Before you can begin using QuickBoooks for your business’s bookkeeping you’ll need to create your company file and configure the software with your preferences. The easiest way to do this is with the Easy Step Interview.
Let’s get started. If you haven’t done so yet, open your QuickBooks program. If this is the first time you’ve opened the program you’ll see a bunch of boxes with different choices. You want to pick the one that says “Create a new company” and then the “Start Interview” button. Here’s where you’ll enter your company information. Along with the company name, address, phone numbers, fax numbers, website and email, you’ll need to enter your Tax ID. If you have a Federal Tax ID assigned to you by the IRS, use this, if not use your social security number. After you’ve got all this done, click “Next” to continue.
Next you’ll need to select your industry, or as close to it as you can get. QuickBooks will use this information to decide which types of data you’ll be tracking. The software will start creating your company data file based on this information. Also are you a service business or a business that sells products? If you don’t see your type of business described select the general service or product based business at the bottom of the list.
What type of business entity is your business. Sole Proprietor is the easiest business structure to set up, and is usually what new small businesses choose to start with. You can read more about business structures in an earlier post that I wrote, called What’s your Legal Structure?
What is the first month of your Fiscal Year? For most it starts in January and ends in December just like a calendar year. The fiscal year is also know as your tax year. Some businesses, usually corporations, will pick something different from the calendar year. If any of these questions sound confusing to you please check with your accountant or legal advisor for assistance.
You’ll want to set up an Administrator Password to help protect your data from being accessed by others who aren’t authorized to do so. It might be a good idea to make this password more unique, not the same one you use all the time! Also make sure its a password you’ll remember or write it down, if you forget what it is you won’t be able to open QuickBooks until you call Intuit to have them change it, but that may take several days.
Now that you have entered your company basics, QuickBooks is getting ready to create and save a company file. Click “Next” to continue. QuickBooks will recommend a location for you. Generally, you should accept it’s recommendation and save the file by clicking save. Or you can also create a folder just for your QuickBooks data (something like C:\QBDataFiles) and even change the name of the company file to something different than your business name. This makes it easier to find and back up your data. Whatever you decide, make a note of where the file is located in case you have difficulty finding it later. Click “Save” to continue.
To customize your company file, QuickBooks wants to know all about the transactions you plan to enter. Some of the questions you will be asked are:
- Do you sell product or services
- Do you sell online
- Do you charge sales tax
- Do you create estimates
- Do you use sales orders
- Do you use sales receipts
- Do you use statements
- Do you use progress invoicing
- Do you want to mange the bills you owe
- Do you print checks
- Do you track inventory
- Do you accept credit cards
- Do you track time (either for payroll or to bill customers for time)
- Do you have employees
- Do you need to track multiple currencies
Although it is best to think these through ahead of time, if you change your mind later, you can always turn these options on or off using Preferences from the Edit Menu. Note that most of the preferences will be found in the “Company Tabs” not the user tabs of the preferences.
During the customization process you will be asked about two items that you need to consider carefully. Your start date and your bank account.
The start date is the date you begin entering your bookkeeping records into QuickBooks. The date you select as your start date is going to impact how much work will be involved to set up QuickBooks. For example: if you pick a start date of say September, that means all transactions before that date will have to be entered before you can start entering current transactions. In other words eight months of transactions. It might be possible to enter some of this information as total figures and only have to enter the open transactions individually, but the more information you have details for the better you’ll be prepared come tax time. So you can see that the date you pick is an important one, and if your not going to fully commit to entering everything you should, pick a date that will require less data entry.
Your existing bank account can be entered now or later. The benefit of entering it now, is that QuickBooks will do the accounting part of entering your opening balance for you. Doing it later will work also. Your accountant however, might recommend that you not enter any beginning balances at all. QuickBooks puts them in an account called Opening Balance Equity, which your accountant will then just have to empty out to enter the figures into the correct accounts. It might be less time consuming for them and you to just leave the balance as zero, and enter it at a later date. If you have other bank accounts you can add them now too if you like.
All throughout the interview, we have been answering various questions about our business and what we do. QuickBooks has been gathering that information and will now recommended a chart of accounts to use. Generally, the selections the software chooses will be a good fit. However, no two business are ever identical. Review the recommended accounts and make any changes. If you are not certain about what accounts you will need, keep the default choices. You can always add accounts or delete accounts as needed later.
Thats its! Your done! QuickBooks will now save your selections and then direct you to the home screen. You’ll be able to get started entering transactions immediately!
