How To Set Up QBO Correctly: Essential Settings to Customize

Hello everyone. Today I'm going to give you some tips for setting up your QuickBooks online file for the first time. So let's go to the section which is a little gear icon on the top right hand side of the QuickBooks interface. We'll click on that and we will click on account and settings.

And this is where you want to set up your file. You have various options here. For example, you set up your company name. You can put in your logo, your business number and various other information. Additionally, you can look at your billing. Subscription usage shows you what your plan is and how many lists and users you're allowed. Sales helps you format the sales forms and the estimates. And there are various options here that you can either toggle on or off or customize. Similarly for expenses, there are a few less of these, but but there are still some options for customization. Payments is if you want to accept credit cards, QuickBooks allows you to do this directly. They actually provide a merchant account and you can sign up for this and if accepted, you can.

Take credit cards from your clients simply by sending them an invoice and and getting them to pay online. It's a seamless process. There are fees involved, as with all credit card transactions, but it is a useful way to receive payments. Time is when you are recording time estimates either for yourself or for your employees. And then there is the advanced tab. And this is what we are going to be looking at today.

So in the first section you have the accounting and this is where you select your fiscal year. And if your year end is December 31st, then you will choose January as the first month of your fiscal year because it goes January from December. This is true for almost all sole propaganda and many partnerships. If you have a corporation, you might actually have a different fiscal year and in that case you would choose the first month. So if your fiscal year.

Ends on June 30, then the first month would be July and you would select that the first month of your income tax year, usually the same as your fiscal year. If it isn't, then you would go ahead and select when you need to accrual or cash.

So in Canada, almost all accounting for almost all types of businesses for tax purposes is on the accrual basis. And the accrual basis in simple terms means that you record income and expenses when you receive a bill from a supplier or send an invoice to a customer, regardless of whether you've been paid or not. And you might have terms that may be three months or one month and you may actually get paid at that time, but it is still income or expenses. So when determining what accounting method to use, you will almost always choose accrual. If you are a commissioned salesperson, you might have the option to choose the cash basis. And the cash basis means that you only record income and expenses when you receive or pay the amounts respectively.

Close the books is the next option here. And this means that you can actually toggle this on and choose a closing date.

By choosing this closing date, no changes can be made to previous periods without either viewing a warning or entering a password. And this is very important and very useful. Useful when you have already filed your taxes and you don't want to make changes to the previous periods. So I always recommend selecting the closing day your previous year end and you would allow changes after viewing a warning and entering a password and select a password. This can always be changed in the future, but again it make sure that you don't make mistakes, enter transactions from previous periods and then mess up your books. And nobody wants that. All right, so the next in the next section and here, once you've done all of this, just make sure you click on save the company type. I'm just going to say no here. The company typed is either a corporation, a sole proprietorship partnership, not for profit. These are your options and you choose what applies to your situation. The chart of accounts I do have a video on chart of accounts you can enable account numbers. Account numbers are useful especially when you want to sort by account numbers or you want a little more granularity in your chart of accounts. And in the beginning you could just toggle this off, that's fine, but as you grow bigger, you might find the need to have account numbers Discount accounts. Similarly, if you do offer discounts, QuickBooks will create an account for you. And same with billable expense income accounts. If these don't apply, then you don't have to worry about changing them.

In this next section you can track classes and locations, which is an option that is available in the advanced versions of QuickBooks. And you can use these types of categorizations to track, for example, sales from different offices or cities or countries. You can use it to track different divisions or products versus services or retail versus wholesale. You can use it to track rental income, separate rental units, separate buildings. There's all kinds of ways in which you can use classes and locations.

What it does is reports are available whereby you can see the sales and the expenses. Anything to which you add a class or a specific location. So from a reporting perspective, it is quite useful in the automation section you can pre fill forms. I don't really I like this off because it can be confusing and it can create errors so I would rather just enter information.

Manually when that is necessary automatically apply credits. Again I like control over this process. I like to turn this off and same with the other options here.

Projects in advanced versions of QuickBooks you actually have a section for projects so you can toggle this on. Your language is whatever you choose, your options are English or French. In Canada, currency is an interesting one and it is important to note that once you turn on multi currency you cannot undo this which isn't a huge deal, but it does add an extra dimension to your reporting and and it can be a bit of a pain. So unless you really need multi currency, leave this on. If you only have a couple of transactions say in US dollars or you buy stuff from the US or internationally but it comes onto Canadian credit card, then just leave it off.

Business network you can allow members to this is actually new, I've never seen this before. And then you have other preferences and you can choose your date format whatever you're used to your number format. These are useful to have on duplicate check numbers and duplicate bill numbers so you don't enter a bill twice. Similarly with a journal entry you can do the same thing and then finally QuickBooks will sign you out if you were inactive. So these are all the advanced functions of QuickBooks Online.

In our next tutorial I will give you some tips on things that you need to do when you are setting up your file your QuickBooks online file for the first time. I hope this was useful. If you have any ideas for videos, please leave them in the comments like subscribe and have a lovely day.