QuickBooks 2020 – Section 2 Transcript

The transcripts below come from the QuickBooks 2020 course on Simon Sez IT. You can follow along for free by watching the free QuickBooks 2020 course.

Setting Up Your Company File

Cindy: The first thing you’ll need to do when you’re working with QuickBooks is go ahead and set up what’s called your Company File. Each file that you set up in QuickBooks is called a Company. You can have as many companies as you would like. For example, a lot of times I see small business owners that will actually have a company file set up for their actual company and they’ll have a separate one set up for their personal information. It might be that you’re a bookkeeper and you’d like to have a separate file for each of your customers. Any way you’d like to set it up you can have as many company files in QuickBooks as you would like. They do not talk to each other so don’t worry about mixing information. And you can only have one company file at any given time.

The first thing you have to do is set up that company file and that’s what I want to do with you here in this first section. Let’s go ahead and flip over to QuickBooks and I will show you how to go ahead and get that company file set up.

When you first open QuickBooks you’re going to see this screen that says No Company Open. If you actually had previously opened some company files you would see them listed here. If you didn’t see one that you know is in your computer and you’d like to open it you can open it a couple of ways. You can go to Open here or you can use this Open or Restore option right here which will allow you to search your computer for that particular file. The Restore option just basically means that if you had a backup copy you needed to restore to QuickBooks for some reason you could get to it through this option here.

You also can find a company file over here, and this is a new feature in the 2020 version. You would actually just type in the name of your company file you were searching for here and then choose Open and it would search for you and it would find it in this list and you could double click on it.

Notice it will search your local drives, meaning your hard drive on your computer for example, it would actually search any removeable media, which would be if you had a flash drive, for example, or if you’re on a network and you want to search there you can do that. I’m just going to hit Cancel right now and that’s going to take me back to the No Company Open window.

You also have these sample files right here that we’ll talk about a little bit later. These are basically a product based business and a service based business. If you don’t know how to set something up or you’re not really sure if what you did is correct open one of these sample files and see how they did it.

Because this is the very first time we’re going to have to go through a process of creating our new company file and that’s this option right here. Once I click on this it’s going to take me into the Easy Step Interview and the first thing it asks you is do you want to set up your business and you can use the Start Setup option here or you can go down here to Other Options and choose to actually do the advanced setup. I’m going to stop right here because I want to go into section two where we actually start going through this Easy Step Interview as it’s called. As a matter of fact I’ll click on the Advanced Setup and that’ll launch me into the Easy Step Interview.

Using the Easy Step Interview – Part 1

Cindy: We saw in section one of this module, which is module two Getting Started, how to actually get started setting up your company file. Now we have to go through what’s called the Easy Step Interview and go ahead and fill out all the information QuickBooks would need to get your company file mostly set up.

We’re going to be going through this interview and it’s going to take a few moments, but you want to make sure that you have a couple things handy. You want to make sure that you have information about your company, like the company name, address, you might need to use the company federal ID if you happen to have one. So just have those things handy so that we can answer these questions as we go through this interview.

There is a part two to this particular section so make sure you watch both parts so that you have a whole interview section down pat.

The Easy Step Interview will take you a few minutes to go through so don’t be in a rush, but you’ll be glad you did it when you’re done because you’ll have all the information filled in.

You’ll notice on this first screen here that it’s asking you to put information about your company. This is basic information like the company name, the company address, things like that. The tax ID number is not really necessary. The only reason you would actually need it would be if you happen to use the Intuit payroll service. They’re going to ask you to have that in here so that you can use it for payroll, but other than that you’re not really going to need this.

Let’s say this company we’re working with is ABC Plumbing. I’m going to go ahead and put in their address which is Coatesveille. Make sure I spelled that right. And this is going to be in Pennsylvania. We’ll go down and pick PA. And then the zip here will be 19320.

You can also put in a phone number and a fax, an email and a web address. You will want to fill those in because when you go to send correspondence to either customers or vendors, for example, QuickBooks will pull this information.

