Professional Tips and Workarounds for QuickBooks Online

Ashley Beetson

• Publisher: Packt Publishing
• Year: 2021
• ISBN:
  9781801815604
• Edition: 1
• Topic: Informatique
• Subtopic: Applications de bureau

Save hours of guesswork and Internet browsing by enhancing your QuickBooks Online skills and leveraging Ash Beetson's extensive QuickBooks knowledgeKey Features• Broaden your knowledge of QuickBooks Online and accounting concepts• Understand how QuickBooks can be adapted to suit different business types using professional techniques• Learn best practices for preparing annual accounts before closing the books for the yearBook DescriptionAccountants and bookkeepers can sometimes face challenges while coming up with solutions to help their clients. QuickBooks Online, a popular cloud accounting software, comes with a wide range of tools that can take time to learn. This book will show you how to properly combine the tools available in QuickBooks to get the most out of this software.Complete with step-by-step explanations of essential concepts and practical examples, the book will begin by helping you understand how to create opening balances for a new company. You'll then discover essential bookkeeping and accountancy tips and tricks, and find guidance to help make QuickBooks as easy to use as possible. As you advance, you'll explore different scenarios in which QuickBooks Online can be used for various business types. This will help you understand that not every business is the same, but using the wide range of functionalities QuickBooks Online offers, you can customize solutions to really make it work for you.By the end of this QuickBooks book, you'll have gained deep insights into how you can use QuickBooks Online to work for different business types, and you'll have a complete checklist of the different things you should be doing when you start reviewing accounts ahead of tax season.What you will learn• Discover how to correctly set up QuickBooks Online with opening balances• Adapt QuickBooks Online to meet specific industry needs, from manufacturing and retail using inventory to helping lawyers and property agents handle client funds• Get the most out of features such as Projects and Multicurrency• Review reports within QuickBooks Online, understand why errors occur, and learn how to resolve them• Get to grips with key accounting principles and concepts tailored for bookkeeping and accounting beginners• Find out how the audit trail works and explore all of the information it holdsWho this book is forBusiness owners, company directors, accountants, bookkeepers, certified public accountants (CPAs), and anyone studying accounting and bookkeeping will find this book useful. The book contains general bookkeeping and accountancy tips and is designed to help you get the most out of the tools available in QuickBooks Online. Prior QuickBooks knowledge is necessary.

Section 1 – General Tips and Shortcuts

It's important that a QuickBooks Online company file is set up correctly, reflecting the financial position of an organization at the point that QuickBooks Online was put into use.

Once the initial Opening Balances are in place, review the general setup of the QuickBooks company, ensuring that it contains just the right amount of account categories. Too few, and it can be a struggle to code transactions; too many, and reporting can become a little messy.

As QuickBooks is used each day, there are a few little tips that can generally save time no matter what type of business you have. So, just for starters, we'll advise you of some of those.

This section comprises the following chapters:

• Chapter 1, Creating and Reviewing Opening Balances in QuickBooks Online
• Chapter 2, Useful Tips and Tricks Every QuickBooks User Should Know

Chapter 1: Creating and Reviewing Opening Balances in QuickBooks Online

As described in the preface of this book, QuickBooks Online is a cloud-hosted accounting software solution for small to medium-sized businesses. Accountants and bookkeepers can assist their clients by being able to access all the information they need at any time.

Opening balances reflect the financial position of a business at the point when QuickBooks Online is brought into use. Where a business has only just been set up and they choose to use QuickBooks from the very beginning, there will not be any opening balances to speak of except for cash or equipment introduced by the business owners.

Where a business has been operating for some time and has perhaps used spreadsheets or other accounting software in the past, there will be a financial history that results in values that will affect the balance sheet in different ways.

It is very important, especially when moving from one method of accounting to another, to ensure there is continuity. Without a correcting starting position, future profits could be over or understated, and the values filed in various tax returns could be incorrect.

In this chapter, we will cover the following topics:

• Should opening balances be in place before using QuickBooks?
• Opening balances – Customers
• Opening balances – Suppliers
• Opening balances – Bank
• Opening balances – VAT/GST/Sales Tax
• Other opening balances

Should opening balances be in place before using QuickBooks?

Before we explore opening balances, we need to know whether it is necessary for our opening balances to be in order when we make the switch from our old method of keeping books to QuickBooks.

The simple answer to this question is no. As soon as you have a subscription in place and set QuickBooks Online up with the required settings, you are likely to want to start creating customer invoices before you do much else.

However, it is best to get some opening balances in place as soon as possible. As customers start to pay for products and services supplied before QuickBooks is in use, it is important to have a record of any of those unpaid amounts in place. This will also be the case when it is time to pay suppliers for amounts owed against historic bills.

We can build our opening balances in stages – it is not necessary to do it all at once. In some instances, it is not possible to deal with all the opening balances because all the information required is not readily available. Therefore, we can put into place the values that are easy to deal with, such as the amounts owed by customers and to suppliers.

What dates are used for opening balances?

Before we answer this question, it is important consider the date you start using QuickBooks Online. You can of course start using QuickBooks at any time, but it can generally make life easier to do so when a clear "line in the sand" has been drawn.

The following are good starting points for a new QuickBooks Online file:

• Any time for a new business (no historical transactions to worry about)
• Start of new financial year/tax year
• Start of new VAT/GST/Sales tax period

Using these starting positions can make life a little easier when preparing financial statements and tax returns. Otherwise, data may need to be merged from two systems, which can increase time consumption and the cost of work required.

Once you select the start date, ensure the financial year date is set correctly in QuickBooks. To do this, select the gear icon found in the top right of the main screen menus and choose Account and settings from the YOUR COMPANY list.

Figure 1.1 – Selecting the financial period start date

From within the Advanced tab, we select the first month of the financial year. In this example, the year-end is March 31, so the first month is set as April. This company is going to use QuickBooks from April 1, 2021.

Now that we have selected our start date, we will visit some examples of opening balances.

Opening balances – Customers

At any given point, it is highly likely that a business is owed money from customers for goods and services already provided in a previous period; this needs to be considered when a business decides to change its bookkeeping system.

There are various methods to create the opening balances for amounts owed from customers, but we will stick with the one that is advised by most professionals.

A business should have a list of the invoices sent to customers and of those that remain unpaid at the date they start using QuickBooks. Taking that list, we will already have the following:

• Customer name
• Invoice date
• Invoice number
• Net charge
• VAT/GST/sales Tax
• Invoice total

From the preceding list of items, we have pretty much all the information we need to create our opening custom...