Bookkeeping In Quickbooks Online (Bookkeeping & Accounting)

By SADANAND PUJARI

In this QuickBooks Online Book, you will learn everything you need to know about QuickBooks Online. The perfectly clear, step by step instructions will show you how to navigate through every part of QBO. We will perform the complete set up together. You will then experience every common transaction type that can be entered into QuickBooks Online. You will see how to manage and customize the most important reports in QBO. You will be able to find and fix data entry mistakes and even find anything ever entered into your QuickBooks Online account.

The projects and tests replicate real life challenges that I will show you how to overcome when using QuickBooks Online. Any industry specific tasks that you might need can be learned from reading those topics in the QuickBooks Desktop chapters. This Book will give you the ability to apply those specialty topics to QuickBooks Online.

The transactions we learn are what any company would need when using QuickBooks Online. We enter invoices, sales receipts and customer payments into the QuickBooks online account. The training includes deposits and QuickBooks bank related transactions as well as entering vendor's bills and paying bills in QuickBooks Online.

This QuickBooks Online chapter instructional Book even includes Petty Cash and other cash back related transactions. I continuously give QuickBooks Tips and QuickBooks tricks along the way to help students have total control over all your QuickBooks Online records. The important QuickBooks Online functionality features will help you become an expert in QuickBooks Online.

I'm right here for you if you have any questions or need support. I hope you learn well and enjoy the Book!

• Language: English
• Publisher: SADANAND PUJARI
• Release date: Feb 2, 2024
• ISBN: 9798224493227

Book preview

Bookkeeping Project Outline and Plan

Within the book keeping a project outline and a plan chapter of the Book we will go over a project outline and discuss the outline of a book keeping project for a business. We'll discuss the types of businesses that would work well for our cash basis bookkeeping system, typically small businesses. We will discuss different types of ways to enter the information into the system including think feeds and using the bank statement in order to enter the information into the system and how we will go about that process in future chapters within this Book.

We'll also talk about the relationship between the bookkeeper and the owner and the end of the time period tax preparer or financial statement preparer CPA firm and how that relationship needs to work in order for things to move most smoothly. We'll also discuss relevant questions. We would want to ask ourselves or clients when setting up a new bookkeeping project in order to get that bookkeeping system set up in as efficient a way as possible.

Data Files and QuickBooks Backup Files

Within the QuickBooks Book we will have a link to this page which will provide some additional resources for example. This link will open up zipped files so if we open up that zip file it will have our client folder. This is a folder that we will be working on. Note that this is a zip file that we're using out here. So what you want to do is copy this right click and copy it and or just drag it to the desktop where you would like to replace it. Also note that we will be creating a folder similar to this if you would like to go through the practice of setting up these folders along with the chapters you can't do so this folder will have some added information which will be necessary throughout the problem however and we'll point them out and where they're located as we go through the problem.

But some of those will be in the 2019 folder or we'll have some Excel documentation. We'll also have in the two months we will be working in January and February we'll have some client provided documentation bank reconciliation and credit cards. So those are things that we will be demonstrating within the Book and instructional chapters and or you can use these documents in order to reference them and or fill out information such as with the Excel documents or Excel spreadsheets. We also have a quick box of backup files you can open. These also will be in zipped folders. Are you going to want to remove them from the zip folder and then you can restore those?

Any time we would need to do so. Note that if you go straight through this problem you won't need any of these backup files. However if you would like to jump forward to a specific area these backup files can be useful to do so. Or if you'd like to rework something either because you made an error or you just want to go back to something then these quick Pook's files can be used to get you to that exact point in time having the data file be the same for what we are entering in the QuickBooks demonstration as well as what is in your system.

As we look at the QuickBooks file that looks something like this. And they'll have numbers related to them. These numbers will correspond to the numbers that are going to be in the chapter chapters. However note that the numbers here represent the completed function. So we've already done that. The activity that was done in chapter 19 here. Therefore if you want to redo to 19 For example you would have to restore to 17 and then restore it before we've entered the data. Then you can read the instructional chapter and we should be at the same point in time within the data system to enter the data and at where we will end at the end of the chapter related to 19.

