QuickBooks For Early-Stage Businesses

QuickBooks For Early-Stage Businesses - Part 2

This is a continuation of the two-part series article on QuickBooks for Early-stage businesses. In this piece, we will cover how to record transactions in QuickBooks, edit chart of accounts and categorize bank statements.

How to record a Transaction Into QuickBooks Online?

In accounting, a transaction record is described as a business occurrence that has a financial impact on a company's financial records. Purchase of a machine, property, or building, selling to a customer on credit or cash, and so on. Any company transaction may be documented in two ways: accrual accounting and cash accounting. The focus of accrual-based accounting is on transactions when revenue is produced and costs are spent, whereas income in cash accounting is recorded when credit or cash payments are issued. With that said, lets look at how we apply these principles in QuickBooks in simple steps.

Steps to Record a Transaction into QuickBooks online

Go to the Accounting menu.

Choose “Chart of Accounts”.

Look for the account register that needs to be viewed.

Navigate to the Action column.

Click View Register.

On the top, select Add Journal Entry, Add Check, or Add Deposit based on the type of transaction you want to record.

Fill in the details for the transaction you want to add

When completed, click Save.

How to add to or edit the Chart of Accounts

The list of different categories used in QuickBooks to categorize money for your company's financial statements is known as the Chart of Accounts. QuickBooks Online has five default categories: income, expenses, assets, liabilities, and equity. Many people who use QuickBooks for business will leave the default settings alone, but you may want to tweak the categories to meet your specific requirements. You may wish to rename the categories, or you may discover that you require the creation of an additional category that does not fall under the five already listed. To accomplish this, follow the steps outlined below.

To Add an account:

Select Chart of accounts from the Bookkeeping menu.

Choose New.

From the Account Type dropdown menu, select the appropriate account type.

From the dropdown menu, select the appropriate Detail Type.

Complete the remaining fields and click Save and Close.

Edit an account:

Navigate to Bookkeeping and then Chart of Accounts.

Locate the account you want to edit.

Choose Account history or Run report from the dropdown arrows (depending on the account).

Select Edit.

After making all necessary changes, click Save and Close.

How to categorize transfers in QuickBooks

Once your bank connection is established, you may begin classifying all imported transactions. The best thing is that much of the transaction posting is automated, making month-end reconciliation a breeze.
Once your bank connection is established, you may begin classifying all imported transactions. The best thing is that much of the transaction posting is automated, making month-end reconciliation a breeze.

Simply follow these steps when you're ready to review imported transactions.

Find the Banking option on the menu. 
You can check a specific bank account by selecting it.
For a list of all recently downloaded transactions, select the "For Review" option.
Make sure each transaction is accurate by closely examining it.
Click the "Match" option if QuickBooks Online finds a match for a transaction and it is accurate.
Enter or approve the proposed category for any transactions that do not have a match.
To add the transaction to your records, click the "Add" button.
Go to the "Reviewed" page after you have added all the relevant transactions.
Verify the accuracy of the transactions in the Reviewed tab once more to make sure there are no mistakes or inconsistencies.

You may also write rules to automate the classification of the majority of your recurring spending transactions, transfers, and deposits, potentially saving you hours or months. The disadvantage is that regulations can cause chaos on your books if applied wrongly.

To create a rule, just follow these simple steps:

Go to Settings, then Rules.
Click Create Rule.
Enter the client or supplier you wish to establish the rule for in the Description area. If you want QuickBooks to only apply the rule when transactions match perfectly, check the
Match exactly checkbox.
Choose the account you want transactions to go into from the Account drop-down option.
Choose either Business, Personal, or Split from the Type dropdown menu.
Select the Category option and pick a category to categorize transactions in QuickBooks.
Check the box next to "Also apply to past transactions" if you want the rule to apply to transactions you've already categorized.

Reporting Tool: A Brief Guide

On the navigation menu is where you'll find the Reports Centre. The Reports Centre contains a selection of predefined QuickBooks reports presenting information about different sections of your business. Finding financial details about your company is simple with the Reports Centre. There are three tabs in the Reports Centre. The Reports Centre's top bar has the tabs.

The tabs include:

Standard—

This tab contains all of the default pre-set reports that you can access in QuickBooks. The data from lists, transactions, and other tasks carried out in QuickBooks are used by QuickBooks to automatically generate the reports seen on this tab. The majority of the reports on the list can be altered to deliver information specifically for your company.

1. Transaction reports

The majority of the reports in QuickBooks are transaction reports. Transaction reports include transactions and are organized in a number of ways to make it easier for you to obtain the data you need for your company. Every firm uses a number of vital reports in its daily operations. The following is a list of these reports:

Profit & Loss Report: A summary of the financial results of your company.

A balance sheet is a picture of the financial situation of your company.

An account's outstanding client accounts are listed in the "Account

Receivable Aging Summary."

Account Payable Aging Summary: A detailed account of your outstanding supplier accounts.

General Ledger: a list of your transactions broken down by account.

To make it simple to access information about your business and to understand how to interpret the reports, QuickBooks Reports have a uniform display.

2. List reports

List reports give you details about the many lists that are offered by QuickBooks, which includes

Account Listing (Chart of Accounts)

Product and Services list

Customer list

Supplier List

3. Summary Reports

In QuickBooks, there are two main types of reports: summary reports and detail reports. You can get a summary of information on clients, sales, expenses, and other topics via summary reports. For instance, the Account Receivable Aging Summary report provides information regarding aging customer accounts in summary form.

4. Detail Reports

The focus of detailed reports is on specific facts regarding clients, vendors, costs, etc. The A/R Aging Detail report, which presents a view of precise data regarding aging client accounts, is one of the typical examples. The full report provides individual transactions in addition to balances and summary information.

Custom Reports

This tab contains a list of the customized reports that you've saved for later use. Any customized reports that other users in your firm have shared with you are also available on this tab.

Management Reports

You can use the QuickBooks Online Management Reports feature to Create a set of reports with a refined appearance, including a cover page, table of contents, introductory pages, reports, and endnotes. You will save time by using the Management Reports function instead of exporting individual reports to applications for assembling and finalizing.

In Summary

By linking directly to your online banking, QuickBooks Online reduces the amount of information you need to submit. When you link your bank or credit card accounts, daily transactions are downloaded and entered automatically. Additionally, it has the ability to automatically classify transactions according to user-defined pre-set rules, which saves a significant amount of time. Editing the chart of accounts is quite easy. Its reporting software generates a precise profit and loss statement that shows whether the company is making a profit or a loss over a given time period. Additionally, it generates and customizes balance sheet reports to assist in identifying and analysing trends in your company, particularly for accounts receivable and accounts payable. Additionally, it displays your income and expenses in the Company Snapshot using pie charts and bar graphs to compare them year over year. This enables you to quickly and precisely assess the state of your company. There is a lot of software available, but nothing compares to what QuickBooks has to offer. It can save you a lot of time and money, both of which can be put to good use for the firm. The adoption of this software will increase corporate productivity, which will inspire employees to be more receptive to innovation and more focused on making their organization better than it is.

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