QuickBooks 2018 Stephen L. Nelson
Introduction... 1 About This Book... 1 Foolish Assumptions... 2 Icons Used in This Book... 2 Beyond the Book... 2 Where to Go from Here... 2 Part One Quickly Into QuickBooks... 5 Chapter 1 QuickBooks: The Heart of Your Business... 7 Learning Objectives... 7 Introduction... 7 Why QuickBooks?... 7 Why you need an accounting system... 7 What QuickBooks does... 8 Why not QuickBooks online?... 9 What Explains QuickBooks Popularity?... 10 What s Next, Dude?... 10 How to Succeed with QuickBooks... 11 Budget wisely, Grasshopper... 11 Don t focus on features... 11 Outsource payroll... 12 Use both the profit and loss statement and the balance sheet... 13 Review Questions... 14 Review Answers... 15 Chapter 2 The Big Setup... 17 Learning Objectives... 17 Introduction... 17 Getting Ready for QuickBooks Setup... 17 The big decision... 17 The trial balance of the century... 18 The mother of all scavenger hunts... 20 Stepping through QuickBooks Setup... 21 Starting QuickBooks... 21 Using the Express Setup... 23 The Rest of the Story... 29 Review Questions... 30 Review Answers... 31 Chapter 3 Populating QuickBooks Lists... 33 Learning Objectives... 33 Introduction... 33 The Magic and Mystery of Items... 33 Adding items you might include on invoices... 34 Creating other wacky items for invoices... 41 Editing items... 44 Adding Employees to Your Employee List... 44 Customers Are Your Business... 46 It s Just a Job... 49 Adding Vendors to Your Vendor List... 52 The Other Lists... 54 The Fixed Asset Item list... 55 The Price Level list... 56
The Billing Rate Levels list... 56 The Sales Tax Code list... 56 The Class list... 56 The Other Names list... 57 The Sales Rep list... 57 Customer, Vendor, and Job Types list... 57 The Terms list... 57 The Customer Message list... 58 The Payment Method list... 58 The Ship Via list... 58 The Vehicle list... 58 The Memorized Transaction list... 58 The Reminders list... 59 Organizing Lists... 59 Printing Lists... 59 Exporting List Items to Your Word Processor... 59 Dealing with the Chart of Accounts List... 60 Describing customer balances... 60 Describing vendor balances... 60 Camouflaging some accounting goofiness... 60 Supplying the missing numbers... 65 Checking your work one more time... 67 Review Questions... 68 Review Answers... 69 Part Two Daily Entry Tasks... 71 Chapter 4 Creating Invoices and Credit Memos... 73 Learning Objectives... 73 Introduction... 73 Making Sure That You re Ready to Invoice Customers... 73 Preparing an Invoice... 73 Fixing Invoice Mistakes... 78 If the invoice is still displayed onscreen... 79 If the invoice isn t displayed onscreen... 79 If you need to delete an invoice... 79 Preparing Credit Memos... 80 Fixing Credit Memo Mistakes... 82 Taking Lessons from History... 82 Printing Invoices and Credit Memos... 83 Loading the forms into the printer... 83 Setting up the invoice printer... 83 Printing invoices and credit memos as you create them... 85 Printing invoices in a batch... 86 Printing credit memos in a batch... 88 Sending Invoices and Credit Memos via Email... 88 Customizing Your Invoices and Credit Memos... 89 Review Questions... 91 Review Answers... 92 Chapter 5 Reeling In the Dough... 93 Learning Objectives... 93 Introduction... 93 Recording a Sales Receipt... 93 Printing a Sales Receipt... 97 Special Tips for Retailers... 98 Correcting Sales Receipt Mistakes... 99 ii
Recording Customer Payments... 100 Correcting Mistakes in Customer Payments Entries... 104 Making Bank Deposits... 104 Improving Your Cash Inflow... 106 Tracking what your customers owe... 106 Assessing finance charges... 108 Dealing with deposits... 111 Review Questions... 112 Review Answers... 113 Chapter 6 Paying the Bills... 115 Learning Objectives... 115 Introduction... 115 Pay Now or Pay Later?... 115 Recording Your Bills by Writing Checks... 115 The slow way to write checks... 116 The fast way to write checks... 120 Recording Your Bills the Accounts Payable Way... 122 Recording your bills... 122 Entering your bills the fast way... 125 Deleting a bill... 127 Remind me to pay that bill, will you?... 127 Paying Your Bills... 128 Tracking Vehicle Mileage... 131 Paying Sales Tax... 132 Review Questions... 134 Review Answers... 135 Chapter 7 Inventory Magic... 137 Learning Objectives... 137 Introduction... 137 Setting Up Inventory Items... 137 When You Buy Stuff... 138 Recording items that you pay for up front... 138 Recording items that don t come with a bill... 138 Paying for items when you get the bill... 140 Recording items and paying the bill all at once... 141 When You Sell Stuff... 