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Learning QuickBooks®
Beginner's Forum For Business Owners Working From Home
by L. Kenway BComm CPB Retired
Published February 2010 | Edited June 10, 2024
Quick Links
Learning QuickBooks® to avoid beginner's mistakes ... gives you a hint about what this chat is all about ... tips on how to use QuickBooks® software correctly.
While I will chat about how to use QuickBooks®, please understand that this page is directed to work from home small business owners who do their own bookkeeping.
It is not intended to instruct the "power" users or advanced users of QuickBooks® ... there are a lot of sites out there that cover that material better than I ever could.
A Word of Caution: Intuit continually revises QuickBooks Online to make it more robust. It's likely that how I did something in 2010 does not work in 2024. That said, you should be able to figure out where menu item sits now, make the adjustment, and still stay on track following my steps.
So fill up your water glass so you stay hydrated and let's get started.
We are not going to be shooting the breeze about QuickBooks® POS software ... or a whole lot about advanced inventory ...
... just useful QuickBooks® tips, tricks and traps that will hopefully make your bookkeeping time more efficient ... and enjoyable ... so you have accurate financial information to make smart business decisions.
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The Bookkeeper's Tip
A Good Bookkeeping Practice
Do You Have The Latest Desktop Version?
Intuit has a Desktop service discontinuation policy. This is not new. It's been here QuickBooks began I believe. Older desktop versions are regularly scheduled to be discontinued after three years.
For example, it's 2024. The 2021 versions of QuickBooks will not have access to add-on services after May 31, 2024. If you don't upgrade before the deadline, you will no longer have access to live technical support or features that require internet access such as payroll and updates, and you will not receive critical security patches. In this day and age of technology, that's risky from a cybersecurity point of view.
Since Intuit rolled out QuickBooks Online in 2012, it has come along way. It is much more robust now. Intuit would like you to consider moving to Intuit Online to provide you with greater flexibility and collaboration opportunities .
Intuit has also decided that after July 31, 2024, they will no longer sell new subscriptions to the certain products (in the U.S. only at this time). It does not affect existing subscribers. QuickBooks Enterprise or QuickBooks Online will be the only solution for new subscribers after the deadline. The products affected are:
- QuickBooks Desktop Pro Plus
- QuickBooks Desktop Premier Plus
- QuickBooks Desktop Mac Plus
- QuickBooks Desktop Enhanced Payroll
Intuit encourages customers who use standalone QuickBooks Desktop to move to QuickBooks Online or purchase a desktop subscription prior to July 31, 2024.
The one thing I love and hate about QuickBooks Online is I no longer have to deal with upgrades however, it means stuff is always changing or moving around making it hard to set procedures. The changes often don't make sense so I always give them the benefit of the doubt that they did due to technology issues not just because they switching stuff for something to do!
Learning QuickBooks® ... The Tips
I want to start by saying that you need to be kind and patient with yourself as you are learning QuickBooks®. The program was designed for small business owners and is user friendly ... but there are a few things that have to be done a certain way.
Here are links to a few tips on QuickBooks® procedures that you should learn to ease your learning curve and make your bookkeeping go smoothly:
Vendors - Accounts Payable - Expenses
- When to use Pay Bills vs Write Cheques
✔ Pay Bills is used if the bill you are paying is sitting in Accounts Payable
✔ Write Cheques/Expense is used if the bill you are paying was NEVER entered into AP - How to adjust GST ITCs for meals and entertainment
✔ CRA only allows you to claim 50% of your input tax credits for meals
Customers - Accounts Receivable - Sales
- When to use Invoice vs Sales Receipt
✔ Invoice is used if YOU are extending credit to your customer. It places the amount in Accounts Receivable.
✔ Sales Receipt is used if the customer is paying you with cash, debit card or credit card at the time of the sale. The amount does not get posted to AR. If a credit card is used, the AR is the credit card company's problem, not yours. - When to use Receive Payments vs Make Deposits
✔ Receive Payments is used if the invoice being paid is sitting in Accounts Receivable
✔ Make Deposits is used if an invoice was NEVER issued and entered into AR - The Bookkeeper's Alert on customer payments and Make Deposits
- How to enter customer prepayments/deposits in QuickBooks
- How to record net online sales revenue (less any service fees) directly deposited to your account
The Bookkeeper's Tip
How To Record Online Business Income
NEVER use Make Deposits in QuickBooks to record online business income. Interest income ... okay. Earned business income ... not okay. Why?
An important concept when learning QuickBooks is to remember it has modules ... one for customers, one for suppliers, one for employees, one for banking.
You need to use the correct module to enter your data if you want it to report properly. Otherwise garbage in, garbage out as they say.
In the case of online business income such as affiliate fees, eBook sales and webinar sales, you must enter it into the customer module if you want your sales tax reports to federal, provincial, state and/or territorial governments to report correctly.
Most affiliate income earned online is not paid out immediately. If you use the accrual basis of accounting, you should be creating a bill at the end of each month for the amount you have earned. When the money is deposited to your account anywhere from 10 days to 6 months later, use Receive Payment to record the receipt of cash.
If the amounts you are earning are immaterial, for example you receive a $50 payment about every 6-12 months, it would be acceptable to not setup Accounts Receivable each month and just create a Sales Receipt when the money is deposited to your account or you receive the cheque/check in the mail.
Other information on doing business online:
- How to setup your chart of accounts to capture online income
- How do you classify web related outlays like domain registrations, web hosting services, and web design services?
- CRA and eBay income earned online
- Recording out-of-province sales
- Canadian business and US online purchases
- GST/HST rules for internet income (online sales)
H E L P ! My A/R ledger is out of balance!!!!
