How to use QuickBooks

QuickBooks is an accounting software package created by Intuit. It offers solutions for managing personal, business, and tax finances.

As with any new software, getting the most out of QuickBooks requires some learning.

This guide provides an overview of QuickBooks and how to get started. It covers the steps needed to set up QuickBooks and to start creating invoices.

Please note that this guide is for QuickBooks Online. There are some differences between it and the QuickBooks Desktop and Mac versions.

Connect QuickBooks and Wise:
Save time on reconciliation

This piece has been written in collaboration with Esther Friedberg Karp, an esteemed bookkeeper and Advanced QuickBooks ProAdvisor.

How to use QuickBooks

Businesses can use QuickBooks to automate invoicing, payments, and accounting. They can also track expenses, pay bills and manage payroll.

The first step to using the software is selecting the right subscription package.

For example, small businesses with international customers may choose to use QuickBooks Essentials, Plus, or Advanced. These subscription levels include the Multicurrency feature, which helps track international transactions.

To use cloud-based QuickBooks Online, you need to sign up for a monthly or annual subscription. You can also take a 30-day free trial to ensure it meets your needs.

There is also a mobile app available for various platforms such as iOS and Android. This can be used for obtaining accounting information, such as income and expenses, on the go.

In the sections below, you can learn how to set up and use specific features of QuickBooks as a first-time user.

Find out:
How to set up QuickBooks How to use QuickBooks, step by step Can a beginner use QuickBooks? QuickBooks tips and tricks How to save time on admin with Wise

How to set up QuickBooks

The initial setup of QuickBooks is very important. Before you use it to create invoices or track payment and expenses, you need to enter your business and basic accounting details.

The following are the main steps:

Enter your business information

Go to: Gear Icon [⚙️] > Account and Settings > Company

General business information needs to be set. This includes company name, address, email, telephone, and website.

This information can appear automatically on invoices and other sales forms.

Set the start and end dates of the fiscal year

Go to: Gear Icon [⚙️] > Account and Settings > Accounting

The fiscal year is the 12-month accounting period for the company.

This can be set as January to December or any other 12-month period. The US federal government’s fiscal year, for example, runs from October 1st to September 30th.¹

Choose cash or accrual method for reporting income

Go to: Gear Icon [⚙️] > Account and Settings > Accounting

It is essential to set whether QuickBooks will use cash or accrual accounting methods.

• Under the cash method, you record income as it’s received and expenses as they’re paid.

• The accrual method counts income when invoiced(whether or not funds are received yet). Likewise, it counts expenses when bills are dated (whether or not bills are paid at that time). Accrual accounting is required for tax purposes by companies tracking inventory.

Set the accounting currency

Go to: Gear Icon [⚙️] > Account and Settings > Advanced > Currency

Here, you choose the main currency used for company accounts.

There is also an option to select “Multicurrency.” This allows you to track transactions in foreign currencies – very useful if you have overseas customers or vendors.

If you plan to use the Multicurrency option, you must ensure that the home currency is correctly set first. You cannot change it after selecting Multicurrency.

Add your company logo

Go to: Dashboard or Gear Icon [⚙️] > Account and Settings > Company

Adding the company logo adds a professional appearance to invoices.

As with the basic company information, this can be set to appear on all invoices and sales forms. The logo can also be set to appear on reports.

Select the invoice terms

Go to: Gear Icon [⚙️] > Account and Settings > Sales > Sales form content

All invoices should specify the terms for payment.

This will inform the custom by when to pay the invoice. It forms an important part of the customer relationship and the legal basis of invoices.

Depending on your business, this could be set to immediate payment or payment on a specific date.

The payment terms you set here will become the default. You can change the terms for each invoice when created.

Set up your relevant sales tax

Go to: Tax Tab

You will need to add sales tax details if you sell products and services.

Sales tax needs to be defined by jurisdiction such as state, county, and city. Once populated here, you can then specify it for specific products and services in the appropriate form.

