1. Linda Bliley, CMA, EA Bliley Tax and Accounting LLC
Setting Up QuickBooks
Linda Bliley, CMA, EA
Bliley Tax and Accounting LLC

2. Topics The QuickBooks Product Line What is the Goal?
Accounting Briefly
Setting Up – What You Need
Entering Transactions in QuickBooks
Payroll Set Up Key Points

3. Editions of QuickBooks
Pro
Premier
Accountant
Enterprise
Online
Industry Editions (Premier and Enterprise)
General Business
Contractor
Manufacturing & Wholesale
Nonprofit, Professional
Services Retailers

4. Snapshots
In order for the information to be useful, it has to be right

5. Snapshots

6. Snapshots

7. Topics Choosing a Start Date – Step 1
Creating the Company File – Step 2
Setting Up the Chart of Accounts and Other Lists – Step 3
Setting Up Opening Balances – Step 4
Entering Open Items – Step 5
Entering Year-to-Date Income and Expenses – Step 6
Adjusting Opening Balance for Sales Tax Payable – Step 7

8. Topics (cont.)
Adjusting Inventory and Setting up Fixed Assets – Step 8
Setup Payroll and YTD Payroll Information – Step 9
Verifying your Trial Balance – Step 10
Closing Opening Bal Equity – Step 11
Setting the Closing Date - Backing up the File – Step 12
Users and Passwords

9. Choosing a Start Date: Step 1
Best start dates:
Calendar-Year Basis
December 31
Fiscal Year basis
Last day of fiscal year
For a new company
First day of the business

10. Creating the File: Step 2
Express Start
Detailed Start

11. Creating the File, Step 2 QBO

12. Setting Up the Chart of Accounts: Step 3
To set up the Chart of Accounts, use the default or talk with your accountant or whoever is going to do your books.
An example of why this is important

13. Payroll Item List
Account numbers are typed in the descriptions of the type of pay (not recommended)

14. Payroll item description and account don’t match

16. What Is Double Entry Bookkeeping?

17. Accounting’s Focus
To assess:
The financial position of the organization relative to its debts (liabilities)
Its capabilities to satisfy those debts and continue operations (assets), and
The difference between liabilities and assets (net worth or equity)
The Accounting Equation,
Assets = Liabilities + Equity

18. Account Types Assets: Bank Accounts Receivable Other Current Asset
Fixed Asset
Other Asset
Liabilities:
Accounts Payable
Credit Card
Loan
Other Current Liability
Long Term Liability
Equity
Income:
Income
Other Income
Expenses:
Expense
Other Expense
Cost of Goods Sold

19. Setting Up Opening Balances: Step 4
Gathering Your Information
Entering the Opening Balances
Understanding Opening Balance Equity

20. Gathering Your Information
Trial Balance for your start date
Bank Statements (all accounts)
Outstanding Checks and Deposits
Open Invoices
Unpaid Bills
Employee List and W-4 Information
Payroll Liabilities by Item
Year-to-Date Payroll Detail by Employee
Year-to-Date Payroll Tax Deposits
Physical Inventory by Inventory Part

21. Understanding Opening Balance Equity
As the opening balances for assets and liabilities are entered, QuickBooks automatically adds offsetting amounts in the Opening Bal Equity account
Opening Bal Equity will be “closed” into Retained Earnings (or Owner’s Equity).

22. Entering Open Items: Step 5
Outstanding Checks and Deposits
Open Bills (Accounts Payable) *
Open Invoices (Accounts Receivable)
Open Purchase Orders
Open Estimates and Sales Orders
* Why use Bills to enter payments and not just write checks?

23. Writing Checks

24. Entering a Bill

25. Paying Bills

26. Cash Flow Forecast

27. Entering Year-to-Date Income and Expenses: Step 6
MID-YEAR SET UP ONLY:
General Journal Entry to enter your year-to-date income and expenses
Summarize the total income and expenses

28. Sales Tax Adjustment: Step 7
Total Tax Due = Collected Tax + Uncollected Tax
Uncollected Tax = Tax on Open Invoices
Collected Tax = Total Tax Due – Uncollected Tax

29. Adjusting Inventory: Step 8

30. Setup Payroll Information: Step 9
Setting up payroll in QuickBooks is a lengthy and involved process
See Payroll in later slides

31. Verifying your Trial Balance: Step 10

32. Closing Opening Balance: Step 11

33. Setting the Closing Date and Backing up the File: Step 12
Set the start date as the Closing Date to Protect your Setup Balances
Backup your finished file

34. Setting Up Users in the Company File

35. Summary of Key Points Choosing a Start Date – Step 1
Creating the Company File – Step 2
Setting Up the Chart of Accounts and Other Lists – Step 3
Setting Up Opening Balances – Step 4
Entering Open Items – Step 5
Entering Year-to-Date Income and Expenses – Step 6
Adjusting Opening Balance for Sales Tax Payable – Step 7

36. Summary of Key Points (cont.)
Adjusting Inventory and Setting up Fixed Assets – Step 8
Setup Payroll and YTD Payroll Information – Step 9
Verifying your Trial Balance – Step 10
Closing Opening Bal Equity – Step 11
Setting the Closing Date - Backing up the File – Step 12
Users and Passwords

