickBooks Online

Recording details of historical data in QuickBooks Online

Recording a summary journal entry of historical data in QuickBooks Online

Converting from QuickBooks Desktop to QuickBooks Online

Functionality not available in QuickBooks Online

QuickBooks Desktop data that will not convert to QuickBooks Online

Converting from QuickBooks Desktop data to QuickBooks Online

Checking the target count

Creating a QuickBooks Online account

Backing up your QuickBooks Desktop file

Checking for updates

Running the QuickBooks Desktop conversion to the QuickBooks Online tool

Logging in to QuickBooks Online

Verifying that all of your data was converted

Summary

Customizing QuickBooks for Your Business

Customizing the chart of accounts

How to add a new account to the chart of accounts list

How to import a chart of accounts list

How to edit accounts on the chart of accounts list

How to inactivate an account on the chart of accounts list

Connecting bank accounts to QuickBooks Online

Importing banking transactions automatically

Uploading banking transactions from an Excel CSV file

Connecting credit card accounts to QuickBooks Online

Importing credit card transactions automatically

Uploading credit card transactions from an Excel CSV file

Giving other users access to your QuickBooks data

Standard user

Company administrator

Reports only user

Time tracking user

Accountant user 

Summary

Managing Customers, Vendors, Products, and Services

Managing customers in QuickBooks Online

Manually adding customers in QuickBooks Online

Importing customers into QuickBooks Online

Making changes to existing customers in QuickBooks Online

Inactivating customers in QuickBooks Online

Managing vendors in QuickBooks Online

Manually adding vendors in QuickBooks Online

Importing vendors into QuickBooks Online

Making changes to existing vendors in QuickBooks Online

Inactivating vendors in QuickBooks Online

Managing products and services in QuickBooks Online

How to manually add products and services in QuickBooks Online

How to import products and services in QuickBooks Online

Making changes to existing products and services in QuickBooks Online

Inactivating products and services in QuickBooks Online

Summary

Recording Sales Transactions in QuickBooks Online

Understanding sales forms 

Recording income using a sales receipt

Recording income using a deposit

Recording income using a sales invoice

Recording customer payments

Issuing credit memos and refunds to customers

Summary

Recording Expenses in QuickBooks Online

Entering and paying bills

Entering bills into QuickBooks Online

Paying bills in QuickBooks Online

Managing recurring expenses

Writing checks

Printing checks

Summary

Managing Downloaded Bank and Credit Card Transactions

Overview of the banking center 

Matching transactions

Editing banking transactions

Understanding bank rules

How do you want to apply this rule?

Reconciling accounts

Summary

Report Center Overview

Navigating the report center

Reports available in the Report Center

Customizing reports

General report customizations

Rows/Columns customization

Filters

Header/footer

Exporting reports

Exporting reports to Excel

Exporting reports to PDF

Sending reports via email

Summary

Business Overview Reports

Understanding profit and loss statements

Generating balance sheet reports

Understanding the statement of cash flows

Creating a budget

Summary

Customer Sales Reports in QuickBooks Online

Accounts receivable aging report

Generating an open invoices report

Generating a sales by customer report

Generating a sales by product/service report

Summary

Vendor and Expenses Reports

Generating an accounts payable (A/P) aging report

Generating an unpaid bills report

Generating an expenses by vendor summary report

Generating a bill payments report

Summary

Managing Payroll in QuickBooks Online

Setting up payroll

Payroll setup checklist and key documents

Setting up the payroll in QuickBooks Online

Running payroll

Generating payroll reports

Filing payroll tax forms and payments 

Summary

Managing 1099 Contractors in QuickBooks Online

Setting up 1099 contractors

Tracking and paying 1099 contractors

1099 year-end reporting

Summary

Closing the Books in QuickBooks Online

Reviewing a checklist for closing your books

Reconciling all bank and credit card accounts

Making year-end accrual adjustments

Reviewing new fixed asset purchases, and adding them to the chart of accounts

Making depreciation journal entries 

Taking physical inventory, and reconciling with your books

Adjusting retained earnings for owner/partner distributions

Setting a closing date and password

Preparing key financial reports 

Giving your accountant access to your data

Recording journal entries

Summary

Handling Special Transactions in QuickBooks Online

Using apps in QuickBooks Online

Overview of the QuickBooks app center

Finding apps for your business

Managing credit card payments

Customizing sales templates

Setting up business loans and lines of credit

Adding a business loan or line of credit to the chart of accounts

Making payments on a loan or line of credit

Managing petty cash

Adding a petty cash account in QuickBooks

Recording petty cash transactions

Replenishing petty cash

Reconciling petty cash

Recording bad debt expense

Creating a bad debt item

Creating a credit memo

Applying a credit memo to an outstanding customer invoice

Understanding delayed charges and credits

Summary

Shortcuts and Test Drive

QBO keyboard shortcuts

QuickBooks Online test drive

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Leave a review - let other readers know what you think

Preface

Intuit QuickBooks is an accounting software package that helps small business owners manage all their bookkeeping tasks. Its complete range of accounting capabilities, such as tracking income and expenses, managing payroll, simplifying taxes, and accepting online payments, makes QuickBooks software a must-have for business owners and aspiring bookkeepers.