142 How Purchase Orders Work... 142 Customizing a purchase order form... 142 Filling out a purchase order... 143 Checking up on purchase orders... 145 Receiving purchase order items... 145 Assembling a Product... 146 Identifying the components... 146 Building the assembly... 146 Time for a Reality Check... 148 Dealing with Multiple Inventory Locations... 149 Manually keep separate inventory-by-location counts... 149 Use different item numbers for different locations... 149 Upgrade to QuickBooks Enterprise Solutions... 149 The Lazy Person s Approach to Inventory... 150 How periodic inventory systems work in QuickBooks... 150 The good and bad of a periodic inventory... 151 Review Questions... 152 Review Answers... 153 iii
Chapter 8 Keeping Your Checkbook... 155 Learning Objectives... 155 Introduction... 155 Writing Checks... 155 Writing checks from the Write Checks window... 155 Writing checks from the register... 156 Changing a check that you ve written... 158 Packing more checks into the register... 158 Depositing Money in a Checking Account... 159 Recording simple deposits... 159 Depositing income from customers... 160 Transferring Money between Accounts... 162 Setting up a second bank account... 162 Recording deposits into the new account... 163 About the other half of the transfer... 163 Changing a transfer that you ve already entered... 165 Working with Multiple Currencies... 165 To Delete or to Void?... 165 Handling NSF Checks from Customers... 166 The Big Register Phenomenon... 167 Moving through a big register... 167 Finding that darn transaction... 167 Review Questions... 169 Review Answers... 170 Chapter 9 Playing with Plastic... 171 Learning Objectives... 171 Introduction... 171 Tracking Business Credit Cards... 171 Setting up a credit card account... 171 Selecting a credit card account so that you can use it... 173 Entering Credit Card Transactions... 173 Recording a credit card charge... 173 Changing charges that you ve already entered... 176 Reconciling Your Credit Card Statement and Paying the Bill... 177 So What about Debit Cards and ATM Cards?... 177 So What about Customer Credit Cards?... 177 Review Questions... 179 Review Answers... 180 Part Three Stuff You Do From Time to Time... 181 Chapter 10 Printing Checks... 183 Learning Objectives... 183 Introduction... 183 Getting the Printer Ready... 183 Printing a Check... 186 A few words about printing checks... 186 Printing a check as you write it... 186 Printing checks by the bushel... 188 What if I make a mistake?... 189 Oh where, oh where do unprinted checks go?... 190 Printing a Checking Register... 190 Review Questions... 193 Review Answers... 194 Chapter 11 Payroll... 195 Learning Objectives... 195 iv
Introduction... 195 Getting Ready to Do Payroll without Help from QuickBooks... 195 Doing Taxes the Right Way... 195 Getting an employer ID number... 196 Signing up for EFTPS... 196 Having employees and employers do their part... 196 Getting Ready to Do Payroll with QuickBooks... 196 Paying Your Employees... 197 Paying Payroll Liabilities... 200 Paying tax liabilities if you use a full-meal-deal payroll service... 200 Paying tax liabilities if you don t use a full-meal-deal payroll service... 200 Paying other nontax liabilities... 201 Preparing Quarterly Payroll Tax Returns... 201 Using the Basic Payroll service... 201 Using a full-meal-deal payroll service... 201 Using the QuickBooks Enhanced Payroll service... 202 Filing Annual Returns and Wage Statements... 202 The State Wants Some Money, Too... 203 Review Questions... 204 Review Answers... 205 Chapter 12 Building the Perfect Budget... 207 Learning Objectives... 207 Introduction... 207 Is This a Game You Want to Play?... 207 All Joking Aside: Some Basic Budgeting Tips... 207 A Budgeting Secret You Won t Learn in College... 208 Setting Up a Secret Plan... 209 Adjusting a Secret Plan... 211 Forecasting Profits and Losses... 212 Projecting Cash Flows... 212 Using the Business Planner Tools... 212 Review Questions... 213 Review Answers... 214 Chapter 13 Online with QuickBooks... 215 Learning Objectives... 215 Introduction... 215 Doing the Electronic Banking Thing... 215 So what s the commotion about?... 215 A handful of reasons to be cautious about banking online... 215 Making sense of online banking... 217 Signing up for the service... 218 Making an online payment... 218 Transferring money electronically... 219 Changing instructions... 220 Transmitting instructions... 220 Message in a bottle... 220 A Quick Review of the Other Online Opportunities... 221 Review Questions... 222 Review Answers... 223 Part Four Housekeeping Chores... 225 Chapter 14 The Balancing Act... 227 Learning Objectives... 227 Introduction... 227 Balancing a Bank Account... 227 v
