Author: Lisa Newton – Best selling handbook Quickbooks Online Quickbooks Online

Quickbooks Online The Handbook



1: Getting Started.. 7

1.1 Introducing QuickBooks. 7

1.2 Free Trial9

1.3 System Requirements. 9

1.4 Getting around in QuickBooks. 9

1.5 All the accounting you need to know.. 10

1.6 Using Lists. 12

1.7 Using Registers. 12

1.8 Getting around in QuickBooks. 13

1.9 Help!14

1.10 Accounting Terminology. 16

2: Setting up QuickBooks. 26

2.1 Creating a QuickBooks Company. 26

2.2 Entering company information. 27

2.3 Chart of Accounts. 39

2.4 Setting up QuickBooks preferences. 46

2.5 Setting up income accounts. 50

2.6 Entering opening balances. 53

2.7 Setting up payroll56

2.8 Getting help whilst using QuickBooks. 57

3: Working with Lists. 59

3.1 Using QuickBooks lists. 59

3.2 Editing the chart of accounts. 60

3.3 Working with the Customer: sub-customer list67

3.4 Working with the Employee list72

3.5 Working with the Supplier list73

3.6 Working with Other Lists (Terms, Payment, Classes)74

3.7 Adding custom fields. 87

3.8 Managing lists. 90

4: Working with bank and credit card accounts  94

4.1 Writing a QuickBooks cheque. 94

4.2 Using bank account registers. 101

4.3 Entering a handwritten cheque. 104

4.4 Transferring money between accounts. 106

4.5 Reconciling bank accounts. 108

4.6 Tracking credit card transactions. 120

5: Using other accounts in QuickBooks. 134

5.1 Other account types in QuickBooks. 134

5.2 Working with asset accounts. 135

5.3 Working with liability accounts. 142

5.4 Understanding equity accounts. 148

5.5 Working with journal entries. 149

6: Entering sales and invoices. 152

Using sales forms in QuickBooks. 152

Filling in a sales form.. 152

Memorising a sale. 152

Entering a new service item.. 152

7: Receiving payments and making deposits. 153

Recording customer payments. 153

Making deposits. 153

8: Entering and paying bills. 154

Handling bills in QuickBooks. 154

Using QuickBooks for accounts payable. 154

Entering bills. 154

Memorising bills. 154

Paying bills. 154

9: Analysing Financial Data.. 155

Reports and graphs help you to understand your business. 155

Creating QuickReports. 155

Creating and customising preset reports. 155

Saving report settings. 155

Printing reports. 155

Exporting reports to Microsoft Excel or CSV file. 155

Creating QuickInsight graphs. 155

10: Setting up stock.. 156

Turning on the stock feature. 156

Entering products into stock. 156

Ordering products. 156

Receiving stock. 156

Entering a bill for stock. 156

Manually adjusting stock. 156

11: Tracking, reporting and paying VAT.. 157

Overview of VAT in QuickBooks. 157

Charging VAT. 157

Viewing the VAT Control Account157

Paying VAT to HM Revenue and Customs. 157

VAT Reports. 157

12: Doing payroll.. 158

Overview.. 158

13: Customising forms and writing QuickBooks Letters  159

About QuickBooks forms. 159

Customising an invoice. 159

Designing a custom layout for an invoice form.. 159

Customising email for sales forms (Pro/Accountant)159

Using QuickBooks Letters. 159

Printing labels. 159

14: Using price levels, sales orders and estimates  160

Using multiple price levels. 160

Using sales orders and delivery notes. 160

Creating jobs and estimates. 160

Writing an estimate. 160

Creating an invoice from an estimate. 160

Displaying reports for estimates. 160

Updating job status. 160

15: Using multiple currencies. 161

Turning on multicurrency. 161

Updating the Currency list161

Setting up foreign accounts. 161

Creating foreign customers and suppliers. 161

Adding foreign prices to items. 161

Creating a foreign invoice. 161

Entering and paying foreign bills. 161

Exchange rate gain and losses. 161

16: Tracking time and mileage.. 162

Tracking time and mileage. 162

Displaying project reports for time and mileage tracking. 162

Paying non-employees for time worked. 162

17: Using advanced stock features. 163

Using units of measure. 163

Working with stock assemblies. 163

18: Tracking Finance.. 164

Tracking finances. 164

Appendix.. 165

Index.. 182

About The Author.. 183


Bookkeeping Made Simple. 184

How To Start Your Own Bookkeeping Business. 184

Make The Most of Your Money. 184

97 Ways To Market Your Accountancy Business. 185

The 21st Century Business Model185

Cosmic Ordering With Vision Boards. 185

Money Maths With Boogles: Workbook 1: Getting To Know Your Numbers: 5-6 yrs  186

1: Getting Started



Summary of what is in this chapter:

1.1Introducing QuickBooks

1.2 Free trial

1.3 System Requirements

1.4 Getting around in QuickBooks

1.5 All the accounting you need to know

1.6 Using Lists

1.7 Using Registers

1.8 Getting around in QuickBooks

1.9 Help!

1.10 Accounting Terminology


1.1 Introducing QuickBooks


This handbook is to help you get to grips with QuickBooks Online 2014 edition. If you are already familiar with the desktop versions – QuickBooks Pro, QuickBooks Premier or QuickBooks Premier Accountant, then making the transition to online shouldn’t be too painful. Be aware that some features are hidden, some aren’t quite where you’d expect them to be and some don’t exist at all (yet). It’s all a work in progress, and the information and screen shots included in this book are correct as at March 2014 at the time of going to print.


Online systems are more fluid than desktop releases, and changes can be made overnight and ongoing without the need for anyone to ‘upgrade’ or ‘get the latest version’. By the time you get to the end of this handbook, you’ll have a very good idea of all that QuickBooks Online can do, and will be familiar with the most common tasks that users perform. It’s written with the non-financial manager in mind. But if you are a bookkeeper or an accountant – then this should still provide useful material for you.


If you are the owner-manager, whether it’s an SME (small-medium sized enterprise) or you are currently a solopreneur – if you have any intention to use QuickBooks Online at all… take this book, read it from cover to cover & get a free trial set up – visit our site for our latest special offers on the software:, and work with me through the modules, so that you ‘use the system’ and ‘read the manual’ at the same time. QuickBooks is a tool you can use to make your bookkeeping task much easier. It is well named in that it certainly DOES make doing the books quick! So whether you need to invoice your customers, send them out a reminder statement, keep track of and pay your supplier bills, track your stock or just run a few reports to see how well your business is doing… QuickBooks has the solution for you. I’ve (personally) been an avid user of the software for over ten years, and have been a QuickBooks Pro Advisor for most of those years. I’ve ran many training courses on this software, (and other accounting systems) and I have to say that it is one of the easier and ‘more intuitive’ types that I’ve (personally) come across. I hope after the end of this book, that you’ll be a raving fan and happy user too.


1.2 Free Trial


To make this more ‘hands on’ I’d suggest you get a free trial of the software (if you haven’t already). For this, you’ll need access to the internet. For the latest special Boogles (free) offers on this software, see:


1.3 System Requirements


One of the biggest advantages of QuickBooks Online (compared to the desktop versions) is that you can access you accounts from anywhere in the world (as long as you have an internet connection), and it doesn’t matter whether you have a PC or a MAC (which was an issue before).


Three Options


There is Simple Start, Essentials and Plus. The most popular option is the middle option – the Online Essentials.




1.4 Getting around in QuickBooks


To log into QuickBooks, go to:

Enter the user name (often an email) and password which you’ve set up.

User name: _________________________________________________________

Password: __________________________________________________________


Use this book by either reading cover to cover from start to end, or look in the index at the back and jump to the part that you need.


1.5 All the accounting you need to know


QuickBooks doesn’t require you to know debits and credits or the accounting equation, trigonometry or high-tech maths … or anything like that (that’s the good news).


Throughout this book we’ll be using the example of Megzina Ltd, a property maintenance company. When you log in, you’ll see this as the home page.



You record most of your daily business transactions on a QuickBooks form, which looks just like a paper form. Below is an example of  the form to use when you want to record an expense. The form is intuitive – you already know how to fill in a form. QuickBooks, simply does the accounting for you in the background. The drop-down menu options make it easy for you to click and choose.