I’m going to click Next at the bottom and the next screen asks me to select my industry. Now you’ll notice there are many different industries in here. There’s automotive, there’s construction, if you go down the list you’ll see there’s a nonprofit. Pick one that’s close to what you do. It does not have to be exact and there’s really no wrong answer here. At the very bottom of the list if you’re still not sure what to do there’s a General Product or Surface-based business and you can choose one of those. I’ll just choose the General Product based business and click Next.

This screen asks how’s your company organized. Now don’t get hung up on this screen. As a matter of fact if you have an accountant that does your taxes, and I always suggest that with a business you never do your own taxes, I want you to pick Other or None. The only reason this option is here is because a lot of times a business may decide to use a software program like Turbo Tax, for example, to do their taxes. And if that’s the case then Turbo Tax has to look at QuickBooks and pull information on to certain lines on the tax form. That’s why it asks you how’s your company organized.

Now here’s the thing. If you choose one of these options every screen that you go to will have an extra question which will ask you which line on the tax form do you want to pull this on to and you’re not going to know because you’re not an accountant. If you just don’t have that option in here you won’t have to worry about it so I suggest everyone choose Other or None and click Next.

Now it asks me to select the first month of my fiscal year. I’m going to leave it on January, but of course if yours is different you can change that.

I’m going to hit Next one more time and it’s going to talk to me about setting up the administrative password. I do want to spend a little time on this because it’s very important that you set up usernames and passwords for each person that’s using your QuickBooks company file. QuickBooks doesn’t make you do this. It’s just highly suggested.

What this means is that when you open your company file each time the user will have to put in their username and their password. Right now it’s asking you about setting up the administrator password, which would be yourself since you’re setting up the company file. I’m going to go ahead and put a password in here. And remember that a good password will be any combination of letters, numbers, special characters. It is case sensitive so you want to remember this password. We’ll talk in a later module more about setting up passwords.

I’m going to click Next at the bottom and now it says Create Your Company File. This is like the save screen. You want to go ahead and actually choose a place to save your company file and once you do you’ll notice it’ll start creating your company file in the background here. You’ll start seeing your icons appear over here and it’ll have your company name at the top like you see ABC Plumbing now and that sort of thing. Give it just a couple seconds and it will be done.

Once your company file has been created that means that if you get out of this at any time by hitting this Leave you can come back in and set up your options again. You can’t get back into the Easy Step Interview but I’m going to show you as we go along how you would go in and change all these options. But let’s go ahead and continue customizing this for your business.

I’m going to click Next and the first thing it asks is what do you sell. Your choices are services, products or both. Again there’s no wrong answer here. If currently you sell services but maybe you add products later on you can always go and turn those options on. If you’re not sure you can just hit Both right here and that way you’ll have all of the options on your Home screen. And really all you’re doing when you answer these questions is turning on the options on your Home screen.

As we go through here if you have different screens than I do it’s because of how you answered the previous questions. So there’s nothing wrong with it. Just kind of hold tight till I get to where you are or vice versa.

I’m going to hit Next at the bottom and because I said I sell products it asks me would I like to charge sales tax. We’ll talk about sales tax in a later module as well but I’ll just say Yes and turn it on for now. And now it’s asking would I like to create estimates in QuickBooks.

Think of estimates as quotes for a job. Construction is a great example because they estimate jobs. If you’re using this feature you go ahead and say Yes and the next thing asks if I’d like to use statements in QuickBooks. This if you use statements will actually send a statement at the end of every month and it’s basically a summary of everything that happened during the month. It will have at the top how much the customer owed you from the prior month, then it will list any payments or any invoices and then what the customer owes you now. I’m going to go ahead and leave this on Yes and click on Next.

This next screen asks about using progress invoicing. Now if I were setting up QuickBooks I would have put this question right behind the estimate question because here’s what this means. If you estimate jobs or customers then you have the ability to pull information from those estimates into an actual invoice so that you can get paid. You can actually invoice your customer progressively. You might invoice them for certain items that were on the estimate, you might invoice them for a percentage of the estimate, and when you’re finished then QuickBooks will know and it will not ask you again if you want to invoice any more from that estimate because it’s all been pulled in.

If you were estimating jobs you will want to use progress invoicing. I’m going to click Next and now it asks about managing the bills that I owe.

