Stephen L. Nelson, MBA, CPA, MS in Taxation provides accounting, business advisory, tax planning, and tax preparation services to small businesses. His more than 100 books—including all editions of QuickBooks For Dummies, have sold over 5 million copies.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 3

Where to Go from Here 3

Part 1: Quickly into QuickBooks 5

Chapter 1: QuickBooks: The Heart of Your Business 7

Why QuickBooks? 7

Why you need an accounting system 8

What QuickBooks does 9

Why not QuickBooks online? 10

What Explains QuickBooks’ Popularity? 11

What’s Next, Dude? 12

How to Succeed with QuickBooks 13

Budget wisely, Grasshopper 13

Don’t focus on features 14

Outsource payroll 15

Get professional help 16

Use both the profit and loss statement and the balance sheet 16

Chapter 2: The Big Setup 17

Getting Ready for QuickBooks Setup 17

The big decision 18

The trial balance of the century 19

The mother of all scavenger hunts 21

Stepping through QuickBooks Setup 23

Starting QuickBooks 23

Using the Express Setup 25

The Rest of the Story 32

Should You Get Your Accountant’s Help? 33

Chapter 3: Populating QuickBooks Lists 35

The Magic and Mystery of Items 35

Adding items you might include on invoices 37

Creating other wacky items for invoices 45

Editing items 49

Adding Employees to Your Employee List 49

Customers Are Your Business 51

It’s Just a Job 55

Adding Vendors to Your Vendor List 59

The Other Lists 63

The Fixed Asset Item list 63

The Price Level list 64

The Billing Rate Levels list 64

The Sales Tax Code list 65

The Class list 65

The Other Names list 65

The Sales Rep list 66

Customer, Vendor, and Job Types lists 66

The Terms list 67

The Customer Message list 67

The Payment Method list 67

The Ship Via list 68

The Vehicle list 68

The Memorized Transaction list 68

The Reminders list 68

Organizing Lists 69

Printing Lists 69

Exporting List Items to Your Word Processor 70

Dealing with the Chart of Accounts List 70

Describing customer balances 70

Describing vendor balances 71

Camouflaging some accounting goofiness 71

Supplying the missing numbers 77

Checking your work one more time 80

Part 2: Daily Entry Tasks 81

Chapter 4: Creating Invoices and Credit Memos 83

Making Sure That You’re Ready to Invoice Customers 84

Preparing an Invoice 84

Fixing Invoice Mistakes 91

If the invoice is still displayed onscreen 91

If the invoice isn’t displayed onscreen 91

Deleting an invoice 92

Preparing a Credit Memo 92

Fixing Credit Memo Mistakes 96

Printing Invoices and Credit Memos 96

Loading the forms into the printer 97

Setting up the invoice printer 97

Printing invoices and credit memos as you create them 100

Printing invoices in a batch 101

Printing credit memos in a batch 103

Sending Invoices and Credit Memos via Email 104

Customizing Your Invoices and Credit Memos 105

Chapter 5: Reeling in the Dough 107

Recording a Sales Receipt 108

Printing a Sales Receipt 112

Special Tips for Retailers 114

Correcting Sales Receipt Mistakes 115

Recording Customer Payments 116

Correcting Mistakes in Customer Payments Entries 121

Making Bank Deposits 121

Improving Your Cash Inflow 124

Tracking what your customers owe 124

Assessing finance charges 125

Dealing with deposits 129

Chapter 6: Paying the Bills 131

Pay Now or Pay Later? 131

Recording Your Bills by Writing Checks 132

The slow way to write checks 132

The fast way to write checks 138

Recording Your Bills the Accounts Payable Way 140

Recording your bills 141

Entering your bills the fast way 145

Deleting a bill 146

Remind me to pay that bill, will you? 147

Paying Your Bills 149

Tracking Vehicle Mileage 152

Paying Sales Tax 153

Chapter 7: Inventory Magic 155

Setting Up Inventory Items 156

When You Buy Stuff 157

Recording items that you pay for up front 157

Recording items that don’t come with a bill 157

Paying for items when you get the bill 159

Recording items and paying the bill all at once 161

When You Sell Stuff 161

How Purchase Orders Work 162

Customizing a purchase order form 163

Filling out a purchase order 163

Checking up on purchase orders 166

Receiving purchase order items 166

Assembling a Product 167

Identifying the components 167

Building the assembly 168

Time for a Reality Check 169

Dealing with Multiple Inventory Locations 171

Manually keep separate inventory-by-location counts 171

Use different item numbers for different locations 172

Upgrade to QuickBooks Enterprise Solutions 172

The Lazy Person’s Approach to Inventory 173

How periodic inventory systems work in QuickBooks 173

The good and bad of a periodic inventory 174

Chapter 8: Keeping Your Checkbook 175

Writing Checks 175

Writing checks from the Write Checks window 176

Writing checks from the register 177

Changing a check that you’ve written 179

Packing more checks into the register 180

Depositing Money in a Checking Account 181

Recording simple deposits 181

Depositing income from customers 182

Transferring Money between Accounts 185

Setting up a second bank account 185

Recording deposits into the new account 185

About the other half of the transfer 187

Changing a transfer that you’ve already entered 187

Working with Multiple Currencies 188

To Delete or to Void? 188

