User Guide

UG Page 1 Friday, September 3, 2004 1:39 PM
User’s Guide
QuickBooks: Pro 2005 for Mac

Copyright
Copyright © 2004 Intuit Inc. Intuit Inc.
All Rights Reserved. P. O. Box 7850
Mountain View, CA 94039-7850
First printing: November 2004
Unauthorized duplication is a violation of applicable law. Intuit, the Intuit logo and QuickBooks are regis-
tered trademarks of Intuit Inc. Mac, the Mac logo and the “Built for Mac OS X” graphic are trademarks of
Apple Computer, Inc., used under license.
Trademarks
Intuit, the Intuit logo, QuickBooks, QuickBase, TurboTax, ProSeries, Lacerte, EasyStep, and QuickZoom,
among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States
and other countries. Other parties’ trademarks or service marks are the property of their respective owners
and should be treated as such.
Other Acknowledgements
Mac, the Mac logo and the “Built for Mac OS X” graphic are trademarks of Apple Computer, Inc., used under
license. Adobe, Acrobat and Reader are either registered trademarks or trademarks of Adobe Systems Incor-
porated in the United States and/or other countries. Aatrix is a registered trademark of Aatrix Software, Inc.
American Express is a registered trademark of the American Express Company.
Other Notices
Some names, company names, and data used in examples and help content are fictitious and are used for
illustration purposes only. Any resemblance of fictitious data to a real person or company is purely coinci-
dental. All features, services and any terms and conditions are subject to change without notice.
Software License Agreement

Please see the Software License Agreement in the file named License Agreement in your Documents >
QuickBooks folder for the terms and conditions under which the Software is licensed to you.
Note
Due to early printing schedules, the screens in this manual might not exactly match the final product screens.
Choose Help > QuickBooks Help for the latest information.
Credits
Engineering Brooks Bell Abdallah Qaisi Ken Victor
Lucien Dupont Mike Rossetti Steven Woolgar
Steven Friedrich Lance Saleme
Quality Assurance Rob Armentrout Steve Laflen Scott Sivi

Rob Bowles Nariman Riahi-Dehkordy Chad Stanke
Victoria Dolginsky Mitchell Salls Peter Tobias
Documentation Leigh Chapman Jennie Tan
Marketing Peggy Chang Tina Lin Michele Rebello
Management Anouk Holleran
Technical & Jonathan Brubaker Jennifer Fisher Carl Nye

Beta Support John Darcangelo Tim Magill Michael Patterson
Steve Darcangelo Lizzie Moran Bryan Ruff
Special Thanks Cristina Andres Bob Heldt Chris Pepper

Steve Bennett Bill Ihrie Philippe Becker Design
Scott Cook Dan Levin Kurt Rutherford
Michelle Cooper Wona Miniati Linda Schmid
Ed Fernandez Lorrie Norrington
Contents
1 Installing QuickBooks 13
System requirements, 13
Installing QuickBooks, 14
Getting started with QuickBooks, 14
Upgrading from an older version of QuickBooks for Mac, 16
Converting data from other Intuit products, 17
Registering your copy of QuickBooks, 17
Checking for QuickBooks software updates, 17
What’s new in this version of QuickBooks, 17
2 Setting up your company file 19

Step 1: Choose a start date, 19
Step 2: Gather information, 20
Step 3: Create your company file, 21
Step 4: Set up company lists, 21
Step 5: Enter opening balances, 24
Step 6: Set up payroll (optional), 28
Step 7: Enter optional adjustments, 28
Step 8: Customize preferences, 31
Next steps, 31
3 Entering historical transactions 33

Historical transactions overview, 33
Entering sales and accounts receivable (A/R) transactions, 34
Entering accounts payable (A/P) transactions, 35
Entering payroll transactions, 36
Entering bank and other transactions, 36
Changing your start date, 38
4 Lists 39
Types of lists, 39
Editing and deleting list items, 54
Speeding up data entry with lists, 55
Adding customized fields to lists, 56
Keeping your lists organized, 58
Printing, saving, or emailing a list, 62
• 5
5 Your chart of accounts 63

Chart of accounts overview, 63
Adding new accounts, 66
Entering opening balances for accounts in use, 68
Editing opening balances, 69
Editing account information, 70
Deleting an account, 70
Using account numbers, 70
Keeping your chart of accounts organized, 71
Changing an account’s color, 71
Merging existing accounts, 71
Printing your chart of accounts, 71
6 Items—your products and services 73

Items overview, 73
Creating items, 76
Tips for businesses that invoice for costs, 86
Using subitems, 89
Reports about items, 90
Editing item information, 91
Deleting items, 91
Changing prices, 92
7 Tracking sales 93
Types of sales forms, 93
Entering a sales transaction, 95
Working with sales transactions, 98
Customizing your sales form, 101
Printing, saving, or emailing a sale form, 109
Charging for actual time and costs, 110
Creating a daily sales summary, 115
Assessing finance charges, 116
Using billing statements, 117
Using estimates, 120
Questions and answers about sales forms, 128
8 Receiving and depositing payments 129

Recording an invoice or statement payment, 129
Overpayments, down payments, and prepayments, 132
Retainers, 134
Correcting the application of a payment, 135
Depositing payments, 135
Recording a return, 139
Handling a bounced check from a customer, 141
Questions and answers about payments, 142
6 •
9 Inventory 143
Inventory overview, 143
Viewing items on order, 145
Receiving inventory items, 145
Using the inventory register, 148
Viewing the average cost of inventory items, 148
Adjusting value and quantity on hand, 149
Returning items to a vendor, 150
Reports about inventory, 151
10 Sales tax—track and pay 153

Sales tax overview, 153
Turning on sales tax, 156
Creating tax items for each single tax you apply, 156
Creating tax groups, 157
Editing sales tax items, 158
Assigning taxes to customers, 158
Marking items you sell as taxable, 159
Applying sales tax to an invoice or cash sale, 160
Non-taxable sales, 161
Unusual tax situations, 161
Keeping track of how much sales tax you owe, 162
Paying sales tax, 163
11 Accounts receivable management 165

Viewing the accounts receivable register, 165
Viewing the customer register, 166
Editing a transaction in the A/R register, 166
Changing the opening balance for a customer, 167
Viewing an A/R transaction history, 167
Viewing a QuickReport about a customer, 168
Working with A/R reports and graphs, 169
12 Bills 171
Bills overview, 171
Entering a bill, 172
Paying bills, 175
Viewing a bill payment, 177
Editing bills and payments, 177
Deleting bills and payments, 178
Having QuickBooks remind you to pay your bills, 178
Entering credit from a vendor, 178
Questions and answers about bills, 179
• 7
13 Accounts payable management 183

Viewing the accounts payable register, 183
Editing a transaction in the A/P register, 184
Viewing an A/P transaction history, 184
Viewing a QuickReport about a vendor, 185
Working with A/P reports and graphs, 186
14 Managing your checkbook 187

Checks overview, 187
Entering a check, 187
Editing checks, 190
Voiding checks, 190
Deleting checks, 191
Printing, saving, or emailing checks, 191
Depositing funds into your checking account, 192
15 Credit card transactions 193

Credit card overview, 193
Entering a credit card transaction, 193
Editing a credit card transaction, 196
Reconciling/paying your credit card statement, 197
16 Purchase orders 199

Purchase order overview, 199
Turning on the purchase order feature, 200
Customizing purchase orders, 200
Entering a purchase order, 201
Viewing purchase orders, 202
Receiving items against a purchase order, 202
Editing purchase orders, 202
Closing a purchase order manually, 203
Printing purchase orders, 204
17 Account registers 205

Account registers overview, 205
Opening an account’s register, 205
Entering transactions in a register, 206
Editing transactions in a register, 208
Finding a specific transaction, 210
Printing, saving, or emailing a register, 211
8 •
18 Assets, liabilities, and equity 213

Assets overview, 213
Adding fixed asset and depreciation accounts, 216
Selling fixed assets, 217
Recording thefts or losses of fixed assets, 220
Purchasing assets, 220
Liabilities overview, 221
Borrowing money, 221
Adding a loan to your chart of accounts, 222
Tracking loan payments, 223
Equity overview, 224
Distributing yearly profits to partners, 230
Creating equity accounts, 230
Transferring money out of Opening Bal Equity, 231
Recording an owner’s draw, 232
Recording an owner’s capital investment, 232
19 Account reconciliation 233

Reconciling accounts overview, 233
Balancing your account for the first time, 234
Reconciling your checking account statement, 234
Marking cleared transactions, 236
Completing reconciliation, 236
Reconciling your credit card statement, 237
Correcting differences, 237
Printing a reconciliation report, 239
20 Time tracking 241

Time tracking overview, 241
Time tracking preferences, 242
Filling in a weekly timesheet, 242
Entering single activities, 244
Invoicing customers for time, 246
Reports about time, 246
• 9
21 Reports, graphs, and budgets 247

Setting your report preferences, 247
Creating a report, 249
Customizing a report, 250
Filtering report data, 255
Using QuickZoom for report details, 257
Printing, saving, or emailing a report, 257
Exporting a report to Microsoft Excel, 257
Memorizing and recalling reports, 258
QuickReports, 259
Questions and answers about reports, 262
Graphs, 265
Budgets, 268
22 Customizing preferences 269

Preferences overview, 269
View preferences, 270
Data entry preferences, 270
Reminder preferences, 271
Graph preferences, 272
Company file backup preferences, 272
Company information preferences, 273
Transaction preferences, 273
Inventory, purchase order, and estimate preferences, 275
Sales and invoicing preferences, 275
Statement preferences, 277
Check preferences, 277
Check format and logos preferences, 278
Finance charge preferences, 278
Reporting preferences, 280
Sales tax preferences, 280
Time tracking preferences, 281
Job preferences, 281
Password preferences, 282
1099 preferences, 284
Toolbar preferences, 285
10 •
23 Maintaining your data 287

Data maintenance overview, 287
Changing your company information, 288
Changing to a different company file, 288
Keeping an audit trail, 289
Backing up your company file, 289
Restoring company data, 291
Transferring lists between company files, 292
Selecting names for mail merge, 292
Condensing data, 293
Periodic tasks, 296
A Accounting basics 299

Balance sheets, 299
Chart of accounts, 301
Payment terms, 304
Customer and vendor aging, 304
Cash basis vs. accrual basis for taxes, 304
Glossary of accounting terms, 305
B Working with QuickBooks for Windows 307

Converting a QuickBooks for Windows file to Mac, 307
Converting a QuickBooks for Mac file to Windows, 313
“Round-tripping” a QuickBooks file from Mac to Windows to Mac, 313
C For Quicken users 315

System requirements, 315
Comparing QuickBooks and Quicken, 315
Step 1: Prepare your Quicken for Mac file, 317
Step 2: Convert your Quicken file to QuickBooks, 318
Differences in your new QuickBooks data, 319
D Contacting Intuit 323

Saving a phone call, 323
Error messages, 323
QuickBooks contact information, 324
Index 325
• 11
12 •
1 Installing QuickBooks
System requirements 13
1
Installing QuickBooks 14
Getting started with QuickBooks 14
Upgrading from an older version of QuickBooks for Mac 16
Converting data from other Intuit products 17
Registering your copy of QuickBooks 17
What’s new in this version of QuickBooks 17
Welcome to QuickBooks® Pro for Mac! Because this book is for QuickBooks and Quick-
Books Pro, the name “QuickBooks” refers to both programs. Features in QuickBooks Pro
only (estimates, time tracking, Report Finder) are indicated in the text.
To upgrade to QuickBooks Pro, contact Intuit (see page 324).
System requirements
• Macintosh with G3, G4, or G5 processor
• Mac OS X, version 10.2.8 or 10.3.5
To find out which version of the system software you are using or how much RAM you
have installed, choose About This Mac from the Apple () menu.
• 128 MB installed RAM
• Hard disk with at least 100 MB of free disk space
• Color monitor with at least 1024 x 768 resolution and millions of colors
• CD-ROM drive (double speed or faster)
• To print checks: Intuit checks and a Mac-compatible laser or inkjet printer
Note: System requirements for Aatrix Top Pay may differ from those of QuickBooks. For
details, see the Aatrix Top Pay documentation.
Using QuickBooks on a network or shared computer

• If QuickBooks is installed on a network, only one user at a time can use QuickBooks.
• If a QuickBooks company file is located on a network, only one user at a time can access
that file.
• If a non-administrative user on a shared computer wants to use a company file, the user
who owns QuickBooks must give read-write access to the company file and the folder
that contains it to the non-administrative user.
Installing QuickBooks • 13
Installing QuickBooks
To install QuickBooks:
1 Insert the QuickBooks CD in your CD–ROM drive.
2 Drag the QuickBooks application icon from the QuickBooks CD to your computer’s
Applications folder.
To install Aatrix Top Pay:

1 From the QuickBooks CD, double-click the Aatrix Payroll folder, and follow the
onscreen instructions.
Getting started with QuickBooks

1 Go to the folder where you installed QuickBooks and double-click the QuickBooks icon.
2 Read the Software License Agreement, and if you agree to the terms of the license, click
Agree.
You must accept the Software License Agreement to continue opening QuickBooks.
3 Click an option on the QuickBooks welcome screen.
• To open an existing company file (including either of the sample files), select it and
click Open Selected File.
• If you don’t see your file listed, click Open File.
• To create a new file, click Create File. See Chapter 2, Setting up your company file,
starting on page 19 for more information.
When you open QuickBooks for the first time, a QuickBooks folder is automatically created
in your Documents folder. The QuickBooks folder will contain your company files, backup
files, sample company files, and any other needed files.
Tools for learning QuickBooks

Sample company files
We’ve included sample company files from a fictional company. Use a sample file to enter
data, create reports, and explore other QuickBooks features.
To open a sample company file:

1 Choose File > Open Company.
2 Choose the sample company file from your Documents > QuickBooks folder.
3 Click Open.
To close a sample company file:

• Choose File > Open Company to open a different company file; otherwise, choose File
> Close Company.
14 • Installing QuickBooks
Onscreen Help
QuickBooks Help has extensive information about every feature.
To search for information in help, enter a keyword

here, and then click press Enter.
To see what’s new in
this version of
QuickBooks, click
here.
To get Help about a particular window, do one of the following:

• Press x ?
• If you are using an extended keyboard, press the Help key.
• Click the Help icon in the toolbar (if you have configured the toolbar to include the
Help icon).
• Choose Help > QuickBooks Help.
QuickBooks and your industry

To get industry-specific documentation, choose Help > QuickBooks and Your Industry.
This PDF document includes tips and examples from small-business experts in areas such
as accounting, construction, non-profit organizations, and service businesses.
Entering data quickly

QuickBooks has several features to make data entry quick and easy.
Toolbar
The toolbar has icons you can click as shortcuts to forms and activities.
Keyboard shortcuts
For a list of shortcuts, see page 348.
Contextual menus
Hold the Control key while clicking on any window to display a contextual menu. From
the contextual menu, you can get Help, the Chart of Accounts, the current Print command,
the Save as PDF command, the E-Mail as PDF command (QuickBooks Pro only), the Save
as Text command, and the Go To command (in registers).
QuickMath
Use QuickMath™ to make simple calculations in a transaction.
To calculate a transaction amount:

1 Click the field where you want to make the calculation.
You can use QuickMath in any numeric entry field.
2 Press the equal key (=), or type a number followed by one of the following operators: + -
* / or =.
You can repeatedly press a function key, to continue to add, subtract, or perform other
calculations on the previously entered number. QuickBooks displays a “paper tape”
where you can see numbers as you enter them.
3 Enter your calculations.
You can do addition, subtraction, multiplication, and division. You can see a subtotal
by pressing the equal key once.
4 Press C or Clear once to clear the last number you entered. Press C or Clear twice to
clear the entire calculation.
5 To enter the calculation result in the field, press Enter, Return, or Tab.
Upgrading from an older version of QuickBooks for Mac

QuickBooks 2005 for Mac can read and update QuickBooks for Mac data created with
QuickBooks Pro 4.0 M12a for Mac, QuickBooks 5 for Mac, or QuickBooks 6 for Mac.
Before installing QuickBooks 2005

1 Make a backup copy of your QuickBooks data file.
It is important to keep the backup copy of your data in the earlier format, in case you
need to open the data with your previous version of QuickBooks. For extra security,
lock your backup data file.
2 Quit any previous versions of QuickBooks that are running.
Updating your QuickBooks data file

Any data file created with QuickBooks 4.0 M12a, QuickBooks 5 for Mac, or QuickBooks 6
for Mac is automatically upgraded to the QuickBooks 2005 format when you first open it.
For example, if you open a QuickBooks 6 for Mac file called My Company with QuickBooks
2005 for Mac, the file is automatically converted to the new format, and a copy of the
original file is created in the same folder as the original file, and named My Company (QB6).
Your converted QuickBooks file cannot be used with previous versions.
Converting data from other Intuit products

• To convert a QuickBooks for Windows file to QuickBooks 2005 for Mac, see page 307.
• To convert a Quicken for Mac file to QuickBooks 2005 for Mac, see page 315.
Registering your copy of QuickBooks

You can use QuickBooks 15 times without registering (10 times if you are using Quick-
Books New User Edition). After your 15th use, you must register to continue using Quick-
Books.
Registering your copy of QuickBooks entitles you to automatic upgrade notifications and
other special offers.
To register QuickBooks:
1 Choose QuickBooks > Register QuickBooks.
2 In the Product Registration window, click Register Now.
3 Enter the Installation Key Code included with your QuickBooks software, and then click
OK.
A window appears that shows your serial number.
4 Call the phone number on the screen, OR click the Connect to Register button.
5 Provide your serial number and any other information that is requested.
You will then be given your QuickBooks registration number.
6 Enter the number in the Registration number field, and then click OK.
Keep your serial number handy in case you need to call Intuit’s Technical Support group
in the future. See “QuickBooks contact information” on page 324.
Checking for QuickBooks software updates

1 Choose QuickBooks > Check for QuickBooks Updates.
A window appears, showing the current version of QuickBooks you are using.
2 Click Check for Updates Now.
QuickBooks opens the QuickBooks updates page in your browser. From there, you can
choose to download and install any available updates to the QuickBooks software.
What’s new in this version of QuickBooks

For information on what’s new in this version of QuickBooks, choose Help > QuickBooks
Help and click “What’s new...” in the left column.
2 Setting up your company file
Step 1: Choose a start date 19

2
Step 2: Gather information 20

Step 3: Create your company file 21
Step 4: Set up company lists 21
Step 5: Enter opening balances 24
Step 6: Set up payroll (optional) 28
Step 7: Enter optional adjustments 28
Step 8: Customize preferences 31
Next steps 31
This chapter helps you create your QuickBooks company file.

In step 3, you’ll be using the New Company Setup Assistant to enter information about
your company so that you can begin working with QuickBooks as soon as possible.
You may not need to use all of the features in QuickBooks (such as inventory or time
tracking), but the Setup Assistant covers all the areas available to you. If an area does not
apply to your company, you can skip it.
This chapter uses common accounting terms such as balance sheet and chart of accounts.
See Appendix A, Accounting basics, starting on page 299 for more information.
Step 1: Choose a start date

Your QuickBooks “start date” is the date for which you give QuickBooks a financial
snapshot of your company. After you complete step 8, you’ll enter all transactions from
your start date through today to make your QuickBooks company file up to date.
To choose the best start date for your company file, consider the following questions:
• When does your company’s fiscal year start?
• How close is today to the end of your fiscal year?
• Do you have an accurate balance sheet for your current fiscal year?
• Do you have an accurate profit and loss statement for your current fiscal year?
• How far back in time are you willing to enter historical transactions?
If your business generates many invoices, bills, or checks, you probably don’t want to enter
more than a few months of historical transactions.
On the other hand, if your business has few historical transactions, you may be willing to
enter more than a few months of transactions so that QuickBooks will have full detail for
the entire fiscal year.
If it’s almost the end of the fiscal year, consider finishing the year with your current method
of bookkeeping. Then set up your company in QuickBooks with a start date of your fiscal
year end so you can use QuickBooks for the new fiscal year.
Setting up your company file • 19

If your fiscal year began some time ago, decide which is more important to you:
• Do you want to have full detail in QuickBooks for the current fiscal year?
OR
• Do you want to spend less time entering fewer historical transactions?
Note: Although you can change your start date at a later time, your start date determines
much of your setup. It’s easier to decide on the best start date now, rather than to
change it later.
Step 2: Gather information

Gather information on your bank account balances, the value of your assets, and so on, as
of your company file start date.
Information you need What it affects in QuickBooks
Bank account balances as of your start date Balance sheet

Ability to reconcile your bank statements with QuickBooks
Value of assets, including inventory on hand as of your start date Balance sheet
How much each customer owes you as of your start date Balance sheet
Accuracy of your accounts receivable records
How much you owe each vendor as of your start date Balance sheet
Accuracy of your accounts payable records
How much sales tax you owe as of your start date Balance sheet
Accuracy of your sales tax records
How much of each payroll tax you owe Balance sheet

Accuracy of your payroll records
Income and expenses (profit and loss statement) for the current Accurate profit and loss statement for entire fiscal year
fiscal year through the start date (for midyear setup)
Names, addresses, and other information about regular Customer:Job list

customers Information prefilled on sales forms
Names, addresses, and other information about regular vendors Vendor list
Information prefilled on checks, bills, and purchase orders
Names, addresses, and other information about employees Employee list
Complete chart of accounts Chart of accounts
Description, price or rate, taxability of goods and services you Item list
sell Information prefilled on sales forms or purchase forms
Rate and tax agency for every sales tax you collect Item list
Ability to track sales tax owed
20 • Setting up your company file

Step 3: Create your company file

We strongly recommend that you use the New Company Setup Assistant to help you set
up your company file.
To start the New Company Setup Assistant:

1 From the QuickBooks Welcome screen, click Create File, or choose File > New
Company.
2 Follow the onscreen instructions to enter information for all the tabs (Welcome,
Company Info, Preferences, and Start Date) in the General section.
QuickBooks uses the information you enter in the General section to ask the appro-
priate questions in the other subsequent of the Assistant.
3 When you have completed the General section, click Next to continue or Leave to exit.
When you want to return, choose File > New Company Setup Assistant.
4 At this point, it’s probably a good idea to back up your company file.
See “Backing up your company file” on page 289 for more information.
Step 4: Set up company lists

QuickBooks lets you decide how much detail you want to enter on your company lists
before you start working with the product.
At the very minimum, you need the following:
• List of each customer who owes you money and how much as of your start date
• List of each vendor to whom you owe money and how much as of your start date
• A chart of accounts
• If you track the value of inventory, a list of each item in stock, including number of units
and value of each as of your start date
To set up your lists more fully, you’ll want the following:
• List of customers you regularly do business with
• List of vendors you regularly do business with
• List of employees
• List of items you sell
• List of payment methods you accept
• List of payment terms for customers and vendors

• List of shipping methods (for companies that ship)

• List of messages you regularly use on sales forms
Customer:Job list
You can skip this section if all your customers pay at the time of the sale and you don’t keep
track of their names.
The Customer:Job list has information about your customers and the individual jobs or
projects you want to track for each customer. You’ll use it for the following:
• Fast entry of name, address, payment terms, tax status on invoices and other sales
forms
• Tracking payments received and amounts owed
• Contacting customers with overdue balances
• Reporting of sales or income by customer, profit and loss by job, budget vs. actual by job
• Tracking reimbursable expenses by customer and job
• Printing mailing labels
Before you add names

To make your customer list consistent, consider the following:
Do you track jobs or projects?

Jobs allow you to break down a customer’s activity by individual jobs or projects. That way,
you can see reports about each job separately. To track jobs, be sure you know the amount
owed to you for each job as of the start date.
You can also use jobs to track sales to different locations of a customer with a central billing
office.
Do you track sales tax for multiple tax districts or at multiple rates?
QuickBooks lets you assign sales tax information to a customer. If you charge sales tax and
have not already set up your sales tax information, it’s best to do it before you add
customers. (However, you can go back later and edit your customer information.) To set up
your sales tax information, see “Understanding your tax rates and agencies” on page 154.
Do you track customers by type?

Customer types let you classify your customers in any way that makes sense to your
business. Examples of customer types are corporate or individual, and residential or
commercial. To see reports by customer type, assign a type to every customer.
Do you track sales by employee?

You can associate each customer with an employee. All sales for an employee’s customers
appear under the employee’s name on a sales report by rep. To associate customers with
employees, you may want to set up your Employee list first.

Adding names
If some customers owed you money as of your QuickBooks start date, add each of these
customers and their open balances as of your start date to the list now. This will ensure that
your accounts receivable will be accurate as of your start date.
Note: If you added all open invoices for customers, you will not need to enter an opening
balance on the Customer:Job window.
See “Customers and jobs” on page 40 for more information.
Vendor list
Use the Vendor list for:
• Fast entry of name, address, payment terms, and account number on bills, purchase
orders, and checks
• Tracking bills received and amounts owed
• Reporting by vendor of amounts owed and aging, expense, items purchased, and 1099-
MISC information about contractors
• Printing mailing labels
If you owed some vendors money as of your QuickBooks start date, add each of these
vendors to the list now so your accounts payable will be accurate as of your start date.
• To enter unpaid bills for a vendor, the name must be on your Vendor list.
• If you have a regular vendor whom you always pay at time of purchase by cash, credit
card, or check, you may put the name either on your Vendor list or your Other Names
list.
See “Vendors” on page 45 and “Other names” on page 49 for more information.
Employee list
Use the Employee list for:
• Fast entry of name and address on checks
• Tracking time on timesheets
• Tracking sales income by employee
If you plan to use Aatrix Top Pay for payroll, see the Aatrix Top Pay documentation
included on your QuickBooks CD for setting up employee information.
See also “Employees” on page 48 for more information.
Chart of accounts
Your chart of accounts is your most important list. Use it to track how much money your
company has, how much money it owes, how much money is coming in, and how much
money is being spent.
Even if you chose a preset chart of accounts, you’ll probably want to add a few accounts,
delete a few accounts, or maybe just edit some accounts. If you didn’t choose a preset chart
of accounts, you’ll need to add all your accounts.
For more information, see Chapter 5, Your chart of accounts, starting on page 63.

To view the chart of accounts:

1 Choose Lists > Chart of Accounts.
2 To print the chart of accounts, choose File > Print List.
Review the printed chart of accounts with your accountant before making changes.
Item list
The Item list has information about the following:
• What your company sells (goods and services)
• Miscellaneous charges, payments, and discounts you enter on sales forms
• Sales tax you collect from customers
• What your company purchases for its own use
Use the Item list for:
• Fast entry of goods, services, and other charges on invoices, cash sales receipts, credit
memos, purchase orders, bills, checks, credit card receipts, and estimates
• Tracking sales quantity and income by item
• Tracking purchase quantity and costs by item
• Tracking inventory of goods you buy for resale
• Calculating and tracking sales tax collected
QuickBooks can track inventory only for finished goods purchased for resale. If you have
this kind of inventory, add inventory items to your Item list so that the value of your
inventory as of the start date is part of your overall assets on that date.
You may also want to add non-inventory goods you sell—or services you provide—to your
Item list now so that they are ready to use on sales forms.
For more information, see Chapter 6, Items—your products and services, starting on page 73.
Step 5: Enter opening balances

Entering an accurate opening balance for each balance sheet account as of your start date
is important for these reasons:
• An accurate opening balance gives you an accurate balance sheet and, therefore, a true
picture of your company’s finances: how much it owes and how much it owns.
• You can reconcile your QuickBooks bank accounts with your bank statements if you
start with an accurate balance as of a specific date. You won’t risk bouncing checks
because your QuickBooks checking account will reflect the amount of money actually
in the bank.
If possible, start from an accountant’s balance sheet. Determining your opening balances
will be easier if you have a balance sheet as of your start date to use as a guide as you enter
opening balances into QuickBooks. For many accounts, you can take the opening balance
from the balance sheet.
If you don’t have a balance sheet, calculate your opening balances. As you calculate
opening balances for each of your company’s balance sheet accounts, write them down to
use later when you enter the balances.
You can adjust opening balances for any account even after you’ve been using the account
for a while. If you’re eager to get started using QuickBooks, you can start using an account

now with an approximate balance. (Remember, the balances should be corrected at some
point!)
When you’re ready to correct the opening balance, see “Editing your opening balances” on
page 26.
Determining amounts for account opening balances

The following table lists the types of balance sheet accounts in QuickBooks and explains
how to determine the opening balance for each type.
Type of account How to determine the opening balance
Bank The opening balance for a QuickBooks bank account is the dollar amount you have in the bank on
your start date. You can determine this amount in two ways:
Examples:
Checking • Use your bank statement
Savings You can use the ending balance on the last bank statement before your start date. At some point,
Money fund you will need to enter into QuickBooks any transactions that occurred before your start date and
that do not appear on the statement you’re using or on any statement before that.
• Use a balance sheet
You can also use your bank account balance from a financial statement (ordinarily a balance sheet)
prepared by your accountant. Ideally, this would be a balance sheet prepared as of the end of a fis-
cal period, when your start date is that same date. (For example, if your start date is March 31, a
balance sheet dated March 31 would be best.)
Accounts Receivable After you enter the unpaid balance for each customer (or job) as of your start date (see page 22), the
(A/R) opening balance of your QuickBooks A/R account equals the sum of the customer balances.
Other Current Asset For an asset account, the opening balance is the worth of the asset as of your start date.
Fixed Asset For an asset account that tracks inventory of items you purchase for resale, the opening balance of the
account equals the sum of the values of each inventory item you have added to your Item list (see
Other Asset
page 24).
If you track depreciation, create two subaccounts called Cost and Accumulated Depreciation for each
fixed asset account. The opening balance of the Cost account is the purchase price of the asset; the
opening balance of the Accumulated Depreciation account is the total depreciation taken (a negative
number), as of your start date.
Accounts Payable After you enter the unpaid balance for each vendor as of your start date (see page 23), the opening
(A/P) balance of your QuickBooks A/P account equals the sum of the vendor balances.
Credit Card The opening balance for a credit card account is the dollar amount you owed on the card as of your
start date.
Use the ending balance on the last statement before your start date. Then enter any transactions that
occurred before your start date and that do not appear on the statement you’re using or on any state-
ment before that.
Other Current Do not enter a minus sign when you enter opening balances for liabilities. QuickBooks automatically
Liability recognizes that the balance represents money owed.
Long Term Liability For a sales tax payable account, the opening balance is the amount you owed as of your start date.
For a long-term or short-term loan, the opening balance is the loan balance as of your QuickBooks
start date.

Type of account How to determine the opening balance
Equity The equity in your business includes money you put into the company (your capital investment) plus
the sum of the retained earnings (the net profit or loss) for each year the company has been in busi-
ness.
When you enter your first opening balance, QuickBooks creates an equity account called “Opening
Bal Equity.” This account is a device to ensure that you can get a balanced balance sheet even before
you have entered all of your company’s assets and liabilities.
We recommend that most people regard the Opening Bal Equity account as a tool that QuickBooks
uses to get you started. It’s best to add one or more additional equity accounts to track your owner’s
investment and draws. (QuickBooks creates a retained earnings account automatically.)
Distribute earnings (or loss) from before your QuickBooks start date to the retained earnings account
QuickBooks set up for your company. See Chapter 18, Assets, liabilities, and equity, starting on
page 213.
Entering opening balances for unused accounts

If you’ve used a preset chart of accounts, you have many balance sheet accounts with no
opening balances. You can enter an opening balance easily as long as you have not yet used
the account in QuickBooks (for example, to record a check or deposit).
If the opening balance of an account is really 0.00 as of your start date, you don’t have to
enter any more information for that account.
To enter an opening balance for an unused balance sheet account:

2 Select the unused account, and then choose Edit from the Actions pop-down menu.
3 Enter the Opening Balance amount and “as of” date.
These fields are in

the Edit Account
window only if the
account is unused.
Otherwise, a register
is used.
4 Click OK.
Editing your opening balances

Once you’ve entered an opening balance, you can change the balance and the start date at
any time.
To edit the opening balance for an unused account:

2 Select the account you want to edit, and then choose Edit from the Actions pop-down
menu.
3 Change the Opening Balance amount and the start date, if necessary.

4 Click OK.
To edit the opening balance of an account in use:

2 Double-click the account whose opening balance you want to edit.
3 Find the “Account Opening Balance” transaction. It’s likely to be the first or nearly the
first transaction in the register.
.
You can edit an
account’s opening
balance by finding
the opening balance
transaction in the
register and
changing the
amount.
4 If you are changing your start date, change the date of the transaction to your new start
date.
5 Change the amount to the correct opening balance.
• In a bank account, change the amount in the Deposit column.
• In an asset, liability, or equity account, change the amount in the Increase column or
other appropriate column.
• In a credit card account, change the amount in the Charge column.
6 Click Record.
QuickBooks adjusts the account balance from the start date forward.
Opening balances for income and expense accounts

If you know your income and expenses for the year to date through your start date, enter
them in the General Journal Entry window. See “Adjusting for mid-year setup” on page 29.
If your start date is the end of your fiscal year, there is no need to enter any income and
expenses for the completed fiscal year. The net income for the year is company earnings.
QuickBooks has created an equity account, called Opening Bal Equity, that has all your
company equity, whether it’s from investments or earnings. You can move equity and
earnings to other equity accounts; see “Transferring money out of Opening Bal Equity” on
page 231.

Step 6: Set up payroll (optional)

If you have employees and need to run a U.S.-based payroll, Intuit provides Aatrix Top Pay
software. To access Aatrix Top Pay, choose Employees > Payroll.
Aatrix Top Pay processes your payroll, prints payroll checks, and lets you export payroll
data for import into QuickBooks so you can assemble your expenses and liabilities for
QuickBooks reports. Aatrix Top Pay is a standalone payroll program for which you need
to follow a separate setup procedure. For complete information on setting up payroll, see
the Aatrix documentation included on your QuickBooks CD.
Tax tables
Aatrix Top Pay comes with payroll tax tables and a tax table update service. To contact
Aatrix, see the Web address and phone number for “Aatrix Sales” on page 324.
Step 7: Enter optional adjustments
Adjusting for accrual basis

When you enter unpaid balances for customers, QuickBooks assigns the income to an
income account called Uncategorized Income. Similarly, when you enter unpaid balances
for vendors, QuickBooks assigns the expenses to an expense account called Uncategorized
Expenses.
If you keep your books on a cash basis (that is, you recognize income when you receive
payment), QuickBooks does not show these two accounts on your profit and loss statement
until payment occurs. This is what you expect. You do not need to make any adjustments.
However, if you keep your books on an accrual basis (that is, you recognize income when
you make the sale), QuickBooks shows these two accounts on a profit and loss statement
as of your start date. You may want to make an adjustment so that the income from all
invoices and the expenses from all bills before the start date are treated the same way,
regardless of whether payment has occurred. This adjustment is optional.
To adjust for Uncategorized Income:

2 Select the income account called Uncategorized Income, and then choose QuickReport
from the Actions pop-down menu.
3 If the report doesn’t list any amounts, change the Dates field to All.
4 Write down the total amount for all the customer opening balance transactions. (You
may have to scroll to the bottom of the report.)
5 Return to the Chart of Accounts window and double-click the account called Opening
Bal Equity.
6 In the empty transaction at the bottom of the register, enter a transaction.
• Enter your start date.
• In the Account field, choose Uncategorized Income.
• In the Increase field, enter the total amount from the Uncategorized Income Quick-
Report.

Enter your start date.
In the Account field, In the Increase field,

choose Uncatego- enter the amount.
rized Income.
7 Click Record.
To adjust for Uncategorized Expenses:

2 Select the expense account called Uncategorized Expenses, and then choose Quick-
Report from the Actions pop-down menu.
3 If the report doesn’t list any amounts, change the Dates field to All.
4 Write down the total amount for all the customer opening balance transactions. (You
may have to scroll to the bottom of the report.)
5 Return to the Chart of Accounts window and double-click account called Opening Bal
Equity.
6 In the empty transaction at the bottom of the register, enter a transaction.
• Enter your start date.
• In the Account field, choose Uncategorized Expenses.
• In the Decrease field, enter the total amount from the Uncategorized Expenses
QuickReport.
7 Click Record.
Adjusting for mid-year setup

If you are setting up with a mid-year start date (a date not at the end of your fiscal year)
and you know what your income and expenses are for the period from the beginning of the
fiscal year through the start date, you can enter an adjustment for them. Then you will have
an accurate profit and loss statement in QuickBooks for the period starting with the
beginning of the fiscal year and ending on any date after your start date.
If you do not make this adjustment for the current fiscal year, you will have to add the
income from your old records, covering the period up through the start date, to the income
in QuickBooks for the period beginning with the day after the start date. Similarly, you will
have to add the expenses from the old records to the expenses in QuickBooks.
Have ready a year-to-date profit and loss statement (also called an income statement) for
the current fiscal year, through your start date. If the names of the income and expense
accounts do not match those in your QuickBooks chart of accounts, be sure you know
which QuickBooks account is equivalent to each account on the statement.
To adjust income and expenses for midyear setup:

1 Choose Banking > Make General Journal Entries.
2 Enter your start date.

Midyear start date

Year-to-date net
profit
Income accounts
Expense accounts
3 In the first line of the Account field, enter Opening Bal Equity. In the Debit field, enter
your net year-to-date profit from the statement.
Important: If the amount is a loss, enter it in the Credit field instead. Do not enter a
minus sign. Your net year-to-date profit equals the sum of all your year-to-
date income minus the sum of all your year-to-date expenses.
4 For each income account on the statement, enter a new line.
• In the Account field, enter the name of the QuickBooks income account.
• In the Credit field, enter the year-to-date amount for that income account.
5 For each expense account on the statement, enter a new line.
• In the Account field, enter the name of the QuickBooks expense account.
• In the Debit field, enter the year-to-date amount for that expense account.
6 Click OK to record.
Distributing earnings and equity from before your start date

After you have entered all of your opening balances and made other adjustments, you may
want to move the amount in Opening Bal Equity to your other equity accounts. This is an
optional adjustment if you want to identify retained earnings or the equity of several
owners. For steps to transfer money out of Opening Bal Equity, see “Transferring money
out of Opening Bal Equity” on page 231.
Creating reports to check your adjustments

After you’ve made your adjustments, create a profit and loss statement and a balance sheet
to check that QuickBooks has the right numbers. For each report, the date range of the
report should match the fiscal year to date that ends with your start date.
• To create a profit and loss statement, choose Reports > Company & Financial > Profit &
Loss Standard.
• To create a balance sheet, choose Reports > Company & Financial > Balance Sheet
Standard.

Step 8: Customize preferences

QuickBooks has a number of preferences you can customize. For example, you can specify
whether you want to:
• Show the Reminders list when QuickBooks starts
• Use a customized format for sales forms, purchase orders, and estimates
• Automatically back up your company file every time you close it
For more information, see Chapter 22, Customizing preferences, starting on page 269.
Next steps
If your start date is earlier than today, you need to enter all the transactions that have
occurred after your start date. Your balances in QuickBooks will not be up to date until you
enter them. See Chapter 3, Entering historical transactions, starting on page 33, for more
information.
If your start date is today and you don’t plan to use payroll, you have finished setting up
your company!
When you’ve entered your opening balances as of your start date, you’re ready to record
regular transactions such as invoices, bills, and payments as they occur.
We encourage you to run reports often, to make sure your chart of accounts is set up in a
useful way and that you’re classifying transactions (using job tracking, class tracking, or
both) in a way that is helpful to your company. Of course, you can edit the chart of accounts
(or any other list) any time, but it’s easier to make changes when you’ve recorded only a
few transactions.


3 Entering historical transactions
Historical transactions overview 33

3
Entering sales and accounts receivable (A/R) transactions 34

Entering accounts payable (A/P) transactions 35
Entering payroll transactions 36
Entering bank and other transactions 36
Changing your start date 38
Historical transactions overview

If you’ve decided on a start date from the past, you’ll need to enter all historical transac-
tions from your start date through today.
After you enter your transactions from your start date up to today, you will have:
• Accurate balances in your bank accounts and all other accounts
• Ability to reconcile your bank statements with your QuickBooks bank account
• Accurate and up-to-date records of what customers owe you and what you owe to
vendors
• Accurate year-to-date profit and loss statement
• Accurate sales tax reports for any period after your start date
You must enter transactions in a specific order

There are two important guidelines to keep in mind as you enter historical transactions:
• You must enter transactions in your bank account last. This is because your accounts
payable and accounts receivable affect your bank account. You must do your bank
account last so that all you have to enter is anything that is still missing after you finish
accounts payable, accounts receivable, and payroll.
• You must enter bills from vendors before you enter your payments of those bills, so you
can tell QuickBooks which bills you are paying. Similarly, if you have received
payments from customers for invoices, you must enter the invoices before the
payments. Then you can tell QuickBooks which invoices are being paid.
This method ensures that QuickBooks knows which invoices and bills are paid in full,
which are partially paid, and which are not paid. As you record the payments (and the
deposit of customer payments), you’ll be updating your bank balance. Then you can fill in
any other transactions not previously recorded.
Entering current and historical transactions simultaneously

You can enter historical transactions at any time. You don’t have to enter all your past trans-
actions before you start using QuickBooks for your current transactions. Start now with
current transactions as they occur, so you don’t get behind. Then catch up with historical
transactions when you can. Remember, though, that your account balances will be off until
you’ve entered all the past transactions.
Entering historical transactions • 33

Important: If a current transaction is related to an earlier transaction, enter the earlier trans-
action first. For example, if you receive a payment today for an invoice you have
not yet entered, enter the invoice first and then use QuickBooks to record the
payment. That way, QuickBooks links your transactions correctly to each other,
and your records will be more useful.
Entering sales and accounts receivable (A/R) transactions

Enter past sales and A/R transactions before any past checking or bank transactions. As
you enter payments received from customers and then enter the deposit of such payments,
QuickBooks updates your bank balance.
You can enter sales and A/R transactions before or after accounts payable (A/P) or payroll
transactions.
Note: To put reimbursable expenses from bills on your historical invoices, enter A/P trans-
actions ahead of A/R transactions.
After you’ve entered the historical sales and A/R transactions from your start date to
today, the following data will be accurate:
• Records of what you sold during the period
• Customer balances as of today
• Records of which historical invoices are unpaid
Gathering information for sales and A/R transactions

If your business invoices customers and receives payment later, you will need the
following information:
• Copy of invoices written between your start date and today
• Copy of credit memos written during that period
• Record of payments received and refunds made during that period
• Record of deposits of customer payments made during that period
• Record of your sales tax payments made during that period
If your business receives payment at the time of sale, you will need the following infor-
mation:
• Record of what you sold between your start date and today, preferably grouped to
correspond with deposits of sales income made
• Record of deposits of sales receipts made during that period
Entering sales and A/R transactions

As you enter your sales transactions, enter the dates of the original transactions.
For invoices and cash sales, enter items in the Item field so QuickBooks can track your sales
income in the correct accounts. You may need to add items to your Item list as you work.
Note: If you are recording sales of inventory items, don’t worry if QuickBooks displays
messages saying you do not have enough items in stock. When you enter purchases
of inventory, QuickBooks will automatically adjust the quantities.
If you collect sales tax, see Chapter 10, Sales tax—track and pay, starting on page 153.
Enter your historical sales transactions in the following order:
34 • Entering historical transactions

• Invoices: In the Create Invoices window, enter a copy of each historical invoice written
between your start date and today. See Chapter 7, Tracking sales, starting on page 93.
• Cash sales: In the Enter Cash Sales window, enter the quantities of each item you sold
and received payment for at the time of sale. You may group the sales as you wish if
you don’t track sales by customer. If possible, group them so that the money received
from cash sales matches actual bank deposits. See Chapter 7, Tracking sales, starting on
page 93.
• Returns: In the Create Credit Memos/Refunds window, enter returns for sales
recorded previously. See “Recording a return” on page 139.
• Payments: In the Receive Payments window, record each payment received from a
customer for an outstanding invoice. Be sure that you apply the payment to the appro-
priate invoice, and that the Date field shows the payment date. If the payment was for
all or part of the customer’s open balance as of the start date, you’ll see a QuickBooks
invoice for that balance. See Chapter 8, Receiving and depositing payments, starting on
page 129.
• Deposits: Record each deposit of payments. In the Payments to Deposit window, select
all customer payments (whether for invoices or sales receipts) deposited on one date.
In the Make Deposits window, be sure the Date field shows the deposit date. See
“Depositing payments” on page 135.
• Payments of sales tax: In the Pay Sales Tax window, record each payment you made of
sales tax you collected. Be sure that you enter the amounts you actually paid the sales
tax agencies, and that the Date field shows the payment date. See “Paying sales tax” on
page 163.
After you record the sales tax checks, display your checking account register. Record
the correct number of each check in the Number field. See “Opening an account’s
register” on page 205.
• Purchase orders: In the Create Purchase Orders window, enter the quantity on order
for each item. See “Entering a purchase order” on page 201.
Entering accounts payable (A/P) transactions

Enter past A/P transactions before any past checking or bank transactions. As you enter
your bills and then enter the payment of these bills, QuickBooks updates your bank
balance.
You can enter A/P transactions before or after sales and A/R or payroll transactions.
After you’ve entered the historical bills and bill payments from your start date to today, the
following data will be accurate:
• Records of your billed expenses during the period
• Records of quantities and costs of inventory items purchased during the period
• Vendor balances as of today
• Records of which historical bills are unpaid
Gathering information for A/P transactions

You will need the following information to enter your A/P transactions:
• Copies of bills received between your start date and today
• Records of bill payments you made during that period

Entering A/P transactions

As you enter your A/P transactions, enter the dates of the original transactions. Enter your
historical bill transactions in the following order:
• Bills: In the Enter Bills window, enter a copy of each bill received between your start
date and today. Be sure to assign amounts to the correct expense accounts or track the
quantities and costs of items received. See “Entering a bill” on page 172.
• Credits from vendors
• Payments: In the Pay Bills window, record each bill payment you made between your
start date and today. Be sure the Payment Date field shows the payment date. See
“Paying bills” on page 175.
• Check numbers: After you record the checks, display your checking account register.
Record the correct number of each check in the Number field. See “Opening an
account’s register” on page 205.
Entering payroll transactions

Intuit provides Aatrix Top Pay software with QuickBooks. Aatrix Top Pay is a standalone
payroll program for which you need to follow separate instructions. To launch Aatrix Top
Pay, choose Employees > Payroll. See the Aatrix Top Pay documentation included on your
QuickBooks CD.
Entering bank and other transactions

When you enter A/P and sales transactions, QuickBooks automatically records the
following checking transactions:
• Checks you wrote to vendors to pay bills
• Deposits of customer invoice payments
• Deposits of cash sales receipts
Important: Don’t enter any checks or deposits “from scratch” unless you are sure they are
not among the transactions QuickBooks enters automatically. Otherwise, you
will end up with double payments or deposits.
To see what QuickBooks has already entered in your bank account, look in your Quick-
Books bank account register. Transactions in the register are in order by date.
After you’ve entered the remaining checks, deposits, fees, and other bank transactions
from your start date to today, you will have the ability to reconcile your bank statements
against your QuickBooks bank account, and the following data will be accurate:
• Balance in your QuickBooks bank account
• Profit and loss statement for this year to date
Gathering information for bank and other transactions

You will need the following information to enter your other transactions:
• Record of checks written (and other payments) between your start date and today
• Record of deposits you made during that same period
• Bank statements showing fees and other charges during that same period
• Credit card statements showing charges and payments made between your start date
and today

Entering bank transactions

Enter your historical bank transactions using the date each transaction actually occurred.
It doesn’t matter whether you enter checks before or after you enter deposits. Enter the
following transactions:
• Checks: In the Write Checks window, enter all miscellaneous checks written between
your start date and today. Do not duplicate bill payments QuickBooks has already
entered. Enter the actual check number in the No. field, and clear the To be printed
checkbox. See “Entering a check” on page 187.
If the check is for an expense, enter the expense account in the Account field in the detail
area. If it is a payment for a liability you track (for example, a loan), enter the liability
account in the Account field in the detail area. If the check is for the purchase of items
on your Items list, enter the item name in the Item field of the Items tab.
If you want to be able to reconcile your account, and your bank account opening
balance is from the statement prior to your start date, you probably have checks and
deposits for the period between that statement date and your start date. Be sure to enter
them so that your bank account balance will be correct.
• Deposits: In the Make Deposits window, enter all remaining deposits made between
your start date and today. Do not duplicate sales deposits QuickBooks has already
entered. See “Depositing payments” on page 135.
• Fees and transfers: In the bank register, enter any other fees or charges from your bank
statement. Also enter any transfers between bank accounts. See “Editing transactions
in a register” on page 208.
Entering credit card transactions

There are two ways you can enter historical credit card transactions.
If you pay your balance in full each month, you can simply record a check for each
payment.
• If you entered a balance for your credit card account as of your start date, the first check
should pay off that balance. In the Account field of the check, enter the name of the
credit card account.
• For checks written to cover credit card charges made between your start date and today,
split the amount of the payment among the various expense accounts it covers.
If you don’t pay in full each month, or if you know of charges that have not yet appeared
on your statement, use the Enter Credit Card Charges window to enter individual charges.
See Chapter 15, Credit card transactions, starting on page 193.
When you write a check to cover charges already entered in your credit card account (or
for the opening balance of that account), enter the name of the credit card account in the
Account field of the check. Don’t enter the expense accounts, because you are already
tracking expenses in the Enter Credit Card Charges window.
You can enter interest and other fees directly in the credit card account register.
Reconciling your bank account

Use QuickBooks’ reconcile feature to track which checks have cleared your bank. After
you’ve entered your checking transactions, it’s a good idea to reconcile your QuickBooks
register with each statement, one at a time, from the first statement after your start date to
your last statement. Then you’ll know that QuickBooks and your bank are in agreement.
See Chapter 19, Account reconciliation, starting on page 233.

Changing your start date

You may want to choose a different start date after you have already entered some of your
historical transactions, so you don’t have to enter so many “catch-up” historical transac-
tions, or you may want to track detail for an earlier period.
If you decide to change your start date to a later date:

1 For any balance sheet account that is missing historical transactions and does not have
the correct balance as of today, edit the opening balance transaction in the register for
that account.
Change the date to the new start date and enter the opening balance for the new start
date. See “Editing your opening balances” on page 26.
2 For the balance sheet account, delete all transactions in the register that are earlier than
the new start date.
Note: Do not delete any payroll transactions if you have already entered them correctly.
You may need to enter a balance adjustment to offset such payroll transactions,
so that the account balance is correct as of your start date.
3 If you have not yet entered historical payroll transactions, edit your payroll year-to-date
setup amounts to be correct for your new start date in QuickBooks and in Aatrix Top Pay
if you are using it.
4 (Optional) Adjust your year-to-date income and expenses for the beginning of your fiscal
year up through the start date.
See “Adjusting for mid-year setup” on page 29.
If you decide to change your start date to an earlier date:

1 Edit the opening balance transaction in the register for each balance sheet account.
See “Editing your opening balances” on page 26.
2 If you have payroll, edit your payroll year-to-date setup amounts to be correct for your
new start date.
3 Enter all missing historical transactions from your new start date to your old start date.
4 (Optional) Adjust your year-to-date income and expenses for the beginning of your fiscal
year up through the start date.
See “Adjusting for mid-year setup” on page 29. If you previously entered such an
adjustment and are moving back to the end of last fiscal year, delete the old adjustment.

4 Lists
Types of lists 39
4
Editing and deleting list items 54

Speeding up data entry with lists 55
Adding customized fields to lists 56
Keeping your lists organized 58
Printing, saving, or emailing a list 62
Types of lists
Chart of accounts
Your company’s chart of accounts tracks who owes you money, how much money you owe
(and to whom), what you’ve earned, and what you’ve spent.
You selected a preset chart of accounts (or set up your own) when you set up your Quick-
Books company. As you work with QuickBooks, you may discover that you need to add
accounts to the chart, or edit accounts on the chart. For more information, see Chapter 5,
Your chart of accounts, starting on page 63.
Items
Your list of items contains the services or items you buy and sell as well as the following
information about each item:
• description
• cost per unit or rate per hour, if applicable
• the income or expense account to which you want to assign income from the sale of the
item or the expense of purchases of the item
• quantity on hand for inventory items (if you have the inventory feature turned on)
Your Item list also contains special calculating items that calculate subtotals and discounts,
and that apply specific sales tax rates.
To view your Item list:

• Choose Lists > Items.
Lists • 39
Classes
Use classes to track your income and expenses — by department, business office, or
separate properties you own. For example, a contractor might classify income and
expenses as either “home” or “business” work. The contractor could then create subclasses
of “remodels,” “repairs,” and “new construction” under each of the two main classes.
At the end of a period, you can create a class report to show all income and expenses for
each of your classes.
You can also use jobs to track income and expenses; see the next section.
Important: For more information about using classes in your business, choose Help >
QuickBooks and Your Industry.
To turn class tracking on or off:

1 Choose Company > Company Settings, and then choose Transactions from the Show
pop-up menu.
2 Select or clear the “Use class tracking” checkbox, and then click Apply.
When class tracking is turned on, QuickBooks adds a Class field to the windows where
you enter sales, checks, bills, credit card charges, splits, and other transactions; and
A/R and customer registers.
To assign a class to a transaction:

• From a register, select a class from the pop-up menu in the Class field.
OR
• On a customized sales form or purchase order, assign classes to individual line items.
See “Customizing your sales form” on page 101 or “Customizing purchase orders” on
page 200 for details.
To see the class associated with a transaction from the register:

• Click in the register entry and click Splits or press x E (Edit).
To add a class:
1 Choose Lists > Classes, and then choose New from the Actions pop-down menu.
2 Enter the class name in the Class Name field.
3 If this is a subclass of another class, select the “Subclass of” checkbox and choose the
higher-level, or parent, class from the pop-up menu.
4 Click Next to enter another new class, or click OK.
Customers and jobs

Customers and jobs are displayed together on one list. Each job is associated with a
particular customer. You can use jobs to keep track of income and expenses for various jobs
you do for one customer, as well as income and expenses for each customer.
The colon (:) between Customer and Job on the name of this list is a reminder that you type
a colon between the name of your customer and the associated job when you’re entering a
customer and job name in a field. QuickBooks knows that the words preceding the colon
are the customer and the words following the colon are the job.
If your company never does more than one job per customer, or you do not want to track
individual jobs, you may not want to enter job names. For example, printers often refer to
40 • Lists
each customer order as a “job.” This type of job would not usually be added to the
Customer:Job list (an invoice would be used instead). However, a contractor who builds
several houses for a customer may wish to track each house as a job. If you don’t need to
track jobs, your Customer:Job list will contain customers only.
Viewing customer balances and other information

The Customer:Job list displays information for each job:
• The current balance owed to you by each customer
• The job status
• The amount of any existing estimate (QuickBooks Pro only)
The Balance column The Job Status column shows the job
shows the current status entered in the Add Job or Edit Job
balance owed by window.
each customer (and
for each job). If a job (or customer) has an estimate, the
Estimate Total column shows the
Actions pop-down amount of the estimate.
menu
To view the Customer:Job list:

• Choose Lists > Customer:Jobs.
Adding a new customer

To add a new customer:
1 Choose Lists > Customer:Jobs, and then choose New from the Actions pop-down menu.
2 Enter the customer’s name in the Customer field.
Enter the last name first if you’d like your list to be sorted alphabetically by last name.
The name you enter here is stored in your Customer:Job list. This name doesn’t print
on invoices, checks, or other forms, and is not exported for mail merge.
3 On the Address Info tab, enter any information you are interested in storing about the
customer.
The information you enter in these fields can be exported for mail merge. See “Selecting
names for mail merge” on page 292. The name and address in the address block prints
on invoices, checks, and other forms.
Note: When you enter an address, be sure to enter a ZIP code so that the address prints
correctly in mail merge documents and on forms.
• Fill in the Company Name field if the customer is a company.
• Enter the customer’s title, first name, middle initial, and last name.
• Enter the customer’s billing address. If the shipping address is the same as or similar
to the billing address, click Copy.
• Enter a contact name if necessary.
• Enter the customer’s phone and fax numbers.
• Enter an alternate contact if necessary.
4 On the Additional Info tab, enter any information you want to store for this customer.
Lists • 41
Select this checkbox

if you charge this
customer sales tax.
Enter the appropriate
See page 60 for more
tax item. See
information about
Chapter 10, Sales
inactive list items.
tax—track and pay,
starting on page 153.
• Enter the customer type and terms.

• Choose an employee’s initials in the Rep field to associate sales income from this
customer with a particular employee.
• (Optional) Fill in the Credit Limit field. QuickBooks remembers the limit and warns
you when the customer is about to exceed it.
• Select the Customer is taxable checkbox if appropriate, and select the appropriate tax
item from the Tax Item pop-up menu. Enter a resale number if one exists.
• Enter an amount in the Opening Balance field if one exists, and the corresponding as
of date.
• To add custom fields to track additional information, click Define Fields. See
“Adding customized fields” on page 56 for details.
5 (QuickBooks Pro only) On the Job Info tab, enter job information if you do not plan to
set up separate jobs for this customer.
You can change the
names for job status
in the Job Prefer-
ences window. See
“Job preferences” on
page 281.
Enter a new job type
if the one you want is
not in the list.
Type a colon after a
job type name to set
up a subtype for that
job type.
6 Click Next to enter another new customer, or click OK.
Adding a new job

To track information about a job, always choose the customer and job name in the
Customer:Job field.
42 • Lists
To add a job:
1 Choose Lists > Customer:Jobs.
2 Select the customer whom the job is for, and then choose Add Job from the Actions pop-
down menu.
3 Enter the job name in the Job Name field.
4 Edit the Address Info tab if the information for this particular job is different from the
information for the customer.
5 Click the Additional Info tab, and edit the information for this particular job if it is
different from the information for the customer.
6 (QuickBooks Pro only) Fill in the Job Info tab.
7 Click Next to enter another new job, or click OK.
Editing customers and jobs

To edit information about a customer or job:
2 Double-click the customer and/or job you want to edit.
3 Make any desired changes, and then click OK.
QuickBooks doesn’t automatically update the job status (for example, from In Progress
to Completed). You must change it yourself.
Keeping notes about a customer or job

Use notes to help track important dates and information for a customer or job. You can have
different notes about separate jobs for one customer.
To enter notes for a customer or job:

2 Double-click the Notes column next to the customer or job you’re interested in.
3 (Optional) Click Date Stamp to enter the current date in the notepad.
4 Enter notes about this customer or job in the notepad.
Each notepad holds roughly 10 windows’ worth of text. Use the Up and Down Arrow
keys to scroll through the text.
5 Click New To Do to add a note to the To Do List.
For more information, see “To Do notes” on page 54.
6 Click Print to print the notes for this customer or job.
7 Click OK.
After you enter notes for a customer or job, QuickBooks displays a notepad icon in the
Notes column next to that customer or job.
To enter notes from a customer’s record:

• From the Edit Customer or Edit Job window, click Notes.
Lists • 43
To enter notes from a transaction:

1 Display a transaction related to a customer, such as an invoice or payment, or select an
invoice or payment in the A/R register.
2 Choose Edit > Notepad.
Deleting customers and jobs

QuickBooks does not allow you to delete a customer or job if there are any transactions
associated with the customer or job. You must remove the customer or job from every asso-
ciated transaction.
Note: If you have existing transactions for a customer or job and want to delete the name,
consider merging the name with another name instead of deleting it. When you
merge, QuickBooks changes the name on all transactions. See “Merging list items”
on page 60.
To find transactions linked to a customer or job:

1 Choose Reports > Accountants & Taxes > Transaction Detail by Date.
2 Click Filters in the report buttonbar.
3 Change the transaction date range to All.
4 From the Add filters pop-up menu, choose Name.
5 In the Name pop-up menu, choose the customer or job name.
6 Click Apply.
QuickBooks displays a report of all transactions associated with the customer or job.
Customer types
The New Customer and Edit Customer windows have a Type field on the Additional Info
tab. Use this field to categorize each customer in a way that is meaningful and useful for
your business. Then you can create reports about the different types of customers you
serve.
For example, you could keep track of the industries your company serves, so you could
send special mailings to customers with special interests. Or perhaps you’d like to keep
your customer base diversified. This field can help you see what kind of customer does the
most business with you.
A doctor, dentist, or other health professional might use this field to record a patient’s
insurance company.
Note: For information about using customer types in your business, choose Help > Quick-
Books and Your Industry.
You can print mailing labels and statements sorted by customer type. For example, you
could send advertisements (or statements) to all high schools for whom you took gradu-
ation pictures.
You can further classify your customers by adding “subtypes.” For example, if you
currently use the Type field to record what industry your customers represent, you could
add a subtype indicating their geographical location.
44 • Lists
To add a customer type:

1 Choose Lists > Customer & Vendor Profile > Customer Type, and then choose New from
the Actions pop-down menu.
2 Enter the customer type in the Customer Type field.
3 If this is a subtype of another customer type, select the “Subtype of” checkbox and
choose the parent type from the pop-up menu.
4 Click Next to enter another new customer type, or click OK.
Job types (QuickBooks Pro only)

Job types are useful for grouping and totaling information on reports. Use job types for
classifying factors that are different from customer types. For example:
• A construction contractor may want to compare profits for job types such as kitchen
remodels, bath remodels, and decks. The contractor may classify customers as resi-
dential or commercial.
• A freelance writer may want to compare income from job types such as writing
business plans and writing brochures. The writer may classify customers as corporate,
startup, retail, or nonprofit.
When you have jobs classified by job type in the New Job or Edit Job window (page 43),
you can create reports that include all jobs of a specific type.
To add a job type:

1 Choose Lists > Customer & Vendor Profile > Job Type, and then choose New from the
Actions pop-down menu.
2 In the New Job Type window, enter the name for the new type, and then click OK.
Vendors
Use the Vendor list to record information about people or companies from whom you buy
goods and services. You select a vendor from the list when you create purchase orders,
enter bills you’ve received, pay bills, or record purchases you’ve made using a credit card.
When you write a check, the payee list also includes these vendors.
The Vendor list shows the current balance you owe each vendor.
If a vendor’s balance is higher than you expect, remember that item
receipt amounts are included in a vendor’s balance, even if you
haven’t received a bill for the items.
Actions pop-down
menu
Adding a new vendor

To add a new vendor:
1 Choose Lists > Vendors, and then choose New from the Actions pop-down menu.
2 Enter the vendor’s name in the Vendor field.
Lists • 45
Enter the name here

as you want to see it
on the Vendor list.
See page 60 for more

To print checks to a information about inactive
different name, enter list items.
it here.
3 On the Address Info tab, enter any information you want to store about the vendor.
names for mail merge” on page 292.
• Fill in the Company Name field.
• Enter the vendor’s title, first name, middle initial, and last name.
• Enter the vendor’s address.
• Enter a contact for this vendor if necessary.
• Enter the vendor’s phone and fax numbers.
• Change the name in the Print on Check as field if you want a name other than the
one in the Vendor field to print on checks.
4 On the Additional Info tab, enter any information you want to store.
Put your account

number here to print
it in the Memo field
on checks to this
vendor.
Enter this vendor’s
payment terms so
QuickBooks can tell
you when you earn a
discount for early
payment.
• Fill in the Account field.