QuickBooks Online also offers automated sales tax, because there are literally thousands of sales tax jurisdictions in the United States. This option is often simpler for businesses.

How do you use QuickBooks, step by step?

Once you have set up your basic company and accounting details, you are ready to start using QuickBooks. The next steps are to prepare QuickBooks to create and send invoices and to access bank accounts.

The following is an overview of the main steps to use the system to send invoices, pay bills, and track expenses.

Customize your invoice

Go to: Gear Icon [⚙️] > Custom Form Styles > New Style > Invoice

The invoice is a very important part of customer interaction. You want this to be accurate but also appealing and easy to understand. It forms part of the audit trail for invoice payments and other related interactions. Just as importantly, it should aim to get customers to pay on time.

Customizing your invoices will make them stand out and be identifiable to customers. QuickBooks allows this for many areas – not just the logo you added in the initial setup. This includes:

• Appearance and format. You should set up the appearance and style as it suits your company.

• Language and tone. Likewise, you can edit the default text and phrases to match your company style.

• Data fields. Decide on the amount of information to display, and set this up as a default template.

Set up electronic invoice payments

Go to: Gear Icon [⚙️] > Custom Form Styles > New Style > Invoice

Providing a direct payment link to customers is a proven way to get faster invoice payments. QuickBooks supports this.

As part of customizing invoices, a “Pay Invoice” button can be added that allows customers to pay directly. This will link with payment methods (such as credit card, debit card, or ACH transfer) and accounts added.

Connect QuickBooks to your online banking

Go to: Banking > Add Account or Connect Account

You can connect your online bank and credit cards accounts to QuickBooks bank feeds to track transactions that clear the accounts automatically. Alternatively, you can use manual uploads of files from your online bank and credit card accounts, but syncing automatically is much faster.

Adding an account is simple. After selecting “Add Account,” search for the name of the financial institution and enter your login details.

If you have international transactions, you can connect to Wise Business.

Wise Business is a multi-currency account that makes it easy to send and receive international invoice payments. Once you add your account details to the invoice in QuickBooks, customers can pay with ease in their local currency.

Create an invoice

Go to: Global Create [⚙️]> Invoice

Once you have entered business details, customized invoices, and set up payment methods and terms, you can create an invoice.

Selecting “Create > Invoice” will create a new invoice based on your default template. It can be set to be populated automatically with the company information, logo, and payment details as you entered previously.

You then enter the details of products and services supplied and select the sales tax.

Products and services can be set up first or added manually onto the invoice. To set up standard products and services, go to “Invoicing (or Sales) > Products and Services.” Here, you enter the relevant details for each product. This includes name, category, SKU, price, and sales tax category.

Send invoices

Invoices are sent from the same section where they are created. Once the invoice is complete, simply select “Save and Send.”

You can, of course, also save the invoice for further editing or to send later. It is then accessed later from the “Invoicing (or Sales) > Invoices” menu.

Adding account details and direct payment links to your invoice is a great way to get paid faster.

For example, you can add your Wise Business account details and get paid like a local in ten major currencies. This makes receiving international payments a breeze.

Pay bills

QuickBooks also offers a solution for automatic bill payment. Bill Pay allows you to pay any bill – including vendors or freelancers – from within the platform.

Managing, tracking, and paying bills is a time-consuming task for many businesses. Making payments late can be a costly error, too.

A solution like this can be a great time-saver and can protect your credit score.

Research from FICO shows that a single late payment can drop a credit score by around 100 points. This will vary depending the on initial credit score and severity of the missed payment.²

To access Bill Pay, click on the ‘Bill’ or the ‘Pay Bills' feature in the application. You can make a single payment or set up future payment schedules. Payments can be made using your linked bank accounts or by credit or debit card.