When you fill out the invoice form, and you select a customer name from the Customer list, QuickBooks not only fills in the name, email, billing address, terms & VAT. Here is an example of the Customer Invoice form:

1.6 Using Lists


The list is another basic QuickBooks feature. You fill in most QuickBooks forms by selecting entries from a list. QuickBooks has lists where you can store information about suppliers, customers, employees, terms, classes, items or services you sell etc., Lists can save you time as you just choose the correct entry from the drop down menu, which helps you to enter information consistently and correctly.



1.7 Using Registers


In addition to forms and lists, you’ll also work with registers in QuickBooks. Just as you can use your bank statement to see a record of all the transactions in your current account i.e. cheques you’ve written, direct debits, standing orders, online bank payments, other withdrawals you’ve made from your account, and deposits – a QuickBooks register contains a record of all the activity in one account. Almost every QuickBooks account has its own register. Here is an example of the register for an Accounts Receivable account:




















1.8 Getting around in QuickBooks


As soon as you log into the system, and land on the home page, click on the cog / wheel in the top right hand corner of the page – which will open up further options to explore. In addition, there is the navigation menu to the left hand side.



Whenever you click on the ‘+’ icon, this too opens up further options.


1.9 Help!


If you’re new to QuickBooks, then as soon as you log in, you’ll see some (very short) videos which you can watch to help you to get started.

  • Learn how to stay organised
  • Learn how to set up your company
  • Learn how to import data




In addition, in the top left hand corner – on whatever page you are on, if you see the ‘?’ icon, you can click on this to get help.



Clicking on the icon, expands the menu option and you can type your question in to search bar. QuickBooks will find the best answer for your question.







1.10 Accounting Terminology


QuickBooks uses some accounting terms, which are handy to know.


Chart of Accounts


When you keep books for a company, you need to track where the money (income) comes from, where you put it, what your expenses are for, and what you use to pay them. You track this flow of money through a list of accounts called the chart of accounts.


To display the chart of accounts

1                   From the COG (top right hand corner of the screen), click once to display further options.

2                   Under ‘Settings’ choose Chart of Accounts, and click once.



The chart of accounts is then displayed. The system comes with a set of accounts already pre-populated. Notice that the list is sorted by TYPE. The Current Assets are displayed first, followed by the Tangible Assets, and then Equity and Income, Cost of Sales, Expenses etc.,




About Assets, Liabilities & Equity




Assets include both what you have e.g. Bank, Petty Cash, Stock, Equipment and what other people owe you e.g. Prepayments, Debtors. The money that people (i.e. your customers) owe you is called your Accounts Receivable, or A/R for short.  Fixed Assets (such as equipment, furniture or vehicles) are items which are used IN the business to RUN the business. They’re less ‘fluid’ i.e. readily convertible into cash (unlike Current Assets). Undeposited funds is money that you’ve received from your customer, but not yet deposited into the bank.


When adding new items to the Chart of Accounts (COA), you need to be aware of the type of item it is. But QuickBooks does provide examples. Be aware, that when adding a new ‘bank’ account – e.g. Savings Account, Current Account or Petty Cash (although they’re all ‘assets’, in the COA’s they’re classed as “bank” type accounts.


Even within ‘asset’ types, there’s still further distinctions which can be made. A ‘Current’ Asset is deemed as something about to be turned into Cash within 12 months e.g. Stock. A Non-Current Asset is something which won’t be turned into cash within 12 months. E.g. a License or a Security Deposit. And then there are ‘Tangible Assets’ – I.e. things which you can touch… an example of an ‘Tangible Fixed Asset’ is Premises (building), and an ‘Intangible Asset’ could be Stocks/Shares Investments, or Goodwill.




Liabilities are what your company owes to other people. They money you owe for unpaid bills is your Accounts Payable  or A/P  for short. QuickBooks uses an accounts payable account to track the money you owe to different people for bills. A liability can be a formal loan, an unpaid bill or taxes you owe to the government.


