001-Navigating QBO

These notes were taken from “thequickbooksdude” on Youtube.

2 Account Settings

Account settings in QBO determine the default behaviors until you modify them. This chapter covers how to switch between Business View and Accountant View, and how to adjust key settings like tracking expenses by customer and updating company information.

  1. Switch Between Views:
    1. Click the cog wheel in the top right corner.
    2. Select Switch to Accountant View or Switch to Business View as needed.
  2. Access Account Settings:
    1. Click the cog wheel and select Account and Settings from the menu.
    2. Navigate to different categories of settings from the left panel of the Account Settings window.
  3. Enable Expense Tracking by Customer:
    1. In the Account and Settings window, select Expenses from the left panel.
    2. Click the pencil icon to edit the settings.
    3. Enable Track expenses and items by customer and Save the changes.
  4. Update Company Information:
    1. In the Account and Settings window, select Company from the left panel.
    2. Click the pencil icon to edit the company name and address.
    3. Start typing the address, select it from the suggested list, or enter it manually.
    4. Save the changes and click Done to exit.
  5. Verify Settings Changes:
    1. Return to the Expenses window, add an expense manually, and check if the customer field is available.
    2. Confirm that the updated company name and address appear correctly on the dashboard and in forms/reports.

3 Chart Of Accounts

The Chart of Accounts is important for correctly categorizing accounts setting up the ledger and associating income accounts with items (bought and sold) for accurate financial tracking.

  1. Accessing the Chart of Accounts
    1. Go to Accounting > Chart of Accounts
    2. Click the green See your Chart of Accounts button if this is your first time accessing it.
    3. Review the list of accounts added by QBO and make any necessary accounts inactive to simplify the list.
    4. To deactivate an account, click the arrow next to the account, select Make inactive, and confirm.
  2. Adding a New Account
    1. Scroll to the top of the window and click New to add an account.
    2. Select the appropriate Type for the account.
    3. Enter the Name of the account in capital letters.
    4. Click Save and Close or Save and New to continue adding accounts.

4 Customers And Vendors

  1. Managing Customers
    1. Go to Sales > Customers > Add Customer Manually (if this is your first time)
    2. Enter the customer’s information, including name and company name, and click Save
    3. To edit customer details, click on the customer’s name, then click Edit
  2. Managing Vendors
    1. Go to Expenses > Vendors
    2. Click Add Vendor Manually if this is your first time.
    3. Enter the vendor’s information, including company name, and click Save
    4. To edit vendor details, click on the vendor’s name, then click Edit

5 Products And Services

  1. Setting Up Products and Services
    1. Click cog wheel > Lists > Products and Services
    2. Click the green button to start adding services.
    3. Select Service, then enter the Name, Sales price/rate, and the associated Income Account
    4. Save and Close
  2. Reviewing and Managing Transactions
    1. To view or edit transactions for a customer or vendor, click on their name, then choose Transaction List or Customer/Vendor Details
    2. You can filter transactions and manage their details from this view.

6 Creating Invoices

The first transaction in QBO, which involves creating an invoice and checking its effects on the trial balance and customer balance reports.

  1. Set Up the Trial Balance Report:
    • Click on Reports > Standard and scroll down Accountant Reports section.
    • Select Trial Balance
    • USE date range All Dates
    • Click Run Report and then Save Customization to save the report in the custom section.
  2. Set Up the Customer Balance Detail Report:
    • Go back to Reports
    • Scroll to the Who Owes You section.
    • Select Customer Balance Detail
    • Click Save Customization to save the report.
  3. Enter the First Invoice:
    • Click on Sales > Invoice
    • Input the invoice date (e.g., January 1st).
    • Select the customer (e.g., Alan).
    • Choose the product/service (e.g., Video) and enter the quantity (e.g., 10 hours).
    • Click Save to record the invoice.
  4. Verify the Results in Reports:
    • Check the Trial Balance report in the custom reports section to see the updated amounts for Accounts Receivable and Video Income.
    • Check the Customer Balance Detail report to confirm the specific customer balance.
  5. Enter the Second Invoice (Optional):
    • Click the + sign and select Invoice
    • Enter the invoice date (e.g., January 2nd).
    • Select the customer (e.g., Betty).
    • Choose the product/service (e.g., Editing) and enter the quantity (e.g., 10 hours).
    • Click Save to record the invoice.
    • Verify the updated reports in the same way as before.