Bills come in the mail that have to be paid. A lot of people will have a little basket on their desk and when the bills are ready to be paid they’ll just go through and pick out the ones that they want to write a check for. You should put all of your bills in QuickBooks and that way you can run reports at any time to see who you owe, how much money you owe, if it’s over 30 days, things like that. Think about too if you’re going to the bank to get a loan for your business they’re going to want to see if you have any accounts payable is the term, or any bills that you owe. So make sure you put any bills or any expenses for the company that are coming up in QuickBooks so that you have accurate reporting.

I’m going to click Next and now it asks me about tracking inventory in QuickBooks.

I want to go ahead and stop the video right here because there is a second part and we’ll just pick up where we left off, right here. I’ll see you shortly over in part two.

Using the Easy Step Interview – Part 2

Cindy: We are working on going through the Easy Step Interview to go ahead and set up our company file. Let’s go ahead and keep on going. This is part two of section two, Using the Easy Step Interview.

Okay when we left off we were on this screen where QuickBooks is asking if we want to track inventory.

Now let me just tell you a little bit about what the word Inventory means. If you sell physical products in your store, for example, and you track the fact that you have six in the backroom and you’d like QuickBooks to let you know that you have two left so you can order some more that’s an example of true inventory. Sometimes businesses sell products but they don’t track how many they have in the back. They might just order a few as the customers request them. That’s what we consider noninventory, when you don’t want to track how many you have. All you have to do here if you want to track inventory is just say Yes and then click Next.

This screen asks about tracking time in QuickBooks and there are a couple of ways you can use the time feature.

One of the ways is if you do job costing in your business and a common question is what is job costing and how do I actually do this? Well job costing basically means that if you work on different jobs or projects you want to know all of the costs involved in working on that particular project or job. And part of that is the time that you or your employees or subcontractors might spend working on that job or project. You can track that time in QuickBooks.

The second way you can use it is let’s say you’re in a business where you bill your customers by the time you spent. Maybe like an attorney, for example, he might track all the time during the month when he talks to you on the phone and then at the end of the month he might send you an invoice or a bill from that.

So there’s a couple of different ways you can use that time tracking. I suggest that you do turn that on.

The next questions says, Do you have employees? Now I find this question very misleading right here. Employees are people that you actually give a paycheck to and you deduct taxes from them. If you have subcontractors that work for you they are not employees. They have nothing to do with payroll, absolutely nothing. They’re considered vendors in QuickBooks. The way this should be handled is they should always send you a bill and you pay that bill. Do not try to use subcontractors as employees to save on taxes because at some point you will get in trouble for doing that. You need to either have employees or have 1099 contractors that work for you. They’re considered 1099 contractors if they dictate their own schedule. If you dictate their schedule, where they have to be, what time then they need to be set up on payroll.

I would go ahead and say Yes here and you can check whichever ones you want. Right now we’re just turning on an icon so that we can do payroll or if we have 1099 contractors in the future we can pay them.

I’m going to click next and it asks about using accounts in QuickBooks. I’ll click Next once more and now it asks about selecting a date to start tracking the finances. You get to decide which date you’d like to start with in QuickBooks. It just have to have a date to start with. You can actually start with the beginning of your fiscal year or you can use today’s date or set a particular date that you’d like to start with. If you’re just getting into QuickBooks towards the end of the year and you’re really wanted to start fresh next year then you don’t really need to go back to the beginning of the current fiscal year. However, if you said to me that you would like to put all of 2019 in here, for example, then I would go back to the beginning of the fiscal year and enter everything that happened. That is really your choice what date you want to start with.

I would actually try to make that date correspond with that bank statement. So if you decided, for example, that today you bought QuickBooks, and let’s just say that it is November of 2019, I would try to go back to maybe the first or whatever date your bank statement cut off and make them correlate that way. You can still enter something prior to that date or after that date. It just needs a date to start with.

Now what we see here is our income and expense accounts. What you’ll see is a list of what is called the Chart of Accounts. The Chart of Accounts basically is a listing of all the buckets that you’d like your money to go into. So for example, when you look at this list, if you’re going down the list and you say to yourself, “You know I have a lot of charitable contributions” you can click on that to turn that one on. Or maybe you don’t have a lot of computer and internet expense, you can turn that one off.

