Before you Begin the Input of Customer Transactions

Posted by on Jan 17, 2011 in Getting Started in QuickBooks | 0 comments

Yes, before you begin to enter in Customer transactions you need to set up some information in the List menu. You will find the List menu on your menu bar at the top of your QuickBooks Home page.

After clicking on List it will open up a menu where you will see a number of names. The one that we will deal with at this time is the Item List. When opened, the Item List should show you a number of tax names with GST, HST and PST in them. These were setup by QuickBooks as defaults to be used along with their percentages. I will explain their use as an item as I go through some other item setups.

How and what type of item you create here will depend on the type of business you have. If you have a business that is selling a product and you have inventory, then the setup for that type of item will be dealt with in a later article on Inventory. For now, I will deal with the sale of a service and the example used will be consulting, and the account we will setup on the fly.

Right click on your mouse and choose New. The next window that opens will automatically stop on the Type field with the default being Service. Click on the drop down button just to see what other choices are in there and remember them because you will need to come back here again at a later date.

You will notice beside Service that there is a brief description of its use. This description will change with each new choice. Now back to Service we go. Tab will take you to the next field, which is Item Name/Number. We will use Consulting as the name so type it in and Tab past the next three fields, which will move you to the Description field.

We’re going to set up two types of Consulting. For the first one in the Description field you will type Consulting – On Site. Tab to the Rate field and type in the hourly rate of 60.00, Tab once to the Tax Code field and choose the code that applies in your province. If you answered the question in the original EasyStep Interview, then your province should appear there. If it does not, you will have to choose <Add New> and proceed to set it up.

For an easier explanation I’m going to use the default H and then tab once to the Account field. Clicking on the drop down button you may see a Consulting Income account setup already but you are going to add another account for the On Site account. Click on the drop down button, grab the slide bar to your right with your mouse, drag it to the top of the list and choose  <Add New>. This will open up the Add New Account screen.

Starting from the top with Account Type you will choose Income from the menu if it has not defaulted to it. Account Name is the next field, where you will type in Consulting – On Site. Tab to the sub-account line and click on the box and tab once into the empty line field. At the end of this blank line will be another drop down box, open it up and choose Consulting Income.

The next two fields are optional and you can use them as you see fit. Have your QuickBooks Trainer, Pro Advisor or Accountant set up the Tax-Line Mapping field for you.

Save and Close takes you back to your item screen setup with your new account you created placed in the Account field. Click on the drop down arrow just to make sure and you should see it highlighted. Hit the Esc (Escape) button on your keyboard to take you back to the Item List screen, then click on OK and you should now see the new item in your list.

Now to create another item list such as Consulting – Off Site, repeat the steps above and change the rate if it is different.

If you made a mistake anywhere in your setup of this item and you need to correct it, then highlight the item, right-click on your mouse, choose Edit Item and make the change. Don’t forget to Save it.

These and any other items will become self-explanatory when you start to create an invoice because these will be your choices once you set them up.  These items can be subtotals, groups, discounts, partial payment or tax.

Most of these will point to some type of general ledger account where the amount will be recorded once you use the item on an invoice. Depending on the account, they can be income, tax, cost of goods sold, bank, and yes, even an expense.

At the bottom of the Item List are four buttons that you should become acquainted with. Many of these functions within the button will be the same as when you highlight an item and right-click on your mouse.

Next up will be creating invoices, now that you have items to work with.

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