If you need to pay international bills, then it’s worth using Wise Business to get the mid-market rate and save your business money. You can also sync Wise with QuickBooks to see your unpaid bills in real time and pay them seamlessly from your ‘Bills’ page on Wise. Your bill payments and any other Wise transactions will be synced, matched and categorised in QuickBooks for simple reconciliation. They'll also be categorized into the right accounts. If no bill is found, each payment will simply be added as an Expense. Sound amazing? See for yourself how much time and hassle you can save.

Join Wise Business today

Track expenses

There are also many other useful features in QuickBooks. Tracking business expenses is one of these.

As mentioned earlier, you can connect QuickBooks to your accounts, including bank accounts, credit cards, PayPal, and more. The bank feeds will then import the transactions as they clear the accounts and allow you to match them to already-entered transactions, or to create new ones

You can also manually upload or email receipts, and they will be matched to existing transactions or create new ones.

This is not just a time-saving alternative to receipts and spreadsheets. It helps with tax calculations and managing business cash flow. It also speeds up the vital step of reconciling bank and credit card accounts.

Can a beginner use QuickBooks?

QuickBooks is designed to be used without accounting software experience. It can be used by small business owners, as well as larger companies.

However, as with any accounting software, there is a learning curve to mastering it. Beginners, though, can easily use the platform once they have learned the key features.

Can I teach myself QuickBooks?

There is plenty of material available to help you learn how to use QuickBooks independently.

For example, there are guides available when using the system. In addition, Intuit provides many tutorials and videos to build and test your knowledge. You can learn broader topics such as small business accounting tips, but also very specific details such as how to enter invoices.

QuickBooks has gained a vast amount of user experience and feedback over the years. Q&As from the QuickBooks community can help answer specific questions.

QuickBooks tips and tricks from Esther Friedberg Karp - QuickBooks ProAdvisor

Before you turn on Multiple Currencies in QuickBooks, be aware that this cannot be undone, so you must be sure that you need it. In addition, certain functions in QuickBooks will change once you turn on Multicurrency. Therefore, if you believe that you need to turn on Multicurrency, confirm this with an experienced Advanced QuickBooks ProAdvisor who understands completely how to use this feature. You can use the QuickBooks Online Test Drive company (qbo.intuit.com/redir/testdrive in the United States) to test out turning on Multicurrency and using the software after it’s turned on. If you have been running your QuickBooks company file for some time before turning on Multicurrency, be aware that any pre-existing accounts will be denominated in your home currency. Therefore, any foreign accounts that you were tracking before Multicurrency was enabled will have all its transactions counted in the financials as if they were entered in the home currency, not the foreign currency. Those accounts need to be adjusted to zero and new foreign-denominated accounts need to be created to replace them.

Save time on admin by using Wise Business and QuickBooks

Accounting can be a pain. Investing some time into learning how to use QuickBooks can save you time and effort in the long run. It can also ensure that the numbers you see on reports are accurate.

This is especially true if you use the online bank connection feature. Doing so can save a lot of time in managing transactions and receiving payments - as long as you use the bank connection (feed) feature properly.

If you have international transactions, you can add your Wise Business account details to the invoice to get paid with ease.

Learn more about Wise

What's more, you can also sync Wise with QuickBooks.
Once connected, all bills you create in QuickBooks Online will automatically sync in real time to Wise, where you can choose which ones to pay.

All bill payments you make with Wise will be matched to the original bill in QuickBooks. As simple as that.

This piece has been written in collaboration with Esther Friedberg Karp, an esteemed bookkeeper, QuickBooks ProAdvisor, and founder of CompuBooks. Esther Friedberg Karp, MBA, is an internationally-renowned trainer, writer, business consultant, and speaker with advanced certifications in both QuickBooks Desktop and QuickBooks Online. She has been named twice to the list of Insightful Accountant’s Top 10 QuickBooks ProAdvisors worldwide, with the titles “Top International ProAdvisor” and “Top Trainer/Writer ProAdvisor.”

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Sources:

1. Budget of the US Government
2. Fico - credit score research

All sources checked December 20, 2021.