QuickBooks puts this information in the Memo field of checks that pay bills from this
vendor. If you put your account number here, it will be on checks to this vendor.
• Enter the vendor type and terms.
• Fill in the Credit Limit field. Leave this field blank if you have no limit with this
vendor. Enter 0 if you have no credit with this vendor.
QuickBooks warns you when you are about to exceed the limit.
• If you are filing a 1099-MISC form for this vendor, fill in the Tax ID field.
If the vendor is a sole proprietor, enter the vendor’s social security number.
Otherwise, enter the vendor’s nine-digit tax identification number.
46 • Lists
• Select the Vendor eligible for 1099 checkbox if you might file a 1099-MISC form for
this vendor. See “1099 preferences” on page 284 for more information.
• Enter an amount in the Opening Balance field if one exists, and the corresponding as
of date.
• To add custom fields to track additional information, click Define Fields. See
“Adding customized fields” on page 56.
5 Click Next to enter another new vendor, or click OK.
Checking vendor addresses for 1099-MISC forms

If you file 1099-MISC forms, the information you enter on the Address Info for a vendor is
printed on the form. You may need to change how you have entered an address so that it
prints correctly on the form. Make sure that you have entered the vendor address in the
following way:
• the individual’s Name and the Company Name in the fields are the same as the indi-
vidual’s Name and Company Name in the block address
• the State is a two-letter abbreviation
• the ZIP code is included
• the Attn: line (if any) is on the line after the ZIP code
Note: QuickBooks warns you if the address you enter for a vendor is too long to fit in the
1099-MISC form’s address field.
For help on verifying 1099 information, choose Help > QuickBooks Help and click “1099s”
in the left column.
Keeping notes about a vendor

To enter notes from a transaction:
1 Display the Enter Bills window with the vendor’s name, or select a bill from the vendor
in the A/R register.
2 Choose Edit > Notepad.
To enter notes from the Vendor list:

1 Choose Lists > Vendors, and then double-click the vendor you want to edit.
2 Click Notes.
Each notepad holds roughly 10 windows’ worth of text. Use the Up and Down Arrow
keys to scroll through the text.
Deleting a vendor
QuickBooks does not allow you to delete a vendor if there are any transactions associated
with the vendor. You must first remove the vendor from every associated transaction.
To find transactions linked to a vendor:

1 Choose Reports > Vendors & Payables > Transaction List by Vendor.
2 Click Filters in the report buttonbar.
3 In the date range, choose All.
4 Click Apply.
Lists • 47
To delete an unused vendor:

• Choose Lists > Vendors, select the unused vendor, and then choose Edit > Delete Vendor.
Vendor types
The New Vendor window and Edit Vendor window have a Type field. Use this field to
classify your vendors by the type of service they perform or items they sell.
For instance, if you own a construction company, you might want to keep track of where
your subcontractors are located, so that you can use the closest ones to each job. You could
create a report for each geographical area. You can further classify your vendors by adding
subtypes.
You can also print mailing labels sorted by vendor type.
To add a vendor type:

1 Choose Lists > Customer & Vendor Profile > Vendor Types, and then choose New from
2 Enter the vendor type in the Vendor Type field.
3 If this is a subtype of another vendor type, select the “Subtype of” checkbox and choose
the “parent” type from the pop-up menu.
4 Click Next to enter another new vendor type, or click OK.
Employees
Use the employee list to store information about your employees, including each
employee’s name, social security number, address, and phone number. If you use Aatrix
Top Pay for your payroll, be sure the employee name is spelled exactly the same in Aatrix
Top Pay. Employee names in paycheck data imported from Aatrix Top Pay must match
your QuickBooks employee list.
To add an employee:
1 Choose Lists > Employees, and then choose New from the Actions pop-down menu.
2 Enter any information you want to store for an employee on the Address Info tab.
• Enter the employee’s title, first name, middle initial, and last name.
QuickBooks automatically records the employee’s initials. If your employees earn
commissions for items they sell, you can select an employee’s initials from the Rep
pop-up menu when entering a sale or estimate to give the employee credit. You can
then produce reports showing all sales for each employee.
• Enter the employee’s address.
• Enter the employee’s home phone number(s).
• Enter the employee’s social security number in the SS No. field.
• Enter Hired and Release dates when appropriate.
3 Click the Additional Info tab and fill in any custom fields, or click Define Fields to add
custom fields that track customer information, such as a birthday or spouse name.
See “Adding customized fields” on page 56 for information about custom fields.
4 Click Next to enter another employee, or click OK.
48 • Lists
Other names
When you enter a name in a field like the Received From field of the Make Deposits
window or the Purchased From field of the Enter Credit Card Charges window, Quick-
Books requires that the name be on a list. You’ll probably want to reserve the Customer:Job
list for customers you invoice; the Vendor list for vendors you track in A/P; and the
Employee list for company employees. Use the Other Names list for any other names or
names you rarely use.
To add a name to the Other Name list:

1 Choose Lists > Other Names, and then choose New from the Actions pop-down menu.
2 Enter the name in the Name field. Enter the last name first to be sorted alphabetically by
last name.
3 Enter any information you want to track.
• Fill in the Company Name field.
• Enter a title, first name, middle initial, and last name.
• Enter the address.
• Enter the phone and fax numbers.
4 Click Next to enter another name, or click OK.
When you enter a new name in the Write Checks or Enter Credit Card Charges windows,
you have the choice of adding the name to your Other Names list, your Vendor list, your
Customer list, or your Employee list.
Important: You can move a name from the Other Names list to the Vendor, Customer, or
Employee list, but you cannot move a vendor, customer, or employee to the
Other Names list.
To change an Other Name to a different name type:

1 Choose Lists > Other Names.
2 Double-click the name whose type you want to change.
3 Click Change Type.
4 Select the name type you want, and then click OK.
Note: Once an Other Name has been changed to a different type, the name cannot be
changed back to an Other Name or to any other type.
Terms
Payment terms indicate when you expect to receive payment from a customer or when
your vendors expect payment from you. Terms also indicate whether you or your vendors
give a discount for early payment.
QuickBooks accepts two types of terms:
• Standard terms, which are defined by the number of days until discount is earned and
payment is due. For example, if you expect payment from a customer within 30 days,
and you give a discount of 2% if you receive the payment within 10 days, the terms are
2% 10 Net 30.
Lists • 49
• Date-driven terms, which are defined by payments due on a specific day of the month,
with a discount if paid by a certain date. For example, you can set up payments to be
due by the 15th day of the month, with a discount if you are paid by the 1st.
Select terms from the pop-up menu when you are creating an invoice or entering a bill. If
your customer has earned a discount, or you’ve earned a discount from your vendor,
QuickBooks calculates the discount based on the terms of the bill or invoice. When you
receive payments or pay bills, you can click the Discount Info button to see and apply any
discounts earned.
To further speed up invoicing and bill entering, specify the payment terms for each
customer in the New/Edit Customer window and each vendor in the New/Edit Vendor
window. Then QuickBooks automatically enters terms for you in invoices and bills.
To add terms:
1 Choose Lists > Customer & Vendor Profile > Terms, and then choose New from the
2 Choose whether the terms are standard or date driven, and enter all the appropriate
information in the New Terms window.
If you choose date-driven terms, enter a number of days in the Due the next month...of
due date field. If the date of the invoice or bill and its due date are within the number
of days you enter, the invoice or bill is due the following month.
3 Click Next to enter more terms, or click OK.
Payment methods
The Payment Method list contains preset items such as Cash, Check, American Express,
MasterCard, and Visa.
When you receive a payment from a customer, you can select a payment method from the
pop-up menu. You can use payment method information later to sort deposits by payment
method to match the way your bank sorts deposits on its statements. When your Quick-
Books deposits match the deposits on your bank statement exactly, reconciling your bank
account with your statement is much easier. See “Separating deposits” on page 137 for
more information.
If you do not separate deposits, you probably do not need to use payment items.
To add a payment method:

1 Choose Lists > Customer & Vendor Profile > Payment Methods, and then choose New
2 Enter the payment method in the New Payment Method window.
3 Click Next to enter another payment method, or click OK.
Ship Via
The Ship Via list contains shipping methods such as Federal Express, UPS, US mail, DHL,
and Airborne Express. Select a shipping method from this list when you are entering a sale.
50 • Lists
To add a shipping method:

1 Choose Lists > Customer & Vendor Profile > Ship Via, and then choose New from the
2 Enter the name of the shipping method in the New Shipping Method window.
3 Click Next to enter more shipping methods, or click OK.
Customer messages
Use the customer messages on this list to inform or remind your customers. Select a
message from the Customer Message pop-up menu at the bottom of an invoice, cash sale
receipt, or credit memo that you print for a customer.
To add a customer message:

1 Choose Lists > Customer & Vendor Profile > Customer Messages, and then choose New
2 Enter the message, and then click OK.
Purchase orders
The Purchase Orders list shows all purchase orders you’ve created in chronological order,
including the vendor, date of the PO, and the PO number.
To view the Purchase Orders list:

1 Choose Vendors > Purchase Order List.
2 To see only open purchase orders, choose Show Only Open Purchase Orders from the
Memorized transactions
You can memorize many QuickBooks transactions that reoccur, such as a monthly lease
payment or a quarterly tax deposit.
Note: You cannot memorize the following transactions: receipt or deposit of payments, bill
payments, time records, and sales tax payments.
Once you memorize a transaction, you can recall it from the Memorized Transaction list,
which contains the name you’ve given the transaction, the type of transaction (for example,
check, invoice, or bill), the amount, and how often you want to be reminded to use the
transaction (if at all). You can even have QuickBooks automatically enter the transaction for
you at intervals you specify.
To memorize a transaction:
1 Create a transaction, such as a check, bill, invoice, statement charge, or credit card
charge.
If you create a check, bill, invoice, or credit card charge, do not click OK. If you create
a statement charge, click Record.
2 Choose Edit > Memorize.
QuickBooks names the transaction in the Memorize Transaction window, but you can
change the name.
3 Choose how you want QuickBooks to treat the transaction.
Lists • 51
• Click Remind Me to have QuickBooks remind you about this transaction. Select how
often you want to be reminded, and enter the next date on which you want Quick-
Books to remind you.
• Click Don’t Remind Me if you don’t want QuickBooks to remind you of this trans-
action.
• Click Automatically Enter to have QuickBooks automatically enter this transaction
for you. Indicate how often you want the transaction to be entered, the next date on
which you want QuickBooks to enter the transaction, the number of transactions
that are remaining to be entered, and how many days in advance of the next date you
want QuickBooks to enter the transaction.
• Click With Transactions in Group to have QuickBooks remind you of this transaction
with others in the group that you specify.
4 Select the Add to iCal checkbox to add a reminder to iCal (see page 98 for more infor-
mation).
5 Click OK.
QuickBooks adds the transaction to the Memorized Transaction list.
Note: QuickBooks does not memorize the date or printing status.
To recall a memorized transaction:

1 Choose Lists > Memorized Transactions.
2 Select the transaction you want to use, and then choose Use from the Actions pop-down
menu.
QuickBooks opens the appropriate transaction window and enters the memorized
information.
3 Make any changes or additions to the transaction, and then click OK.
QuickBooks automatically fills in the current date and increments the number based on
the last transaction you entered of this type.
To change an existing memorized transaction:

2 Select the memorized transaction you want to change and choose Use from the Actions
pop-down menu.
3 Make any changes to the transaction that you want.
4 Press x +.
QuickBooks alerts you that a memorized transaction for this name already exists.
5 Click Replace to copy over the old memorized transaction with your changes, click Add
to add a new memorized transaction, or click Cancel to leave the memorized trans-
action as it is.
Memorized transaction groups

You can group several memorized transactions together if you usually record several trans-
actions on the same day. Here are two examples:
52 • Lists
Example 1
You memorize your rent payment check, your vehicle insurance payment check, and an
invoice for a monthly standing order from a customer. Each of these transactions occurs
monthly just a couple of days before the end of the month. You could group them together
in a group called “End of month,” and have QuickBooks remind you to recall the memo-
rized transactions on the same day each month, or have QuickBooks enter the transactions
automatically.
Example 2
You own a health club. Twice a year, you send a billing statement to every member of your
club for membership dues. You could memorize each person’s billing statement; then
group them all together on your Memorized Transaction list, and have QuickBooks remind
you when it’s time to recall and print all the membership billing statements.
To create a memorized transaction group:

1 Choose Lists > Memorized Transactions, and then choose Make New Group from the
2 Enter the name of the new group.
3 Choose how you want QuickBooks to treat the transaction group.
• Click Remind Me to have QuickBooks remind you about this transaction group.
Select how often you want to be reminded, and enter the next date on which you
want QuickBooks to remind you.
• Click Don’t Remind Me if you don’t want QuickBooks to remind you of this trans-
action group.
• Click Automatically Enter to have QuickBooks automatically enter this transaction
group for you. Indicate how often you want the transaction group to be entered, the
next date on which you want QuickBooks to enter the transaction group, the number
of transactions that are remaining to be entered, and how many days in advance you
want QuickBooks to enter the transaction group.
4 Click OK.
To change an existing memorized transaction in a transaction group:

2 Select the memorized transaction you want to change, and then choose Use from the
3 Make any changes to the transaction that you want.
4 Press x +.
QuickBooks alerts you that a memorized transaction for this name already exists.
5 Click Replace to copy over the old memorized transaction with your changes; click Add
to add a new memorized transaction; or click Cancel to leave the memorized trans-
action as it is.
6 Select the old memorized transaction and press x D.
7 Select the changed transaction, and then choose Edit from the Actions pop-down menu.
8 Select “With Transactions in Group” and choose the group name in the Schedule Memo-
rized Transaction window.
QuickBooks adds the changed transaction back to the group.
Lists • 53
To Do notes
You can enter notes to remind yourself of tasks to complete by a certain date, or about
upcoming events, such as a lease expiration. View the To Do list at any time, or use the
Reminders list to see which notes are currently due when you start QuickBooks.
To add a note to the To Do list:

1 Choose Company > To Do List, and then choose New from the Actions pop-down menu.
2 Enter the note and the reminder date in the New To Do window.
3 Select the Add to iCal checkbox to add a reminder to iCal (see page 98 for more infor-
mation).
4 Click Next to enter another To Do note, or click OK.
QuickBooks sorts the current and past due To Do notes by date, and sorts completed To
Do notes at the bottom of the list.
Reminders
Display the Reminders list whenever you want to see which transactions or tasks you need
to take care of now or in the near future. You can set up the Reminders list to show you the
information you need. For information about customizing the Reminders list for your
company, see “Reminder preferences” on page 271.
To display the Reminders list:

• Choose Lists > Reminders.
Editing and deleting list items
Editing or renaming list items

When you rename a list item, QuickBooks modifies all existing transactions containing the
item. If you don’t want to change existing transactions, add a new item instead of renaming
an existing one.
To edit or rename a list item:

1 From the Lists, Customers, or Vendors menu, choose the list containing the item you
want to rename.
2 Select the item from the list, and then choose Edit from the Actions pop-down menu.
3 Type in the new name and make any other desired changes, and then click OK.
Deleting list items

You can delete only list items that are not used in any transactions. Use the Find command
to locate the transactions in which the item you want to delete is used, so that you can
delete it from its list. See “Finding a specific transaction” on page 210 for more information.
54 • Lists
To delete a list item:

want to delete.
2 Select the item from the list, and then choose Edit > Delete [item name], where [item
name] is the type of item you are deleting. For example, if you are deleting a vendor from
the Vendor list, the menu item will be named Delete Vendor.
Unused items can be removed when you condense your QuickBooks data. See
“Condensing data” on page 293 for more information.
Maximum number of items

Each list in QuickBooks has a maximum number of items it can contain.
List type Item Limit
Chart of Accounts 10,000
Classes 10,000
Terms 10,000
Payment Methods 10,000
Shipping Methods 10,000
Name Types (all name types together) 10,000
Customer Messages 10,000
Memorized Transactions 30,000
Items (including inventory items) 16,000
Total names (employees, customers, vendors, and other names) 16,000
Speeding up data entry with lists
QuickFill
When you click in a field where you’ll use a list item (for example, the Vendor field in the
Enter Bills window), start typing the item’s name. QuickFill™ completes the entire item as
you type the beginning letters.
Pop-up menus
Every field that can be filled with a list item has an Arrow button next to it. Click the Arrow
to see the list, and then click the item you want to fill in the field.
You can also start typing letters in the field to filter the list:
Lists • 55
This example shows the Customer:Job field in the Create

Invoices window. First, click the Arrow button to see the
complete list of items available.
If you type the letter ‘c’ in the field, the list

shortens, showing only those items starting
with the letter ‘c’.
If you then type the letter ‘e’, the list gets shorter
still, showing only those items starting with the
letters ‘ce’.
To re-display the original list of items, press the
Delete key to empty the field.
Using keystrokes to display lists

At any field that can be filled with a list item, press x L to display the appropriate list.
Select the item you want to use in the list (by using the arrow keys, the mouse, or by typing
the first letters of the item), and then choose Use from the Actions pop-down menu.
Adding customized fields to lists
Adding customized fields

Customized fields let you associate information specific to your business with customers,
employees, vendors, and items. For example, you can add fields such as the following:
• Pager number, cell phone number, or website (for vendors and employees)
• Birthday or email address (for customers)
• Unit of measurement (for items)
• Color (for items)
You can record the information just for your use, or you can make it appear on your Quick-
Books sales forms, estimates, or purchase orders. For example, you may want to add a field
to the top of your invoices for a patient’s health insurance plan, or add a column to your
invoices or purchase orders for an item’s color.
QuickBooks remembers the information you entered in customized fields when you
import and export, and when you memorize transactions.
If you change a customized field later, QuickBooks remembers the data you entered in that
field. For example, if you are using a customized field for customers called Region that
contains information like Northeast and South, and you decide to rename the field State
and enter new information (for example, Maine and Georgia), QuickBooks still has a record
of the information you originally entered in the field. QuickBooks also retains the data you
entered in a field, even if you turn off the field.
56 • Lists
You can add customized fields to the customer, vendor, employee, and item setup
windows. Then when you add to (or edit) any of these lists, you can fill in the information
for the customized fields.
You can add fields for customers, vendors, and employees all at the same time. You must
add fields for items separately.
To add customized fields for customers, vendors, and employees:

1 Choose Lists > Customer:Jobs, Vendors, or Employees, and double-click a name.
2 Click the Additional Info tab.
3 Click Define Fields.
4 For each field you want to add, enter a name in the Label field, and select the lists in
which to use the field.
You can add up to seven fields each for customers, vendors, and employees, including
fields that overlap. For example, if you add a customized Birthday field for
customers:jobs, vendors, and employees, QuickBooks counts it as one field used for
each.
You cannot add more than 15 fields altogether for all three lists.
5 Click OK.
6 Fill in the fields, and then click OK.
To add customized fields for items:
1 Choose Lists > Items, and double-click an item.
2 Click Custom Fields.
3 Click Define Fields.
4 For each field you want to add, select the “Use” checkbox, and enter a name in the Label
field.
You can add up to five customized fields for all the service, inventory part, non-
inventory part, and other charge items on your Item list.
5 Click OK.
QuickBooks adds the field(s) to the Custom Fields window.
6 Fill in the fields to record the information for this item.

7 Click OK.
Using customized fields

After you add customized fields, you can customize your forms to include these fields. You
can add customer:job fields to the top of sales forms and estimates, vendor fields to the top
of purchase orders, and item fields as columns to sales forms. See “Customizing your sales
form” on page 101, “Customizing your estimates” on page 172, and “Customizing
purchase orders” on page 200 for more information.
Lists • 57
QuickBooks prefills customized fields on a form with information you’ve already entered
for the customer:job, vendor, or item. If you change the name of a customized field, the
name also changes on the sales forms, estimates, or purchase orders where you have used
the field.
Removing customized fields

To remove a customized field you have already added to sales forms, estimates, or
purchase orders, first remove the customized field from the forms. Then display the
window where you added the field and clear the checkbox for it. (You can leave the name.)
Keeping your lists organized

QuickBooks offers several ways to keep your lists organized. For a summary of list organi-
zation features, see page 62.
Arranging lists manually

To manually arrange a list:
1 Move your cursor over the small blue dot in front of the list item you wish to move.
The cursor changes to a two-way arrow.
A manually- If you see a gray dot instead of a
arranged list blue one to the left of the item,
choose Show Sorted List from the
This example shows Actions pop-down menu.
‘the blue dot to the
left of Union Dues”
being dragged to the
left to make it at the
same level as “Dues
and Subscriptions.”
Actions pop-down
menu
2 Drag the item up, down, left or right to its new location.
You can move subitems independently; that is, you can move a subitem up or down
from one main item to a different main item.
• To move a list item and its subitems, drag the main item.
• To make a subitem a main item, drag it to the left.
• To make a main item a subitem, drag it to the right.
• To make a subitem of a subitem, drag the item further to the right.
When you manually arrange a list, the list appears in that custom order in any window that
uses it; for example, if you manually arrange the Customer:Job list, the Customer:Job pop-
up menu on the Create Invoices menu will appear in the same order.
58 • Lists
Sorting lists by column

To sort a list by column:
• Click any column header to sort the list by that column in ascending order; click the
header again to sort in descending order.
A column-sorted list Note the Name column is shaded
in hierarchical view blue, and the triangle indicates the
sort is in ascending order. Click the
This shows the same Name header again to sort in
list from the previous descending order.
section, with the
Name column
header clicked once.
The gray dots to the left of the items
show that this is a column-sorted
Actions pop-down list.
menu
Displaying a list in flat or hierarchical view

All lists by default are displayed in hierarchical view — that is, subitems are indented and
listed directly below their corresponding “parent” item.
You can also display lists in flat view — which lists items without indentation.
To display a list in flat or hierarchical view:

1 From the Lists, Customers, or Vendors menu, choose the list you’d like to change.
2 Choose either Flat View or Hierarchical View from the Actions pop-down menu.
A column-sorted list
in flat view
This shows the same
list from the previous
section, with Flat
View chosen from
the Actions pop-
down menu.
Toggling between a manually-rearranged and column-sorted list

You can switch (or “toggle”) between a manually-rearranged and column-sorted list, for
maximum flexibility in organizing your lists.
To toggle between a manually-rearranged and column-sorted list:

1 From the Lists, Customers, or Vendors menu, choose the list for which you’d like to
toggle views.
2 Choose Show Sorted List from the Actions pop-down menu; choose Show Sorted List a
second time to toggle to the other view.
Lists • 59
Reverting lists to their default sort order

1 From the Lists, Customers, or Vendors menu, choose the list for which you’d like to
revert to its default sort order.
2 Choose Edit > Re-sort List.
The list reverts back to its default sort order that shipped with QuickBooks.
Merging list items

In most lists, you can combine two list items into one. For example, you may find that
you’ve been using two customers (because of different spellings) when you really need
only one on your Customer:Job list.
Important: Merging list items is irreversible.
To combine existing list items:

1 Display the list with items you want to merge.
2 Select the list item whose name you don’t want to use, and then choose Edit from the
3 Change the list item name to be the same as the item you’re combining with.
4 Click OK.
5 Click Yes to confirm that you want to merge the two list items.
Hiding inactive list items (QuickBooks Pro only)

You can “hide” inactive items so they do not appear in lists. This can make it easier to scroll
through, and select from, very long lists.
To mark a list item as inactive:

want to make inactive.
2 Select the item from the list, and then choose Make Inactive from the Actions pop-down
menu
OR
Control-click the item from the list, and then choose Make Inactive.
To hide inactive items in a list:

1 From the Lists, Customers, or Vendors menu, choose the list containing the items you
want to hide.
2 Clear the Include inactive checkbox.
Clearing the Include inactive checkbox hides all inactive items; selecting the Include
inactive checkbox displays inactive items in gray.
60 • Lists
Notes:
• When you mark a list item as inactive, it is hidden in any windows that use that list. For
example, an inactive item from the Items list will be hidden in the Item pop-up menu
in the Create Invoices window (Customers > Create Invoices).
• Inactive list items still appear in reports and transactions.
• When you mark an item as inactive, its subitems are also marked inactive.
• To make an inactive item active again, select the Include inactive checkbox from its list,
Control-click the item from the list, and then choose Make Active.
If you mark Fred
Ahl’s kitchen job as
inactive, it is shown
in gray on the
Customer:Job list if
the Include inactive
checkbox is
selected...
...or completely
hidden if the Include
inactive checkbox is
not selected.
An inactive list item no longer appears in any

windows that use that list; in this example,
Fred Ahl’s kitchen job does not appear in the
Customer:Job pop-up menu in the Create
Invoices window.
Lists • 61
Summary of list organization features

Sort by Mark item
Arrange Levels of Merge
List type column as inactive
manually subitems items
(Pro only) (Pro only)
Lists > Chart of Accounts Yes Yes Yes 4 Yes
Lists > Items Yes Yes Yes 4 Yes
Lists > Classes Yes Yes Yes 4 No
Lists > Customer:Jobs Yes Yes Yes 4 Yes
List > Vendors No Yes Yes 0 Yes
Lists > Employees No Yes Yes 0 Yes
Lists > Other Names No Yes Yes 0 Yes
Lists > Customer & Vendor Profile > Customer Types Yes Yes Yes 4 No
Lists > Customer & Vendor Profile > Vendor Types Yes Yes Yes 4 No
Lists > Customer & Vendor Profile > Job Types Yes Yes Yes 4 No
Lists > Customer & Vendor Profile > Terms No Yes Yes 0 No
Lists > Customer & Vendor Profile > Customer Messages No Yes Yes 0 No
Lists > Customer & Vendor Profile > Payment Methods No Yes Yes 0 No
Lists > Customer & Vendor Profile > Ship Via No Yes Yes 0 No
Lists > Memorized Transactions Yes Yes No 1 No
Company > To Do List No Yes Yes 0 No
Company > Reminders No No No 0 No
Vendors > Purchase Orders No Yes No 0 No
Printing, saving, or emailing a list

To print a list:
1 From the Lists menu, choose the list you want to print.
2 Choose File > Print List.
To save a list as PDF:

1 From the Lists menu, choose the list you want to save as PDF.
2 Choose File > Print List, click the PDF button, and then choose Save As PDF.
To email a list as PDF (QuickBooks Pro only):

1 From the Lists menu, choose the list you want to email as PDF.
2 Choose File > E-Mail List as PDF.
To save a list as text:

1 From the Lists menu, choose the list you want to save as text.
2 Choose File > Save List as Text.
For more information, choose Help > QuickBooks Help, click “Printing” in the left column,
and then click Lists.
62 • Lists
5 Your chart of accounts
Chart of accounts overview 63

5
Adding new accounts 66

Entering opening balances for accounts in use 68
Editing opening balances 69
Editing account information 70
Deleting an account 70
Using account numbers 70
Keeping your chart of accounts organized 71
Changing an account’s color 71
Merging existing accounts 71
Printing your chart of accounts 71
Chart of accounts overview

QuickBooks’ accounts are highly flexible and easy to use. You can name accounts using
your own words, and arrange them in any order that is useful for your company.
Note: When you set up your company using the New Company Setup Assistant interview,
QuickBooks automatically customized the chart of accounts for your industry.
Every chart of accounts has two kinds of accounts:
• Balance sheet accounts
• Income and expense accounts
Your chart of accounts • 63

For more information on working

with lists, see Chapter 4, Lists,
Balance sheet
accounts
Income and expense

accounts
Actions pop-down
menu
Understanding balance sheet accounts

Balance sheet accounts include assets, liabilities, and equity.
• Assets are money and things you own.
• Liabilities are your debts: money you owe.
• Equity is the worth of your company.
Assets include furniture or equipment your company owns, money it has in the bank, and
even money it is owed by customers (accounts receivable).
A balance sheet report shows how much your business is worth by subtracting all the
money your company owes (liabilities) from everything it owns (assets). The result is what
your company is worth: your business’s equity.
Balance sheet account balances (for example, a checking account balance) are not viewed
over a period of time, since they can increase or decrease day to day. Their balances are
always referred to as of a specific day.
In QuickBooks, each balance sheet account has its own register, just like your check register.
The register shows every transaction for that account, as well as the account balance. For
example, the register for accounts payable shows every bill, every payment, and the total
amount outstanding.
The following table describes the types of balance sheet accounts.
QuickBooks
Use to track
account type
Bank Transactions in checking, savings, and money market accounts. Add one bank account for each
account your business has at a bank or other financial institution. You can also use this type of
account for petty cash.
Accounts Receivable Transactions between you and your customers, including invoices, statement charges, payments from
(A/R) customers, deposits of customer payments, refunds, and credit memos. QuickBooks automatically
creates an A/R account when you first create an invoice or statement charge.
64 • Your chart of accounts

QuickBooks
Use to track
account type
Other Current Asset Assets that are likely to be converted to cash or used up within one year, such as petty cash, the value
of your inventory on hand, notes receivable due within a year, prepaid expenses, and security depos-
its.
Fixed Asset Depreciable assets your business owns that aren’t liquid (not likely to be converted into cash within a
year), such as equipment, furniture, or a building.
Other Asset Any asset that is neither a current asset nor a fixed asset, such as long-term notes receivable.
Accounts Payable Your business’s outstanding bills. When you first enter a bill, QuickBooks automatically creates an A/
(A/P) P account.
Credit Card Credit card transactions.
Other Current Liabilities that are scheduled to be paid within one year, such as sales tax, payroll taxes, accrued or
Liability deferred salaries, and short-term loans. Some businesses include the current portion of long-term lia-
bilities in this kind of account.
Long Term Liability Liabilities such as loans or mortgages scheduled to be paid over periods longer than one year.
Equity Owner’s equity, including capital investment, draws, and retained earnings. When you create a new
company, QuickBooks creates a retained earnings account. When you enter balance sheet accounts,
QuickBooks adds an equity account called Opening Bal Equity to help balance your books as you set
up. You’ll probably want to add your own equity accounts.
Balances for balance sheet accounts

The Chart of Accounts window shows a balance for each balance sheet account (except for
the special equity account, Retained Earnings). The balance is the ending balance after all
transactions that affect the account are included.
• To print the entire chart of accounts, with balances for the balance sheet accounts,
choose File > Print List.
• To see a register (like your checkbook register) that shows all transactions that affect the
balance of a particular account, double-click the account.
• To see a report that shows all your balance sheet accounts with their balances, choose
Reports > Company & Financials > Balance Sheet Standard.
Understanding income and expense accounts

Income and expense accounts track the sources of your income and the purpose of each
expense. When you record transactions in one of your balance sheet accounts, you usually
assign the amount of the transaction to one or more income or expense accounts. For
example, not only do you record that you took money out of your checking account, but
you keep track of what you spent the money on: utilities, advertising, or office supplies, for
example.
Income and expense account balances accumulate over one year. At the beginning of a
fiscal year, reports show income and expense account balances starting again at zero. You
can use a profit and loss report to compare how much you make and spend on specific
items this year to how much you made and spent on those items last year.

Balances for income and expense accounts

QuickBooks does not display a balance for income and expense accounts in the chart of
accounts.
To see income and expense account detail:

• Choose Reports > Company & Financials, and then select a Profit & Loss report.
OR
• Select the income or expense account in the Chart of Accounts window, and then choose
QuickReport from the Actions pop-down menu.
Cost of goods sold accounts

The account type “cost of goods sold” (or COGS or cost of sales) is usually grouped with
income and expense accounts, even though it is a separate account type. Many businesses
have one cost of goods sold account, which is similar to an expense account. COGS
contains all expenses that are direct costs of your sales, such as materials for a job or
inventory. When you use inventory items to track purchases and sales of inventory, Quick-
Books automatically calculates the COGS every time you sell an item.
In reports, your COGS accounts always appear after income accounts and before any other
expense accounts, so you can see what your net income is before subtracting your
business’s indirect expenses, such as utilities or office supplies.
Automatically created accounts

During your work with QuickBooks, the program creates certain accounts automatically
when you need them. Following are the automatically created accounts and the situations
in which they’re created.
Adding new accounts

You can add to your Chart of Accounts list at any time. As you become more familiar with
your company’s finances, you may decide you need to add more accounts or divide an
account into subaccounts to track specific income and expenses. You may also need to add
a balance sheet account if you open a new bank account or get a new credit card.
Name Account Type This account is automatically created when
Sales Tax Other Current You create a new company and answer “Yes” to the question about charging
Payable Liability sales tax. If you answer “No”, QuickBooks creates this account later if you
ever use sales tax on an invoice.
Undeposited Funds Other Current Asset You first receive an invoice payment or cash from a cash sale. Undeposited
Funds holds money you’ve collected until you deposit it in a bank account.
Accounts Receivable Accounts You create an invoice for the first time.
Receivable
Accounts Payable Accounts Payable You first enter a bill.
Purchase Orders Non-Posting You first create a purchase order or estimate. These accounts do not affect your
balance sheet or income statement.
Estimates

Name Account Type This account is automatically created when
Opening Bal Equity Equity You first enter balance sheet account opening balances. This account is used
by QuickBooks to help set up your accounts correctly.
Retained Equity You set up a new QuickBooks company.

Earnings
Uncategorized Income You enter opening balances for customers.

Income
Uncategorized Expense You enter opening balances for vendors.

Expense
Inventory Asset Other Current Asset You first add an inventory item.
Cost of Goods Sold Cost of Goods Sold You first add an inventory item.
To add a new account:

1 Choose Lists > Chart of Accounts, and then choose New from the Actions pop-down
menu.
2 Choose the account type from the Type pop-up menu.
3 Enter the account’s name or number.
4 Enter an account description.
5 Enter a note or bank number for this account.
6 If this account is a subaccount, select the Subaccount of checkbox. From the pop-up
menu, select the higher-level or parent account for this subaccount.
For example, if your business has high advertising expenses, you might decide to
divide your advertising expense account into several subaccounts, such as Newspaper
Ads, Signs, Yellow Pages Listing, and Direct Mailings. For more ways to use subac-
counts, see the next section, “Special uses for subaccounts” on page 68.
7 If this account will be used for reimbursable expenses, click the Track reimbursed
expenses in checkbox.
This field appears only if you have the Track reimbursed expenses as income checkbox
selected in the Sales/Invoicing Preferences window. See “Sales and invoicing prefer-
ences” on page 275.
8 Choose the income tax line to associate with this account from the Tax Line pop-up
menu. If this is not a tax-related account, choose <Not tax related>.
Check with your accountant if you are not sure which account to associate with each
tax line.
The type of tax form you chose in the New Company Setup Assistant interview or
Company Information window determines the income tax lines that QuickBooks
displays in the pop-up menu. For example, if you specified that you file the Form 1040,
you could associate an automobile expense account with the Schedule C: Car and truck
expenses tax line.
When you fill out your tax forms, you can use QuickBooks to create reports that show
the amount associated with each tax line.
Important: Occasionally, the government changes the information required on IRS tax
forms and schedules. Make sure that you have the latest tax information by
consulting IRS publications. Intuit provides an updated list of tax forms in
TurboTax® (Windows only).

9 If this account type has an Opening Balance field, enter the amount as of your start date,
and enter the start date in the “as of” field.
For detailed information about determining an existing account’s opening balance, see
“Step 5: Enter opening balances” on page 24.
If the account is brand new, its opening balance should be 0. For example, if you open
a new savings account by transferring $500 from your checking account, enter an
opening balance of 0 here. Then record a $500 check with the new savings account in
the Account field.
You can leave this field blank now and enter the opening balance at a later date. See
“Entering opening balances for accounts in use” on page 68.
10 Click Next to create another new account, or click OK.
Special uses for subaccounts

You can use subaccounts when arranging income and expense accounts. Subaccounts are
also helpful for some balance sheet accounts, such as setting up a joint checking account.
Setting up a joint checking account

To set up a joint checking account:
1 Add the main checking account to your chart of accounts.
See “Adding new accounts” on page 66. Do not enter an opening balance.
2 Add a subaccount for each person who uses the checking account.
You might call the subaccounts something like “John–checking” and “Sue–checking.”
Enter each person’s opening balance as of the start date.
Record the transactions for each person in his or her subaccount. For example, if you look
at Sue’s register, you see the checks she wrote and deposits she made. In the main account’s
register, QuickBooks combines the information from each subaccount. When you look at a
register for the main account, you see the checks Sue wrote and the checks John wrote. All
the transactions are shown in date order.
Using subaccounts for fixed assets

You can track fixed assets and their depreciation by using subaccounts. You can see how
much each asset is worth, how much depreciation you’ve recorded to date, and how much
all the related assets are worth as a group. See “Fixed assets” on page 214 for detailed infor-
mation.
Entering opening balances for accounts in use

If you have a balance sheet account on your chart of accounts but have not used it in any
transactions, you can enter an opening balance for it.
To enter an opening balance for an account with no transactions:

2 Select the account whose opening balance you want to enter, and then choose Edit from
3 Fill in the Opening Balance and “as of” fields.

For detailed information about determining an existing account’s opening balance, see
“Step 5: Enter opening balances” on page 24.
If you’ve already used the account in one or more transactions, you’ll need to create an
opening balance transaction.
To enter an opening balance for an account with transactions:

2 Double-click the account whose opening balance you want to enter.
3 Click the blank entry at the end of the register.
4 Enter the date as of which you want to record the opening balance.
QuickBooks automatically fills in the Date field with the current date, but you should
enter your QuickBooks start date (or the date of your last statement prior to your start
date). See “Step 5: Enter opening balances” on page 24 for more information.
5 Leave the Number field blank.
6 Leave the Payee (or Vendor) field blank, or enter a description of the transaction, such
as “Opening Balance.”
7 Enter the opening balance amount.
• In a bank account, enter the amount in the Deposit column.
• In an asset, liability, or equity account, enter the amount in the Increase column.
• In a credit card account, enter the amount in the Charge column.
8 In the Account field, choose Opening Bal Equity from the pop-up menu.
9 Click Record.
Editing opening balances

After you’ve started to use an account, you may need to correct your original opening
balance or change your start date. For example, if you originally decided to use the end of
last fiscal year as your start date, but now you want to use the end of last quarter, you will
need to change both the opening balance and the start date. Once you change your start
date, you’ll need to refigure all your balance sheet opening balances as of the new date and
edit the existing opening balances.
To change an existing opening balance for an account:

2 Double-click the account whose opening balance you want to edit.
3 Find the Account Opening Balance transaction in the register.
The opening balance transaction is likely to be the first one in the register, since the
register sorts transactions by date.
Look for Opening Bal Equity in the Account field. This is the equity account Quick-
Books assigns to an opening balance transaction.
4 If you are changing your start date, change the date of the transaction to your new start
date.
5 Change the amount to the correct opening balance.
6 Click Record.
QuickBooks adjusts the account balance from the start date forward.

Editing account information

To edit account information:
• Choose Lists > Chart of Accounts, select the account you want to edit, and then choose
Edit from the Actions pop-down menu.
Deleting an account
You can delete only unused accounts. You cannot delete an account if it:
• Has subaccounts
• Has items assigned to it
• Is used in transactions
• Is included in memorized transactions
To delete an account you’ve used, you’ll need to go to each transaction where you’ve used
the account and associate it with a different account, until the account you want to delete
is unused.
To find transactions that use an account:

• (Balance sheet accounts only) Double-click the account in the chart of accounts.
• (Income and expense accounts only) Select the account in the chart of accounts, and
then choose QuickReport from the Actions pop-down menu.
• (All accounts) Create a transaction detail by account report. Choose Reports > Accoun-
tants & Taxes > Transaction Detail By Account.
To delete an unused account:

• From the Chart of Accounts window, select the account you want to delete, and then
choose Edit > Delete Account.
Using account numbers

You can use both numbers and names for any accounts in your QuickBooks chart of
accounts.
When you set the account number preference on, QuickBooks displays a Number field
when you create or edit an account or subaccount. QuickBooks displays the numbers
before the names on the chart of accounts, in Account fields, and in reports and graphs.
When QuickBooks creates an account (for example, Undeposited Funds), it automatically
displays the number for that account. You can add a number for each account you created
previously.
If you turn off this preference, QuickBooks does not display numbers for accounts.
However, it saves numbers you already entered, and displays them if you turn the pref-
erence on again.
To turn account numbers on or off:

pop-up menu.
2 Select or clear the “Use account numbers” checkbox, and then click Apply.

Keeping your chart of accounts organized

QuickBooks initially arranges your chart of accounts in alphabetical order within account
type. You can, however, move accounts around within the list to create an order that is
more useful for you. See “Keeping your lists organized” on page 58.
Changing an account’s color

You can change the color of any account in QuickBooks. When you change the color, your
change affects the account’s register and the data entry forms, such as a check or bill, asso-
ciated with that account. For example, if you make your checking account blue, both the
register and the Write Checks window for that account are blue.
Changing an account’s color is useful if you have several accounts of the same type, such
as two or three checking accounts. You may want to make each account a different color to
avoid mistakenly writing checks out of the wrong account.
To change an account’s color:

1 Open the register or data entry form for the account whose color you want to change.
2 Choose Edit > Change Account Color.
3 Click one of the colors in the Colors window, and then click OK.
Merging existing accounts

You can merge two accounts of the same type into one. See “Merging list items” on page 60.
Printing your chart of accounts

To print your chart of accounts:
• Choose Lists > Chart of Accounts, and then choose File > Print List (or press x P).
For more information, choose Help > QuickBooks Help, click “Printing” in the left
column, and then click Lists.


6 Items—your products and services
Items overview 73
6
Creating items 76
Tips for businesses that invoice for costs 86
Using subitems 89
Reports about items 90
Editing item information 91
Deleting items 91
Changing prices 92
Items overview
Items are primarily services or products that you buy, sell, or resell in your business.
However, in QuickBooks, you can also create items that represent a discount, calculate a
subtotal, or represent a sales tax.
Whether you record a sale or a purchase, use items from your Item list to fill out the form
quickly. When you choose an item in the Item field on the form, QuickBooks fills in the
description, rate, or price and then calculates the amount.
QuickBooks uses information you’ve recorded about each item to assign the sale or
purchase to the right income or expense accounts. Reports and graphs can then give you
valuable information, such as your greatest sources of income and which items you sell
most.
Important: For more information about using items in your business, choose Help > Quick-
Books and Your Industry.
Using items, saving time

When you fill out a sales form, you list each service or product you’re selling on its own
line of the invoice or cash sale, along with the amount the customer owes for that item.
Similarly, when you write a purchase order or receive a bill, each service or product is listed
on its own line.
Items—your products and services • 73

Because information about individual items is listed on separate lines, the items are called
“line items.” In QuickBooks, enter line items by using the Item list so you don’t have to
type and retype lines for services or products you sell frequently. Instead, just choose from
the pop-up menu in the Item field of a sales or purchase form.
Type or choose an
item from the pop-up
menu in the Item
field.
Each item on the Item list can contain all the information you need to fill in one line. You
can always change any information, such as the description and rate, as you’re filling in a
sales form. When you enter a quantity, QuickBooks calculates the amount for you.
You’ll have separate items not only for each service rendered and each product sold, but
also for discounts, markups, sales taxes, and subtotals. If the customer makes a partial
payment at the time of the sale, you can add a line item for the payment.
Types of items
There are ten different types of QuickBooks items.
Type Use for
Service Services you charge for or services you purchase

EXAMPLES: professional fees, labor
Inventory Part Items you purchase, track as inventory, and then resell
EXAMPLES: Electrical outlets, T-shirts
Non-inventory Part Items you purchase but do not resell; items you sell but do not purchase; items you purchase and
resell but do not track as inventory
EXAMPLES: Custom-made slipcovers, pizza
Other Charge Other charges on a sale or a purchase, such as freight or finance charges
EXAMPLES: Shipping charge, delivery charge
Subtotal Calculating a subtotal before calculating a discount or charge on several items
Group Fast entry of a group of individual items already on the list

EXAMPLE: a group of services and food items provided by a caterer.
Discount Calculating an amount to be subtracted from a total or subtotal
Payment Payment received at the time of invoicing so that amount owed on invoice is reduced
74 • Items—your products and services

Type Use for
Sales Tax Item Calculating a single tax
Sales Tax Group Calculating two or more sales taxes grouped together and applied to the same sale
If you sell items

You should name items to fit the way you bill your customers. For example, if your
company sells only services, you could use the Service item type for your usual charges,
and the Other Charge item type for special or unusual charges. Later, you can see reports
on the money you make from services and the money you make from other charges.
If you’ve already created inventory items for things you buy and resell, you can use those
items on both sales forms and purchase forms.
Choose income accounts you want to see on your reports

The account to which you assign an item is important when you’re analyzing sales reports
or profit and loss reports.
For example, to keep track of the income you make from products separately from the
income you make from services, assign all items that are products to a sales income subac-
count called Products, and all items that are services to a sales income subaccount called
Services. Then your reports will show separate amounts for products and services, as well
as a subtotal for all sales.
If you buy items

You can create items, including services, that you can track by unit and by amount spent in
purchase reports. For example, to track how much fax paper and copier paper your
company buys during a financial period, create items for fax paper and copier paper to use
on purchase forms.
Note: Don’t create separate inventory part items to use on purchase forms; use the same
inventory part items you created for sales.
Use items for purchases to do the following:
• Track each item you receive against a purchase order.
• Track the number of items on order.
• Track the number of items you buy in a specified period of time or the number of items
you buy from each vendor.
• Track the amount you spend on each item, not just groups of items. For example, using
items, you can see how much you spend on envelopes; using expenses, you can see
how much you spend on office supplies.
If you do not use items for non-stock purchases, you can indicate the expense accounts of
the purchases directly on the bill, check, or credit card forms to get accurate profit and loss
statements.

Item types to use on purchase forms

You can use the following item types on purchase forms:
• Inventory part
• Service
• Non-inventory part
• Other Charge
• Group
Group items on purchase orders

When setting up a group item for use on purchase orders, be sure to select the Print items
in group checkbox. Your vendor needs to see what quantity you want of each item.
Reimbursable items
You may purchase services or products for specific customers or jobs and then invoice the
customer for the items (with or without markup). For example, an interior designer may
buy furniture at wholesale and sell it to the client at retail. Service items, non-inventory
parts, and other charge items all have a checkbox that allows you to pass through their
costs at a markup and track costs and revenues in separate accounts. Then you can track
both the expenses and the income for these items for a particular job.
Creating items
Create items to represent things that you buy, sell, or resell in your course of business. You
can also create items that represent a discount, calculate a subtotal, or represent a sales tax
on a form. When you enter a sale or purchase, you select items from your Item list to
quickly and accurately fill in the form.
Service items
Service items represent services you charge for or buy (or both). These services can be
professional fees or labor. They can also be subcontracted services you purchase for a
specific job.
After you have set up a service item, you cannot change its type to another item type.
To create a service item:

1 Choose Lists > Items, and then choose New from the Actions pop-down menu.
2 Choose Service from the Type pop-up menu.
3 Enter an item name or number.
Enter a name that will distinguish this item from others on the list. You may use letters
or numbers, up to a maximum of 31 characters.
The item name you enter here appears on the Item list you choose from while entering
a sale or purchase. It prints on invoices, sales receipts, estimates, or purchase orders
only if you print Item columns.
4 If this service item is a subitem of an existing service item, select the “Subitem of”
checkbox and specify the parent item’s name.
For more information, see “Using subitems” on page 89.

5 (QuickBooks Pro only) If the service is performed by a subcontractor, select the “This
service is performed by a subcontractor” checkbox.
Select the checkbox also if this service item is for employee labor for which you write
estimates and you want to be able to compare estimated costs with actual costs.
6 Enter a description.
QuickBooks enters this description in the Description field of the form when you enter
the item name in the Item field of the form.
If you marked the checkbox, you can enter different descriptions for purchasing and for
sales.
Note: The description may be up to three lines long; to start a second or third line, press
Return. You can edit the description on the form if you need to.
7 (Optional) Enter a rate for the service (for example, an hourly rate).
If the rate of this item changes often, you can leave this field blank and enter an amount
when you’re entering a sale or purchase.
If you plan to track time for this service and then charge for it, the rate should be the
hourly rate you charge. (If you charge different hourly rates, set up a separate service
item or subitem for each rate.)
If you marked the checkbox, you can enter both a cost and a sales price. If you enter a
cost and you have previously set up a default markup percentage in the Sales/
Invoicing Preferences window, QuickBooks automatically calculates a sales price based
on the markup. However, you can enter a different sales price.
QuickBooks enters the cost on purchase forms and on estimates. (On estimates you see
the cost and markup onscreen, but the customer sees only the final price unless you
customize the estimate to print the cost.) It enters the sales price on sales forms.
8 If you charge sales tax but this service is not taxable, clear the Taxable checkbox.
If you sell a taxable item, you’ll see a “T” next to the item on the sales form. If the
customer is taxable, QuickBooks will use the item in its calculation of sales tax. For
more information on sales tax, see Chapter 10, Sales tax—track and pay, starting on
page 153.
9 Enter an account for this item.
If you marked the checkbox, enter an expense account (or subaccount) for purchases
and an income account for sales.
If you didn’t mark the checkbox and you sell this service, enter an income account, such
as “Fee income.” If you purchase this service, enter an expense account (or subaccount).
If the correct account doesn’t exist, type a new account and set it up by following the
onscreen prompts.
10 (Optional) Click Custom Fields to enter custom fields for this item.
See “Adding customized fields” on page 56 for more information.
11 Click OK.
Non-inventory part items

Set up a non-inventory part item for any of the following:
• Products and goods you purchase for a specific job and then charge for
• Products and goods you sell but do not purchase
• Products and goods you purchase but do not resell
• Products and goods you purchase and resell but don’t track as inventory

To create a non-inventory part item:

2 Choose Non-inventory Part from the Type pop-up menu.
4 If this item is a subitem of an existing item, select the “Subitem of” checkbox and specify
the parent item’s name.
For more information about subitems, see “Using subitems” on page 89.
5 (QuickBooks Pro only) If the item is purchased for and sold to a specific customer, select
the “This item is purchased for and sold to a specific customer:job” checkbox.
If you marked the checkbox, you may enter different descriptions for purchasing and
for sales.
7 Enter a sales price for the item.
If the price of this item changes often, you can leave this field blank and enter an
amount when you’re entering a sale or purchase.
Invoicing Preferences window, QuickBooks automatically calculates a sales price based
on the markup. However, you can enter a different sales price.
8 If you charge sales tax but this item is not taxable, clear the “Taxable” checkbox.
To clear the checkbox, click it (or tab to it and press the spacebar).
If you sell a taxable item, you’ll see a “T” next to the item on the sales form. If the
customer is taxable, QuickBooks will use the item in its calculation of sales tax. For
more information on sales tax, see Chapter 10, Sales tax—track and pay, starting on
page 153.
If you marked the checkbox, enter an expense account (or subaccount) for purchases of
the item and an income account for sales.
If you didn’t mark the checkbox and you sell this item, enter an income account, such
as “Sales.” If you purchase this item, enter an expense account (or subaccount).
onscreen prompts.
10 Click Custom Fields to enter custom fields for this item.
11 Click OK.

Other Charge items

Set up an Other Charge item for miscellaneous charges such as shipping and delivery
charges you add to your sales forms.
To create an Other Charge item:

2 Choose Other Charge from the Type pop-up menu.
the parent item’s name.
5 If the item is reimbursable, select the “This is a reimbursable charge” checkbox.
If you marked the checkbox, you can enter different descriptions for purchasing and for
sales.
7 Enter an amount or a percentage for the item.
To enter a percentage, type a % sign after the number. If you specify a percentage,
QuickBooks calculates the percentage on the line item above this item on a sales or
purchase form.
Invoicing Preferences window, QuickBooks automatically calculates a sales price on
the basis of the markup. However, you can enter a different price.
8 If you charge sales tax but this item is not taxable, clear the “Taxable” checkbox.
To clear the checkbox, click it (or tab to it and press the spacebar).
If you add a taxable item to a sales form, you’ll see a “T” next to the item on the form.
If the customer is taxable, QuickBooks will use the item in its calculation of sales tax.
For more information on sales tax, see Chapter 10, Sales tax—track and pay, starting on
page 153.
If you marked the checkbox, enter an expense account (or subaccount) for purchases
and an income account for sales.
If you didn’t mark the checkbox and you charge for this item, enter an income account.
onscreen prompts.


11 Click OK.
Inventory part items

If you track inventory, the Inventory Part item type allows you to keep track of how many
items remain in stock after a sale, how many items you have on order, your cost of goods
sold, and the value of your inventory. See Chapter 9, Inventory, starting on page 143, for
more information.
To create an inventory item:

2 Choose Inventory Part from the Type pop-up menu.
Note: If the Inventory Part item type is not available, turn inventory tracking on.
Choose Company > Company Settings, and then choose Inventory/Purchase
Orders/Estimates from the Show pop-up menu. Select the Inventory and
purchase orders are active checkbox.
You may use letters or numbers, up to a maximum of 31 characters.
the other item’s name.
For more information about subitems, see “Using subitems” on page 89.
5 Fill in the Purchase Information fields.
QuickBooks uses the purchase cost and purchase description you enter here on
purchase orders, and checks, credit cards, and bills you use to pay for this item.
• Enter the Description on Purchase Transactions your vendor uses to describe this
item. You may enter up to three lines of description.
• Enter the Cost per item you expect to pay when you reorder. You can change the cost
on any purchase order.
• In the COGS Account field, select a different cost of goods sold account if you don’t
want to use the preset account.
QuickBooks calculates the cost by using the average cost of the items in stock at the
time of sale.
• Choose or enter your Preferred Vendor.
QuickBooks displays the preferred vendor for an item in reports like the Physical
Inventory Worksheet, so you can easily re-order inventory from your preferred
vendors by looking at the report.
6 Fill in the Sales Information you show to customers.
QuickBooks uses the sales description and sales price on invoices, cash sales, and credit
memos relating to this item.
• The Description on Sales Transactions may be up to three lines long. You can edit the
description on any sales form.
• Enter the Sales Price for this item, or leave the field blank if the sales price varies.

• If you charge sales tax on this item, select the Taxable checkbox. On a taxable sale,
QuickBooks will include this item in its calculation of sales tax. For more information
on sales tax, see Chapter 10, Sales tax—track and pay, starting on page 153.
• In the Income Account field, choose an income account for tracking income you earn
from sales of this item.
7 Fill in the Inventory Information for easy reordering of stock.
• In the Asset Account field, select a different inventory asset account if you don’t want
to use the default account.
If you use the same account for all your inventory items, the balance of this account
will show the total value of all your inventory at any one time.
• Enter the Reorder Point at which you want QuickBooks to remind you to reorder. See
“Reminder preferences” on page 271.
• Enter the current quantity as of your start date.
QuickBooks automatically calculates the total value of inventory for this item. You
can adjust the total value by entering a different amount in the Total Value field.
If you find later you made a mistake in the quantity on hand, you can adjust it in the
Adjust Quantity/Value on Hand window. See “Adjusting value and quantity on
hand” on page 149. You can also change the value or date in the Inventory register.
• Choose a date.
It’s best to use today’s date. If you’re converting this item from a different type of
item, you must use today’s date for accurate records.
If you use your start date or any date in the past, you’ll need to enter all purchases
and sales of this item up to today in order for your quantity on hand and value to be
correct.
9 Click OK.
Group items
The Group item type allows you to enter several items all at once on a sales form, purchase
order, estimate, check, or bill. If you often sell the same group of items together, using a
group item saves you the trouble of entering the same set of line items again and again.
When you use a group item on a sales form, you can enter quantities for the group or each
item in the group, and edit descriptions and rates. When you specify a quantity for the
group, it affects the quantity and amount of each item in the group.
Using a Group item to hide details on a sales form

The Group item lets you be very detailed in tracking the items you sell without showing
all that detail to your customers. The more detailed your items are, the more information
you can get from reports.
For example, if you have a construction company, you may send invoices for full jobs, such
as complete remodels. If you use one general service item called “Remodel,” a sales report
can show your income from remodels.
However, if you use more detailed items, you can learn more from your sales reports.
You could break down the remodel cost, and use items such as “lumber,” “hardware,”
“markup,” “carpentry hours,” and “laborer hours.”

You can group these items under one item called “Remodel.” If you choose not to print the
items in the group on the invoice for your customer to see, you’ll still have those details on
your sales reports.
QuickBooks shows
you the items in the
group onscreen,
whether you choose
to print them or not.
To create a group item:

2 Choose Group from the Type pop-up menu.
3 Enter a group name or number.
QuickBooks enters this description on sales forms when you use this group item (you
can edit this description on the forms themselves at any time). You may enter up to
three lines of description.
5 Select the “Print items in group” checkbox.
• If you want the customer to see a list of the individual items and their amounts,
select the Print items in group checkbox.
• To hide the details of your group from the customer, do not select the Print items in
group checkbox.
6 In the Item column, select items from your Item list that you want to include in this
group.
• When you use this group on a sales form, you can enter quantities for the group or
each item in the group, and edit descriptions and rates. When you specify a quantity
for the group, it affects the quantity and amount of each item in the group.
• If you want this group to include a markup or discount calculated on several items
in the group, you must include a subtotal item before the markup or discount, as in
the example shown on the previous page.
7 Enter a quantity for each item.
If you do not enter a quantity for each item, QuickBooks automatically sets the Qty
column to one. You can change the quantity later on a sales form.
9 Click OK.

Subtotal items
The Subtotal item adds up the amounts of the items above it, up to the last subtotal.
You’ll need a Subtotal item if you ever want to apply a percentage discount or surcharge to
several items. Since QuickBooks calculates percentages on the line above, you’ll need to
subtotal the items before entering the percentage line item.
If you use two subtotals in a row, the last subtotal will add up all the previous subtotals on
the form.
The first subtotal is

for materials.
The third subtotal adds the two previous
The second subtotal subtotals, so that a markup can be
is for labor. applied to the entire sale.
To create a subtotal item:

2 Choose Subtotal from the Type pop-up menu.
3 Enter an item name such as “Subtotal.”
4 Enter a description to appear on each sale where you use this subtotal item, and then
click OK.
Discount items
A discount can be either a fixed amount or a percentage of the line above.
You do not need a discount item for discounts you give for early payment. See “Applying
a discount for early payment” on page 130.
If you give discounts of different percentages at the time of sale, and you want QuickBooks
to calculate the amount, you need a separate discount item for each percentage. If you give
discounts of stated amounts, on the other hand, you can easily edit the amount right on the
sales form.
To discount one particular item you’ve sold and not the entire sale, add a discount item
directly beneath the one discounted item. You won’t need a subtotal item.
This discount applies This discount is not included in the sales
to a subtotal of tax calculation for this sale.
multiple labor items.
This discount applies
only to one item. This discount is applied before sales tax is
calculated, so it lowers the tax amount on
the sale.
To create a discount item:

2 Choose Discount from the Type pop-up menu.

the other item’s name.
5 Enter a description to appear on each sale where you use this discount item.
You can edit the description on any sales form.
6 Enter the discount amount.
If the discount amount is a percentage, include a % sign. For example, 5% tells Quick-
Books to multiply the line above on the sale by 0.05.
If your discount amounts vary, you may want to leave the Amount field blank and enter
the amount on sales forms directly.
7 Enter an account.
You can use an expense account or an income account (sometimes called a contra-income
account).
8 Indicate whether this discount should reduce sales tax on the sale.
To include the discount amount in its calculation of sales tax on the sale, select the Apply
discount before sales tax checkbox. On a sale, QuickBooks displays a “T” next to
discounts you’ve marked as applying before sales tax.
10 Click OK.
Payment items
You’ll need a payment item if you receive a partial payment toward the amount of an
invoice or statement at the time you create the invoice or statement.
The Payment item tells QuickBooks to subtract the amount of the payment from the total
invoice or statement amount. To record the payment on the invoice or statement, enter a
payment item for the amount you’ve received after you’ve entered all the items you’ve
sold. You can tell QuickBooks to automatically put any payment amount you record with
a payment item into your Undeposited Funds account until you make a deposit, or to
deposit the payment directly to a checking or other account. See “Depositing payments”
on page 135.
Use a payment item QuickBooks subtracts a payment item
when you receive a amount from the invoice or statement
partial payment at or total.
before the time you
create the invoice or
statement.
Note: If you receive payment in full at the time of the sale, use the Enter Cash Sales
window. If you receive payment after the sale, use the Receive Payments window.
You also use a payment item to record a down payment in the Create Credit Memos/
Refunds window. Note that while a positive payment item subtracts from the total of an
invoice or statement, a positive payment item adds to the total of a credit memo in the
Create Credit Memos/Refunds window.

To create a payment item:

2 Choose Payment from the Type pop-up menu.
To track payments by different methods (such as check, cash, credit card), indicate the
method as part of the name.
4 Enter a description to appear on each invoice where you use this payment item.
You can edit the description on any invoice.
5 Enter a payment method.
If you enter a payment method, QuickBooks allows you to group the money you
receive by payment method (checks with checks, American Express charges together,
and so on) when you deposit it. If you group your bank deposits this way, create a
separate payment item for each payment method your customers use. See “Separating
deposits” on page 137 for more information.
6 Choose whether to group payments for this item with other undeposited funds or to
deposit the payments directly to an account.
You may want to create two payment items: one that groups payments with other
undeposited funds; and one that deposits payments directly to an account. See “Depos-
iting payments” on page 135 for more information.
8 Click OK.
Sales tax items

Before you create sales tax items, read Chapter 10, Sales tax—track and pay, starting on
page 153, for a complete picture of how QuickBooks handles sales tax.
QuickBooks has two types of items for sales tax on your Item list.
Item type Designed for:
Sales Tax Item A single tax with a specified rate, payable to a specified agency, that you collect from customers
Sales Tax Group A group of two or more single taxes collected for the same sale and shown on the sales form as one
tax item
On invoices, cash sales receipts, and credit memos, you specify which sales tax applies to
the taxable items. QuickBooks calculates the correct tax and prints it on the sales form after
all the other line items.

Tips for businesses that invoice for costs

Here are some tips for businesses that invoice for costs. They include tips on setting up
items for services or products, entering the costs incurred, and then invoicing for the costs.
Why use items for costs?

QuickBooks has two ways of tracking a purchase or other cost on a bill, check, or credit card
charge:
• Set up an item on the Item list. Remember, items can be services, products, or miscella-
neous charges. Then enter the item on the Items tab of the bill, check, or credit card
charge.
• Assign an expense account on the Expenses tab of the bill, check, or credit card charge.
Thus, for every cost you enter, you have a choice between entering it as an item purchased
and entering it as an expense. (You can even have a combination of expenses and items on
the same bill, check, or credit card charge.)
In QuickBooks, there are several advantages to using items:
• It is easy to associate the cost of an item with an expense account and the income with
a separate income account. You do this when you set up the item. (Select the checkbox
in the New Item window for service, non-inventory part, or other charge items. Then
you’ll have two account fields.)
• You can track the number of units or hours purchased or sold.
• You can create estimates and purchase orders.
• If you write a purchase order for an item, you can create a bill from the purchase order
and assign a job. Then you can invoice the customer for the item.
• When you enter a bill, check, or credit card charge, QuickBooks fills in the description
of the item and the unit cost after you choose the item from the pop-up menu on the
Items tab.
• When you invoice the customer for the cost of the item, QuickBooks fills in the sales
description of the item and the sales price.
• There are reports comparing costs and revenues that are broken down by item.
For detailed instructions on entering costs on the Items or Expenses tab of a bill, check, or
credit card charge, see the following:
• Chapter 12, Bills, starting on page 171
• Chapter 14, Managing your checkbook, starting on page 187
• Chapter 15, Credit card transactions, starting on page 193
Services performed by subcontractors

Here’s how to track and invoice for actual costs of services performed by outside subcon-
tractors. Note that QuickBooks allows you to charge a higher rate than the one you pay the
subcontractor.
Services billed by the hour

When a service is billed by the hour, you set up a service item for it on your Item list. You
can enter the service item on estimates, purchase orders, and bills. After you record it on a
bill, you can invoice your customer for it.

To track and invoice for a service via a service item:

1 Add a service item to your Item list for the services performed by the subcontractor.
Be sure to select the checkbox for This service is performed by a subcontractor. Then you
can enter different hourly rates for your cost and the sales price to your customer.
2 When you receive a bill for the service, use the Items tab of the bill.
• Enter the service item in the Item field.
• Enter the hours billed in the Qty field.
• Fill in the Customer:Job field on the same line of the Items tab so you can associate
the job with this cost.
3 When you invoice the customer for the subcontracted work, select this service item on
the Items tab of the Choose Billable Time and Costs window (see page 110).
QuickBooks automatically fills in the sales price, which may be higher than the cost you
entered on the bill.
Services billed as a flat fee

There are two ways to track subcontracted services billed as a flat fee.
In the first method, you use the preceding procedure.
• If the fee varies, leave the Cost and Sales Price fields 0.00 when you set up the service
item.
• If the Sales Price field is 0.00, you must edit the invoice to enter the amount you want
to charge.
Use the first method to write estimates for the service or track the time worked on this
service.
The second method is simpler if the fee varies because you can add a markup easily.
However, you won’t be able to write estimates or purchase orders for the service.
In the second method, you don’t set up a service item on your Item list for the service. You
simply record the expense and then pass the expense to the customer, along with a markup
if you wish, as in the following procedure.
To track and invoice for subcontracted services as expenses:

1 When you receive a bill for the service, use the Expenses tab.
• Enter the expense account for this cost in the Account field of the bill.
• Enter the flat fee in the Amount field.
• Fill in the Customer:Job field on the same line of the Expenses tab, so you can asso-
ciate the job with this cost.
2 (QuickBooks Pro only) When you are invoicing the customer for the subcontracted
work, mark this service on the Expenses tab of the Choose Billable Time and Costs (see
Step 5 on page 110).
QuickBooks fills in the actual cost unless you add a markup to your reimbursable
expenses.

Services performed by an owner or partner

You’ll probably want to set up an owner or partner on the Other Names list, since an owner
or partner is neither a customer, a vendor, nor an employee.
Set up one or more service items for services performed by an owner or partner. Don’t
select the This service is performed by a subcontractor checkbox unless you plan to account
for the costs of the work as described in “You can track the costs of services performed by
an owner or partner.” on page 114.
You can easily make the work of an owner or partner billable by tracking the time as in
Chapter 20, Time tracking, starting on page 241. Assign a service item that corresponds to
the type of work performed. Be sure to fill in the Customer:Job field, and be sure the time
is marked as billable.
When you invoice the customer for the work of the owner or partner, mark the time entries
on the Time tab of the Choose Billable Time and Costs window (shown on page 110).
QuickBooks automatically fills in the sales price for the service item you assigned.
Items ordered especially for a job

To handle custom-ordered items for a job:
1 Add a non-inventory part to your Item list for items ordered especially for a job.
Be sure to select the This item is purchased for and sold to a specific customer:job
checkbox. Then you can enter different rates for your cost and the sales price to your
customer.
2 When you enter a bill, check, or credit card charge for the item, use the Items tab.
• Enter the non-inventory part item in the Item field of the Items tab.
• Fill in the Customer:Job field on the same line of the Items tab so you can associate
the job with this cost.
3 When you invoice the customer for the custom item, mark this non-inventory part item
on the Items tab of the Choose Billable Time and Costs window (see page 110).
QuickBooks automatically fills in the sales price, which may be higher than the cost you
entered on the bill.
Materials from inventory used in a job

If you keep materials in inventory and want to invoice customers for an unitemized group
of materials used in their jobs, you can track the costs and changes in inventory. (If you
would rather itemize the materials used, simply add them directly to the invoice.)
To track inventory used in a job and add the cost as a lump amount to the customer’s
invoice:
1 Set up a group item called “Materials” on your Item list. Include all the inventory parts
you normally use as materials in a job.

