Ask the Mompreneur:
Last week you explained some of the advantages of QuickBooks Online versus the desktop version. This week, can you give us a roadmap for how to get started?
There are three main steps to getting started with QuickBooks Online. Each step takes about an hour, depending on your specific business. As a busy entrepreneur, you may find it easier to space these steps over three different days, rather than all at once.
Once you’ve decided to do it, block out the time in your calendar and treat it as you would any other appointment. You’ll be so glad that you devoted the initial effort to properly setting up your accounts and invoices, because once you have established the framework, this program will truly cut down on the time you spend invoicing and reconciling.
Day 1: The interview
QuickBooks Online will ask you a laundry list of questions about your business, including tax structure, how you bill your clients, how you receive money, how you pay your vendors, etc. Gather up your documents before you start so that you can enter the tax id numbers as you go.
Based on the type of business you have, it will customize your accounts for what businesses like yours typically use. You can add or delete from this list at any time. Once you have done this initial setup, it might be a good time to let your accountant or bookkeeper look over the list of accounts and help you tweak them. This is well worth your money on the front end to avoid reclassifying large amounts of transactions at the end of the fiscal year.
Day 2 – Customers and vendors
Spend time today entering all the contact information you have on your customers and vendors. You can chose to print and mail invoices or email them right from the program. QuickBooks lets you set terms of payment for each customer as well, so it is very easy to see when invoices are overdue and mail reminders to those customers. You can also customize your invoices with your contact information and logo.
Each vendor that you pay can be automatically classed to a certain expense account, and the program will ask you whether each company or individual will need a 1099 at the end of the year. This alleviates many tax issues, and at the end of the year, the program will generate a list of 1099s that need to be printed.
Day 3 – Bank accounts and credit cards
If you do online banking and can access your credit card balances electronically, then QuickBooks Online can be set up to automatically download your transactions every day. Your Paypal account can be set up the same way. Each account gets set up separately, and you will enter your login information under the online banking tab. After your account information is downloaded, you can select categories for each expense or deposit.
Finally, a last piece of advice as you set up your accounts - one of the most valuable “accounts” I initially created was “Ask my Accountant.” If I have questions about how to categorize a transaction, I use this category, and can enter notes in the memo section so that we can easily find and discuss them when we meet.
Jennie Wong, Ph.D. is an executive coach, author of “Ask the Mompreneur,” and founder of the social shopping startup CartCentric.com. Email your entrepreneurship questions to TheJennieWong@gmail.com. Guest bloggers welcome.