Record Expenses in QuickBooks Online and On Your Phone

The money you spend to run your business must be recorded conscientiously for your taxes and reports. Here’s how to do it.

You undoubtedly keep a very close watch on the money coming into your business. You record payments as soon as they come in and deposit them in your company’s bank account. But are you as careful about your purchases?

It’s easy to go out to lunch with a client and forget to save the receipt. You figure it’s not that much money, anyway. Or you pick up a ream of printing paper and a cartridge at the office supply store and neglect to record the purchase. When you disregard even small expenses, you can have two problems. One, your books won’t be accurate. And two, you never know how an extra $42.21 under Meals and Entertainment might affect your income taxes.

QuickBooks Online provides two ways to enter expenses. You can create a record on the site itself. Or you can snap a photo with your phone using the QuickBooks Online mobile app to document the money spent. Here’s how these two methods work.

Documenting At Your Desk

Let’s say you just had lunch with a vendor to discuss some products you’re planning to buy for a project you’re doing for a customer. You charged it to your company credit card, which you track in QuickBooks Online. You still have to enter it as an expense on the site so that when your credit card statement comes, you can match the credit card transaction to the expense you recorded.

Hover over Expenses in the navigation toolbar and click on Expenses. Click the down arrow in the New transaction button and select Expense. Fill in the fields at the top of the screen with details like Payee, Payment date, and any Tags you want to specify. Under Category details, select the correct category from the drop-down list and enter a Description and Amount

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QuickBooks Online allows you to thoroughly document expenses. You can attach a picture of a receipt if you’d like.

Since you’re going to bill this to the customer as a part of your project fee, click in the Billable box to create a checkmark. Select the Customer/Project. Add a Memo to remind yourself of the reason for the lunch (very important!) and attach a photo of the receipt if you take one. Click Save. Your record of the lunch will now appear on the Expense Transactions screen. It will also show up in the Expenses by Vendor Summary and Unbilled Charges reports, among others.

Recording on the Road

In the example we just went through, attaching a photo of the receipt was the last thing we did to record an expense in QuickBooks Online. There’s another way to document a purchase that starts with a photo of a receipt and should save you a bit of data entry: using the QuickBooks Online mobile app. The app uses Optical Character Recognition (OCR) to “read” the receipt and transfer some of its data to fields on an expense record. 

(If you haven’t installed the QBO app on your smartphone, you should. You can do a lot of your accounting work that synchronizes automatically with QBO. It’s free, too.)

Open the app and log in. On the opening screen, you’ll see an icon labeled Snap Receipt. Click on it, and your phone’s camera will open (you’ll be asked for permission to use it). Position your phone over the receipt and move it around until you see the blue box covering the content of the receipt.  Take the picture. You’ll see it displayed on the phone with a message saying, “Use this photo.” If it seems OK, click the link. 

A message on the screen will tell you that the upload is complete and that the app is extracting the information from it. Click “Got it!” It should only take about a minute for your receipt to appear in the list on the Receipt snap screen. You’ll see the details that the app has pulled from your receipt. Tap the matching expense and click Done on the next screen.

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You can snap a photo of the receipt in the QuickBooks Online mobile app, and some fields will be automatically entered on a receipt form in QBO.

When you’re back at your computer, open QuickBooks Online and go to Transactions | Receipts. At the end of the row that contains your receipt, click the down arrow next to Delete and select Review. QBO will display the partially-completed receipt form next to the photo you took of the receipt. Fill in any missing fields and save the transaction. Click Create expense on the screen that opens. Then open the Expenses menu and select Expenses, and there should be an entry for the receipt you just added.

This tool isn’t perfect, of course. Every receipt has different fields in different places, and sometimes they’re just not very readable. But in our tests, the app picked up an average of four fields.

Documenting your expenses using one of these two methods is so important. It will help you remember why you stored the receipt and make your reports more accurate. As long as you’re categorizing each transaction correctly, it will also make your tax preparation easier and faster and ensure that you’re charging customers for billable expenses. And if you’re ever audited, your careful work will come in handy.

QuickBooks Online does expense management well, but there are enough moving parts in these recording tools that you may have some questions. We’re here, as always, to answer them.

8 QuickBooks Online Tips

There are always more things to learn about the applications we use every day. Here are some tips for expanding your use of QuickBooks Online. 

We tend to fall into the same old patterns once we’ve learned how to make a computer application work for us. We learn the features we need and rarely venture beyond those unless we find we need the software or website to do more. 