7 Transactions

This section guides users through practicing inputting multiple invoices into QBO and verifying the results by comparing them with expected balances in the trial balance and customer balance detail reports. Users are encouraged to enter the invoices one by one and check that their final balances match the provided figures.

  1. Review Initial Reports:
    • Check the trial balance to note the current balances before entering the new invoices.
    • Check the customer balance detail report to see existing customer balances.
  2. Enter Invoices:
    • Enter each invoice into QBO with the following details:
      • Invoice 1003:
        • Date
        • Quantity
        • Item
        • Customer
      • Invoice 1004:
        • Date
        • Quantity
        • Item
        • Customer
      • Continue entering each subsequent invoice in the same manner.
  3. Verify Final Balances:
    • Check the final trial balance to ensure that:
      • Total Accounts Receivable is $21,820.
      • Editing Income and Video Income reflect the expected amounts.
    • Check the customer balance detail report to ensure:
      • RB’s balance is $9,000.
      • Betty Boop’s balance is $7,280.
      • Candy’s balance is $5,540.
  4. Correct Any Discrepancies:
    • If the final numbers do not match the expected figures, review and correct any mistakes using the guidance provided in the following instructional video.

8 Fixing Mistakes

The text provides guidance on how to input invoices into QBO and check the accuracy of the entries by comparing them with the expected balances in the trial balance and customer balance detail reports. It emphasizes practicing these steps to ensure accuracy in recording transactions.

  1. Access the Trial Balance:
    • Navigate to Reports > Standard > Accountant Reports
    • Select Trial Balance and use All Dates
    • Click Run Report to view current balances
  2. Review Customer Balances:
    • Navigate to Reports > Standard > Who Owes You
    • Select Customer Balance Detail to view existing balances
  3. Input Invoices:
    • Go to Sales > Invoices > New Invoice
    • Enter invoice details:
      • Select the customer
      • Choose the date of the invoice
      • Enter the product/service, quantity, and rate
    • Click Save and Close to record each invoice
  4. Verify Final Balances:
    • Reopen the Trial Balance report and ensure the total balances match the expected amounts
    • Check the Customer Balance Detail report to confirm the individual customer balances are correct
  5. Correct Errors (if needed):
    • If discrepancies are found, review the invoice entries and correct any mistakes using QBO’s edit functions

9 Delete Transactions

  1. Access the Trial Balance:
    • Navigate to Reports > Standard > Accountant Reports
    • Select Trial Balance and adjust the date range to All Dates
    • Click Run Report to view current balances
  2. Review Customer Balances:
    • Navigate to Reports > Standard > Who Owes You
    • Select Customer Balance Detail to view existing balances
  3. Input Invoices:
    • Go to Sales > Invoices
    • Click New Invoice
    • Enter invoice details:
      • Select the customer
      • Choose the date of the invoice
      • Enter the product/service, quantity, and rate
    • Click Save and Close to record each invoice
  4. Verify Final Balances:
    • Reopen the Trial Balance report and ensure the total balances match the expected amounts
    • Check the Customer Balance Detail report to confirm the individual customer balances are correct
  5. Correct Errors (if needed):
    • If discrepancies are found, review the invoice entries and correct any mistakes using QBO’s edit functions

10 Receiving Payments

Record invoice payments, emphasizing the impact on both the general ledger (i.e. Trial Balance) and customer records. It demonstrates step-by-step how receiving payments affects Accounts Receivable and cash balances.