Giving QuickBooks information from the bank statement... 227 Marking cleared checks and deposits... 229 Eleven Things to Do If Your Non-Online Account Doesn t Balance... 232 Review Questions... 235 Review Answers... 236 Chapter 15 Reporting on the State of Affairs... 237 Learning Objectives... 237 Introduction... 237 What Kinds of Reports Are There, Anyway?... 237 Creating and Printing a Report... 239 Visiting the report dog-and-pony show... 241 Editing and rearranging reports... 241 Reports Made to Order... 244 Processing Multiple Reports... 246 Your Other Reporting Options... 246 Last but Not Least: The QuickReport... 247 Review Questions... 249 Review Answers... 250 Chapter 16 Job Estimating, Billing and Tracking... 251 Learning Objectives... 251 Introduction... 251 Turning On Job Costing... 251 Setting Up a Job... 252 Creating a Job Estimate... 252 Revising an Estimate... 254 Turning an Estimate into an Invoice... 255 Comparing Estimated Item Amounts with Actual Item Amounts... 255 Charging for Actual Time and Costs... 257 Tracking Job Costs... 258 Review Questions... 259 Review Answers... 260 Chapter 17 File Management Tips... 261 Learning Objectives... 261 Introduction... 261 Backing Up Is (Not That) Hard to Do... 261 Backing up the quick-and-dirty way... 262 Getting back the QuickBooks data you backed up... 266 Making an Accountant s Copy... 268 Working with Portable Files... 268 Using an Audit Trail... 269 Using a Closing Password... 269 Review Questions... 271 Review Answers... 272 Chapter 18 Fixed Assets and Vehicle Lists... 273 Learning Objectives... 273 Introduction... 273 What Is Fixed-Assets Accounting?... 273 Fixed-Assets Accounting in QuickBooks... 274 Setting Up a Fixed Asset List... 275 Adding items to the Fixed Asset list... 275 Adding fixed-asset items on the fly... 277 Editing items in the Fixed Asset list... 277 Tracking Vehicle Mileage... 278 Identifying your vehicles... 278 vi
Recording vehicle miles... 279 Using the vehicle reports... 280 Updating vehicle mileage rates... 281 Review Questions... 282 Review Answers... 283 Part Five The Part of Tens... 285 Chapter 19 Tips for Handling (Almost) Ten Tricky Situations... 287 Learning Objectives... 287 Introduction... 287 Tracking Depreciation... 287 Selling an Asset... 288 Selling a Depreciable Asset... 288 Owner s Equity in a Sole Proprietorship... 289 Owner s Equity in a Partnership... 289 Owner s Equity in a Corporation... 289 Multiple-State Accounting... 290 Getting a Loan... 290 Repaying a Loan... 291 Review Questions... 293 Review Answers... 294 Chapter 20 (Almost) Ten Secret Business Formulas... 297 Learning Objectives... 297 Introduction... 297 The First Most Expensive Money You Can Borrow Formula... 297 The Second Most Expensive Money You Can Borrow Formula... 298 The How Do I Break Even? Formula... 299 The You Can Grow Too Fast Formula... 301 How net worth relates to growth... 301 How to calculate sustainable growth... 302 The First What Happens If...? Formula... 302 The Second What Happens If...? Formula... 303 The Economic Order Quantity (Isaac Newton) Formula... 305 The Rule of 72... 306 Review Questions... 308 Review Answers... 309 Part Six Appendixes... 311 Appendix A Installing QuickBooks in 10 Easy Steps... 313 Appendix B If Numbers Are Your Friends... 317 Introduction... 317 Keying In on Profit... 317 Let me introduce you to the new you... 317 The first day in business... 317 Look at your cash flow first... 318 Depreciation is an accounting gimmick... 318 Accrual-basis accounting is cool... 319 Now you know how to measure profits... 320 Some financial brain food... 320 In the Old Days, Things Were Different... 321 What Does an Italian Monk Have to Do with Anything?... 323 And now for the blow-by-blow... 324 Blow-by-blow, Part 2... 326 How does QuickBooks help?... 327 vii
Two Dark Shadows in the World of Accounting... 327 The first dark shadow... 327 The second dark shadow... 328 The Danger of Shell Games... 328 Appendix C Sharing QuickBooks Files... 331 Introduction... 331 Sharing a QuickBooks File on a Network... 331 User permissions... 331 Record locking... 332 Installing QuickBooks for Network Use... 333 Setting User Permissions... 333 User permissions in Enterprise Solutions... 333 User permissions in QuickBooks Pro and Premier... 335 Specifying Multi-user Mode... 336 Working in Multi-user Mode... 336 Glossary... 339 Index... 341 viii