When learning QuickBooks, sometimes you goof. (GASP) If your Accounts Receivable ledger balance does not equal your Accounts Receivable subsidiary ledger balance, then you know you've goofed somewhere in your process. Check:
- Your Open Invoice report to ensure payments were applied to invoices. If they haven't, they will show up in the Open Invoice report.
- Your Open Balance report if your Undeposited Funds account is growing or you can't find customer payments. Look to see if any deposits were made directly through Make Deposits or even the banking register bypassing the Accounts Receivable subsidiary ledger.
The Bookkeeper's Tip
A Good Bookkeeping Practice
Naming Convention For AR and AP
QuickBooks doesn't allow you to use the same name for a person or business who is both a customer and a vendor. Here's the workaround:
When you have a business or person that is both a customer and supplier, use this naming convention:
Joe's Plumbing - c ... for the customer (c) name and Joe's Plumbing - v (or s) for the vendor (v) / supplier (s) name.
No more guessing the various names, initials, abbreviations!
Banking - Cash
- A good way to record cash taken when it is not deposited in the bank
- How to reimburse the owner for expenses paid with personal funds
- How to handle stale dated cheques in QuickBooks
- How QuickBooks undeposited funds account works
- How to deposit loan proceeds received in QuickBooks
- How to handle NSF (bounced) cheques
- How to handle a refund to a debit card In QuickBooks desktop and online
Company - Period End Closing
Government Compliance
- When to delete vs void a transaction
- How to write-off a bad debt
- The best way to make adjusting entries in QuickBooks
- How to file GST/HST in QuickBooks® using the Quick Method
- There is a way to enter a CRA Hiring Credit through your QB Desktop Pay Payroll Liabilities window. Contact me if you need this method for backwork.
Learning QuickBooks® ... The Shortcuts
The QuickBooks® accounting system has keyboard shortcuts to make data entry more efficient. There are six different types or categories of shortcut keys:
- General
- Dates - my favorite category so I talk about it below
- Editing
- Help window
- Activity - I give you a few of my favorites below
- Moving around in a window
If you key in "keyboard shortcuts" to the QuickBooks® help menu, the above categories will come up. Click on the one you are interested in. Take the time when learning QuickBooks to memorize the shortcuts ... it will save you time.
My favorite shortcut keys are the dates. It is really quick and easy to enter dates using these shortcuts. They work in the desktop version AND online version.
- The + or - key can be used to increase (next day) or decrease (previous day) the date by one day to the next day or the previous day.
- Typing T in the date field will give you Today's date.
- W gives you the first day of the Week
- K gives you the last day of the Week.
- M gives you the first day of the Month
- H gives you the last day of the Month.
- Y gives you the first day of the Year
- R gives you the last day of the Year.
- If you want the date calendar to pop open, your shortcut key is Alt + down arrow.
As you can see, the keys are easy to remember because they are tied to what you want to accomplish and they are not case sensitive ... one of the reasons these are my favorite keys ... I can actually remember with no effort. That is great accounting system design.
A few activity shortcut keys that are very useful ... but only in the desktop version.
Ctrl + G ... transfers you to the line/entry of the account register directly from the entry you are in ... a real time saver when working on the bank reconciliation and one of my all time favorites!
Ctrl + M ... is one I use frequently to memorize a recurring transaction or report.
Ctrl + T ... takes you to your memorized transaction list.
Ctrl
+ Y ... opens up the transaction journal so you can see the entry in
debits and credits ... bookkeepers like this one. :0) It's especially
useful when using the forms to see the other side of the entry.
- In the QuickBooks® online version, look for "More" in the transaction you are in ... usually near the bottom right menu bar. You will see "transaction journal" in the popup menu. See the image on the right hand side below.
Ctrl + I ... quickly opens a customer invoice.
Ctrl + A ... brings up your COA but I prefer use my icon bar to get to my COA.
F2 let's you see the number of vendors, employees, and customers ... and the version you are using along with what updates have been installed.
F1 gets you to the contextual Help menu ... which helps to let you exhale while you are learning QuickBooks®! :0)
- In QuickBooks® Online Canada you do have some keyboard shortcut keys ... just less of them. You can view your options by pressing your Control+Alt keys simultaneously. I suggest you take a snapshot of the table and keep it open on your desktop while you are learning your options. Nowadays it may let you down the shortcut keyboard guide.
Learning QuickBooks® ... The Reporting
Follow these links for customized QuickBooks® reports and other useful information to assist the management of some of your balance sheet accounts.
- What Are QuickBooks® Closing Procedures
- How to Track Cheques Issued
- How to Track Customer Deposits
- How to Track Construction Holdbacks
- How QuickBooks® Handles HST/GST
- if you are an HST/GST registrant
(GST collected vs GST paid [ITC]) - if you are NOT an HST/GST registrant
The Forum
Ask A Learning QuickBooks® Question Here
Are you learning how to use QuickBooks®? Maybe this forum can help you out ... it is strictly for beginner's ... no advanced stuff here.
Ask your beginner QuickBooks® questions here ... I promise the answer won't be to go talk to a professional.
Hopefully others who know QuickBooks® will join in too ... offering to share their expertise.
Contributions to this site are moderated. They may be edited for grammar, spelling, and presentation. (I may even change your title if I think it will help the search engines find your page.)
Your contribution will appear below once it has been approved.
Learning QuickBooks® Questions & Answers
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That's it for today. I hoped you enjoyed this introduction to learning QuickBooks® and found the information useful, practical ... and not too overwhelming.
It's been great chatting with you.
Your Tutor
10 Part QuickBooks® Primer
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