  1. Review Trial Balance:
    • Go to Reports > Standard > Accountant Reports
    • Select Trial Balance and view current balances before recording the payment
  2. Record Invoice Payment:
    • Click the + New button and select Receive Payment under the Customers section.
    • Choose the customer who made the payment
    • Enter the payment date (e.g., January 9)
    • For a direct deposit, enter a reference number (e.g., 111111)
  3. Apply Payment to Invoice:
    • Enter the payment amount (e.g., $3,000)
    • Ensure QuickBooks automatically matches the payment to the correct invoice
    • If necessary, manually apply the payment by selecting the corresponding invoice
    • Click Save and Close to record the transaction
  4. Verify Trial Balance Update:
    • Reopen the Trial Balance report to confirm that Accounts Receivable decreased by the payment amount, and cash increased by the same amount.
  5. Check Customer Records:
    • Go to Reports > Standard > Who Owes You
    • Select Customer Balance Detail to verify that the customer’s balance reflects the payment and that the paid invoice is removed from the report.
  6. Repeat for Additional Payments:
    • Follow the same steps for each payment, ensuring accuracy in recording and applying payments to specific invoices.
    • Verify that all updates are accurately reflected in the Trial Balance and Customer Balance Detail reports.

11 Sales Receipts

Sales receipts, explain how immediate payment transactions affect the Trial Balance and where to find these transactions in various reports. It provides a step-by-step guide for recording sales receipts and verifying their impact on financial records.

  1. Record a Sales Receipt:
    • Click the + New button and select Sales Receipt under the Customers section.
    • Choose the customer who made the payment (e.g., Alan).
    • Set the date of the transaction (e.g., January 11).
  2. Enter Payment Details:
    • Select the service provided (e.g., video hours) and the quantity (e.g., 10).
    • Ensure the payment is marked as directly deposited into the bank account (e.g., Chase Bank).
    • Enter the amount received (e.g., $3,000).
  3. Save the Sales Receipt:
    • Click Save and Close to record the transaction.
  4. Verify Trial Balance Updates:
    • Reopen the Trial Balance report to check that Video Income has increased by the payment amount and Cash and Bank reflects the new balance.
    • Expected updates: Video Income increases to $17,400, and Cash and Bank increases to $6,680.
  5. Review Sales by Customer:
    • Go to Reports > Sales and customers
    • Select Sales by Customer Detail and adjust the date range to view the recent sales receipt.
    • Verify that the receipt appears under the correct customer (e.g., Alan).
  6. Find the Sales Receipt in Other Reports:
    • Double-click Cash and Bank on the Trial Balance to locate the sales receipt.
    • Double-click the relevant income account (e.g., Video Income) to see the receipt listed.
  7. Repeat for Additional Sales Receipts:
    • Follow the same steps for each immediate payment transaction, ensuring accuracy in recording and verifying each receipt’s impact on the Trial Balance and Sales reports.
    • Example: On January 12, enter 10 editing hours for Betty, resulting in a $1,400 sales receipt and corresponding updates to Editing Income and Cash and Bank

12 Customize Reports

The Journal report is particularly useful for tracking transactions by the order of creation, helping identify and correct date-related mistakes. Customize a Journal report, focus on adding and removing columns, sorting transactions, and saving customizations.

  1. Open the Journal Report:
    • Click Reports in the left navigation panel.
    • Select All Reports, then scroll down and choose Accountant Reports
    • Click on Journal to open the report.
  2. Set the Date Range:
    • At the top left of the report, click the date range dropdown menu.
    • USE All Dates for all transactions
  3. Add a ‘Created’ Column:
    • Click the Customize button at the top right of the report.
    • Under the Rows/Columns > Change columns
    • Add the Created column by checking the box next to it.
    • Click Run Report to apply the changes.
  4. Sort Transactions by Creation Date:
    • Use the Sort dropdown at the top left of the report.
    • Select Sort by Created to organize transactions by their creation date.
  5. Reverse the Sort Order:
    • Change the sort order to Descending to display the most recently entered transactions at the top.
  6. Save the Customized Report:
    • Click Save Customization at the top right of the report.
    • Name the report (e.g., My Journal) and click Save
  7. Access the Customized Report:
    • Go to Reports > My Custom Reports to find and open your saved journal report.
    • Use this report to easily track and correct date-related transaction errors.