QuickBooks Online is no exception. It makes its capabilities known through an understandable system of menus and icons, labeled columns and fields, and links. But do we really see what else it can do? Expanding your knowledge about what QuickBooks Online can do may help you shave some time off your accounting tasks and better manage the forms, transactions, and reports that you work with every day. Here are some tips.

Edit lines in transactions. Have you ever been almost done with a transaction and realize you need to make some changes farther up in the list of line items? Don’t delete the transaction and start over. QuickBooks Online comes with simple editing tools, including:

  • Delete a line. Click the trash can icon to the right of the line. 
  • Reorder lines. Click the icon to the left of the line, hold it, and guide it to the new position. This is tricky. You may have to work with it a bit.
  • Clear all lines and Add lines. Click the buttons below your line items, to the left.
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Click the More link at the bottom of a saved transaction to see what your options are.

Explore the More menu. Saved transactions in QuickBooks Online have a link at the bottom of the screen labeled More, as pictured above. Click it, and you can Copy the transaction or Void or Delete it. You can also view the Transaction journal, which displays the behind-the-scenes accounting work, and see an Audit history, which lists any actions taken on the transaction. 

Create new tabs. Do you ever wish you could display more than one screen simultaneously so you can flip back and forth between them? You can. Right click on any link in QuickBooks Online, like Sales | Customers,  and select Open link in new tab

Use keyboard shortcuts. Not everyone is a fan of these, mostly because they can’t remember them. Hold down these three keys together to see a list: Ctrl+Alt+?. Some common ones include those for invoices (Ctrl+Alt+i) and for expenses (Ctrl+Alt+x).

Modify your sales forms. Do you need more flexibility than what’s offered in your sales forms? It may be there. Click the gear icon in the upper right and select Account and settings under Your Company. Click the Sales tab. In the section labeled Sales form content, notice that you can add fields for Shipping, Discounts, and Deposits by clicking on their on/off switches. You can also add Custom fields and Custom transaction numbers.

Add attachments. Sometimes it’s helpful to have a copy of a source document when you enter a transaction. To attach a receipt to an expense, for example, look in the lower left corner of the transaction. Click Attachments and browse your system folders to find the file, then double click on it.

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Record expenses made with credit cards. Who doesn’t use credit cards for expenses sometimes? You can track these purchases in QuickBooks Online, as pictured above. Click the gear icon in the upper right and select Chart of Accounts under Your Company, then click New in the upper right. Select Credit Card from the drop-down list under Account Type. Enter Owner Purchase in the Name field and then Save and Close. When you create an expense, select Owner Purchase as the Payment account

Previous Transaction Button. Are you trying to find a transaction that you entered recently but don’t want to do a full-on search? With a transaction of the same type open, click the clock icon in the top left corner. A list of Recent Expenses will drop down. Click on the one you want.

Whether you’re new to QuickBooks Online or you’ve been using it for years, there’s always more to explore. We’d be happy to help you expand your use of QuickBooks Online by introducing you to new features, building on what you’re already doing on the site to improve your overall financial management. Call us to schedule some time.

Customers Paying Late? How to Create Statements

There are many ways to encourage delinquent customers to pay. QuickBooks Online’s statements may be effective for you.

After the year-plus you’ve just experienced, the last thing your small business needs is customers who are behind on their payments to you. You may have been giving them a break because you know that they’re struggling, too, but things have been looking up for many companies in the past few months. It’s time for you to be more proactive about calling in your debts.

There are numerous ways you can accomplish this. One of the best is to send statements in QuickBooks Online, which are detailed reminder forms that contain multiple transactions. These can be especially helpful if you’ve sent multiple invoices with no response. There are three different types you can send, depending on your needs. Here’s how you create them.

Before You Start

QuickBooks Online offers a couple of options for formatting your statements. To see these, click the gear icon in the upper right corner and select Your Company | Account and Settings. Click the Sales tab and scroll down to the Statements section. Click the pencil icon over to the far right to make any changes needed. You can:

  • List each transaction as a single line or include all of the detail lines.
  • Display an aging table at the bottom of each statement.

Click the buttons to specify your preference and then click Save and Done.

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QuickBooks Online gives you control over some elements of your statements.

