QuickBooks makes it easy to get started because it has a lot in common with other programs you use, like dialog boxes, windows, and choosing from dropdown lists. However, to make bookkeeping in QuickBooks or any other accounting program as painless as possible, it helps to understand a few basic accounting concepts. Everything starts with what's called double-entry accounting. In every transaction, money comes from somewhere and goes somewhere. Think about when you pay your credit card bill. The check you write takes money from your checking account to pay the balance on your credit card account.
In QuickBooks, accounts are how you keep track of your company finances. These accounts all live in what's known as a Chart of Accounts, but not just bank accounts. Accounts come in different flavors: income for the money you make, expense for the money you spend and several other types, which you'll learn about later. Then there is cash accounting and accrual accounting. Here is a typical business scenario. You hire a vendor to do billable work from January 2nd to January 15th.
The vendor sends you a bill, which you record in QuickBooks on January 31st. You also invoice your customer on January 31st. That's your big paperwork day. You pay the vendor for this work here on February 28th and finally your customer pays you on April 6th. Your books reflect income from the customer and the vendor's expense differently in cash and accrual accounting. Cash accounting is easy. Expense show up when you pay for products or services here on February 28th when you pay the vendor.
Income shows up when you receive payment from a customer, in this example on April 6th. Notice that the expanse occurs in the first fiscal quarter, but the income doesn't show up until second fiscal quarter. Accrual accounting puts income and corresponding expenses in the same period, no matter when cash goes in or out. That way it's easier to see profitability. Expense occurs as soon as you enter a bill, here January 31st, and that's no matter when you pay the bill.
Income occurs when you record a customer invoice, and that's January 31st. It doesn't matter that your customer pays in the next fiscal quarter. In this example, the income and expense appear during the same fiscal period. Now that you understand how QuickBooks uses accounts in cash or accrual accounting, you can start keeping your books in QuickBooks.
Author
Released
2/24/2010- Establishing a company file and Chart of Accounts
- Creating purchase orders and paying bills
- Invoicing customers
- Tracking time, mileage, and other non-inventory items
- Monitoring sales and inventory
- Paying sales tax
- Reconciling accounts and bank statements
- Running and printing reports
Skill Level Beginner
Duration
Views
Q: I have QuickBooks Pro 2011. Will this course work for me?
A: Yes. The changes in QuickBooks Pro 2011 are minor, and all the information in QuickBooks 2010 Essential Training applies to QuickBooks 2011.
Related Courses
-
Excel 2010 Essential Training
with Bob Flisser6h 21m Beginner -
Excel 2010: Financial Functions
with Curt Frye2h 18m Intermediate
-
Introduction
-
Welcome52s
-
Editions of QuickBooks3m 24s
-
Disclaimer36s
-
-
1. Touring QuickBooks
-
Opening a company file2m 4s
-
-
2. Setting Up a Company File
-
Creating a company file5m 33s
-
3. Setting Up a Chart of Accounts
-
Creating an account2m 26s
-
Making an account inactive2m 17s
-
4. Setting Up Customers, Jobs, and Vendors
-
Creating a customer profile3m 40s
-
Adding customer information4m 32s
-
Creating a job2m 18s
-
Making customers inactive1m 38s
-
Creating a vendor2m 40s
-
-
5. Setting Up to Sell Services and Products
-
Why use QuickBooks items?2m 59s
-
Creating a service item4m 26s
-
Setting up time tracking2m 52s
-
Entering time4m 19s
-
Tracking mileage4m 34s
-
Setting up sales tax2m 14s
-
Creating a group of items2m 16s
-
Making items inactive1m 42s
-
-
6. Paying for Expenses
-
Entering a bill4m 37s
-
Paying bills4m 5s
-
Writing a check for expenses3m 17s
-
Paying with a credit card1m 40s
-
Paying with cash2m 53s
-
Paying sales tax2m 17s
-
7. Invoicing
-
Creating an estimate2m 49s
-
Handling a customer credit4m 57s
-
Producing a statement4m 44s
-
8. Printing and Emailing Forms
-
Setting up print options4m 13s
-
Printing one or more forms4m 29s
-
Emailing a sales form3m 2s
-
-
9. Receiving Payments
-
Receiving a payment3m 49s
-
Depositing payments3m 31s
-
-
10. Reconciling a Bank Account
-
Correcting discrepancies5m 33s
-
11. Running Reports
-
Running a report3m 45s
-
12. Working with Journal Entries
-
Why use journal entries?3m 3s
-
-
13. Managing Your Company File
-
Creating a new user4m 58s
-
Backing up your company file6m 10s
-
Restoring a company file2m 31s
-
-
Conclusion
-
Goodbye27s
-
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.
CancelTake notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.
Share this video
Embed this video
Video: QuickBooks bookkeeping basics