13 Transactions

Customer transactions, ensure your trial balance and customer balance detail match! It also discusses common mistakes and how to troubleshoot them.

  1. Ensure your trial balance and customer balance detail match the provided examples before starting.
  2. Enter the transactions one by one into QBO.
  3. After completing the entries, compare your trial balance and customer balance detail to the provided examples.
  4. If your numbers do not match:
    • Check each customer balance and invoice individually.
    • Identify and fix mistakes using logic and the techniques learned in previous lessons.
    • Review common mistakes like selecting the wrong customer, using the wrong transaction type (invoice vs. sales receipt), or applying payments to the wrong invoice.

14 Accounts Payable

Manage vendors and accounts payable, how to track money owed to vendors through the vendor balance detail report.

  1. Understand that accounts payable represents the total money owed to all vendors.
  2. Access the Vendor Balance Detail report by navigating to Reports > All Reports > Manage Accounts Payable > Vendor Balance Detail
  3. Save the Vendor Balance Detail report to My Custom Reports by clicking Save Customization

15 Entering Bills

Record bills received from vendors, which affect trial balances and vendor records.

  1. To enter a bill:
    • Click the + icon and select Bill under the Vendors column.
    • Enter the vendor, bill date, bill number, expense account, and amount.
    • Click Save and Close or Save and New
  2. Review the impact on the trial balance and Vendor Balance Detail report to ensure correct entries.
  3. Add new vendors on the fly if needed during bill entry.

16 Exercise

Vendor bills and identifying common mistakes

  1. Ensure your trial balance and vendor balance detail match the provided examples before starting.
  2. Enter the provided bills slowly and carefully, watching for potential errors.
  3. After completing the entries, compare your trial balance and vendor balance detail to the provided examples.
  4. If discrepancies are found:
    • Identify common mistakes like selecting the wrong account or vendor.
    • Use logic and troubleshooting techniques to correct errors.

17 Paying Bills

Record payments made to vendors which affect trial balances and vendor records.

  1. To pay bills:
    • Click the + icon and select Pay Bills under the Vendors column.
    • Filter the list by vendor, select the bill(s) to pay, and enter the payment details.
    • Click Save and Close
  2. Review the impact on the trial balance and Vendor Balance Detail report to ensure payments are recorded correctly.
  3. Understand that paying a bill reduces accounts payable and cash in bank.

18 Paying Expenses

Record check and expense transactions, it highlights the difference between immediate payment and bills payed later.

  1. To write a check:
    • Click the + icon and select Check under the Vendors column.
    • Enter the check details, including date, vendor, expense account, and amount.
    • Click Save and Close
  2. To record an expense:
    • Click the + icon and select Expense under the Vendors column.
    • Enter the expense details, including date, vendor, and account.
    • Click Save and Close
  3. Check the trial balance to ensure entries are correct.

19 Petty Cash

Mnage cash transactions and petty cash funds, including setting up a petty cash account and recording transactions.

  1. Set up a petty cash account:
    • Go to Chart of Accounts and create a new account as a Bank type named “Cash on Hand - Petty Cash.”
  2. To establish petty cash:
    • Write a check to cash, selecting the petty cash account as the recipient.
  3. Record petty cash expenditures:
    • Use the Expense option and select the petty cash account for payment.
  4. Replenish petty cash by transferring funds from your bank account.

20 Exercises

Vendor-related transactions

  1. Ensure your trial balance and vendor balance detail match the provided examples before starting.
  2. Carefully enter the provided transactions.
  3. Compare your trial balance and vendor balance detail to the examples after completing the exercise.
  4. Troubleshoot and correct any discrepancies using techniques from previous chapters.

21 Bank Deposits

Record bank deposits, particularly when payments are received and deposited into the bank without tracking quantities.

  1. To record a deposit:
    • Click the + icon and select Bank Deposit
    • Enter the deposit details, including date, customer, account (income), and amount.
    • Click Save and Close
  2. Review the trial balance to confirm that cash and income accounts are updated correctly.