Three Statement Types

You can choose from among three different types of statements in QuickBooks Online: Balance Forward includes invoices with outstanding balances for a specified range of dates. Open Item statements contain information about all unpaid (open) invoices from the last 365 days. And Transaction Statements show every transaction in a date range that you specify. We’ll describe how to create them so you can decide which makes the most sense for a particular situation.

One Way to Create Statements

Like it does for many other actions, QuickBooks Online offers two ways to create statements. The first is easier. Click the New button in the upper left and select Statement (under Other). Click the down arrow in the field under Statement Type to see the three options there.

If you select Balance Forward, you’ll need to define three criteria (there will be similar options for the other two types):

  • Statement Date
  • Customer Balance Status (Open, Overdue, or All)
  • Start Date and End Date
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QuickBooks Online makes it easy to create any of three types of customer statements.

When you’re satisfied with your statement parameters, click Apply. QuickBooks Online will display a list of the transactions that meet your criteria, along with the number of them that will be generated. Each row in the list will display the recipient’s name, email address, and balance. In the upper right corner, you’ll see the number of statements again and the total balance these customers represent. 

If you want to exclude any of these customers, click in the box in front of each to unselect them and delete the checkmark. When you’re satisfied with your list, click Save, Save and send, or Save and close. If you click Save and send, a window will open containing a preview of your statements. Thumbnails of each will appear in the left pane. Click on any to see their previews. When you’re ready, you can download, print, or send them.

If you click Save or Save and close, you’ll still be able to see the statements you’ve just generated. Click the Sales tab in the toolbar, then All Sales. Click the down arrow next to Filter and open the drop-down list under Type. Select Statements, and your list will appear. You can print or send one by selecting the correct option in the Action column. If you want to dispatch multiple statements, click in the box in front of each, and then click the down arrow next to Batch actions.

Another Method

There’s an alternate way to create statements. Click the Sales tab in the toolbar, then Customers. Select any or all of the customers in the list, then click the down arrow next to Batch actions and select Create statements. QuickBooks Online will open the Create Statements window again so you can select the type and process your statements like you did using the previous method.

We don’t expect that you’ll have much trouble working with statements, though you may want to consult with us on when they’re appropriate. We can also suggest other ways to bring your accounts receivable up to date. As always, we’re available to help you maximize and streamline your use of QuickBooks Online. Keeping your financial books current and organized is one way to ensure that you don’t fall too far behind with customer payments.

How to Create Estimates in QuickBooks Online

Whether you sell products or services, you may need to create estimates in QuickBooks Online. Here’s how it’s done.

It would be nice if you could just instantly invoice every sale. But sometimes your customers need to know what a particular purchase will cost before they make the decision to buy. So you need to know how to create an estimate. If the sale goes through, you’ll of course want to send an invoice.

QuickBooks Online automates this entire process. It even helps you track the progress of your estimates by providing a special report. Here’s how it works.

Just Like An Invoice – Almost

The process of creating an estimate in QuickBooks Online is almost identical to creating an invoice. You click the New button in the upper left and select Estimate

Creating an estimate in QuickBooks Online is like creating an invoice, with a few differences.

When the form opens, you’ll notice one difference right away. Directly below the Customer field, you’ll see the word Pending next to a small down arrow. Click it to see what your options are here. You’ll be able to update its status later. Select a Customer to get started. If this is a new customer, click + Add New and enter at least the name. If you want to build a more complete profile at this point, click Details and complete the fields in the window that opens. To send a carbon copy or blind copy of the estimate to someone else, click the Cc/Bcc link.

Next to the Estimate date, there’s a field for Expiration date. Enter that and continue on to add the products and/or services that will be included, just as you would on an invoice. If you’re generating an estimate for a new product or service, click + Add new in the drop-down list. A panel will slide out from the right that allows you to create one. 

You’ll see more options for your estimate at the bottom of the page. You can add a message in the message box (or leave the default message if there is one). You can also Customize it, Make recurring, or Print or Preview it. When you’re satisfied, Save it, and send it to the customer. 

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You can preview your estimate to see what the customer will see before saving it.

Updating the Status

Your estimate will not be considered a transaction until you accept it. To do this, click the Sales link in the toolbar, then All Sales. Find your estimate in the list by looking in the Type column. Click the down arow next to Create invoice to see your other options there. You’ll see that you can Print or Send it or save a Copy

Click Update status. In the window that opens, click the down arow next to Pending. From the list that drops down, select Accepted. You can also mark it Closed or Rejected. If you choose any of the last three options, another window opens that allows you to enter the name of the individual who authorized the action and the date it was done.