Even within ‘liability’ types, there’s still further distinctions which can be made. A ‘Current’ Liability is deemed as something due to be paid within 12 months e.g. Tax & National Insurance. Other examples on the system include insurance payable, line of credit, loan payable, short term borrowings. And then there is Credit Card – which is a current liability, but in a separate category on the system. A Non-Current Liability  is something which isn’t due to be paid within 12 months. E.g. a long term borrowings or Shareholder notes payable.




Equity is the difference between what you have (your assets) and what you owe (your liabilities):


Equity = Assets – Liabilities


If you sold all of your assets today, and paid off your liabilities using the money received from the sale of your assets, the money you’d have left would be your equity. Your equity reflects the health of your business, since it is the amount of money left after you satisfy all your debts. Equity comes from three sources:


1.     Money invested in the company by its owners

2.     Net profit from operating the business during the current accounting period

3.     Retained earnings – net profits from earlier periods that haven’t been distributed to the owners


You as the owners can also take money out of the business – this withdrawal is called owners drawings, which reduces the business equity.

On the system there are many sub-accounts of Equity including called up share capital, ordinary shares, owners equity, paid-in capital or surplus, preference shares, partners equity.


If you run a Balance Sheet report – you can check the value of the business equity.


Cash vs Accrual Bookkeeping


When you begin your business, you should decide which bookkeeping method to use. The bookkeeping method determines how you report income and expenses on your tax forms. Check with your accountant or HMRC before choosing a bookkeeping method for tax purposes. The key is consistency. Choose one and be consistent.


Cash basis


Many small businesses record income when they receive the money and expenses when they pay the bills. This method is known as bookkeeping on a cash basis. If you’ve been recording the deposits of your customer payments but have not been including the money customers owe as part of your income, you’ve been using the cash basis. In the same way, if you’ve been tracking expenses at the time you pay them, and not at the time when you first receive the bills – you’ve been using the cash basis.


Accrual basis


With the accrual basis of bookkeeping – you record the income at the time the invoice is sent, not at the time you receive the payment. Similarly, you enter expenses when you receive the bill – not when you pay for it.


Most accountants feel that the accrual method gives you a truer picture of your business finances because EVERYTHING is being taken into account.


How your bookkeeping method affects QuickBooks


When you use the cash or accrual method, you enter transactions the same way into QuickBooks.


QuickBooks is automatically set up to do your reports on an accrual basis, i.e. it shows income on a profit and loss statement for invoices as soon as you enter them, even if the customer hasn’t paid yet. It shows expenses, even if they’re unpaid.


You can see any report (except transaction reports) on a cash basis by changing the reporting preference. From the left hand menu, chose Reports, and then choose the report e.g. Profit and Loss account. Choose customise.



Under the accounting method, you can choose between Accrual and Cash.



Measuring Business Profitability


Two of the most important reports for measuring the profitability of your business are the balance sheet and the profit and loss statement (also called an income statement). These are the reports most often requested by accountants and financial advisors (e.g. your bank manager may request both of these reports when applying for a loan).


The balance sheet


The balance sheet is a financial snapshot of your company on one date It’s like an X-ray. It shows:


§         What you have (assets)

§         What people owe you (accounts receivable)

§         What your business owes to other people (liabilities and accounts payable)

§         The net worth of your business (equity)


To run a balance sheet report:

1.     From the Reports menu, choose run Balance Sheet.


The profit and loss statement


A profit and loss statement, also called an income statement, shows your income, expenses, and net profit or loss (equal to income minus expenses). The QuickBooks profit and loss statement summarises the revenue and expenses of your business by category (first income, then expenses).


To run the profit and loss report:

1.     From the Reports menu, choose run Profit and Loss account.

The statement of cash flows


Another report that the accountant may be interested in is the statement of cashflows report. A statement of cash flows shows your receipts and payments during a specific accounting period.


To run the statement of cashflows report:

1.     From the Reports menu, choose from the dropdown menu Statement of Cash Flows.



Exiting QuickBooks

QuickBooks online saves your data as you go along. It will automatically log you off the system after a period of inactivity.

To exit QuickBooks:


§         From the top right hand corner, click on the cog icon and then click Sign Out.



Quickbooks Online The Handbook


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Author Lisa Newton’s Quickbooks Online Course is available here: Quickbooks Online Course

Quickbooks Online The Handbook

Preface March 26, 2014