Group items are for

quick entry of
several items.
To prevent the details

of this group from
printing on the
invoice, leave this
checkbox clear.
You can omit quantities if they vary from job to job.

2 On the invoice, enter the group name in the Item field.
After QuickBooks displays all the individual items in the group, you can edit their
quantities in the Qty field for each item.
QuickBooks automatically adjusts your inventory of each item when you record the
invoice.
If you don’t want to invoice customers for materials taken out of inventory and used in
their jobs, you can still track the costs and changes in inventory.
To track inventory used in a job without charging for it:

1 In the Adjust Quantity/Value on Hand window, enter the job name in the Customer:Job
field.
2 Enter an expense account in the Adjustment Account field.
3 In the Qty Difference field, enter a negative number for the quantity of each item used
in this job. Then click OK.
QuickBooks calculates the amount by which to reduce the value of your inventory and
assigns this amount as an expense for the job.
For details about how to use this window, see “Adjusting value and quantity on hand”
on page 149.
Using subitems
You can create a hierarchy of parent items and subitems to group similar items on your
Item list. On reports based on items, QuickBooks subtotals each group of subitems. On
sales forms, you use subitems the same way you use other items.
For example, you could enter Lumber as a parent item, and Decking, Rough, and Trim as
subitems. On your Item list, subitems are indented beneath their parent item.
Actions pop-down
menu

To create parent items:

2 Select your item type.
3 Enter the parent’s Item Name/Number.
4 Enter information in all the appropriate item fields.
If you won’t be using the parent item on invoices or other sales forms, you can leave the
rate or price of the parent item zero. QuickBooks requires you to assign an account to
the item even if you don’t plan to sell it.
5 Click Next to enter another item, or click OK.
To create subitems:
2 Select the same item type as the parent item.
3 Enter information in all the appropriate item fields.
4 Select the “Subitem of” checkbox and choose the name of the parent item.
5 Click Next to enter another subitem, or click OK.
Reports about items

Reports can show sales by item, purchases by item, job and project information by item, or
information about inventory items. (For descriptions of the seven inventory reports, see the
table on page 151.)
Preset reports about items

The preset item reports include only the following types of items:
• Service
• Non-inventory parts
• Inventory parts
• Other Charges
• Discounts
They do not include payment items, group items (although they include the members of
the group), reimbursed expenses, sales tax items, or sales tax groups.
Sales Description
Sales by Item Summarizes your unit and dollar sales and returns for this month, subtotaled by item type and item.
Summary
Sales by Item Like the sales by item summary report, but with invoices, cash sales receipts, and credit memos listed
Detail for each item.
Purchases Description
Purchases by Item Summarizes your unit and dollar purchases and returns for this month, subtotaled by item type and
Summary item.

Purchases Description
Purchases by Item Like the purchases by item summary report, but with bills, checks, and credit card receipts listed for
Detail each item.
Jobs & Time Description
Job Profitability Actual cost, actual revenue, and difference for one customer or job, subtotaled by item type and item.
Detail
Job Estimates vs. Estimated cost, actual cost, and difference; estimated revenue, actual revenue, and difference; report
Actuals Detail is for one customer or job and is subtotaled by item type and item.
Item Profitability Shows actual cost, actual revenue, and difference, subtotaled by item type and item.
Item Estimates vs. Shows estimated cost, actual cost, and difference; estimated revenue, actual revenue, and difference;
Actuals report is subtotaled by item type and item.
Time by Job Shows hours worked subtotaled first by customer and job and then by service item.
Summary
Time by Item Shows hours worked subtotaled first by service item and then by customer and job.
To create a report about your items:

1 Choose Reports > Sales, Purchases, or Jobs & Time.
2 Choose an item report listed in the menu.
For more information, see Chapter 21, Reports, graphs, and budgets, starting on page 247.
Editing item information

After you’ve created an item, you can edit information about it at any time, subject to
certain restrictions. You can change a non-inventory part or other charge item to a service,
non-inventory part, inventory part, or other charge item; however, you cannot change any
other existing type.
Note: If an item has subitems, you must clear the Subitem of checkbox for the subitems
before changing the item’s type.
To edit an item:
• Choose Lists > Items, and then double-click the item you wish to change.
Deleting items
You can delete an item only if it is not used in any transaction or group item. To locate all
transactions that use a given item, create a QuickReport for the item for all dates. See
“Creating a QuickReport” on page 261 for instructions.
To delete an unused item:

• Choose Lists > Items, select the item you wish to delete, and then choose Edit > Delete
Item.
You can also remove unused items when you condense your QuickBooks data. See
“Condensing data” on page 293.

Changing prices
You can change the prices of many items at one time through the Change Prices window.
To change one price at a time:

1 Choose Lists > Items.
2 From the Actions pop-down menu, choose Change Prices.
3 In the Type field of the Change Prices window, choose the type of item for which you
want to change prices.
4 In the New Price column, enter new prices for any items, and then click OK.
To change several prices at once:

2 From the Actions pop-down menu, choose Change Prices.
3 In the Type field of the Change Prices window, choose the type of item for which you
want to change prices.
4 Click Calculate Prices.
QuickBooks adds a box with calculation choices to the bottom of the window.
QuickBooks displays
all items of this type.
To mark an item
whose price you
want to calculate,
click the ✓ column
next to the item. To
mark all, click Select After selecting items and specifying a
All. markup amount or percentage, click
Apply to calculate the new prices.
5 To calculate a new price:

• Mark the items whose price you want to change, either by clicking the ✓ (check
mark) column next to each item or clicking the Select All or Select None buttons.
• Enter the amount you want prices to change in the Mark up sales price field. To enter
a percentage, type a number followed by a % sign (for example, 5%).
• (Inventory items only) Specify whether to calculate the markup based on the current
sales price or the unit cost of each item.
• Click Apply to calculate new prices for the marked items.
Important: QuickBooks does not update item prices in memorized transactions. If you use
memorized transactions that contain items, you’ll need to edit or re-enter those
transactions so they’ll reflect your price changes. See “Memorized transactions”
on page 51 for more information.
6 To enter a new price directly, enter it in the New Price column.
7 Click OK to record both new prices QuickBooks calculated and any prices you typed in
the New Price column.

7 Tracking sales
Types of sales forms 93

7
Entering a sales transaction 95

Working with sales transactions 98
Customizing your sales form 101
Printing, saving, or emailing a sale form 109
Charging for actual time and costs 110
Creating a daily sales summary 115
Assessing finance charges 116
Using billing statements 117
Using estimates 120
Questions and answers about sales forms 128
Types of sales forms

When you sell a product or service to your customers, record the transaction using a sales
form. You can invoice customers at the time of the sale, or send out periodic statements of
sales activity.
Sales receipts
Choose Customers > Enter Sales Receipts to record point-of-sale payments (that is,
payment on the spot), or to summarize your day’s sales if you don’t want to record each
cash sale separately. (See “Creating a daily sales summary” on page 115.) Cash sales
include payments by cash, credit card, or check. Sales receipts do not involve accounts
receivable. Instead, they are treated in one of two ways:
• QuickBooks puts the money in an account called Undeposited Funds until you record
a deposit to a bank account.
• QuickBooks deposits the money directly into the account you specify.
Invoices
Choose Customers > Create Invoices to bill a customer or client who has purchased goods
or services from you, and to record transactions that affect your accounts receivable
account; that is, transactions that result in a customer or client owing you money.
Tracking sales • 93
Most businesses use invoices. An invoice lists what you sold on one date. It also shows the
quantity and cost of each item. Use invoices if you:
• sell goods or services and need to keep a detailed record of each sale with multiple line
descriptions
• use sales tax, finance charges, discounts, or any other item that is calculated as a percent
of charges
• bill at the time of a sale or the completion of a job, rather than on a regular interval
• group and total certain types of billings together, for example, all services or all reim-
bursable expenses
Examples of businesses that could use invoices include general contractors, consultants,
and mail order firms.
An example of an
invoice
When to use invoices with reminder statements

When you use invoices to bill your customers, you can also send statements as reminders
to your customers about delinquent payments. As you enter invoices, customer payments,
and credit memos day to day, QuickBooks tracks information to create reminder state-
ments.
Billing statements
To send statements instead of invoices, you can use billing statements. A billing statement
lists the charges a customer has accumulated over a period of time. Enter the charges when
they occur, then send a statement at your regular billing time. You can use statements to bill
customers periodically, such as once a month. See page 117 for more information.
Important: Use invoices instead of statements if you charge sales tax, use group items, or
apply percentage-based discounts.
Examples of businesses that could use billing statements include medical and dental prac-
tices, and property management companies.
Credit memos
Choose Customers > Create Credit Memos/Refunds to record returned items and/or
canceled orders for which you’ve already sent an invoice or billing statement and received
a payment. See “Recording a return” on page 139 for more information.
94 • Tracking sales
Entering a sales transaction
Entering customer information

1 Choose Customers > Create Invoices, Enter Sales Receipts, or Create Credit Memos/
Refunds.
To turn class tracking (Invoices and credit memos) If you have more than one A/R account, a field will appear here. Choose
on, see “Transaction the one in which you want to record the invoice. If you only have one A/R account, you won’t see
preferences” on this field.
page 273.
If this sale or invoice is for a particular job, choose the job from your Customer:Job list. QuickBooks
assigns the amount of the invoice to the customer and job.
2 In the Customer:Job field, choose from the pop-up menu or enter a new customer or job.
To learn about adding jobs, see “Customers and jobs” on page 40.
For sales receipts, you do not have to enter a name in the Customer:Job field unless you
want this customer’s name added to your customer list. To display the customer’s
name on the printed receipt, enter the name in the Sold To field.
3 If you create an invoice or sales receipt, QuickBooks will automatically alert you if you
choose a customer:job that has outstanding billable time and/or costs.
For more infor-
mation on charging
for actual time and
costs, see page 110.
To turn off future alerts, select the Do not show this dialog again checkbox, and then
click OK. If you change your mind and want to turn on future alerts, choose Quick-
Books > Preferences, and then select the Turn on all one-time messages checkbox.
4 (Invoices and credit memos) Choose which accounts receivable account to use.
This field appears only if you have more than one A/R account. The field does not
appear on a cash sale.
5 (Optional) Assign a class to the sales form.
The Class field appears only if class tracking is turned on in Transaction Preferences. See
“Classes” on page 40 for more information.
Note: You can also assign classes to individual line items by adding a Class column
when you customize a sales form. See “Customizing your sales form” on
6 Enter the date.
Press + or - to increase or decrease the date by one day.
7 Enter the invoice or sale number.
You can use letters, numbers, and hyphens. Press + or - (when the entire field is
selected) to increase or decrease the number by one.
8 Enter your customer’s name and address in the Bill To (invoices) or Sold To (cash sales)
field.
If you entered the customer’s name in the Customer:Job field, the Bill To or Sold To field
also contains the customer’s name, along with an address. You can add a title, such as
Dr. or Mr. and Mrs., a company name, or “Attn:”, to print with the customer’s name
and address.
9 (Optional) Enter your customer’s purchase order number (service and product formats)
and payment terms.
QuickBooks enters terms if you assigned any when you set up this customer. Quick-
Books uses the terms to determine the due date of the invoice and whether you owe
your customer a discount for early payment. For more information, see “Terms” on
page 49.
Entering item information

Items can include merchandise or services sold, as well as any discounts or payments
applied at the time of the invoice or sale. A line item includes an item, description, price,
the quantity of items sold, and the total amount for that item.
An item you buy or The “T” shows the
sell item is taxable. Click
to delete or add a “T.”
An item that calcu-
lates (like a discount)
QuickBooks calculates the AMOUNT field, using the RATE and QTY fields.
You create a list of items that fit your sales and purchasing needs; then choose from the list
as you fill out sales forms.
It’s important to understand items thoroughly so that you get accurate sales and income
reports. Read Chapter 6, Items—your products and services, starting on page 73 for more
information.
To enter items on a sales form:

1 In the Item field, choose an item from the pop-up menu or enter a new item.
3 Enter a quantity.
4 Enter the rate (price per item).
If you entered a rate when you set up this item, QuickBooks enters it in the RATE field.
QuickBooks uses the quantity and rate to calculate the amount.
To insert a line item between two others:

• Click where you want the new line to appear, and then choose Edit > Insert Line.
QuickBooks inserts an empty line that shifts the current line and all lines below that line
down. QuickBooks recalculates any subtotals, percentages, and the TOTAL field at the
bottom of the sale to include the amount of the new line item.
If you need a blank line for spacing, leave all the fields on a line empty.
To delete a line item:

• Click the item you want to delete, and then choose Edit > Delete Line.
For items that are more than one line long, such as items with multiple-line descrip-
tions, delete each line separately. However, you can delete a group item by deleting its
first line.
Account information relating to items

Each item is associated with an account that you assign to it (usually an income account).
When you enter an item in the ITEM field of a sales form, QuickBooks records the income
from the item in the assigned account. Then you can see the income on profit and loss state-
ments.
Sales tax information

QuickBooks adds sales tax for items on the sales forms under the following conditions:
• sales tax is turned on
• the sales tax rate is set up through a sales tax item
• taxable items that you sell are set up or marked as taxable
• the customer is set up or marked as taxable
To learn about sales tax, see Chapter 10, Sales tax—track and pay, starting on page 153.
Charging for expenses and time

You can charge your customers for billable hours, items purchased for the job, and other
reimbursable expenses you’ve already entered. QuickBooks puts these charges on the sales
form for you; you don’t have to enter them yourself. See “Charging for actual time and
costs” on page 110.
Completing the sales form

Choose a Customer The Tax field shows which sales tax item is QuickBooks calculates the TOTAL and updates
Message from a pop- used to calculate tax on items you’ve it when you make changes to the invoice.
up menu or enter marked as taxable.
your own.
Balance Due is the

amount your
customer owes on
this invoice. When
you apply a payment The Memo appears on reminder statements to the customer as a reference to this invoice. If you
to the invoice, don’t send reminder statements, or if this is a receipt, it is a reminder for you and does not appear
Balance Due reflects on the printed form.
the change.
1 In the Customer Message field, choose a message from the pop-up menu or enter a new
message to your customer.
The message you enter here is saved on a list of customer messages.
2 Enter the preset sales tax information.
QuickBooks automatically selects the Customer is taxable checkbox if you marked this
customer as taxable when you added the customer to your Customer:Job list.
QuickBooks uses the tax item you assigned to this customer when you added the
customer to your Customer:Job list. To change the tax item for this sale, choose a
different tax from the Tax list.
For more information, see Chapter 10, Sales tax—track and pay, starting on page 153.
3 Enter a memo.
This memo does not print on an invoice or cash sales receipt. It does print on a reminder
statement as a description of an invoice. If you send reminder statements to your
customers, you might want to use this memo field for an invoice summary. The memo
also appears in the Accounts Receivable and customer registers.
4 Select the “To be printed” checkbox.
Select this checkbox to add this sale to a list of receipts or invoices you can print all at
the same time. See “Printing, saving, or emailing a sale form” on page 109.
5 Select the Add to iCal checkbox to add a reminder to iCal (see page 99).
6 To customize the format of your invoices, click Format.
7 To change a title of a sales form for a single use, click Change Title.
The current sales form has the title you entered. The next blank sales form will have the
preset title.
8 Click OK.
If the sale is an invoice, QuickBooks records the invoice in your Accounts Receivable
register. If the sale is a cash sale, QuickBooks records the sale in your Undeposited
Funds register or deposits funds directly into a checking or other account. See “Depos-
iting payments” on page 135.
Working with sales transactions
Editing a sale
You can edit an invoice, cash sales receipt, or credit memo in the same window where you
created it. This is useful when you forget a line item or discover an error when you see the
printed form.
To edit a sales form:

2 For an invoice, double-click your A/R account; for a cash sale, select Undeposited
Funds.
3 In the register, select the sale you want to edit.
4 Press x E.
5 Edit any fields on the form you want, and then click OK.
Note: If you have chosen to deposit funds directly to an account, open the register for that
account to edit the sales form.
Voiding a sale
Void a sales form instead of deleting it to retain complete records of all sales.
To void a sale:
• Display the sale you want to void, or select it in the appropriate register, and then choose
Edit > Void Invoice.
QuickBooks changes the amounts on the sale to zero and enters “Void” in the Memo
field. (Your memo remains; QuickBooks enters “Void” before it.)
Deleting a sale
Important: Don’t delete an invoice or receipt if you made an error on the invoice. Just
correct the error on the original form and reprint it. Likewise, don’t delete an
invoice if you’ve already applied a payment to it. If a customer cancels an order
on which you have received some payment, your records will be clearer if you
use the Credit Memo/Refund window. See “Recording a return” on page 139.
To delete a sale:
• Display the invoice or receipt you want to delete, and then choose Edit > Delete Invoice.
Adding a sales transaction to iCal

iCal is a calendar application that comes pre-installed on Mac OS X computers. You can add
QuickBooks invoices to your iCal calendar to help remind you of important transaction
dates.
To add a QuickBooks invoice to iCal:

1 In QuickBooks, choose Customers > Create Invoices.
2 Select the Add to iCal checkbox, and then click OK.
If iCal is already open, QuickBooks adds the transaction. If iCal isn’t already open,
QuickBooks opens iCal, adds the transaction, and then closes iCal.
To display the invoice in iCal:

• In iCal, click the date of the invoice in the calendar.
QuickBooks creates
a new iCal calendar
for each company
file; to hide transac-
tions in iCal,
uncheck its calendar
in the Calendars list.
QuickBooks adds
the transaction as an
all-day event.
To see the details of a transaction, select the transaction and then click the ‘i’ button.
To hide QuickBooks invoices in iCal:

• Uncheck the calendar of the QuickBooks company file in the iCal Calendars list.
Other areas of QuickBooks from where you can add a transaction to

iCal
• Customers > Enter Sales Receipts
• Customers > Create Credit Memos/Refunds
• Customers > Receive Payments
• Vendors > Enter Bills
• Vendors > Receive Items
• Vendors > Create Purchase Orders
• Company > To Do List (New or Edit)
• Edit > Memorize Transaction
Marking a sale as pending

You can mark an invoice, cash sale, or credit memo as pending so that it does not affect
account balances, registers, and reports. You can use pending sales for the following situa-
tions:
• Order entry. When you receive an order from a customer, you can enter a pending sale.
When the customer pays for the order, you can mark the sale as final.
• Draft approval. When you create a billing draft that needs to be reviewed before you
permanently enter it into QuickBooks, use a pending sale. Once the draft is approved,
mark the sale as final.
To mark a sale as pending:

1 After you complete the sales form, choose Edit > Mark as Pending.
QuickBooks displays the word “Pending” on the sales form on your screen. If you want
the printed sales form to indicate this sale is pending, use a customer message such as
“Pending” or “Needs approval.” See also “Printing a status stamp” on page 106.
An invoice marked
as pending
Note: You cannot mark a transaction which already has payments against it as
pending.

2 Click OK.
QuickBooks does not record the sale until you mark it as final, so the sale does not affect
account balances and reports.
To mark a sale as final:

1 Create the Pending Sales Report.
Choose Reports > Sales > Pending Sales.
2 Use QuickZoom to locate the sale you want to mark as final.
3 Choose Edit > Mark as Final.
4 Click OK to record the sale.
If the sale is an invoice, QuickBooks records the invoice in your Accounts Receivable
register. If the sale is a cash sale, QuickBooks records the sale in your Undeposited
Funds register or deposits funds directly into a checking or other account. See “Depos-
iting payments” on page 135.
Memorizing invoices and statement charges for future use

You can memorize a sale that you enter repeatedly (for example, an invoice for a standing
monthly order from a regular customer). After you memorize the sale, you can have Quick-
Books remind you when to use the memorized transaction, or have QuickBooks enter the
memorized transaction automatically.
If you regularly send invoices with the same line items to several customers, you can
memorize the line items. If you send periodic billing statements to customers for the same
charges, such as rent, you can memorize the statement charges. When you’re ready to use
the memorized invoice or statement charge, recall it, fill in the customer and any other
header information, and add or change any line items or charges as necessary.
You can also combine numerous memorized invoices or statement charges into a memo-
rized transaction group. Memorized transaction groups are particularly useful for busi-
nesses that send invoices or statements to all their clients at once, like property managers
or therapists. See “Memorized transaction groups” on page 52 for more information.
Customizing your sales form
Choosing a sales form format

QuickBooks offers four different formats for sales forms: Service, Professional, Product,
and Custom. The first three are preset formats that offer fields for specific types of busi-
nesses. The Custom format lets you design the form yourself.
To decide which format is right for your company, consider the amount of detail you want
your customers to see and the length of the line-item description. The sales form format
you choose does not affect the information you see in reports. You can print samples of the
formats you want to see or preview them.

Product format
Use this format if your business sells and ships parts or products.
Besides the fields The Product sales form includes fields
shown here, the relevant only to product sales, such as
printed version of SHIP TO, SHIP DATE, SHIP VIA, and
this form includes a FOB.
PROJECT field,
where QuickBooks
prints the job you
specified in the
Customer:Job field.
The printed Product invoice has the narrowest description column of the preset formats.
On a Product invoice, you can track the salesperson in the REP field, and then create reports
broken down by salesperson.
Professional format
Use this format if your business sells services and you require a lot of room for descriptions.
.
The printed version
of this form omits the
ITEM, QTY, and
RATE fields.
Only an AMOUNT
and DESCRIPTION
print in the line-item
area.
The non-printing fields are for bookkeeping purposes and fast data entry. For example, you
can multiply the hours worked by the rate, but the client sees only the amount. The printed
Professional invoice has the widest description column.
Service format
Use this format if your business primarily sells services, but may sell some goods.
The printed version
of this form includes
a PROJECT field,
which contains the
job you specified in
the Customer:Job The Tax field appears only when sales
field. tax is turned on (choose Company >
It omits the ITEM Company Settings), and then choose
field, leaving room Sales Tax from the Show pop-up
for a wider menu).
DESCRIPTION field.

Custom format
You can customize the names of fields on any sales form, and decide which fields to view
onscreen and which fields to print. If you enter information into a field and then later elim-
inate that field, the information remains in your data file even though the field is gone.
However, you must specify to view or print the field again to see that information.
To change the sales form format:

1 Choose Company > Company Settings.
2 Choose either Sales Receipt Format, Credit Memo Format, or Invoice Format from the
Show pop-up menu.
3 Select the format you want from the Format pop-up menu, and then click Apply.
Customizing the content on a sales form

Note: If you change the columns on your sales forms, you won’t be able to use the Intuit
forms that have preprinted columns. However, you can use Intuit’s multi-purpose
forms, which have no columns.
2 Choose Sales Receipt Format, Credit Memo Format, or Invoice Format from the Show
pop-up menu.
3 Choose Custom from the Format pop-up menu.
When you
customize a sales
form (in this case, an
invoice), you can
type in your own
names for fields and
columns.
4 In the Header tab, mark the fields that you want in the header area of your sales forms.
• Select the Screen checkbox to see the field on your screen.
• Select the Print checkbox to print the field. (You can have fields that are on the screen
but that do not print, and vice versa.)
• In the Title fields, you can change the field names.
5 Click the Fields tab to make field changes.

You cannot specify

the position or size
of these fields.
The marked field

choices on the Fields
tab appear onscreen
and print below the
date and above the
columns.
If you’ve added
custom fields to the
Customer:Job list,
they are listed as
additional choices.
The Fields tab includes choices for custom fields you’ve added to your Customer:Job
list. (See “Adding customized fields” on page 56.)
• Select the fields you want to display on the screen.
• Select the fields you want to print for the customer.
• Enter the field names.
6 Click the Columns tab.
If you select the
Service Date column
to display on your
screen or print on the
sales form, Quick-
Books enters the date
of each bill, check,
or credit card charge
in that column.
The Columns tab includes choices for custom fields you’ve added to your Item list. (See
“Adding customized fields” on page 56.)
• Select the columns you want to display on the screen.
• Select the columns you want to print for the customer.
• In the Order column, enter a number that represents the order, from left to right, that
you want to display the columns.
• In the Print Width column, enter numbers to indicate the relative width of the
columns on the printed sales form (for example, 20 is twice as wide as 10). When you
change a width, the % of Page column displays the width of each column as a
percentage of the width of the sales form. (You can see the changed widths onscreen
only by using Print Preview.)
• Enter the column names.
If you delete or add columns, QuickBooks automatically resizes the remaining
columns, but you can adjust the widths. If you delete a column you’ve previously used,
QuickBooks saves the data you entered, even though you can no longer see it.

7 Click the Footer tab to change the Message or Total fields at the bottom of the sales form.
8 Click Apply.
9 To preview your changes, choose Customers > Create Invoices, Enter Sales Receipts, or
Create Credit Memos/Refunds, press x P, and then click Preview.
Customizing the fonts printed on a sales form

2 Choose Sales Receipt Format, Credit Memo Format, or Invoice Format from the Show
pop-up menu.
3 Click the Fonts tab.
Select the item for

which you want to
change fonts from
this pop-up menu.
Click Show Fonts to
select the fonts you
want to use from the
Mac Font panel.
4 From the Set font for pop-up menu, select the area of the form for which you want to
change fonts.
You can change the font for the form data, address, form title, column headers and field
labels, and footer labels.
5 Click Show Fonts to select the fonts you want to use from the Mac Font panel.
You can change the typeface, style, size, and color of the font you select.
6 Click Apply.
Note: Font changes are reflected on the printed form only.
Customizing the artwork on a sales form

Printing a company logo
You can print your company logo on invoices.
For best results, use an image file (PICT format only, maximum size 32k) with the same
height and width. If you have a non-color printer, create the logo in black and white. Quick-
Books reduces or expands the logo size, if necessary, so that neither the height nor the
width exceeds .75 inch for sales forms and .5 inch for checks.

To specify a logo to print:

1 From another software program, such as a paint or drawing program, copy your logo
onto the clipboard.
Note: To make sure the logo is on the clipboard, from the Finder, choose Edit > Show
Clipboard.
2 Choose Company > Company Settings, and then choose Invoice format from the Show
pop-up menu.
3 Click the Artwork tab.
4 Drag or paste your logo into the Logo box, and then click Apply.
You can drag a clipboard file only. Open your drawing package, select the image, and
drag it to the window.
Once the image is placed, you can copy, cut, or clear it. For example, you can copy it
back to your drawing package and make changes. You can clear it by cutting it or by
pressing the Delete or Clear key.
Click Paste or press
x-V to copy the
contents of your clip-
board into the Logo
box.
Press Delete to
remove a logo from
Logo box
the Logo box.
To print the logo on an invoice:

1 Choose File > Print Setup > Invoice.
2 Select the Print logo checkbox, and then click OK.
3 Choose File > Print Invoice or File > Print Forms > Invoices.
Part of a sample
invoice printed with
a company logo
Printing a status stamp

You can print a status stamp on various forms:
• PENDING: this stamp appears on invoices, sales receipts, and credit memos that you
mark as pending (see “Marking a sale as pending” on page 100).
• PAID: this stamp appears on invoices for which the balance due is zero.
• RECEIVED IN FULL: this stamp appears on purchase orders for which the balance due
is zero.

• CLOSED: this stamp appears on purchase orders that you mark as closed (see “Closing
a purchase order manually” on page 203).
To print a status stamp:

2 Choose Sales Receipt Format, Credit Memo Format, Invoice Format, or Purchase Order
Format from the Show pop-up menu.
4 Select the Print Transaction Stamp checkbox.

5 Choose the Small or Large stamp, and then click Apply.
The status stamp appears in blue when you print the form.
Note: These settings apply only to the printed status stamp; you can’t change their
appearance or turn them off onscreen.
6 To print the form, open the form’s window, and then press x P.
Part of a sample sales
receipt printed with
a Large status stamp
Printing a PDF background image (QuickBooks Pro only)

You can print a background image on various forms (purchase orders, estimates, sales
receipts, credit memos, invoices, and statements). Use background images to give your
forms visual appeal, or to extend your company image for a more customized look.

To print a background image:

2 Choose Sales Receipt Format, Credit Memo Format, Invoice Format, Purchase Order
Format, Estimate Format, or Statement Format from the Show pop-up menu.
PDF background box
4 Select the Print PDF Background checkbox.

5 Click Import PDF Background, choose the file you wish to use, and then click Open.
You can also drag a file to the PDF background box.
QuickBooks comes with several sample PDF background files. Go to your Documents
> QuickBooks > PDF Backgrounds folder.
6 Click Apply.
Note: Background images appear on printed forms only.
A sample PDF
background image...
...printed with a QuickBooks

service-based invoice.

To create a background image:

Here is one suggestion on how to create a PDF background image for use with QuickBooks.
1 In QuickBooks, display the form for which you wish to create a background image.
2 Save the form as a PDF file (see “Printing, saving, or emailing a sale form” on page 109).
3 In your graphics program, open the PDF.
4 Create your background image on a separate graphics layer, using the QuickBooks PDF
form to guide you on where to place the image.
5 Delete the layer containing the QuickBooks PDF, leaving only the newly-created back-
ground image, and save it as PDF.
6 Follow the instructions on page 107 to use the image as a QuickBooks form background
image.
Tips on using background images

• If the image is to appear directly behind the contents on an invoice, make sure it is fairly
light in color and/or partially transparent, so as not to degrade the readability of the
invoice.
• To make more room for a background image that appears at the top of a form (such as
a business logo), choose File > Print Setup > Invoice. Then from the Print On pop-up
menu, choose Letterhead Paper or Letterhead (w/drawn in boxes). Either option will
leave 1.9 inches blank at the top of the form.
• To turn off QuickBooks borders, choose File > Print Setup > Invoice. Then from the
Print On pop-up menu, choose any item that doesn’t include “(w/drawn in boxes).”
For more tips and instructions on how to print forms with background images, choose
Help > QuickBooks Help, click “Invoices” in the left column, and then click Printing a PDF
background image.
Printing, saving, or emailing a sale form

While the instructions below refer to invoices, they can also be used for any other sales
form.
To print a sales form:

• Choose Customers > Create Invoices, and then choose File > Print Invoice.
To save a sales form as PDF:

• Choose File > Print Invoice, click the PDF button, and then choose Save As PDF.
To email a sales form as PDF (QuickBooks Pro only):

• Choose File > E-Mail Invoice as PDF.
and then click Invoices, sales receipts, and credit memos.

Charging for actual time and costs

Charging your customer for the actual time and costs for a job is a two-step process:
• Track the time and costs, assigning them to the specific job.
• Transfer the time and costs to a sales form (with or without a markup) or to the register
for the job.
To track You must Refer to
Time billable to this Record hours spent on this job, using either a weekly “Entering single activities” on
job timesheet or a single activity record. Be sure to mark the page 244
hours as billable. “Filling in a weekly timesheet” on
Assign the hours to the same job for which you plan to write page 242
the invoice.
Assign the hours to the service item that should be used on

the invoice.
To show the service date for each time entry on the invoice, “Customizing your sales form” on
customize the invoice to add a Service Date column. page 101
Items, subcontracted Record a bill, check, or credit card charge, using the Items “Tips for businesses that invoice for
services, and other tab to identify items and services purchased for this job. costs” on page 86
charges purchased
Assign the items to the same job for which you plan to write “Filling in the detail area” on page 172
for this job
the invoice. (bills), page 188 (checks), and
page 194 (credit card charges)
Other costs incurred Record a bill, check, or credit card charge, using the “Filling in the detail area” on page 172
for this job Expenses tab to identify other costs incurred for this job. (bills), page 188 (checks), and
page 194 (credit card charges)
Assign the expenses to the same job for which you plan to
write the invoice.
To charge for time and costs on a sales form:

1 Choose Customers > Create Invoices or Enter Sales Receipts.
2 Enter a customer name or a customer:job name in the Customer:Job field.
3 Click Time/Costs (QuickBooks Pro) or Expenses (QuickBooks).
4 (QuickBooks Pro only) On the Items tab of the Choose Billable Time and Costs window,
click the Use column for each part, subcontracted service, or other charge for which you
want to be reimbursed.

These tabs display There is a Time tab only if time Click the Hide field only if you do not want ever to charge
the total for the lines tracking is turned on. this customer for the item. (The bill is not affected.)
that are marked in
the Use field. These
amounts are added
to the invoice.
Select this to print

only the total and a
general description
for the group of
marked items on all
three tabs. To use all lines on this tab,
click Select All (in the
To print an overall upper left corner of the
total but no detail for tab). To unmark all lines,
one tab alone, mark click Clear All (the button
the lines on only one name changes).
tab, and then select
the checkbox.
Items appear on the Items tab after they have been entered on the Items tab of a bill,
check, or credit card charge and have been assigned to this job but have not yet been
used on a sales form.
On the sales form, QuickBooks uses the sales price, not the cost, for each inventory part
and for each resale non-inventory part, subcontracted service, and reimbursable other
charge item. You can change the price on the sales form. (If you set up the item with a
sales price of 0.00 because costs vary, be sure to enter a sales price on the sales form.)
5 Click the Expenses tab. Then click the Use field for each expense on the Expenses tab for
which you want to be reimbursed.
For a percentage
markup, add a %
sign after the
number. Quick-
Books prefills your
preset markup
percentage if you set
one up in sales/
invoicing prefer-
ences.
You can use an
income account for The Expenses tab includes
markup. any payroll costs assigned
to this job but not to any
To mark expenses service item.
taxable on the
invoice, click here.
To hide the markup, clear this checkbox.
You may add a markup to your actual expenses.
• To add a markup, enter an amount or a percentage in the Markup Amount or % field.
Then enter an account in the Markup Account field. To hide the markup, select the
checkbox at the bottom of the window.
• Alternatively, you can change the rates or prices directly on the sales form. Then the
entire income for each expense is assigned to the account for the expense (instead of
partly to a markup account).
You can assign income for a reimbursed expense to an income account. See Step 4
under “Sales and invoicing preferences” on page 275. If you do not assign the income

to an income account, the income cancels the original expense in the expense account.
(Your net profit is the same in either case.)
6 (QuickBooks Pro only, if time tracking is on) Click the Time tab. Then click the Use field
for each activity on the Time tab for which you want to charge for the time spent.
The Time tab shows
all time that is
billable but has not
yet been billed.
Click Change to:
• Show each activity
as a separate line
or to combine all
activities for the
same service item.
• Copy notes or the
item description
into the
Description field
of the sales form.
In this window and on the sales form, QuickBooks uses the hourly rate for the service
item you assigned to the activity, not the payroll rate of the employee. If the service item
has the subcontractor checkbox marked, QuickBooks uses the sales price. You can
change the rate on the sales form.
To change how QuickBooks groups and describes time activities on the sales form, click
Change.
7 Click OK to add the marked costs to the sales form.
8 To group costs into two or more groups, click Time/Costs again to repeat the process.
The invoice symbol
in the Use field indi-
cates that the item
has already been
added to the invoice.
9 Before recording the sales form, preview the printed sales form.
Press x P, and then click Preview.
To remove a job cost, click it on the sales form before recording. Then choose Edit >
Delete Line.
Important: If you record a sales form that has actual job costs on it and then discover you
made a mistake, the actual job costs you used previously are no longer available
to use again. To reinstate such costs, go to the original record (that is, weekly
timesheet, single activity, bill, check, or credit card charge). Click the Billable
field to make the cost billable again.

Tips for invoicing for time and costs

To pass through expenses from a vendor or supplier, enter the bill or payment
before creating the invoice.
If the vendor submits a bill, enter the bill in the Enter Bills window. If you bought some-
thing by check or credit card, enter the check or credit card charge. You can pass through
expenses from either the Items tab or the Expenses tab, as long as you assign a customer or
job.
Use the Items tab, not the Time tab, when invoicing for subcontracted work.
Subcontracted work is on the Items tab of the Choose Billable Time and Costs window, if
you recorded it on the Items tab of the subcontractor’s bill as a subcontracted service item.
Even if you also track time for the subcontractor, do not look for the work on the Time tab.
(Time for a vendor is never billable.)
If you enter costs on the Expenses tab, associate an income account with the
expense account.
QuickBooks assigns income for reimbursed expenses to the original expense account
unless you associate an income account with the expense account. To learn how to do this,
see Step 4 under “Sales and invoicing preferences” on page 275.
If you invoice for time, consider combining time activities for the same service
item before transferring them from the Time tab to the sales form.
To combine time activities for the same service item on the sales form, click Change on the
Time tab. Then select Combine activities with the same service item and click OK. When
you transfer time to the sales form, QuickBooks enters only one line for each service item,
with the total hours for that service item.
If you select Do not combine activities, QuickBooks enters each time activity on a separate
line of the sales form. Select Transfer notes for each activity if you want the notes in the
Description field of the sales form. Otherwise, select Transfer service item descriptions.
To transfer the date of each cost or time activity to the sales form, add a Service
Date column.
Customize the sales form by adding a Service Date column. (See “Customizing your sales
form” on page 101.) Then for items and expenses, QuickBooks enters the date of each bill,
check, or credit card charge in that column. For time, it enters the activity date (or the
earliest activity date, if you are combining several activities for one service item).
You can invoice for only 90% of time and costs at the completion of a job.
Construction contractors may invoice for 90% at the completion of a job and the final 10%
later. Here are two ways to accomplish this.
Method 1 (invoice for 90% at each phase):

Create two Other Charge items for retainage on your Item list. On the first item, enter -10%
in the Amount field; in the Account field, assign an Other Current Asset account for
retainage. Add this retainage item to every invoice you write during the job, to reduce the
amount owed by 10%. (At the same time, the Other Current Asset increases by the same
amount.)

Create a second Other Charge item with a blank Amount field; in the Account field, assign
the same Other Current Asset account for retainage. When you are ready to invoice for the
final 10%, determine how much it is. (An easy way to determine the amount is to display
the register of the Other Current Asset account for retainage, select the job in the register,
and click QuickReport.) Create a new invoice with only this Other Charge item on it. Enter
the amount in the Amount field of the invoice.
Method 2 (invoice for remaining 90% of total at completion):

Create one Other Charge item for retainage on your Item list. Leave the Amount field blank;
in the Account field, assign an Other Current Asset account for retainage. At the completion
of the job, record an invoice for the full amount of the final phase. Run the job profitability
summary report (one of the project reports) to determine the total revenue for the job. Then
edit the invoice you just recorded by adding the Other Charge item for retainage and
entering 10% of the total revenue as a negative number in the Amount field of the invoice.
For example, if the total revenue is $20,000, you should enter the 10% retainage as –2000.
When you are ready to invoice for the final 10%, create a new invoice with only this Other
Charge item on it. Enter the amount as a positive number in the Amount field of the invoice.
You can track the costs of services performed by an owner or partner.

Since owners and partners do not submit bills, the costs of the services they perform will
not be part of the overall costs of the job unless you enter a transaction to account for the
work. If you want owner and partner time to contribute to the job costs on reports such as
job profitability or job estimates vs. actuals, here’s what to do.
First, when you set up a service item for the work of the owner or partner, select the
checkbox for This service is performed by a subcontractor. Then enter the name of the
person’s equity account in the Expense Account field. (On the pop-up menu of accounts,
equity accounts are above expense accounts.)
To make owner and partner time part of the job costs on job reports without affecting the
profit and loss statement, write a zero-amount check as follows:
• Write the check either in your regular checking account or in a special checking account
(with no money in it) that you can set up for checks like these.
• Enter the name of the owner or partner in the Pay to the Order of field.
• Clear the To be printed checkbox.
• In the No. field, enter a word or leave it blank.
• On the Items tab, in the Item field, enter each service item for the work performed. On
each line, enter the number of hours in the Qty field, and enter the job in the
Customer:Job field.
• On the Expenses tab, enter the name of the person’s equity account in the Account field.
In the Amount field, enter the negative of the amount on the Items tab. Do not enter a
job.
Important: If you have not yet invoiced the customer for the time, be careful not to invoice
twice for the same time. Use the work from the Time tab only, not the Items tab,
of the Choose Billable Time and Costs window. (On the Items tab, mark the Hide
field to remove the work permanently from the Items tab without putting it on
an invoice.)
After you record the zero-amount check, the cost (as shown on the Items tab) appears on
all job and item reports that show costs by job or by item. On the other hand, the cost does
not appear as an expense on a profit and loss by job report because it is not assigned to an
expense account.

Creating a daily sales summary

If you have a number of cash sales each day, and you don’t need to add each cash-paying
customer to your Customer:Job list, use the Enter Cash Sales window to record a summary
of the day’s sales activity.
To create a daily sales summary:

1 Choose Customers > Enter Sales Receipts.
2 Leave the Customer field blank, since you don’t need to add a name to the Customer:Job
list.
3 Enter each item that was sold and the quantity sold for the day.
For example, if you sell several packages of fancy paper in one day to walk-in
customers, lump all the paper sales into one line item, with the total quantity of all sales
in the Amount field.
4 Enter a new title, such as “June 21, 2005 Receipts.”
QuickBooks records your cash sales in the Undeposited Funds register if you have chosen
to group the funds for later deposit. See “Depositing payments” on page 135.
To see a register of your cash sales:

2 Double-click the account named Undeposited Funds.
Note: Any cash sales you have chosen to deposit directly to an account do not appear in
this register.
Tracking daily overages and shortages

You can track your daily overages (money on hand that exceeds the listed amount in your
books) and shortages (money on hand that is less than the listed amount in your books).
To set up overages and shortages accounts:

menu.
2 Create an income account called Discrepancies.
3 Create two new income subaccounts—Overages and Shortages—for the Discrepancies
account.
To set up overage and shortage items:

2 Create a non-inventory part item called Overages and assign it to your Overages subac-
count.
3 Click Next.
4 Create a non-inventory part item called Shortages and assign it to your Shortages subac-
count.
5 Click OK.
Use the overages and shortages items in the Enter Cash Sales window when you are
creating a daily sales summary to record any discrepancies.

Important: Remember to record shortages with a negative amount in the Enter Cash Sales
window.
When you view a sales report, you’ll see any overages or shortages for each day of cash
sales.
Assessing finance charges

If you’ve set up payment terms for your customers, QuickBooks can assess finance charges
for any customers whose payments are late. When you assess finance charges, QuickBooks
creates an invoice for each charge. To set up your finance charge rate, see “Finance charge
preferences” on page 278.
To assess finance charges:

1 Choose Customers > Assess Finance Charges.
Note: When you apply a customer’s payment in the Receive Payments window, Quick-
Books records that your customer has paid.
2 Select the customers for whom you want to assess finance charges.
To choose all customers, click Mark All. To clear all check marks, click Unmark All.
3 (Optional) Change any finance charge amounts.
QuickBooks uses the customer’s terms to determine the finance charge amount. Click
Settings to change your finance charge rate, or change a particular charge by typing
over it in the Fin. Charge column.
4 (Optional) To print the finance charge invoices, select the Mark Invoices “To be printed”
checkbox.
If you send reminder or billing statements, you can leave the checkbox clear.
5 Click OK.
QuickBooks records an invoice for each customer you marked. You can view the
invoices in the accounts receivable register or the customer’s register.
For more information on finance charges, choose Help > QuickBooks Help, click
“Payments from customers” in the left column, and then click any of the finance charge
topics.
How QuickBooks calculates finance charge amounts

QuickBooks uses this equation to calculate finance charges:
number of days past due x balance due x rate/365
For example, suppose that on June 1, you assess a finance charge for a customer whose
terms are Net 30. QuickBooks creates an invoice for the amount of the finance charge. If
your customer does not pay by July 2, and you added terms of Net 30 to the finance charge
invoice and selected the Assess finance charges on finance charges checkbox, QuickBooks
calculates interest on both the original overdue amount and on the finance charge amount.
If you did not select the Assess finance charges on finance charges checkbox, QuickBooks
calculates finance charges only on the original overdue amount.
Important: Laws vary about whether you can charge interest on overdue interest payments.
Please confirm with the appropriate jurisdiction that you are in compliance with
that jurisdiction’s lending laws.

Using billing statements

QuickBooks creates billing statements that summarize activity for a customer during a
specified time period. A billing statement includes the following information:
• Balance forward
• Date, number, amount, and description for each statement charge
• Date and amount of each payment received
• Finance charges
• Balances
- Current balance (the non-overdue portion of the balance forward plus new invoice
amounts minus payments received)
- 1 to 30 days overdue
- More than 90 days overdue
- Total amount due
A sample billing
statement.
Entering statement charges

You enter statement charges into a customer register, which displays all accounts
receivable transactions for a customer or job. A statement charge is one item from your list.
You need to enter a separate charge for each item. For more information about customer
registers, see “Viewing the customer register” on page 166.

To enter a statement charge:

1 Choose Customers > Enter Statement Charges, and choose the customer or job you want
to enter a charge for from the Customer:Job pop-up menu.
OR
Choose Lists > Customer:Jobs, select the customer or job you want to enter a charge for,
and then choose Use Register from the Actions pop-down menu.

3 Fill in the register fields for the new charge:
• (Optional) Click the Number field (or press Shift + Tab) to automatically assign a sale
number to the charge.
• Enter the item and the quantity. QuickBooks automatically fills in the Rate,
Description, and Charge fields on the basis of the information you entered in the Item
and Qty fields. To edit this information, do it here; you cannot edit the statement.
4 Click Record to record the statement charge.
To enter statement charges for reimbursable job costs or time:

1 Choose Customers > Enter Statement Charges, and choose the customer or job you want
to enter a charge for from the Customer:Job pop-up menu.
OR
Choose Lists > Customer:Jobs, select the customer or job you want to enter a charge for,
and then choose Use Register from the Actions pop-down menu.
2 Click Time/Costs to charge for job costs, including items, expenses, and time, you have
already assigned to this customer or job.
See “Charging for actual time and costs” on page 110 for more information.
The following restrictions apply to statement charges:
• You cannot combine items or expenses into a single statement charge. However, you
can combine time activities for the same service item.
• You cannot add a markup to expenses.
• You cannot add sales tax to expenses. Also, QuickBooks doesn’t add sales tax to any
items, even for items that are normally taxable.
3 Specify whether to enter each statement charge with the date shown for it in the table,
or with a date that you specify.
• Select Dates from tables below to enter the actual date of each charge into the
customer register.
• Select This date to enter the date that you specify.

Important: The date that QuickBooks records for the statement charge affects both the
customer register (QuickBooks sorts the customer register by date) and the
statements that you send customers (each statement covers a specific date
range).
4 Click OK.
Customizing a billing statement

If QuickBooks’ standard statement format doesn’t suit your company’s needs, you can
create a customized format. For example, you can customize the statement to include your
company logo and to have specific fields in the header and footer.
Note: If you customize the columns in your statements, you won’t be able to use the Intuit
forms that have preprinted columns. However, you can use Intuit’s multipurpose
forms, which have no columns.
To customize statements:
1 Choose Company > Company Settings, and then choose Statements from the Show pop-
up menu.
2 From the Header, Fields, Columns, and Footer tabs, check the fields you want to appear
on your printed form in the Print column.
Note: Any customized fields that you added to your customers, vendors, employees,
or items do not appear in the Customize Statements window, because you cannot
use customized fields on a statement.
On the Columns tab, the Item, Quantity, and Rate fields apply only to billing statements
(not reminder statements) that you send to customers.
3 Click the Font tab to change the font for any section of text on the statement.
See page 105 for more information.
4 Click the Artwork tab to print a logo or PDF background on the statement.
5 Click Apply.
Billing customers
When you send a billing statement to a customer, QuickBooks does the following:
• It enters the statement date in the Billed Date field of the customer register for each item
on the statement.
• It calculates when the payment is due on the basis of the terms for that customer, and
fills in the Due Date field of the customer register with the appropriate due date.
When you are ready to bill your customers, print out the statements by choosing File >
Print Forms > Statements.

Note: If you send invoices and reminder statements, use this procedure to print the
reminder statements for your customers that summarize their accounts during a
specified time period or assess finance charges.
and then click Statements.
Using estimates
An estimate is a description of work you propose to do for, or products you propose to sell
to, a current or prospective customer.
Note: The estimate feature is in QuickBooks Pro only. For details on upgrading to Quick-
Books Pro, contact Intuit (see page 324).
Creating an estimate is very similar to creating an invoice.
• You can customize an estimate’s headings, fields, and columns.
• You associate each estimate with a customer or with a job for the customer. You may
have only one estimate for each name (customer or customer:job combination); see
“Alternative estimates for one job” on page 125. The name must be on your
Customer:Job list.
• You can start with a blank estimate and fill in items already on your Items list, or enter
new items as you write. You can also start with a memorized estimate that is partly
filled in.
• Print estimates on a multipurpose form, letterhead, or plain paper.
• Modify an existing estimate any time and resubmit it.
• If the customer accepts the estimate, you can turn the estimate into an invoice.
• When you have actual costs and revenues, you can compare them with your estimated
costs and revenues.
Turning the estimate feature on

1 Choose Company > Company Settings, and then choose Inventory/Purchase Orders/
Estimates from the Show pop-up menu.
2 Select the “Customer and/or job estimates are prepared” checkbox, and then click
Apply.
Customizing an estimate
1 Choose Company > Company Settings, and then choose Estimate Format from the Show
pop-up menu.
2 Customize your estimate’s content in the Header, Fields, Columns, and Footer tabs.
• Header tab: in the Title field, you may change the name to use for the heading (for
example, Proposal, Bid, or Grant).
• Columns tab: if you use a markup onscreen but do not print the Markup column,
QuickBooks Pro recalculates the unit cost on the printed estimate so that it equals the
Total divided by the Quantity and calls it the “Rate” on the printed form.
3 Click the Font tab to change the font for any section of text on the estimate.

4 Click the Artwork tab to print a logo or PDF background on the estimate.
5 Click Apply.
Creating an estimate
Tip for jobs invoiced in installments or phases
If you usually invoice in installments or phases, and you plan to turn your estimate into a
series of invoices, divide the estimate into sections. Make each section correspond to one
installment. Enter a subtotal item after the items for each installment.
When you turn the estimate into an invoice for one installment, it will be easy to keep the
section for that installment and delete the sections not needed then.
Filling in the top of an estimate

1 Choose Customers > Create Estimates.
If this choice is not on the menu, you must first turn on the estimating feature. (See
“Turning the estimate feature on” on page 120.)
Alternatively, choose Lists > Customer:Jobs, select a job (or a customer that has no jobs),
and choose Create Estimate from the Actions pop-down menu.
2 In the Customer:Job field, choose an existing customer or both a customer and a job
from the pop-up menu, or enter a new name to set up.
If the customer you If you have
choose already has class tracking
one or more jobs, turned on
you must enter both (see
a customer and job page 273),
in the Customer:Job you can enter
field. a class for
this estimate.
To customize the
format of your esti- To add fields
mates, click Format. to this area,
see Step 2 on
page 120.
The Tax field and the Customer is taxable checkbox appear only if sales tax tracking is turned on
(see page 280).
If the customer (and job) already exist, QuickBooks Pro prefills the billing name and
address.
If neither the customer nor the job exists, you can set them up one at a time by entering
a customer name first, pressing Tab, and following the onscreen instructions.
For details about setting up a customer and job, see “Customers and jobs” on page 40.
3 (If class tracking is turned on) Enter a class in the Class field.
Use classes to track estimates by company division, sales office, profit center, or any
other factor that is meaningful for your business. See “Classes” on page 40 to learn
more.

To assign individual line items to different classes, you can add a Class column by
customizing your estimates. See “Customizing an estimate” on page 120.)
Filling in the columns of an estimate

Fill in the line-item area of an estimate just the way you do it on an invoice or cash sales
receipt. If you are not already familiar with the Items list, see Chapter 6, Items—your
products and services, starting on page 73.
1 In the Item field, choose an item from the pop-up menu or enter a new item.
2 Press Tab.
If the item is not set up, follow the onscreen instructions to set it up.
QuickBooks Pro fills in the DESCRIPTION and COST fields from the item setup infor-
mation. If the item has both a cost and a sales price, QuickBooks Pro enters the cost in
the COST field. However, if you have removed the MARKUP column by customizing the
estimate (page 120), then QuickBooks Pro enters the sales price in the RATE field (which
replaces the COST field).
You can change the description and cost (or rate) on this estimate.
3 Enter a quantity in the QTY field.
QuickBooks Pro automatically multiplies the quantity by the cost and enters this value
in the AMOUNT field.
4 Change the markup percentage or amount.
If the item has both a cost and a sales price, QuickBooks Pro prefills the markup
percentage on the basis of those two prices. QuickBooks Pro does not prefill a markup
for other items on the estimate, but you can add one.
For more information, see “Markup of items” on page 123.
5 Fill in other columns you have added to your estimates when you customized them.
6 Change the taxability of individual items by clicking the right end of the TOTAL field.
A “T” indicates that the item is taxable. QuickBooks Pro prefills a “T” if you set up the
item to be taxable. If the customer is not taxable, QuickBooks Pro ignores the taxability
of individual items.
To learn more about sales tax, see Chapter 10, Sales tax—track and pay, starting on
page 153.
7 Continue entering items line by line until you have all you need.
On estimates, as on sales forms, you can enter items that subtotal, take discounts, or
add other charges. (However, you cannot enter payment items on estimates.)
8 To insert a new line, choose Edit > Insert Line; to delete an entire line, choose Edit >
Delete Line.
Filling in the bottom of an estimate

At the bottom of the estimate, you can enter a message to print, and you can specify the
customer’s sales tax.
1 In the Customer Message field, choose a message from the pop-up menu or enter a new
message.
2 Enter sales tax.
Sales tax choices are visible only if sales tax is turned on in the Sales Tax Preferences
window. QuickBooks Pro prefills the customer’s sales tax if you specified it when you
set up the customer. You can choose a different sales tax here.

• If the customer is out of state and thus exempt, choose Out of State. This sales tax
item has a rate of 0%.
• If the customer is exempt from sales tax but you need to track nontaxable sales in the
customer’s tax district, choose the sales tax item for that district. Be sure the
Customer is taxable checkbox below the estimate is clear. (If it isn’t, click the
checkbox to clear it.) Then the sales tax on the estimate will be zero.
• If the customer is usually taxable, but you don’t want to include sales tax on the
estimate, clear the Customer is taxable checkbox below the estimate.
3 Click OK.
Markup of items
QuickBooks Pro allows you to add a markup to your basic costs when you write an
estimate.
QuickBooks Pro hides markups from the customer by printing only the price or rate after
markup; however, you can customize your estimates to print the original cost and markup
if you want customers to have this information. (See “Customizing an estimate” on
page 120.)
When you set up items on your Items list, you can have separate amounts for the cost and
for the sales price for all the types of items you are likely to sell:
• Service items (when the checkbox for subcontractors is marked)
• Inventory parts
• Non-inventory parts (when the checkbox for a specific customer:job is marked)
• Other charge items (when the checkbox for reimbursable charges is marked)
Entering markups on the estimate

If you enter an item that has both a cost and a sales price, QuickBooks Pro prefills the
markup percentage on the basis of those two prices. For one of the item types listed above,
you can enter (or edit) a markup on the estimate regardless of whether QuickBooks Pro has
prefilled a markup percentage.
When there is a percent (%) sign after the number in the MARKUP field, QuickBooks Pro
multiplies that percentage by the amount in the AMOUNT field, adds it to the amount, and
enters the total in the TOTAL field.
• For example, if the amount is $200 and the markup is 15%, QuickBooks Pro enters $230
in the TOTAL field.
When there is no percent (%) sign after the number in the MARKUP field, QuickBooks Pro
interprets the number as an amount. It adds the amount in the AMOUNT field to the amount
in the MARKUP field, and enters the total in the TOTAL field.
• For example, if the amount is $200 and the markup is $15, QuickBooks Pro enters $215
in the TOTAL field.
What shows up on printed estimates

If you have markups set to show only on the onscreen estimate, QuickBooks Pro prints a
Rate column instead of the Cost column, and it omits the Amount and Markup columns.
The amount in the Rate column always equals the amount in the Total column divided by
the quantity.

For example, if the onscreen estimate shows the following:
The onscreen markup here is hidden when the estimate prints (below).
then the printed estimate will have the following information:
QTY RATE TOTAL
10 23.00 230.00
Hiding markup onscreen

To hide markup onscreen, you must clear the checkboxes for the MARKUP column in the
Customize Estimates window.
When markup is hidden onscreen, estimates have neither an AMOUNT nor a MARKUP
column. When you enter an item with both a cost and a sales price, QuickBooks Pro enters
the item’s sales price (not its cost) in the RATE field.
If you now look at estimates you recorded when there was a MARKUP column, the RATE field
now shows an amount equal to the total divided by the quantity, just as on the printed
estimate.
Printing an estimate
To print an estimate:
2 Display the estimate you want to print, and then choose File > Print Estimate.
For more information on printing estimates, choose Help > QuickBooks Help, click
“Printing” in the left column, and then click Estimates.
Differences between the onscreen and the printed estimate

If you have not customized your estimates, the AMOUNT and MARKUP columns display
onscreen but do not print. The onscreen COST column becomes a printed RATE column, and
the rate printed equals the total divided by the quantity. See page 124 for an illustration.
The job name, if there is one, prints in the PROJECT box to the right of the customer name
and address.
If you have customized your estimates, QuickBooks Pro displays and prints the columns
you specified. If you have changed the name of the COST column, the new name is printed
as well as displayed onscreen.
For details on how to customize what prints and what displays, see “Customizing an
estimate” on page 120.
If you added sales tax, it prints on a separate line below all other items. The description that
prints is the one set up for the sales tax item.
On blank paper, your company name and address (and logo if you wish) can print in the
upper left, above the customer name and address. The title Estimate (or your choice) prints
in the upper right.

On letterhead, nothing prints in the upper 1.9 inches of the page, allowing room for the
preprinted company name and address.
Working with estimates

Alternative estimates for one job
QuickBooks Pro keeps only one estimate for each job. You cannot add a second estimate for
the exact same job.
To have alternative estimates for one job, you can:
• Create slightly different job names (for example, Remodel A and Remodel B) and write
a different estimate for each.
OR
• Add a note about other estimate options for this job. To add a note, display the
Customer:Job list, double-click the job, and then click Notes.
Reviewing an existing estimate

There are three ways you can locate an existing estimate.
To display an existing estimate from a list of estimates:

2 Select the account named “Estimates” (at the bottom of the list), and then choose Quick-
Report from the Actions pop-down menu.
3 Locate the estimate on the QuickReport (they are in order by date) and double-click to
QuickZoom to it.
To display an existing estimate from the Customer:Job list:

2 Select the job name (or customer name if there’s no job) for the existing estimate.
If you can’t remember the customer or job name, scan the Estimate Total column for an
appropriate amount.
3 Choose Create Estimate from the Actions pop-down menu.
To display an existing estimate by moving from one to another:
2 Click Previous until you see the estimate you want.
Editing an estimate
You can always make changes to an existing estimate. Simply display the estimate, make
the changes, and click OK to record them.
• To insert a line, click the line below the intended insertion point and choose Edit >
Insert Line.
• To delete a line, click the line and choose Edit > Delete Line.
• To replace one line item with another, enter a different item in the ITEM field and press
Tab. Fill in the rest of the line as you would if it were a new line.

QuickBooks Pro automatically recalculates totals and sales tax when you make changes.
If you select a job that already has an existing estimate, QuickBooks Pro asks whether you
want to replace it with the estimate you are currently displaying.
Deleting an estimate
You can delete an estimate you no longer need. (You will then not be able to compare it with
actual costs and revenues for the job on a report.)
To delete many old estimates, and consolidate other, older transactions, you can condense
your QuickBooks Pro data as of a specified date in the past. For details, see “Condensing
data” on page 293.
To delete an estimate:
• Display the estimate you wish to delete, and then choose Edit > Delete Estimate.
Memorizing an estimate
Memorize an estimate when you want to:
• Use a similar estimate for a different customer or job.
• Create an estimate template that you can use for filling in quantities or other infor-
mation job by job.
To memorize an estimate:
1 Create a new estimate, or display an existing estimate.
2 Delete fields you don’t want to memorize.
3 Delete other fields you don’t want to memorize. For example, you can enter items but
not quantities.
4 Choose Edit > Memorize Estimate.
5 When prompted to remove the customer:job name, click OK.
6 In the Memorize Transaction window, give the memorized estimate a unique name by
which you can identify it on a list.
7 Click OK.
QuickBooks Pro puts the memorized estimate on your Memorized Transaction list,
which may also include other types of memorized transactions (for example, checks,
invoices, and bills).
The memorized estimate has no customer:job name.
To use a memorized transaction:

2 Select the memorized estimate you want to use, and then choose Use from the Actions
pop-down menu.
3 In the Customer:Job field, enter the customer and job name for the new estimate.
4 Fill in or edit the estimate, and then click OK.

Turning an estimate into an invoice

When the customer has accepted your estimate and has agreed to pay a fixed amount
(rather than for actual time and costs), you can turn the entire estimate into an invoice.
After you do this, you can modify the invoice if necessary.
If you invoice in installments or phases, you can create multiple invoices from the same
estimate. If your estimate is in sections, as recommended in “Tip for jobs invoiced in install-
ments or phases” on page 121, delete all sections from the invoice except the one for this
installment.
Note: When you have the same fields on your invoice and estimate, you can easily transfer
your information from an estimate to an invoice. For example, if you have an Other
column titled UOM on both, you can transfer the unit of measure to the invoice.
(However, invoices don’t have markup columns.)
To turn an entire estimate into an invoice:

1 Locate the estimate by displaying the Customer:Job list, selecting the job (or the
customer, if there is no separate job for the customer), and choosing Estimate from the
2 Click Create Invoice at the bottom of the Create Estimates window.
After you click OK in the message window, QuickBooks Pro displays an invoice with
all the information from the estimate. The invoice includes subtotals for group items,
other subtotals, discounts, and sales tax if they were on the original estimate.
You may edit the invoice as you edit any other QuickBooks Pro invoice. For example,
you may delete lines, change prices or quantities, and add new line items. QuickBooks
Pro automatically recalculates sales tax, subtotals, and other calculated amounts.
Differences between the estimate and the invoice

Even when you have customized your estimates and invoices similarly, there are differ-
ences in what you see onscreen.
On an estimate, you see a preset cost and a markup.
Invoices, on the other hand, don’t have a Markup column. The Amount on the invoice
equals the Total on the estimate. The Rate (or Price) on the invoice is the sales price (the
estimate Total divided by the Qty).

Questions and answers about sales forms

When I preview an invoice, there is a Project field that is not in the Create Invoices window.
How can I put something in that field?
The Project field shows the job. If you have set up jobs for your customers on the
Customer:Job list, choose a job in the Customer:Job field of the Create Invoices window.
The job prints in the Project field of Service and Product invoices. (Professional invoices do
not print this field, but you can still track jobs for reports.)
How do I include units of measure (UOM) for line items?

Add a custom field for the item called “UOM.” (See “Adding customized fields” on
page 56.) Use a custom invoice or other sales form, and select the “UOM” column to print
on the sales form.
How can I print packing slips without prices?

If you order quadruplicate product invoices from Intuit, the last part is a goldenrod
packing slip with price information blocked out.
You can also create a custom invoice for which the Amount column is onscreen, but doesn’t
print. Change the header title to “Packing Slip.”
I changed the price (or rate or description) of an item on my Item list, but QuickBooks didn’t
update the invoice I was writing. How can I get the change on the invoice without having
to retype it?
Delete the item from the Item field of the invoice. Click outside the field. Then choose the
item again. Now it will have the updated information.
How can I enter a sales rep on a Service or Professional invoice?

You can use a custom form that looks just like a Service or Professional invoice (if that’s
what you like) but with a Rep field added. Also, if you assign customers to employees by
using the Rep field in the New (or Edit) Customer window, all sales to the customer are
attributed to the employee on Sales by Rep reports.
How can I calculate the daily overage or shortage from my cash register receipts? In Quick-
en, the last line of the split always showed the difference between my total deposit and the
detail from cash register receipts, but neither the Enter Cash Sales window nor the Make
Deposits window works that way.
Use the General Journal Entry window. (Choose Banking > Make General Journal Entries.)
• On the first line of the detail area, choose the name of your checking account in the
Account field. Enter the deposit amount in the Debit field.
• On the next several lines, show the detail. In the Account field, choose the appropriate
income account. Enter the amount in the Credit field.
If the total credits do not equal the total debits, the difference will be on the last line. An
overage will be in the Credit field. A shortage will be in the Debit field. Choose the appro-
priate account for this amount and click OK.

