Last time we examined one of the QuickBooks Centers, specifically the Customer Center, we ended the article with some practice exercises for adding new customers.
As our series continues on training materials for QuickBooks Enterprise using 2017 product illustrations (although you could use these for the Pro/Premier as well), we'll examine some of the other 'Lists' QuickBooks makes use of.
You might say that QuickBooks is a list-driven system. The various lists are used to standardize information and make it easier to fill in forms accurately.
For example, lists not only contain information like the name or number associated with the various products you sell, but also the cost and sales price of those items.
Of course, QuickBooks is an "accounting system," and you simply cannot have an accounting system without having accounts that get debited and credited. You know, "debits on the left" and "credits on the right."
The Chart of Accounts appears in its own list window, as do other lists like the Item list. To view one of these lists, click the Lists menu and then click the list you want. Here's an example of the Chart of Accounts for one of your company files:
Chart of Accounts list window
Lists of this type can have the viewable information changed simply by customizing the column header to add or remove columns. For example, we can easily add a column to display account balances, if desired.
To enter information in these fields, use the menu button at the bottom of the list to add, edit, or delete list items.
The Lists menu also provides access to features associated with the list. The more detail you enter for each list item, the more information Enterprise Solutions can use to pre-populate forms, track financial data and display useful reports about your business.
Another advantage is that common tasks like adding list entries, editing list information and deleting list entries are performed the same way.
As your business grows or changes, you might need to add new accounts to your chart of accounts to better organize your finances. Or, you might need an account that was not provided during setup.
To add an account:
1 Go to the "Lists" menu and click "Chart of Accounts."
2 Click the "Account" button at the bottom of the list window, then click "New."
3 In the "Add New Account" window , select the "Account Type" you want to create, and then click "Continue." We'll cover the different types of accounts as part of this training.
4 Enter the account's name in the "Account Name" field. This name appears on your Company financial statements.
5 If you are using account numbers, you'll want to enter the account number for this new account in the "Account Number" field
6 If you want to make this account a sub-account of another account, click the "Sub-account" of checkbox. From the drop down list, click the account that will be the higher level account for this sub-account.
7 (Optional) "Enter" a short description, note, bank account number or credit card number, depending on the type of account you are adding.
8 For income and expense accounts. From the "Tax Line Mapping" dropdown list, click the appropriate tax line or <Not tax-related>.
9 Click "Save & Close" or "Save & New" to add another account.
Note: You also can add accounts as you perform everyday tasks. For example, if you're writing a check and enter an account name that has not yet been set up in QuickBooks Enterprise, you'll be prompted to set up the new account.
If you need to make changes to your account information, double-click the account in the Chart of Accounts list. The Edit Account window opens; make your changes and click OK.
There are several account types supported by QuickBooks including 11 Balance Sheet related accounts:
- Accounts Payable
- Accounts Receivable
- Credit Card
- Fixed Asset
- Long Term Liability
- Other Asset
- Other Current Asset
- Other Current Liability
There are also five Income Statement (Profit & Loss) related accounts:
- Cost of Goods Sold
- Other Expense
- Other Income
Items (sometimes called Products & Services)
An item is anything that might appear as a line item on an invoice, including subtotals, discounts, and sales tax, as well as the products and/or services that you sell. You enter items on your invoices and sales receipts.
For example, a QuickBooks consultant might set up one item for Training Services with an hourly rate, and another item for QuickBooks Installation with a different hourly rate. On an invoice, the items would be entered with the number of hours worked as the quantity.
While providing a quick means of data entry, items also handle the behind-the-scenes accounting. When an item is created, it's linked to one or more accounts on the Chart of Accounts.
When the item is used on a form, it posts an entry to that account and another to the appropriate accounts receivable, accounts payable, checking or other account. When you choose an item from the Item list, QuickBooks Enterprise fills in a description of the line item and calculates its amount for you.
QuickBooks Enterprise provides several different types of items, such as service or inventory part items, that help you record the services and products your business sells. Other items, such as the subtotal or discount item, are used to perform calculations on the amounts in a sale.
The following table shows the Item types and purpose of each:
QB Item types (1)
Another type of items you'll probably be using are configured for your sales tax tracking. They are shown in the table below:
QB Item Types - ST Related
If you'll be using QuickBooks Payroll features, additional item types are related to Payroll including wage items, tax items, benefit items, etc. These will be discussed in the optional "Payroll" related training you may participate in.
Although you can use items as a quick means of entering data, items fulfill a much more important role in the behind-the-scenes accounting. When you create an item, you link it to at least one account. When the item is used on a form, it posts an entry to that account and another entry to the appropriate offsetting account.
Depending on the form you're using, that off-setting account might be accounts receivable (when using an Invoice), accounts payable (when posting a Vendor Bill), checking (when writing a check) or other account.
While items are easy to set up, you need spend time deciding how they can best work for you before you start configuring and using them. I always think it's best to look at your current list of services and products as your starting point.
Consider how much detail you want on your invoices or statements, and set up your items with that level of detail in mind. For example, if you're a contractor who's performing construction work, you could set up a single item and charge a flat rate per yard of concrete poured, but more than likely you'll choose to break down the construction work into various labor and material items.
When you use items, QuickBooks Enterprise provides many useful reports that break information based upon the goods or services you purchase and sell. That way, you can quickly find out:
- How much income your items bring in
- What you are spending to purchase items
- How well you estimate the costs associated with a specific job, and
- How much time you spent on each type of job or item
To add an item:
1 Go to the Lists menu and click Item List
2 Click Item at the bottom of the list and then click New
3 Click the Type drop-down arrow and choose the type of item you want to create
4 Enter an item name as you want it to appear on purchase and sales forms
5 Enter the description that you want to appear on sales forms when you use the payment item
6 In the Rate field, enter the amount you want to charge for the item or leave as zero, if the rate varies
7 In the Account field, choose the account that is associated with this item. (In most cases, you will assign the item to an income account)
8 In the Tax Code list, select the appropriate sales tax code or create a new one. If you do not see the Tax Code list, you must turn on the tax preference in the Sales Tax area under Edit/Preferences.
9 Click OK or Next (if you want to enter another item)