Handling NSF Checks from Customers 190

The Big Register Phenomenon 190

Moving through a big register 191

Finding that darn transaction 191

Chapter 9: Paying with Plastic 193

Tracking Business Credit Cards 193

Setting up a credit card account 194

Selecting a credit card account so that you can use it 195

Entering Credit Card Transactions 196

Recording a credit card charge 197

Changing charges that you’ve already entered 199

Reconciling Your Credit Card Statement and Paying the Bill 200

So What about Debit and ATM Cards? 201

So What about Customer Credit Cards? 201

Part 3: Stuff You Do from Time to Time 203

Chapter 10: Printing Checks 205

Getting the Printer Ready 205

Printing a Check 208

A few words about printing checks 209

Printing a check as you write it 209

Printing checks by the bushel 211

What if I make a mistake? 214

Oh where, oh where do unprinted checks go? 215

Printing a Checking Register 215

Chapter 11: Payroll 219

Getting Ready to Do Payroll without Help from QuickBooks 219

Doing Taxes the Right Way 220

Getting an employer ID number 220

Signing up for EFTPS 221

Employees and employers do their part 221

Getting Ready to Do Payroll with QuickBooks 221

Paying Your Employees 223

Paying Payroll Liabilities 226

Paying tax liabilities if you use a full-meal-deal payroll service 226

Paying tax liabilities if you don’t use a full-meal-deal payroll service 226

Paying other nontax liabilities 227

Preparing Quarterly Payroll Tax Returns 228

Using the Basic Payroll service 228

Using a full-meal-deal payroll service 228

Using the QuickBooks Enhanced Payroll service 228

Filing Annual Returns and Wage Statements 229

The State Wants Some Money Too 230

Chapter 12: Building the Perfect Budget 231

Is This a Game You Want to Play? 231

All Joking Aside: Some Basic Budgeting Tips 232

A Budgeting Secret You Won’t Learn in College 233

Setting Up a Secret Plan 234

Adjusting a Secret Plan 237

Forecasting Profits and Losses 237

Projecting Cash Flows 238

Using the Business Planner Tools 238

Chapter 13: Online with QuickBooks 239

Doing the Electronic Banking Thing 239

So what’s the commotion about? 239

A handful of reasons to be cautious about banking online 240

Making sense of online banking 243

Signing up for the service 243

Making an online payment 243

Transferring money electronically 245

Changing instructions 246

Transmitting instructions 246

Message in a bottle 247

A Quick Review of the Other Online Opportunities 248

Part 4: Housekeeping Chores 249

Chapter 14: The Balancing Act 251

Balancing a Bank Account 251

Giving QuickBooks information from the bank statement 252

Marking cleared checks and deposits 254

Eleven Things to Do If Your Nononline Account Doesn’t Balance 258

Chapter 15: Reporting on the State of Affairs 263

What Kinds of Reports Are There, Anyway? 263

Creating and Printing a Report 266

Visiting the report dog-and-pony show 268

Editing and rearranging reports 269

Reports Made to Order 272

Processing Multiple Reports 275

Your Other Reporting Options 275

Last but Not Least: The QuickReport 276

Chapter 16: Job Estimating, Billing, and Tracking 279

Turning On Job Costing 279

Setting Up a Job 280

Creating a Job Estimate 281

Revising an Estimate 284

Turning an Estimate into an Invoice 284

Comparing Estimated Item Amounts with Actual Item Amounts 286

Charging for Actual Time and Costs 287

Tracking Job Costs 288

Chapter 17: File Management Tips 289

Backing Up is (Not That) Hard to Do 289

Backing up the quick-and-dirty way 291

Getting back the QuickBooks data you backed up 296

Using the Accountant’s Copy 298

Working with Portable Files 299

Using an Audit Trail 300

Using a Closing Password 300

Chapter 18: Fixed Assets and Vehicle Lists 303

What is Fixed-Assets Accounting? 303

Fixed-Assets Accounting in QuickBooks 305

Setting Up a Fixed Asset List 306

Adding items to the Fixed Asset list 306

Adding fixed-asset items on the fly 308

Editing items in the Fixed Asset list 309

Tracking Vehicle Mileage 310

Identifying your vehicles 310

Recording vehicle miles 312

Using the vehicle reports 313

Updating vehicle mileage rates 313

Part 5: The Part of Tens 315

Chapter 19: Tips for Handling (Almost) Ten Tricky Situations 317

Tracking Depreciation 317

Selling an Asset 318

Selling a Depreciable Asset 319

Owner’s Equity in a Sole Proprietorship 320

Owner’s Equity in a Partnership 320

Owner’s Equity in a Corporation 321

Multiple-State Accounting 322

Getting a Loan 323

Repaying a Loan 323

Chapter 20: (Almost) Ten Secret Business Formulas 325

The First “Most Expensive Money You Can Borrow” Formula 326

The Second “Most Expensive Money You Can Borrow” Formula 328

The “How Do I Break Even?” Formula 328

The “You Can Grow Too Fast” Formula 331

How net worth relates to growth 331

How to calculate sustainable growth 332

The First “What Happens If ?” Formula 333

The Second “What Happens If ?” Formula 335

The Economic Order Quantity (Isaac Newton) Formula 337

The Rule of 72 338

Part 6: Appendixes 341

Appendix A: Installing QuickBooks in Ten Easy Steps 343

Appendix B: If Numbers Are Your Friends 347

Appendix C: Sharing QuickBooks Files 365

Index 375

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