8 Receiving and depositing payments
Recording an invoice or statement payment 129

8
Overpayments, down payments, and prepayments 132

Retainers 134
Correcting the application of a payment 135
Depositing payments 135
Recording a return 139
Handling a bounced check from a customer 141
Questions and answers about payments 142
When you receive payments from customers for invoices or billing statements you’ve sent,
you’ll discover additional benefits of using QuickBooks’ accounts receivable:
• As you start to record a payment, you immediately see the customer’s current balance,
including any credits, and a complete list of outstanding invoices (or statement
charges). You can assign the payment to any of the invoices or statement charges.
• You can indicate which payments to group in a deposit in the same way your bank
groups them on its statements, according to type (check, cash, or credit card), and print
a deposit summary you can take to your bank.
• You can record a cash sale, create a credit memo, or create a refund check.
To record this type of payment Use this QuickBooks window
Payment against an invoice or billing statement Receive Payments
Full payment at time of sale Enter Cash Sales
Partial payment at or before time of sale Create Invoices

(use a Payment item)
Down payment, prepayment Receive Payments
Recording an invoice or statement payment

To enter a customer’s invoice or statement payment:
1 Choose Customers > Receive Payments.
Receiving and depositing payments • 129

If the payment is for a

particular job, make
sure you choose the
job as well as the
Click here to add
customer’s name.
this deposit
reminder to iCal (see
Group payments
page 98 for more
with other unde-
information).
posited funds or
deposit them directly For more infor-
to an account. See mation on
“Depositing discounts, see
payments” on “Applying a
page 135. discount for early
payment” on
When you see the page 130.
QuickZoom cursor,
double-click an
This shows the $10,000 payment automatically applied to the oldest invoice first (number 139). To
invoice to display
change the way the payment is applied, click Clear Payments, and then manually enter amounts in
more detail.
the Payment column.
2 Enter the Customer:Job name. If the payment is for a particular job, make sure you
choose the job as well as the customer’s name.
The bottom half of the window displays any unpaid invoices (or statement charges) for
this customer or job.
If a customer pays for two jobs with one payment, use the Receive Payments window
twice and split the amount of the payment as though it were two payments.
• Choose the first job in the Customer:Job field, and enter only the amount the
customer is paying for that particular job in the Amount field.
• Apply the amount to the correct invoice or invoices by clicking the invoice in the
✓(check mark) column.
• Repeat the process for the other job.
3 Enter the Amount, Pmt. Method, and Check No. (if the payment method is by check).
The payment is automatically applied to the oldest invoices or statement charges first.
See “Sales and invoicing preferences” on page 275 to change this setting.
If the customer sends more money than he or she owes, the extra amount is treated as
unapplied credit. See “Overpayments, down payments, and prepayments” on
page 132 for more information.
4 (Optional) To change the way the payment is applied, click Clear Payments to clear the
Payment column, and then enter the amounts you want to apply the payment to.
5 Click Next to record this payment and enter another one, or click OK.
Applying a discount for early payment

Use the Discount Info button when your payment terms include a discount for customers
who pay before the due date. QuickBooks holds any credit amount in accounts receivable
until you apply it to an invoice or issue a refund check.
To apply a discount for other reasons besides early payment, use the Discount item. See
“Discount items” on page 83.
130 • Receiving and depositing payments

To apply a discount:
1 Fill in the top of the Receive Payments window.
If the Disc. Date column shows a date the same as or earlier than the payment date,
there is a discount available to this customer based on the terms on the original invoice.
You can apply a discount even if you did not set up discount terms prior to receiving
payments.
2 Click in the Payment column of the appropriate line, and then click the Discount Info
button.
If the Disc. Date
column shows a date
on or before the
payment date, click
the invoice in the list
that you want to
discount; then click
Discount Info to
apply the discount
amount you owe
your customer.
QuickBooks calcu- Click Discount Info to see

lates the suggested this Discount Information
discount amount window.
based on your terms
and the payment
date. Enter the account you use to
track discounts given.
3 Use QuickBooks’ calculated discount amount, or enter another amount.

4 Enter the expense account you use to track discounts.
5 Click OK.
Recording bad debts

You can also use the Discount Information window to record bad debts and write-offs from
your customers. This method does not change your sales tax liability.
To record bad debts:

1 Open the Receive Payments window and choose the customer from whom you incurred
the bad debt.
2 Leave the Amount field at 0.00.
3 In the Memo field, enter an appropriate description.
This description appears in the customer’s register and prints on statements.
4 Click in the Payment column of the line that will not be paid; then click the Discount
Info button.
5 In the Discount Information window, enter the amount of the bad debt in the Amount
of Discount field and the name of your bad debt expense account in the Discount
Account field.
6 Click OK in the Discount Information window and the Receive Payments window.

Calculated amounts in the Receive Payments window

The Receive Payments window shows several calculated amounts for your convenience:
Existing Credits, Total to Apply, and Unapplied Amount.
Select this checkbox From the payment on the previous page, $0.00 is unapplied, because the
if there are existing customer paid the discounted invoice amount and not the original invoice
credits and you want amount.
to apply them now.
Existing Credits
The Existing Credits for a customer consist of any amounts from transactions that resulted
in credit to the customer, such as an overpayment, down payment, return for which you
recorded a credit memo, or cancellation of an order after paying. QuickBooks displays this
amount automatically as soon as you enter the customer’s name. To apply existing credits
to invoices (or statement charges), select the Apply Existing Credits? checkbox.
Total to Apply
The Total to Apply is the sum of the current payment amount and the customer’s existing
credits (if the checkbox is marked). It is the total amount available to apply to invoices (or
statement charges). QuickBooks calculates this amount automatically after you fill in the
amount of the current payment or mark the checkbox to apply credits. If the total includes
both existing credits and a payment, QuickBooks applies the existing credits to open
invoices or statement charges first. It then applies the current payment amount.
Unapplied Amount
If you have “Automatically Apply Payments” turned off in Sales/Invoicing Preferences,
QuickBooks recalculates the Unapplied Amount each time you apply part of the payment
to an invoice. Initially, the figure displayed is the same as the Total to Apply amount. As you
apply the payment to invoices, the Unapplied Amount field shows the difference between
the Total to Apply amount and the totals shown in the Payment column. When the Total to
Apply amount is applied completely, the Unapplied Amount becomes 0.00.
If the customer has sent more than he or she owes, the overpayment is in the Unapplied
Amount field after you have applied the payment to all open invoices (or statement
charges). The next time you use the Receive Payments window for this customer, this new
credit will be part of the customer’s Existing Credits.
Overpayments, down payments, and prepayments

If a customer sends you more money than he or she owes, there will be an amount left over
at the Receive Payments window after you have applied the payment to invoices (or
statement charges). You can print a credit memo for your customer, acknowledging the
amount you owe.
Whether you print the credit memo or not, QuickBooks keeps track of the credit amount,
and you can apply it to any future invoices (or statement charges) for the customer.
QuickBooks either holds the money you receive for payments in an account called Unde-
posited Funds until you record a deposit to your bank account, or deposits the money
directly into a checking or other account. See “Depositing payments” on page 135.

To record an overpayment, down payment, or prepayment:

1 Choose Customers > Receive Payments to enter the payment.
Important: If you’re recording a down payment, and you are doing more than one job
for this customer, be sure to specify both the customer name and job name
in the Customer:Job field. The job name will ensure that this down payment
gets applied to invoices (or statement charges) for this particular job.
2 For an overpayment, apply as much of the payment as you can to outstanding invoices
(or statement charges).
3 Note the leftover amount in the Unapplied Amount field.
If the payment is a down payment, and there is no invoice (or statement charge) yet, the
entire payment amount is displayed in the Unapplied Amount field. QuickBooks holds
the unapplied amount with this customer’s name, so that when you do have an invoice
or statement charge for this customer, you can apply this down payment amount.
The next time you enter this customer in the Receive Payments window, this credit
amount is included in the Existing Credits field.
The customer’s balance (next to the customer name in the Customer:Job list) also
reflects the credit amount.
4 Click Print Credit Memo to give the customer a receipt for the down payment or over-
payment. Click Yes in the Print Credit Memo window, and then click Print.
The amount that prints on the credit memo is the dollar amount in the Unapplied
Amount field minus the amount in the Existing Credits field.
5 Click OK.
Recording a down payment on the Credit Memo form

You can also use the Create Credit Memos/Refunds window to record a down payment
and print a receipt. Whether you use the Receive Payments window or the Create Credit
Memos/Refunds window to record a customer’s down payment, the credit amount ends
up in the Existing Credits field of the Receive Payments window, and you can use the down
payment amount to pay off part or all of an invoice (or statement charge).
To record a down payment using the Credit Memo window:

1 Choose Customers > Create Credit Memos/Refunds.
2 Fill in the top of the credit memo just as you would an invoice for this customer or
customer and job.
3 In the line-item area, use a payment item to record the down payment amount. You can
add any description for the down payment.
For more information, see “Payment items” on page 84.
4 (Optional) Click Change Title, and type “Down Payment” in the Set Title field; then click
OK.
5 Add a customer message and memo.
6 Press x P to print the credit memo.
7 Click OK to record the credit memo.
The credit amount appears in the Receive Payments window for this customer. You can
use the credit (down payment) amount toward any invoice (or statement charge) for
this customer.

Retainers
When you receive income in advance of performing a service (a retainer), this money
creates a liability because you owe the service to the customer. As you work off the liability,
you may want to know how much remains. For example, property owners may receive
prepaid rent.
Note: If your company is a legal firm, do not use this procedure to track retainers. Instead,
choose Help > QuickBooks and Your Industry for detailed instructions for your
industry.
To use retainers in QuickBooks, you need to set up the following:
• An Other Current Liability account for tracking retainers. Retainers are liabilities
because in return for them, you owe clients a certain amount of work.
- Name this account “Retainers,” and type unearned retainers in the description field.
- Set up the account with a zero opening balance unless you want to track retainers
existing as of your start date.
• An item of the Other Charge type to use for showing the retainer on invoices.
- Name this item “Retainer,” and type retainer applied in the Description field.
- In the Account field, enter the name of your account for tracking retainers.
• An item of the Payment type to use for showing the original payment received.
- Name this item “Payment,” and type Payment by check received in the Description
field.
- Choose Check in the Payment Method field. If you accept advance payments by other
methods, set up separate items for each method.
To add a new balance sheet account, see “Adding new accounts” on page 66. To add a new
item, see “Creating items” on page 76.
To track receipt of the retainer:

1 Write an invoice for the customer, choosing the retainer item in the Item field.
Although you need to have this invoice in QuickBooks, you don’t have to send it to the
customer.
2 Edit the description so that it says “Retainer account established.”
3 In the Rate field, enter the retainer amount as a positive number.
This amount increases the balance of your liability account that tracks retainers.
4 On the next line, choose the payment item in the Item field.
5 In the Rate field, enter the payment amount as a positive number.
QuickBooks automatically makes a payment negative. This line item balances the
previous line item and makes the invoice balance zero.
To apply the retainer to services:

1 On an invoice for the customer, enter one or more line items for services.
Usually, you’ll write a new invoice. However, you could add the first service to the
invoice that shows receipt of the retainer. You could even add all subsequent services
to the same invoice.
2 Subtotal if you have more than one line item.
3 On the next blank line, choose the retainer item in the Item field.

4 In the Rate field, enter the amount of the retainer you are applying as a negative number.
This amount decreases the balance of your liability account that tracks retainers. If you
apply an amount equal to the charges on the invoice, the balance on the invoice is zero.
To see the current retainer balance for each client, you can create a custom report.
To create a report of retainer balance by customer:

1 Choose Reports > Custom Summary Report.
2 Customize the report as follows:
• In the Customize Report window, select the earliest dates for customers that still
have retainer balances in the Report Dates field. Select Customer in the Row axis
field.
• (Optional) In the Advanced Options window, select Non-zero in the Display Rows
area.
• In the Filter Transactions window, select your account for tracking retainers in the
Account field.
• In the Format Header/Footer window, enter a new report title that describes the
report in the Report Title field (for example, Retainer Balance by Client).
See “Using the Customize button” on page 252 and “Filtering report data” on page 255
for details.
3 Memorize this report so you can recall it later.
See “Memorizing and recalling reports” on page 258.
4 Click OK.
Correcting the application of a payment

If you apply a payment to the wrong invoice (or statement charge), you can easily correct
the error by editing the payment transaction.
To correct the application of a payment:

1 In the Accounts Receivable register, select the payment you want to change.
Choose Edit > Find to locate the payment if necessary. See “Finding a specific trans-
action” on page 210.
Note: You cannot edit or delete a payment that has been deposited. To edit a deposited
payment, you must remove it from the deposit transaction. For specific instruc-
tions, see “Editing or deleting deposited payments” on page 138.
2 Press x E.
Make any changes in the Receive Payments window and click OK to record the change.
Depositing payments
When you receive payments, whether for invoices or cash sales, you can either show them
as deposited into a bank account, or you can wait until the end of the day or the end of the
week to deposit the money you’ve collected. QuickBooks allows you to use the method you
prefer for depositing payments.
When you are deciding on the method to use to deposit payments, think about how your
bank statement shows deposits. You should select the deposit method in QuickBooks that
imitates your bank statement to make it easier for you to reconcile your bank accounts.

If the bank statement shows a lump sum for a deposit, you should choose to group
payments with other funds for later deposit; if the bank statement shows each individual
check that was deposited, you should choose to deposit directly to an account.
You choose a deposit method in the Receive Payments window, the Enter Cash Sales
window, or the New/Edit Item window for a payment item.
Note: If you use invoices to bill your customers, and you deposit payments directly to
several different accounts, create a separate payment item for each account.
If you choose Deposit To and select an account from the pop-up menu, QuickBooks auto-
matically records a deposit for the amount of the payment in the account you selected on
the date you received the payment.
If you choose Group with other undeposited funds, QuickBooks holds your undeposited
funds in an other current asset account called Undeposited Funds until you record a
deposit.
To record a deposit:
1 Choose Banking > Make Deposits.
If you have received payments that you have not yet deposited into a bank account,
QuickBooks displays them in the Payments to Deposit window.
2 In the Payments to Deposit window, click on the payments you want to deposit; then
click OK.
QuickBooks puts the payments in the Make Deposits window.
3 In the Make Deposits window, select the account you’d like to deposit into.
4 In the detail area of the Make Deposits window, type in any amounts to deposit that are
not payments you received for sale of items.
Deposits that are not customer payments might include refunds or rebates from
vendors, or money an owner is investing in the company.
5 Click OK.

Printing a deposit summary to take to the bank

When you record a deposit into a bank account, you can print a deposit summary that lists
the payments you have recorded. Use the printed list to help you fill out a deposit slip at
the bank.
To print a deposit summary:

2 Click the payments you want to deposit; then click OK.
3 With the Make Deposits window open, choose File > Print Deposit.
For more information on printing deposit summaries, choose Help > QuickBooks Help,
click “Printing” in the left column, and then click Deposit slips.
Separating deposits
To make it easier to reconcile your bank accounts, separate deposits if your bank statement
separates them. For example, your bank may separate credit card deposits and checks. You
should treat payment methods the same way your bank does, so that your QuickBooks
check register matches your bank statement.
To put different payment methods into separate deposits:

2 Check off only one type of payment method in the Payments to Deposit window.
3 Click OK and complete the deposit in the Make Deposits window.
4 Click Next in the Make Deposits window to record your deposit; then click Pmts.
5 Choose another type of payment, and repeat the process.
Depositing American Express charges

With most bank credit cards, you simply deposit in QuickBooks the amount your customer
has charged on the card. Your bank credits you with the total amount charged and the
credit card company charges you a fee. With American Express®, you send your receipts
to the credit card company and they send you back your revenue minus their charge.
To set up a system to track receipts charged to American Express:

1 Add a current asset account to track payments you receive that are American Express
charges. Call it something like “Due from AmEx.”
As the opening balance, enter the amount that American Express currently owes you.
2 As your customers make payments using American Express, you can choose between
two methods:
• If the customer pays at the time of the sale, use the Cash Sale window and enter
American Express as the payment method. If you are depositing the payment
directly to an account, choose the “Due from AmEx” account in the Deposit To field.
• If the customer will pay after receiving an invoice or billing statement, fill in the
invoice or statement without any reference to payment method. Then use the
Receive Payments window as usual when you receive the customer’s charge to
American Express. At the Pmt. Method field, choose American Express. If you are
depositing the payment directly to an account, choose the “Due from AmEx”
account in the Deposit To field.

3 When you send in your receipts to American Express, choose Banking > Make Deposits.
• In the Payments to Deposit window, select those payments with American Express
as the payment method.
• In the Make Deposits window, in the Deposit To field, choose the “Due from AmEx”
account.
• Click OK.
4 When you receive a check from American Express, choose Banking > Make Deposits.
• If you see the Payments to Deposit window, do not select any payments. Click OK
to display the Make Deposits window.
• Choose your bank account in the Deposit To field.
• Enter the original total of the receipts. Choose “Due from Am Ex” in the From
Account column.
• Enter the fees that American Express charged you as a negative amount to arrive at
the correct deposit amount. Choose your expense account that tracks credit card fees
in the From Account column.
• Click OK.
Getting cash back from a deposit

You can add one line in the Make Deposits window to indicate that you received cash back
after making the deposit.
To record a deposit with a cash withdrawal:

2 In the Payments to Deposit window, click the payments you want to deposit; then click
OK.
3 In the blank line after the last item, enter the following:
• In the Amount column, enter the amount of cash you got back with a minus (-) sign
in front.
• In the Account column, enter your petty cash account or the expense account related
to how you spent the money.
• In the other columns, enter any necessary information.
4 Click OK.
Editing or deleting deposited payments

If you need to edit or delete a payment that you’ve already included in a deposit in the
Make Deposits window, you must remove the payment from the original deposit trans-
action before you can edit or delete it in the A/R register, the Receive Payments window,
an invoice, a billing statement, or a cash sale.
Important: If you have set up QuickBooks to bypass Undeposited Funds and deposit
payments directly to an account, you cannot edit or delete a payment without
affecting your records. When you delete a payment from the account register,
the payment no longer exists in QuickBooks. You will need to enter the correct
deposit.

To edit or delete a payment that has been deposited through the Make Deposits window:
1 From the Undeposited Funds register, select the deposit containing the payment you
want to edit or delete.
2 Choose Edit > Edit Deposit.
3 Select the line containing the payment you want to delete.
4 Choose Edit > Delete Line, or press x B.
QuickBooks deletes this payment from this deposit. The payment still exists in your
records; it is just undeposited. QuickBooks puts the money back in Undeposited Funds.
5 Click OK in the Make Deposits window to record the deposit without the payment
you’ve deleted.
6 Edit or delete the original payment transaction.
7 After editing a payment, you can re-deposit it using the Make Deposits window.
Recording a return
Use the Create Credit Memos/Refunds window to record a return in either of these situa-
tions:
• A customer brings back items for which you have already recorded a payment for an
invoice or a cash sale.
• A customer cancels an order for items for which you have already recorded a payment
for an invoice.
Note: If you use billing statements, you can enter a negative statement charge to record a
return. See “Entering statement charges” on page 117 for details.
To record a return:
1 Choose Customers > Create Credit Memos/Refunds.
2 Fill in the window, entering the returned items in the line-item area.
QuickBooks decreases the income accounts of the invoice items by the amount of the
return.
In the line-item area,

enter the returned
items.
3 If you plan to print the credit memo for your customer, you can enter a customer
message.

4 Click OK.
QuickBooks enters a negative amount in your A/R register, indicating that you owe
this customer this amount.
To print a credit memo for the returned items:

• Choose File > Print Credit Memo.
To write a refund check for the credit amount:

1 Display the credit memo for the amount you’d like to refund, and then click Refund.
Leave Accounts Receivable as the account in the detail area of the refund check. This
ensures that the credit and refund are correctly accounted for in your records.
2 Make sure all the information on the check is correct.
3 Select the “To be printed” checkbox to print this check later, or press x P to print the
check now.
4 Click OK.
Now that you’ve recorded the credit memo and check, you need to connect the check to the
credit memo in the Receive Payments window so that QuickBooks can track this trans-
action.
To connect the refund check to the credit memo:

2 Choose the customer to whom you just wrote a refund check.
You’ll see the amount of the credit included in the Existing Credits field and the refund
check in the bottom section of the window.
3 On the Refund Chk line, enter the credit amount (this is the same as the check amount)
in the Payment column and press Tab.
4 Click OK.
The refund check is now “linked” to the credit memo you wrote for this customer.
To apply a credit amount to an invoice or billing statement:

2 Choose a customer’s name.
You’ll see the credit amount in the Existing Credits field.
3 Select the “Apply Existing Credits?” checkbox to apply the credit amount to any invoice
for this customer.
4 Click OK.
For more information about the calculated amounts in the Receive Payments window,
see “Existing Credits” on page 132.
When you record a return, you can void an invoice or a billing statement if you haven’t
received a payment yet. You retain a record of what was returned, and you can edit the
memo on the invoice or statement to state the reason for the return.
To void an invoice or billing statement:

1 Display the original invoice or statement.
2 Choose Edit > Void Invoice, and then click OK.
QuickBooks enters the word VOID: in the Memo field.

Handling a bounced check from a customer

When a customer’s check bounces, subtract the amount of the check from the account
where you originally deposited the check, and update your A/R account to show that you
are still owed the amount of the check.
To create an item for tracking bad checks:

2 Choose Other Charge from the Type pop-up menu.
3 Enter the item name as Bad Check.
The type should be
Other Charge.
For the account, choose your

checking account.
• In the Account field, choose your checking account.

• Leave the zero amount in the Price field.
• Click OK.
To record a bounced check if you send your customers invoices:

1 Choose Customers > Create Invoices and fill in the customer information.
2 Change the date to the date the bank reversed the deposit.
3 Enter the Bad Check item in the detail area. For the amount, enter the amount of the
bounced check plus any additional bank charges you want to pass on to the customer.
4 To assess a penalty as well, you should create another Other Charge item called
Penalties. The account for this item can be an income account. Add the Penalty item in
the detail area.
5 Change the terms to make this invoice due now with no discount.
6 In the Memo field, you can enter references to the invoices paid with the bounced
check.
7 Click OK.
To record a bounced check if you send your customers billing statements:

1 Open the register for the customer whose check bounced.
2 Change the date to the date the bank reversed the deposit.
3 Enter the Bad Check item in the Item field. For the amount, enter the amount of the
bounced check plus any additional bank charges you want to pass on to the customer.
4 In the Description field, you can enter references to the statement charges paid with the
bounced check.
5 To assess a penalty as well, you should create another Other Charge item called
Penalties. The account for this item can be an income account. Add the Penalty item as
another statement charge.

6 Click Record.
7 Print a billing statement for this customer.
If you receive a replacement check from the customer, enter it in the Receive Payments
window as a payment for the invoice or statement charge you just created.
If the customer never sends you another check to cover the one that bounced, record the
amount as a bad debt expense in the Receive Payments window. See “Recording bad
debts” on page 131.
Questions and answers about payments

I want to record a payment from a customer. Why doesn’t the customer’s invoices show up
in the Receive Payments window?
If you use jobs on invoices or billing statements, you must choose the job in the Receive
Payments window. If one payment covers more than one job, record the portion for each
job separately. The Customer:Job list then displays the outstanding balance for each job.
My customer has an unapplied credit because of overpaying for one job. How can I apply
the credit to a second job for that customer?
• In your A/R register or the register for that customer, select the overpayment.
• Choose Edit > Transaction History. If there is a deposit, select it and click Go To.
• At the Make Deposits window, choose Edit > Delete Deposit and click OK.
• In the A/R register or customer register, select the same payment and click Edit.
• Edit the Amount field of the payment to be the correct amount for the first job (the
Unapplied Amount should become zero), and click OK.
• Enter a new payment in the Receive Payments window for the second job and for the
amount of the credit.
• Now deposit the two payments (and anything else that was part of the deleted deposit).
If you had previously reconciled the deposit, click in the ✓ field of this deposit in your
check register, and click Record.
A customer overpaid. I clicked Print Credit Memo in the Receive Payments window. Why
isn’t the credit memo showing up in my A/R register?
The only credit memos that appear in the A/R register are those you write in the Create
Credit Memos/Refunds window. QuickBooks continues to display the credit in the Existing
Credits field of the Receive Payments window. You can apply the credit to any invoices (or
statement charges) in this window, now or later.
How should I write a refund check for a customer overpayment?

• Write a check in the Write Checks window:
- Enter the customer name in the Pay to the Order of field.
- Choose the A/R account name in the Account field.
- Choose the job (if applicable) or customer in the Customer:Job field.
• In the Receive Payments window, apply the existing credits to the refund check and
click OK.

9 Inventory
Inventory overview 143

9
Viewing items on order 145

Receiving inventory items 145
Using the inventory register 148
Viewing the average cost of inventory items 148
Adjusting value and quantity on hand 149
Returning items to a vendor 150
Reports about inventory 151
Inventory overview
If your business purchases items, keeps them in inventory, and then sells them, you can
track the current number in stock and the value of your inventory after every purchase and
sale.
After you enter the information about each item, you can:
• Fill in ordering information on purchase orders
• Track changes in the value of your inventory when you receive and sell items
• Fill in sales information on invoices or cash sales receipts
• Track income when you sell items
• Track cost of goods sold when you buy and sell items
• View the value of your inventory at any time
• View your average cost for any of your inventory items
• Set a warning when you enter a sale for more items than you have in stock (although
QuickBooks still allows you to enter the sale)
Accounts used to track inventory

To track inventory, you need at least one each of the following types of accounts on your
chart of accounts:
Account type and QuickBooks uses for

Comments
suggested name tracking:
Other Current Asset The current value of your (Optional) Set up subaccounts to track the value of different types of
account named inventory inventory.
Inventory Value
Income account The income from the (Optional) Set up subaccounts to track income for different types of inven-
named Sales resale of inventory items tory.
Inventory • 143
Account type and QuickBooks uses for

Comments
suggested name tracking:
Cost of Goods Sold The cost to you of the QuickBooks automatically creates this account for you the first time you
items you have sold add an inventory item.
On a profit and loss report, QuickBooks subtracts the total cost of goods
sold from your total income to provide a gross profit before expenses.
(Optional) Set up subaccounts to track costs for different types of inven-
tory sold.
For more information, see “Adding new accounts” on page 66.
Ordering inventory with PO’s

When you use purchase orders to order inventory, QuickBooks helps you fill in the
purchase order quickly and keeps track of how many items are on order and when you
expect to receive them.
For more information, see Chapter 16, Purchase orders, starting on page 199.
Average cost of an inventory item

The average cost of an inventory item equals the total cost of the items currently in stock
divided by the number of items in stock. QuickBooks uses this method to determine the
value of inventory, rather than another method such as LIFO or FIFO.
QuickBooks recalculates the average cost of an item every time you record the purchase of
more units of the item. It adds the cost of the new items to the cost of the old stock and then
divides by the total number of new and old items.
For example, suppose you originally bought 100 shirts at $5 each. When you reordered, the
price had gone up to $6 each. When you receive a new shipment of 100 shirts, you have 10
from the original shipment left in stock.
Thus:
The cost of your old stock = 10 shirts X $5 per shirt = $50 cost
The cost of the new inventory = 100 shirts X $6 per shirt = $600 cost
The cost of the old and new inventory combined = $50 + $600 = $650
You now have 110 shirts total, so the (total cost) / (total number) =
average cost = ($650) / 110 = $5.91
If your quantity on hand of an item goes below zero, that is, you enter an invoice for items
you don’t have yet, QuickBooks uses your last average cost as the average cost of the item.
When you actually purchase the items, QuickBooks adjusts the average cost if necessary.
Selling inventory
When you sell items from inventory, QuickBooks not only helps you fill in the sales form
quickly but also keeps track of how many items remain in stock after the sale. As you sell
items, QuickBooks assumes that you are reducing the value of your inventory by the
number of items sold times the average cost per item. Thus, a sale does not affect the
average cost.
144 • Inventory
For information about how to record the sale of inventory items, see “Entering a sales trans-
action” on page 95.
After you enter a sale, QuickBooks does the following:
• It increases your sales income by the amount of each line item.
• It adjusts your cost of goods sold by the result of (qty sold x avg cost each item).
• It enters a transaction in your inventory register for each item sold.
Setting up to track inventory

To set up your business to track inventory, follow this procedure:
• Turn on the inventory preference.
Choose Company > Company Settings, and then choose Inventory/Purchase Orders/
Estimates from the Show pop-up menu. Select “Inventory and Purchase Orders are
active,” and then click Apply.
• Create your inventory items.
See “Inventory part items” on page 80 for details.
Viewing items on order

After you record a purchase order for inventory items, QuickBooks tracks which items, and
how many, you have on order. You can view details as follows:
To view: Display: Comments
List of purchase Purchase Order list. List displays vendor, date, and PO number.
orders • Choose Vendors > Purchase Orders List.
A particular Purchase Order list. When you view a purchase order recorded
purchase order • Double-click the purchase order on the list. earlier, it displays information about which
items have been received to date.
Quantity on order for Inventory stock status by item report. QuickBooks calculates the quantity on order
all inventory items • Choose Reports > Inventory > Stock Status by Item. for each item from all open purchase orders.
List of open purchase QuickReport for that item. To view a particular purchase order listed on
orders for one item • Choose Lists > Items. the QuickReport, double- click it.
• Select the item, and then choose QuickReport from
Receiving inventory items

Whether or not you use purchase orders, there are three ways to record the inventory items
you receive, depending on how you pay for the items:
• You buy inventory over-the-counter.
• You receive items, and the bill comes later.
• You receive items with the bill included.
Inventory • 145
Buying inventory over-the-counter

When you’re paying for and receiving items on the spot, you record the items and payment
in one step on the check or credit card form. When you pay with cash, use the check form
to enter the payment if you have petty cash set up as a bank account type on your chart of
accounts.
To pay for inventory items with a check, see “To distribute your check amount to items:”
on page 189.
To pay for inventory items with a credit card, see “To distribute your charge amount to
items:” on page 195.
Receiving items and getting a bill later

When you receive items and get the bill later, enter the information in two steps: enter an
item receipt, and enter the bill when you get it.
Step 1: Enter an item receipt

To enter an item receipt for items that were not ordered on a PO:
1 Choose Vendors > Receive Items.
Click Format to customize

the item receipt format.
Click here to add this receipt

to iCal (see page 98 for more
information).
2 Fill in the Vendor field.

3 Click the Items tab.
4 Enter the items you’re receiving in the detail area.
5 Click Next to enter another item receipt, or click OK to record this item receipt.
QuickBooks increases your accounts payable by the amount shown on the item receipt.
You can see the increase in the Accounts Payable register.
For each inventory item on the receipt, QuickBooks adjusts the quantity in stock and
recalculates your average cost for each item.
146 • Inventory
To enter an item receipt for items ordered on a PO:

1 Choose Vendors > Receive Items.
2 Fill in the Vendor field.
If one or more open purchase orders exist for this vendor, you can receive against them.
3 Click Yes in the Open PO’s Exist window.
4 Select the PO’s which contain items you’re paying for in the Open Purchase Orders
window.
QuickBooks places a check mark to the left of the PO’s you click. You can select more
than one PO.
5 When you’ve marked the correct PO’s, click OK.
QuickBooks returns you to the Create Item Receipts window and fills in the items from
the PO’s you marked.
6 Make any necessary changes to the items listed in the detail area.
• If you didn’t receive all the items on the PO, you can edit the quantity (or cost) of any
item, or delete an item completely from the detail area of the receipt. Edit the detail
area until it reflects the actual items you received.
• If you make a mistake editing the detail area, or delete a line you later decide you
want to have on the receipt, click Select PO; then click the PO containing the items
you want to re-add to the receipt. QuickBooks remembers the edits you’ve made to
other lines, but replaces any lines you deleted.
• If you received additional items not on any purchase order, enter them directly on
the next available line.
• You can assign a customer or job in the Customer:Job field for any items.
7 If you make changes in the detail area and then decide you want to start over or see all
items as they are on the PO, click Clear Qtys, and then click Receive All.
QuickBooks replaces your changes with the original quantity and cost of items from the
PO.
8 Click Next to enter another item receipt, or click OK to record this item receipt.
QuickBooks increases your accounts payable by the amount shown on the item receipt.
For each inventory item on the receipt, QuickBooks adjusts the quantity in stock,
lowers your quantity on order, and recalculates your average cost for each item.
Step 2: Enter the bill when you receive it

QuickBooks changes the item receipt into a bill. You can add any expenses that weren’t on
the item receipt.
To enter a bill for items you’ve received:

1 Choose Vendors > Enter Bill for Received Items.
2 Select a name from the Vendor pop-up menu.
3 Click the item receipt associated with this bill, and then click OK.
QuickBooks displays the Enter Bills window with the items from the item receipt in the
detail area.
4 In the detail area of the bill, correct the cost or amount if necessary. Add any other
charges (like sales tax or freight charges) to the Expenses tab.
Inventory • 147
5 Fill in the vendor’s terms.

QuickBooks fills in the date the bill payment is due, and can remind you when to pay.
See “Having QuickBooks remind you to pay your bills” on page 178.
6 Fill in the bill number in the Ref. No. field, and enter a memo in the Memo field.
The memo you enter here appears on the check you print to pay this bill.
7 Make sure the Amount Due equals the total on the bill. If the amounts aren’t equal, click
Recalc to add the amounts in the detail area and put their total in the Amount Due field.
8 Click Next to enter another bill, or click OK to record this bill.
If you made any changes to costs in the detail area, QuickBooks adjusts the average cost
for the inventory items you changed.
Receiving items with a bill included

To enter items and a bill in one step:
1 Choose Vendors > Receive Items and Enter Bill.
2 Fill in the Enter Bills window as described in the previous procedure.
Using the inventory register

You can view a register for your inventory asset account just as you can for any Other
Current Asset account. The inventory register has one entry for each item bought, sold, or
adjusted in a transaction.
To view the inventory register:

2 Double-click your inventory asset account.
These two transac-

tions are from the
same invoice. There
is one entry for each
inventory item on
the invoice. The ending balance is
the current value of
your inventory.
Viewing the average cost of inventory items

The average cost of an inventory item equals the total cost of the items currently in stock
divided by the number of items in stock. QuickBooks recalculates the average cost of an
item every time you record the purchase of more units of the item. It adds the cost of the
new items to the cost of the old stock and then divides by the total number of new and old
items.
148 • Inventory
To view the average cost of an inventory item:

2 Select the item you want, and then choose Edit from the Actions pop-down menu.
QuickBooks displays the average cost at the bottom of the Edit Item window.
To view the average cost of all inventory items:

• Choose Reports > Inventory > Valuation Summary.
For more reports about inventory, see page 151.
Adjusting value and quantity on hand

Although QuickBooks automatically adjusts your quantities after every purchase and sale,
you may need to adjust them yourself from time to time. For example, you may lose
inventory as a result of spoilage, fire, theft, breakage, or flood. Or, when you take a physical
inventory, you may discover that some quantities differ from the values in QuickBooks.
When you adjust a quantity, QuickBooks assumes that the average cost of the item remains
the same, and it adjusts the value accordingly. For example, if the average cost is $10 and
you reduce the quantity by 2, QuickBooks reduces the value of the items on hand by $20.
To adjust the quantity on hand:

1 Choose Vendors > Inventory Activities > Adjust Quantity/Value on Hand.
2 In the Adjustment Account field, enter the expense account for the expense of the
shortage or loss of inventory. If you need to assign the expense to more than one
account, enter a separate adjustment for each account.
The Total Value of Adjustment field in the lower right corner of the window displays the
amount QuickBooks assigns to this expense account, that is, the difference in the value
of your inventory.
3 Enter either the new quantity in the New Qty column or the quantity difference in the
Qty Difference column.
Note: QuickBooks calculates the other amount automatically. To enter a difference that
reduces the quantity, type a minus sign (-) before the number (for example, -4) in
the Qty Difference column.
4 Edit the value of the inventory after adjusting the quantity by selecting the “Value
Adjustment” checkbox.
For example, if you sell clothing and have extra swimsuits from summer that you have
to sell in December, they’re likely to be worth less than they were when you bought
them in spring. You’d enter a value adjustment after the summer season to show that
the swimsuits have lost value.
QuickBooks displays Current Value and New Value columns in the Adjust Quantity/
Value on Hand window.
5 In the New Value column, enter a new value for any of the items.
Note: If you edit the value, you’ll change the average cost of the items in stock. Edit the
value only if you know that the value of items has changed, even if the quantity
has remained the same.
6 Click OK.
QuickBooks enters the adjustment in your inventory register. See “Using the inventory
register” on page 148.
Inventory • 149
Returning items to a vendor

You can return items to a vendor before or after you’ve entered the bill in QuickBooks.
If you are recording a return for items before you’ve entered a bill, you use different
methods depending on whether you entered the items on an item receipt or on a purchase
order.
To record a return for items on an item receipt:

1 Delete the item receipt, or delete some items off the receipt or edit the quantities if
you’re returning a partial shipment.
• To delete the entire item receipt, display it; then press x D.
• To remove lines from an item receipt, click in a line; then press x B.
• To edit quantities, type over the old quantity with the new number.
If you originally used a PO to order the items you’re returning, and you don’t want to leave
the PO open for these items (because your vendor is not sending replacements, for
example), you can close all or part of the PO manually. See “Closing a purchase order
manually” on page 203.
To record a return to a vendor after you’ve entered a bill:

1 Choose Vendors > Enter Bills.
2 Select “Credit” at the top of the Enter Bills window.
3 Enter the vendor to whom you’re returning items.
4 Click the Item tab.
5 Enter the items.
QuickBooks decreases your quantity on hand of the items you enter and creates a credit
with this vendor which you can apply to your next bill. See “Applying credit from a
vendor to pay bills” on page 179.
150 • Inventory
Reports about inventory

Report title Report shows
QuickReport
Item QuickReport Opening and ending quantity on hand, and a list of every transaction (purchase, sale, or quantity
adjustment) that has affected quantity on hand since the beginning of the time period (defaults to this
fiscal year).
List of every open purchase order with quantities still on order for this item, and total on order.
Inventory reports
Stock Status by Item Item name, description, preferred vendor, reorder point, quantity on hand, quantity on order,
expected receipt date, and average sales per week of each inventory item. To calculate sales per
week, QuickBooks divides the quantity of sales for the whole period covered by the report by the
number of weeks in the period covered by the report.
Stock Status by Ven- Same information as the Stock Status by Item report, but grouped by preferred vendor.
dor
Open Purchase Open PO’s for this month, including vendor, PO number, and expected receipt date.
Orders
Valuation Summary Item name, description, unit price, quantity on hand, average cost, asset value, % of total inventory
value, retail price, retail value, and % of total retail value of each inventory item.
Valuation Detail For each inventory item, lists the opening and ending balances and every transaction (purchase, sale,
or adjustment) that has affected the inventory value since the beginning of the time period.
For each transaction, lists the date, transaction type, number, name, change in quantity, unit cost,
change in asset value, remaining quantity on hand, average cost, and remaining asset value.
Physical Inventory Item name, description, and quantity on hand of each inventory item, with lines to enter your physical
Worksheet count of each item.
Inventory Price List Item name, description, preferred vendor, and sales price of each inventory item.
To create an inventory item QuickReport:

2 Select an inventory item, and then choose QuickReport from the Actions pop-down
menu.
To create an inventory report:
1 Choose Reports > Inventory.
2 Choose the report you want.
You can customize and filter inventory reports, except for the Physical Inventory Work-
sheet and the Price List. To learn more about customizing and filtering reports, see “Using
the Customize button” on page 252 and “Filtering report data” on page 255.
Inventory • 151
152 • Inventory
10 Sales tax—track and pay
Sales tax overview 153

10
Turning on sales tax 156

Creating tax items for each single tax you apply 156
Creating tax groups 157
Editing sales tax items 158
Assigning taxes to customers 158
Marking items you sell as taxable 159
Applying sales tax to an invoice or cash sale 160
Non-taxable sales 161
Unusual tax situations 161
Keeping track of how much sales tax you owe 162
Paying sales tax 163
Sales tax overview

Keeping track of the sales taxes you have to collect and pay can be a challenge. You may
have to collect more than one tax per sale, and different sales may require different taxes.
Some of the things you sell may be taxable, while others aren’t. In addition, certain
customers must be taxed, while sales to others are non-taxable.
QuickBooks can help you automate your sales tax complexities so that you can enter sales
quickly and easily, and you have accurate information about the sales taxes you’ve
collected when it comes time to pay.
The following flowchart illustrates the basic steps you perform in the area of sales tax in
QuickBooks.
Sales tax—track and pay • 153

Sales Tax Payable account

When you set up a company that charges sales tax, or when you enter your first sale, Quick-
Books automatically creates a current liability account called Sales Tax Payable. The Sales
Tax Payable account keeps track of as many tax agencies as you need.
As you record invoices or cash sales with sales tax, QuickBooks automatically adds the tax
to the Sales Tax Payable account. To see a record of the transaction, use the Sales Tax
Payable register. See “Sales Tax Payable register” on page 162.
Understanding your tax rates and agencies

If your business collects only one tax for one agency
You must set up a preset, or most common, tax item when you create your QuickBooks
company file (if you indicated that you charge sales tax), or when you turn sales tax on in
company settings. To learn how to create your tax item, see “Creating tax items for each
single tax you apply” on page 156.
Once you’ve set up your tax item, QuickBooks is ready to use it automatically on sales
forms. Your sales tax liability report will show all your sales recorded as taxable or non-
taxable sales for the tax district associated with your tax item.
154 • Sales tax—track and pay

If your business collects several sales taxes

You charge one combination rate:
You report or pay several single taxes, but you want to charge your customers only one
overall tax amount, a combination of several single taxes. Setting up your taxes to work
automatically is a three-step process:
• First, create sales tax items for each single tax you must report on when you report sales
tax.
• Second, create a sales tax group that includes the single taxes.
• Third, choose which tax is your most common, so that the rate appears automatically.
You charge different rates under different conditions:

Some of the taxes you charge may be single taxes, while others are groups of taxes. Setting
up your taxes to work automatically is a three-step process:
• First, create sales tax items for each single tax you must report on when you report sales
tax.
• Second, set up group tax items for those taxes you charge that are made up of several
taxes.
• Third, choose which tax (single or group) is your most common, so that the rate appears
automatically.
Deciding whether to use single tax items or groups

QuickBooks reports taxable sales and non-taxable sales for each single tax item you create.
Use the following two examples of tax reporting to help you determine how to set up your
sales tax items.
The following scenario applies to both examples:
You collect sales tax for your state and several counties.
• State tax is 6%
• County X tax is 2%
• County Y tax is 2%
When you charge tax on a sale, you want your customers to see one overall tax amount, not
separate taxes for the state and county.
Example 1
When you report the tax you’ve collected to your state, you are required to show your
taxable and non-taxable sales for each county, and you are expected to report the state tax
you’ve collected separately:
• County X at 2%
• County Y at 2%
• State at 6%
If your reporting situation is like the one described in Example 1, you need to create
separate sales tax items for each county and the state, since you report on each separately.

For your customer’s benefit, you can create group tax items, one for each county, that
includes that county’s tax and the state tax.
• Group 1, called County X at 8%
- includes items for County X: 2% and State: 6%
• Group 2, called County Y at 8%
- includes items for County Y: 2% and State: 6%
This way, your customers see one overall tax, but QuickBooks can still report on each
county and the state separately.
Example 2
When you report the tax you’ve collected to your state, you are required to show your
taxable and non-taxable sales for each county, and expected to include state tax in each
county’s amount.
• County X tax is 8%
• County Y tax is 8%
If your reporting situation is like the one just described in Example 2, where you include
more than one single tax in the tax amounts you report, you do not need to create separate
tax items for the separate tax amounts, because you’ll never need to report on them sepa-
rately. Instead, create single tax items that look like the items you report on. You would
create one item called County X tax with a rate of 8%, and one item called County Y tax
with a rate of 8%.
This situation does not require any tax groups.
Turning on sales tax

If you did not specify that you charge sales tax when you first set up your company, you
need to turn on sales tax before you can track it.
To turn on sales tax:

1 Choose Company > Company Settings, and then choose Sales Tax from the Show pop-
up menu.
2 Select the “Customers are charged sales tax” checkbox, and then click Apply.
For more information about setting up your most common sales tax and other tax prefer-
ences, see “Sales tax preferences” on page 280.
Creating tax items for each single tax you apply

You’ll need to create a separate sales tax item for each tax whose amount you must report.
Use the following procedure until you’ve created as many tax items as you have single
taxes.
To create a single sales tax item:

2 Choose Sales Tax Item from the Type pop-up menu.

3 Enter a name for the tax.

This name will be one of the sales tax choices available when you create an invoice or
other sales form.
4 Enter a description to describe this sales tax on your sales forms.
The description prints on your invoices and other sales forms after the final line item.
You can NOT edit it on the forms themselves.
5 Enter the tax rate.
QuickBooks assumes the rate is a percentage. For example, enter 7.25 if the rate is
7.25%.
6 Enter the tax agency to whom you pay the tax.
If the tax agency is not already on your Vendor list, QuickBooks adds it to your list now.
When you are ready to pay the tax you owe to this agency, QuickBooks fills out a check
payable to this agency for the correct amount.
7 Click OK.
Creating tax groups

Even though you may be charging your customers a combination of local taxes and a state
tax, they’re used to seeing only one sales tax line and rate on receipts and invoices. By
creating group tax items, QuickBooks allows you to track and report taxes separately, but
display them as one combined amount to customers.
After you have added the single sales tax items you need, create a sales tax group for each
group of two or more single sales tax items you must apply at the same time to sales.
To create a sales tax group:

2 Choose Sales Tax Group from the Type pop-up menu.
Choose two or more
sales tax items from
the Item pop-up
menu, or enter a new
name to add it now.
The Group Rate is

the total rate of all
items in the group.
3 Enter a name for the group.

This name will be one of the sales tax choices available when you create an invoice or
other sales form.

4 Enter a description to describe this sales tax on your sales forms.

The description prints on your invoices and other sales forms after the final line item.
You can NOT edit it on the forms themselves.
5 In the Tax Item column, choose the single taxes that make up this group.
When you press Tab, QuickBooks fills in the rate, tax agency, and description of the
single tax. Continue to add single taxes to the group until all the correct taxes are
included.
6 Click OK.
Editing sales tax items

You can change the name, rate, and description of your sales tax item, and the tax agency
to whom you pay sales tax.
To edit a sales tax item:

2 Double-click the sales tax item you wish to change.
3 Enter your changes, and then click OK.
Assigning taxes to customers

To assign tax to a customer, complete two fields related to sales tax on the customer’s
record. You will need to:
• mark the customer as either taxable or not
• assign a preset single tax or tax group to the customer
When you enter this customer’s name on a sale, QuickBooks uses the tax you specified on
the customer’s record.
To assign taxes to customers:

2 Double-click an existing customer, or choose New from the Actions pop-down menu to
enter a new customer.
Select this checkbox
to automatically
calculate sales tax at
the rate associated
with this tax item on
sales to this
customer.
You can change the
taxable status and
the tax item on any
invoice or receipt.

3 If a customer is sometimes exempt from sales tax, enter the customer’s resale number
(or tax exemption ID).
4 If you usually charge this customer tax, select the “Taxable” checkbox to mark the
customer as taxable.
5 Choose the tax you usually charge this customer in the Tax Item field.
Your preset tax from the Sales Tax Preferences window is proposed on each customer
record. You can accept the proposed tax item or select a different tax item for this
customer.
6 Click OK.
Selling to out-of-state customers

If your tax agency requires you to track the amount of sales to out-of-state customers, use
the QuickBooks-created sales tax item with a zero tax rate, called “Out of State.”
Marking items you sell as taxable

Some of the items you sell may be taxable while others aren’t. For example, maybe you sell
taxable parts, but the services you sell are not taxable. In QuickBooks, you can mark any
item you sell as taxable. When you enter a sale for a taxable customer, QuickBooks calcu-
lates sales tax only for those items you’ve marked as taxable. You can change any default
tax information on any sale.
You can mark inventory parts, non-inventory parts, services, and other charges as taxable.
You cannot mark any other types of items as taxable; however, discount items allow you to
choose whether to apply the discount before or after sales tax is calculated.
To mark an item as taxable:

2 Double-click the item you want to mark as taxable.
When you mark
items as taxable,
they are included in
sales tax calcula-
tions.
On the sales form,
you’ll see a “T” next
to each taxable item.
3 Select the “Taxable” checkbox.

When you use this item in a sale, QuickBooks displays a “T” next to the item to show
you which items are taxable.
4 Click OK.
You can change the taxable status of an item on any invoice or receipt without changing an
item’s taxable status permanently. The change is only for the sale on which you’re working.

To change an item’s taxable status on a sales form:

• On the sales form, click a “T” to remove it, or click in the Tax column next to a line item
to make a “T” appear.
Applying sales tax to an invoice or cash sale

QuickBooks automatically calculates the tax on a sale if you have:
• Set up your most common sales tax (see page 280)
• Assigned taxes to your customers (see page 158)
• Marked taxable items on your Item list as taxable (see page 159)
At the time of sale, QuickBooks applies the tax you have assigned a customer to items
you’ve marked taxable (shown with a “T” on the sales form). When you enter a sale for a
new customer, QuickBooks automatically fills in your most common tax in the Tax field.
To apply a different tax to a sale:

1 Choose a different item from the Tax pop-up menu at the bottom of the sales form.
QuickBooks applies the new tax item or tax group to the taxable amounts on the sale.
2 Click OK or Next.
QuickBooks ask if you would like the change to be permanently stored with the name.
3 Click Permanent to always associate the new tax item or tax group with that customer.
OR
Click One time to use the customer’s preset tax item the next time you enter a sale to
this customer.
Using sales tax items in the detail area of a sale

When you want sales tax to apply to some taxable items on a sale, but not all taxable items,
use a sales tax item in the detail area of the sale. A sales tax line item calculates tax on the
taxable portion of the line above if that line is not a percentage.
Note: The tax item that you use in the detail area cannot be the same as the tax item selected
in the Tax field at the bottom of the form.
To add a sales tax line item to a sale:

• Choose the item from the list in the ITEM column of the detail area.
How a sales tax line item calculates tax

When you use a subtotal with a tax line item, the tax line item calculates tax on the taxable
portion of the subtotal amount.
For example, suppose your line items on an invoice are installation and an appliance,
followed by a tax line item.
Tax is calculated only on the item above the tax line item (appliance). Installation is not
included in non-taxable sales for the tax line item.

Now suppose that your line items are an appliance, cabinets, cabinet pulls and a subtotal
item, followed by a tax line item.
Tax is calculated on the taxable portion of the subtotal. All of the taxable items are included
in the tax. The non-taxable item (installation) is also included in non-taxable sales for this
tax item.
For more information about setting up subtotal items, see “Subtotal items” on page 83.
Non-taxable sales
If you never tax a customer, clear the Taxable checkbox on the customer’s record. See
“Assigning taxes to customers” on page 158.
To not tax a customer on a particular sale:

1 Clear the “Customer is taxable” checkbox at the bottom of the sales form.
2 Leave the sales tax item in the Tax field.
The sale is recorded as a non-taxable sale for the correct tax district or districts.
If the customer is taxable, but none of the items on a sale are taxable, leave the sales tax item
in the Tax field, so that the sale is reported as a non-taxable sale for the correct district(s).
Unusual tax situations

You may need to change the sales tax that QuickBooks automatically applies when you
have an unusual sale. The following table gives examples of special tax situations and how
you can handle them.
Special tax situation How to handle in QuickBooks Result
Sale to out-of-state Choose the Out of State sales tax item for the sale QuickBooks records the sale as non-tax-
customer (QuickBooks creates this item). able and out of state, so you can report it
when you pay taxes.
Some items on a • List items taxed at the same rate together. QuickBooks includes the taxable items
sale are taxed at one • Add a subtotal item below each set of items. subtotaled above each tax line item in
rate, some at that tax line item’s gross sales and taxable
• Add a tax line item below each set of taxable items.
another rate. sales. Non-taxable items included in the
• Create a placeholder 0.00% tax item to put in the subtotal above each tax line item are
Tax field, since you can’t record a sale with the Tax included in that tax item’s gross sales and
field empty. non-taxable sales.
All taxable items on • List all items taxable at the additional rate together. All taxable items are included in taxable
a sale are taxable at • Add a subtotal item below the set of items. sales for the tax item in the Tax field.
one rate; some items • Add a tax line item for the additional rate below the Items with the additional tax are included
are taxable at an subtotal line. in taxable sales for the tax line item.
additional rate.
• In the Tax field, enter the tax item for all taxable
items.

Special tax situation How to handle in QuickBooks Result
QuickBooks cannot • Create a tax item for the tax. QuickBooks reports the amount you type
calculate tax the • Enter the tax as a line item on a sale, then select and in as the amount of tax you owe your tax
way you need it cal- type over the amount of the tax using an amount you agency for the sale.
culated (for exam- calculate yourself. Taxable sales and non-taxable sales
ple, for tiered taxes). amounts are based on the taxable and
non-taxable amounts included in the item
(usually a subtotal) above the tax line.
Shipping and han- Set up an other charge item called “shipping and han- QuickBooks calculates tax on shipping
dling are taxable in dling” that is taxable. and handling, since you’ve marked it as
your state. taxable.
A sales tax credit or Enter it directly in the register of your Sales Tax Payable After you record your entry, QuickBooks
discount from the account: makes the transaction type GENJRNL
tax agency. • Put the tax agency name in the Vendor field and the (general journal). Next time you pay your
amount in the Paid column. sales tax, the credit or discount will be a
negative amount in the Pay Sales Tax
• Enter your income account for tax credits or dis-
window. Mark the Pay column next to the
counts in the Account field.
credit or discount, so that the payment
check is reduced by its amount.
Keeping track of how much sales tax you owe

You can view the sales tax liability you are accruing in the sales tax liability report and the
Sales Tax Payable register.
Sales tax liability report

QuickBooks’ preset sales tax liability report shows your total taxable sales, total non-
taxable sales, and the amount of sales tax you owe each tax agency as of the date you spec-
ified.
To view the sales tax report:

• Choose Reports > Vendors & Payables > Sales Tax Liability.
QuickBooks displays your sales tax liability report on an accrual basis unless you changed
the setting in the Sales Tax Preferences window. See “Sales tax preferences” on page 280 for
more information.
Sales Tax Payable register

Each time you enter a sale that includes sales tax, QuickBooks enters the tax information in
your Sales Tax Payable register.
Note: QuickBooks keeps track of transactions for all tax vendors in the same Sales Tax
Payable account.
To display the Sales Tax Payable register:

2 Double-click your Sales Tax Payable account.

To see a list of all transactions involving a particular tax agency:

1 Select a transaction involving a specific agency.
2 Choose Reports > QuickReport.
Paying sales tax

Use the Pay Sales Tax window to see how much tax you owe and to write a check to your
tax agency or agencies. QuickBooks updates your sales tax account with the payment infor-
mation. QuickBooks calculates the tax you owe on either a cash basis or an accrual basis.
To pay off your sales tax liability:

1 Choose Vendors > Pay Sales Tax.
2 In the Pay From Account pop-up menu, choose the account from which you want to pay
your sales tax agency or agencies.
3 Change the date in the “Show sales tax due through” field if necessary.
QuickBooks uses the date at the end of the last sales tax period. You can change the date
QuickBooks uses by indicating whether you pay monthly, quarterly, or annually in
Sales Tax Preferences. See “Sales tax preferences” on page 280.
4 Select the tax agencies you want to pay in the Pay column. Edit the amount you want to
pay if necessary.
If you make a mistake, click Clear Payments. The button name changes to Pay All Tax.
Click Pay All Tax to mark all of the taxes as ones you want to pay.
5 Click OK.
QuickBooks writes and records checks to the tax agencies you indicated. All you need
to do is print the checks.
QuickBooks also updates your sales tax report and Sales Tax Payable register to show
that you’ve paid the tax agencies.


11 Accounts receivable management
Viewing the accounts receivable register 165

11
Viewing the customer register 166

Editing a transaction in the A/R register 166
Changing the opening balance for a customer 167
Viewing an A/R transaction history 167
Viewing a QuickReport about a customer 168
Working with A/R reports and graphs 169
As you enter A/R transactions, QuickBooks tracks information about your customers and
the money you’re owed. You can easily find out:
• which customers owe you money and how much
• whether a particular invoice or billing statement has been paid
• a customer’s buying history
• which invoices or billing statements have payments that are more than a month
overdue
You can get answers to these and many other questions by using the tools QuickBooks
provides for viewing your accounts receivable.
Viewing the accounts receivable register

The accounts receivable register lists all invoices, statement charges, payments, credit
memos, and customer discounts you’ve entered. You can browse through the register and
easily open related QuickBooks windows such as Create Invoices and Receive Payments.
To view the accounts receivable register:

2 Double-click your accounts receivable account from the list.
Accounts receivable management • 165

Number shows Amt Chrg shows invoice

FINCHG for finance or statement charges, and
charges, or check Amt Paid shows payment
numbers for amounts.
customer payments.
When a customer pays an
Type shows invoice invoice or billing
(INV), statement statement, QuickBooks
charge (STMTCHG), replaces the date in the
credit memo Due Date field with the
(CREDMEM), word “Paid.”
payment from a
customer (PMT), or Select Show open balance to Ending balance shows the total amount
customer discount show the amount still due for you are owed (unpaid invoices minus
(DISC). invoices and billing statements. any unused customer credit).
The one-line view of

the A/R register
displays many more
transactions in one
window. You can use
this view when you
want to see more
transactions with less
detail.
Viewing the customer register

The customer register is an accounts receivable register for just one customer. A customer
register is available for each customer on your Customer:Job list. It lists all invoices,
statement charges, payments, credit memos, and customer discounts you’ve entered for
that customer. All of the tasks you can do with the A/R register, you can also do with the
customer register.
To view the customer register:

2 Select a customer, and then choose Use Register from the Actions pop-down menu.
Editing a transaction in the A/R register

Whether you entered a sale with a sales form or as a statement charge, you can edit the
transaction in the A/R register.
To edit an A/R transaction in the register:

1 Choose Lists > Chart of Accounts, and then double-click your accounts receivable
account.
If you have many transactions in your register, let QuickBooks search for the trans-
action you want. See “Finding a specific transaction” on page 210 for more information.
You can also select the 1-Line checkbox to see more transactions at once, so you can find
the transaction quickly.
166 • Accounts receivable management

2 Double-click the transaction in the register you’d like to edit.

QuickBooks displays the transaction in its original form, unless you selected a
statement charge. You edit statement charges directly in the register.
3 Make any changes you’d like in the form, and then click OK.
Changing the opening balance for a customer

You can use the A/R register or a customer’s register to change the opening balance for a
customer.
To change the opening balance for a customer in the A/R register:

1 Choose Lists > Chart of Accounts, and then double-click Accounts Receivable.
2 Double-click the customer’s opening balance transaction.
This transaction is usually one of the first in the register.
3 On the invoice QuickBooks created, change the amount in the Amount field.
4 Click OK.
To change the opening balance for a customer in the customer register:

2 Select the customer whose opening balance you want to change, and then choose Use
Register from the Actions pop-down menu.
3 Double-click the customer’s opening balance transaction.
4 On the invoice QuickBooks created, change the amount in the Amount field.
5 Click OK.
Viewing an A/R transaction history

A transaction history shows you transactions that are related or “linked” to the one you
selected, so you can move easily to any related transaction. For example, from an invoice,
you can move to any of the payments that paid the invoice.
You can view an A/R transaction history from the following registers and windows:
• A/R register
• Customer register
• Check register
• Undeposited Funds register
• Create Invoices window
• Receive Payments window
• Create Credit Memos/Refunds window
The history shows all transactions that are related to the transaction you select, in chrono-
logical order.

To view a transaction history for an A/R transaction:

1 Select or display the transaction you’re interested in from the A/R register or from the
appropriate window: Create Invoices, Receive Payments, or Create Credit Memos/
Refunds.
2 Choose Edit > Transaction History.
This transaction
history is for an
invoice.
Click Edit Invoice to edit any of

QuickBooks displays the original invoice information.
all transactions
related to the invoice
you selected in the Click a transaction and then click
bottom part of the Go To to view or edit that trans-
window. action.
The following table describes the transaction history QuickBooks shows for different types
of transactions.
Transaction history
for this type of Shows these related transactions, in chronological order
transaction
Invoice Payments applied to the invoice or statement charge

Statement charge Point-of-sale payments (Payment invoice items)
Deposits of point-of-sale payments
Discounts applied for early payment
Credit memos applied to the invoice or statement charge
Payment Invoices to which the payment was applied

Deposit, if the payment was deposited using the Make Deposits window
Deposit Payments included in the deposit
Credit memo Invoices this credit paid
Discount Invoice to which the discount was applied
Cash Sale Deposit of the money received
Viewing a QuickReport about a customer

From any accounts receivable window, you can see a QuickReport about a customer. The
QuickReport shows different information depending on how you create it.
• When you create a QuickReport while displaying an invoice, payment, or the customer
list, it shows all open invoices, statement charges, and unapplied credits related to a
customer. The QuickReport also shows the due date, the open balance, and the original
amount of the invoice or statement charge. The total equals the customer’s balance.
• When you create a QuickReport while displaying the A/R register or customer register,
it shows all transactions, including payments and paid invoices and statement charges,
for a customer. The QuickReport also shows the account that you assigned the payment
to, the open balance, and the original amount of the invoice or statement charge. The
total equals the customer’s balance.

To view a QuickReport for a customer:

1 Display an invoice or customer payment, select a transaction from the A/R register or
customer register, or select a name from the Customer:Job list.
2 From an invoice or payment, choose Reports > QuickReport; from the Customer:Job list,
choose QuickReport from the Actions pop-down menu.
QuickBooks displays a chronological report showing transactions for the customer.
Working with A/R reports and graphs

QuickBooks has several preset A/R reports that give you valuable information about your
customers and sales. You can “filter” each preset report so that it shows only the infor-
mation you need to see. You can also customize each report so that it looks the way you
want onscreen and on paper.
Because preset reports are designed to give you just the information you need, you may not
need to change any settings when you display the report. Just choose the report you want
from the Reports menu.
To create an A/R report or graph:

1 Choose Reports > Customers & Receivables.
2 Choose the particular A/R report or graph you want to see.


12 Bills
Bills overview 171

12
Entering a bill 172

Paying bills 175
Viewing a bill payment 177
Editing bills and payments 177
Deleting bills and payments 178
Having QuickBooks remind you to pay your bills 178
Entering credit from a vendor 178
Questions and answers about bills 179
Bills overview
Using QuickBooks’ accounts payable includes two easy steps:
• Enter bills when you receive them.
• Check off the bills you want to pay. QuickBooks writes and records the checks, which
you can then print.
QuickBooks can remind you when your payments are due, and calculate and apply any
discounts you earn for paying bills early.
At any time, you can see reports about your purchasing and the vendors you buy from, as
well as cash flow reports, which help you learn about and plan your spending.
Will your business benefit from tracking A/P?