Also remember that these are backup files so you're going to want to copy and paste these outside the system. These are QB backup files; we can't open them straight here. We would have to restore them to our system. Make sure you don't restore them over anything other than the system that you're working on and the other problem that you're working on. Make a separate copy and then you can restore this information and you can jump to any component of the problem. We are working on that fashion.

Outline Of Standard Client

In this chapter we will take a look at the type of clients and the type of bookkeeping system for which our system will work well for. In other words we're putting together a very systematic bookkeeping system and it will work well for certain types of customers and certain types of needs. So whether we are a business that is thinking about implementing an accounting system such as this or a bookkeeping business that wants to pick up clients we need to understand the types of clients that we want to pick up. Clearly we want to pick up types of clients that have integrity that we're going to work well with.

We're going to get paid from that perspective. We also want to know what types of clients we want to pick up in terms of their needs so that we can specialize what we do to a specific client. And that's what we're doing within bookkeeping. Even within accounting, within bookkeeping we've got to trim our needs down. What we do is down to specifics so we can specialize and differentiate in this way. This is one way to differentiate by doing a specific type of bookkeeping. Who are we going to apply this bookkeeping for? What type of clients are we looking for when we're using this type of bookkeeping system?

If we want to variate from that system if and when we want to do that. These are questions we need to know and understand as we go through our bookkeeping process. First we wanted to find what we do and what type of client would fit well for what we do. And for this case we're going to be talking about small businesses because we will be offering a cash basis service. So we're going to do bookkeeping specific bookkeeping on a cash basis in a simplistic type of way getting the information directly from the bank statement in a cash basis format.

And that will typically work for smaller businesses who have specific needs oftentimes to compile the information in a format that can be useful for indeed the year needs such as tax preparation and financial statements. We'll talk more about what this includes And in defining what it is we do and what type of client we work with. We also need to define what we do not do and what types of clients we are not going to take on so that we can focus on our specialty so areas to consider are going to be the areas that are kind of in between we want to think about such as inventory. Typically we're not taking on inventory in this type of system because if we want a full service tracking of inventory that's going to add a level of complexity.

So we'll talk about different ways that we can think about inventory and we may want to work with a small client for inventory. But if we take on our client that has inventory we need to be straightforward with what types of services we're going to provide in terms of tracking that inventory and how we're going to deal with that inventory. Otherwise we may just want to not be working with customers who have a significant need to track inventory and work with more types of clients that just have service type industries because those lend themselves to a straight cash basis format more easily. So we will actually work on a problem where we will have inventory involved.

So you can see the kind of complications that you may run into with inventory in the system and decide for yourself do you want to include inventory or do you want to just work with customers that don't have that inventory type needed. Payroll is another issue that we want to consider whether the customer has payroll or not. Do we want to work with the types of clients that are sole proprietors and don't have any payroll needs? They're just going to be sole proprietors and just need the needs for the financial statements. Basically the profit and loss or income statement or if they do have payroll how are we going to deal with payroll. Do we want to have an outside service dealing with payroll.

Do we want to enter the payroll ourselves and take on that level of complexity? We and this problem will include payroll just so we can see some of the complications with payrolls and some of the options that we have with payroll. However if we're starting out we might want to consider taking on small customers that don't have the payroll needs or we don't need to take on the payroll needs. And again we'll look at some other options that we can use to deal with payroll. We also want to be clear on what it is we do not do in the system. So in our system we're looking at here we're not going to be doing a full service or cruel bookkeeping.

We'll talk about what that is. What we are doing is a cash basis bookkeeping based on the information that is in the bank. We'll take a look at more detail of what those differences are. We're not going to be doing tax preparation. And you can think about doing tax preparation but we're going to argue here that we're just doing bookkeeping at this point not tax preparation we'll discuss why that can be beneficial in some cases for bookkeeping. I would not do in financial state but preparation meaning we're not doing audits or financial statements or compilations or reviews we're just basically providing the reports necessary.

We'll talk more about that full service payroll. We're typically not going to be doing a full service payroll process and we'll think about some workarounds for dealing with payroll as well so let's get into a little bit more detail about these items. Full service rule book in full service accrual bookkeeping means that we're going to be tracking things like accounts receivable and accounts payable. We're going to be entering invoices, we're going to be entering bills. We're going to be entering the data as it happens throughout the time period in our system we're proposing here. We're not doing that. What we're really doing is taking the information that's clear from the bank already and entering that data into the system.