I usually suggest you just leave what it pulls up automatically and then we’re actually going to get into the Chart of Accounts over in module three in section three and spend more time on it there.

I’m going to click Next and it’s going to say Congratulations you’ve completed the Easy Step Interview. Now at this point I would say that80-85% of your company information is set up. We still have a little bit more but let’s go ahead and hit Go to Setup here and then what you’re going to see is a few little screens pop up that will give you some suggestions or like in this case, this is what they call a desktop usage and analytics study. I’m just going to hit Continue past that. If you see this screen it’s asking you first of all would you like to add the people you do business with. Do you want to add your customers now, your vendors now? Do you want to add your products and services that you sell? And also do you want to add your bank accounts? Let’s just go ahead and say Start Working. We’re going to set those up as we go along. You could have also clicked the X in the top right of that particular window.

And you’ll also get a new feature tour that will appear if you’re new to QuickBooks. Now these are nice to go through if you want to go through and see some of the new features, but if you don’t want to just click the X in the top right hand corner and that will close that window for you.

You’ll notice that you will get these yellow helpful hints that appear around your screen. You can turn those off if you want. You’ll notice they will just fade automatically if you don’t do anything with them.

And this is what we call your Home screen right here. Now we’re going to spend time in a little bit going through this Home screen. Let’s go ahead now and go over to section three and I’m going to take you into a feature called My Company and give you a quick overview of how it works.

My Company Overview

Cindy: There is a feature in QuickBooks called My Company. Basically what it is is when we went through the Easy Step Interview and set up our company file, if you remember the very first screen asked us to put in information about the company like the address, if we had a federal tax ID number, website, email, things like that. Well what if we misspelled it or we forgot to put some of that information in? This is where we’re going to go to actually edit that information. This little section is called My Company.

Let me flip over to QuickBooks and I’ll show you real quick how to get into the My Company feature.

All you have to do to get to the My Company feature is go up to the menu at the very top of your screen and click on Company and then you’ll see My Company. In here this is all the information that you use when you went through the Easy Step Interview to set up your company file. Let’s say that I misspelled Coatesville, for example right here. All I have to do to edit that information is come over to this little pencil and then I can edit anything I see on the screen there. So I’m going to take out that E. And if I wanted to edit that phone number I could certainly do that. I can go ahead and add it right here. And of course I can add fax, email and website here as well.

You’ll notice on the left hand side that I’m currently on the Contact Info. If I click on Legal Information it brought in the same information that I had used to set up the company with. And if the legal information happens to be different, maybe the company is owned by some sort of organization, I could fill out all of that information right here. And obviously I would want to edit Coatesville again and make sure I spell it correctly.

The next tab down on the left is your company ID information. If you remember it asked us to put in our federal ID number and we decided not to do that, but if I wanted I could here. And if I wanted to put in the social security number I could here. Maybe I’m not incorporated and that’s what I’m using. You’ll find there are a lot of places in QuickBooks where it asks for some what I call personal information and if you don’t have to have it I wouldn’t put it in here.

Next on the left is Report Information. This is the information on the first month of your fiscal year, your tax year, if you have a particular income tax form you use. And remember here I told you to leave it on other or none unless you happen to be using another software package that works with QuickBooks for tax purposes.

And the last option on the left is your Payroll tax form identification. If you have a particular person that is preparing and signing your payroll tax forms you might want to put their contact information in here, their title and they’re phone number.

And that’s really all you have to do to change that information about your company. I’m going to click OK and see what else is here on the screen.

Now a couple of other things you’ll notice is your version of QuickBooks. You’ll notice it’s right over here and it’s going to have your license number and all of that information. You’re also going to see a lot of services that QuickBooks can offer as ancillary services to QuickBooks. For example, when you decide to do payroll if you decide to use the Intuit payroll service it is not free. You do have to pay for it. Here’s where you can turn it on. You might also want to buy from Intuit the merchant services account that they have so that you can accept credit cards through QuickBooks. You might want to order checks. And they also had some additional things you could purchase as well. And all of that is in the My Company information here.

All you have to do when you’re finished is go to the top of that window and click the X and that will put you back on what we call the Home screen. And that’s really all there is to the option called My Company in QuickBooks.