If you defer bill payment until the due date
If you set bills aside to pay later, accounts payable is an easy and beneficial way to handle
your bills. QuickBooks can help you pay on time and help you forecast your cash flow, so
you can use your business’s money in the best way possible.
Even if you report on a cash basis (so that accounts payable doesn’t enter into your reports),
the Enter Bills and Pay Bills features described in this chapter provide a convenient way of
keeping track of and controlling the timing of your bill payments.
If you pay bills right away

If you always pay bills when you receive them, and you prefer to continue that practice
rather than wait until they’re due, you do not need to use accounts payable. Use the Write
Checks window to pay your bills and assign their amounts to appropriate expense
accounts. See “Managing your checkbook” on page 187.
Bills • 171
Memorizing bills you receive regularly

If the preference for automatically recalling transactions is off, you may want to use the
memorize transaction feature to memorize bills you enter regularly.
• To automatically recall transactions, see “Data entry preferences” on page 270.
• To memorize transactions, see “Memorized transactions” on page 51.
Entering a bill
To get the most benefit from tracking accounts payable, enter bills as soon as you receive
them. That way, your cash flow reports will be up to date, and you won’t run the risk of
setting bills aside and forgetting about them.
Entering the vendor-related information

2 In the Vendor field, choose from the pop-up menu or enter a new vendor.
3 If a purchase order exists for this vendor, you will be prompted to receive against the
purchase order. Select Yes in the Open PO’s Exist window to receive against a purchase
order.
QuickBooks displays a list of open PO’s for that vendor.
• Click the PO’s that contain items you’re receiving and being billed for.
QuickBooks places a check mark to the left of the PO’s you click. (You can enter one
bill for several PO’s.)
• Click OK.
QuickBooks returns you to the Enter Bills window and fills in the items from the
PO’s you marked.
4 (Optional) Change the date of the bill.
Press + or − to increase or decrease the date by one day.
5 (Optional) Enter the bill number in the Ref No. field.
If you print voucher checks, entering the bill number in this field helps specify to your
vendor which bills you’re paying, since the number in the Ref No. field prints in the
voucher area.
6 Enter the amount of the bill in the Amount Due field.
7 Choose or enter the vendor’s payment terms.
QuickBooks automatically enters the terms you specified when you set up this vendor.
QuickBooks uses the terms to determine the due date of the bill payment and the date
you’d need to pay by in order to receive a discount for early payment.
8 (Optional) Enter a memo about the bill.
If the Account field is blank on this vendor’s record, the memo you enter here appears
as the check memo. You can use the Memo field for your account number, the vendor’s
invoice number, or anything you’d normally like to see on the check memo.
Filling in the detail area

You can assign a bill amount to expenses, items, or both.
172 • Bills
To record a bill for expenses:

1 Click the Expenses tab.
2 Fill in the Account, Amount, Memo, Customer:Job, and Class fields where necessary for
each detail line of the bill.
If you assign the amount of the bill to various expense accounts, customers, jobs, and
classes in the detail area, your reports will accurately reflect how much you spend
within each expense account, for each customer or job, and within each class you have
set up.
Distributing the bill amount to the correct customers also allows you to apply any reim-
bursable expenses to your sales. See “Charging for actual time and costs” on page 110.
For information about tracking your income and expenses by class, see “Classes” on
page 40.
3 If you enter a customer or job in the Customer:Job field, indicate in the billable column
whether to pass this charge on to the customer.
• If the expense is billable to that customer, leave the invoice icon next to the
customer’s name as it is.
• If the expense is not billable to that customer, click on the invoice icon next to the
customer’s name to mark an “X” through it. (Clicking on the invoice icon again
removes the “X.”)
After you record the invoice that includes the expense, the invoice icon for that expense
is grayed, indicating that you’ve billed the customer for that expense.
4 Click Next to record this bill and enter another, or click OK to record the bill and close
the window.
QuickBooks tells you if the amounts in the detail area do not add up to the total of the
bill.
5 (Optional) Click Recalc to recalculate the amounts in the detail area and put the total in
the Amount Due field.
QuickBooks enters the transaction into your accounts payable register.
To record a bill for items:

When you enter a
bill for inventory,
QuickBooks auto-
matically updates
your inventory
quantity on hand
and adjusts your
average cost if Click here to add this bill to
necessary. If you iCal (see page 98 for more
already created an information).
item receipt for these
items, QuickBooks
does not adjust your Click a line item and then
quantity on hand. click Show PO to see infor-
mation about the purchase
order associated with that
To enter a bill for
item.
items you have on a
purchase order,
select the PO to
enter the items in the
detail area. If the quantity or cost of items you’re receiving is different from the quantity or cost on the PO, edit
them here to reflect what you really received.
Bills • 173
2 If there is no purchase order for the items, enter the items in the detail area.
If you enter inventory items, QuickBooks adjusts your inventory to show that you have
received the items. QuickBooks uses the cost you enter here to adjust the average cost.
3 If you are receiving against a purchase order for these items, make any necessary
changes to the items listed in the detail area.
item, or delete an item completely from the detail area of the bill. Edit the detail area
until it reflects the actual items you received and are being charged for on this bill. If
you make a mistake, click Clear Qtys and then Receive All to return all quantities to
their original values.
• If you make a mistake editing the detail area, or you delete a line you later decide
you want to have on the bill, click Select PO; then click the PO containing the items
you want to re-add to the bill. QuickBooks remembers the edits you’ve made to
other lines, but replaces any lines you deleted. Letting QuickBooks enter the items
(instead of typing them in) ensures that your quantity on order for the items is
reduced.
4 On each line, assign a Customer:Job if the items are for a specific customer or job.
whether the item is billable to that customer.
The billable column is the one with a small drawing of an invoice.
If the item is billable to that customer, leave the invoice icon next to the customer’s
name as it is.
If the item is not billable to that customer, click the invoice icon next to the customer’s
name to mark an “X” through it. (Clicking the invoice icon again removes the “X.”)
After you record the invoice that includes the item, the invoice icon for that item is
grayed, indicating that you’ve billed the customer for that item.
6 If you received additional items not on any purchase order, enter them directly on the
next available line.
7 To enter shipping charges or tax not associated with any one item, click the Expenses tab
and add the charges and their expense accounts.
See the previous procedure, “To record a bill for expenses:” on page 173 for details.
Note: For inventory item purchases, you may want to associate expenses like tax or
freight charges with your cost of goods sold account (COGS) instead of an
expense account.
8 Click Next to record this bill and enter another, or click OK to record the bill and close
the window.
bill.
the Amount Due field.
QuickBooks enters the transaction into your accounts payable register.
174 • Bills
Using the A/P register to enter a bill

You can enter some bills directly into the A/P register. However, to receive against a
purchase order, or distribute the amount of a bill to several accounts, customers, jobs,
classes, or items, use the Enter Bills window.
To enter a bill in the A/P register:

2 Double-click the A/P account you want to work with.
3 Enter your new bill information in the blank transaction at the bottom of the register.
4 To enter more detail than is possible in the register, click Splits or double-click the trans-
action to edit it.
You can enter multiple expense accounts or customer and job names in the detail area.
Note: If you click Splits, you cannot enter detail about items. See “Entering split trans-
actions” on page 207.
5 Click Record.
Paying bills
In the Pay Bills window, you can list all unpaid bills or all bills due as of a date you enter.
You mark the bills you want to pay, and QuickBooks writes and records the checks or credit
card charges. If you pay by check, you can then print (or write) the checks.
You don’t have to print (or even use) checks to use the Pay Bills window. Use the Pay Bills
window to automatically calculate what you owe each vendor and record the checks (or
credit card charges). QuickBooks enters the checks in your check (or credit card) register.
Important: Don’t enter checks to your vendors after using the Pay Bills window. Quick-
Books writes and records checks to pay the bills you marked in the Pay Bills
window. If you also enter bill payments in the Write Checks window, you’ll
have two checks recorded to each vendor.
To pay bills:
1 Choose Vendors > Pay Bills.
If you don’t see all the bills you expect in the Pay Bills window, check that the date in
the Show bills due on or before field is correct, or select Show all bills.
Bills • 175
Choose to display all

unpaid bills or just
the bills due as of a
certain date.
A checkmark shows
you want to pay this Amt. Due may be less than
bill. the Bill Amt if you’ve made
a partial payment or earned
Bill Amt. is the total a discount.
of the original bill.
When you see the Disc. Date shows when

QuickZoom cursor, you need to pay to earn a
double-click a bill to discount based on the
display more detail. vendor’s terms.
2 Select your payment method (check or credit card) and the appropriate account.
If you select check as your payment method, select To be printed to print the check or
checks.
Note: If you pay by cash and your petty cash account is a bank account type, select
Check in the Pay By area; then choose your cash account from the pop-up menu.
3 To list only your bills due as of a certain date, enter that date in the Show bills due on or
before field.
Click Show all bills to see all bills that are due.
4 Choose to sort the bills by due date, discount date, vendor, or amount due.
5 Mark the bills you want to pay now, or click Pay All Bills to mark them all.
Mark bills to pay by clicking on them, or select a bill with the arrow keys and press the
spacebar to mark it.
The Pay All Bills button changes to Clear Payments, so you can unmark bills and start
over.
6 To pay only part of a bill now, enter the amount you’d like to pay in the Amt. Paid
column.
7 To review or update discount information for a bill, select the bill and click Discount
Info.
• In the Discount Information window, review the discount information. Make
changes as necessary.
• Click OK to record the discount.
QuickBooks reduces the Amount Due for this bill in the Pay Bills window. If you pay
the lowered amount, QuickBooks puts the amount of the discount into the account
you specified in the Discount Information window.
8 Click Next to pay this bill and keep the window open, or click OK to record your
payments and close the window.
QuickBooks prepares one check for each vendor and records the checks in the check
register with BILLPMT in the Type field. If you pay with a credit card, QuickBooks
records a charge for each vendor in your credit card register.
QuickBooks records the payment to each vendor in the accounts payable register. The
amount you paid appears in the Paid column.
176 • Bills
To enter the correct check numbers in the check register:

• If you send handwritten checks, go to the check register and enter the number of each
handwritten check in the Num field of each check QuickBooks prepared.
To print checks:
• Choose File > Print Forms > Checks.
If your checks are not listed, go to the check register. Enter “T” in the Num field to quickfill
“To be printed” and click Record for each check. Next time you pay bills, be sure to select
To be printed in the Pay Bills window.
Viewing a bill payment

To view a bill payment:
• For a check, double-click the check in either the check register or the accounts payable
register. (Its Type field says BILLPMT.)
OR
• For a credit card charge bill payment, double-click the charge in your credit card
register or the A/P register.
QuickBooks displays the payment. The detail area of the check or credit card charge
itemizes which bills were paid with the payment.
To view a bill’s payment history:

1 In the A/P register, click in the bill whose payment history you want to see. (Its Type field
says BILL.)
QuickBooks displays transactions (purchase orders, payments, or credits) related to
this bill.
Editing bills and payments

You can edit any bill or payment transaction. Even if you’ve already paid a bill, you can
edit its amount. If you reduce the bill amount, QuickBooks creates a credit with the vendor
you overpaid. If you increase the bill amount, QuickBooks considers the bill not fully paid
until you pay the additional amount.
To edit a bill or payment:

2 Double-click the A/P account containing the transaction you want to edit.
3 Select the specific bill or payment in the register window.
To find the bill or payment, choose Edit > Go To and enter the vendor name in the
Search For field.
4 Double-click the transaction to edit it.
5 Make any changes you wish in the window that QuickBooks displays, then click OK.
QuickBooks records your changes in the A/P register.
Bills • 177
Deleting bills and payments

You can delete any bill or payment transaction. If you delete a bill that you have already
paid, QuickBooks creates a credit with the vendor. If you delete a payment, the bill or bills
it was paying will have unpaid balances.
To delete a bill or payment:

2 Double-click the A/P account containing the transaction you want to delete.
3 Select the specific bill or payment in the register window.
To find the bill or payment, choose Edit > Go To and enter the vendor name in the
Search For field.
4 Choose Edit > Delete Bill or Delete Bill Pmt.
Having QuickBooks remind you to pay your bills

The due date in the Enter Bills window allows QuickBooks to remind you to pay each bill.
You tell QuickBooks how many days in advance to remind you.
To have QuickBooks remind you to pay bills:

1 Choose QuickBooks > Preferences, and then choose Reminders from the Show pop-up
menu.
2 Choose whether to have the QuickBooks Reminders window show a summary of the
bills you need to pay, or a list of the bills in detail, or not remind you at all to pay bills.
3 Enter the number of days before the due dates of your bills that you’d like to be reminded
to pay.
For example, if it takes four days for your mailed checks to reach your vendors, you
might enter 5 or 6 days.
4 Click Apply.
For more information, see “Reminder preferences” on page 271.
Entering credit from a vendor

Enter credit from a vendor in the Enter Bills window. Just change the Bill setting to Credit.
To enter a credit amount you have with a vendor:

2 At the top of the Enter Bills window, click “Credit.”
3 Enter a vendor name or choose one from the pop-up menu, and enter the credit amount.
4 In the detail area, enter the expense accounts, customers, jobs, items, or classes you
want to credit.
5 Click OK.
QuickBooks records the credit in your A/P account. In the A/P register, the transaction
type is BILLCRED.
178 • Bills
Applying credit from a vendor to pay bills

You can easily apply any credit you have with a vendor to pay bills from that vendor.
To apply credit to a bill:

1 Choose Vendors > Pay Bills.
2 In the Sort Bills By pop-up menu, choose Vendor.
QuickBooks displays both bills and credits for each vendor.
3 Fill in the rest of the fields in the top of the Pay Bills window.
4 Select the bills you want to pay and any credit you want to use.
QuickBooks applies any credit you marked to bills you marked for the same vendor.
5 Click OK.
QuickBooks writes a check to each vendor for the amount of the bills you marked
minus any credits you marked.
Questions and answers about bills

Why don’t the checks that QuickBooks wrote to pay bills show up in the Select
Checks to Print window?
In the Pay Bills window, you did not select the To be printed checkbox.
To mark the checks to be printed:

1 Display the check register.
2 To QuickFill the Num field with “To Print”, enter T in the Num field and click Record
for each check.
I just received some new bills. When I choose Vendors > Pay Bills, how do I enter
the bills I want to pay?
The Pay Bills window displays bills you have already entered in the Enter Bills window.
To enter a new bill:

• Choose Vendors > Enter Bills (or click the Bill icon).
After you record the bill, QuickBooks displays it automatically in the Pay Bills window if
its due date is on or before the date specified.
I just entered several bills, but when I try to pay them, I can’t find them in the Pay
Bills window. Why aren’t they there?
The due date on the “missing” bills is probably later than the date in the Show bills due on
or before field in the Pay Bills window. Change the date in that field to one after the due
date for all the bills, or click Show All bills.
How should I record a finance charge from a vendor for late payment of a bill?
Enter a new bill for the finance charge alone.
Bills • 179
How should I record a discount from a vendor for early payment of a bill?
If you are paying less than the full amount of the bill, you can apply the discount in the Pay
Bills window. For details, see “Paying bills” on page 175.
If you have paid the bill in full and now have credit from the vendor, enter a credit for the
overpayment. See “Entering credit from a vendor” on page 178.
When I look at my A/P register, it doesn’t show any amounts for bills I’ve already
paid or their payments. Why are the amounts missing?
At the bottom of the register, you have a check mark in the Show open balance checkbox.
When you select this option, the register shows only the remaining balances on unpaid bills
and unapplied credits. Click the checkbox to clear it. You will see original amounts for all
bills, payments, and credits.
Last month I paid several bills from one vendor with a single check. Is there some
way I can print the details of which bills I paid with that check?
Be ready to print on plain paper (not checks).
To print the details of the check:

1 Choose File > Print Setup > Check.
2 Choose Voucher from the Check Style pop-up menu, and then click OK.
The voucher area lists the amount you paid on each bill.
3 Double-click the check in your checking register.
4 Press x P.
5 Click Print.
I have a vendor who is also a customer. How can I show a bill as being paid by my
services, and an invoice as being paid by the vendor’s services?
You will need to have slightly different names on your Customer:Job and Vendor lists to be
able to track the vendor as a customer also. One way is to add “_v” after the name for the
Vendor list, but specify that checks should print with the regular name.
After you’ve entered both the bill and the invoice, write two general journal transactions.
To write the general journal transactions:

2 On the first line of the detail area, enter the name of your A/P account in the Account
column, the amount to apply in the Debit column, and the vendor name in the Name
column.
3 On the second line, enter a name such as Exchange (an income or expense account) in
the Account column, the same amount you entered in the Debit column in the Credit
column, and the vendor name in the Name column.
4 Click Next.
5 For the second transaction, on the first line of the detail area, enter the name of your A/
R account in the Account column, the amount to apply in the Credit column, and the
customer name in the Name column.
180 • Bills
6 On the second line, enter the same income or expense account as in the first transaction
(for example, Exchange) in the Account column, the same amount you entered in the
Credit column in the Debit column, and the customer name in the Name column.
Now you have “payments” in both your A/R and A/P accounts.
To apply the “payments” to the invoice and bill:

1 In the Receive Payments window, apply the existing credits to the invoice.
2 In the Pay Bills window, mark both the bill and the general journal “payment” to be paid,
and click OK.
If the amounts are the same, QuickBooks doesn’t write a check, but records both transac-
tions as paid.
Bills • 181
182 • Bills
13 Accounts payable management
Viewing the accounts payable register 183

13
Editing a transaction in the A/P register 184

Viewing an A/P transaction history 184
Viewing a QuickReport about a vendor 185
Working with A/P reports and graphs 186
Once you’ve recorded some bills and payments in your accounts payable account, Quick-
Books can give you important information about your vendors and the money you owe
now and in the near future. You can easily find out:
• which vendors you owe and how much
• whether you’ve paid a certain bill
• whether any of your payments are overdue, which ones, and by how much
• how much you spent with each vendor last quarter
You can get answers to these and many other questions by using the tools QuickBooks
provides for viewing your accounts payable.
Viewing the accounts payable register

The accounts payable register is a list of all bills, payments, and credit related to your
vendors. From the register, you can view your accounts payable transactions in date order
and enter bills directly into the register. For instructions, see “Entering a bill” on page 172.
To view the accounts payable register:

2 Double-click your accounts payable account from the list.
The Number field The Due Date column shows The Billed column shows bill amounts, and
shows the vendor’s PAID when a bill is paid off. the Paid column shows payment amounts.
bill number or check
numbers for bill
payments. The Ending Balance shows
the total amount you are
The Type field shows owed (unpaid invoices
whether the trans- minus any unused
action is a bill (BILL), customer credit).
payment (BILLPMT),
credit (BILLCRED),
discount (DISC), or Select Show open balance
item receipt (ITEM to show the unpaid or open
RCPT). amount that you owe.
Select 1-Line to see the register in a one-line view.
Accounts payable management • 183

Editing a transaction in the A/P register

To edit an A/P transaction in the register:
2 Double-click the A/P account containing the transaction you want to edit.
If you have many transactions in your register, let QuickBooks search for the trans-
action you want. See “Finding a specific transaction” on page 210 for more information.
You can also select the 1-Line checkbox to see more transactions at once, so you can find
the transaction quickly.
3 Double-click the transaction you’d like to edit.
4 Make any changes you’d like in the form, and then click OK.
Changing the opening balance for a vendor

You can use the A/P register to change the opening balance for a vendor.
To change the opening balance for a vendor:

1 Choose Lists > Chart of Accounts, and then double-click Accounts Payable.
2 Select the vendor’s opening balance transaction.
3 Change the amount in the Billed field.
4 Click Record.
Viewing an A/P transaction history

A transaction history shows you transactions that are related or “linked” to the one you
selected, so you can move easily to any related transaction. For example, from a bill, you
can move to any of the payments that paid the bill.
You can view an A/P transaction history from the following registers and windows:
• A/P register
• Check register
• Credit card register
• Enter Bills window
• Create Purchase Orders window
• Write Checks window
• Enter Credit Card Charges window
The history shows all transactions in the register that are related to the transaction you
select, in chronological order.
To view a transaction history for any A/P transaction:

1 Select or display the transaction you’re interested in from the A/P register or from the
appropriate window: Enter Bills, Create Purchase Orders, Write Checks, or Enter Credit
Card Charges.
184 • Accounts payable management

This transaction
history is for a bill.
QuickBooks displays
the bill information
at the top of the
window.
Click Edit Bill to edit any of the
original bill information.
QuickBooks displays
all transactions
related to the bill you
selected in the
bottom part of the
window. Click on a transaction; then click Go To to view or edit that transaction.
The following table describes the transaction history QuickBooks shows for different types
of transactions.
Transaction history for Shows these related transactions,

this type of transaction in chronological order
Bill Payments made on the bill

Discounts
Purchase Orders
Payment Bills to which your payment was applied
Credit with a vendor Bills to which your credit was applied
Item receipt PO’s against which the items were received
Viewing a QuickReport about a vendor

From any accounts payable window, you can see a QuickReport about a vendor. The
QuickReport shows different information depending on how you create it.
• When you create a QuickReport while displaying a bill or the Vendor list, it shows all
unpaid bills from that vendor. The QuickReport also shows the due date, the open
balance, and the original amount of the bill. The total equals the vendor’s balance.
• When you create a QuickReport while displaying the A/P register, it shows all transac-
tions, including payments and paid bills, for a vendor. The QuickReport also shows the
account that you assigned the bill to, the open balance, and the original amount of the
bill. The total equals the vendor’s balance.
To view a QuickReport for a vendor:

1 Display a bill or payment or select a name from the Vendor list.
2 From a bill or payment, choose Reports > QuickReport; from the Vendor list, choose
QuickReport from the Actions pop-down menu.
QuickBooks displays a chronological report showing transactions for the vendor.
Accounts payable management • 185

Working with A/P reports and graphs

QuickBooks has several preset A/P reports that give you valuable information about your
vendors and expenses. You can “filter” each preset report so that it shows only the infor-
mation you want to see. You can also customize the appearance of each report.
Because preset reports are designed to give you just the information you need, you may not
need to change any settings when you display the report. Just choose the report you want
from the Reports menu.
To create an A/P report or graph:

1 Choose Reports > Vendors & Payables.
2 Choose the particular A/P report or graph you want to see.
186 • Accounts payable management

14 Managing your checkbook
Checks overview 187

14
Entering a check 187

Memorizing a check 190
Voiding checks 190
Deleting checks 191
Printing, saving, or emailing checks 191
Depositing funds into your checking account 192
Checks overview
QuickBooks’ Write Checks window looks just like the paper checks you’re used to. Use the
Write Checks window to do the following:
• Write checks
• Record any bank account or petty cash withdrawals
• Because the Write Checks window works for any QuickBooks bank account, you can
use it to record withdrawals from any account you have classified as a bank account
type
• Review and edit checks and withdrawals
• Print checks
You can also write checks and other withdrawals directly into the check register. See
“Entering transactions in a register” on page 206.
Important: If you use the Enter Bills and Pay Bills windows to enter and pay your bills,
respectively, QuickBooks writes the checks to your vendors for you. Do not
write checks with the Write Checks window or check register for these bills.
Entering a check
Entering the information on the check face

1 Choose Banking > Write Checks.
2 Make sure the bank account shown is the one you want to use.
3 In the Pay to the Order of field, choose from the pop-up menu or enter a new name.
When you write a check to someone you’ve written a check to before, QuickBooks fills
in the check fields with the information from the last check to this person. As you tab
through the check fields, you can change any field information that is different for this
check. This feature, called AutoRecall, can be turned on or off in Data Entry Preferences.
See “Data entry preferences” on page 270.
Managing your checkbook • 187

4 If you entered a vendor here that has an open purchase order, you will be prompted to
receive against the purchase order. Select Yes in the Open PO’s Exist window to receive
against a purchase order.
• Click the PO’s that contain items you’re paying for.
QuickBooks places a check mark to the left of the PO’s you click. (You can select more
than one PO.)
• Click OK.
QuickBooks returns you to the Write Checks window and fills in the items from the
PO’s you marked.
5 (Optional) Change the date of the check.
6 Enter the amount of the check in the “$” field.
QuickBooks automatically writes out the dollar amount for you.
7 (Optional) Enter a memo about the check.

To record a check for expenses:
each detail line of the check.
If you assign the amount of the check to various expense accounts, customers, jobs, and
classes in the detail area, your reports will accurately reflect how much you spend
set up.
Distributing the check amount to the correct customers also allows you to apply any
reimbursable expenses to your sales. See “Charging for actual time and costs” on
page 110.
page 40.
whether the expense is billable to that customer.
• If the expense is not billable to that customer, click the invoice icon next to the
customer’s name to mark an “X” through it. (Clicking the invoice icon again
4 (Optional) Select the “To be printed” checkbox to add this check to a list of checks you
can print all at once from the File menu. Or press x P to print just this check now.
If you write checks by hand, clear the To be printed checkbox and make sure the No.
field has the same check number as the check you write.
5 Click Next to record this check and enter another one, or click OK to record the check
and close the window.
188 • Managing your checkbook

the $ field on the check face.
To distribute your check amount to items:

When you pay for
inventory items with
a check, Quick- Click here to add
Books automatically this check to iCal
updates your (see page 98 for
inventory quantity more information).
on hand and adjusts
your average cost if
necessary. Click Format to
customize the check
format.
To pay for items you
have on a purchase
order, select the PO Click a line item and
to enter the items in then click Show PO
the detail area. to see information
about the purchase
order associated
with that item.
If the quantity or cost of items you’re receiving is different from the

quantity or cost on the PO, edit them here.
3 If you created a purchase order for these items, make any necessary changes to the items
listed in the detail area.
item, or delete an item completely from the detail area of the check. Edit the detail
area until it reflects the actual items you received and are paying for with this check.
If you make a mistake, click Clear Qtys and then Receive All to return all quantities
to their original values.
• If you make a mistake editing the detail area, or you delete a line you later decide
you want to have on the check, click Select PO; then click the PO containing the items
you want to re-add to the check. QuickBooks remembers the edits you’ve made to
(instead of typing them in) ensures that your quantity on order for the items will be
reduced.
The billable column is the one with the small drawing of an invoice.
name as it is.
If the item is not billable to that customer, click on the invoice icon next to the
customer’s name to mark an “X” through it. (Clicking the invoice icon again removes
the “X.”)

See the previous procedure, “To record a check for expenses:” on page 188 for details.
For inventory item purchases, you may want to associate expenses like tax or freight
charges with your cost of goods sold account (COGS) instead of an expense account.
8 (Optional) Select the “To be printed” checkbox to add this check to a list of checks you
can print all at once from the File menu. Or press x P to print just this check now.
If you write checks by hand, clear the To be printed checkbox and make sure the No.
field has the same check number as the check you write.
9 Click Next to record this check and enter another one, or click OK to record the check
check.
the $ field on the check face.
QuickBooks enters the transaction into your checking or other bank account register.
Memorizing a check
If you repeatedly write similar checks, such as rent or insurance payments, you can save
time by memorizing the checks. If the preference for automatically recalling transactions is
off, you can use the memorize transaction feature to memorize checks you enter regularly.
• To automatically recall transactions, see “Data entry preferences” on page 270.
• To memorize transactions, see “Memorized transactions” on page 51.
Editing checks
2 Double-click the bank account containing the check you want to edit.
To find the check, choose Edit > Go To and enter the payee name in the Search For field.
3 Double-click the check in the register you’d like to edit.
To edit the entry to be a split transaction, see “Entering split transactions” on page 207.
4 Make any changes you’d like in the window, and then click OK.
Voiding checks
Voiding a check changes the amount of the transaction to zero, but keeps a record of the
transaction in QuickBooks. If you stop payment on a check or a check is lost, you may want
to void rather than delete it.

To void a check:
1 Display the check you want to void, or select it in the check register.
2 Choose Edit > Void Check.
QuickBooks inserts the word VOID in the memo area. The amount of the check is
changed to $0.00.
3 Click Record.
Deleting checks
Important: Once a check is deleted, it cannot be recovered. Be sure you really want to delete
a check before doing so.
To delete a check:
1 Display the check you want to delete, or select it in the check register.
If you need help finding the check, choose Edit > Go To and enter the payee name in
the Search For field.
2 Choose Edit > Delete Check. Click OK to confirm that you want to delete the check.
Printing, saving, or emailing checks

To print a single check:
1 Choose Banking > Write Checks, and then display the check you want to print.
2 Choose File > Print Check.
To print a batch of checks:

1 Make sure the To be printed checkbox is selected on the checks you want to print.
From the Write Checks window, select this checkbox.
Or in the register, you can mark a check for

printing by typing “T” in the Number field to
enter “To Print.” Then click Record.
2 Choose File > Print Forms > Checks.

QuickBooks prints the following information you entered in the Write Checks window on
the voucher portion of the check:
• Payee
• Date
• Account (from first 16 lines of detail)
• Memo or description (from first 16 lines of detail)
• Amount (from first 16 lines of detail)
• Bank account name
• Memo
• Total amount

Note: QuickBooks does not print either the customer or the class, even if you have
customer and class tracking turned on. If you want this information to print on the
check, enter it in the Memo field.
For more information on printing checks, choose Help > QuickBooks Help, click “Printing”
in the left column, and then click Checks.
Depositing funds into your checking account

You can deposit funds and customer payments into your checking account. If the money
you’re depositing includes invoice payments received from customers, enter the payments
in the Receive Payments window first.
To deposit a customer payment into your checking account:

2 Enter the appropriate customer:job and payment information.
3 Click the button that indicates “Deposit To” and choose your checking account from the
pop-up menu.
If you click the button that indicates “Group with undeposited funds,” you need to use
the Make Deposits window to deposit the customer payment.
4 Click OK.
To deposit undeposited funds:

2 Select the customer payment checks you want to deposit and click OK.
3 Select the checking account you want to deposit into.
4 To record getting cash back, in the blank line after the last item, enter the following:
• In the Amount column, enter the amount of cash you got back with a minus (-) sign
in front.
• In the Account column, enter your petty cash account or the expense account related
to how you spent the money.
• In the other columns, enter any necessary information.
5 (Optional) Press x P to print a deposit summary.
6 Click OK.
To make a non-payment deposit into your checking account:

2 Double-click the checking account you want to make the deposit into.
3 Click in the empty line at the bottom of the register.
4 In the Deposit column, enter the amount you’re depositing.
5 In the Account column, enter the appropriate account.
Common accounts used here include Petty Cash, Savings, and Uncategorized Income.
6 Click Record.

15 Credit card transactions
Credit card overview 193

15
Entering a credit card transaction 193

Editing a credit card transaction 196
Reconciling/paying your credit card statement 197
Credit card overview

Some businesses use credit cards as an integral part of their finances. You can use Quick-
Books credit card accounts to track charges and assign them to the appropriate expense
accounts. (To add a credit card account to your chart of accounts, see “Adding new
accounts” on page 66).
When you enter a credit card charge, QuickBooks reports the amount as a liability on your
balance sheet since you still owe the money. If you enter a bill for several charges, Quick-
Books moves the amount you owe into accounts payable until you pay the bill. If you never
enter a bill, but just pay by check when you get your statement, QuickBooks decreases your
liability amount when you pay.
When you purchase inventory items with a credit card, QuickBooks adjusts your inventory
automatically.
You can reconcile a credit card account with your credit card statement just as you’d
reconcile a bank account. After you’ve reconciled, you can enter the credit card bill in
accounts payable or write a check to pay the bill.
Paying bills with a credit card

You can pay bills with your credit card. QuickBooks enters a charge in your credit card
register for each vendor you paid. For details, see “Paying bills” on page 175.
Using the credit card register

You can enter, edit, and delete credit card transactions in your credit card register.
However, you’ll need to use the Enter Credit Card Charges window if you plan to
distribute the amount among several accounts, customers, jobs, or classes. For information
about working with the register, see Chapter 17, Account registers, starting on page 205.
Entering a credit card transaction
Filling in the receipt area

To fill in the credit card receipt area:
1 Choose Banking > Enter Credit Charges.
2 Make sure the credit card account shown is the one you want to use.
Credit card transactions • 193

3 In the Purchased From field, choose from the pop-up menu or enter a new vendor.
4 If a purchase orders exists for this vendor, you will be prompted to receive against the
purchase order. Select Yes in the Open PO’s Exist window to receive against a purchase
order.
• Click the PO’s that contain items you’re paying for.
QuickBooks places a check mark to the left of the PO’s you click. (You can select more
than one PO.)
• Click OK.
QuickBooks returns you to the Enter Credit Card Charges window and fills in the
items from the PO’s you marked.
5 Enter the reference number of the credit card transaction in the Ref No. field.
6 (Optional) Change the date.
7 Enter the amount of the charge in the Amount field.
8 (Optional) Enter a memo about the charge.

To record a credit card charge for expenses:
each detail line of the bill.
If you assign the amount of the charge to various expense accounts, customers, jobs,
and classes in the detail area, your reports will accurately reflect how much you spend
set up.
Distributing the charge amount to the correct customers also allows you to apply any
reimbursable expenses to your sales. See “Charging for actual time and costs” on
page 110.
page 40.
whether the expense is billable to that customer.
• If the expense is not billable to that customer, click the invoice icon next to the
customer’s name to mark an “X” through it. (Clicking on the invoice icon again
4 Click Next to record this charge and enter another one, or click OK to record the charge
charge.
the Amount field.
194 • Credit card transactions

To distribute your charge amount to items:

When you pay for
inventory items with
a credit card, Quick-
Books automatically
updates your
inventory quantity
on hand and adjusts
your average cost if
necessary.
To pay for items you

have on a purchase
order, select the PO Click a line item and then
to enter the items in click Show PO to see infor-
the detail area. mation about the purchase
order associated with that
item.
If the quantity or cost of items you’re receiving is different from the quantity or cost on the PO, edit
them here to reflect what you really received.
3 If you created a purchase order for these items, make any necessary changes to the items
listed in the detail area.
item, or delete an item completely from the detail area of the charge. Edit the detail
area until it reflects the actual items you received and are paying for on this charge.
If you make a mistake, click Clear Qtys and then Receive All to return all quantities
to their original values.
• If you make a mistake editing the detail area, or delete a line you later decide you
want to have on the charge, click Select PO; then click the PO containing the items
you want to re-add to the charge. QuickBooks remembers the edits you’ve made to
(instead of typing them in) ensures that your quantity on order for the items is
reduced.
The billable column is the one with the small drawing of an invoice.
name as it is.
If the item is not billable to that customer, click the invoice icon next to the customer’s
name to mark an “X” through it. (Clicking the invoice icon again removes the “X.”)

See the previous procedure, “To record a credit card charge for expenses:” on page 194
for details.
For inventory item purchases, you may want to associate expenses like tax or freight
charges with your cost of goods sold account (COGS) instead of an expense account.
8 Click Next to record this charge and enter another, or click OK to record the charge and
close the window.
charge.
the Amount field.
Entering a credit
To enter a credit amount you have with a vendor:
1 Choose Banking > Enter Credit Charges.
2 Click Credit.
3 Choose or enter a vendor name and the amount of the credit.
4 In the detail area, enter the expense accounts, customers, jobs, items, or classes you
want to credit.
5 Click OK.
QuickBooks records the credit in your credit card account. In the credit card register, the
transaction type is CC CRED.
Editing a credit card transaction

To edit a credit card transaction:
2 Double-click the credit card account containing the transaction you want to edit.
To find the transaction, choose Edit > Go To and enter the vendor name in the Search
For field.
3 Double-click the specific transaction in the register window.
4 Make any changes you’d like in the window, and then click OK.
To delete a credit card transaction:

2 Double-click the credit card account containing the transaction you want to delete.
3 Select the transaction you want to delete.
To find the transaction, choose Edit > Go To and enter the vendor name in the Search
For field.
4 Click Edit > Delete Credit Card Charge.

Reconciling/paying your credit card statement

When you receive your credit card statement, you check off transactions you’ve entered to
make sure your QuickBooks records agree with the statement you get from the credit card
company. This procedure is similar to reconciling a bank statement.
To reconcile your credit card statement:

1 Choose Banking > Reconcile.
2 In the Account to Reconcile field, enter or select the account you want to reconcile.
QuickBooks displays the cleared balance for this credit card account from the last time
you reconciled. You can enter the opening balance from your statement, but Quick-
Books does not use the number you enter in its calculations.
3 Enter the ending balance from your credit card statement in the Ending Balance field.
4 Enter any finance charges associated with the statement and then select your finance
charge expense account.
QuickBooks displays the cleared balance from this credit card account (from the last time you recon-
ciled). You can enter the opening balance from your statement, but QuickBooks does not use the
number you enter in its calculations.
Enter the ending

balance from your
credit card statement
Enter any finance in the Ending Balance
charge from this field.
statement. Then
enter your finance
charge expense
account.
Click on each trans-

action that appears
on your statement.
5 Select the transactions that appear on your statement.

See “Marking cleared transactions” on page 236 for more information.
6 When you’ve marked all transactions from your statement and the difference is zero,
click Done.
OR
If the difference amount is not zero, correct the difference or have QuickBooks adjust
for the difference, and then click Done.
For more information, see “Correcting differences” on page 237.
7 In the Make Payment window, choose whether to write a check to pay for the bill, or if
you use accounts payable, to enter the bill for later payment.


16 Purchase orders
Purchase order overview 199

16
Turning on the purchase order feature 200

Customizing purchase orders 200
Entering a purchase order 201
Viewing purchase orders 202
Receiving items against a purchase order 202
Editing purchase orders 202
Closing a purchase order manually 203
Printing purchase orders 204
Purchase order overview

Purchase orders (PO’s) help track your inventory on order. At any time, you can see items
you have on order and when they’re due to be received. When you receive items you’ve
ordered, check them against the purchase order. If they’re all there, QuickBooks marks the
purchase order “Received in full.”
You can customize the purchase order form to meet your company’s needs. See “Custom-
izing purchase orders” on page 200.
When to use purchase orders

Use a purchase order when you order items. Use other forms when you receive or buy
items that are never on order.
To do this Use this form
Order items that you’ll receive and pay Purchase order

for later.
Receive items before receiving a bill; no Item receipt

initial order. See “Receiving items and getting a bill later” on page 146.
Receive items and a bill together; no Bill

initial order. See “Entering a bill” on page 172.
Pay for and receive items at the same Check or credit card
time, as in an over-the-counter purchase. See “Entering a check” on page 187, or “Entering a credit
card transaction” on page 193.
Purchase orders • 199

Your Purchase Orders account

After you create your first purchase order, QuickBooks creates a Purchase Orders account
that appears as the last account in your chart of accounts. This account does not affect your
balance sheet or income statement.
Reports showing items on order

Several QuickBooks reports are set up specifically to help you track items you have on
order. Choose Reports > Purchases or Inventory.
Turning on the purchase order feature

Estimates from the Show pop-up menu.
2 Select the “Inventory and purchase orders are active” checkbox, and then click Apply.
Customizing purchase orders

You can change the names of any of the fields of a purchase order to fit the needs of your
company.
To customize the purchase order form:

1 Choose Company > Company Settings, and then choose Purchase Order Format from
the Show pop-up menu.
You cannot specify

the position or size
of these fields.
2 Customize your purchase order’s content in the Header, Fields, Columns, and Footer
tabs.
See “Customizing the content on a sales form” on page 103 for more information.
3 Click the Font tab to change the font for any section of text on the PO.
See “Customizing the fonts printed on a sales form” on page 105 for more information.
4 Click the Artwork tab to print a logo or PDF background on the purchase order.
See “Customizing the artwork on a sales form” on page 105 for more information.
5 Click Apply.
6 To preview your changes, choose Vendors > Create Purchase Orders, press x P, and then
click Preview.
200 • Purchase orders

Entering a purchase order

You can use purchase orders to buy inventory, non-inventory (such as office supplies), and
service items.
When you use purchase orders to buy inventory items, QuickBooks updates your
inventory, so you know which items are on order and when they’re due to be received.
When you use PO’s for non-inventory items, you can still track your open PO’s to see what
you have and have not received, but non-inventory items are not included in reports
showing items on order.
Important: If you enter non-inventory and service items in the detail area of a PO, make
sure you assign expense accounts to the items.
To buy items with a purchase order:

1 Choose Vendors > Create Purchase Orders.
2 Enter the vendor.
QuickBooks automatically fills in the vendor’s address, your company’s shipping
address, and today’s date in the Expected field. The date in the Expected (delivery date)
field appears on stock status reports as the next receipt date for inventory on order.
3 (Optional) Enter a class for this transaction.
If the Class field does not show on your screen, you can turn Class Tracking on in Trans-
action Preferences. See “Classes” on page 40.
when you customize a purchase order. See “Customizing purchase orders” on
4 Enter the items you’re ordering.
• If you’ve already set up these items as inventory items on your Item list, choose the
items you’re ordering from the list in the Item column. QuickBooks fills in the
description and rate from the information you entered when you set up the item.
• If you’re entering a new item, type in the item’s name and press Tab. QuickBooks
asks if you’d like to add the item to your Item list. When you’re done adding the
item, QuickBooks returns you to your purchase order.
5 (Optional) Enter a message to your vendor.
6 (Optional) Enter a memo for this PO.
The memo appears in the PO list and other places QuickBooks refers to this PO. It may
be helpful to enter a short description. The memo does not print on the PO.
7 To change the title of this purchase order only, click Change Title.
8 To change the layout of purchase orders, click Format.
9 Select the Add to iCal checkbox to add this purchase order transaction to iCal (see
page 98 for more information).
10 Click OK.

Viewing purchase orders

You can quickly see either a list or QuickReport of the PO’s you’ve created.
To see a list of all your purchase orders:

2 Choose Show Only Open Purchase Orders from the Actions pop-down menu to see only
open PO’s.
To see a QuickReport of your PO’s:

2 At the bottom of the chart of accounts, select Purchase Orders.
3 Choose QuickReport from the Actions pop-down menu.
The Account QuickReport shows the PO’s you’ve created in chronological order, along
with the PO number, vendor name, memo, and amount.
Receiving items against a purchase order

When you receive items against a purchase order, the QuickBooks form you use depends
on when you pay for the items. Once you receive the items, you can see a list of the trans-
actions where you recorded receipt of these items.
To do this Use this form
Receive items with Item Receipt

no bill; pay later. Choose Vendors > Receive Items.
See “Step 1: Enter an item receipt” on page 146.
Receive items and Bill

bill at the same time. Choose Vendors > Enter Bill for Received Items.
See “Entering a bill” on page 172.
Receive items and Check or credit card

pay for them at the Choose Banking > Write Checks or Enter Credit Charges.
same time.
See “Entering a check” on page 187, or “Entering a credit card transaction” on page 193.
To see a transaction history for a purchase order:

• Click the Receipts button in the Create Purchase Orders window.
Editing purchase orders

To edit an existing PO:
• Choose Vendors > Purchase Order List, and double-click the PO you want to edit.
To delete an existing PO:

• Choose Vendors > Purchase Order List, select the PO you want to delete, and then
choose Edit > Delete.

Closing a purchase order manually

When you receive all the items against a purchase order, QuickBooks marks the PO
“Received in full.” Suppose, however, that your vendor is out of an item, or the item is not
made anymore, so you will not be able to receive all the items on a PO. You would “close”
either all or part of the PO manually, so that QuickBooks doesn’t show the items as “on
order” anymore, but you still have a record that you ordered them. When you close a PO
manually, QuickBooks marks the PO “Closed.”
To close a line of a purchase order manually:

2 Double-click an open PO you want to close items on.
3 On the PO, click the Clsd column at the end of the detail area.
QuickBooks removes any inventory items you mark as closed from reports showing
items on order. If you close every line of the PO, QuickBooks marks the whole PO
closed.
4 Click OK.
To close an entire PO manually:

• Select the Closed checkbox in the upper right corner of the Create Purchase Orders
window.
QuickBooks marks each line item as closed, displays “Closed” on the PO, removes the
PO from the Open Purchase Orders report, and no longer shows the items as on order.
A purchase order
marked as closed
Click Receipts
to see a list of
the transactions
where you
recorded
receipt of these
items.
For information on printing the “Closed” status stamp, see “Printing a status stamp”
on page 106.

Printing purchase orders

1 Choose Vendors > Create Purchase Orders.
2 Display the purchase order you want to print.
3 Choose File > Print Purchase Order.
For more information on printing purchase orders, choose Help > QuickBooks Help, click
“Printing” in the left column, and then click Purchase Orders.

17 Account registers
Account registers overview 205

17
Opening an account’s register 205

Entering transactions in a register 206
Editing transactions in a register 208
Finding a specific transaction 210
Printing, saving, or emailing a register 211
Account registers overview

QuickBooks provides a “check register” for each of your bank and cash accounts. Each
register is a record of all activity that affects your account balance displayed in chrono-
logical order.
Although all QuickBooks registers are similar, special characteristics of other account
registers are discussed in the chapters relating to their account types. For example, the
accounts receivable register is discussed in Chapter 11, Accounts receivable management,
Opening an account’s register

A register is a list of all transactions in a particular QuickBooks balance sheet account.
When you record a check in the Write Checks window or a deposit in the Make Deposit
window, QuickBooks automatically adds the transaction to the appropriate register.
Opening a register
To open a register for the balance sheet account you’re working with:
• From the window you’re working in, choose Edit > Use Register, or click the Register
icon on the toolbar.
To open a register for any balance sheet account:

2 Double-click the balance sheet account whose register you’d like to open.
Account registers • 205

All balance sheet The ✓ (cleared) column shows transactions marked as cleared
accounts have a when you reconcile your account.
register that looks QuickBooks calcu-
like this one. lates your new
balance each time you
Reference numbers record a transaction.
appear in the
Number field.
Choose Edit > Go To Select the 1-Line

to find a specific checkbox to see each
transaction in the transaction abbre-
register. viated to one line.
Clear the checkbox to
see this two-line view
Click Splits to enter a split transaction into the register. See “Entering again.
split transactions” on page 207 for more information.
Scrolling through a register

You can scroll through a register using the scroll bar on the right side of the register
window or by using a variety of keyboard shortcuts.
To review a register:
• Drag the scroll box on the right side of the window up and down.
OR
• See the keyboard shortcuts on moving around a window on page 348.
Account colors
To use different colors within an account type so that you can easily and quickly distin-
guish one register from another, see “Changing an account’s color” on page 71.
Entering transactions in a register

Note: Not all transactions can be entered in a register. For example, to enter into Quick-
Books that you received items and a bill, use the Enter Bills window.
Adding a transaction
2 Double-click the appropriate account.
4 Fill in the register fields for the new transaction.
5 Click Record.
If you enter a transaction dated earlier than today, it may disappear from view because
the transaction moves to its correct chronological position in the register when you
record it.
If you enter a transaction dated after today, QuickBooks places it below a thick line in
the register.
206 • Account registers

Calculating amounts with QuickMath

Sometimes you may want to make simple calculations to determine the correct dollar
amount, rate, or quantity to enter in a transaction. For example, you may want to calculate
some of your business expenses, such as two items for office supplies and one for software.
QuickBooks has a feature called QuickMath that can do calculations for you.
Entering split transactions

Sometimes you need to assign more than one account, customer, job, or class to a trans-
action. For example, you may write a check to a vendor that pays for advertising as well as
a subscription.
You can “split” a transaction to different accounts, customers, jobs, or classes, so that you
can keep track of how much you’re spending on each one.
You can also view split transactions using the Expenses tab in the Write Checks, Enter Bills,
Enter Credit Card Charges, or Create Item Receipts windows.
Note: You cannot view or enter a split transaction in the register that tracks items.
To enter a split transaction:

1 Select the transaction you want to split, or click in the blank entry at the end of the
register.
2 Enter the payee, vendor, or name.
3 Enter the total amount of the transaction in the Payment field.
If you don’t know the total amount, leave the Amount field blank. QuickBooks totals
the amount as you fill in the splits and displays it in the Payment field.
4 Click Splits.
5 In the Account field, enter an account.
6 In the Amount field, enter the amount to be assigned to this account.
QuickBooks subtracts the amount entered from the total amount and displays the
remainder in the next Amount field, or adds it to the total transaction amount.
7 (Optional) Enter a memo in the Memo field.
8 (Optional) Fill in the Customer:Job field, and indicate in the column with the invoice
icon whether the expense is billable to that customer.
If the expense is billable to that customer, leave the invoice icon next to the customer’s
name as it is.
If the expense is not billable to that customer, click the invoice icon next to the
customer’s name to mark an “X” through it. (Clicking the invoice icon again removes
the “X.”)
After you record an invoice that includes the expense, the invoice icon for that expense
is grayed, indicating that you’ve billed this customer for that expense.
9 (Optional) Enter a class in the Class field.
For more information, see “Classes” on page 40.
10 Continue to add accounts and amounts (and customers, jobs, or classes, if needed) until
you have added one line for each part of the transaction.

The word -split- in

the Account field
means that the
amount of the trans-
action is distributed
to two or more
accounts, customers,
jobs, or classes.
Click Edit or Splits to
see the selected
transaction in full
detail.
In this example, there is only one account associated with the transaction, but it is split
between two jobs.
11 Click Record.
Making sure your split amounts add up

As you enter amounts in the Splits window, QuickBooks enters the remainder on the next
free line. Sometimes the total of the amounts entered in the Splits window doesn’t equal
the figure entered in the register. For example, you might delete a splits line, or change the
total amount in the register.
If your split amounts don’t add up to the register figure when you click Record, Quick-
Books warns you that the transaction is not in balance.
To balance your transaction:

• Click the Recalc button in the Splits window.
QuickBooks recalculates the amount and adjusts it in the register.
Editing transactions in a register

When you record a changed transaction, QuickBooks recalculates the account balance, if
necessary.
You cannot directly edit the Type field and the Balance field in the register. If you need to
change the balance, you must do so by adding, editing, or deleting a payment or deposit
as an adjustment.
Editing a transaction
3 Double-click the transaction you want to edit.
4 Enter your corrections.
5 Click Record from the register or OK from the transaction form.
Note: If you begin making changes and decide you would rather go back to the transaction
as it was before you started editing (before you record your changes), choose Edit >
Revert.

Moving a transaction to a different account

When you accidentally enter a transaction into the wrong account, you can easily correct
the mistake without having to reenter the transaction.
To move a transaction to a different account:

3 Select the transaction you want to move.
4 Choose Edit > Copy transaction.
The word “transaction” in the menu changes depending on the type of transaction you
have selected in the register. If you’re on a check, the menu item says “Copy Check.”
Note: You can copy and paste a transaction between similar types of registers, that is,
only between registers that accept the same types of transactions. For example,
all bank transactions and credit card transactions have similar fields, but A/R
transactions have items, so they cannot be pasted into non-A/R types of
registers.
5 Open the register for the correct account and click in the blank entry at the bottom.
6 Choose Edit > Paste.
7 In the original register, delete the incorrect transaction.
Voiding transactions in a register

If you want complete records of all transactions, you may want to void a transaction
instead of deleting it. For example, if you stop payment on a check, or a check is lost or
contained an error, you’ll have a record of the situation if you choose Void instead of Delete.
To void a transaction:
• Click the transaction, and then choose Edit > Void.
QuickBooks attaches the word “Void” to the transaction’s memo and changes the trans-
action amount to zero, so that it no longer affects your account balance.
Deleting transactions in a register

To delete a transaction:
• Click the transaction, and then choose Edit > Delete.

Finding a specific transaction
Finding a transaction within a register

You can quickly move to a transaction within a register if you know the contents of the
following fields:
• The name in the Payee, Vendor, or Customer field
• The check or transaction number in the Number or Ref field
• The text in the Memo field
• The amount in the Amount field
To go to a specific transaction:
1 From an open register, choose Edit > Go To.
2 Choose criteria from the Which Field pop-up menu: Payee/Name, Number/Ref, Memo,
or Amount.
3 Choose a customer, vendor, employee, or other name to search for in the Search For
field; or enter a number, text, or amount.
4 Click Next to search forward chronologically; click Previous to search backward chro-
nologically through the register.
Note: QuickBooks searches only the register you’re working in. To search for a transaction
in another register, use the Find feature (see page 210).
Using Find to locate a transaction

You can use Find from any place in QuickBooks to search all transactions in any account
for the transaction(s) you specify.
To search for a specific transaction:

1 Choose Edit > Find.
Click a filter to begin To further refine your search, click More Options to display the Filter Transactions window used with
defining your search Reports.
criteria.
Select a transaction and click Go
To to display the window that you
Select and enter the used to enter the transaction.
search criteria in the
fields that are
displayed here.
Click Report to create a report

The results of the using your search criteria. You can
search are displayed then print the report to get a
here. printout of your search results.

2 In the Find window, choose a filter:
To find a transaction using Choose this filter
Dates Date
The type of transaction (checks, deposits, invoices, bills, purchase orders, etc.) Type
The transaction number that appears in the register or on the entry form Number
Customers, vendors, employees, or any other names Name
The account from which the transaction originated Source
The account to which the amount of the transaction was distributed Account
Memos Memo
Amounts Amount
3 Select the specific search criterion from the pop-up menu.

For example, to look for an invoice, click Type in the Filter column, and select Invoice
from the list. The Set to column displays the criterion that you specified.
4 If necessary, select more filters.
Select as many filters as you want. To continue searching for your invoice, you could
click Name and select the customer’s name from the list. If you know that the invoice
is for more than $25.00, you could then click Amount and > (greater than), and enter 25.
5 Click Find.
Note: If you search for a specific transaction number, QuickBooks does not display
each line associated with it, but displays only the transaction.
6 Select the transaction you want to see, and click Go To.
7 To start over or search for different transactions, click Reset.
8 To see a report using the search criteria, click Report.
9 To print the search results, press x P from Find Report buttonbar.
Printing, saving, or emailing a register

To print a register:
1 Display the register you want to print.
2 Choose File > Print Register.
For more information on printing, saving, and emailing registers, choose Help > Quick-
Books Help, click “Printing” in the left column, and then click Registers.


18 Assets, liabilities, and equity
Assets overview 213

18
Adding fixed asset and depreciation accounts 216

Selling fixed assets 217
Recording thefts or losses of fixed assets 220
Purchasing assets 220
Liabilities overview 221
Borrowing money 221
Adding a loan to your chart of accounts 222
Tracking loan payments 223
Equity overview 224
Distributing yearly profits to partners 230
Creating equity accounts 230
Transferring money out of Opening Bal Equity 231
Recording an owner’s draw 232
Recording an owner’s capital investment 232
Assets overview
Your assets are the things your company owns, such as:
• Cash you have on hand
• Money in your checking and savings accounts
• Money you are owed for services you’ve provided or items you’ve sold (accounts
receivable)
• Money you have loaned
• Furniture and fixtures
• Property
• Equipment
You’ll probably want to use expense accounts, rather than asset accounts, for ordinary
supplies, such as stationery, light bulbs, and disks. Also, if you don’t report on inventory,
but purchase items for resale, you can use expense accounts for such items. For example, a
caterer can use expense accounts for the food purchased.
Assets, liabilities, and equity • 213

Current assets
Current assets are assets likely to be converted to cash within one year. They include
accounts receivable, bank accounts, and cash.
QuickBooks provides three types of current asset accounts for you to use as you create asset
accounts for your company:
• bank
• accounts receivable
• other current asset
To add a current asset account, see “To add a new account:” on page 67.
Bank accounts
You’ll need to set up a bank type account to track each bank account your company has.
You can also use a bank account for petty cash.
Accounts receivable
Your accounts receivable account tracks amounts owed to your business for the goods and
services you’ve sold to your customers. When you create an invoice, QuickBooks records
the amount of the invoice in your accounts receivable account.
Other current assets

Use an other current asset account to track any other asset that is likely to be converted into
cash or used up within one year.
If you buy and sell inventory, the value of all your inventory on hand is usually an other
current asset account named Inventory Asset.
Other current assets could include:
• Treasury bills
• Certificates of deposit
• Prepaid expenses (amounts already paid for services your business has yet to receive)
• Prepaid deposits (which will be returned to you at a later date)
• Reimbursable expenses
• Notes receivable (if due within one year)
You can also use an other current asset account for petty cash.
Fixed assets
A fixed asset is something tangible you own and use in your business that is not converted
into cash during one year of normal operations. A fixed asset is usually something
necessary for the operation of your business, like a truck, cash register, computer, or photo-
copier.
Understanding depreciation
Fixed assets include equipment or property that your business owns that are not for sale.
Since fixed assets last a long time, their cost is not completely charged to the year in which
they were bought. Instead, their cost is spread over several years. However, because fixed
214 • Assets, liabilities, and equity

assets wear out or become obsolete, their value declines constantly from the day they are
purchased. The amount of this decline in value is called depreciation.
To determine the value of a fixed asset at any point in time, subtract its accumulated depre-
ciation (total amount of depreciation since the asset’s purchase) from its original cost.
Important: Determining the amount of depreciation to deduct can be a complex process,
and the IRS rules on the subject change often. Ask an accountant for help in
figuring actual depreciation amounts.
Example
Say you bought a company truck in December 2001 for $20,000. By December 2003, the
truck may have depreciated by $4,000. Therefore, the value of the truck in December 2003
is:
$20,000 -$4,000 = $16,000
original cost - accumulated depreciation = current value
Usually, you’ll want your balance sheet to show the original cost of an asset on one line,
with the accumulated depreciation subtracted from the original cost on a second line, and
the current value on a third line.
The current value of
a fixed asset is its
original cost minus
its depreciation.
Tracking fixed assets

You can use the following method to track fixed assets and depreciation. This method
allows you to see the cost of each asset or asset group and its accumulated depreciation
separately on your balance sheet.
You need to set up a fixed asset account for each asset with two subaccounts: one for
original costs and one for accumulated depreciation. You record past and present
purchases in the subaccount for costs. You record depreciation in the other subaccount. The
fixed asset portion of your balance sheet shows the total of the subaccounts, which equals
the current value of the assets.
For more information, see “Entering a depreciation transaction” on page 217.
If you bought the asset with a loan

If you buy a new truck with a loan, you’ve gained an asset—the truck— and you’ve also
gained a liability—the loan. The asset and liability are not connected in any way in Quick-
Books. On your balance sheet, you’ll see the value of the truck as an asset, adding to the net
worth of your business, and the loan as a liability, subtracting from the net worth of your
business.

Adding fixed asset and depreciation accounts

When you use one or more fixed asset accounts and plan to track depreciation, set up
separate subaccounts for original costs and for accumulated depreciation. You record past
and present purchases in the subaccount for costs. You record depreciation in the other
subaccount. Then your balance sheet shows the total of the subaccounts, which equals the
current value of the assets.
To add a new fixed asset account:

menu.
2 Choose Fixed Asset as the account type.
3 Enter the name of the asset.
4 (Optional) Choose the tax line to associate with this account from the Tax Line pop-up
menu.
5 Leave the opening balance at 0.00 for this “parent” account.
6 Click Next.
To add a cost subaccount for an asset:

1 In the New Account window, choose Fixed Asset as the account type.
2 Enter “Cost” in the Name field.
3 (Optional) Enter a description.
4 Select the “Subaccount of” checkbox.
5 Choose the name of the asset account for which this account is the cost.
6 Enter an opening balance and the date you purchased the asset.
The opening balance is the original cost of the asset if you purchased the asset before your
QuickBooks start date. If you’re buying the asset now, do not enter an opening balance.
Instead, enter a transaction in the register of the account you used to purchase the asset,
such as a checking or credit card account. In the detail area of the purchase transaction,
choose this cost account in the Account field.
.
Use “Fixed Asset” as
the account type.
In the Opening Balance field, enter the original

cost of the asset, and in the as of field, enter the
date you purchased the asset (if you bought it
before your QuickBooks start date).
7 Click Next.
To add an accumulated depreciation subaccount for each asset:

1 In the New Account window, choose Fixed Asset as the account type.
2 Enter “Accumulated Depreciation” in the Name field.
3 (Optional) Enter a description.

4 Select the “Subaccount of” checkbox.

5 Choose the name of the asset account for which this account is tracking depreciation.
6 Enter a negative opening balance.
The opening balance is the accumulated depreciation for the asset as of the day before
your start date. Enter this amount as a negative number so that it will be subtracted
from the value of the asset. If you’re buying the asset now, leave this opening balance
at 0.00.
7 Click Next.
Note: When you add the Cost and Accumulated Depreciation subaccounts, QuickBooks
displays them in alphabetical order in your chart of accounts. You can drag Cost
above Accumulated Depreciation in the chart of accounts so that Cost appears first
in the chart of accounts and reports. See “Keeping your chart of accounts organized”
on page 71.
You’ll also need to add one expense account to track all your depreciation, since the
amount that your assets lose in value is an expense to your business.
To add a depreciation expense account:

1 In the New Account window, choose Expense as the account type.
2 Enter something like “Depreciation Expense” as the name.
3 Enter a description and note, and then click OK.
Entering a depreciation transaction

For help on entering a depreciation transaction, choose Help > QuickBooks Help and click
“Assets, liabilities and equity” in the left column.
Selling fixed assets

You may sell a fixed asset for more than or less than its value on your company books. For
example, you bought a truck for $15,000 a few years ago. You have depreciated it to $8,000
but you are able to sell it for $9,000. Thus, you have a capital gain of $1,000 on the sale.
You want your records to show that you no longer own the asset, so its current value on
your books should be zero.
To your company, any capital gain is income and any capital loss is expense. You can add
an other income account called Capital Gain/Loss so that gains or losses will appear on
your profit and loss statement. Losses will be negative.
Determining the current value of a fixed asset

Before you enter the sale of a fixed asset, you need to know the value of the asset on your
books. If you’ve been tracking the asset by name, create one or more QuickReports as
follows:
• If you’ve tracked everything about the asset in a single asset account, display the
register of the asset account. Select any transaction with the name of the asset, and click
Q-Report. The QuickReport shows all costs and depreciation entries, and the total
amount is the current value. Make a note of the current value.
• If you’ve tracked the accumulated depreciation of the asset in a depreciation subac-
count, display the register of the subaccount. Select any transaction with the name of

the asset, and click Q-Report. The QuickReport shows all depreciation entries and the
total depreciation for this asset. Make a note of the total depreciation.
• If you’ve tracked the asset cost (or value as of your start date) in a different asset
account, display the register and make a note of the cost (or starting value).
To enter the sale of a fixed asset:

2 In the Account field, choose the fixed asset account or subaccount where you track the
cost (or starting value) of the asset.
The first and second
lines reduce the
current value on
your books to zero.
The third line shows

money deposited in
the bank.
The last line shows your net gain or loss.
3 In the Credit field, enter the cost (or starting value) if you track depreciation in a
separate asset subaccount. Otherwise, enter the current value of the asset (which you
obtained from the QuickReport).
4 (Optional) In the Name field, choose the name of the asset.
5 If you track accumulated depreciation in a separate subaccount, fill in a second line.
• In the Account field, choose the fixed asset subaccount where you track the accumu-
lated depreciation of the asset.
• In the Debit field, enter the total accumulated depreciation of the asset (which you
obtained from the QuickReport).
• In the Name field, choose the name of the asset.
6 Enter the selling price on the next line.
• In the Account field, choose the bank account in which you deposited the money
from the sale.
• In the Debit field, enter the actual amount you deposited. This amount may be
higher or lower than the current value.
• Press Tab so that QuickBooks fills in the difference in the Debit or Credit field of the
next line.
7 Enter the net gain or loss on the last line.
• In the Account field, choose the other income account for capital gains and losses.
8 Click OK.
If you run the same QuickReports for this asset again, the totals should now be zero.

Making a loan to the purchaser

If you sell an asset and take back a loan, you’ll need an other asset account to track the loan
you have made. Money that someone owes you is a company asset.
To make a loan:
1 Enter the sale as described in “To enter the sale of a fixed asset:” on page 218.
2 Enter the loan you’ve made on the next line.
The sales price of
$9000 is divided into
a down payment
deposited in the
bank (third line) and
a loan given to the
buyer (last line).
• In the Account field, enter the other asset account for the loan.
• In the Debit field, enter the loan amount.
3 Click OK.
When the buyer sends you a payment, enter the payment in the Make Deposits window.
To record a payment on a loan:

2 Enter a line to show the payment of the principal.
• Enter the person you are receiving the payment from in the Received From field.
• Enter the amount.
• Enter the asset account for this loan in the From Account field.
3 On the next line, enter the part of the payment that goes to interest.
• Enter the person you are receiving the payment from in the Received From field.
• Enter the amount.
• Enter the other income account used to track interest income in the From Account
field.
The total should equal the payment amount.
4 Click OK.

Recording thefts or losses of fixed assets

You track a theft or loss of a fixed asset similarly to a sale, except you use an other expense
account.
To record thefts or losses:

1 Enter the sale as described in “To enter the sale of a fixed asset:” on page 218, but omit
the lines for the selling price and the net gain or loss.
2 Enter any insurance money you received.

• In the Account field, choose the bank account in which you deposited the money.
• Enter the amount in the Debit field.
3 On the next line, enter the amount of the loss not covered by insurance. In the Account
field choose the other expense account for thefts or losses.
4 Click OK.
Purchasing assets
When you enter the purchase of an asset, use the usual check or credit card window you
would use for any company purchase, except assign the purchase to your asset account,
instead of an expense account.
To pay for an asset with a company check or credit card:

1 Enter the purchase in the Write Checks window or the Enter Credit Card Charges
window.
2 In the Account field, choose the account for the asset, whether it’s an expense account,
an other current asset account, or a fixed asset account.
3 Click OK.
To pay for an asset with cash:

1 Choose Lists > Chart of Accounts, and then double-click your Petty Cash account.
2 Enter the transaction in the register and click Record.
Tracking a fixed asset by name

You can track the name of fixed assets in the fixed asset account. When you track the name
of the asset, you can create a QuickReport to show all transactions involving that asset.
To track a fixed asset by name:

1 In the register of the fixed asset account, replace the payee name with a name that iden-
tifies the asset.

2 Add this name to your Other Names list.

3 Click Record.
4 Use this name if you later record depreciation or if you sell the fixed asset.
The purchase transaction retains the original payee name.
Liabilities overview
Liabilities are your company’s debts. Liabilities also represent the credit extended to your
business. They include your payables, money you owe on credit cards, sales tax you owe
the government, withholdings from employee earnings you owe the government, and
short-term and long-term debts.
If you indicate that you charge sales tax when you set up a new company, QuickBooks
automatically sets up a liability account called Sales Tax Payable. You can add as many
other liability accounts as you need to track your debts.
Current liabilities
A current liability is a debt your company expects to pay within a year, such as a short-term
loan or a bill.
QuickBooks provides three types of current liability accounts:
Accounts payable Accounts payable is the amount you owe to suppliers or vendors for services or items you’ve bought
from them. Your accounts payable balance is the total of the unpaid bills that you entered in the Enter
Bills window.
Credit card accounts With QuickBooks you can easily track expenses you charge to your credit cards. Just set up a credit
card account for each card you have.
Other current liabili- Use an other current liability account to track any other liability that is scheduled to be paid off within
ties one year of regular operations.
Examples of other current liabilities are accrued sales tax, lines of credit, and short-term loans.
To add a current liability account, see “To add a new account:” on page 67
Long-term liabilities
The most common long-term liabilities are loans that you expect to pay off in more than
one year.
Borrowing money
QuickBooks makes it easy to pull together the financial information a lender asks for. After
you receive the loan, track it as a company liability.
Reports to show your lender

Your lender will probably ask for profit and loss statements (sometimes called “P and L’s”
or income statements) and balance sheets for the current fiscal year and for prior fiscal
years.

