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QuickBooks How To | #10 Advanced Settings | Free QuickBooks Online Training
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Oct 4, 2022
QuickBooks How To | Lesson #10 Advanced Settings | Free QuickBooks Online Training Take the frustration and headaches out of using QuickBooks Online with this step-by-step tutorial series. Brought to you by accounting educator and Advanced Certified ProAdvisor, Caroline Grimm and her sidekick Terrance the T-Rex. Helpful Videos: Financial Statements for Compete Beginners https://youtu.be/_SRscyHHXDc Accounting Equation Demystified https://youtu.be/hsx0VHi_lzk Normal Balances Simplified https://youtu.be/vgkfujPyis8 Debits and Credits Explained https://youtu.be/rGRnGiGtOaw Chart of Accounts Explained https://youtu.be/VPGEsughzgc 🎥 Playlists: QuickBooks How To | Free QuickBooks Online Training: https://youtube.com/playlist?list=PLPDomDzptO13gjIPUwzZWdERq7Tsr02RP 🔥 Smoking Hot Deal! Use this link https://quickbooks.grsm.io/accounting-how-to to access special pricing for new QuickBooks customers. Accounting How To receives a small commission if you sign up through this link. That helps keep this channel going and makes sure Terrance gets enough snacks so he doesn’t get hangry. Nobody likes a hangry T-Rex. 👹 Get Caroline’s books on Amazon:
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0:00
All right, we are back in the gear icon, account and settings, and now we're going to the advanced
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section. So there's all kinds of stuff in here. I mean, this is where the goodies are. Understanding all
0:16
of this stuff is going to really help you to understand how QuickBooks works. So let's dig into this
0:22
In our first section, we have accounting. So this is where we're going to tell QuickBooks what to base our reports on
0:30
So what is the first month of this company's fiscal year? So a fiscal year is 12 months
0:36
But that 12 months could start in July. It could start in February. So a fiscal year is any
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12 months that you're going to use to track your details. For most businesses, it's going to run
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January to December. It's going to be a calendar year. For governments, it's going to be July 1st
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to June 30th. Now, the first month of the income tax year is going to
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to be either the same as the fiscal year or it's going to be different. So if you are running a fiscal
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year that starts in January, your first month of your income tax year is also going to be January. And then
1:12
we're going to tell QuickBooks what the accounting method is that's being used. Is it the accrual
1:19
basis or is it the cash basis? And of course, to make that determination, you have to actually know the
1:25
difference. So I'm going to drop a video down below that explains the difference. The difference
1:30
between accrual basis accounting and cash basis accounting. Now, the good thing with QuickBooks is that when you go to run a report
1:37
you can tell it to run it on an accrual basis or on a cash basis
1:42
You can run reports either way. This piece right here about closing the books
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what this does is it says we have closed our books through this date
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So if I have finished the books, everything is finalized for 1231
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I'm going to put that date in there. And then I'm going to assign a password to it so that in order to make any changes to those books that have been closed, the person has to know the password
2:07
So this means that in order for somebody to make changes before that date, they're going to have to either see a warning on the screen that says, we've already closed the books
2:19
Do you want to proceed? Or we can set it up so that it gives them a warning and requires a password
2:25
Okay, so when we were going through the setup process, we already saw this in the company section
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and in the interview for the setup. This happens in there. So this is what tax form we're using again
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So this is a sole proprietorship, we said, and it's using a form 1040
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You can change that either here or you can change it with the company, but generally you're
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not going to change it unless your business changes. So you go from a sole proprietorship to a corporation
2:54
All right under the chart of accounts portion you have the option of enabling account numbers So the default is set up to be no account numbers And that fine Account numbers are not required but it can make it a little easier
3:09
in categorizing things. And the way that account numbers work in accounting is that all assets
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start with the number one. So your cash account might be 10,000 and your accounts receivable account
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might be 12,000, but everything starts with a 1. For liabilities, everything starts with a 2
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So maybe you've got accounts payable as being account number 2,0001. The next piece of it is the
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discount account. Are we going to give discounts to our customers? And that discount might be
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if you pay within 10 days, we're going to give you a 1% discount. So if your business is going
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to offer a discount like that, we're going to do that here. And it is going to set up a
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account in the chart of accounts. Now, if you need to set up a tips account, you can do that here
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So if you are a caterer and you're going to be adding tips to your invoice that are then going to get
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split out between your employees, you can add a tips account here. And before when we talked about
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billable expenses, we said that we could set up an income account to keep track of that. And here
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is the spot where we're going to do that. Okay, the next section has to do with categorizing
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And I mentioned tags before. We haven't really touched on classes and locations yet
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So when you track things by class, let's use an HVAC company for an example
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So let's say you do residential work, you do commercial work, and you do service work
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So you can set those three things up as classes. And every time you do a residential job, you're going to assign it to a residential class
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You're going to assign your commercial jobs to a commercial. class, and what that allows you to do is to run a profit and loss statement, an income statement
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by class. So you can look at all of your residential work, the income that you made from it
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the expenses that went with it, and you can see whether residential work is more profitable
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than commercial work or inspection work or service work. So it's a really, really powerful
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part of QuickBooks. Now, on the location side of it, let's say we are a recent
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business and we have five stores. So you can track things by store location and then you can run a
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profit and loss by location. So you can know whether the store on Main Street is making more than the
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store on Elm Street. The next section is all about automation. So let's say you're entering your
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cable bill. So you get your cable bill, you start putting in your cable company's name and then you go
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through and put everything in and then you go through and you put in the date and you put in the
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amount and then you're like, oh, what was the name of that account we were using for this
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Is it cable expense Is it internet expense Is it under utilities I don remember So what this does is it says if we have previously entered a bill for your cable company it going to automatically fill in the
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information. It's going to fill in your account number. If you put that in there, it's going to fill in