37. Entering Transactions in QuickBooks
Forms
Lists
Accounts
Registers
Items
Demo a form, list, account, register, and item.
in order to make the most useful of the software you should have these things set up

38. The Accounting in QuickBooks
Transactions are entered in forms
Invoices, Bills and Checks
QuickBooks handles the debits and credits

39. QuickBooks Items and Other Lists
To help you track more details about your sales, QuickBooks provides several lists:
The Items List
The Terms List
The Price Levels List

40. QuickBooks Items
The Item list identifies products and services purchased and/or sold
Used on the sales forms
QuickBooks automatically handles the behind the scenes accounting for items

41. Item Types
There are several different types of items in QuickBooks

42. Service Item

43. Subcontracted Services Item

44. Sales Tax Items

45. The Terms List Payment terms for your Invoices and Bills
Terms used to calculate when the Invoice or Bill is due
If the terms specified on the transaction include a discount for early payment, QuickBooks also calculates the date on which the discount expires

46. Payroll Basics Types of Payroll QuickBooks Offers
Checklist for Setting up Payroll

47. Payroll Options in QuickBooks
Three payroll choices :
Basic Payroll
Enhanced Payroll
Full Service Payroll

48. Payroll Options

49. Checklist for Setting up Payroll
Gather information about each of your employees
Activate the Payroll function
Set up payroll accounts
Enable your QuickBooks file for payroll processing
Use the Payroll Setup Interview
Add additional payroll items directly into Payroll Item List
Edit payroll items to modify the vendor information and the way it affects the Chart of Accounts
If setting up mid-year, enter year-to-date information for each employee and enter year-to-date liability payments
Verify payroll item setup, employee setup, and the vendor list
Proof your setup.

50. Setting up Year-to-Date Payroll Amounts
If you are setting up your own payroll in the middle of the fiscal year, you’ll need to enter the year-to-date payroll information for each of your employees before entering your first paychecks

51. You probably don’t need to know
Other Stuff
You probably don’t need to know

52. Activating Account Numbers

53. Adding Accounts

54. Adding Accounts

55. Adding Subaccounts

56. Removing Accounts from the Chart of Accounts
Deleting Accounts - Option 1
Deactivating Accounts - Option 2
Merging Accounts - Option 3

57. Deleting Accounts – Option 1

58. Deactivating Accounts – Option 2

59. Merging Accounts – Option 3
Select the account you wish to change
Rename the account to the account you wish to keep

60. Reordering the Account List
Sorted by name without account numbers

61. Entering the Opening Balances: Step 4 (cont.)
Two Methods
Directly Editing the Account
Using a General Journal Entry to Record Opening Balances

62. Directly Editing the Account

63. Using a General Journal Entry

64. Payroll Accounts
Payroll Liability Accounts
Payroll Expense Accounts

65. Payroll Items

66. The Payroll Setup Interview
This Interview is optional, but very helpful and works even if you have existing payroll
Starting the Payroll Setup Interview:
Select the Employees menu, select Payroll Setup

67. Setting up Compensation and Benefits Payroll Items

68. Medical Insurance
Three ways to allocate costs between the company and the employee:
The company could pay the entire expense
The company and employee could share the expense
The employee could pay the entire expense
If the costs are shared between the company and the employees, or if the employees pay for the entire cost via payroll deductions, use a Deduction Item to track the deductions

69. Medical Insurance Payroll Deduction

70. 401(k) Employee Deduction and Company Match Items
If you have a 401(k) plan, you can set up Payroll Items to track the employee contributions (salary deferral) to the plan

71. Paid Time Off Payroll Items
The Payroll Setup Interview will walk you through creating items to track and pay vacation or sick pay
If you have a “Paid Time Off (PTO)” policy instead of separate sick and vacation time you can use either Sick or Vacation time to keep track of PTO.

72. Setting up Employees
After you have set up your Payroll Items, you can set up each employee’s payroll record.

73. Payroll Tax Item Setup

74. Vendors for Payroll Tax and Withholding Items
To set up vendors for payroll liabilities, continue with the payroll Setup Interview

75. Setting Up Employee Defaults
Default settings for each new employee

76. The Employee Contact List report
To view all employees, including deactivated employees, display the Employee list and click the Include inactive box

77. Accounting’s Focus
To assess:
The financial position of the organization relative to its debts (liabilities)
Its capabilities to satisfy those debts and continue operations (assets), and
The difference between liabilities and assets (net worth or equity)
The Accounting Equation,
Assets = Liabilities + Equity

78. Accounts and Chart of Accounts
Business transactions are recorded in several types of ledgers, called accounts
The summary of all transactions is called the General Ledger
A listing of every account is called the Chart of Accounts.
Each account has a type (i.e., asset, liability, equity, income, or expense)

79. Double-entry Accounting
Total debits must always equal total credits
Debits = Credits
Double Entry Accounting
Every transaction creates a debit in one or more accounts and a credit in one or more accounts.
A debit might increase or decrease an account; the same is true of credits
Depending on the type of account
Debits are not always “bad” and credits are not always “good”