To create a profit and loss statement:

• Choose Reports > Company & Financial > Profit & Loss Standard.
QuickBooks displays a report for the current month to date.
To create a balance sheet:

• Choose Reports > Company & Financials > Balance Sheet Standard.
Make sure the report covers the dates you need. If it doesn’t, choose the correct date or
date range in the list for Dates.
For details about working with reports, see Chapter 21, Reports, graphs, and budgets, starting
on page 247.
Adding a loan to your chart of accounts

Use liability accounts to track the loans your company has with lending institutions and
lenders.
If you take out a loan to pay for a new asset, such as a new vehicle for your business, the
asset account (for the vehicle) and the liability account (for the loan) are not connected in
QuickBooks in any way.
To add a loan to your Chart of Accounts:

menu.
2 For short-term loans, choose an account type of Other Current Liability. For long-term
loans, choose an account type of Long Term Liability.
3 Enter the account name, description, and any bank number.
4 (Optional) Associate a tax line with this account.
5 For a new loan, enter 0.00 as the opening balance. For an existing loan, enter the
balance as of your start date.
6 Click OK.
If you receive a cash loan

To deposit loan money in a bank account:
2 Enter the amount you received in the Amount field.
3 In the From Account field, enter the name of the liability account you’ve created to track
the loan.

QuickBooks adds the amount to the bank account and also creates a loan balance of that
amount.
4 Click OK.
If you receive a loan for an asset

If you’ve received an asset (such as a new truck), you need to show an increase in your asset
account. (If you need to create a new asset account, leave the balance as 0.00.)
To receive an asset by taking out a loan:

1 If you’ve made a down payment on the asset, record the down payment as an ordinary
check or withdrawal from a bank account.
• In the Account field, enter the name of the asset account.
• Record the transaction.
2 Display the register of the asset account.
3 In the down payment transaction, change the name in the Payee field of the register to
the name of the asset.
4 Add the name to your Other Names list.
5 Click Record.
6 Enter a new transaction in the asset account register.
The first transaction
is a down payment
made from a
checking account.
The next transaction
shows the loan.
• In the Payee field, enter the name of the asset.

• In the Increase field, enter the amount of the loan.
• In the Account field, enter the name of the liability account you’ve created to track
the loan.
Tracking loan payments

To record a payment on a loan:
2 Make a check out to your bank for the amount of the payment.
3 In the detail area, assign the amount for interest to an interest expense account, and the
amount for principal to your liability account for this loan.

Distribute the full

amount of the
payment to two
accounts: an
expense account for
the interest and your
liability account for
the principal.
4 Click OK.
If you don’t know how much of your payment goes toward interest, ask your bank (or
other lender) for an amortization schedule for your fixed-rate loans. The schedule shows
the amount of each payment that is for interest and the amount applied to the principal.
Equity overview
Equity or capital is the difference between what you owe (your liabilities) and what you
have (your assets). If you sold all your assets today, and you paid off your liabilities using
the money received from the sale of your assets, the money you would have left would be
equity.
This chapter teaches you how to set up equity accounts, how to move money from the
QuickBooks Opening Bal Equity account to your own equity accounts, and how to record
an owner’s draw.
Discuss how your business handles equity with your accountant to determine the best
setup and procedures for your situation.
Equity and your balance sheet

A balance sheet shows your company assets, liabilities, and equity on a particular date.
Since equity is the difference between total assets and total liabilities, the total assets equal
the sum of total liabilities and equity.
When you set up your company in QuickBooks as of a particular start date, you may
already have company assets and liabilities as of that date. When you tell QuickBooks the
opening balances of your assets and liabilities, QuickBooks automatically tracks the
amount of equity in an equity account called Opening Bal Equity (where Bal is short for
“balance”).
If your company is a sole proprietorship (that is, an unincorporated company with only
one owner), you don’t have to add any more equity accounts to your chart of accounts. All
the equity belongs to the company’s sole owner.
After you enter transactions in QuickBooks for a while, the company’s income and
expenses produce a net income from the start date to the present date. QuickBooks adds
the net income to the balance sheet to keep it in balance.

For example, if you started with $5,000 in checking, then had an income of $3,000 and
expenses of $2,000, you’d have $1,000 more in checking. QuickBooks adds a Net Income
line of $1,000 to the equity section of the balance sheet to keep assets equal to liabilities plus
equity.
As of QuickBooks start date One month later
TOTAL ASSETS=TOTAL LIABILITIES + EQUITY TOTAL ASSETS=TOTAL LIABILITIES + EQUITY

This company starts with $5,000 in the bank. One month later, after earning a net income of
QuickBooks tracks the $5,000 owner’s equity in $1,000, the company has $6,000 in the bank.
an equity account called Opening Bal Equity. QuickBooks adds the net income to the equity
Note that total assets equal total liabilities plus section of the balance sheet. Note that total
equity. assets still equal total liabilities plus equity.
The Net Income line is the only amount on the balance sheet that is neither the balance of
an account nor a subtotal of account balances. Instead, it comes from the company’s activ-
ities for the current fiscal year. It is the same amount as the bottom line on a profit and loss
statement for the current fiscal year.

At beginning of fiscal year At end of fiscal year
Balance Sheet Profit and Loss Balance Sheet

1/1/02 1/1/02- 12/31/02 12/31/02
Net
Income 12,000.00
Total Total
Equity Net
5000.00 Equity 17,000.00
Income 12,000.00
Notice the amount of This is the company profit Notice how the Total Equity
Total Equity. for the year. amount has increased
because of the company’s
net income.
The balance sheet at the This profit and loss This balance sheet is
beginning of the fiscal statement shows income another snapshot of your
year (January 1) is a minus expenses for the finances, taken at the end of
snapshot of your whole fiscal year. It summa- the fiscal year (December
finances on that date. rizes the activity that has 31).
occurred over 12 months.
After the end of the first fiscal year, QuickBooks automatically makes an end-of-year
adjustment to net income. It makes the net income return to zero, and transfers the net
income earned in the previous year into the equity account called Retained Earnings.
For example, if the net income for the year was $12,000, QuickBooks puts the $12,000 in the
Retained Earnings account and makes net income zero.
After the end of the second fiscal year, QuickBooks makes a similar adjustment, increasing
Retained Earnings by the amount of net income for the second fiscal year.
Thus, at any time, the Net Income line of the balance sheet shows net income for the current
fiscal year. The Retained Earnings line shows net income for previous fiscal years tracked
in QuickBooks.

One year after QuickBooks start date Two and a half years after QuickBooks start date
After one fiscal year has passed, the company has Two and a half years after the start date, the
generated a net income of $12,000 and has company has generated a total net income of
$17,000 in the bank. QuickBooks tracks the net $30,000: $24,000 in the first two fiscal years and
income for the first fiscal year in an equity account $6,000 in the current fiscal year.
called Retained Earnings.
The Retained Earnings line on the balance sheet is
Note that the amount in Opening Bal Equity is the for the two completed fiscal years (2002 and
same as on the start date. Total assets still equal 2003). The Net Income line is for the current fiscal
total liabilities plus equity. year (2004).
Your equity reflects the health of your business, since it is the amount of money left after
all your debts are satisfied. Equity comes from two sources:
• Money invested in your company
• Profits of your business
Of course, the owner can also take money out of the company. Such withdrawals, called
owner’s draws, reduce the company equity.
Some people like to track owner investments, owner’s draws, and retained earnings prior
to the QuickBooks start date by putting them in separate equity accounts. If you decide to
add additional equity accounts, QuickBooks still adds the Retained Earnings and Net
Income lines on your balance sheet.
Types of ownership
There are three basic types of business ownership:
• Sole proprietorship
• Partnership
• Corporation
For each type of business, you may want to add equity accounts to track the details of
investments, withdrawals, and earnings.
• For instructions on how to add an equity account, see “Creating equity accounts” on
page 230.

• For instructions on how to record an owner withdrawal or an investment of capital, see

“Recording an owner’s draw” on page 232 or “Recording an owner’s capital
investment” on page 232.
Sole proprietorships
A sole proprietorship is an unincorporated company owned by one person.
Since all the equity belongs to one person, tracking equity can be very simple. All the equity
is initially in the Opening Bal Equity account QuickBooks creates when you set up a new
QuickBooks company. QuickBooks creates a second equity account, called Retained
Earnings, which initially has a zero balance.
You may want to take one additional step after setting up to move the balance of Opening
Bal Equity into Retained Earnings. See “Transferring money out of Opening Bal Equity” on
page 231.
To separate the different types of equity in your business, you can use separate equity
accounts:
Eduardo’s Equity 5,000.00
Eduardo’s Investment 10,000.00
Eduardo’s Draws -5,000.00
New businesses
If the business itself is new as of your QuickBooks start date, your initial assets in Quick-
Books, including your business bank account, come from the owner’s investment. The
business has no prior earnings.
• Transfer the balance from Opening Bal Equity to a new equity account called “Owner
Investments.” Record any additional investments in the business in this account.
• Add a third equity account called “Owner Withdrawals.” It should have a zero opening
balance.
Established businesses
If the business is ongoing as of your QuickBooks start date, the equity on the start date is a
combination of owner investments and prior earnings minus owner withdrawals.
• Add a third equity account called “Owner Investments.” For its opening balance as of
your start date, enter your actual capital investment prior to the start date.
If you make additional investments in the business, record them in this account.
• (Optional) Add a fourth equity account called “Owner Withdrawals.” For its opening
balance as of your start date, enter your actual owner withdrawals prior to the start
date as a negative amount. (Or, start with a zero opening balance but track owner with-
drawals in this account from now on.)
• Move the balance of Opening Bal Equity into Retained Earnings. See “Transferring
money out of Opening Bal Equity” on page 231. If you don’t have a separate account
for owner withdrawals, you can assign them to Retained Earnings in the future.
Partnerships
A partnership is an unincorporated business owned by two or more persons. In a part-
nership, each partner owns a share of all assets and liabilities. Each partner may have
invested in the partnership, and each receives a specified share of profits. Partners do not
receive salaries, but they may withdraw money against their share of profits. QuickBooks
makes it easy to track these partnership transactions.

There are many possible ways to handle partnership equity.

• Set up separate equity accounts for each partner.
If you don’t want to see further detail, record each partner’s capital investment, draws,
and share of profits in the partner’s single equity account. If you use this approach, each
partner’s equity will always appear as one amount, as in the following example:
Marilyn’s equity +20,000; Peggy’s equity + 25,000.
• (Optional) Add subaccounts to provide the level of detail you’d like to see on the chart
of accounts and on the balance sheet. For example, add subaccounts for each partner’s
capital investment, share of profits, and draws. On the chart of accounts and on the
balance sheet, QuickBooks shows amounts for each subaccount as well as subtotals for
each partner’s equity, as in the following example.
Marilyn’s Equity 20,000.00
Marilyn’s Investment 10,000.00
Marilyn’s Profit 35,000.00
Marilyn’s Draws -25,000.00
Peggy’s Equity 25,000.00
Peggy’s Investment 10,000.00
Peggy’s Profit 35,000.00
Peggy’s Draws -20,000.00
In this example, each partner has one main equity account that includes subaccounts for
tracking investment, share of profits, and draws.
When you have finished setting up the partnership in QuickBooks, transfer any money
remaining in Opening Bal Equity to the appropriate partner equity accounts, since all the
equity belongs to the partners. You can enter such transfers directly into the register of
Opening Bal Equity.
Corporations
A corporation is owned by its stockholders. Unlike a sole proprietorship or a partnership,
a corporation can pay a working owner a salary.
In a corporation, you’ll usually want to separate the stockholders’ investment of capital
from the stockholders’ share of earnings.
To track paid-in capital or investments of stockholders, add an equity account with a name
such as “Capital Stock.” Although you do need to have records of the names and invest-
ments of each stockholder, you probably won’t want to show this detail on your chart of
accounts. For the opening balance, enter the total paid-in capital as of your QuickBooks
start date.
After you have set up all your accounts, the amount remaining in Opening Bal Equity
represents retained earnings prior to the start date. You can rename this account with a
name such as “Prior Earnings” or “Pre-2002 Earnings.”

QuickBooks automatically tracks the corporation’s retained earnings for completed fiscal
years in an equity account called Retained Earnings. After the end of the year, you may
distribute some or all of the retained earnings of the corporation to stockholders as divi-
dends.
Tracking retained earnings

You may need to transfer some of your Opening Bal Equity into retained earnings when
you first set up your company (see “Transferring money out of Opening Bal Equity” on
page 231), but after you’re set up, QuickBooks automatically transfers your profit (or loss)
into Retained Earnings at the end of each fiscal year.
For example, if your fiscal year is January through December, and you create a standard
balance sheet on December 31, 2001, QuickBooks shows your net income for 2001 on a line
labeled “Net Income.”
If you create the same standard balance sheet on January 1, 2002, you’ll see that the same
net income from 2001 now appears in an account called Retained Earnings, and net income
has changed to 0.00 (for 2002).
Note: Retained earnings is a special balance sheet account. Its balance is not displayed in
the Chart of Accounts. To see your retained earnings amount, create a balance sheet
report.
Distributing yearly profits to partners

The profit and loss statement for a year shows the net profit for the business for that year.
After you have decided how much of the profit each partner should get, you can distribute
the profit by entering a transaction in each partner’s equity account.
To distribute profits to partners:

menu.
2 In the New Account window, add an Other Expense type account called Distribution of
Net Income.
On your profit and loss statement, the amount of the distribution you assign to this
account will appear at the bottom of the statement, after the net income from opera-
tions.
3 Display the register of the equity account where you track a partner’s share of profits.
4 Enter this partner’s share of profits in the Increase field. (If there is a loss, enter the
amount in the Decrease field.)
5 In the Account field, choose the Distribution of Net Income account.
Creating equity accounts

Although QuickBooks creates two equity accounts (Opening Bal Equity and Retained
Earnings) when you set up your company, you’ll probably want to add at least one other
equity account to your chart of accounts if you’ve invested capital in your company.
To keep track of your personal investment in your business separately from your draws,
you can create two equity accounts: one called “Owner Investment” and one called
“Owner Draws.”

To add an equity account to your chart of accounts:

menu.
2 Choose Equity as the account type.
3 Enter a name for this account (for example, “Owner’s Equity” or “Owner’s Investment,”
or whatever equity account name you currently use).
4 If you know the balance of this equity account as of your QuickBooks start date, enter
the balance and start date.
• If you’re creating an equity account to track your investment, enter the total amount
of your investment as of your start date.
• If you’re creating only one equity account to track your investment and draws,
subtract the amount of your total draws as of your start date from your investment
and enter the result as your owner’s equity starting balance.
• If you’re creating an equity account to track draws only, the total amount of your
draws should be entered as a negative starting balance.
5 Click OK.
Transferring money out of Opening Bal Equity

After you’ve set up your chart of accounts and entered correct opening balances for each
balance sheet account, you may want to transfer money from Opening Bal Equity to other
equity accounts.
Note: If you’ve created an equity account to track your investment and draws and entered
a starting balance for that equity account, it’s likely that any money left in Opening
Bal Equity is retained earnings from prior years. You can transfer the Opening Bal
Equity amount to Retained Earnings to finish setting up.
To transfer money out of Opening Bal Equity:

1 Choose Lists > Chart of Accounts, and then double-click Opening Bal Equity.
2 In the Account field, enter the name of the equity account to which you are transferring
the money.
Many of the transac-
tions in your
Opening Bal Equity
register are from the
opening balances of
your various balance
sheet accounts.
3 Enter the amount in the Decrease field.

Recording an owner’s draw

When you want to withdraw money for your own use, you can write yourself a check. In
the detail area of the check, you select an equity account, such as Owner’s Equity.
To record an owner’s draw:

2 Make the check out to yourself.
3 Choose the equity account you use to record draws in the Account field.
4 Click OK.
Recording an owner’s capital investment

When you or a business partner invest personal money in your business after your Quick-
Books start date, record the transaction in an equity account.
Perhaps you have an account called Owner’s Equity, Partner’s Equity, Owner Investment,
or something similar. The balance of such an account is increased by an investment of
owner capital.
Record the investment as a deposit into the bank account where you actually deposited the
money. For example, if you write a personal check to your company and you deposit the
check into your company’s savings account, record a deposit to the savings account, and
show the equity account in the detail area of the deposit.
To record an owner investment:

2 If QuickBooks displays the Payments to Deposit window, you can choose to deposit
some of the payments along with your investment check or click Cancel to deposit the
investment by itself.
3 In the Make Deposits window, choose the account into which you’re depositing the
money from the Deposit To pop-up menu.
4 Choose the owner who is making the investment in the Received From field.
5 Enter the amount of the owner investment in the Amount field.
6 Choose the appropriate equity account in the From Account field.
7 Fill in the rest of the fields as necessary.
In this transaction,
an investment of
$6,000 is being
deposited into
Checking, and is also
increasing the
balance in the equity
account, “Owner’s
Equity.”
8 Click OK.

19 Account reconciliation
Reconciling accounts overview 233

19
Balancing your account for the first time 234

Reconciling your checking account statement 234
Marking cleared transactions 236
Completing reconciliation 236
Reconciling your credit card statement 237
Correcting differences 237
Printing a reconciliation report 239
Reconciling accounts overview

When your statement arrives, you can reconcile it with your QuickBooks credit card or
check register in just a few minutes.
The goal of reconciling is to make sure that your QuickBooks records and the bank’s or
credit card company’s records agree about the amount of money in your account.
You can reconcile any QuickBooks credit card account or checking account, as well as
accounts for savings and money market funds.
QuickBooks lets you reconcile to the degree of accuracy that you prefer. You can track
down every cent if you want to, but QuickBooks does not require you to balance to the
penny.
If you’ve skipped reconciling for a month or more

If you have used QuickBooks for a number of months and have just decided that you want
to use the Reconcile feature, you may not want to go back and reconcile your QuickBooks
account against the bank statements for each of the previous months. You can skip recon-
ciling for some months, but your records may not be as accurate as they would be if you
reconciled monthly.
The most accurate way to catch up is to reconcile each month you skipped. Balance each
month separately, starting with your earliest statement since you’ve been using Quick-
Books, until you balance your most recent statement.
If you add earlier transactions to QuickBooks

You may have begun using QuickBooks as of a certain date and would now like to add
transactions that occurred before that original start date.
After you add earlier transactions, and you want to reconcile past months, you should
reconcile month by month only if you’ve never used QuickBooks’ reconcile feature.
Account reconciliation • 233

However, if you’ve already reconciled one or more months, you should reconcile forward
only; that is, reconcile months after your start date. Use the previous months’ data for
reporting only. You need to mark all older transactions as cleared to reconcile future
months.
If you cancel in the middle of reconciling

QuickBooks keeps track of the items you’ve marked as cleared so far. They appear in the
register with a light check mark in the ✓ (cleared) column, instead of a bold check mark,
indicating that those items are pending and you haven’t completed reconciling them.
You’ll need to re-enter your ending balance or the amounts you entered for interest and
service charges when you choose Banking > Reconcile again.
Note: You don’t ordinarily need to cancel in the middle of reconciling, since you can work
in other windows to correct errors and still leave the Reconcile window open.
Balancing your account for the first time

Before you can reconcile your accounts accurately, you need to do the following:
• Enter all uncleared transactions in your account.
These are all transactions that haven’t cleared or shown up on previous statements.
In most cases, you’ll be reminded to enter all uncleared transactions because they
appear on the statement. You can enter these transactions as you find them during
reconciliation.
• Update the Opening Balance transaction to reflect the amount that was actually in your
account when you began using QuickBooks.
You can correct the amount of the Opening Balance transaction in your register to
match the ending balance from the last bank statement you received before you started
using QuickBooks. Or, you can create an opening balance adjustment at the end of your
first reconciliation.
Reconciling your checking account statement

You can print a report of your last reconciliation of this account by clicking Last Rpt. Quick-
Books automatically overwrites this report when you reconcile again.
To enter information from your bank statement:

1 Choose Banking > Reconcile.
234 • Account reconciliation

Enter information QuickBooks displays the cleared balance from the last time you recon-
from your bank ciled. You can enter the opening balance from your statement, but
statement: the QuickBooks does not use the number you enter in its calculations.
ending balance, any
service charge, and
any interest earned Enter the ending
in the top part of the balance from your
window. statement in the
Ending Balance field.
Click here to mark
deposits that are
shown on your bank
statement.
This is a running
Click here to mark comparison of the
cleared checks. total of the items
marked cleared and
To see more infor- the total of the items
mation about a trans- shown on the bank
action, select the statement.
transaction and click
Go To.
As you check off cleared transactions, the total appears as the Cleared Balance.
2 Select the account you want to reconcile from the Account To Reconcile pop-up menu.
3 Compare the opening balance amount shown on your bank statement with the amount
shown in the Opening Balance field in the Reconcile window. If the opening balances
match, go to Step 5.
QuickBooks Opening Balance is the sum of all previously cleared items (those marked
with a ✓ in the register.)
Note: If this is first time you’ve reconciled, or if you’ve skipped reconciling for several
months, the amounts may differ. See “Updating your previously reconciled
balance” on page 237.
4 (Optional) If the amount in the Opening Balance field doesn’t match the opening
balance shown on your bank statement, enter the opening balance from the statement.
Entering the amount from your bank statement is for your reference only. QuickBooks
does not use the number you enter to calculate any balance.
5 Find the ending balance on your bank statement and enter it in the Ending Balance field.
6 Enter any service charge listed on your bank statement that you haven’t already entered
in your QuickBooks register.
Specify the date of the service charge and an expense account for tracking service
charges (such as Bank Charges). The Checks and Payments total includes any service
charge you enter. When you’ve finished reconciling, QuickBooks enters a cleared trans-
action for the charge in your register.
7 Enter the interest you’ve earned.
If this account earned interest that you haven’t recorded in your register, enter the
amount in the Interest Earned field. Enter the date you earned the interest and the
income account you use to track interest income. The Deposits and Other Credits total
includes any interest you enter. When you’ve finished reconciling, QuickBooks records
the cleared interest transaction for you in the register.
8 Continue your reconciliation by completing the steps listed below.

Marking cleared transactions

A cleared transaction is one that has been processed by the bank and is listed on your bank
statement. The Reconcile window contains a list of transactions you haven’t marked as
cleared in your QuickBooks account.
To mark cleared transactions:

1 When you find a transaction in the Reconcile window that matches a transaction on the
bank statement, click the transaction to mark it as cleared. Or, you can mark all the
transactions by clicking Mark All.
To unmark a transaction, click the transaction again. To unmark all transactions, click
Unmark All.
2 If a transaction contains an incorrect amount or other error, correct it now.
• Select the incorrect transaction in the Reconcile window.
• Click Go To to move to the transaction. QuickBooks displays the original transaction
window.
• Correct the error.
• Click OK to record the change.
• Click in the Reconcile window or choose Banking > Reconcile to return to the list of
items you were marking.
• Mark the corrected transaction as cleared.
3 If a transaction on your bank statement doesn’t appear in QuickBooks’ list of uncleared
transactions, enter it now.
• Choose Edit > Use Register to open this account’s register; then move to the blank
transaction at the end of the register.
• Enter the missing transaction. (Double-click the transaction to enter more detail.)
• Click OK to record the transaction.
• Click in the Reconcile window or choose Banking > Reconcile to return to the list of
items you were marking.
• Mark the transaction as cleared.
Completing reconciliation
After you complete your reconciliation, the balance in your QuickBooks check register is
accurate as of your latest bank statement. The next time you look at the check register,
you’ll see a ✓ in the cleared column next to each reconciled transaction.
To complete the reconciliation:

1 When you’ve finished checking off cleared transactions and making any corrections,
check the difference amount in the bottom right corner of the Reconcile window.
If the difference amount is zero, you’ve reconciled the current bank statement success-
fully.
If the difference is not zero, review the material in “Correcting differences” on page 237.
2 Click Done to complete reconciliation.

Reconciling your credit card statement

When you receive your credit card statement, check off transactions you’ve entered to
make sure your QuickBooks records agree with the statement you get from the credit card
company. This procedure is similar to reconciling a bank statement.
For details, see “Reconciling/paying your credit card statement” on page 197.
Correcting differences
If your account doesn’t balance (the Difference amount is not zero), you can record an
adjustment transaction that modifies your QuickBooks balance so that it agrees with your
bank statement. Or, you can find the difference between your check register and the bank
statement and correct it.
Having QuickBooks adjust for differences

You might decide to ignore the difference between your QuickBooks account balance and
the bank statement, if the amount is small and you feel it’s not worth your time to track it
down. If you ignore the difference, you’ll want QuickBooks to enter an adjustment for the
amount of the difference. That way, you’ll start with accurate totals the next time you
reconcile your account.
To create a balance adjustment:

1 Click Done in the Reconcile window.
If there is a difference to resolve, QuickBooks displays a window giving the amount of
the difference.
2 Click OK to add a balance adjustment transaction to your account register. You can
delete the adjustment transaction later if you find the error.
OR
Click Cancel to track down the difference on your own. QuickBooks takes you back to
the Reconcile window.
Updating your previously reconciled balance

If the opening balance from your bank statement is different from the amount QuickBooks
expected as your previously reconciled balance, you need to correct the difference so that
QuickBooks can reconcile your account accurately.
The previously reconciled balance might differ because of one of the following reasons:
• You are balancing your QuickBooks account for the first time.
QuickBooks uses the amount of the Opening Balance transaction in your register as the
Opening Balance in the Reconcile window. When you set up the QuickBooks account,
you may have entered a balance that was different from the actual amount in your bank
or credit card account. There are probably transactions missing from your QuickBooks
account that affect the balance. See “Balancing your account for the first time” on
page 234.
• You inadvertently changed or deleted a previously reconciled transaction.
• You mistakenly cleared a transaction in the current statement period.
If you find the problem, fix the error in your register; QuickBooks updates the Opening
Balance in the Reconcile window. Your opening balances should now match.

Or, you can ignore the discrepancy in the opening balances and create a balance
adjustment, so that your QuickBooks account balance matches the bank’s as of the day of
the statement.
Finding and correcting differences yourself

As you search your QuickBooks transactions for the source of differences, check for these
common reconciling errors:
• You mistakenly cleared transactions that weren’t on your statement.
• You didn’t mark all the transactions shown on your statement.
• You didn’t notice an incorrect dollar amount on one or more items.
• You’re missing transactions in your QuickBooks records that appear on the statement.
• You have not yet entered service charge or interest transactions that are included on
your bank statement.
• You never cleared your QuickBooks opening balance for this checking account.
If you prefer to work off paper instead of your screen, you can print a transaction report,
filtered for this account, for cleared or uncleared transactions (whichever you’re
researching), or particular transaction types, such as checks, deposits, or payments. This
report may be easier to look at than your register, where transaction types are mixed. You
can also run an audit trail report to look for modified or deleted transactions.
To correct a problem with the number of checks, withdrawals, and/or deposits:

1 Count the number of checks and withdrawals on your bank statement and compare that
number with the number of checks and withdrawals you’ve marked in the Reconcile
window.
2 Count the number of deposits listed on your bank statement and compare that number
with the total number of deposits checked off in the Reconcile window.
3 If you find that the problem is the number of checks and withdrawals, look only at
payment transactions for a mistake. If you find the problem is the number of deposits,
look only at deposit transactions for a mistake.
Check to see if you:
• missed recording a transaction in QuickBooks
• missed marking an item as cleared
• mistakenly marked an item as cleared
• entered a transaction twice
• entered a deposit as a payment or a payment as a deposit
Note: The bank may summarize transactions that you’ve listed separately in your
register. For example, if you made several deposits on a single day, the bank
might indicate the total sum of deposits for that day rather than listing each
deposit separately. Similarly, you may summarize transactions in your register,
such as bank charges, that the bank itemizes. For information about imitating
your statement for easier reconciliation, see “Separating deposits” on page 137.
To correct a problem with the dollar amount of checks, withdrawals, or deposits:

1 Compare the dollar amount of the checks and withdrawals total in the Reconcile
window with the dollar amount of these items shown on your bank statement.
If the totals don’t agree, you may have incorrectly entered a check or withdrawal
amount.
2 Select any incorrect transactions you find; then click Go To to edit the amount.

3 Return to the Reconcile window.

4 Compare the total dollar amount of the deposits in the Reconcile window with the dollar
amount of deposits shown on your bank statement.
If the totals don’t agree, you may have incorrectly entered a deposit amount.
5 Select any incorrect transactions you find; then click Go To to edit the amount.
6 Return to the Reconcile window.
As you change cleared items or make corrections to the amounts of items, QuickBooks
updates the information at the bottom of the window. Examine the new totals to see if
they match the ending balance on your bank statement.
If the account still doesn’t balance, you may want to double-check your work. In particular,
make sure that all items on the bank statement are correctly recorded in the check register
and are marked as cleared.
Bank errors
If you still can’t locate the problem, the bank may have made a mistake by processing a
transaction for a different amount than you wrote it for. If this is the case, let QuickBooks
make an adjustment transaction; then contact your bank. The bank will make an
adjustment that appears on your next statement. Because QuickBooks’ adjustment appears
as a cleared item in the check register, your account will be off by the same amount at the
end of the next reconciliation. Delete QuickBooks’ balance adjustment transaction when
you reconcile the next statement.
Printing a reconciliation report

QuickBooks automatically writes a full reconciliation report to a file after you reconcile,
even if you choose None in the Reconciliation Complete window. You can print a report of
your last reconciliation of this account by clicking Last Rpt. QuickBooks automatically
overwrites this report when you reconcile again.
You can also write the report to a unique file. For more information, choose Help > Quick-
Books Help, click “Printing” in the left column, and then click Saving items as text files.
A full report lists totals for cleared and uncleared transactions as well as the transactions
themselves. A summary report lists totals only.
To print a reconciliation report:

1 Click Done in the Reconcile window.
2 In the Reconciliation Complete window, select Full or Summary report.
3 (Optional) Enter a different statement closing date to print a past reconciliation report
for this account.
4 Click OK in the Reconciliation Complete window and Print in the Print Report window.


20 Time tracking
Time tracking overview 241

20
Time tracking preferences 242

Filling in a weekly timesheet 242
Entering single activities 244
Invoicing customers for time 246
Reports about time 246
Time tracking overview

Note: Time tracking is a feature in QuickBooks Pro only. To upgrade to QuickBooks Pro,
contact Intuit (see page 324.)
Time tracking lets you track the time a person spends on each job (as well as sick and
vacation time). You can then use this information to invoice the customer for the time spent
doing a job.
Note: If you’re using Aatrix Top Pay for your payroll, use their time card feature to track
employee time on the job. For details, see the Top Pay manuals.
Time tracking methods

There are two different ways to enter time.
Window where you

Advantage Disadvantage
enter time:
Weekly Timesheet • You can enter all jobs for one day (or even • The weekly timesheet has many fields and looks
one week) for one person at one time. more complex than an Enter Single Activity window.
• You can see the work already entered for • There is little room to enter a note about an activity.
a person for the week.
Enter Single Activity You can concentrate on the details of one You cannot enter more than one day, one job, or one
day’s work (or part of a day’s work) on one activity in an Enter Single Activity window.
job.
Both a Weekly Timesheet window and an Enter Single Activity window are for a single
person. You cannot enter time for two people in the same Weekly Timesheet or Enter Single
Activity window.
When you fill in and record an Enter Single Activity window, you can later view the infor-
mation on a weekly timesheet. Conversely, when you fill in and save a weekly timesheet,
you can view Enter Single Activity windows that each show the work on one job on one
day. The two are simply different views of the same data.
Time tracking • 241

Invoicing customers for time worked

After you’ve recorded time worked by an employee on a particular job, you can invoice the
customer for this time. When you’re writing an invoice, you can display a list of as-yet-
unbilled time worked for the job and select which time to include. When you record the
invoice, QuickBooks Pro marks the time you selected as billed, so you won’t bill for it again
by mistake. (You can also charge for time as a statement charge.) For details, see “Invoicing
customers for time” on page 246.
Should you track time for subcontractors?

Here are two reasons you may want to track subcontractor time:
• On time reports, you want to see all time for a particular job, whether for an employee,
a subcontractor, or an owner.
• You want to track subcontractor time independently of the time subcontractors report
on the bills they submit to you.
Subcontractors should usually be set up as vendors so that you can enter bills from them
and keep track of how much you owe them. Even if you track time for a vendor, you can’t
invoice directly for the time the way you can for employee or owner time. Instead, you
must enter the vendor expenses on a bill, check, or credit card charge. You can enter these
expenses on the Items tab (as service items, for example) or on the Expenses tab. Then you
can invoice for the vendor expenses. For details, see “Services performed by subcon-
tractors” on page 86.
Time tracking preferences

To set time tracking preferences:
1 Choose Company > Company Settings, and then choose Time Tracking from the Show
pop-up menu.
2 Specify the first day of your work week for the weekly timesheet and your preference
for the Record Time button.
3 Click Apply.
Filling in a weekly timesheet

A weekly timesheet is a record of time spent by one person on any number of jobs within a
seven-day period. Use a weekly timesheet when you want to record work done on several
days or on several jobs.
Any data previously entered in either an Enter Single Activity window or a weekly
timesheet automatically appears on the person’s weekly timesheet for the same time
period.
To fill in a weekly timesheet for a person:

1 Choose Employees > Time Tracking > Use Weekly Timesheet.
Alternatively, if your preference is set for weekly timesheets click the Timesheet toolbar
icon; or choose Lists > Employees, and choose Record Time from the Actions pop-down
menu.
242 • Time tracking

2 In the Name field, enter the name of the person who performed the work, and press Tab.
In the Service Item This shows the
column, specify status of each
which service item task: A white
on your Item list you invoice means
want to use to “billable but not
invoice for this work. yet billed”; an X
over an invoice
Click in a day means “not
column, and then billable”; after
click Edit Activity to you invoice the
edit information or customer, the
enter a long note invoice
about the activity. becomes gray
for “billed.”
Depending on whether you enter the name of an employee, a vendor, or an other name,
QuickBooks Pro may not display certain columns.
3 If necessary, change the date range of the week displayed.
Click Next Week or Prev Week, or click Set Date and specify a date within the week you
want to display.
4 In the Customer:Job field, enter the customer and/or job for whom the work was
performed. Press Tab.
If the work is general overhead, leave the Customer:Job field blank.
5 Enter an item in the Service Item field, and press Tab.
The service item tracks the income for this work when you enter it on the customer’s
invoice. QuickBooks Pro uses the income account and rate you assigned to this item
when you set it up.
If you don’t plan to invoice the customer for this time, and you don’t need to see this
time on a report of time subtotaled by service item, you may leave the Service Item field
blank.
6 (Optional) In the Notes field, enter additional information about this activity, and press
Tab.
Tip: To write an extensive note, enter the time in the Enter (or Edit) Single Activity
window instead of the Weekly Timesheet window.
• To display the Edit Single Activity window from the timesheet, click the column for
the correct day, and then click Edit Activity.
• To record and return to the Weekly Timesheet window, click OK.
7 In the column for the correct day, enter the number of hours worked on this job (or used
as sick or vacation time), and press Tab.
• Use a decimal point to enter parts of an hour as a decimal.
• Use a colon to enter hours and minutes.
For example, for 4 hours and 30 minutes, enter either 4.5 or 4:30.
When you press Tab, QuickBooks Pro displays the hours according to your data entry
preference for portions of an hour. (See “Data entry preferences” on page 270.)
You may enter hours for more than one day on the same line, as long as all the other
information is the same for all days on the line.

8 If you don’t plan to invoice the customer for this time, click the Billable field.
Gray means “already billed (invoiced).”

White means “billable but not yet billed.”
X means “not billable.”
Click the Billable field (the small drawing of the invoice) to place an X over the invoice
symbol (or to remove an X that is already over it). An X indicates that the time is not
billable.
If there is a white invoice in the field, you can charge the customer for the time spent
doing this job and to track whether you have invoiced it yet. The Customer:Job and
Service Item fields must be filled in. (After you invoice for this time, QuickBooks Pro
replaces the white invoice with a gray invoice.)
If a vendor name is in the Name field, you cannot remove the X. (Instead, you can
invoice the customer for vendor expenses recorded on the Items or Expenses tab of
bills, checks, or credit card charges.)
9 Continue on additional lines, if necessary, to record time spent on other jobs or doing
other services.
10 Record the weekly timesheet.
• To record and close the window, click OK.
• To record and display a weekly timesheet for a different person for the same week,
enter that person’s name in the Name field.
• To record and display a new, blank weekly timesheet for the same week, click New
Sheet.
• To record and display a weekly timesheet for this person for next (or last) week, click
Next Week (or Prev Week).
Entering single activities

The Enter Single Activity window is designed for recording time spent by one person on a
single activity for a single job and on a single date.
Use the Enter Single Activity window when you want to enter details of a job as soon as
you’ve done work on it. For example, a lawyer might use it to record a billable phone
conversation.
To enter several dates, activities, or jobs at once, use a weekly timesheet instead (see
“Filling in a weekly timesheet” on page 242).
To enter a single activity:

1 Choose Employees > Time Tracking > Enter Single Activity.
Alternatively, if your preference was set for individual time entries, choose Lists >
Employees and choose Record Time from the Actions pop-down menu.
2 In the Date field of the Enter Single Activity window, enter the date the work was
performed, and press Tab.

You can enter a start

and end time to
calculate the
duration. For
example, if you enter
Click Timesheet to
10:10–2:30 display the weekly
timesheet that includes
then QuickBooks the date shown.
Pro enters 4:20.
3 In the Name field, enter the name of the person who performed the work, and press Tab.
You can choose an existing name from the list or enter a new name to set up as an
employee, vendor, or other name. On the list, vendors are above employees, and other
names are below employees. (Subcontractors are usually vendors, because they submit
bills you have to pay; owners and partners are usually other names, since they are
neither employees nor vendors.)
4 In the Customer:Job field, enter the customer and/or job for whom the work was
performed. Press Tab.
If the work is general overhead, leave the Customer:Job field blank.
5 In the Service Item field, enter the name of the service-type item from your Item list that
matches this type of work, and press Tab.
The service item tracks the income for this work when you enter it on the customer’s
invoice. QuickBooks Pro uses the income account and rate you assigned to this item
when you set it up.
If you don’t plan to invoice the customer for this time, and you don’t need to see this
time on a report of time subtotaled by service item, you can leave the Service Item field
blank.
6 In the Duration field, enter the number of hours worked on this date and on this job, and
press Tab.
• Use a decimal point to enter parts of an hour as a decimal.
• Use a colon to enter hours and minutes.
• For example, for 4 hours and 30 minutes, enter either 4.5 or 4:30.
When you press Tab, QuickBooks Pro displays the hours according to your data entry
preference for portions of an hour. (See “Data entry preferences” on page 270.)
7 If you plan to invoice the customer for this time, be sure the “Billable” checkbox has a
mark in it; otherwise, clear it.
Click the checkbox either to clear it or to mark it if it’s currently clear.
If the checkbox is marked, you will be able to charge the customer for the time spent
doing this job and to track whether you have invoiced it yet. The Customer:Job and
Service Item fields must be filled in.
If a vendor name is in the Name field, the time cannot be billable. (Instead, you can
invoice the customer for vendor expenses recorded on the Items or Expenses tab of
bills, checks, or credit card charges.)
The activity is marked “Not Billed” until you have invoiced the customer for the time.
Afterwards, the activity is marked “Billed.”
8 In the Notes field, enter any additional information you want to record about this
activity.
9 Click Next or OK.

Invoicing customers for time

After you’ve recorded time worked on one or more jobs, you can invoice your customers
for the time worked on their jobs.
QuickBooks Pro uses the customer:job and service item you assigned to each activity.
When you start to create an invoice for the customer:job, you can display a list of all billable
but still unbilled activities for that customer:job. Then you can choose which ones to put on
this invoice.
For full details about invoicing customers for time, see “Charging for actual time and costs”
on page 110. (If you use statement charges, you can charge customers for time as a
statement charge in the same way.)
If you need to make time billable again

When you record an invoice for billable time, QuickBooks Pro changes the billing status
from not billed to billed. The status doesn’t change back to not billed even if you edit or
delete the invoice.
To make time billable again:

1 Display the timesheet or Enter Single Activity window for the time data you want to
change.
2 On the timesheet, click the gray invoice symbol; in the Enter Single Activity window,
click the “Billable” checkbox.
3 Answer Yes to the question.
4 Click OK.
Reports about time

QuickBooks Pro has four reports that look at time tracked:
• Time by name
• Time by job
• Time by item
• Time activity detail
You can print or customize time reports just like other reports. For more information, see
Chapter 21, Reports, graphs, and budgets, starting on page 247.

21 Reports, graphs, and budgets
Setting your report preferences 247

21
Creating a report 249

Customizing a report 250
Filtering report data 255
Using QuickZoom for report details 257
Printing, saving, or emailing a report 257
Exporting a report to Microsoft Excel 257
Memorizing and recalling reports 258
QuickReports 259
Questions and answers about reports 262
Graphs 265
Budgets 268
Setting your report preferences
Reporting preferences
To report by accrual or cash basis:
1 Choose Company > Company Settings, and then choose Reporting from the Show pop-
up menu.
2 Select whether reports and graphs should show income and expenses on an accrual or
cash basis.
• Select Accrual to display income on reports and graphs as of the invoice date, and
expenses as of the bill or check date.
• Select Cash to display income on reports and graphs as of the date you receive
payment; it displays expenses as of the date you pay for them.
This preference affects summary reports (reports that summarize amounts and do not
list transactions). This preference has no effect on transaction or transaction detail
reports.
Important: This preference does not affect the 1099 reports (which are always cash-
based) and the sales tax report. (To change the report basis on the sales tax
report, use the Sales Tax Preferences window. See “Sales tax preferences”
on page 280.)
Reports, graphs, and budgets • 247

3 Select whether to show aging on reports from the due date or the transaction date.
This preference affects all aging reports and graphs for accounts receivable and
accounts payable.
Select Age from due date to count the number of days after the due date that an invoice,
statement, or bill remains unpaid.
Select Age from transaction date to count the number of days after the transaction date
that an invoice, statement, or bill remains unpaid.
4 Select the type of account information to display in reports.
5 (Optional) Select “Display Customize Report window automatically.”
The Display Customize Report window automatically preference affects what Quick-
Books displays when you choose a report from the Reports menu.
Select this checkbox, to automatically display the Customize Report window for the
report you’ve chosen. You can make changes to the report settings before you see the
report.
6 Click Apply.
You can change this setting at any time by customizing the report when you create it. See
“Using the Customize button” on page 252.
Report format preferences

To set report format preferences:
1 Choose Company > Company Settings, and then choose Report Format from the Show
pop-up menu.
2 Make any desired changes, and then click Apply.
Report header and footer preferences

To set report header and footer preferences:
1 Choose Company > Company Settings, and then choose Report Header/Footer from the
Show pop-up menu.
248 • Reports, graphs, and budgets

Statement of Cash Flows report preferences

For more information on setting up preferences for the Statement of Cash Flows report,
choose Help > QuickBooks Help, click “Reports” in the left column, and then click Setting
up the Statement of Cash Flows report.
Creating a report
For descriptions on what each report shows, choose Help > QuickBooks Help, click
Reports, and then click Types of reports.
To create a report:
• From the Reports menu, choose the report you want.
To create a report using Report Finder (QuickBooks Pro only):

1 Choose Reports > Report Finder or from the toolbar, click Reports.
2 Choose a report type from the pop-up menu.

3 Select a report from the list.

4 Set the date range by either choosing a date option from the pop-up menu (for example,
last week) or by choosing dates in the From and To lists.
5 Click Display.
6 To customize the report, click Customize.
• From the Customize Report window, you can change report dates, the setting for
cash or accrual, and column options.
• To get advanced options (such as Display rows, Display Columns, and Reporting
Calendar), click Advanced.
• To filter the report by fields, for example, by Account or Customer Type, click Filters.
Customizing a report
Using the report buttonbar

A buttonbar appears at the top of every report. Use the buttonbar to customize the exact
report you want.
Use this To do this
Customize Change several report elements at once. See “Using the Customize button” on page 252.
Filters Restrict the report to selected names, accounts, types of transactions, and so on. See “Filtering report
Format Change fonts and adjust how numbers display. See “Formatting numbers, fonts, and the header and
footer” on page 251.
Header/Footer Change the information in, and the positions of, the header or footer. See the Format Header/Footer
window in “Formatting numbers, fonts, and the header and footer” on page 251.
Hide Header Hide the report title and header to show more of the report. You can show the header again by clicking
the Show Header button. This button does not affect the printed report.
Show Header
Collapse Summarize details and combine subaccounts or subitems on the report. You can expand accounts and
items by clicking the Expand button.
Expand
Memorize Memorize the current report settings. See “Memorizing and recalling reports” on page 258.
Date range list Change the date range covered by the report. See “Changing report date ranges” on page 252.
From and To fields Enter the start and end dates of a date range, instead of choosing a preset date range.
Columns or Total Change how the data is grouped or subtotaled. See “Grouping and subtotaling data” on page 253.
By lists
Export to Excel Export the data to a Microsoft Excel spreadsheet. See “Exporting a report to Microsoft Excel” on
page 257.

Adjusting columns
To make this change Do this
Make column wider Move your mouse between two columns until you see the double-arrow cursor. Drag the cursor to the
or narrower right or left.
This example shows the Name column being widened. The double-arrow
cursor shows the column’s new width.
Rearrange columns Drag the column’s header to its new position.

This example shows the Date column being moved to the right of
the Num column. The red arrow shows where the moved column
will go.
Sort data by a Click any column header to sort on it; click the header again to sort in the opposite direction. The
particular column arrow next to the column header shows whether the column is sorted in ascending or descending
order.
This example shows the report sorted by Name. The arrow shows it is
sorted by descending order. Click the column header again to sort it in
ascending order.
Eliminate a column Click Customize, then click the column you want to eliminate to remove the check mark.
(on reports that list OR
transactions)
Drag the small diamond at the right of the column header all the way to the small diamond at the left
of it.
Display a column not Click Customize, then click the column you want to display.
currently displayed
(on reports that list
transactions)
Formatting numbers, fonts, and the header and footer

Note: To change the preset format for all reports, not just for a particular report, choose
Company > Company Settings, and then choose Report Format from the Show pop-
up menu.
To format numbers and fonts:

1 Click Format on the report buttonbar.

To format the header and footer of the report:

1 Click Header/Footer in the Format Report window or on the report buttonbar.
Using the Customize button

The Customize button on the report buttonbar gives you access to the Customize Report
window, where you can change a number of report elements at once. Some of these features
also have buttons or lists elsewhere on the buttonbar.
The Customize Report window varies according to the type of report. The window you see
may differ from the one shown here.
The following Customize Report window is for a Profit and Loss report.
.
To restrict the report to certain

transactions, click Filters. See
“Filtering report data” on
page 255.
Changing report date ranges

The date range covered in a report is the range in the Dates field on the report buttonbar.
Balance sheet reports show balances as of the last date of the period chosen. Quarterly or

yearly date ranges are based on your company’s fiscal year unless you customize the
report.
You can change the Dates field directly on the buttonbar or in the Customize Report
window or Filter Transactions window.
To change a report date range:

• Choose another date range from the Dates list.
OR
• Enter a different start date in the From field and a different end date in the To field.
Specifying columns in a report

You can add and remove the columns of data that you want to see in a report. The Columns
scroll list displays all of the columns available for a report, including any customized fields
that you added.
Each item that you check appears as a column in the report. Click the item to remove the
check mark so that the column is not displayed the report.
Note: You can add a customized field as a column in a report, but it will not show any data
until you use the field on a sales form, estimate, or purchase order. See “Customizing
your sales form” on page 101, “Customizing your estimates” on page 172, or
“Customizing purchase orders” on page 200 for more information.
Grouping and subtotaling data

Most QuickBooks reports allow you to group and subtotal data by time periods, list items,
or other factors.
Subtotaling in columns on summary reports

To subtotal data in columns on a summary report:
• On the report buttonbar or in the Customize Report window, choose the element you
want to subtotal by from the Columns pop-up menu.
Grouping data by row on the custom report

To group by specific rows of data, choose Report > Custom Summary Report, which allows
you to choose the rows to group by.
To group data by row in the custom report:
1 Click Customize.
2 Choose a row from the Row Axis pop-up menu.
Subtotaling on transaction detail reports

Transaction detail reports list individual transactions that can be grouped and subtotaled.

To customize how transactions are grouped and subtotaled:

• On the report buttonbar or in the Customize Report window, choose the element you
want to subtotal by from the Total By pop-up menu.
Including subtotal headings with no transactions in them

If you subtotal a transaction detail report by time period, account, or other factor, the report
usually includes a subtotal heading only if there are transactions for it.
To include all headings:

1 Click Customize.
2 Click All in the Include option.
To limit the report to headings for which there are transactions:

• In the Customize Report window, click Active in the Include option.
Creating reports that compare data from previous periods

You can create reports that compare any year against the previous year. You can also
compare any period (month, quarter, and so on) against the previous period.
Two preset reports in QuickBooks, the profit and loss previous year comparison report and
the balance sheet comparison report, already provide yearly comparisons.
To create a comparison report:

1 Create a profit and loss, balance sheet, time, or custom report.
2 Click Customize on the report buttonbar.
3 Choose the date range you want to compare in the Report Dates list.
4 In the Other Columns area, choose the “Previous Period” checkbox, the “Previous Year”
checkbox, or both.
5 (Optional) For each comparison, select the “$ Change” checkbox, the “% Change”
checkbox, or both.
If you select these checkboxes, the report displays the dollar change or percentage
change from the previous period or year.
On time reports, there is an Hour Change checkbox instead of a $ Change checkbox.
6 Click OK.
Advanced options
You can choose which rows and columns to display in the report, and which reporting
calendar to use for the report. These options are available only for reports that summarize
data.
To set advanced options for a report:

1 Click Customize.
2 Click Advanced.
3 Click a choice for Display Rows and Display Columns.

• Select Active to displays only those rows or columns that showed activity during the
period covered by the report.
The amount shown may be zero if there were transactions that canceled each other.
• Select All to display all rows or columns, regardless of whether they showed activity
during the period covered by the report.
• Select Non-zero to displays only those rows or columns that show activity during the
period and contain an amount.
4 Click a choice for Reporting Calendar.
• Select Fiscal Year to display information for your company’s fiscal year starting with
the month you specified in the New Company Setup Assistant interview or
Company Info window.
• Select Calendar Year to display information for the calendar year.
• Select Income Tax Year to displays information for your company’s income tax year
starting with the month you specified in the New Company Setup Assistant
interview or Company Info window.
5 Click OK in the Advanced Options window and the Customize window.
Filtering report data

When you filter report data, you limit a report to transactions that meet the criteria you
specify. For example, you may wish to look at the number of each kind of item sold to one
particular customer.
After you filter a report, you can memorize the filters you set to create a similar report later
without having to set the filters again. See “Memorizing and recalling reports” on page 258.
Note: Not all filters in the Report Filters window affect all reports. If you choose a filter that
does not affect the results in the report, then QuickBooks does not save the filter
setting in the window. For example, if you select a filter for Name and leave the
default setting All names, when you close the Report Filters window and re-open it
for that report, the Name filter will be gone (since filtering for All names does not
affect the results of the report).
To filter report data:

1 Click Filters on the report buttonbar.
OR
In the Customize Report window, click Filters.
Your Report Filters
window might not
look like this. The
filters that appear
depend on which To remove a filter, click here.
report you create.
To add other filters,

click here.
2 (Optional) Choose a different transaction date range for the report.

3 (Optional) Choose other filter(s) from the filter pop-up menu.

You can use as many filters as you want.
A scroll bar appears in the Report Filters
window if you have more filters than can
be displayed.
For example, to restrict your report to
certain account(s), choose this filter.
To restrict your report to items received,

choose this filter.
To restrict your report to a vendor type,

choose this filter.
If you have set up custom fields, such as
these in the Sample company, you can
filter data in your custom fields.
4 To save your changes, click Accept, or to return to the original filter settings, click Reset.
To use filters on an invoice report:

1 From the Report Finder, choose Customers & Receivables and then Open Invoices. Or
choose Reports > Customers & Receivables > Open Invoices.
2 Click Filters.
3 (Optional) Choose All accounts receivable accounts or select a specific account.
4 (Optional) Choose a due date range for invoices and bills to include in the report.
5 (Optional) Choose All customers/jobs or choose a specific customer.
6 (Optional) Specify the paid status of invoices and bills to include in the report.
7 (Optional) Add other filters as desired, for example, Aging, Ship Date, Item, Ship Via,
Terms, or Payment Method.
8 Click Apply.
Filters and customized fields

If you use customized fields in transactions, you can filter your reports on data you’ve
entered into the fields. Your custom fields appear at the bottom of the Filters pop-up menu.
Note: You can filter only on customized fields that are associated with transactions. For
example, to filter a report by a customized Referred by field for customers, those
customers must appear on a transaction. Reports cannot show which names on a list
(Customer:Job, Vendor, Employee, Item) are associated with a particular customized
field.

Using QuickZoom for report details

QuickZoom shows which transaction or transactions make up any amount in a report.
To use QuickZoom:
• When the mouse pointer changes from an arrow to a magnifying glass with a Z inside,
double-click the amount or transaction you want to investigate.
When you use QuickZoom on an amount, QuickBooks displays a transaction detail report
that shows the transactions contributing to that amount. The transaction detail report is on
the same basis (accrual or cash) as the original report.
When you use QuickZoom on a transaction, QuickBooks displays the invoice, bill, or other
form for the requested transaction. If you make a change to the form, QuickBooks automat-
ically updates the displayed report.
Printing, saving, or emailing a report

To print a report:
• Click the Print button on the report buttonbar, or choose File > Print Report.
To save a report as PDF:

• Choose File > Print Report, click the PDF button, and then choose Save As PDF.
To email a report as PDF (QuickBooks Pro only):

• Choose File > E-Mail Report as PDF.
To save a report as text:

• Choose File > Save Report as Text.
and then click Reports.
Exporting a report to Microsoft Excel

Note: This feature is in QuickBooks Pro only. For details on upgrading to QuickBooks Pro,
contact Intuit (see page 324). You must also have Microsoft Excel X or Microsoft
Excel 2004 installed on your Mac to use this feature.
To export a report to Excel:

1 Display the report you want to export.
2 Click Export to Excel.
QuickBooks opens a copy of the report in Excel, preserving as much as possible the
fonts and colors you set in the original report. You can then use Excel’s formatting and
data features to further customize the report.

Click this button...

...to export a QuickBooks report to
Microsoft Excel.
Formulas for calculated fields are retained.
3 To save the report in Excel, choose File > Save.

4 From the Format pop-up menu, choose Microsoft Excel workbook.
5 Enter a name in the Save As field, and then click Save.
See the Microsoft Excel documentation for more information.
Memorizing and recalling reports

Whenever you change the settings for a report, you can memorize the report with the new
settings. Whenever you want to create a similar report, you can recall it from your own list
of memorized reports.
When you recall a memorized report, it has the same settings as the one you memorized.
The data may be different, however, if it has changed since you memorized the report. For
example, if the report was set in September to cover last month, and you recall it in
December, the recalled report will have data for November, not for August.
QuickBooks memorizes report settings, not data. To save actual data, print the report to a
text file. For more information, choose Help > QuickBooks Help, click “Printing” in the left
column, and then click Saving items as text files.

To memorize a report:
1 After you have customized a report, click Memorize.
2 In the Memorize Report window, type a unique name for the report.
3 Click OK.
QuickBooks adds the report to the Memorized Reports list on the Reports menu.
To recall a memorized report:

1 Choose Reports > Memorized Reports.
2 Select the report you want to use, and then choose Show Report from the Actions pop-
down menu.
To change an existing memorized report:

2 Select the memorized report you want to change, and then choose Show Report from
3 Make any changes to the report settings that you want.
4 Choose Edit > Memorize or press x +.
QuickBooks displays a message that a memorized report for this name already exists.
5 Click Replace to copy over the old memorized report with your changes; or click New
to create a new memorized report.
To change the name of a memorized report:

2 Select the report whose name you want to change, and then choose Edit from the
3 Enter the new report name, and then click OK.
To delete a memorized report:

2 Select the report you want to delete, and choose Edit > Delete Memorized Report.
QuickReports
At key places in QuickBooks, you can click a QuickReport button to bring up the infor-
mation you’re most likely to want at that place.
You can create a QuickReport for a list, account register, or form (such as an invoice or a
bill) that has a name field (such as customer name or vendor name).
What a QuickReport shows

The information displayed about each transaction varies by QuickReport. Here’s an
example for a particular customer:job from the Customer: Job list:

QuickReports from a list
List Transactions included in QuickReport
Chart of Accounts Year-to-date transactions for the income or expense account you have selected
(income/expense
accounts)
Class Year-to-date income and expense transactions for the class you have selected
Customer:Job All unpaid invoices, statement charges, and unapplied payments or credits for the customer or job
you have selected; the open balance and original amount of each transaction; total equals balance on
Customer:Job
Vendor All unpaid bills and unapplied credits in your accounts payable (or all sales tax transactions) for the
vendor you have selected; the open balance and original amount of each transaction; total equals
balance on Vendor list
Other Name Year-to-date transactions in balance sheet accounts for the name you have selected
Customer Type Year-to-date income and expense transactions for customers of the type you have selected
Vendor Type Year-to-date income and expense transactions for vendors of the type you have selected
Terms Year-to-date transactions containing the terms you have selected
Payment Method Year-to-date payments you have received of the payment type you have selected
Ship Via Year-to-date invoices, cash sales, and credit memos containing the shipping method you have
selected
QuickReports from a register

When you create a QuickReport after selecting a transaction in a register, the report shows:
• all transactions in that register for that name
• whether a transaction has been paid
• the total for the transactions, which equals the outstanding balance in the register
QuickReports from a form

When you create a QuickReport after displaying a form (for example, an invoice or bill),
the QuickReport is based on the name on the form.
The QuickReport is the same as if you created it after selecting the name on the Customer,
Vendor, Employee, or Other Name list. For example, the QuickReport from an invoice
shows all unpaid invoices (or statement charges), and unapplied payments and credits for
the customer.

Creating a QuickReport
To create a QuickReport from a list:
1 On the list, select the name of the item or person for whom you want to create a Quick-
Report.
To create a QuickReport from a register or a form:

1 Display a form or register that has the name you want in the field for customer, vendor,
or payee; or enter the name on a new form.
2 On the register, select the name of the item or person for whom you want to create a
QuickReport.
Each QuickReport can be customized like a standard transaction report. For more infor-
mation, see “Customizing a report” on page 250.
Examples of QuickReports
Customer or job QuickReport
A QuickReport for a customer shows all unpaid invoices and unapplied payments and
credits for that customer. If there are unpaid items for jobs for that customer, the report has
subtotals by job.
Item QuickReport
A QuickReport for an invoice item shows all year-to-date sales transactions containing that
item.

Questions and answers about reports

The type (font) on my reports isn’t the size I want. How can I change the size of
the type?
To change the type size on all reports:
1 Choose Company > Company Settings, and then choose Report Format from the Show
pop-up menu.
2 Make the desired changes in the Font Style Settings box.
3 Click Apply.
To change the type size on a report you are viewing:

1 On the report buttonbar, click Format.
2 Click Change Font to change the selected part of the report.
Some of the columns on my reports are not wide enough, and others are
completely blank. How can I make some columns wider and delete ones I don’t
need?
Drag the diamonds to the left or right. For details, see “Adjusting columns” on page 251.
What does “Other” mean after the name of an account, customer, or class on a
report?
When you have subaccounts of a main account, and you have some transactions for the
subaccounts and others for the main account alone, QuickBooks groups the data for the
main account alone in a row or column with the name of the main account followed by a
hyphen and “Other.” For example, if you assign some bills to Utilities and others to Util-
ities:Electric, then the bills for Utilities alone are with “Utilities - Other” on reports.
QuickBooks follows the same procedure for customers not used with their own jobs and
for classes not used with their own subclasses.

How can I create a report that shows income and expenses for specific balance
sheet accounts?
Filter a profit and loss statement:
• Click Filters, choose Source Account from the Add filter pop-up menu, and then from
the Source Account pop-up menu, choose “Selected accounts,” all accounts of one type
(for example, All bank accounts,) or one specific account name.
• Be sure that you’re choosing balance sheet accounts and not income or expense
accounts.
• Leave the Account pop-up menu set to All income/expense accounts.
How can I get a list of all transactions for one balance sheet account?
Filter a transaction detail by account report:
• Click Filters and choose the balance sheet account from the Account pop-up menu.
• (Optional) Change the date range.
If you have classes, they may not appear on this filtered report for some balance sheet
accounts.
How can I get a list of all transactions for one class and for one balance sheet
account?
Filter a transaction detail by date report:
• Click Filters, choose Source Account from the Add filter pop-up menu, and then from
the Source Account pop-up menu, choose the balance sheet account.
• Choose Class from the Add filter pop-up menu, and choose the class from the Class
pop-up menu.
• (Optional) Change the date range.
How can I get a list of all payments from one customer?

To get a list of all payments from one customer:
1 Choose Reports > Customers & Receivables > Customer Balance Detail.
2 Click Filters.
3 Choose Name from the Add filter pop-up menu; choose the customer from the Name
pop-up menu.
4 Choose Transaction Type from the Add filter pop-up menu; choose Payment from the
Transaction Type pop-up menu.
5 Click Apply.
The filtered report shows all payments from this customer, subtotaled by job.
To see how any payment was applied:

• Double-click the payment to QuickZoom to the Receive Payments window.

Why doesn’t my 1099 report have anything on it?

There may be several reasons:
• This report looks for names on the Vendor list. If your vendors are on the Other Names
list, change them to vendors. See “Other names” on page 49.
• You need to select the Vendor eligible for 1099 checkbox for your vendors. Go to the
Additional Info tab in the Edit Vendor window, and select this checkbox. See page 47.
• You need to select accounts for tracking 1099-related expenses. Go to the 1099-MISC
Setup window to set up accounts. See “1099 preferences” on page 284.
• You may need to check your threshold amounts for 1099s. See “1099 preferences” on
page 284.
• This report automatically shows 1099 information for the last calendar year. Change the
date range of the report, if necessary.
Does an aging report measure aging from the date on the invoice (or bill) or from
the date it’s due?
Normally, the report measures aging from the due date. On an invoice, QuickBooks calcu-
lates the due date from the terms. If there are no terms, the invoice is due immediately.
To measure aging from the transaction date:

• Choose Company > Company Settings, then choose Reporting from the Show pop-up
menu, and then click Age from transaction date and then Close.
If I create an aging report as of the end of last month, will it include items that were
unpaid at the time but have since been paid?
Normally, the report includes all items that were unpaid as of the report date.
To exclude items that have been paid since the report date:
• Click Customize and then click Current (under Open Balance/Aging).
I see there’s a missing check report. Is there anything similar for invoices?
You can use the missing check report to find missing invoices.
To create a report for missing invoices:

1 Choose Reports > Banking > Missing Checks.
2 Specify your A/R account in the Specify Account field and click OK.
The report lists all invoices in numerical order.
Why are there different income amounts for the same job on a profit and loss by
job report, an income by customer summary report, a sales by customer summary
report, and a job profitability summary report? (The date range and report basis
are the same.)
The profit and loss by job report has the same total income as the income by customer
summary report. It shows net income from any source, as long as (1) the income is assigned
to the customer or job, and (2) it is assigned to an income account.
• It includes items on sales forms if items are assigned to an income account.
• It includes reimbursed expenses from a sales form or statement charge only if the
expense account for the original expense has an income account associated with it.
• It excludes sales tax.
• It excludes income assigned to a balance sheet account instead of an income account.

• (Cash basis only) If the income is from an invoice, payment must be applied to the
invoice prior to the report end date.
The sales income for the job on a sales by customer summary report differs from the income
on a profit and loss by job report in two ways:
• Sales income must be from sales recorded on an invoice or cash sales receipt.
• Sales income from reimbursed expenses on a sales form or statement charge is not
included.
Finally, the revenues for the job on a job profitability summary report differ from the
income on a profit and loss by job report in two ways:
• Revenues may be associated with either an income account or a balance sheet account.
• Revenues from reimbursed expenses on a sales form or statement charge are included.
Why are there different expense amounts for the same job on a profit and loss by
job report and a job profitability summary report? (The date range and report basis
are the same.)
The profit and loss by job report shows net expense for anything, as long as (1) it is assigned
to the customer or job, and (2) it is assigned to an expense account.
• It includes items on bills, checks, and so on if the items are assigned to an expense
account.
• It ignores item receipts if the bill has not been received.
• It includes the original cost of reimbursed expenses from a sales form or statement
charge only if the expense account for the original expense has an income account asso-
ciated with it.
• It excludes expenses assigned to a balance sheet account instead of an expense account.
• (Cash basis only) If the expenses are from a bill, the bill must be paid prior to the report
end date.
The costs for the job on a job profitability summary report differ from the expenses on a
profit and loss by job report in two ways:
• Costs may be associated with either an expense account or a balance sheet account.
• The original cost of reimbursed expenses from a sales form or statement charge is
always included.
Graphs
QuickBooks creates graphs for different areas of your company’s financial picture with
which you can:
• Analyze your income and expenses
• Study sales income
• Examine customer and vendor aging
• Determine changes in your net worth
• Develop better budgets
Most of the graphs you create cover the current fiscal year to date, unless you change the
date range.