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the last amount. It's going to fill in the account that you put it to the last time. All you have to do
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is check the amount and change the date. This is a handy feature. The problem that can arise from this
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is if you don't check the date and check the amount, you could end up having an invoice that is the
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wrong date or the wrong amount. But it is one of those labor-saving features that it probably
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makes a lot of sense to have turned on. The next piece of it is to automatically apply credits
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So let's say you purchase something from a vendor, the vendor charges you for something that you
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never received, and then the vendor gives you a credit. What happens if you don't automatically
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apply credits? When you go to pay that invoice, the invoice is going to show up
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but the credit is going to be over here, and it's not going to meet up with this
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So if you set it up so it will automatically apply credits, it will look at the vendor account
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and say, okay, we've got these bills that we're paying, and there are these credits that are available
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We're going to apply those two together, and then we're only going to pay what we actually really have to pay
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So it makes a lot of sense to have that turned on. The next piece of it is to automatically invoice unbilled activity
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So this is the plane tickets and the photocopies and the phone calls, those extra
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things that you may be billing to your customer. You want to automatically bill those. I would tell you
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probably having this turned off as a better idea, but it depends on your business. So every time you do an
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invoice for this, do you want those expenses to automatically come into the invoice, or are you going to
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do those as a separate invoice? Or are you going to invoice those once a month or at the end of the
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project? So those are business decisions that have to be made. The next piece of it is to automatically
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apply bill payments. So let's say you go to pay bills and you put in, you're going to pay $10,000
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QuickBooks is going to look at that and say, is there an outstanding bill for $10,000
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No. So it's going to automatically apply bill payments to the oldest bill and move forward
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You may want to have this turned on. You may not want to have this turned on
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And it depends on your business. If you are going in and saying, I specifically want to pay this invoice and this invoice for my vendor
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then don't have this turned on. The next piece of it is this really great feature, projects
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So let's come back to our builder. They're building this house and they want to have the whole picture of this project
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From the estimate to all of the stuff that they bought for this, to all of the time for the
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employees that's been charged, all of the expenses that go along with this project
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I want to look at this project from start to finish. This is a great thing to have turned on
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It's useful for any business that does any kind of project work
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Brings everything into one place, gives you a nice dashboard so you can track all of your stuff
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The next section is currency. And basically you probably never going to touch this because it default set up for United States dollar If you in another country you change it to whatever your currency is there The other piece of this is multi
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Are you getting paid or paying out in different types of currency
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For a lot of businesses, they're only ever going to do their home currency
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But if you're a business that is working with other countries and you're receiving or paying
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out in their funds, then you would turn on multi-currency. Now, understand that once you turn it on, it stays on
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Don't mess around with this because you want to push buttons, which brings us to, finally
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the last section of account and settings, which is other preferences. And these are pretty basic things, so this will go quickly
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The date format, generally you're not going to change this unless you are in a different country
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that uses the day, month, year format. But generally, you're going to never touch this
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The number format, again, is basically. based on US dollar. And let's talk about the customer label. So you can change this based on the
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type of business that you are and what you call your customers. So if your customers are called
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clients, you can change it to clients. If they are donors, because you've got a nonprofit
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you can change it to donors. If they're patients or tenants or members, you can change that
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the title by which they are known. Warren, if duplicate check number is used, always have this
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turned on because it will tell you whether you've already done a check for that number before
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This is an anti-fraud thing as well as an anti-messing stuff up thing
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Warn me when I enter a bill number that's already been used for that vendor, always have this
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turned on. What this does is it says, let's say I've got a stack of invoices and I'm entering them and
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I get interrupted in the middle of it and then I go back and I enter the same bill again
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QuickBooks is going to say, hey, you already entered that number. Is sure? and then warn if duplicate journal number is used
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Yeah, I usually have this turned on by default because when I'm doing a journal entry
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it's going to automatically number it sequentially. Now, this one right here, sign me out if inactive for
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So you have three choices, one hour, two hours, three hours. So if you have your computer on and you're going to walk away to a meeting and it's going to be sitting there
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and other people have access to it, then you should sign out before you leave for the meeting
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but if not have it set for the least amount of time one hour
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If you are going to be working in QuickBooks, and if you are going to be doing any certification exams in QuickBooks
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is really important. You're going to want to change that to the maximum amount of time, the three hours
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So that is it. That is the final piece of account and settings, and that was a lot
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But once you do it, you don't have to go back again. But it's important to know what these different pieces are
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and where to find them to turn them on and work. So we will now move away from the account and settings, and we're going to go on to other things
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It will hopefully be a little more interesting because, boy, there's a lot of details
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I know. All right, I will see you in the next video
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