Click Create invoice if your estimate was accepted. You’ll have three options here. You can invoice your customer for:

  • The estimate total.
  • A percentage of each line item.
  • A custom amount for each line.
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When you locate your estimate on the Sales Transactions page, you’ll have several options for managing it.

After you’ve made your selection, click Create invoice to open the form with the amounts filled in based on your preference. Complete anything that’s unfinished but do not change any of the product or service line items. Save it, and your invoice is ready to go. You can always check the status of your estimates by running the Estimates by Customer report.

Creating and tracking estimates is as easy as working with invoices. You may run into difficulties, though, if you need to do anything beyond that point with estimates, such as modifying it and re-submitting them. We’re here to answer any questions you might have about this. It’s important that you get your estimates and their subsequent invoices exactly right, so you don’t lose money or sales. Let us know if you want to go over these concepts.

Some Small Businesses Are Recovering. Is Yours?

The COVID-19 pandemic isn’t over, but many small businesses are on the upswing. How QuickBooks Online can help if yours isn’t.

Intuit recently did a survey documenting the financial losses that many small businesses had experienced since March 2020. Not surprisingly, the report, Intuit QuickBooks Small Business Recovery, found that COVID-19 has had a significant impact on the financial health of U.S. small businesses.

But many of the companies surveyed have proved to be resilient. As of March 31, 2021, 61 percent of them saw an annual revenue increase compared to pre-COVID days.

How would you have answered the survey? If indeed you did suffer financial and personnel losses because of the pandemic, has your business started to rebound yet? If not, there are actions you can take in QuickBooks Online to help in your recovery. Here are some of them.

Transactions: Watch your income and expenses like a hawk.

QuickBooks Online provides excellent transaction-tracking tools that help you document income and expenses.

How much time do you spend working with your downloaded transactions? If you take advantage of the excellent tools QuickBooks Online provides, you may notice patterns that you’ll want to explore and modify. For example, are you spending too much in one or more particular areas? When and where is your income dipping?

It’s critical that you connect to as many online financial institutions as possible, so you get a complete picture of your income and expenses. Once you have, click on Transactions in the toolbar, which should open to the Banking page. If you’re only going there to make sure there are no unrecognized entries, you’re missing out on some of QuickBooks Online’s transaction-tracking tools. In the image above, we’ve specified a vendor and chosen a Category and Tags. This will make your reports more meaningful and actionable.

If you don’t know what it means to Find Match, we can show you how that works. It’s a real time saver. 

Sales: Make it easier for customers to pay you.

We’ve written about accepting online payments in this column before. It’s especially important if you’re struggling. You may actually be losing sales if you don’t let potential customers pay online through a credit card or bank account transfer. And existing customers may pay faster if they can do business with you in that way.

QuickBooks Payments makes this possible. There are some nominal fees involved, but the potential increase in your income should more than cover them. Let us know if you want us to help you set up a merchant account.

When you set up a merchant account through QuickBooks Payments, you may find that your customer base will grow, and existing customers will pay faster.

Expenses: Categorize expenses with tax time in mind.

You’ve probably already filed your 2020 income taxes, but we’re well into 2021, and it’s not too early to start thinking about your current tax situation. QuickBooks Online helps you track your income carefully, but it’s equally important to make sure you know what your tax-related expenses are. You want to get every deduction and credit you can. So when you’re looking at transactions, like we described above, make very certain that you’re assigning the correct categories to each of them. 

We can help you run reports on a quarterly basis that should be of help when you make estimated tax payments. That way, you may be able to reduce your quarterly obligation during the 2021 tax year and won’t have to wait until you file in 2022 to see savings.

Time: Make sure your billable hours are billed.

Unless you have an organized, easy-to-use method for tracking billable time, some hours are likely to fall between the cracks. QuickBooks Online provides effective tools in this area. As you go through your downloaded transactions, you may see expenses that can be billed to a customer. Select the Customer/project and check the Billable box so you’ll be able to include it on their next invoice.

You can mark expenses as billable to customers in your Transactions register.

As you create time entries for you and/or your employees, you can also mark those hours as billable.

Reports: Run basic, critical reports regularly.