Creating graphs
To create a graph:
1 Choose one of the following:
• Reports > Company & Financial > Income & Expense Graph
• Reports > Company & Financial > Net Worth Graph
• Reports > Customers & Receivables > Accounts Receivable Graph
• Reports > Sales > Sales Graph
• Reports > Vendors & Payables > Accounts Payable Graph
• Reports > Budgets > Budget vs. Actual Graph
QuickBooks displays the title and date range above the graph. Legends identify the
meaning of each bar, line, or pie slice. In bar graphs, QuickBooks displays dollar
amounts on the y-axis and months, accounts, or other factors on the x-axis.
2 (Optional) Click Dates on the graph buttonbar to change the date range for the report.
Choose another date range from the pop-up menu or enter dates in the From and To
fields.
3 (Optional) Click a button on the graph buttonbar to group the data in a different way.
For example, a sales graph usually displays sales by item, but you can change it to
display sales by customer or by rep.
4 (Optional) Click Next Group on the graph buttonbar to see the next group of data.
In a bar graph, if all of your data doesn’t fit on the axis, QuickBooks displays the largest
groups first.
In a pie chart, if you have more than ten data groups, QuickBooks displays the largest
ten groups first, and summarizes the rest of the groups in the eleventh slice of the pie,
which is called “Other.”
5 (Optional) Press x P to print the graph.
column, and then click Graphs.
You can change the look of the graphs; choose QuickBooks > Preferences, and then choose
Graphs from the Show pop-up menu. See “Graph preferences” on page 272 for more infor-
mation.

Getting more graph details

You can investigate the information you see in a graph in three ways:
• Using QuickZoom
• Viewing data labels
• Hiding data
Using QuickZoom
If you need more detailed information about an item in a graph, you can go to it quickly
using QuickZoom.
To use QuickZoom:
1 When the mouse pointer changes from an arrow to a magnifying glass with a Z inside,
double-click the item you want to investigate.
QuickBooks displays another graph showing the details of one bar, one pie slice, or one
data point.
2 Double-click the new graph to display the related report.
3 Double-click a transaction in the report to see the form for that transaction (invoice,
check, etc.).
If you make changes in the form and save them, QuickBooks automatically updates the
graphs and reports affected by the changes.
Viewing data labels

To see the exact value of a bar, pie slice, or data point:
• Click on the graph element.
To see detailed information on a bar, pie slice, or data point:

• Double-click on the graph element.
Hiding data
To hide a bar or pie slice from the graph:
• Shift-click the mouse. (Hold down the Shift key while you click the bar or pie slice.)
QuickBooks redraws the graph without that bar or pie slice.
Shift-click to hide a
large pie slice so that
you can see other
pieces of the pie
more clearly.
To display a hidden pie slice or bar:

• Create the graph again.

Budgets
For information on creating budgets and budget reports, choose Help > QuickBooks Help
and then click Budgets.

22 Customizing preferences
Preferences overview 269

22
View preferences 270

Data entry preferences 270
Reminder preferences 271
Graph preferences 272
Company file backup preferences 272
Company information preferences 273
Transaction preferences 273
Inventory, purchase order, and estimate preferences 275
Sales and invoicing preferences 275
Statement preferences 277
Check preferences 277
Check format and logos preferences 278
Finance charge preferences 278
Reporting preferences 280
Sales tax preferences 280
Time tracking preferences 281
Job preferences 281
Password preferences 282
1099 preferences 284
Toolbar preferences 285
Preferences overview
Setting preferences for QuickBooks overall

To set preferences for QuickBooks itself, choose QuickBooks > Preferences. Preferences for
views, data entry, reminders, graphs, and file backups apply to all company files you use
with QuickBooks. If you make a change in these preferences, the change is in effect no
matter which company file you are using.
Customizing preferences • 269

Setting preferences for a particular company file

If you have more than one company set up in QuickBooks, you can set preferences for each
company file. To set preferences for a company, choose Company > Company Settings. To
change preferences for another company file, open another company file.
Restoring default settings

To restore QuickBooks’ default settings, click the Restore Defaults button on most of the
preference windows.
View preferences
To change view preferences:
1 Choose QuickBooks > Preferences, and then choose Views from the Show pop-up menu.
2 Click Automatically when closing company to save the desktop settings when you close
a company file.
When you return to the file, the same windows are open in the same position as when
you closed the file.
3 To save your current desktop settings, click Manually by clicking the Save Desktop Now
button, and then click Save Desktop Now.
4 Select “Turn on All One-time Messages” to have QuickBooks show you helpful messages
that you can turn off at any time.
5 Click Apply.
Data entry preferences

To change data entry preferences:
1 Choose QuickBooks > Preferences, and then choose Data Entry from the Show pop-up
menu.
2 (Optional) Select “Pressing Return moves between fields.”
Pressing the Return key is the equivalent of clicking the default button (the button that
has the dark border around it). To move to the next field, you press Tab or click the field.
Some people may want the Return key to move between fields. If you select this pref-
erence, you can still press Tab or click to move to a field. To use the default button, you
can press x-Return.
3 (Optional) Select “Automatically place decimal point.”
QuickBooks places a decimal point between the second and third digit from the right
when you enter a number with no decimal point in a numerical field. For example, if
you type 4995 and press Tab, QuickBooks enters the number 49.95. If you type 49,
QuickBooks enters the number 0.49. If you type 49.953, QuickBooks enters 49.953.
If you clear this preference, QuickBooks places a decimal point at the end when you
enter a number with no decimal point in a numerical field. For example, if you type 499
and press Tab, QuickBooks enters the number 499.00.
270 • Customizing preferences

4 (Optional) Select “‘Quick-fill’ transactions.”

This preference can save you time if you have many repeat transactions for your
vendors. It does not affect invoices or purchase orders.
Select this preference to recall the last transaction of the same type (check, bill, credit
card charge) for a particular name as soon as you enter the name on a form.
For example, if you are entering a bill and choose a vendor from the pop-up menu and
press Tab, QuickBooks fills in the entire bill just like the last one you entered for that
vendor.
You can also recall a transaction from the Memorized Transaction list. Choose Lists >
Memorized Transactions; then choose a transaction. See “Memorized transactions” on
page 51 for more information.
5 (Optional) Select “Warn when editing a transaction.”
Select this preference to be warned when you change a transaction and then try to leave
it without recording the change.
If you clear this preference, QuickBooks lets you change a transaction and leave it
without a warning. QuickBooks saves the change.
6 (Optional) Select “Warn when deleting a transaction or unused list item.”
If you select this preference, QuickBooks warns you when you try to delete a trans-
action or an unused item on a list.
If you clear this preference, QuickBooks allows you to delete a transaction or an unused
item on a list without warning you. QuickBooks always warns you if you try to delete
a list item that has been used in any transaction.
7 (Optional) Select “Play a sound when recording a transaction.”
8 (Optional) Select whether to sort your employee list by first name or last name.
Note: This option affects only the company file you’re working in, rather than all of
your QuickBooks files.
9 (Optional) Select whether you want QuickBooks to display portions of hours in a
decimal format or a minutes format.
For example, QuickBooks would display eight and a half hours as 8.5 in decimal format
and 8:30 in minute format.
10 Click Apply.
Reminder preferences
To change reminder preferences:
1 Choose QuickBooks > Preferences, and then choose Reminders from the Show pop-up
menu.
2 Choose either Show Summary, Show List, or Don’t Remind Me for each reminder:
• Checks to Print, Paychecks to Print, Invoices/Credit Memos to Print, Overdue
Invoices, Sales Receipts to Print, Inventory to Reorder, Bills to Pay, Memorized
Transactions Due, Money to Deposit, Purchase Orders to Print, and To Do Notes.
For each reminder, you can customize how much detail you see in the Reminders
window and (for most of the reminders) how far in advance QuickBooks reminds you.
• Select Show Summary to display a heading and, if applicable, the total dollar amount
for that reminder.
• Select Show List to display the individual transactions for that reminder with their
due dates and (if applicable) dollar amounts.

• Select Don’t Remind Me to not display that reminder in the Reminders window.
The reminders with due dates have a box in which you can enter the number of days
before the due date you want to be reminded of the activity to do. For example, if the
due date of a bill to pay is October 12 and you want to be reminded five days ahead,
QuickBooks first reminds you on October 7. It includes that bill among the reminders
until you take action on it.
If you don’t use QuickBooks every day, make the advance reminder time long enough
so you’ll see the reminders before the due date.
3 (Optional) Select “Show Reminders List when QuickBooks starts” to automatically show
the Reminders window when QuickBooks starts.
In this example, Once you display the
QuickBooks shows a detailed reminder, double-
summary of tasks to click any transaction or task
complete. To see to display it in its window.
details, click Detail.
Clear this checkbox to display the Reminders window only when you click the
reminders icon or choose Lists > Reminders.
4 Click Apply.
Graph preferences
To change graph preferences:
1 Choose QuickBooks > Preferences, and then choose Graphs from the Show pop-up
menu.
Company file backup preferences

You can set QuickBooks to automatically back up your company file, or remind you to back
up your company file when you close it.
To change backup preferences:

1 Choose QuickBooks > Preferences, and then choose Company File Backups from the
Show pop-up menu.

Even if you choose

QuickBooks to make
automatic backups, Click here to set the
you may want to set backup folder location.
the backup reminder
as well as an extra
safeguard.
Whether you choose to automatically schedule backups, you can manually back up your
company file at any time by choosing File > Back Up > To a Disk or To .Mac (see page 289).
Company information preferences

For details on changing your company information, see “Changing your company infor-
mation” on page 288.
Transaction preferences
With Transaction preferences, you can customize how you track accounts when you enter
transactions and whether you track classes on any transactions. You can also specify
whether you want to be warned of duplicate bill numbers, how QuickBooks should
calculate the due date on bills, and whether you want QuickBooks to maintain an audit
trail (a list of all changes made to transactions).
To change transaction preferences:

pop-up menu.
If you select the
account numbers
preference, you can
also choose whether
a subaccount
appears alone in a
field or with its
parent account (or
accounts).
2 (Optional) Select “Use account numbers.”

Select this checkbox to use both numbers and names for any accounts on your chart of
accounts. QuickBooks displays a Number field when you create or edit an account or
subaccount. QuickBooks displays the numbers before the names on the chart of
accounts, in Account fields, and in reports and graphs. When QuickBooks creates an

account (for example, Undeposited Funds), it automatically displays the number for
that account. You can add a number for each account you created previously.
If you clear this checkbox, QuickBooks does not display numbers for accounts.
However, it saves numbers you already entered, and displays them if you turn the pref-
erence on again.
3 (Optional) Select “Show lowest subaccount only.”
You access this preference by first selecting Use account numbers.
Many people have a chart of accounts in which accounts have one or more levels of
subaccounts. For example, you may have the following accounts:
If you select this checkbox, QuickBooks displays only the lowest level subaccount on
forms and registers when you choose a subaccount in the Account field of a transaction.
For example, if you choose the 6410•Liability Insurance subaccount, QuickBooks
displays 6410•Liability Insurance in the field.
If you clear this checkbox, QuickBooks displays the main account and all subaccounts
(for example, 6380•Insurance:6410•Liability Insurance: 6420•Worker’s Comp) up to the
maximum character count allowed in the field.
This preference also affects the Account and Split columns of transaction reports.
4 (Optional) Select “Require accounts.”
If you select this checkbox, you cannot record a transaction until you assign it to an
account on your chart of accounts.
If you clear this checkbox, you can record a transaction that is not assigned to an
account on your chart of accounts. It automatically assigns the transaction to Uncate-
gorized Income or Uncategorized Expense.
5 (Optional) Select “Use class tracking.”
Select this checkbox to display a Class field at the top of the invoice, cash sale, credit
memo, and purchase order windows and in the detail area at the bottom of the forms
for bills, checks, credit card receipts, and general journal entries.
when you customize a sales form or purchase order. See “Customizing your sales
form” on page 101 or “Customizing purchase orders” on page 200 for details.
6 (Optional) Select “Use Audit trail.”
Select this checkbox to maintain a record of all changes made to transactions. When
you’ve selected this preference, you can view an audit trail report showing current
transactions and how they’ve been modified. For an example of this report and more
information about the audit trail, see “Keeping an audit trail” on page 289.
7 (Optional) Select “Warn about duplicate bill numbers.”
If you select this checkbox, QuickBooks warns you if you try to record a bill with the
same number as one entered previously.
8 (Optional) Enter a value in the “Bills are due X days after receipt” field.
When you enter a bill without terms, QuickBooks automatically enters a due date that
is after the bill date. It calculates the due date according to the number you enter here.
(You can change the due date when entering the bill.)
9 Click Apply.

Inventory, purchase order, and estimate preferences

Note: Estimates is a feature available in QuickBooks Pro only. For details on upgrading to
QuickBooks Pro, contact Intuit (see page 324).
To change inventory, purchase order, and estimate preferences:

Estimates.
2 (Optional) Select “Inventory and purchase orders are active.”
Select this checkbox to make all inventory and purchase order features available. You
can use purchase orders even if you don’t have inventory, but PO’s are best suited to
buying inventory. See Chapter 9, Inventory, starting on page 143, and Chapter 16,
Purchase orders, starting on page 199, for more information.
3 (Optional) Select “Warn if not enough stock to sell.”
Select this checkbox to display a warning if you enter more items on a sale than you
actually have in stock.
4 (Optional) Select “Warn about duplicate purchase order numbers.”
Select this checkbox to display a warning if you use duplicate PO numbers.
5 (Optional) Select “Customer and/or job estimates are prepared.”
6 (Optional) Select “Warn about duplicate estimate numbers.”
Select this checkbox to display a warning if you try to record an estimate with the same
number as an existing estimate.
7 Click Apply.
Customizing purchase orders

See “Customizing purchase orders” on page 200.
Customizing estimates
See “Estimating preferences” on page 171.
Sales and invoicing preferences

To change sales and invoicing preferences:
1 Choose Company > Company Settings, and then choose Sales/Invoicing from the Show
pop-up menu.

2 (Optional) Specify your usual FOB location and your usual shipping method when you
enter a new sale.
3 (Optional) Enter your Default Markup Percentage.
QuickBooks automatically uses the specified markup percentage if you invoice for
reimbursable expenses at a markup. You can change the markup percentage before
using it.
QuickBooks also uses the default markup to suggest a sales price when you set up any
item that has a separate cost and sales price, for example, inventory items or service
items for work performed by subcontractors.
4 (Optional) Select “Track reimbursed expenses as income.”
With the Track reimbursed expenses as income preference, you can track an expense
and your customer’s reimbursement for the expense in separate accounts.
For example, an interior designer may want to track both the reimbursement for the
cost of delivering a client’s furniture and the markup as income, especially if the
designer collects sales tax on both.
If you simply want to make sure you invoice a client for expenses you incurred, don’t
bother tracking the reimbursement as income. When you invoice the client, the income
offsets the amount assigned to the account of the original expense. If the expenses are
substantial and you don’t want them to be on your profit and loss statement before you
invoice the client, consider assigning the expenses themselves to an other current asset
account.
You may want to ask your accountant for advice on tracking reimbursed expenses.
If you select this checkbox, QuickBooks puts an additional checkbox and Income
Account pop-up menu in the New Account and Edit Account windows for expense
accounts.
Then when you add reimbursable expenses to an invoice, QuickBooks assigns the
income you receive as reimbursement to the income account associated with the
expense. On a profit and loss statement, the income increases your total income, while
the original expense increases your total expenses.
If you do not select this checkbox, QuickBooks assigns the income from the reimbursed
expense to the expense account of the original expense. Thus, on a profit and loss
statement, the income reduces the amount for the expense account. (Selecting this pref-
erence makes no difference in your net income.)
5 (Optional) Select “Automatically apply payments.”
The Automatically apply payments preference affects the Receive Payments window.
Select this checkbox to automatically apply the amount received to the outstanding
invoices (or statement charges) for the customer or job. If the amount received is less
than the total outstanding balance, QuickBooks applies the payments to the oldest
invoices or statement charges first.

6 (Optional) Select “Warn about duplicate invoice numbers.”

Select this checkbox to be warned when you try to record an invoice that has the same
number as that of an existing invoice.
If you clear this checkbox, you record a duplicate invoice number with no warning.
7 Click Apply.
Customizing sales forms

See “Customizing your sales form” on page 101.
Statement preferences
To change statement preferences:
1 Choose Company > Company Settings, and then choose Statements from the Show pop-
up menu.
2 Choose Customized from the Statement Format pop-up menu.
3 (Optional) Make the desired changes in the Headers, Fields, Columns, Footer, Font, and
Artwork tabs.
For information about creating customized statements, see “Customizing a billing
statement” on page 119.
4 Click Apply.
Check preferences
To change check preferences:
1 Choose Company > Company Settings, and then choose Checks from the Show pop-up
menu.
2 (Optional) Select “Print account names on voucher.”
This preference affects only voucher checks (not standard or wallet) created in the Write
Checks window.
Select this checkbox to print the name of the account to which you assigned the expense
on the voucher portion of the check.
This preference has no effect on what prints on the voucher of any of the following
types of checks:
• Bill payments
• Employee paychecks
3 (Optional) Select “Change check date when check is printed” to change the date on the
Date line of your checks to the date on which you print the checks.
If you clear this checkbox, QuickBooks prints the original date you entered in the Write
Checks window.

4 (Optional) Select “Start with payee field on check.”

This preference affects the position of the insertion point when you open the Write
Checks, Enter Bills, and Enter Credit Card Charges windows.
Select this checkbox to place the insertion point in the payee field of the check, the
Vendor field of the bill, and the Purchased From field of the credit card charge form.
If you clear this checkbox, QuickBooks places the insertion point in the first field at the
top of the window (the Bank Account field of the check and the Credit Card field of the
credit card charge form).
5 (Optional) Select “Warn about duplicate check numbers.”
If you select this checkbox, QuickBooks warns you when you try to record a check that
has the same number as that of an existing check.
6 Click Apply.
Check format and logos preferences

To change check format and logo preferences:
1 Choose Company > Company Settings, and then choose Check format from the Show
pop-up menu.

3 (Optional) Click the Artwork tab to print a company logo.
See “Printing a company logo” on page 105 for more information.
4 Click Apply.
Finance charge preferences

To change finance charge preferences:
1 Choose Company > Company Settings, and then choose Finance Charges from the Show
pop-up menu.

QuickBooks creates
an invoice for each
customer for whom
you assess a finance
charge. Select here
to mark finance
charge invoices to be
printed all at once. Make sure you comply with
your jurisdiction’s lending
If you send reminder laws before setting this option.
or billing statements,
you’ll probably want
to leave this
checkbox clear.
2 Enter the annual interest rate that you want QuickBooks to use to calculate how much
your customers owe in finance charges.
For example, if you enter 12%, QuickBooks charges 1% per month. To charge a flat rate
instead of a percentage, enter 0 in the Annual Interest Rate field, and your flat rate in the
Minimum Finance Charge field. You can change your rate at any time.
3 (Optional) Enter a dollar amount in the Minimum Finance Charge field.
QuickBooks will use this as the lowest possible finance charge. For example, if you
enter $10, and a customer has accrued $7.50 in finance charges, QuickBooks fills in $10
for that customer in the Assess Finance Charges window.
4 In the Grace Period field, enter the number of days after a payment is due that you will
allow a customer to send payment without incurring a finance charge.
5 Select your Finance Charge Account from the pop-up menu.
Enter the account (usually an income account) you’ll use to record finance charge
amounts you receive from customers. To create a new account, for example one called
“Finance charges,” choose New from the Finance Charge Account pop-up menu and
complete the New Account window.
6 (Optional) Enter a different finance charge title if you want a name other than the
default to appear on finance charge invoices.
7 (Optional) Select “Assess finance charges on overdue finance charges” to include
overdue finance charges in its calculation of current finance charges.
Important: Laws vary as to whether you can assess finance charges on finance charges.
Please confirm with the appropriate jurisdiction that you are in compliance
with that jurisdiction’s lending laws.
8 Choose to calculate charges from either the due date or the invoice date.
9 (Optional) Select “Mark finance charge invoices “To be printed.”
QuickBooks creates an invoice for each customer for whom you assessed finance
charges. Selecting this checkbox causes QuickBooks to mark each finance charge
invoice it creates “To be printed,” and adds the invoice to a list of invoices you can print
all at once.
10 Click Apply.

Reporting preferences
See “Setting your report preferences” on page 247.
Sales tax preferences

Use the sales tax preferences if your business collects sales tax from customers. When you
first open the Sales Tax Preferences window, it shows the sales tax information you entered
when you set up your company file.
It’s important to set up your sales tax line item or items correctly, so that you have accurate
information when it’s time to pay your tax agencies. For details, see Chapter 10, Sales tax—
track and pay, starting on page 153.
To change sales tax preferences:

1 Choose Company > Company Settings, and then choose Sales Tax from the Show pop-
up menu.
2 Select the “Customers are charged sales tax” checkbox.
QuickBooks displays the Pay Sales Tax choice on the Vendors menu, and adds the Sales
Tax Liability report to the Reports > Vendors & Payables menu.
3 Indicate whether you pay sales tax monthly, quarterly, or annually.
No matter which choice you make, you can pay tax anytime. This choice helps Quick-
Books set up your sales tax reports to be most helpful and remind you when to pay.
4 Indicate whether you owe your tax agencies when you create an invoice (accrual basis)
or when you receive a customer payment (cash basis).
Important: QuickBooks uses your choice of accrual basis or cash basis to determine the
amount you owe for the Pay Sales Tax window and to determine the
amounts displayed in the Sales Tax Liability report.
Accrual report basis is the same as applying the tax on the invoice date. Cash report
basis is the same as applying the tax upon receipt of payment.
If you collect sales tax for multiple districts, some of which require payment on an
accrual basis, some on a cash basis, you can change the sales tax preference back and
forth from accrual to cash to view the amount you owe different districts.
For example, if you owe most districts on a cash basis, but you owe one district on an
accrual basis, you can set the sales tax preference to cash, (upon receipt of payment),
view the report, noting how much you owe each district that requires cash basis, then
change the preference to accrual and note how much you owe the district you pay on
an accrual basis.
You can also change this preference with a sales tax report open.
5 From the “Most common sales tax” pop-up menu, choose the tax item or tax group
you’ll use most often or create a new account.
QuickBooks prefills each sales form’s Tax field and each new customer’s Tax Item field
with your most common sales tax. You can change to a different tax item or tax group
in any of these fields.
To create a new account, from the Most common sales tax pop-up menu, choose New
and complete the New account window.
6 Clear the checkbox at the bottom of the window if you don’t want QuickBooks to print
a “T” next to each taxable item on printed invoices or cash sales receipts.
7 Click Apply.

Time tracking preferences

Note: Time tracking is available in QuickBooks Pro only. For details on upgrading to
To change time tracking preferences:

1 Choose Company > Company Settings, and then choose Time Tracking from the Show
pop-up menu.
2 Select the “Keep track of time” checkbox.
3 From the First Day of Work Week pop-up menu, choose the first day of your work week
for the weekly timesheet.
4 Specify whether you want the Record Time button in the Employee List window to open
an Enter Single Activity window or a Weekly Timesheet window.
5 Click Apply.
Job preferences
Note: Job preferences are available in QuickBooks Pro only. For details on upgrading to
To change job preferences:

1 Choose Company > Company Settings, and then choose Jobs from the Show pop-up
menu.
2 Make the desired changes to the job status descriptions.
QuickBooks uses the descriptions in the following places:

• Job Status pop-up menu on the Job Info tab of the New Job, Edit Job, New Customer,
and Edit Customer windows
• Job Status column of the Customer:Job List window
• Job administration report
QuickBooks Pro does not automatically change the job status of any job on the basis of
transactions you enter. You can use any five descriptions that are meaningful to your
company.
3 Click Apply.

Password preferences
Passwords provide a basic degree of protection for your data, but it is not a complete
security system. For example, it will not prevent someone from using the Finder to delete
a company file. For stronger protection, keep your computer and backup disks in a secure
area. If your computer has a key lock, use it.
Important: Write down your passwords and store them in a safe place. Once you have set
up file passwords, you will not be able to access the data in your company file
without entering a password.
To change password preferences:

1 Choose Company > Company Settings, and then choose Passwords from the Show pop-
up menu.
To delete an existing password,

Enter the ending date select it and press Delete.
of the period for
which you want to
protect transactions
with a password.
Enter a password
here to restrict
changes to data for
earlier fiscal periods.
This password
allows you to “close”
earlier periods.
2 Enter an owner password.

The owner password allows unlimited access to your company file. If you set an owner
password, you must enter it to display or change information in the Password Prefer-
ences window in the future.
3 Enter a data entry password.
The data entry password allows a person to enter new transactions, but not to edit
transactions entered in an earlier session. It restricts this person from viewing registers,
account balances, customer and vendor balances, reports, or graphs.
Note: Because the data entry password restricts access to registers, a person must have
the owner password to enter statement charges.
If you set a data entry password, you must also set an owner password so that you can
access the rest of your company file.
QuickBooks asks for a file password before it opens your company file. If you enter the
data entry password, you are allowed to enter only new transactions. If you enter the
owner password, you have unlimited access.
The data entry password is independent of the transaction password.

4 Enter the transaction password and the date through which you want your books to be
closed.
The transaction password restricts editing of transactions in a prior period, defined by
the date you enter.
When you have set a transaction password, QuickBooks asks for the password when
you try to add or edit a transaction that has a date before the date you’ve chosen.
The transaction password is independent of the file passwords except that you must set
an owner password in order to have a transaction password. For example, suppose you
close last year with a transaction password. QuickBooks asks for the owner or data
entry password before opening the company file. It asks for the transaction password
each time you try to add or change a transaction for last year.
5 Click Apply.
Using passwords to close a period

QuickBooks does not require you to “close the books” at the end of a period. Closing books
is often a complicated process that involves transferring information from one book to
another and summarizing it. QuickBooks does all this as you are entering data. You can ask
QuickBooks for reports at any time, not just at the end of a period.
However, you may want to restrict access to the transactions of prior accounting periods to
be sure the transactions are not changed without your knowledge. This type of restricted
access is independent of whether you have passwords that restrict access to the data as a
whole.
By requiring a password to delete, add, or edit any transaction before a chosen date, you
can discourage accidental or casual changes to “closed” periods, but still make corrections
when necessary by entering the password. You do not need to enter the password to view
transactions.
To set up a transaction password to close a period:

1 Choose Company > Company Settings, and then choose Passwords from the Show pop-
up menu.
2 Enter the last date of the period in the Closing Date field.
3 Enter a password in the Transaction Password field.
4 Click Apply.
When you try to record a change for the closed period, QuickBooks asks you to enter
this password.

1099 preferences
If you file Form 1099-MISC for any of your vendors, you can associate accounts with 1099
categories. You can also change the threshold amounts for these categories. (When you are
ready to file the 1099-MISC and 1096 forms, create a 1099 report or print the 1099 forms.)
To change 1099 preferences:

1 Choose Company > Company Settings, and then choose 1099s from the Show pop-up
menu.
2 If you file 1099s, click the 1099-MISC forms are filed checkbox.
QuickBooks adds menu options for printing and creating reports of 1099s.
3 Choose an account or accounts to associate with the 1099 categories for which you
report amounts to the IRS.
• Click in the Account column and choose an account from the pop-up menu.
OR
• To associate more than one account with a 1099 category, choose Selected accounts
from the pop-up menu and select the accounts from the Select Accounts window;
then click OK.
The accounts you select should be accounts you use to track expenses related to Form
1099-MISC. Typically, the accounts are expense accounts. If you need to, you can also
associate liability or asset accounts with 1099 categories.
4 Click in the Threshold column to change threshold amounts for the categories.
QuickBooks uses the thresholds set by the federal government. These amounts may
become outdated as the government enacts changes.
Important: To make sure that you have the latest threshold information, ask your
accountant or call the IRS (or contact http://www.irs.org).
5 Click Apply.

Toolbar preferences
To customize the toolbar:
1 Choose Company > Configure Company Toolbar.
2 To hide the toolbar, clear the Show Command Buttons checkbox.

3 To change the toolbar display, choose Icon & Text, Icon Only, or Text Only from the
Show pop-up menu.
4 To add a button to the toolbar, double-click the button, or drag the button to the toolbar.
5 To remove a button from the toolbar, drag it off the toolbar.
6 To move a button, click and drag the button to its new position.
7 Click Change.
Adding a window to the toolbar

You can add a window -- for example, to display a particular report -- to the toolbar for easy
access.
To add a window to the toolbar:

1 Open the window you would like to add.
For example, to add the Standard Balance Sheet report, choose Reports > Company &
Financial > Balance Sheet Standard.
2 Choose Company > Add Window to Toolbar.
3 Click the button you want to assign this window in the toolbar.
4 Enter a name, up to nine characters, and an optional description.
5 Click Add.
To delete a window, drag its button off the toolbar for future use (you can find it in the
Configure Toolbar window), or drag it to the Trash for permanent removal.


23 Maintaining your data
Data maintenance overview 287

23
Changing your company information 288

Changing to a different company file 288
Keeping an audit trail 289
Backing up your company file 289
Restoring company data 291
Transferring lists between company files 292
Selecting names for mail merge 292
Condensing data 293
Periodic tasks 296
Data maintenance overview

This chapter tells you how to keep your data safe and how to perform regular and occa-
sional maintenance tasks.
Understanding QuickBooks data files

When you create a new company file in QuickBooks, you supply a company name. Quick-
Books suggests the company name you entered as a filename for your company’s Quick-
Books data.
A QuickBooks data file contains all the financial transactions you’ve entered plus any
company customization choices you have made (for example, sales tax rate and pass-
words).
When you open an existing company in QuickBooks by choosing File > Open Company,
you see a list of all QuickBooks files. Unless you keep books for several companies, you’re
likely to have just one file to choose.
Avoiding data file problems

Follow these two guidelines to help avoid data file problems:
Do NOT turn off the computer before exiting QuickBooks

Always quit (close) QuickBooks before turning off your computer. When you quit a
program, it saves information that has been held in memory.
Maintaining your data • 287

Make regular backup copies

Your data is valuable! No technique can recover all possible file damage or protect against
theft or natural disasters. When you make regular backup copies, you have easy access to
data that may just need some updating. For more information, see “Backing up your
company file” on page 289.
Changing your company information

When you create a company file, you enter information about it in the New Company
Setup Assistant or in the Creating New Company window. You can change your company
information at any time.
To change your company information:

2 Change any of the following information:
• Your company name and address
This information is printed on invoices, checks, and other forms.
• Your company’s legal name
• Your federal identification number
• The month your fiscal year starts
• The month your income tax year starts
• The income tax form you use
Note: If you change the tax form you use, all of the associations between accounts and
tax lines are reset to <Unassigned>. See “Adding new accounts” on page 66 for
details about associating accounts with tax lines.
3 Click Apply.
Changing to a different company file

If you work with several companies, you’ll be keeping their financial records in separate
data files.
To choose a different company:

1 Choose File > Open Company.
QuickBooks closes the current company and prompts you for the location of the new
company.
2 Select the filename of the company you want, and then click Open.
If the filename list in the Open a Company window does not show a company file that you
know exists, QuickBooks is probably looking in the wrong place for the data. Check that
the folder displayed in the pop-up menu above the list is the one where you store the data
file you are looking for. If it isn’t, choose the correct one from the pop-up menu.
288 • Maintaining your data

Keeping an audit trail

You can turn on the audit trail preference for your company, which tells QuickBooks to
keep a record of all changes made to transactions.
If you turn this preference on, you may find that QuickBooks works a little more slowly,
and your data takes up more memory. These changes occur because instead of writing over
transactions you change (which is how QuickBooks works with the audit trail preference
off), QuickBooks must record not only the new changed transaction, but any previous
versions of the same transaction.
Important: You must have the audit trail preference turned on to keep a record of changed
transactions. If the preference is turned off, QuickBooks will no longer keep a
record of the changes.
To turn on the audit trail preference:

pop-up menu.
2 Select the “Use audit trail” checkbox, and then click Apply.
To view the audit trail report:

• Choose Reports > Accountants & Taxes > Audit Trail.
Any transactions labeled “Previous Transaction” have been modified. You can compare
the previous transaction to the current transaction to see which part or parts of the
transaction were modified. QuickBooks also shows you the date and time of the modi-
fication.
If the audit trail was turned off during part of the period covered by the report, Quick-
Books may not show the modification date of some transactions.
To include deleted transactions in the Audit Trail report:

1 Click Customize in the report buttonbar of the Audit Trail report.
2 Select the “Show deleted transactions” checkbox, and then click OK.
Backing up your company file

Backups are important because in the event of a data loss, you can restore your data from
a backup copy. You might lose data if you delete data by mistake, if your hard disk fails, or
if your computer is stolen or damaged.
Backing up your company file to disk

• To back up to disk, choose File > Back Up > To a Disk, and follow the onscreen instruc-
tions.
The Back Up to a Disk command does not simply make a copy of your company file; it
also compresses the data into a compact backup file.

Recommended backup routine

We recommend that you back up your data at the end of each session. If your hard disk has
more than one drive, back up onto a different drive from the one where you keep your
working data. If you have one hard disk drive, back up onto a CD.
Back up your data on CDs or other media as follows:
1 Each day, back up onto a CD to keep in the office.
We suggest that you make a set of backup CDs and label the CDs “QuickBooks Backup
Monday,” “QuickBooks Backup Tuesday,” etc. Each day, back up your data onto the CD
for that day. If you have a problem with any of your backup CDs, you can still use the
data on the previous day’s backup CD.
2 At least once a month, make a backup to keep off your premises.
You may want to alternate between two sets of CDs.
3 At the end of the fiscal year, make an archive copy of your data to keep off your
premises.
Backing up your company file to your iDisk

If you have an Apple .Mac account, you can back up your QuickBooks company file to your
iDisk.
System requirements:
• An active Apple .Mac account with available space on your iDisk
• An Internet connection
To back up a QuickBooks company file to iDisk:

• Choose File > Back Up > To .Mac, and follow the onscreen instructions.
QuickBooks backs up a password-encrypted version of your file to your iDisk/Docu-
ments/QuickBooks/Data File Backups folder.
To restore a QuickBooks company file from iDisk:

1 Choose File > Restore > From .Mac.
2 Select the file you want to restore from the list, and then click Restore.
For more information about .Mac accounts, go to http://www.mac.com.
Automatically backing up your company file

You can set QuickBooks to automatically back up your company file whenever you close
the file. See page 272.

Comparing the different methods for transferring QuickBooks data

The following table compares the different maintenance activities for your data.
Activity What it does Advantages Disadvantages
Backing up a com- Makes a compressed More data fits on one CD. Backup QuickBooks must restore backed-
pany file copy of everything in allows you to divide very large files up copy before it can open the
original company file among multiple CDs. file.
Saving as text Makes a copy in a format You can use the file in a spreadsheet Only lists and reports can be
common to other soft- or word-processing program. saved as text.
ware programs QuickBooks cannot read files
saved as text.
Exporting Puts lists into a file in IIF You can share lists with another copy QuickBooks can export only lists,
format, with one record of QuickBooks or use a list in a data- not transactions or reports.
per line and one column base or spreadsheet program. You
for each field can add to the list and then import it
back into QuickBooks.
Restoring company data

You may need to restore company data from your backup files if one of the following situ-
ations has occurred:
• your working data is damaged
• your hard disk has malfunctioned
• you need to put the data on another computer
• you want your data to revert to the state it was in at an earlier date
Because the Back Up command creates a compressed file, you must restore the backup data
onto your hard disk by using the QuickBooks Restore command.
If your hard disk has malfunctioned, you first need to reinstall QuickBooks on the repaired
or new hard disk. See “Transferring lists between company files” on page 292. Then follow
these steps to restore your backup data.
To restore company data:

1 Start QuickBooks.
2 Choose File > Restore > From a Disk or From .Mac, and follow the onscreen instructions.
QuickBooks restores the company file and opens it when the restoration is complete.
Note: If QuickBooks finds a company file with the same name in the same folder on the
hard disk, it asks you whether you want to replace the existing file on the hard disk.
If you answer “No,” QuickBooks returns you to the Restore window.

Transferring lists between company files

Use Import and Export to copy lists from one QuickBooks company file to another. You can
also use Import and Export to move lists between QuickBooks for Windows and Quick-
Books for Macintosh.
QuickBooks can export and import data in a format called IIF (Intuit Interchange Format).
For details about IIF, choose “Printing, file operations, preferences” from the onscreen Help
table of contents; then choose “Transferring data.”
Note: Creating an IIF file from scratch or changing data from another accounting program
into an IIF file is technically complex and is not recommended for those who do not
have programming experience.
To export lists:
1 Choose File > Export > Lists to IIF File.
2 Select the lists you want to export.
3 Click OK.
4 Enter a filename and choose a location for the export file, and then click OK.
To import all of an existing IIF file into the current file:

1 Choose File > Import > From IIF Files.
2 Specify the correct location of the IIF file, and then click Open.
Selecting names for mail merge

You can export a list of names (customers/jobs, employees, vendors, and other names) to
a .TXT file that is compatible with many word processing and spreadsheet programs. Titles,
names of contacts and alternate contacts, and both shipping and billing addresses are
exported for the list(s) you select. Additional information on how to perform a mail merge
can be found in your word processing or spreadsheet program’s documentation. Here are
two examples of using mail merge:
• If you have shipping labels with your company’s address preprinted on them, export
your customers’ names and print your customer names and addresses on the pre-
printed labels.
• If your company is moving and you want to send a letter to your customers and
vendors about your new address, create a form letter in your word processing program,
and then mail merge the names from QuickBooks.
To specify names for mail merge:

1 Choose File > Export > Addresses to Text File.
2 Choose which names you want to use in your mail merge.
3 Select the “Include Jobs” checkbox to export all jobs associated with any customers you
selected.
4 Click OK.
5 Enter a file name and specify where you want to save the .TXT file.
QuickBooks saves the information in a .TXT file that you can use with your word
processing or spreadsheet program.

Condensing data
If your company file has grown too large, you can reduce its size by having QuickBooks
condense the transactions for a period of time that you designate. QuickBooks accom-
plishes this in two ways:
• QuickBooks deletes transactions you no longer need to keep your records current.
• QuickBooks adds new transactions that provide monthly summaries of the transac-
tions it deleted.
Important: QuickBooks does not condense any transactions that include inventory items.
Condense time
The amount of time QuickBooks requires to condense your data depends on your
computer’s speed, your computer’s amount of memory, the size of your company file, and
other factors. The process could take anywhere from a few minutes to a few hours. During
the process, QuickBooks scans your data three times. Because of this, the completion level
may remain the same for a long time, but if your hard disk shows activity, the process is
continuing.
What happens when you condense data

When you condense data, you specify an ending date for the period of time you want to
condense. This has no effect on transactions dated after the ending date. For example, if
your ending date is 12/31/03, all transactions dated 1/1/04 and later remain intact in your
company file.
Of the transactions dated on or before the ending date, QuickBooks deletes and summarizes
only those that have no effect on transactions dated after the ending date.
Examples of deleted data

• If an invoice has been paid in full, QuickBooks deletes the details and includes the
amount in a summary transaction showing income accounts. Neither the customer
name nor the items sold are retained. However, if an invoice is unpaid, partially paid,
or marked as pending, QuickBooks leaves the invoice in your file so you can apply
payments to the invoice.
• If you have the audit trail turned on, QuickBooks removes transactions even if they
have been changed, if they’re dated before the ending date.
• If you have paid a bill for a reimbursable expense, QuickBooks deletes the bill
regardless of whether you have invoiced the customer for the expense.
• QuickBooks deletes only those estimates that are dated on or before the ending date
and that have a job status of Closed. If an estimate has any other job status (Pending,
Awarded, In Progress, or Not Awarded), QuickBooks retains the estimate regardless of
its date.
• QuickBooks deletes time data if it is marked as “billed” or “not billable” of if its job
status is Closed.

Retained transactions
The following table gives examples of when QuickBooks retains transactions dated on or
before your specified ending date:
Situation for which

QuickBooks retains
Example of retained transaction
transaction with
earlier date
A transaction has an Unpaid, partially paid, or pending invoices, undeposited customer payments, unpaid bills, unused
open balance. credit memos.
A transaction is An undeposited customer payment that you applied to an invoice. Even though the invoice is paid,
linked to another QuickBooks retains the invoice because it has a link to an open transaction (the undeposited pay-
transaction that has ment).
an open balance.
A checking or credit Unreconciled transaction in a checking or credit card account.

card transaction is
not marked as
cleared.
A transaction is Any invoice, credit memo, sales receipt, or check that has a check mark in its “To be printed” check-
marked as “To be box.
printed.”
Summary transactions
The summary transactions that QuickBooks creates appear in the registers of your balance
sheet accounts (Bank, Accounts Receivable, Accounts Payable, and so on). When you open
a register, you can spot the summary transactions by looking for GENJRNL in the Type
field.
Note: You cannot edit or delete a summary transaction.
Each balance sheet account has one GENJRNL summary transaction for each month in
which QuickBooks deleted transactions. The transaction amount is the total of the transac-
tions that QuickBooks deleted for the month.
For a given month, the register may also show other transactions that QuickBooks did not
delete. These are transactions that could be affected by transactions you have yet to enter.
For a list of reasons why QuickBooks retains some transactions, see the table on page 294.
How condensing data affects your reports
Account balances
After you condense your data, you can still create reports that summarize financial activity
for the period of time you condensed. For example, if you condense last fiscal year’s data,
you can still create profit and loss reports that compare last year’s results to this year’s. This
is because QuickBooks adds summary transactions to your company file to preserve
monthly account balances.

Transaction detail
After you condense your data, you won’t be able to create reports that show daily detail for
the period of time you condensed. This is because QuickBooks has deleted the individual
transactions that would have provided the detail. In addition, you won’t be able to create
reports that show balances for individual customers or vendors over that period of time.
As a result, the totals for sales revenue on sales tax liability reports will be incorrect. As a
precaution, QuickBooks creates a backup file in case you need access to the deleted trans-
actions later.
Cash basis reports

After you condense your data, you won’t get an accurate cash basis report for data that
includes a condensed time period. This is because QuickBooks has deleted the individual
transactions that would have provided the information about whether transactions were
paid. As a result, the totals will be incorrect.
The condensing process

To condense your data:
1 Before running Condense Data, run several reports, such as Profit & Loss, Balance Sheet,
and transaction reports, so that you can compare figures before and after you condense
your data.
2 Close any open QuickBooks windows.
3 Choose File > Utilities > Condense Data.
4 In the Condense Data window, enter the date through which QuickBooks should
summarize transactions.
Enter the ending date
for condensed data
here.
For example, to
condense data
through the end of
2004, enter
12/31/04.
Select this checkbox to remove all audit trail

information for all dates.
5 (Optional) If there are any types of unused list items that you wish to remove from your
company file, select the checkboxes for those lists.
• Select All audit trail information to remove all information on changed or deleted
transactions for all dates.
• Select To Do notes to remove all notes that you marked as completed.
After QuickBooks condenses the transactions, you may have list items that are no
longer in use. QuickBooks removes such inactive items from each list that has a check
mark in its box.

6 Click OK.
A message appears stating that QuickBooks will make a backup file before it condenses
the transactions. The backup file ensures that you will still have a record of the details
of any transactions that QuickBooks deletes from your company file. If your company
file is large, you may need more than one blank disk for the backup.
7 At the message window, click OK.
8 Create the backup file:
• If you are backing up to a disk, be sure that you have a blank disk in your drive.
Choose your drive from the pop-up menu.
• (Optional) Change the name of the backup file.
• Select the drive and folder where you want to backup the file.
• Click Save.
QuickBooks creates the backup file and condenses the data. If your company file is
large, the process may take several minutes. When the process has ended, store the
backup disk or disks in a safe place.
If you ever need to open the backup file, choose File > Restore. See “Restoring company
Periodic tasks
Certain tasks fall neatly into weekly, monthly, quarterly, and yearly time frames. With
QuickBooks, you’ll spend far less time on periodic tasks because QuickBooks pulls infor-
mation together for you.
Weekly tasks
• Make a backup copy of each of your QuickBooks companies.
See “Backing up your company file” on page 289.
• Use Aatrix Top Pay to write your weekly paychecks.
See the Aatrix manuals for information about creating paychecks.
• Pay bills due the following week.
See “Paying bills” on page 175.
• Print unprinted sales forms and checks.
column.
• Create a cash flow forecast report to review your anticipated cash flow for the next few
weeks.
Monthly tasks
• Make a monthly backup copy of each of your QuickBooks companies to keep some-
where away from your company premises. This procedure safeguards you from losing
valuable data in case of fire, flood, theft, or other disasters.
• Pay sales tax due monthly.
See “Paying sales tax” on page 163.
• Use Aatrix Top Pay to pay payroll taxes due monthly (or however frequently you are
required to pay them).
See the Aatrix manuals for information about payroll taxes.

• Reconcile your checking and credit card accounts when you receive your statements.
See Chapter 19, Account reconciliation, starting on page 233, and “Reconciling/paying
your credit card statement” on page 197.
• Print monthly reminder or billing statements to send to your customers.
See “Billing customers” on page 119.
• Print a collections report so that you can contact customers with past-due balances.
Quarterly tasks
• Make a backup copy of each of your QuickBooks companies.
See “Backing up your company file” on page 289.
• Pay sales tax due quarterly.
See “Paying sales tax” on page 163.
• Use Aatrix Top Pay to file Form 941, Employer’s Quarterly Tax Return, and state with-
holding tax forms.
See the Aatrix manuals for information about Form 941 and state withholding taxes.
• Create a profit and loss statement and a balance sheet, to review how your business is
doing.
Year-end tasks
Year-end tasks include making any year-end entries, archiving last year’s data, and gath-
ering information for your tax forms. The great news for year-end is that QuickBooks does
not require you to close your books!
There are two major advantages to not closing your books:
• Detail: you always have easy access to last year’s data, including all the detail of every
transaction
• Reporting: you can create comparison reports to compare this year with last year.
You can protect the prior year’s transactions from accidental change by using a password.
What QuickBooks does at year-end

QuickBooks makes automatic adjustments to your income and expense accounts at year-
end, so that you start the fiscal year with zero net income. In your old bookkeeping system,
you may have had to make such adjustments yourself.
Suppose, for example, that your net profit for the year was $12,000. A year-end balance
sheet would show a line for net income of $12,000 in the equity section of the balance sheet.
(See the illustration on page 226.)
At the beginning of the new fiscal year, QuickBooks increases your Retained Earnings
equity account by the previous year’s net income ($12,000 in this example) and makes your
net income zero. (See the illustration on page 227.)

Making year-end accounting entries

Remember that every business has its own accounting requirements and bookkeeping
practices.
To make year-end accounting entries:

1 Reconcile your checking accounts against your bank statements through the final month
of the accounting year (for example, December 2005).
Reconciling ensures that you have recorded every check, deposit, and other charge and
that your records agree with the bank’s.
2 Talk to your accountant about your year-end procedures:
• Ask what kind of reports your accountant would like to see.
• Ask for a list of “adjusting entries” for the year just ended. Your accountant may give
you a list of “adjusting” entries to correct, change, or add transactions that you have
entered throughout the year. For example, you may need to record depreciation of
fixed assets at year-end.
3 Make the adjusting entries in your company file.
• For a mistake that needs to be corrected, simply edit the transaction.
• For depreciation of fixed assets, see “Entering a depreciation transaction” on
page 217.
• For distribution of profits in a partnership, see “Distributing yearly profits to
partners” on page 230.
Safeguarding last year’s data

• Freeze earlier transactions with a password. (See “Using passwords to close a period”
on page 283.)
You’ll be able to view the earlier transactions as you normally do, but QuickBooks will
ask for the password if you try to change them.
• Make two backups of your company file at year-end, labeled with the year. Keep one
on your premises; keep the other away from your premises for added security.
Yearly tax forms

Here’s how to use QuickBooks to gather information for yearly tax forms:
• For Form 1099-MISC, see “1099 preferences” on page 284.
• For Forms W-2, W-3, and 940, see the Aatrix Top Pay manuals for information.
• For your personal income taxes or for corporate income taxes, the QuickBooks profit
and loss statement will help your accountant get an overview of your business transac-
tions for your fiscal year. This report summarizes your income and expenses by
account.
• If your accountant wishes to see details of transactions in specific areas, create a trans-
actions detail by account report or a transactions detail by date report (which you can
subtotal by time period or as you wish). These reports are on the Reports > Accountants
& Taxes submenu.

A Accounting basics
Balance sheets 299

A
Chart of accounts 301

Payment terms 304
Customer and vendor aging 304
Cash basis vs. accrual basis for taxes 304
Glossary of accounting terms 305
This section explains the bookkeeping terms that QuickBooks uses.
Balance sheets
A balance sheet represents a financial snapshot of your company on one date. It shows the
following:
• What you have
• What people owe you
• What your company owes to other people
• The net worth of your company
The following figure shows an example of a balance sheet. (For more information about the
QuickBooks balance sheet, see “Equity and your balance sheet” on page 224.
ASSETS:
What you have
What people owe
you
Total assets always equal total liabilities plus equity.

LIABILITIES:
What your company
owes to other people
EQUITY:
The net worth of
your company
Accounting basics • 299

Assets
Assets include both what you have and what other people owe you.
Suppose Company A has $5000 in the bank. Company B has $5000 in the bank, too, but it
also has done work and invoiced customers for $15,000. Company B expects to receive the
$15,000 in the next 30 days. Thus, Company B has total assets of $20,000 (in comparison
with only $5,000 for Company A).
Business In bank Outstanding invoices Total assets
Company A $5,000 $0 $5,000

Company B $5,000 $15,000 $20,000
The money that people owe you is called your accounts receivable, or
A/R for short. (Even though the word accounts is plural, QuickBooks uses a single account
to track all the money that different people owe you.)
The rest of your company’s assets may include checking accounts; savings accounts; petty
cash; equipment, trucks, and other fixed assets; inventory; and even money you’ve already
received from your customers but have not yet deposited in the bank.
Liabilities
Liabilities are what your company owes to other people.
A liability can be a formal loan, an unpaid bill, or sales and payroll taxes you owe to the
government.
The money you owe for unpaid bills is your accounts payable, or A/P for short. (Again,
even though the word accounts is plural, QuickBooks uses a single account to track all the
money you owe different people for bills.)
Equity
Equity is the net worth of your company. Equity equals the company’s total assets minus
the total liabilities:
equity = assets − liabilities
A company builds equity from three sources:
• Investment of capital in the business by the owners
• Net profit from operating the business during the current accounting period
• Retained earnings, or net profits from earlier periods that have not been distributed to
the owners
All the equity belongs to the owners. In a sense, it is the money that the company owes the
owners, so it is a liability from the company’s point of view. A balance sheet adds equity
and liabilities to show that they equal the total assets:
assets = liabilities + equity
300 • Accounting basics

Chart of accounts
When you keep books for a company, you want to track where your 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.
QuickBooks provides a choice of preset charts of accounts for different businesses while
you are setting up. You can then customize the chart of accounts for your business by
adding, deleting, and rearranging accounts.
There are three basic kinds of accounts on a chart of accounts: balance sheet, income, and
expense. The chart of accounts shows balances only for balance sheet accounts. To see totals
for income and expenses for a specified time period, create a profit and loss statement for
that period.
Balance sheet accounts

Balance sheet accounts appear on a balance sheet (see example on page 299). They include
the following:
• Asset accounts (for example, bank accounts, accounts receivable, and fixed asset
accounts)
• Liability accounts (for example, accounts payable, credit card accounts, and loan
accounts)
• Equity accounts (for example, investment of capital, retained earnings)
As you track daily transactions in your books, QuickBooks changes the balances of your
balance sheet accounts. For example, if you write an invoice, QuickBooks increases your
accounts receivable. If you pay a bill, QuickBooks decreases both your checking account
and your accounts payable. In almost all situations, a transaction affects at least one balance
sheet account.
Income accounts
Income accounts are accounts that track the source of your company’s income. (You can
think of income as money that comes into the company.)
There is no single “right” way to organize accounts for any given business.
Income accounts appear on a profit and loss statement, also called an income statement.
This statement shows your income, expenses, and net profit or loss (equal to income minus
expenses). When deciding what income accounts to use, think about how much detail
you’d like to see on a profit and loss statement for your business. Also think about what
you need to list on the tax returns you file.
QuickBooks has two types of income accounts:
Account type: Use for:
Income Income from ordinary business activities (fees, sales)
Other Income Income not directly related to business activities (such as interest)

The essential difference between the two types is the order in which QuickBooks arranges
them on a profit and loss statement. If you customize your chart of accounts, you can
specify which type you want for each income account in the Type field of the New Account
or Edit Account window.
When you add a
new income
account, you can
choose between
Income and Other
Income on the Type
pop-up menu.
QuickBooks places all income type accounts at the top of the profit and loss statement.
QuickBooks places all “other income” type accounts at the bottom, after ordinary income
and expenses.
Here are some examples of income accounts for different businesses.
Account type Consultant Landscape maintenance
Income Consulting Consulting

Installation & planting
Maintenance
Materials sold
Other income Interest income

Use items to track sales income. If you write invoices in QuickBooks, assign every item for
services and products to an income account. Do this when you set up the item. Then when
you enter these items as you write invoices, QuickBooks automatically assigns the income
to the correct income accounts.
For instructions on setting up items, see “Creating items” on page 76.
On a QuickBooks chart of accounts, the income accounts follow all the balance sheet
accounts. (You may have to scroll down to see them.) QuickBooks doesn’t display balances
for them. (To see the total income for each income account, you can create a profit and loss
statement with a few clicks of the mouse.)
Other income type accounts are near the bottom of the chart of accounts, after the expense
accounts.
Expense accounts
Expense accounts are accounts that track what your company is spending. (You can think
of expenses as money that leaves the company.)
You’ll probably have many more expense accounts than income accounts. You may have
separate accounts for expenses such as advertising, bank charges, dues, interest on loans,
rent, and telephone.
If you enter bills in your accounts payable when you receive them, you tell QuickBooks
which expense account the bill is for. (You can divide the bill among several accounts.) On
the other hand, if you enter the bill directly in your checking account, you indicate on the
QuickBooks check form which expense account to use.
Similarly, if you charge company expenses to a credit card, you can indicate the expense
account when you enter the transaction in QuickBooks.
QuickBooks has three types of expense accounts:
Account type: Use for:
Expense Expenses for ordinary business activities
Cost of Goods Sold Cost of goods and materials held in inventory and then sold
Other Expense Expenses not directly related to business activities (such as corporate income tax)
The essential difference among them is the order in which QuickBooks arranges them on a
profit and loss statement:
• QuickBooks puts cost of goods sold type accounts ahead of expense type accounts. It
subtracts cost of goods sold from income to show the company’s gross profit (before
expenses). For details about tracking cost of goods sold, see Chapter 9, Inventory,
• QuickBooks places other expense type accounts after ordinary income and expenses.
Similarly, on a QuickBooks chart of accounts, the expense accounts follow all the balance
sheet accounts, income accounts, and cost of goods sold type accounts. (You may have to
scroll down to see them.) QuickBooks doesn’t display balances for them. (To see the totals
for each expense account, create a profit and loss statement.) Other expense type accounts
are at the very end.

Payment terms
QuickBooks has a list of commonly used payment terms that you can use on your invoices
and bills. For example, one is “1% 10 Net 30.” Another is “Net 15.”
The word Net and the number following it indicate that you expect payment of the full
amount within that number of days after the invoice date. Thus, “Net 15” means that you
want full payment in 15 days.
A percentage followed by a number indicates that you will give a discount of that
percentage if you receive payment within that number of days. Thus, “1% 10” means that
the customer can deduct 1% of the total if paying the remainder within 10 days. And “1%
10 Net 30” means there is a 1% discount if paying within 10 days, but the full amount must
be paid within 30 days.
If you’re not sure what a term means, choose Lists > Customer & Vendor Profile > Terms.
Select an item on the list and choose Edit from the Actions pop-down menu to display the
term’s definition.
Customer and vendor aging

If you send invoices or billing statements, QuickBooks can help you track whether your
customers have paid them. Aging refers to the tracking of due dates and amounts of
outstanding invoices (and of your own unpaid bills).
When you enter the payment terms (for example, Net 30 days) on an invoice or billing
statement, QuickBooks keeps track of when the invoice is due. You can create an A/R aging
report to see which customers have overdue balances, for what amounts, and by how many
days.
Similarly, when you enter bills in QuickBooks, you indicate the due date. Then you can
create an A/P aging report to see whether you have overdue bills: for which vendors, for
what amounts, and by how many days.
Cash basis vs. accrual basis for taxes

Tax forms may ask you to indicate which of two methods of bookkeeping you are using:
• Cash basis
• Accrual basis
Cash basis
Many small businesses track income at the time 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 deposits of your customers’ payments but have not been including the
money customers owe you as part of your income, you’ve been using cash basis. Similarly,
if you’ve been tracking expenses at the time you pay them, rather than at the time you first
receive the bills, you’ve been using cash basis.
If you do bookkeeping manually, cash basis is simpler. However, when you use Quick-
Books, it is equally easy to use either method, and accrual basis has some added benefits.

Accrual basis
In bookkeeping on an accrual basis, you record income at the time of the sale, not at the
time you receive the payment. Similarly, you enter expenses when you receive the bill, not
when you pay it.
Accountants usually recommend accrual basis because it gives you a better picture of how
your business is doing.
The choice is yours

QuickBooks makes bookkeeping really simple by enabling you to enter transactions the
same way no matter which method you use for taxes. You can create reports that follow
either method, so you are not restricted to one method.
QuickBooks comes set up to create your reports on an accrual basis. That is, it shows
income on a profit and loss statement for invoices as soon as you record them, even if you
haven’t yet received payment. It shows expenses as soon as you record bills, even if they
are unpaid.
If you prefer to see reports on a cash basis, just change the preference in the Reporting Pref-
erences window. (See “Reporting preferences” on page 280.) For cash-basis sales tax
reports, use the Sales Tax Preferences window, instead. You can also customize the settings
for individual reports.
Glossary of accounting terms

To see a glossary of common terms, choose Help > QuickBooks Help, and then click
Glossary in the left column.


B Working with QuickBooks for Windows
Converting a QuickBooks for Windows file to Mac 307

B
Converting a QuickBooks for Mac file to Windows 313

“Round-tripping” a QuickBooks file from Mac to Windows to Mac 313
Converting a QuickBooks for Windows file to Mac

We recommend that you carefully read this entire section before converting, especially
pages 309 to 312, which contain important information on the data that will be (and won’t
be) converted.
Step 1: Prepare your QuickBooks for Windows file

You can only convert data files created with the following versions of QuickBooks for
Windows:
• Basic Edition 2004 or 2005 for Windows
• Pro Edition 2004 or 2005 for Windows
• Premier Edition 2004 or 2005 for Windows
• Premier Accountant Edition 2004 or 2005 for Windows
To see which version of QuickBooks you have:

1 From your PC, open QuickBooks for Windows.
2 Choose Help > About QuickBooks.
3 If the “About QuickBooks” window shows one of the versions of QuickBooks for
Windows listed above, then you are ready to copy your data file to your Mac; go to “Step
2: Copy the file from your PC to your Mac” on page 308.
Otherwise, see the next section for information on installing the QuickBooks 2005 for
Windows trial version.
To install the QuickBooks for Windows trial version:

1 Go to http://www.tryqb.com to order the free QuickBooks 2005 for Windows trial
version.
2 When you receive the trial version, follow the instructions that come with it to install it
on your PC.
The CD may include trial versions of more than one QuickBooks product; we
recommend you install the Pro version.
Important! QuickBooks normally installs in the default directory C:\Program
Files\Intuit\QuickBooks Pro. If you already have a copy of QuickBooks installed in
this location, install the trial version in a different directory; when you reach the Desti-
nation Location window in the installation process, click the Change button to install
the trial version in a different directory.
3 Double-click the QuickBooks for Windows icon to start the program, and follow the
onscreen instructions.
Working with QuickBooks for Windows • 307

4 On the Welcome screen, Click ‘Open Your Existing Company File’. Your file will be
located in its original directory.
5 QuickBooks asks which file you want to open, as well as where you want to back up the
original file for safekeeping. Follow the instructions that appear on the screen.
Note: If your data file is password-protected, you will need to enter your password
when QuickBooks prompts you for it.
When you see the name of your company file at the top of the QuickBooks for Windows
screen, you’ll know your file has been updated.
6 To save the file as a .qbb file, choose File > Backup and follow the onscreen instructions.
QuickBooks for Mac can open either a QuickBooks for Windows .qbw or .qbb file.
Step 2: Copy the file from your PC to your Mac

There are several ways to copy your QuickBooks data file from your PC to your Mac:
• Copy the file from your PC to your Mac via a floppy disk, CD, or other removable
storage media.
• Email or FTP the file to yourself via an Internet connection.
• If you have an Apple .Mac account, you can use iDisk to copy the file from your PC to
your Mac via Windows File Explorer and an Internet connection. (Windows 98, 2000,
or XP is required.)
• Use Connectix Virtual PC software, if you have Virtual PC and QuickBooks for
Windows installed on your Mac.
For more information on transferring a file from a PC to a Mac, see the documentation that
came with your computer or file transfer software.
Step 3: Convert your data file to QuickBooks Pro 2005 for Mac
To open a QuickBooks for Windows .qbw file:
1 In QuickBooks Pro 2005, choose File > Open Company.
2 Select your QuickBooks for Windows .qbw file, and then click Open.
To restore a QuickBooks for Windows .qbb file:

1 In QuickBooks Pro 2005, choose File > Restore > From QuickBooks for Windows.
2 Select your QuickBooks for Windows .qbb file, and then click Open.
3 When asked if you want to convert this file to QuickBooks for Mac, click OK.
Depending on the size of your data file, the conversion process can take up to ten minutes.
When conversion is complete, QuickBooks will open the file.
308 • Working with QuickBooks for Windows

Step 4: Compare the original file with the new file

To verify that your data was converted accurately, run a Balance Sheet report on both your
original data file and your newly-converted file, and compare the data between the two.
To compare Balance Sheet reports:

1 In QuickBooks for Windows:
• Open your original data file in QuickBooks for Windows.
• Choose Reports > Company & Financial > Balance Sheet Standard.
• From the Dates pop-up menu, choose All.
• Click Print to print the QuickBooks for Windows report.
2 In QuickBooks Pro 2005 for Mac:
• Open your newly-converted data file in QuickBooks 2005 for Mac.
• Choose Reports > Company & Financial > Balance Sheet Standard.
• From the Dates pop-up menu, choose All.
• Choose File > Print Report to print the QuickBooks for Mac report.
3 Compare the two Balance Sheet reports.
If the reports don’t match, examine both data files for discrepancies, make any
necessary changes, and if necessary, convert the QuickBooks for Windows file to Quick-
books for Mac again.
What data is and isn’t converted

Although Intuit has used reasonable efforts to include all features affected, Intuit disclaims
that all features are included in these lists. Be sure to compare the newly-converted data
with the original data to learn what data was not converted.
Data that IS converted

• Account list (chart of accounts)
• Customer list
• Vendor list (notes will not be converted)
• Item list
• Payment terms list
• Shipping via list
• Customer type list
• Vendor type list
• Employee list (notes will not be converted)
• To do list (alerts will not be converted)
• Other names list (without notes)
• Job types list
• Payment method list
• Customer message list
• Classes
• Reminders (alerts will not be converted)
• Links between pay items and other items

• Custom field definitions

• Transactions and their links:
- Invoices
- Bills
- Deposits
- Payments
- Transfers (will be shown as a journal entry)
Memorized transactions
• Memorized reports (in alphabetical order, without groups)
• History of QuickBooks versions used with the data file
• Transaction statistics
• 1099 categories
• Notes
• Audit trail
• Preferences
- Company name and address
- Which features are enabled
• Time and activity records
• Budgets
• Reconcile
• Address book data
• Income and expense tracking by class (available in QuickBooks Pro 2005 for Mac using
Profit & Loss by Class reports)
• Job costing data (available in QuickBooks Pro 2005 for Mac using Job Profitability
reports)
Note: If you are converting to QuickBooks 2005 New User Edition for Mac, which comes
pre-installed on some Mac systems, any data regarding time tracking, job costing,
and estimates will be accessible for viewing, but will not be available for new entries
after conversion from QuickBooks for Windows. To take advantage of these features,
upgrade to the Pro edition of QuickBooks 2005 for Mac; go to http://www.usequick-
books.com.
Data that ISN’T converted

Some features and data will NOT be converted from PC to Mac, including (but not neces-
sarily limited to) the following:
• Intuit integrated payroll and payroll item lists (QuickBooks Pro 2005 for Mac uses
Aatrix Top Pay for payroll services)
• Online banking transactions that have not been accepted into a register (transactions
that have been accepted will appear as payments, deposits, and transfers with asso-
ciated links)
• Customized settings for forms like invoices, estimates, statements, and purchase orders
(forms can be customized in QuickBooks Pro 2005 for Mac)
• Multi-user data, such as sales representative information
• File passwords
• Business planning, expert analysis, and business optimization tools
• Customized price levels
• Integration with third party applications, including Microsoft Word, Excel, Outlook,
and ACT!