Let’s go ahead now and jump over to section four and talk about identifying the components of the QuickBooks environment.

Identifying the Components of the QuickBooks Environment

Cindy: We’re currently working in module two and this is the module called Getting Started. We’re in section four now and I want to take a few moments and talk to you a little bit about identifying the components of the QuickBooks environment. Basically what I mean by that is I’d like to go over the screen itself with you, get you familiar with terminology, maybe how you can change some things so they work better for you, and that’s all we want to do here is just kind of get you familiar with things.

Let me go ahead and flip over to QuickBooks and I will get started talking to you about the Home screen.

Let’s go ahead and start at the top and work our way down.

The first thing I want you to notice is that your company name is right here in your title bar at the top. It also tells you the version of QuickBooks you’re using and which screen you happen to be on. In this case your Home screen. This is what we call your Home screen right here.

The next thing you’ll notice is a Menu bar. And you’re probably familiar with using these in other programs. There’s a few things here that I want you to get familiar with. First of all under the Edit option there’s a Find here that we’re going to use when we’re searching for anything, and we’ll get to that a little bit later. Also there’s some preferences we’re going to be looking at over in module three.

A lot of these options that you see up here you can also see on your Home screen. For example, when it says Vendors right here it also says Vendors right here. That’s a quick way to get to what we call the Vendor Center. Or also if it says Customers here, here’s the Customers Center. That’s another way to get to customers. So you’ll have multiple ways to get to the same place.

On the left hand side of your screen here you have what we call your Icon bar. And as you click on the different options here you will open the different windows. Some people prefer this to be across the top of their screen and you have an option to change that if you like. The way you change that is you go to View on your menu and choose Top Icon Bar and now you’ll see it’s up here at the top. It’s really just a matter of personal preference. I prefer this myself because I feel like I have more room to work on the screen from left to right when that is on.

Now something else that I’m not sure how people work without this but there’s something called the Open Windows List that you can turn on. If I go up to View and choose the first option, Open Windows List, then this will appear on the left. Now what this does is every single time I click on an icon on my Home screen, let’s say I click Create Invoices, I’ve now opened a window that will allow me to actually put an invoice in. If I don’t want to close it for whatever reason I can just come over here and go back to Home and open something else or do whatever I need to do and when I’m ready I can go back to Create Invoices. When I’m ready to close this window all I have to do is use the X that’s in the top right corner of that window to close it and now you can see that I only have Home over here under the Open Windows.

You also have here your Home page which you’re on now and also your Insights. Let me just mention the Insights real quick.

The Insights tab is going to allow you to see what some people call a dashboard. It’s a quick overview of what’s going on with your company file. Now obviously we have no data in here yet but if we did we could see a quick profit and loss right here, we could see information about our income down here, we could see information about our expenses over here, and there’s a little donut graph it looks like over here. Once we get some information in later on we’ll go back and look at this. I’m going to flip back to the Home page.

Now let’s talk a little bit about how the Home page is actually set up. There are actually five sections. The first section that you see here where it says Vendors, this is account payable. If you’re not familiar with that term anything having to do with the bills that you pay that come in the mail, this is where you’re going to work with that. You can see here you can enter your bills and you can pay bills. If you work with a purchase order system this is where you could enter purchase orders, receive your inventory, and then a bill would come in the mail for that.

This is your Accounts Receivable section down here and this probably where you’ll spend the majority of your time. Accounts Receivable has to do with customers. Customers are people or businesses that buy from you, whereas when we talk about Vendors up here, these are people or businesses you buy from. That’s a good way to remember that.

This has your entire flowchart as far as customers are concerned. You’ll notice sometimes you estimate jobs, sometimes you invoice customers, that’s how you’re going to get paid, then they pay you and obviously at some point the money goes in the bank.

The next section down here has to do with your payroll. You’ll notice that if you had gone through the Easy Step Interview and said Yes, I want to use the payroll service, this would have populated some icons for payroll. Since I did not tell it that the only one I have is the Enter Time option.

The next section over here where it says Company, these are things that have to do with the file itself, not necessarily specific customers or specific vendors.