You can’t know how your business is doing financially unless you create reports. Besides the quarterly and standard financial reports we can run and analyze for you, you can—and should—be generating reports yourself through QuickBooks Online. Here are some of the ones we suggest:

  • Budget vs. Actuals. If you’ve put the time and effort into creating a budget, it’s critical that you gauge your progress regularly and make adjustments as needed.
  • Open Invoices. Who have you billed that hasn’t paid?
  • Accounts Receivable Aging Detail. Who owes you, and how far behind are they?
  • Sales by Product/Service Detail. What is selling well and what isn’t? You can make decisions about your product and service lines by viewing this report. This is especially important when your sales are sluggish.
  • Business Snapshot. This is a series of charts and lists that provides a quick visual overview of key data.

QuickBooks Online can’t, of course, revive your business if the pandemic has created conditions that are out of your control. But that shouldn’t stop you from controlling what you can, no matter what your situation is. It was designed not only to automate and streamline your daily accounting work, but also to provide the information you need as you evaluate your present situation and plan for the future. Please call on us if you need help making optimal use of QuickBooks Online.

How Do You Manage Downloaded Transactions in QuickBooks© Online?

Downloading them is the easy part. QuickBooks Online lets you work with downloaded transactions in numerous ways.

QuickBooks Online was built to import transactions from your online financial institutions. You can enter them manually but downloading them saves an enormous amount of time and minimizes errors. It also makes reconciliation much easier, since you can see which transactions have cleared without calling the bank or waiting for a printed statement.

Once they’re in QuickBooks Online, your transactions are stored in a list, waiting for you to further define and categorize each one. Let’s look at how you can work with them to make sure your records are as thorough as possible.

Getting Connected

As long as you have online access to your bank and credit card accounts, you can set up QuickBooks Online to import cleared transactions. Click the Transactions tab in the toolbar, then click Banking. On the next screen, click Connect account. You’ll see links to popular financial institutions on the next page. If yours isn’t listed, enter its name in the search box at the top of the screen. Follow the onscreen instructions to make your initial connection and start downloading transactions. 

When you’ve completed the connection, you can click Link account in the upper right to add more.

Dealing With Transactions

After you set up a connection to a bank or credit card account, its account information will appear in a box on the Banking page.

Once you’ve finished adding accounts, you’ll still be on the Banking page. Each of your connected accounts will appear in a box that includes the balance and the number of transactions that need to be reviewed. There will probably be quite a few, dozens or hundreds, the first time you download, since most financial institutions send you 90 days’ worth the first time. Every time your accounts are updated after that, you’ll only get new ones that have cleared since your last connection.

Tip: QuickBooks Online generally updates once every day. If you want to see your new cleared transactions at any time, click Update in the upper right corner.

Click on any of the account boxes, and its list of downloaded transactions will appear below. Make sure that For review is highlighted. You’ll notice that each row has one of two icons at the far right. Review means that QuickBooks Online has not assigned a category to the transaction. Confirm means it has, and it wants you to either approve it or change it. Check these carefully. Sometimes QuickBooks Online gets it right, but not always.

Click on a transaction in the register to open its action box. Here’s a partial view:

QuickBooks Online allows you to add a great deal of information about each individual transaction in the register.

Categorize is checked by default, since this is the most common action you’ll take in the list. Click Find match if, for example, you received a payment on an outstanding invoice, or Record as transfer. We can help you work with the latter two options.

Select a Vendor/Customer and a Category (if QuickBooks Online hasn’t assigned one or it’s not the best one for that transaction). Click in the Billable box if you want to bill this transaction to a Customer/project. You can also Split transaction if you need to divide it between multiple categories and/or billing statuses. 

There are several other options below the section pictured above that allow you to:

  • Add Tags.
  • Attach a file.
  • Create a Rule for how similar transactions should be recorded.
  • Exclude the transaction if you have, for example, a duplicate one or a personal expense.

Before you take either of the latter two actions, talk to us. We don’t want you to do anything that might adversely affect your bookkeeping.

When you’ve finished, click Confirm. The transaction will move from the For review list to the Categorized one. It will now appear in the register for that account.

Once you’ve confirmed a transaction, it moves into the Categorized list.

As you might imagine, it’s a good idea to keep up with your downloaded transactions so you have time to give each the attention it needs. We recommend you review them daily. Your transactions, of course, flow into your reports and taxes, so you want to be sure you’re categorizing them correctly. Let us know if you’d like help with this.

How to Use Tags in QuickBooks Online

Where is your money coming from? Where is it going? You can use tags in QuickBooks Online to find out.