• Merchant account services

• Multiple estimates per job (QuickBooks Pro 2005 for Mac supports a single estimate per
job)
• Sales order and back order tracking
• Assembly items (available only in Premier versions of QuickBooks for Windows) will
be converted into regular non-inventory part items
• Transaction type “transfer” (will convert into a journal entry)
• Transaction type “EFP payroll” (will convert into a payroll liability check)
• Workers comp list
• Vehicle list
• Fixed asset item list
Note: If you are converting to QuickBooks 2005 New User Edition for Mac, which comes
pre-installed on some Mac systems, any data regarding time tracking, job costing,
and estimates will be accessible for viewing, but will not be available for new entries
after conversion from QuickBooks for Windows. To take advantage of these features,
upgrade to the Pro edition of QuickBooks 2005 for Mac; go to http://www.usequick-
books.com.
Unsupported reports
The following preset reports are currently not supported by QuickBooks Pro 2005 for Mac.
You can, however, create many of these reports using the customization, filtering, and
memorization features in QuickBooks Pro 2005 for Mac.
• Profit & Loss Unclassified
• Job Progress Invoices vs. Estimates
• Open Purchase Orders by Job
• Sales Tax Revenue Summary
• Pending Builds
• Income Tax Preparation
• Profit & Loss Budget Performance
• Estimates by Job
• Reconciliation Discrepancy
• Previous Reconciliations
• Voided/Deleted Transactions (available only in Premier versions of QuickBooks for
Windows)
• Voided/Deleted Transactions History (available only in Premier versions of Quick-
Books for Windows)
• Closing Date Exception (available only in Premier versions of QuickBooks for
Windows)
• Open Sales Orders by Customers (available only in Premier versions of QuickBooks for
Windows)
• Open Sales Orders by Item (available only in Premier versions of QuickBooks for
Windows)
• Adjusted Trial Balance (available only in Premier versions of QuickBooks for Windows)
• Adjusting Journal Entries (available only in Premier versions of QuickBooks for
Windows)
• Forecast Overview (available only in Premier versions of QuickBooks for Windows)
• Forecast vs. Actual (available only in Premier versions of QuickBooks for Windows)

• All payroll reports

• All mileage reports
• All list reports
Unsupported report filters

The following report filters are currently not supported by QuickBooks Pro 2005 for Mac.
Memorized reports that were created using these filters will not be converted, since their
balances will not match balances in the original data file.
• Detail Level
• Name Email
• Paid Thru
• PO Number
• Posting Status
• Sales Tax Code
• Template
• Estimate Active
• Online Status
• Printed Status
• Voided
• Name Address
• Name Street1
• Name Street2
• Name City
• Name State
• Name Zip
• Name Phone Number
• Name Fax Number
• Name Account Number
• Workers Comp Code
• Is Adjustment

Converting a QuickBooks for Mac file to Windows
Step 1: Convert your file to QuickBooks for Windows

1 In QuickBooks 2005 for Mac, open the company file you want to convert.
2 Before converting to Windows, make a backup of your file by choosing File > Back Up
> To a Disk or To .Mac.
See “Backing up your company file to disk” on page 289 for more information.
3 Choose File > Back Up > To QuickBooks for Windows.
4 Enter a name for the file and click Save.
Important: Do not remove the .qbb file extension, or else QuickBooks for Windows will
be unable to open the file!
The converted file contains important information required for “round-tripping” the file
from Mac to Windows, and then back to Mac. See the next section for more information.
Step 2: Open the file in QuickBooks for Windows

1 Copy the .qbb file from your Mac to a PC that is running QuickBooks for Windows.
2 In QuickBooks for Windows, choose File > Restore, complete the information in the
Restore window, and then click Restore.
For more information, see the QuickBooks for Windows documentation.
“Round-tripping” a QuickBooks file from Mac to Windows to

Mac
There are some situations in which you may want to convert a QuickBooks for Mac file to
QuickBooks for Windows, and then convert it back again to QuickBooks for Mac. (This
process is referred to as a “round-trip” in the following discussion.)
For example, if you use QuickBooks for Mac to run your business, but your accountant
uses QuickBooks for Windows, you may want to convert your Mac file to Windows so that
your accountant can review your file, and then send it back to you with changes that you
can then view in QuickBooks for Mac.
It is important to note that:
• Since QuickBooks for Mac does not have the exact same features as QuickBooks for
Windows, some data may be lost when the Windows file is converted back to Mac. See
“What data is and isn’t converted” on page 309 for more information.
For complete technical information on how your QuickBooks for Mac file preserves round-
trip information, choose QuickBooks Help from the QuickBooks for Mac Help menu. From
the left column, click File Operations, and then click Round-tripping a QuickBooks file
from Mac to Windows to Mac.


C For Quicken users
System requirements 315

C
Comparing QuickBooks and Quicken 315

Step 1: Prepare your Quicken for Mac file 317
Step 2: Convert your Quicken file to QuickBooks 318
Differences in your new QuickBooks data 319
This chapter explains how to convert a Quicken for Mac data file into a QuickBooks Pro
2005 for Mac data file.
System requirements
To convert a Quicken for Mac file to QuickBooks for Mac, you need:
• A Quicken for Mac data file created with, or updated by, Quicken for Mac 2003, 2004,
or 2005
• QuickBooks Pro 2005 for Mac
After conversion, you will have two files: your original, unchanged Quicken data file, and
your new QuickBooks company file.
Comparing QuickBooks and Quicken
Terminology differences
Quicken uses terms familiar to anyone who has used a checkbook. QuickBooks uses terms
that are standard in business bookkeeping. The following table lists the most important
differences in terms.
Quicken term QuickBooks term Definition
File Company All records related to one bookkeeping entity—one set of books.
Account Balance sheet A grouping of records related to one kind of asset, liability, or equity.
account These accounts appear on a balance sheet.
Category Income or A grouping of transactions related to one kind of income or expense.

expense account These accounts appear on a profit and loss statement (income statement).
Category and Trans- Chart of Accounts The QuickBooks Chart of Accounts is equal to the Quicken Account list (bal-
fer List ance sheet accounts) plus the Quicken Category list (income and expense
accounts).
plus
You can add, edit, or delete any kind of account in QuickBooks.
Account List
For Quicken users • 315

Feature differences
The following table lists differences in features that exist in both Quicken and QuickBooks.
Feature Quicken QuickBooks
Entering transac- Enters most transactions in regis- Enters most transactions in forms (check window, invoice win-
tions ters. dow, and so on).
In QuickBooks, you can copy and paste a transaction from one
register to another.
Write Checks Displays a check that looks like a Displays a business check with voucher area (so the “split” is
paper personal check. part of the check form).
Classes Uses a slash (/) to separate a cate- Enters classes in separate fields. No need for a slash (/) as a
gory from a class in transactions. separator.
In QuickBooks, jobs and projects can be associated with cus-
tomers as part of the Customer:Job list, so you can use classes
for different kinds of classification.
Transfers Uses brackets [] to indicate a No need to use brackets. QuickBooks handles transfers like
transfer to another balance sheet any other transaction.
account.
Passwords One password for entering and Three levels of password protection (including one for payroll).
viewing data.
Reports Offers reports for personal finance Omits personal finance reports and investment reports. Offers
and investments. Has only a few many pre-designed reports for businesses.
business reports.
Subaccounts Categories can have subcatego- All accounts, even balance sheet accounts, can have subac-
ries, but accounts cannot have counts.
subaccounts.
Payroll accounts A separate liability account for You can continue using your old liability accounts. However,
each tax withheld and for every with the new system of tracking by using payroll items, you
other payroll liability. can put all payroll liabilities into a single liability account.
New and renamed balance sheet accounts

Balance sheet accounts (assets, liabilities, and equity) are accounts whose balances affect
your balance sheet report. QuickBooks and Quicken have similar kinds of balance sheet
accounts, but QuickBooks uses different names for some account types. When you convert
a Quicken file for use in QuickBooks, QuickBooks creates accounts most like your Quicken
accounts. For details, see “Differences in your new QuickBooks data” on page 319.
316 • For Quicken users

Should you continue using Quicken for some things?

Once you’re using QuickBooks for your business, you’ll probably want to continue using
Quicken for your personal finances.
Here are activities you can perform only with Quicken:
• Track investments
Quicken includes investment tracking and reporting. Quicken updates the market
values when you enter the latest share prices, and it reports on average annual total
return, capital gains, and investment income.
• Online services
With Quicken you can use online services for banking and bill payment. You can also
use online investment tools.
• Amortize mortgage loans
Each time you record a payment made on a loan, Quicken updates the dollar amount
of payments made and calculates the amount credited to principal and interest.
• Create reports for personal finances
Quicken has many preset reports designed for personal use.
Step 1: Prepare your Quicken for Mac file

You may need to make some changes to your Quicken Account list, your Memorized Trans-
action list, and Customer list to make the transition from Quicken to QuickBooks as smooth
as possible.
If you plan to continue using Quicken with this data (for example, if you had combined
business and personal finances in your Quicken file), make a copy of your Quicken file to
convert before you make any of the following changes.
Convert only the accounts you want to use in QuickBooks

Before you convert to QuickBooks, delete accounts in Quicken that you know you won’t
want in QuickBooks. In QuickBooks, you cannot delete accounts that contain transactions,
but in Quicken you can. So it’s easier to delete accounts you know you won’t want before
you convert.
You might want to delete some accounts from your Quicken file in the following situations:
• You have personal accounts as well as business accounts in your Quicken file.
• You have an investment account in your Quicken file.
• Your Quicken investment account would be converted to a QuickBooks Other Current
Asset account, because QuickBooks does not have a special feature to track invest-
ments. You can keep the QuickBooks Other Current Asset account, using it simply as a
way to include the value of your investments in your QuickBooks balance sheet.
Continue tracking your investments in Quicken and update the QuickBooks Other
Current Asset account balance periodically. Or you can delete the investment account
from the file you’re converting to QuickBooks and continue to track investments only
in Quicken.

Review your memorized and scheduled transactions

QuickBooks converts the following Quicken transactions:
• Memorized QuickFill transactions that are ‘locked’ in Quicken are converted into
memorized transactions with a frequency of ‘Never’ in QuickBooks. Unlocked memo-
rized QuickFill transactions are not converted.
• Scheduled transactions in Quicken are converted into memorized transactions in
QuickBooks.
Make customer names consistent

When you convert to QuickBooks, names in your Accounts Receivable register become
customers, and transactions become invoices and payments. If you used different names
for the same customer in Quicken, QuickBooks won’t link the customer’s invoices and
payments correctly. (For example, perhaps you have your customer Daniel Miller listed as
Dan Miller, D. Miller, and Daniel G. Miller.) To avoid this problem, edit your customer
names in Quicken so that each customer goes by only one name.
Step 2: Convert your Quicken file to QuickBooks

QuickBooks does not change your original Quicken files in any way. You can continue to
use those original files with Quicken. You may want to continue using Quicken for
personal finance and for investment accounts. There is no connection between your
Quicken data and your new QuickBooks company.
To convert your Quicken file into a QuickBooks company file:

1 Make sure that Quicken is not running.
2 Open QuickBooks Pro 2005.
3 Choose File > Import > From Quicken Files.
4 Click View Help to read important conversion information, and then click OK.
5 In the Select your Quicken data file window, specify the location of your Quicken data
file, and then click Open.
6 In the Create a new QuickBooks file window, enter a name and location where you want
to save the converted file, and then click Save.
7 Answer the question about whether you’ve been tracking accounts receivable in
Quicken.
If you click Yes:
• Select the Quicken account or accounts you use for A/R.
Important: Do NOT select a bank account or any account that has employee names
in it. You cannot change a customer to an employee or vendor after you have
converted. If you select the wrong accounts, you will have to convert again.
• Click OK.
QuickBooks uses the data from your Quicken A/R account to create a QuickBooks
A/R account.

Before you begin using QuickBooks

Fill in your QuickBooks company information
• Choose Company > Company Settings, and fill in your company information.
Set your QuickBooks preferences

• If you track inventory or write purchase orders, turn on the preference for inventory
and purchase orders.
Choose Company > Company Settings, and then choose Inventory/Purchase Orders/
Estimates from the Show pop-up menu. Select the “Inventory and purchase orders are
used” checkbox and click Apply.
• If you collect sales tax from customers, turn on the sales tax preference and then set up
at least one sales tax item.
Choose Company > Company Settings, and then choose Sales Tax from the Show pop-
up menu. Select the “Customers are charged sales tax” checkbox and click Apply.
• If you plan to use Aatrix Top Pay for payroll, see the Aatrix documentation for infor-
mation.
Differences in your new QuickBooks data

Following is a list of the differences in your new QuickBooks file:
• For each account in the Quicken file, QuickBooks creates a balance sheet account of the
type closest to the Quicken account type.
Quicken account type Converted to QuickBooks account type
Bank Bank
Credit Card Credit Card
Cash Other Current Asset
Asset Other Current Asset
Liability Other Current Liability
Investment Other Current Asset
• In a few cases, you may not want to continue using the account that QuickBooks
created automatically. To learn how to change or delete QuickBooks accounts, see
Chapter 5, Your chart of accounts, starting on page 63. For example, in Quicken, equity
type accounts are other liabilities. In QuickBooks, you can make them equity accounts.
• QuickBooks creates an Opening Bal Equity account. When you create new accounts
and enter their opening balances, QuickBooks automatically enters the amount in the
Opening Bal Equity account, so that your accounts balance. You can leave the Opening
Bal Equity amount, or you can distribute the amount to other equity accounts. To learn
about distributing the Opening Bal Equity amount, see Chapter 18, Assets, liabilities, and
equity, starting on page 213.
• QuickBooks does not convert memorized reports, because QuickBooks reports are too
different from Quicken reports.

• QuickBooks changes your Quicken categories and subcategories into income and
expense accounts with subaccounts.
Editing your Other Names list

QuickBooks places the name (or description) from every Quicken transaction (except in
your A/R account) in the Other Names list. This list contains not only names of customers,
vendors, and employees but also descriptions such as “Deposit,” “Transfer,” and
“Interest.”
If you have slightly different versions of the same name (for example, Mike Rhymes,
Michael Rhymes, and Michael P. Rhymes), QuickBooks puts each version of the name on
the Other Names list.
To merge similar names:

2 Double-click a name you want to merge into another name.
3 Edit the name so that it is exactly like the name you want to keep, and then click OK.
4 When QuickBooks asks to merge this name with the existing name, click Yes.
To move customers, vendors, and employees to their own list:

2 Double-click the name you want to move.
3 Click Change Type.
4 In the Select Name Type window, choose Vendor, Customer, or Employee.
This change cannot be undone after you record it.
A name can be on only one list. If you need to have the same person or company on two
lists, add a new name that is slightly different from the first name.
5 Click OK at this window and again at the Edit Name window.
Your converted Quicken A/R transactions

The transactions in your Quicken A/R account are converted in the following ways:
This item in your Quicken A/R account... ...is converted to this in QuickBooks
Each transaction that increases your A/R An invoice to a customer

balance
Each transaction that decreases your A/R A credit memo

balance and has only one split line
Each transaction that decreases your A/R A credit memo to a customer

balance and has more than one split line
Each payee A customer on your QuickBooks Pro Customer:Job list
Each category Both an item on your Item list and an income account
on your Chart of Accounts

QuickBooks marks invoices as paid by assigning each payment it converts to the oldest
invoices for that customer first.
The conversion saves you the time of typing in all your accounts receivable transactions,
but you’ll probably want to make some changes to the converted data.
For example, if the category you used in most A/R transactions was “Sales income,” you’ll
want to change the name of the converted invoice item from “Sales income” to the product
or service you actually sell, such as “Consulting hours.” The converted income account,
however, may be just fine as “Sales income.”
To learn about using and viewing QuickBooks accounts receivable, see Chapter 11,
Accounts receivable management, starting on page 165.
Changing to QuickBooks accounts payable

The Quicken manual explains how to use Quicken for cash-basis accounts payable and for
accrual-basis accounts payable. For a cash-basis system, the manual recommends using a
Bank account and simply postdating checks. For an accrual-basis system, the manual
recommends using an Other Liability account. The transition to QuickBooks accounts
payable is the same for either system.
If you used postdated checks to track your bills, treat checks you’ve already entered in your
usual manner.
If you had a Quicken Other Liability account for accounts payable, it is now a QuickBooks
Other Current Liability account. Continue to use it only for bills you already entered that
are still outstanding. Track your payments of these bills as you did in Quicken.
QuickBooks automatically adds a new account named Accounts Payable to your Chart of
Accounts when you enter your first bill. No matter which method you were using in
Quicken, from now on, use the Enter Bills window to enter new bills into the new Quick-
Books Accounts Payable account.
Change your payees to QuickBooks vendors

Quicken payees are now on the Other Names list in QuickBooks. You must move vendor
names from the Other Names list to the Vendor list before you can use them in QuickBooks
accounts payable. See “Editing your Other Names list” on page 320.
If the Quicken payee has a balance, continue as you did in Quicken until the balance of
your old Quicken A/P account equals zero (you’ve paid off all your bills for that vendor).
Enter any new bills into QuickBooks accounts payable.
If QuickBooks converted memorized transactions for Quicken accounts payable, delete
them because they will not work in QuickBooks accounts payable.
For complete information about using QuickBooks for accounts payable, see Chapter 13,
Accounts payable management, starting on page 183.


D Contacting Intuit
Saving a phone call 323

D
Error messages 323

QuickBooks contact information 324
Saving a phone call

If you have a simple question about how QuickBooks works, try searching the documen-
tation first:
• Check the index of this manual for the topic you need.
• Use onscreen QuickBooks Help.
To get Help information about the window you’re working in, press x-?. Once you
have displayed the Help window, you can look up other topics by clicking either a
keyword or asking a question.
Error messages
Occasionally, you may encounter a QuickBooks message that includes an error number
and instructions to call Technical Support. You cannot solve such a problem without help
from Intuit. If you see an error message, write down the error number and see “Using
QuickBooks” on page 324 for the phone number of our Technical Support group.
Contacting Intuit • 323

QuickBooks contact information
For information about... Contact...
Registering Choose QuickBooks > Register QuickBooks

QuickBooks Or register by phone:
800-924-3894 (Pro Edition) or
877-683-3270 (New User Edition)
Using QuickBooks QuickBooks Telephone Support

888-320-7276
• To speak to a technical support representative
• To purchase an annual support plan
QuickBooks.com Web site

www.quickbooks.com
• To view answers to more than 1000 QuickBooks questions
• To get the most up-to-date QuickBooks information, tips, and advice
• To find a QuickBooks Advisor or training seminar in your area
Ordering QuickBooks supplies: IntuitMarket Phone Sales and Customer Service

• Checks, invoices, 800-548-0289
statements, envelopes, etc. IntuitMarket Online Support
800-955-8890
www.intuitmarket.com
Ordering QuickBooks products: 888-859-4093

• Software www.quickbooks.com
• Additional user’s guides
Ordering other Intuit products 888-2-INTUIT (888-246-8848)

www.shop.intuit.com
Aatrix Top Pay Aatrix Sales

payroll software 800-426-0854
Aatrix Technical Support

701-746-6017
www.aatrixtoppay.com
• To register your copy of Aatrix Top Pay
• To subscribe to Aatrix Top Pay tax table service
• For help using Aatrix Top Pay payroll software
324 • Contacting Intuit

Index
Symbols information, 70
.Mac, backing up to, 290 opening balances, 69
entering opening balances, 68–69
equity, 224–232
Numbers creating, 230
1099 described, 65
categories, associating accounts with, 284 equity, opening balance, 26
preferences, 284 estimates, when created, 66
specifying vendors for, 47 expense
threshold amounts, changing, 284 associating tax lines with, 67
turning on, 284 defined, 65
90% of job, invoicing for, 113 overview, 303
viewing balances, 66
A finance charges for, 279
A/P, see accounts payable fixed asset, 65
A/R, see accounts receivable income
Aatrix, 14, 28, 36, 48, 324 associating tax lines with, 67
account names, changing, 70 choosing for items, 75
account numbers defined, 65
turning on, 273 overview, 301
using, 70 viewing balances, 66
vendor, on bill payments, 46, 172 inventory
accounting, cash vs. accrual, 304 adjustments, 149
accounts asset, viewing register, 148
accounts receivable, when created, 66 items, assigning to, 80
adding to chart of accounts, 66–68 needed for, 143
asset, 213–221 Inventory Asset, when created, 67
asset, opening balance, 25 joint checking, 68
associating with 1099 categories, 284 liability
automatically created by QuickBooks, 66 described, 221–224
balance sheet opening balance, 25
associating tax lines with, 67 long term liability, 65
defined, 64 merging, 60, 71
viewing balances, 65 non-inventory part items, assigning to, 78
balance sheet, overview, 301 numbers, using, 70
bank, described, 64 numerical preference, 273
bank, opening balance, 25 Opening Bal Equity
chart of, see chart of accounts described, 224
colors, 71 when created, 67
combining, 71 opening balances
correcting transactions, 209 described, 24–27
cost of goods sold, 66, 303 editing, 69
tracking inventory in, 144 other asset, described, 65
Cost of Goods Sold, when created, 67 other charge items, assigning to, 79
credit card other current asset, 65
described, 65 other current liability account, 65
opening balance, 25 other expense, uses for, 303
deleting from chart of accounts, 70 other income, uses for, 301
depreciation, 216–217 purchase orders
depreciation expense, 217 described, 200
discount expense, 84 when created, 66
editing Quicken, equivalent of, 315
rearranging in chart of accounts, 71
Index • 325
reconciling, 233–239 customized fields, 56

requiring in transactions, 274 for customers, 42
retained earnings for discount items, 84
described, 226 for employees, 48
when created, 67 for group items, 82
sales tax payable for inventory part items, 81
tracking sales tax, 154 for non-inventory part items, 78
when created, 66 for other charge items, 80
service items, assigning to, 77 for payment items, 85
subaccounts for service items, 77
creating, 67 for vendors, 47
uses for, 68 employees, 48
using for fixed assets, 68 jobs, 43
tracking lines in transaction detail area, 96
income from inventory part items, 81 loans, 222–223
inventory in, 143 other names, 49
Uncategorized Expense payment methods, 50
when created, 67 payment terms, 50
Uncategorized Income, when created, 67 shipping methods, 51
Undeposited Funds, when created, 66 to do notes, 54
accounts payable, 183–186 vendor types, 48
historical transactions, enter, 35–36 vendors, 45
opening balance, 25 Adjust Quantity/Value on Hand command, 149
paying bills, 175–177 adjusting inventory
register, 183 quantity on hand, 149
editing transactions in, 184 value, 149
entering bills in, 175 viewing in inventory register, 148
tracking Advanced Options window for customizing reports,
benefits of, 171 254
when created, 66 aging
see also vendors defined, 304
accounts receivable, 165–169 graph, A/R, (illustration), 169
account described, 64 alert, under-billing, 95
converting from Quicken, 320–321 American Express, depositing receipts, 137
customer registers, 166 amortization of loans, available in Quicken only, 317
graph (illustration), 169 amounts
historical transactions, enter, 34–35 calculating, 16, 207
opening balance, 25 how defined on different reports, 264
QuickReport of customer, 168 Apple
receiving payments, 129 iCal, adding QuickBooks transactions to, 99
register, 165 iDisk, backing up to, 290
editing transactions in, 166 artwork, printing on sales form, 105
when created, 66 assessing finance charges, 116
see also customers assets, 213–221
accrual basis buying, 220
adjustment during setup, 28 current, 214
overview, 305 fixed, 214
reports, preference for, 247 using subaccounts for, 68
activities, single inventory asset account, 81
combining on invoice, 113 loans for, recording, 215
entering time for, 244–245 opening balance for accounts, 25
adding other current, 214
accounts, 66–68 overview, 300
classes, 40 selling, 217
customer messages, 51 audit trail
customer types, 45 deleting changed transactions, 295
customers, 41 preference (turning on feature), 274
326 • Index
automatic file backup, 272 bills

automatic recall applying credit, 179
checks, 187 charges, 179
transactions preference, 271 creating after item receipt, 147–148
automatically created accounts, 66 deleting, 178
average cost, inventory discount for early payment, 176
calculating, 144 due date, preference for, 274
not affected by sales, 144 editing, 166, 177
viewing, 148 entering, 172–175
finding, 210–211
B for inventory items, 173
grouping for payment, 52
backing up data
memo, transferred to check, 172
compared to other data maintenance, 291
partial payments, 176
preferences, 272
paying, 175–177
procedure, 289
with credit card, 176
bad debts, recording, 131
questions and answers about, 179
balance adjustment, while reconciling, 237
receiving after inventory items, 147–148
balance sheet accounts
receiving with inventory items, 148
associating tax lines with, 67
reminder to pay, 178
defined, 64
transaction history of, 184
overview, 301
borrowing money, 221
viewing balances, 65
bounced checks, 141
balance sheets
business logo, printing on sales form, 105
equity and, 224
buttonbar, for reports, using, 250
net income line on, 225
buying items, recommendations, 75
overview, 299
retained earnings on, 226
balances C
current for customers, 41 Calculate Prices button, 92
current for vendors, 45 calculating
opening, 24–27 average cost of an inventory item, 144
viewing for balance sheet accounts, 65 transaction amounts, 16, 207
viewing for income and expense accounts, 66 calculator, 16, 207
balancing calendar year, on reports, 255
accounts, 233–239 cancelled orders, 139
for the first time, 234 capital investments
see also reconciling corporations, in, 229
bank accounts partnerships, in, 229
described, 64 recording owner’s, 232
historical transactions, enter, 37 sole proprietorships, in, 228
opening balances, 25 cash back, on deposit, 138
bar graphs, 266 cash basis
bill credit transaction type, 178 and accounts payable, 171
bill payments overview, 304
deleting, 178 report preferences for, 247
editing, 166, 177 cash sales, 93, 128
history, 177 customizing form for, 101–109
partial, 176 daily summary, 115
transaction type, 176 overages and shortages, 128
viewing, 177 pending, 100–101
Bill To field on invoice, 96 register, 115
billing statements, 117–120 Sold To field, 96
billing status transaction history of, 168
entering for single activity, 245 cash vs. accrual, 280
entering on timesheet, 244 categories, equivalent of, 315
making time billable again, 246 Change Prices button, 92
Index • 327
changing cleared transactions, 236

account colors, 71 closed purchase orders, 203
prices, 92 closing
sales tax rates, 158 books or period, 283
charges purchase orders, 203
depositing American Express receipts, 137 COGs, 66
setting minimum finance, 279 Collapse button, 250
statement, entering, 117 colon, (:) between customer and job, 40
chart of accounts, 63 colors, changing account, 71
account colors, 71 columns
account colors, changing, 71 adjusting report, 251
combining accounts, 71 customizing on sales forms, 104
deleting accounts from, 70 order on sales forms, specifying, 104
printing, 71 print width on sales forms, specifying, 104
purchase orders account, 200 combining
rearranging, 71 accounts, 71
setting up, 23 list items, 60
using account numbers, 70 names after Quicken or QuickBooks conversion,
checking accounts, joint, 68 320
checks command keys, 348
accounts printed on voucher, preference, 277 commission, employees on, 48
assigning to accounts, customers, classes, 188 companies
automatically filled in by QuickBooks, 187 backing up, 289
bounced, 141 changing address, 288
date printed, preference, 277 changing fiscal year, 288
detail area, 188 changing income tax year, 288
duplicate numbers, warning, 278 changing name, 288
finding, 210–211 creating, procedure, 21
for items data files, 287–296
sales tax on, 190 locating, 288
shipping charges on, 190 preferences, 31
handwritten, 188 preferences for, 269
insertion point, preference, 278 setting up, 15, 19–31
memorizing, 190 comparison reports, creating, 254
ordering from Intuit, 324 condensing data, 293
payments for bills, 175–177 construction retainage, 113
preferences, 277 contextual menus, 16
printing, 191 contra-income account, 84
marking to be printed, 191 converting
printing bill numbers on, 172 from a spreadsheet or text file to QuickBooks, 292
refunds for returns, 139 QuickBooks file from Mac to Windows, 313
returned, 141 QuickBooks file from Windows to Mac, 307
withdrawals, recording on check, 187 Quicken file to QuickBooks, 315
writing by hand, 188 copying transactions to other accounts, 209
choosing income accounts for items, 75 corporations, 229
Class list, 40 cost of goods sold account
classes described, 303
adding, 40 in chart of accounts, 66
assigning to line items tracking inventory in, 144
on a PO, 201 when created, 67
on a sales form, 95 costs
assigning to sales, 95 calculating the average of an inventory item, 144
tracking, turning on in preferences, 274 invoicing for, 110
uses for, 40 setup tips, 86–89
using subclasses with, 40 passing through, 113
viewing from registers, 40 creating
cleared column in registers, 206 discount items, 83–84
328 • Index
estimates, 121–123 Customer Type list, 44

graphs, 266 customer types, adding, 45
group items, 81–82 Customer:Job list, 40
inventory part items, 80–81 customers
items, 76–85 adding, 41
non-inventory part items, 77–78 current balance, 41
parent items, 90 Customer:Job list, 40
payment items, 84–85 customized fields, adding, 42, 57
sales tax items, 156–157 discounts for early payment, 130
subaccounts, 67 editing, 43
subitems, 90 finance charges, 116
subtotal items, 83 keeping notes about, 43
credit merging on Customer:Job list, 60
applying to bills, 179 name in list vs. printed name, 96
applying to invoices, 140 non-taxable, 161
customer, in Receive Payments window, 132 not adding to list for cash sales, 95
printing a receipt, 133 out of state, selling to, 159
vendor, entering, 178, 196 payment terms, 49
credit card charges register, 166
for items resale number, 159
sales tax on, 196 setting up, 22–23
shipping charges on, 196 tax rates, assigning to, 158–159
credit cards viewing QuickReports, 168
account described, 65 Customize button, 250
deleting transaction, 196 customized fields
editing transactions, 196 adding, 56
list of charges, 193 for customers, 42
opening balance for accounts, 25 for discount items, 84
paying bills with, 176 for employees, 48
reconciling your statement, 197, 237 for group items, 82
register, 193 for inventory part items, 81
transaction type, 196 for non-inventory part items, 78
credit memos, 93–128 for other charge items, 80
customizing, 101–109 for payment items, 85
for returned items, 139 for service items, 77
invoices, applying to, 132 for vendors, 47
refunding amount, 140 on statements, not supported, 119
transaction history of, 168 using on sales forms, 104
current assets, 214 customizing
current balances columns, on sales forms, 104
customers, 41 estimates, 120–121
vendor, 45 purchase orders, 200
current liabilities, 221 reports, 252
custom fields, see customized fields sales forms, 101–109
custom format for sales forms, 103
Customer Message list, 51 D
customer messages, adding, 51
daily cash sales, 115
customer payments
data
applying, preference for, 276
backing up, 289
bounced checks, 141
condensing, 293
correcting application to invoices, 135
hiding, 267
depositing, 135
data entry
one check for 2 jobs, 130
fast, 55
recording, 129
password, 282
customer registers
preferences, 270
browsing, 166
data files
entering statement charges, 117
Index • 329
changing, 288 using payment item in credit memo, 133

opening, 288 drafts, handling in QuickBooks, 100
data labels, in graphs, 267 due dates, preference for bills, 274
date driven payment terms, 50 duplicate
date ranges, defined for reports, 252 bill numbers, warning about, 274
date, start, 19 PO numbers, warning about, 275
dates, transferring to sales forms, 113 duplicate names
decimal points, entering, 270 Quicken conversion, after, 320
default markup, 276
default sales tax rate, 280 E
deleted transactions
early payment discounts
including in audit trail report, 289
for customers, 130
deleting
from vendors, 176
accounts, 70
Edit button on registers, 208
bill payments, 178
editing
credit card transaction, 196
account information, 70
estimates, 126
account opening balances, 69
item receipts, 150
bill payments, 166, 177
items, 91
customers, 43
list items, 54
deposited customer payments, 138
memorized reports, 259
items, 91
sales, 99
jobs, 43
transactions, 209
sales forms, 98
lines in detail area, 97
transactions, 208
preference for warning, 271
A/P register, 184
vendors, 48
A/R register, 166
deposit summary
preference for warning, 271
printing, 137
electronic bill payment, available in Quicken only, 317
using as deposit slip, 137
Employee list, 48
deposited payments, editing or deleting, 138
sorting by first or last name, 271
deposits
employees
American Express charges, 137
adding, 48
cash back, 138
customized fields, adding, 48, 57
customer payments, 135
merging on Employee list, 60
deleting (to edit payments), 138
setting up, 23
finding, 210–211
ending balance
printing summary, 137
bank statements, reconciling, 235
end-of-year income transfer to retained earnings, 230
depreciation
Enter Bill for Received Items command, 147
adding accounts, 216–217
Enter Credit Card Charges window, 193
description, 214
see also credit card charges
detail area in checks, 188
entering
discount expense account, 84
bills, 172–175
Discount Info button, 131
data, 55
discount items
opening balances for accounts in use, 68–69
creating, 83–84
orders in QuickBooks, 100
customized fields for, 84
envelopes
uses for, 74
ordering from Intuit, 324
discounts
equity, 224–232
customer, for early payment, 130
balance sheet and, 224
corporations, in, 229
vendor, for early bill payment, 176
Opening Bal Equity, 26
disk space required, 13
opening balance for accounts, 26
displaying lists using keystrokes, 56
overview, 300
dividends, stockholders, 230
partnerships, in, 228
down payments, 132
redistributing during setup, 30
printing receipt, 133
330 • Index
sole proprietorships, in, 228 for payment items, 85

stockholders, 229 for service items, 77
equity accounts for vendors, 47
creating, 230 customizing for sales forms, 103
described, 65 FIFO, not used by QuickBooks, 144
error messages files
described, 323 backing up, 289
estimates changing, 288
creating, 121–123 condensing, 293
customizing, 120–121 maintaining, 287–296
deleting, 126 opening, 288
editing, 125 Quicken, equivalent of, 315
finding, 125 filtering reports, 255
invoices, turning into, 127 Filters button, 250
list of, 125 finance charges
markup on, 123 account to record in, 279
memorizing and recalling, 126 assessing, 116
preferences for, 275 for bills, 179
printing, 124 printing invoices for, 116
sales tax on, 122 setting minimum, 279
templates, creating, 126 setting up rate, 278
turning on or off, 275 Find command, 210
estimates account, when created, 66 Find results, printing, 211
Excel, Microsoft, 257 finding
existing credits, 132 estimates, 125
Expand button, 250 transactions, 210–211
expense accounts fiscal year
associating tax lines with, 67 adjust for mid-year QuickBooks start date, 29
defined, 65 changing, 288
opening balances, 29 gather information for start date, 20
overview, 303 on reports, 255
Uncategorized, 29 fiscal year-end, automatic adjustment to income, 226
viewing balances, 66 fixed assets
see also accounts account, 65
expenses buying, 220
account for discounts, 84 description, 214
depreciation account, 217 losses of, 220
reimbursable, specifying account for, 67 selling, 217
exporting thefts of, 220
data, 291 using subaccounts for, 68
reports to Microsoft Excel, 257 flat list view, 59
FOB, setting for all invoices, 276
F fonts, changing, 251
Format button, 250
features
formats
new in this version, 15
purchase orders, changing, 200
turning on, 269
sales forms, changing, 101–109
Federal ID, changing, 288
forms
fields
QuickReport, 260
customized
tax, changing, 288
for customers, 42
for discount items, 84
for employees, 48 G
for group items, 82 glossary of accounting terms, 305
for inventory part items, 81 graphic, printing on sales form, 105
for non-inventory part items, 78 graphs
for other charge items, 80 accounts receivable (illustration), 169
Index • 331
accrual vs. cash, preference, 247 income tax

creating, 266 changing year, 288
data labels, 267 form, 288
hiding data in, 267 inserting lines in transaction detail area, 96
legends, 266 installation, 14
preferences for, 272 installments
QuickZoom, 267 estimates, tip for jobs invoiced by, 121
titles, 266 invoicing in, from single estimate, 127
group invoicing, 52 interest
group items charging for late payments, 116
creating, 81–82 entering in bank account, 235
customized fields for, 82 paying on a loan, 223
on purchase orders, 76 interview used for setup, 15
uses for, 74 Intuit
using to hide details, 81 Interchange Format, 292
grouping data in reports, 253 phone numbers, 324
technical support, saving a call, 323
H Web sites, 324
inventory, 143–151
hardware requirements, 13
adjusting
Header/Footer button, 250
quantity on hand, 149
help
value, 149
for sales problems, 128
adjustments
online, using, 323
viewing in inventory register, 148
QuickBooks, 15
asset account, 81
Hide Header button, 250
average cost
hiding data, in graphs, 267
calculating, 144
hiding details, using group items, 81
not affected by sales, 144
hiding inactive list items, 60
viewing, 148
hierarchical list view, 59
bills for items, 173
historical transactions
buying over-the-counter, 146
accounts payable, 184
deleting purchase orders, 202
accounts receivable, 167
editing purchase orders, 202
entering, 33–38
LIFO, FIFO, not used by QuickBooks, 144
hours worked
receiving, 146
entering for single activity, 245
against a purchase order, 202
entering on timesheet, 243
bill after items, 147–148
invoicing for, 110
bill with items, 148
hours, displaying portions of, 271
register, 148
returning to a vendor, 150
I setting up, 24, 145
iCal, adding QuickBooks transactions to, 99 tracking accounts used, 143
identification number, federal, 288 viewing on order, 145
iDisk, backing up to, 290 viewing purchase orders, 202
IIF files, 292 Inventory Asset account, when created, 67
image, printing on sales form, 105 inventory part items
inactive list items, 60 creating, 80–81
income accounts customized fields for, 81
associating tax lines with, 67 uses for, 74
choosing for items, 75 see also items, inventory part
defined, 65 inventory price list report description, 151
inventory part items, assigning to, 81 investment, recording owner’s, 232
opening balances, 29 investments, tracking, available in Quicken only, 317
overview, 301 invoices, 93, 128
Uncategorized, 28 Bill To field, 96
viewing balances, 66 credit memo, applying, 132
see also accounts customer messages on, 51
332 • Index
customizing, 101–109 markup on estimates, 123

estimates, creating from, 127 merging on Item list, 60
finding, 210–211 non-inventory part
for finance charges, printing, 116 assigning to an account, 78
formats, 101–109 creating, 77–78
grouping, 52 customized fields for, 78
memorizing, 101 uses for, 74
numbers, warning for duplicate, 277 non-taxable, 161
ordering from Intuit, 324 other charge
payment items on, 84 assigning to an account, 79
payments, recording, 129 creating, 79–80
pending, 100–101 customized fields for, 80
preferences, 275–277 uses for, 74
time and costs, charging for, 110 parent, creating, 90
tips for invoicing for time and costs, 113 payment
transaction history of, 168 creating, 84–85
Item list, 39 customized fields for, 85
item receipts uses for, 74
creating, 146 prices, changing, 92
deleting, 150 receiving against a purchase order, 202
items reimbursable, 76
adding customized fields, 57 reports, 90
buying, recommendations, 75 sales tax
creating, 76–85 described, 85
customized fields groups, creating, 157
adding, 56–57 single tax items, creating, 156–157
deleting, 91 uses for, 75
discount sales tax group, 75
creating, 83–84 selling, recommendations, 75
customized fields for, 84 service
uses for, 74 assigning to an account, 77
editing, 91 creating, 76–77
estimates, entering on, 122 customized fields for, 77
group uses for, 74
creating, 81–82 setting up, 24
customized fields for, 82 subitems, creating, 90
on purchase orders, 76 subtotal
uses for, 74 creating, 83
hiding, 60 uses for, 74
inactive, 60 types
inventory defined, 74
bills for, 173 on purchase forms, 76
ordering, 201 restrictions on changing, 91
QuickReports about, 151
receiving, 145, 146 J
returning to a vendor, 150
Job Type list, 45
viewing on order, 145
jobs
inventory part
adding, 43
accounts for, 81
Customer:Job list, 40
creating, 80–81
editing, 43
items ordered for, 88
uses for, 74
Job Type list, 45
jobs, ordered for, 88
keeping notes about, 43
line
materials used in, 88
defined, 74
merging on Customer:Job list, 60
sales tax, calculating with, 160
preferences, 281
marking as taxable, 159–160
Index • 333
receiving one check for two jobs, 130 merging items, 60

sales, tracking by, 95 Other Name, 49
setting up, 22–23 Payment Method, 50
status printing, 62
editing names for, 281 Purchase Order, 51, 202
viewing for all jobs, 41 QuickReport, 260
joint checking accounts, 68 Reminders, 54
renaming items, 54
K reorganizing, 58
setting up, 21–24
keyboard shortcuts, 348
Ship Via, 50
keystrokes to display lists, 56
sorting alphabetically, 60
Terms, 49
L To Do, 54
late payments, finance charges for, 116 Vendor, 23, 45
late-payment charges for bills, 179 Vendor Type, 48
legends, graphs, 266 loans
liabilities, 221–224 adding, 222–223
current, 221 amortization, available in Quicken only, 317
long-term, 221 applying for, 221
opening balance for accounts, 25 buying assets with, 215
overview, 300 making to purchaser of assets, 219
Sales Tax Payable register, 162 payments, 223
sales tax report, 162 logo, printing on sales form, 105
LIFO, not used by QuickBooks, 144 long term liability account, described, 65
limit to items, 55 long-term liabilities, 221
limits, 55 losses of fixed assets, 220
line items
assigning classes to, 95, 201 M
defined, 74
Macintosh
tax, using subtotals with, 160
converting Quicken to QuickBooks, 315–320
see also items
disk space required for QuickBooks, 13
lines
hardware and software requirements, 13
deleting in transaction detail area, 97
OS X system requirements, 13
inserting in transaction detail area, 96
using on a network, 13
lines of credit, 221
mail merge, selecting names for, 292
linked transactions, viewing, 167
maintaining data, 287–296
list items
Make Deposits window
combining, 60
cash back, 138
deleting, 54
customer payments in, 135
merging, 60
markup, on estimates, 123
renaming, 54
markup, setting default for sales forms, 276
lists
materials used in jobs, 88
adding customized fields, 56
maximum number of items, 55
Chart of accounts, 23
memo, non-printing on sales forms, 98
Class, 40
Memorize button, 250
Customer Message, 51
memorized reports
Customer Type, 44
deleting, 259
Customer:Job, 22–23, 40
modifying and re-memorizing, 259
deleting items, 54
name, changing, 259
displaying using keystrokes, 56
recalling, 258
Employee, 23, 48
Memorized Transaction list, 51–53
sorting by first or last name, 271
memorized transactions
estimates, 125
grouping, 52
Item, 24, 39
modifying and re-memorizing, 52
Job Type, 45
using, 52
Memorized Transaction, 51–53
334 • Index
memorizing not sufficient funds checks from customers, 141

checks, 190 notes
estimates, 126 about customer or job, 43
invoices, 101 about vendors, 47
reports, 62, 109, 257 Notes button, 43
statements, 101 NSF checks from customers, 141
transactions, 51 number display, changing in reports, 251
memos, transferred to check, 172 number of items, maximum, 55
menus numbering accounts, 70
contextual, 16 numerical accounts preference, 273
merging
accounts, 71 O
list items, 60
Office, Microsoft, 257
mail, 292
on order, viewing inventory items, 145
merging names after Quicken or QuickBooks conver-
one-time customers, cash sales, 95
sion, 320
online registration of Aatrix Top Pay, 324
messages, error, 323
onscreen help, 15
Microsoft Excel, 257
open purchase orders report description, 151
midyear setup, 29–30
opening
minimum finance charge, setting, 279
account register, 205
money, transferring from Opening Bal Equity, 231
files, 288
mortgage, amortization in Quicken only, 317
Opening Bal Equity account, 26, 224
most common sales tax, applying to sales, 160
adjusting balance during setup, 30
mouse, using to organize lists, 58
transferring money from, 231
moving
when created, 67
accounts, in chart of accounts, 71
opening balance in reconcile window, 235
transactions to other accounts, 209
opening balances, 24–27
date for, 19
N editing, 26–27, 69
name type, changing, 49 entering for accounts in use, 68–69
name, changing, 288 entering for unused accounts, 26
names order entry, handling in QuickBooks, 100
account, changing, 70 order of columns on sales forms, 104
customers and jobs, 23 ordering
employees, 23 checks, 324
Other Name list, 49 envelopes, 324
Quicken conversion, after, 320 invoices, 324
selecting for mail merge, 292 statements, 324
net income user’s guides, 324
balance sheet, line on, 225 other asset accounts, described, 65
fiscal year-end adjustment, 226 other charge items
profit and loss statement, on, 225 assigning to an account, 79
transfer to retained earnings, 230 creating, 79–80
network, using QuickBooks on, 13 customized fields for, 80
New Company Setup Assistant, 15, 21 uses for, 74
new company, procedure for creating, 21 using for taxable shipping and handling, 162
new features in this QuickBooks version, 15 other current asset account, 65, 214
non-inventory part items other current liabilities, 65, 221
assigning to an account, 78 other expense accounts, uses for, 303
creating, 77–78 other income accounts, uses for, 301
customized fields for, 78 other names
uses for, 74 adding, 49
non-taxable changing to a different type, 49
customers, 161 merging on Other Name list, 60
items, 161 Other Names list, 49
sales, 161 Quicken conversion, after, 320
Index • 335
Other on reports, explanation, 262 bounced checks, 141

Other, definition of in graphs, 266 correcting application to invoices, 135
out of state sales, tax item for, 159 customer, 129
overdue invoices reminder, 271 depositing, customer, 135
owner password, 282 down payments, 132
owner's equity editing or deleting after depositing, 138
partnerships, in, 228 finding, 210–211
sole proprietorships, in, 228 history, for bills, 177
owner’s capital investment, recording, 232 in accounts payable, transaction history of, 184
owner’s draw, recording, 232 loan, 223
owners partial
services performed by, 88 for bills, 176
tracking costs of services performed by, 114 on invoice, 84
prepayments, 132
P receiving, 129
receiving one check for two jobs, 130
packing slips, 128
to vendors, 175–177
paid-in capital, 229
parent items, creating, 90
viewing, 177
partial payment on invoice, 84
PDF
partners
print background image, 107
services performed by, 88
save or email list as, 62
tracking costs of services performed by, 114
save or email report as, 257
partnerships, 228
save or email sales form as, 109
passing expenses through from a vendor, 113
pending sales, 100–101
passwords, 282–283
percentages, calculating, 16, 207
.Mac backup, 290
petty cash, 187
changing, 282
phases
closing books or period, 283
estimates, tip for jobs invoiced by, 121
data entry, 282
invoicing in, from single estimate, 127
owner, 282
phone numbers
transaction, 283
Intuit, 324
past transactions, entering, 33–38
ordering checks and other supplies, 324
Pay Sales Tax window, 163
ordering software and other products, 324
payables, see accounts payable
payroll tax table service, 324
paying
registering QuickBooks, 324
bills, 175–177
technical support, saving a call, 323
applying credit, 179
phone registration of QuickBooks, 324
reminder, 178
physical inventory worksheet report description, 151
sales tax, 163
pop-up menus, 55
payment items
portions of hours, displaying, 271
creating, 84–85
postdated transactions, 166
preferences, 269
uses for, 74
1099, 284
using for down payments, 133
audit trail, 274
Payment Method list, 50
checks, 277
payment methods, adding, 50
company, 269
payment terms
data entry, 270
adding, 50
estimating, 275
date driven, 50
finance charge rate, 278
overview, 304
graphs, 272
standard, 49
job, 281
payments
passwords, 282–283
applying, preference for, 276
reminders, 271
bill
sales tax, 280
deleting, 178
sales/invoicing, 275–277
editing, 166, 177
time tracking, 242, 281
336 • Index
toolbar, 285 QuickBooks

transaction, 273–274 create new company, 21
prepayments, 132 disk space required, 13
preset chart of accounts help, 15
modifying, 23 industry-specific documentation, 15
prices, changing, 92 installing, 14
print width of columns network, 13
on sales forms, 104 setting up a company, 19–31
printing gather information needed for, 20
“T's” for taxable items on sales, 280 upgrading from 4.0M12a, 14
bill numbers user’s guides, ordering from Intuit, 324
on voucher checks, 172 QuickBooks for Windows, working with, 307
billing statements, 119 QuickBooks.com Web site, 324
chart of accounts, 24, 71 Quicken, 315–320
checks, 191 accounts payable, converting, 321
deposit summary, 137 accounts receivable, converting, 320–321
estimates, 124 converted data, differences, 319–320
Find results, 211 setting preferences, 319
invoices for finance charges, 116 QuickFill, 55
lists, 62 QuickInsight graph (illustration), 169
purchase orders, 204 QuickMath calculator, 16, 207
receipt for down payment, 133 QuickReports
reminder statements, 119 creating, 261
sales forms, 109 customer, 168
setting checks to be printed, 191 estimates, 125
problems examples, 261
solving sales, 128 form, 260
troubleshooting, 323 item, 151
producing reports, 249 list, 260
product format for sales forms, 102 purchase orders, 202
professional format for sales forms, 102 register, 260
profit and loss statements, 225, 301 Sales Tax Payable register, 163
profits, distributing to partners, 230 vendor, 185
projects, setting up, 22–23 QuickZoom
Purchase Order list, 51 graphs, 267
purchase orders Pay Bills window, 176
account created by QuickBooks, 200 Receive Payments window, 130
closing, 203 reports, 257
customizing, 200
finding, 210–211 R
formats, 200
rearranging chart of accounts, 71
list of, 202
Recalc button, 208
ordering inventory, 201
recalculating split transactions, 208
printing, 204
recalling
QuickReport, 202
memorized estimates, 126
received in full, 203
transactions automatically, 271
receiving items against, 202
receipts for down payments or overpayments, 133
title, changing, 201
receivables, see accounts receivable
viewing, 202
Receive Items and Enter Bill command, 148
when to use, 199
Receive Items command, 146
Purchase Orders account, when created, 66
Receive Payments window, 129
correcting errors, 135
Q refund checks in, 140
qbb and qbw files, converting to QuickBooks for Mac, received in full purchase orders, 203
308 receiving
quantity on hand, adjusting inventory, 149 inventory items, 145
Index • 337
items against purchase order, 202 reimbursable expenses

payments described, 129 assigning check amounts to customers, 188
receiving payments charging for, 110
one check for two jobs, 130 preference for, 276
reconciliation report, 239 specifying account for, 67
reconciling reimbursable items, 76
accounts, 233–239 reminder statements, 94, 117–120
adding earlier transactions, 233 reminders
bank errors, 239 paying bills, 178
cancelling in the middle, 234 setting up, 271
clearing transactions, 236 Reminders list, 54
correcting differences with statement, 237 renaming list items, 54
credit card statement, 237 reorganizing lists, 58
ending balance, 235 Rep field
interest earned, 235 in New Customer window, 42
opening balance, 235 in New Employee window, 48
printing reconciliation report, 239 reporting
QuickBooks balance adjustment, 237 cash basis
skipping months, 233 and accounts payable, 171
transaction report, using to research balance differ- reports
ence, 238 accounts receivable examples, 169
recording accrual vs. cash, preference, 247
owner’s capital investment, 232 amounts, why they may differ, 264
owner’s draw, 232 audit trail, including deleted transactions in, 289
refunds buttonbar, 250
credit memos, creating from, 140 calendar year, 255
for returned items, 139 columns
in Receive Payments window, 140 adding new, 251
registering Aatrix Top Pay online or by phone, 324 adjusting, 251
registering QuickBooks, 17, 324 changing widths, 251
registers eliminating, 251
accounts payable, 183 comparisons in, 254
editing transactions in, 184 customizing, 252
entering bills in, 175 advanced options, 254
accounts receivable, 165 date ranges, defined, 252
editing transactions in, 166 deposit summary, 137
cash sales, 115 descriptions of
copying, pasting transactions in, 209 inventory price list, 151
credit card, 193 open purchase orders, 151
customer, 166 physical inventory worksheet, 151
entering statement charges, 117 stock status by item, 151
defined, 64 stock status by vendor, 151
entering transactions in, 206 valuation detail, 151
opening, 205 valuation summary, 151
opening balance transaction filtering, 255
editing, 69 fiscal year, 255
entering, 68–69 fonts, changing, 251
QuickReport, 260 grouping data, 253
Sales Tax Payable, 162 item, 90
QuickReport, 163 memorizing, 62, 109, 257
scrolling in, 206 number display, changing, 251
searching, 210 preset reports for items, 90
transactions producing, 249
deleting, 209 QuickZoom, 257
editing, 208 recalling, memorized, 258
voiding, 209 reconciliation, 239
undeposited funds, cash sales in, 115 restricting to certain transactions, 255
338 • Index
row headings, changing, 253 sales tax, 153–163

sales tax liability, 162 “T's,” printing on sales forms, 280
selecting items to include, 255 amount owed, 162–163
requirements, hardware and software, 13 applying, 97
resale number, customer, 159 applying to a sale, 160–161
resetting checks to be printed, 191 applying to shipping and handling, 162
Re-sort List command, 60 cash or accrual liability, 280
restricting reports, 255 creating
retainage, 113 group items, 157
retained earnings single tax items, 156–157
automatic transfer, 230 credits or discounts from tax agency, 162
retained earnings account, 226 customers
adjusting for during setup, 30 assigning rates to, 158–159
when created, 67 exempt from, 159
retainers, 134 default rate, 280
Return key, behavior, preference, 270 estimates, on, 122
returned checks, 141 group tax items, 157
returns, recording, 139 items, marking taxable, 159–160
Revert command, 208 liability report, 162
round-trip conversion of a QuickBooks file, 313 line items, calculating with, 160
row headings, changing in reports, 253 most common rate, 280
applying to sales, 160
S multiple taxes, 157
non-taxable
sales
customers, 161
cash, daily summary, 115
items, 161
classes, assigning to, 95
sales, 161
deleting, 99
out of state sales, 159
discounts account, 84
payable register, 162
entering, 95–98
paying, 163
jobs, tracking by, 95
preferences, 280
non-taxable, 161
QuickReport, 163
pending, 100–101
rates
preferences, 275–277
changing, 158
sales tax, applying, 97
setting up, 156–157
tracking commissions, 48
reimbursable expenses, making taxable on invoice,
troubleshooting, 128
111
voiding, 99
turning on, 156
sales forms
unusual situations, 161
column order on, 104
sales tax group items, 75
column print width on, 104
sales tax items
custom format, 103
creating, 156–157
customer messages on, 51, 97
described, 85
customized fields on, 104
uses for, 75
customizing columns on, 104
sales tax payable account, 66
definitions, 93–94
Sales Tax Payable register, 162
deleting lines in, 97
search results, printing, 211
editing, 98
searching registers, 210
memo field, uses of, 98
Select PO button, 195
printing, 109
selecting items to include in reports, 255
product format, 102
selling
professional format, 102
items, recommendations, 75
service format, 102
to out of state customers, sales tax for, 159
setting default markup for, 276
service dates, transferring to sales forms, 113
time and costs, charging for, 110
service format for sales forms, 102
title, changing, 98
service items
sales summary, 115
assigning to an account, 77
Index • 339
creating, 76–77 lowest only, display, 274

customized fields for, 77 moving in chart of accounts, 71
specifying for subcontractor, 77 uses for, 68
uses for, 74 using for fixed assets, 68
setting up subclasses, 40
chart of accounts, 23 subcontractors
customers and jobs, 22–23 invoicing for, 113
employees, 23 services performed by, 86
gather information needed for, 20 specifying service item for, 77
lists, 21–24 subitems
QuickBooks company, 19–31 creating, 90
vendors, 23 using, 89–90
Ship Via list, 50 subtotal items
shipping and handling, making taxable, 162 creating, 83
shipping methods uses for, 74
adding, 51 subtotals
setting for all invoices, 276 changing in reports, 253
shortcuts, keyboard, 348 using with tax line items, 160
Show Header button, 250
Show PO button T
on a bill, 173
“T,” printing next to taxable items, 280
on a check, 189
tax
on credit card charge, 195
changing year, 288
single activities
exemption ID, 159
entering time for, 244–245
income, 67
software requirements, 13
sales, 153–163
Sold To field for cash sales, 96
amount owed, 162–163
sole proprietorships, 228
applying to a sale, 160–161
sorting
applying to shipping and handling, 162
chart of accounts, 71
assigning to customers, 158–159
lists, 58
credits or discounts from tax agency, 162
report columns, 251
customers exempt from, 159
sounds, preference for, 271
group items, creating, 157
speed keys, 348
items, marking taxable, 159–160
split transactions
liability report, 162
checks, 188
line items, calculating with, 160
entering, 207–208
non-taxable, 161
recalculating, 208
out of state, 159
standard payment terms, 49
payable register, 162
start date
paying, 163
changing, adjustment needed, 38
QuickReport, 163
choosing, 19
single tax items, creating, 156–157
gather information needed for, 20
turning on, 156
statements
unusual situations, 161
entering charges, 117
tax forms
memorizing, 101
1099
ordering from Intuit, 324
categories, associating accounts with, 284
reminder, 94
preferences, 284
statements, billing and reminder, 117–120
specifying vendors for, 47
printing, 119
threshold amounts, changing, 284
viewing, 119
turning on, 284
stock status by item report description, 151
cash vs. accrual, 304
stock status by vendor report description, 151
tax line items, using subtotals with, 160
stockholders equity, 229
tax lines, associating accounts with, 67
subaccounts
tax table service, Aatrix Top Pay
creating, 67
phone numbers for, 324
depreciation, 216–217
340 • Index
taxable items, printing or hiding "T"s, 280 in a register, 208

technical support warning when, 271
phone numbers and Web sites, 324 entering in wrong account, 209
saving a call, 323 filtering on reports, 255
templates for estimates, 126 historical, 33–38
terms memorized
adding, 50 using, 52
applying discounts for early payment, 130 memorizing, 51
for payment, overview, 304 recalling preference for, 271
Terms list, 49 split, see split transactions
thefts of fixed assets, 220 splitting, 207–208
thresholds, changing amounts for 1099s, 284 types
time bill credit, 178
combining activities on invoice, 113 credit card credit, 196
displaying in decimal or minute format, 271 voiding, 209
displaying portions of hours, 271 transferring money from Opening Bal Equity, 231
invoicing for, 110 troubleshooting
transferring service dates to sales forms, 113 bills, 179
time tracking QuickBooks problems, 323
activities, single, entering, 244–245 sales, 128
billing status, making time billable again, 246 turning on
preferences, 242, 281 estimating feature, 275
single activities, entering, 244–245 time tracking, 242, 281
timesheets, filling in, 242–244 types
turning on or off, 242, 281 customer, 44
timesheets job, 45
filling in, 242–244 of items
tips for businesses that invoice for costs, 86–89 defined, 74
titles on purchase forms, 76
customizing on sales forms, 98 restrictions on changing, 91
graphs, 266 transactions
To Do list, 54 bill credit, 178
to do notes, adding, 54 bill payment, 176
toggling list views, 59 credit card credit, 196
toolbar preferences, 285 vendor, 48
tracking
inventory, 145 U
retainers, 134
unapplied amount in Receive Payments window, 132
sales tax, 153–163
Uncategorized Expense account
sales, by job, 95
adjusting at setup, 29
transaction history
Uncategorized Expense account, when created, 67
accounts payable, 184
Uncategorized Income account
accounts receivable, 167
adjusting at setup, 28
Transaction History command, 168, 184
when created, 67
transaction password, 283
undeposited funds
transaction preferences, 273–274
bypassing, 136
transactions
holding customer payments in, 136
audit trail, 295
Undeposited Funds account, when created, 66
backing up, 289
under-billing alert, 95
bill payment type, 176
unearned income, prepayments by customers, 132
calculating amounts, 16, 207
upgrading, 14
deleting
user’s guides, ordering from Intuit, 324
in a register, 209
warning when, 271
depreciation, 217
earlier, adding, 233
editing
Index • 341
V
valuation detail report description, 151
valuation summary report description, 151
value, adjusting inventory, 149
vendor costs, passing through, 113
Vendor list, 45
Vendor Type list, 48
vendors
account number on bill payments, 46
adding, 45
applying credit to pay bills, 179
credit with, 178, 196
credit, transaction history of, 184
current balances, 45
customized fields, adding, 47, 57
deleting, 48
discounts for early payments, 176
keeping notes about, 47
merging on Vendor list, 60
payment terms, 49
QuickReport, 185
setting up, 23
specifying for 1099, 47
viewing
accounts receivable, 165–169
balances for balance sheet accounts, 65
balances for income and expense accounts, 66
purchase orders, 202
voiding
sales, 99
transactions, 209
voucher checks
printing bill numbers on, 172
W
warnings
check numbers, duplicate, 278
invoice numbers, duplicate, 277
preferences for deleting transactions, 271
preferences for editing transactions, 271
Web sites
Aatrix Top Pay, 324
Intuit, 324
what’s new in this QuickBooks version, 15
Windows, QuickBooks for, 307
writing estimates, 121–123
Y
year-end net income, adjustment to, 226
Z
zero amounts on reports, 255
342 • Index
QuickBooks Keyboard Shortcuts
General Key Activities Key

QuickBooks > Preferences x, Lists > Chart of Accounts çxA
QuickBooks > Hide QuickBooks xH Lists > Customer:Jobs çxJ
QuickBooks > Hide Others z xH Lists > Employees çxE
QuickBooks > Quit QuickBooks xQ Lists > Items çxI
File > New Company çxN Lists > Memorized Transactions çxM
File > Open Company xO Lists > Vendors çxV
File > Close Company çxW Customers > Create Invoices xI
File > Close window xW Banking > Write Checks xK
File > Print xP Reports > Transaction Journal xT
Window > Minimize xM
Help > QuickBooks Help x? Moving around a window Key
Display contextual menu Ctrl-Click Next field Tab
Display info x1 Previous field Shift -Tab
Report column to the right Right Arrow
Editing Key Report column to the left Left Arrow
Edit > Undo xZ Report row below Down Arrow
Edit > Cut xX Report row above Up Arrow
Edit > Copy xC Line below in form detail area Ctrl-Up Arrow
Edit > Paste xV Line above in form detail area Ctrl-Down Arrow
Edit > Insert Line xY Down one screen PgDn
Edit > Delete Line xB Up one screen PgUp
Edit > Edit xE First item in list or first transaction of a xPgUp*

month in register
Edit > New xN
Last item in list or first transaction of a xPgDn*
Edit > Delete xD month in register
Edit > Memorize x+ First transaction in register xHome*
Edit > Transaction History xU Last transaction in register xEnd*
Edit > Copy Transaction z xC Close all windows in QuickBooks z
box
+ click the close
Edit > Go To Transfer xG
Edit > Show List xL
Edit > Use Register xR Dates Key
Edit > Find xF Next day + (plus key)
Delete character to left of insertion point Delete Previous day - (minus key)
Increase check or form number by one + (plus key) Today t
Decrease check or form number by one - (minus key) First day of the week w
Cancel x. (period) Last day of the week k
Record (always) xReturn First day of the month m

Last day of the month h
First day of the year y
x - Command, ç- Shift, z - Option
Last day of the year r
* On notebook computers, press the Fn key at the same time.

User Guide

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

User Guide

Uploaded by

Copyright:

Available Formats

UG Page 1 Friday, September 3, 2004 1:39 PM

QuickBooks: Pro 2005 for Mac

Software License Agreement

Quality Assurance Rob Armentrout Steve Laﬂen Scott Sivi

Documentation Leigh Chapman Jennie Tan

Marketing Peggy Chang Tina Lin Michele Rebello

Management Anouk Holleran

Technical & Jonathan Brubaker Jennifer Fisher Carl Nye

Special Thanks Cristina Andres Bob Heldt Chris Pepper

2 Setting up your company file 19

3 Entering historical transactions 33

5 Your chart of accounts 63

6 Items—your products and services 73

8 Receiving and depositing payments 129

10 Sales tax—track and pay 153

11 Accounts receivable management 165

13 Accounts payable management 183

14 Managing your checkbook 187

15 Credit card transactions 193

16 Purchase orders 199

17 Account registers 205

18 Assets, liabilities, and equity 213

19 Account reconciliation 233

20 Time tracking 241

21 Reports, graphs, and budgets 247

22 Customizing preferences 269

23 Maintaining your data 287

A Accounting basics 299

B Working with QuickBooks for Windows 307

C For Quicken users 315

D Contacting Intuit 323

Using QuickBooks on a network or shared computer

To install Aatrix Top Pay:

Getting started with QuickBooks

Tools for learning QuickBooks

To open a sample company file:

To close a sample company file:

To search for information in help, enter a keyword

To get Help about a particular window, do one of the following:

QuickBooks and your industry

Entering data quickly

To calculate a transaction amount:

Upgrading from an older version of QuickBooks for Mac

Before installing QuickBooks 2005

Updating your QuickBooks data file

Converting data from other Intuit products

Registering your copy of QuickBooks

Checking for QuickBooks software updates

What’s new in this version of QuickBooks

2 Setting up your company file

Step 1: Choose a start date 19

Step 2: Gather information 20

This chapter helps you create your QuickBooks company ﬁle.

Step 1: Choose a start date

Setting up your company file • 19

Step 2: Gather information

Information you need What it affects in QuickBooks

Bank account balances as of your start date Balance sheet

How much of each payroll tax you owe Balance sheet

Names, addresses, and other information about regular Customer:Job list

Names, addresses, and other information about employees Employee list

Complete chart of accounts Chart of accounts

20 • Setting up your company file