The purpose of this book is to teach small business owners, bookkeepers, and aspiring accountants how to properly use QuickBooks Online. Using a fictitious company, we will demonstrate how to create a QuickBooks Online account; customize key settings for a business; manage customers, vendors, and products and services; enter transactions; generate reports; close the books at the end of the period. QuickBooks records the debits and credits for you so that you don't have to know accounting. However, we will show you what's happening behind the scenes in QuickBooks so that you can understand how your actions in QuickBooks impact financial statements. We will also provide you with tips, shortcuts, and best practices to help you save time and become a QuickBooks pro.

Who this book is for

If you're a small business owner, bookkeeper, or accounting student who wants to learn how to make the most of QuickBooks Online, this book is for you. Business analysts, data analysts, managers, professionals working in bookkeeping, and QuickBooks accountants will also find this guide useful. No experience with QuickBooks Online is required to get started; however, some bookkeeping knowledge will be helpful.

What this book covers

Chapter 1, Getting Started with QuickBooks Online, starts off with a brief description of QuickBooks Online, then it gives us more information about the different editions, different versions, and finally how to decide which version is suitable for your business.

Chapter 2, Company File Setup, shows how you can set up a QuickBooks Online account for your company and takes you through different options available on the dashboard, followed by what information needs to be added for your company.

Chapter 3, Migrating to QuickBooks Online, gives you all the information required for migrating to QuickBooks Online from platforms such as Excel, QuickBooks Desktop, or the data stored on your desktop.

Chapter 4, Customizing QuickBooks for your Business, introduces customization for the chart of accounts and then dives into the different ways of connecting bank accounts and credit cards to your QuickBooks Online account, followed by granting users access to your QuickBooks data.

Chapter 5, Managing Customers, Vendors, Products and Services, gives you a detailed insight on how to manage your customers, vendors, and products and services.

Chapter 6, Recording Sales Transactions in QuickBooks Online, starts by giving detailed information on different forms of sales, followed by how the customer can record payments using different methods, and finally teaches you how to initiate refunds for your customers.

Chapter 7, Recording Expenses in QuickBooks Online, teaches you how to enter and pay bills for your QuickBooks Online account. Then we start exploring how to manage recurring expenses, followed by writing and printing checks.

Chapter 8, Managing Downloaded Bank and Credit Card Transactions, gives you a brief overview of the banking center in QuickBooks Online and gives you a deep understanding of how the bank rules work, followed by how to edit QuickBooks Online transactions, and finally how to reconcile bank accounts.

Chapter 9, Report Center Overview, takes you through the report center, followed by the different reports available, how to customize and export reports, and finally how to send reports via email.

Chapter 10, Business Overview Reports, discusses the three primary reports that provide a good overview of your business: the profit and loss statement, balance sheet report, and statement of cash flows.

Chapter 11, Customer Sales Reports in QuickBooks Online, focuses on reports that will give you insight into your customers and sales. We will discuss what information you will find on each report, how to customize the reports, and how to generate each report.

Chapter 12, Vendor and Expenses Reports, dives into what information you can expect to find on each report, how to customize the report, and how to generate it. This chapter also discusses ways that you can use the report to help you manage your expenses and cash flow.

Chapter 13, Managing Payroll in QuickBooks Online, shows you how to set up your payroll system, how to generate payroll, and how to fill payroll tax forms and payments.

Chapter 14, Managing 1099 Contractors in QuickBooks Online, shows you how to set up 1099 contractors, tracking and paying 1099 contractors, followed by how to generate the 1099 year ending report.

Chapter 15, Closing the Books in QuickBooks Online, covers reconciling all bank and credit card accounts, making year-end accrual adjustments (if applicable), recording fixed asset purchases made throughout the year, recording depreciation, taking a physical inventory, adjusting retained earnings, and preparing financial statements. 

Chapter 16, Handling Special Transactions in QuickBooks Online, starts by using apps in QuickBooks Online. Apps are a great way to help you streamline day-to-day business tasks that can be time-consuming. Next, we will show you how to record credit card payments from customers. We will also show you how to keep track of petty cash. Finally, we will show you how to record delayed charges.

To get the most out of this book

This book is ideal for anyone who has accounting/bookkeeping knowledge as well as those that don't. Each chapter builds on the knowledge and information presented in the previous chapters. If you don't have any experience of using QuickBooks Online, we recommend you start with Chapter 1, Getting Started with QuickBooks Online, and complete each chapter in the order it is presented. If you have experience of using QuickBooks Online, feel free to advance to the chapters that cover the topics you need to brush up on.

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Conventions used

Bold: Indicates a new term, an important word, or words that you see on screen. For example, words in menus or dialog boxes appear in the text like this. Here is an example: "Click on the Accounting tab located on the left menu bar and select Chart of Accounts."

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Tips and tricks appear like this.

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