22 Cash Deposits

Handle deposits where cash back is taken for expenses, requires the use deposits window with adjustments.

  1. To record a deposit with cash back:
    • Click the + icon and select Bank Deposit
    • Enter the full income amount on the first line.
    • Deduct expenses with a negative amount on subsequent lines.
    • Ensure the final deposit amount matches the actual deposit made to the bank.
    • Click Save and Close

23 Undeposited Funds

Manage undeposited funds, handling scenarios where payment is received but not immediately deposited into a bank account.

  1. Set up the Undeposited Funds account:
    • Go to Chart of Accounts, create a new Other Current Asset account, and select Undeposited Funds as the detail type.
  2. Record payments to undeposited funds:
    • Use Sales Receipt or Receive Payment and choose Undeposited Funds as the deposit account.
  3. Deposit undeposited funds into the bank:
    • Use the Bank Deposit window, select items from undeposited funds, and record the deposit.

24 Deposit Detail Report

Reviews & edit bank deposits

  1. Access the Deposit Detail report:
    • Go to Reports > All Reports > Review Sales > Deposit Detail
    • Set the date range to All Dates
  2. Review and edit deposits:
    • Click on the specific deposit to view details.
    • Remove or add items by adjusting the checkmarks in the deposit window.
    • Save changes and verify updates in the trial balance.

25 Advanced Search Tool

The Advanced Search tool allow you to locate specific transactions based on filters.

  1. Access the Advanced Search tool:
    • Click the magnifying glass icon and select Advanced Search
  2. Perform a search:
    • Select the transaction type, data field, and search criteria (e.g., amount equals, contains text).
    • Click Search to view results.
  3. Review and refine search results as needed.

26 Audit Log

Audit Logs record all events and changes within your account, allowing you to track actions and edits made over time.

  1. Access the Audit Log:
    • Click the cog wheel icon and select Audit Log under the Tools column.
  2. Filter events by type (e.g., Sign In/Sign Out, Settings, Lists, Transactions).
  3. Review event details and use filters to narrow down specific actions or changes.
  4. View the history of a list item or transaction to see detailed changes over time.

27 Exam

  1. Ensure your trial balance, customer balance detail, and vendor balance detail match the provided examples before starting.
  2. Enter the provided transactions carefully and accurately.
  3. After completing the entries, compare your trial balance and balance details to the examples.
  4. Find and fix any discrepancies using techniques from previous chapters.
  5. Review each transaction type and correct any errors to ensure all balances are correct.

Appendix 1

https://www.youtube.com/watch?v=aoWghI3kvpc
QBO Complete Tutorial

Timestamps:
00:00 Intro
1:45 Navigate The QBO Interface
9:10 Adjust Company Settings and adjust Account Settings
16:22 Manage The QBO Chart Of Accounts
26:10 Managing Customer And Vendor Data
34:07 Managing The List Of Products And Services
40:05 Entering Your First Transaction, Creating An Invoice
56:22 First QuickBooks Transaction Practice
58:35 Finding And Fixing QBO Mistakes
1:03:42 Delete Transactions In QBO
1:09:16 Receiving Invoice Payments
1:18:54 How To Enter Sales Receipts
1:26:28 Customize QuickBooks Reports With The Journal
1:38:11 Practice Transactions with Customers And Receivables
1:44:05 What Is Accounts Payable?
1:47:07 Entering Vendor’s Bills
1:54:08 Practice Enter Bills Exercise
1:57:23 Paying Bills From Vendors
2:05:22 How To Record Checks And Expenses
2:12:44 Cash Transactions And Petty Cash
2:22:04 Practice Vendor And Expense Transactions
2:27:51 Bank Deposits
2:35:44 Deposits With Cash Back
2:41:45 Managing Undeposited Funds
2:58:54 How To Edit A Deposit With The Deposit Detail Report
3:07:19 How To Use The Advanced Search Tool
3:13:47 How To Use The Audit Log
3:27:38 QBO Final Exam

Mark Smolen is a certified instructor and the creator of the QuickBooks Instructional YouTube Channel and Website.

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