QuickBooks Online offers numerous ways to help you track your sales, expenses, and profitability. If you’re using QuickBooks Online Plus or Advanced, you can create and assign Classes to transactions to differentiate between, for example, store departments or product lines. Some of the site’s reports are designed specifically for these tools, like Sales by Class and Profit and Loss by Class

You can assign Categories to products and services to gain insight into your sales and inventory. There’s a different set of Categories that you’ll use when you record bills and expenses. These are important for reporting and tax purposes. You can also add a Location field to sales transactions so you can track sales by stores, sales regions, or counties, for example.

What Are Tags?

Then there are Tags, which are fairly new to QuickBooks Online. These are customizable labels that you can assign to transactions (invoices, expenses, and bills). They’re more flexible than the tools we’ve already mentioned – they allow you to track your money any way you want. They don’t affect your books, and they’re not included in the customization criteria for reports. But there are two reports specifically designed for them: Profit and Loss by Tag Group and Transaction List by Tag Group.

Creating Your Own Tags

Once you’ve given your group a name, you can start adding tags to it.

Before you create a tag, you need to create a Group. Groups consist of related tags that share a common theme. For example, say you do some event planning. You might have a group titled Events. Individual events might read, for example, Grayson Wedding, Spring Art Show, and Hillman Conference.

To get started, click the gear icon in the upper right. Under Lists, click Tags to get to the tool’s home page. (You can also click on the Transactions link in the toolbar, then click the Tags tab.) Click New, then Tag group. A vertical panel slides out from the right. Enter a name in the Group name field. Click the down arrow to select a color, then click Save

Enter your tags one by one in the fields labeled Tag name. Click Add after each one until your list is complete. Click the Edit button to make any changes. When you’re finished, click Done. The main Tags page will open again, and you’ll see your new group under Tags and Tag Groups. Repeat to add as many as you’d like, up to 300 tags.

Using Tags

You can add tags to any transaction that contains a field for them

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Let’s look at how you’d use tags in an expense. Click the Expenses link in the toolbar, then New transaction | Expense in the upper right. Click the down arrow in the Payee field in the upper left and select + Add new. Enter Billy’s Bridal in the Name field Leave the Type as Vendor and click Save. Back on the Expense screen, select the Payment account, Payment date, and Payment method for the expense (reference number is optional).

Directly below those fields, you’ll see the Tags field. Click Manage tags if you need to add or edit one; the right vertical pane you saw before will slide out. Otherwise, click in the field below Tags. Your list of tags will drop down. Select Grayson Wedding to move it into the field. You can assign as many tags as you’d like to transactions, but you can only select one tag from each group. Finish the expense and save it. 

Go back to the Tags home page, and you’ll see that there’s a link to one transaction in the Events row. At the end of each row is the Action column, where you can run a report, add a tag, and enter or delete a group. Your expense total appears in the Money Out (by tag) box above it. 

Tags are a great addition to the tools QuickBooks Online provides to help you track incoming and outgoing funds. If you’re not familiar with the others we mentioned at the beginning of this column and want to learn how to explore them, let us know. We’d be happy to walk you through their use and help you understand how they can make your finances more understandable.

New to QuickBooks® ? Try These 5 Activities

QuickBooks can be overwhelming when you first start using it. Here are five ways to familiarize yourself with some of its features to get you up and running in no time.

Tackling any new piece of software can be daunting. Add a complex process like accounting to the mix, like QuickBooks does, and you may feel apprehensive about your ability to learn how to use it. 

But QuickBooks was designed for small businesspeople, not for accountants nor technical wizards. It uses familiar language and forms, and it works like other Windows programs. That doesn’t mean, though, that you’ll be able to just jump in and start completing your accounting tasks. 

Here are five steps you can take to start familiarizing yourself with QuickBooks that will get you up and running in no time. We’ll assume that you’ve already created your company file. If you need help with this critical first step, let us know.

Open a sample file.

While you’re exploring QuickBooks, it’s a good idea to work with a sample file. That way, you can look around and practice without risking compromising your company file. You’ll be able to see how completed records and transactions should look and try your hand at entering sample data of your own.

QuickBooks comes with sample files that allow you to practice entering data without harming your own company file.

Before you open a sample file, you’ll need to close your current company. Click on File in the upper left to open that menu, then select Close Company. A window will open that should have your company file in its list. Below that, you’ll see three boxes containing different options. Click on the down arrow next to Open a sample file, as pictured above (this may look slightly different in your version). Choose the one you want to open and click on it. QuickBooks will load again with that file open. When you’re done looking at the sample file, go to File | Close Company again. The No Company Open window should appear again. Click on your company file name and then on Open to return to your own file.