This Chart of Accounts is the most important thing in QuickBooks right here. Get really, really, really familiar with that. We’ll be talking about it in a later module. But all of the money that flows in or out of QuickBooks will go into one of these accounts in the Chart of Accounts.

The Items and Services, these are things that you would sell your customer or sometimes you purchase them as well. We’ll have a list of those. And there’s some other things here that you may or may not use, like the Time Tracking, for example, or the Inventory Activities or Ordering Checks and Tax Forms. Really those are ancillary things that you may or may not use. And then we’ll talk about the Calendar in a later module as well.

The last little section here is your banking section. All of these items that you see here have to do with something that happens at the bank. You make deposits, you write checks, you have a checkbook register, you reconcile your checking account or your credit cards.

So again you have five sections. You have your Vendor section which is accounts payable, Customers, which is accounts receivable, your Payroll, Company, and then Banking.

Now on the right there’s a couple of things. First of all this section that says Account Balances. Once we get some accounts set up for you, like your checking account, savings, etcetera you would see them in the list with the balance. And one of the ways you can go to that particular account is to double click on it right from this list. These are all things that Intuit can sell you. you can turn on payroll, accept credit cards, order checks from them, or activate T-sheets which is time sheets. If you don’t want to see this just hit this little arrow on the right and that will hide it for you.

And there’s one more thing I’ll mention and that is your backup status. We haven’t really talked about backing up yet but if you have the desktop version of QuickBooks you will want to back it up and that way if you ever need to use that backup for some reason you would have it. And there’s a couple of ways you can do it. You can actually do it manually where you actually put in a flash drive, a CD, some other form of media where you can save it to. The other option is for a fee, this is not free, Intuit will back it up for you. And so you’ll just see right here it says your data has not been backed up. It may have just been backed up so don’t always rely on that to tell you. Again, if you don’t want to see this just use this little arrow to kind of hide that and get it out of your way.

And that gives you a quick overview of how the Home screen is set up.

One more quick thing. If you happen to navigate somewhere in QuickBooks, let’s just say I clicked Receive Payments here, and I don’t know how to get back to Home, maybe you didn’t have your Open Windows List here, you’ll notice the very first icon says Home and that’s always going to take me back to my Home screen. That’s a real quick way of actually looking at the Home screen.

What I want to do now is take you over into section five and we’re going to talk a little bit in section five about how to upload your data from the desktop version to the QuickBooks online, if you decide to move to the online version.

Converting QB Desktop Data to the Online Version

Cindy: This is the last section of module two, Getting Started, and before we leave this module I wanted to take a moment and talk to you a little bit about how to convert your QuickBooks desktop data to the online version. You may decide at some point you need to access your QuickBooks file remotely and that might be a reason for going with the online version. It’s a pretty simple process to do so let me show you how this works.

Make sure you have your QuickBooks desktop file open. It doesn’t matter which window you happen to be looking at. All you have to do is go up to File on your menu, come down to Utilities, Copy Company File for QuickBooks Online. It’s going to tell you that before it can export your data it has to close all of the windows. It will ask you if you want to continue. You just click OK there and now you’re going to save this. You decide where you’d like to save it. You just hit Save at the bottom and then it’s going to convert your data for you.

Now what you have to do is go ahead and set up your subscription online. And once you get it set up in there you can go in and you can actually import this particular file. So you can see that it’s a super simple process to do.

If you decide that you don’t like the online version once you start working with it you can’t go the other way. You can’t download it back to your desktop version. You would get in touch with Intuit at that point and then they would go in and back up your file for you and they would help you actually put it back into your desktop version.

That’s going to wrap up module two, which was Getting Started module. I want to take you now over to module three where we’re going to talk a lot about different ways to customize the QuickBooks environment.

Cindy McGuckin

Cindy McGuckin is an IT trainer with over 20 years of experience. Cindy currently manages the IT Training Department at Trident Technical College, she's a Member of the Association of IT Professionals, Charleston, SC chapter and the Treasurer of the South Carolina Association of Continuing Higher Education.Cindy is a Microsoft Office and QuickBooks expert and her online courses have received hundreds of 5-star reviews. Her no-nonsense approach to teaching complicated topics makes her classes engaging and interesting.