How to Setup QuickBooks Desktop: Part 1
Ronika Khanna walks through setting up a new QuickBooks Desktop company file for Canada. You'll pick your industry, business structure, and fiscal year (which affects your reports), then choose features like sales tax, payroll, and inventory. Most settings can change later, but multi-currency is permanent once you turn it on.
Chapters
Hello everyone. Today we are going to create a new company file in QuickBooks Desktop. So let's begin. First of all, you'll click on Create a new company File. It will take you to this screen where you have the option of either creating.
A new file based on Express Start, you can do Detailed Start, or you can create a new company file based on an existing one if you already have one. Today we're going to look at how to create a company file using Detailed Start, which is where you can input all of the information right away and it will be set so you don't have to worry about entering these details in the future. So let's click on Detailed Start. You will put in your company name meets the Sherlock Holmes Detective Agency. The legal name possible pre populate. You can enter your address. Your city. The province is actually essential. This is, we're working with the Canadian version of QuickBooks Desktop and the province is essential because tax codes tend to be based on where your province is located. You will set up your proposal code.
And then you can enter all this other information. The purpose of entering the information here is obviously just to have your information, but it also pre populates on forms such as sales invoices or sales orders. You can enter your email address website if you want those to show up on these forms. Once this is done, you can click on Next. Now you have to choose an industry.
There are a variety of industries here that you can choose from pre populated and what this does by choosing one of these specific industries, it actually pre populates the chart of accounts which is the account structure that will be used to enter and allocate your transactions. So it's quite useful because it's more specific to your industry. If you don't see your industry, however, you can scroll down and just choose a general product or service based business, which is what I am going to do in this case and it will come up again. The chart of accounts will be standard for a service based business. And remember that you can always adjust, add, delete accounts from your chart of accounts in the future. So click on next. Now you have to choose what type of business structure you have. This is important in Canada. This is very specific to Canada. It's for tax purposes to a certain extent and it provides you with certain information in your reports that can then be used to input into your tax software. So we are going to choose corporation, but if you're a sole proprietorship or partnership, any one of these you would choose what pertains to your business. Click on next.
This is really important. Your fiscal year.
Is the beginning of your year. If you're a sole proprietorship or partnership, this is almost always going to be January.
And your fiscal year runs from January to December. However, if you're a corporation, it could really be any month of the year. In our case, the fiscal year starts in July. So that's what we're going to select. And it goes from July 1 to June 30, and June 30 is the year end. Click Next. Here is where you'll type a password.
Which is required.
To access your file in the future. Make a note of this password, you don't want to lose it. And then you'll click on next.
This is really important.
Where you're going to save your company file and you want to make sure it's in a place. I like to choose an accounting folder on my computer where it's easily accessible and all of my accounting files are in the same folder.
So here I will go and find a place to put it. For now, I'm just going to put it on my desktop. But as indicated, you should select an accounting folder that would be.
Easily accessible. Click Save.
It is now creating the new company file. This takes a couple minutes sometimes, usually not that long.
Okay, so now it's going to ask you about the features that you intend to use. Remember the thing to remember is all of this can be changed. Nothing is set in stone. Just for now, use whatever the best information that you have at this time. So click on next. What do you sell? The Sherlock Holmes Detective Agency sells both services and products. So I'm going to click on that. Click next. I don't sell online, but I may want to someday. That kind of that works for for my business. So I'll click on next. Do you charge sales tax? Many of you will. If you do charge sales tax, you will have numbers. This is where you want to input your GST number. And if you are located in Quebec or Manitoba, Saskatchewan or bc, you might have a PST number. That's you would put that here. And again, this is important because it appears on the invoice and it is actually required information on your invoice. Click on next.
Do you want to create estimates in QuickBooks? I'm going to say yes here. Some businesses might. Some you may never do that. You may just simply send an invoice and you would click no. It just activates this feature in QuickBooks to Desktop.
Click next. Tracking customer orders do you want to track sales orders? So this is if you prepare a sales order, send it to the customer, and then they approve it and then it gets converted into an invoice. So we'll click on yes for now. We can deactivate it in the future if we want. Add Use statements this is when you send a statement statement to a customer with a list of all of the invoices for which they owe you money. This is a very useful feature, especially for customers who tend to pay their invoices late and need a gentle reminder. Click on next. Use Progress Invoicing I'm going to say no. This is great if you're in construction or a contractor or a consultant who bills again once a major milestone has been achieved. Click Next. Do you want to keep track? I would say definitely say yes to this because it allows you to enter bills that you can then pay at a later date and it makes it very easy to track how much you owe and manage your cash flow. Click Next. Do you print checks? Some of you do. Some of you just may have converted fully to making payments online by credit card or E transfers, so you can choose the option that pertains to you. I don't plan to use checks. I don't like them. They're a pain. So let's move on. Are you tracking inventories? So inventory. This you want to think about. If you only sell services, chances are you don't have any inventory. It's not necessary to activate this. If you do have products and you want to track them every time they're sold and have indications of when to reorder your inventory or manage it, then you can leave this on. So I'm going to click yes because the Sherlock Holmes Detective Agency does sell products such as microphones and surveillance equipment. So I think this is useful for me. Click Next. Do you accept credit cards? So there's a way in which you can actually apply to QuickBooks to directly accept credit cards, making the whole payment process very easy. They charge a fee, but it is something to consider. You go through an application process as you would with any other emergency service provider and then you can accept credit cards by directly sending out invoices. I am going to select the middle option as this is something I will think about in the future. Do you want to track time? Is it important that that you show your customer how much time you are spending on a particular project or do you just want to track time for internal purposes? Have employees or subcontractors enter time, then this might be useful. If not, you can just click no. Click next. You have employees. If you do this will activate the Payroll functionality in QuickBooks Time Desktop. This is something that you have to pay for separately and monthly. So something to consider. You can either use the built in Payroll functionality in QuickBooks Desktop, which is quite good, or you could have a third party external service do it for you. Click on next. Do you have multiple currencies? Do you invoice customers or clients in different currencies? This is important to consider at this juncture because once you turn it off you cannot once you turn it on rather you cannot turn it off. So if you're not sure, leave it. Keep it as no for now until you do have customers to whom you bill in foreign currencies and then you can actually activate it. So here, this is the chart of accounts and this is really important. This dictates the structure of your accounting and it is really important because there's a ton of useful information that you can get from your reports and QuickBooks, but only if your chart of accounts are set up in a way that provides you with the best snapshot of your business. Click on next. The date you will select beginning of this fiscal year. We'll go with that. You can also go with today's date or the first day of a quarter of a month. This doesn't really matter that much.
It's. It's sort of. It can be changed in the future. I would just go with beginning of this fiscal year. Here, this is your chart of accounts. You can go through it and, and select things that you might need or not need. I'm going to. I definitely want sales. I want merchant account fees because I will probably be accepting credit cards. I do have subcontractors. I don't really have workers comp premiums per se that I want to track separately. I might want to use a different account. I do have business licenses and permits and so you would just kind of go over dues and subscriptions is something that most people businesses have insurance, expense interest.
Office expenses, professional postage and delivery. Something that many businesses have. And so again this can all be changed later. You're not stuck with this. So just choose the accounts that you feel are pertinent to your business as a juncture and then later on you can go in and change them. So that's it. Again, I'm going to uncheck that. Click next and then. And voila. Congratulations, you have completed the easystep interview. So now you will enter your critical business info using the QuickBooks setup. Let's go to the setup.
And this is where you can add your customers, the products that you sell, and your bank accounts, which we will cover in another tutorial. Thanks for listening. Have a great day.