Learn where your lists are.

You’ll be storing a great deal of information in lists. QuickBooks maintains these automatically sometimes when you enter information in a record or transaction. For example, when you create a record for a product or service you sell, it goes into a master list that you can access by opening the Lists menu at the top of the screen and clicking on Item List. You’ll also open the Lists menu when you want to add options to an existing type of list, like Class List (QuickBooks allows you to assign Classes to transactions so you can group related information, like New Construction or Remodel if you’re a contractor).

You’ll sometimes select from lists of commands in QuickBooks. This is the menu for the Item List.

Try a Transaction.

There are two transactions you’ll probably be using the most: invoices and sales receipts. QuickBooks comes with templates that resemble these sales forms’ paper counterparts. You simply fill in the blanks by entering data and selecting options from drop-down lists. Open the Customers menu and select Create Invoices. Click the back arrow above Find in the upper left corner to see sample invoices. Then click the right arrow to get back to a blank form and create an invoice by clicking the down arrows in blank fields to see your sample lists.

Explore Snapshots.

Once you start entering records and transactions, you’ll want to be able to access that information in ways that provide insight on how your company is doing. You’ll eventually start running reports in QuickBooks, but the software also accomplishes this through its Snapshots. There are three of them, and they all provide these overviews by using data tables and charts. Open the Company menu and click on Company Snapshot, then click the tabs to move between Company, Payments, and Customer. You’ll learn how QuickBooks provides real-time information about your finances.

Look at the Income Tracker.

It’s easy to see the status of your invoices (and estimates) in QuickBooks. Open the Customers menu and select Income Tracker. Colored bars at the top of the screen show you what’s outstanding and what’s been paid. A list of the related transactions appears below these bars.

This partial view of the Income Tracker tells you how much money is tied up in unbilled Time & Expenses and unpaid Invoices.

As we said earlier, QuickBooks can be overwhelming when you first start to use it. We can ease that transition by providing training and helping you move your existing accounting information over to the software. If you’ve started using QuickBooks on your own and you have questions, we can always step in to offer answers.

Stay healthy, and best wishes for a more prosperous 2021.

How Do You Create Price Levels in QuickBooks?

QuickBooks allows you to create Price Levels that you can assign to customers and jobs and to individual items.

You already know that when you create a product or service record in QuickBooks, you must assign a sale price to it. But did you know that QuickBooks gives you a great deal of flexibility when to comes to pricing items you sell? The software allows you to create one or more additional Price Levels that you can access in invoices, estimates, sales receipts, credit memos, and sales orders.

There are three ways you can use these. Once you’ve created them, they’ll be available in a drop-down list in the Rate field. This means you can assign them manually to individual transactions. The second option is to assign them globally to specific customers or jobs. Once you’ve done so, that price will apply every time you create a transaction for one of them. Finally, you can create price levels for selected items.

Here’s how it works. Let’s say you want to be able to create a price level that’s 15 percent below the actual price that you can use in individual transactions. You open the Lists menu and select Price Level List. Click the arrow in the lower left corner next to Price Level and select New. A window like this will open:

You can create price levels in QuickBooks and assign them to individual sales transactions.

Fill in the field next to Price Level Name, and then click the arrow next to Price Level Type. Select Fixed %. Select decrease from the drop-down list on the next line and enter your percentage number. Round up to the nearest is an optional field, Click OK when you’re done. The next time you create a sales transaction, your new price level will be available as an option when you open the drop-down list in the Rate column.

When you need to edit or delete a price level, go to Lists | Price Level List again and click the arrow next to Price Level in the lower left corner. You have several options here. You can, for example, make a price level inactive so it doesn’t appear on the list. The field next to Price Level is labeled Reports. Click on the arrow to see what’s available there.

Customers and Jobs

You can also apply a price level you’ve created to a specific customer or job, perhaps to reward a customer for frequent purchases. When you do so, that rate will appear every time you enter a sales transaction for the customer or job you selected.

Open the Customers menu and select Customer Center. Double click on a customer or job’s name to open the record. Click on the Payment Settings tab. Click the arrow in the field next to Price Level and select the right one, then click OK.

You can assign a Price Level to specific customers or jobs.

Per Item Price Levels

QuickBooks also allows you to set custom prices for specific items that are associated with preferred customers or jobs (this option is only available if you’re using QuickBooks Premier or Enterprise). Let’s say you want to give a 10 percent discount to specific customers who purchase your website development services. Go to Lists | Price Level List and click the arrow next to Price Level in the lower left corner again, then select New (you can also get to the New command by right-clicking anywhere in the window). 

Give your price level a name (like Web Development 10 Off), then select Per Item from the Price Level Type drop-down list. Click in front of the Item you want to include. The fields in the next line should read as pictured in the image below: 10% | lower | standard price. Click Adjust. You’ll see your reduced prices in the Custom Price column in the table above.

You can establish a Price Level for specific items in QuickBooks.

Again, the rounding field is optional. When you’re finished here, click OK. The next time you create a sales transaction for a customer who is eligible for the lower price, you’ll select Web Development 10 Off from the drop-down list in the Rate column.

Feel like you’re outgrowing your current version of QuickBooks, or is it several years old? Talk to us about upgrading. We’re here to support you and to help you more effectively use the software as your business changes and grows.

How to Create Product Records in QuickBooks® Online

Whether your company sells product or services, QuickBooks Online can help you track them.

If you sell one-of-a-kind products and can see all of them at a glance, tracking your inventory isn’t such a big issue. But not many people run businesses like that. Even if you do, you’d want to keep track of what you have and what you’ve sold for accounting purposes.

Most businesses sell multiple types of products and stock numerous units of them. These companies need to be able to easily add them to invoices and sales receipts. They need to know what’s selling and what’s not, and they need to know when it’s time to reorder.

QuickBooks Online’s recording and tracking tools meet all of these requirements by allowing you to create records for services. Here’s how it works.

Getting Ready

Before you can start working with QuickBooks Online’s product records, you should make sure that the site is set up for this purpose. Click the gear icon in the upper right, then Your Company | Account and settings. Click the Sales tab to get to the Products and services section, as pictured below.

QuickBooks Online’s Account and Settings has a section devoted to Products and services.

Click on Products and services to open your options here. To turn any entry from On to Off, or vice versa, click in the box at the beginning of the line to check or uncheck it. To see an explanation of each, click on the small circled question mark. When you’re done here, click Save. Then click the X in the upper right to close this window.

Creating Records

To start entering product and service data in records, click the gear icon in the upper right, then select Products and services. Since you haven’t entered anything yet, the table will be blank. Eventually, it will contain data for each record you’ve created. You’ll also notice two colored circles at the top of the screen, one marked Low Stock and the other, Out of Stock. When there is a number next to either of them, you’ll be able to click on either circle to see a list of what’s low or what’s out.

Click New in the upper right. A vertical panel will slide out asking what kind of record you want to create. You can choose from:

  • Inventory – Physical items you sell whose quantity you want to track
  • Non-inventory – Products you buy or sell but whose quantities you don’t need to track
  • Service – Services you sell, like legal representation or landscaping
  • Bundle A group of products and/or services that are sold together, like computer training and accompanying software

We’re going to create an inventory item, so click on Inventory. Type its Name in that field and add a photo if you’d like. If the product has been assigned a SKU, enter that in its field. You may want to divide your products into primary categories and sub-products or services (like Writing Instruments and Pens, Pencils, Markers, etc.). You can skip this option if you don’t.

QuickBooks Online helps prevent product shortages.

In the next section, you’ll enter the Initial quantity on hand. How many do you have as of (current) date? And where do you want to set your Reorder point? What number of items remaining should trigger the Low Stock alert so you can replenish your supply?

Inventory asset account should already be set at Inventory Asset. Enter a brief Description and then the product’s Sales price/rate (the price you’ll charge customers) and leave Income account set at Sales of Product Income. Then select a Sales tax category. If you haven’t set up sales taxes in QuickBooks Online and believe you’re required to pay them on at least some sales, please let us help. 

In the Purchasing information field, enter the description that should appear on purchase forms, then Cost (the price you paid to buy the product, if any). The Expense account should be Cost of Goods Sold. Select a Preferred Vendor if you’d like and Save the record.

Not all fields are required in your product and service records, but we strongly recommend you complete each record as thoroughly as is possible.

Next month, we’ll look at how product and service records are used in QuickBooks Online. In the meantime, please let us know if there’s any way we can help with your accounting or your use of QuickBooks Online. We know these are challenging times for you, and we hope you’ll use us as one of your resources.