And that means we have no accounts receivable. That means we have no revenue recognition principle; we're not recognizing revenue when the work is done as would be done under an accrual method. But when it cleared the bank that's when we're going to recognize revenue. So it's not a full service system in that format. We're just doing the data input really on from the bank statements. We're also not doing a matching principle meaning we're not entering the expenses when they happened, we're entering the expenses when they cleared the bank.

Now there will be some exceptions if we see large transactions and whatnot. We're going to have to do some accrual type concepts. I mean for example if we paid cash for equipment we'll put that on and as an asset and if we took out a loan or something like that we'll have to deal with some accounts that will be kind of more rule related but we're not going through the full process. And the major thing that we will notice on the balance sheet is that we're not invoicing people, we're not tracking the accounts receivable. We're not adding bills and we're not tracking accounts payable. So again if a company really needs that we'll discuss a little bit how they can track the accounts receivable out you know in our system using a system like this.

However if a customer needs the system in order to process invoices like bills from that company filed and sent those out. That's not what we're really doing. We're just entering the data into the system. In our case if the company wants to track outstanding payables who is owed money to. That's not what we are really doing either, we're just basically putting the bills that have been paid into the system. So it's important when we discuss with clients what it is we're proposing to do here and what we're not doing. Tax preparation is also something I wouldn't recommend doing in this type of format.

So taxes being like income taxes at the end of the year form 10 40 income taxes if you were to take on into income taxes it could be a revenue stream for income tax but it's also something that can get complicated fairly quickly because once we start doing taxes we'll have the business taxes and then we'll have the personal taxes. And if you do not do the taxes it could be beneficial for bookkeeper's because then you can work with CPA firms and other accounting firms that do taxes but don't want to do as much of that data entry type of bookkeeping process and they're more than willing to work with bookkeepers that want to pick that up.

And so you can. It's a lot. We'll talk a little bit more about networking and who you can work with and it's a lot easier to set up a system that we will be proposing. If we can work with tax preparers and accounting firms and CPA firms they can help with the end of the period adjustments help with things like tax preparation help with things like payroll help with things like the period adjustments. So we're going to be actually dependent on those things to be done by things like accounting firms under a system like this. And it's easier to work with them if they don't think that we're competing on the areas that they see as their major revenue source.

So if we don't compete on the tax side but do the bookkeeping and use them for the tax side we have a very good type of relationship that could build on a business side of things. So that's why under this type of system we're proposing here whether it be our books or whether it be where we have taken on clients that we do not do the tax preparation and work with somebody. The tax preparer either someone that we propose or whatever tax preparer the client would like us to work with but it be nice for us to build a relationship with the tax preparers because we can feed we can feed each other in terms of clients and and working and being able to work more efficiently and all that financial statement preparation.

What we will do in our system, which is our main goal for the small companies, is often to make basically an income statement at the end of the year that can be used to help in the processing including including the tax return. So that's usually what the data entry is often needed for for small companies. They want to track what they're doing. They want to make sure that they're getting the financial statement at least compiled from the bank and that information then being put into such a format that can be used for tax preparation. So although we're making reports such as a profit and loss and balance sheet, we're probably focusing on more of the profit and loss.

We're not really reviewing those, we're not putting any opinion on those and we're not, you know, saying that these are correct in our opinion as a format of a review or an attestation type of format. We're just entering the data and giving reports for that data if they need a review such as for like a loan if you needed to have a loan or something like that the bank may want some type of opinion on the financial statements. And for that again we'd want to work with the CPA firms and we would want to work with an accounting firm so that they can take that information and then process it to give their opinion on that information.

That's not what we do here. We're just putting the data into the system to process the reports for it. It's important to be clear about that with with the clients and let the clients know that hey this is what we're entering into the system doesn't mean that we're we're giving our assurance in it as would be the case basically for financial statement preparation and we'll talk a little bit more about making that clear in terms of an engagement letter when we talk about putting together an engagement letter in terms of what we do and what we're not doing full service payroll all that also something that I would recommend under this system we're not not to take on the full service payroll and work with clients.

Either that or that are sole proprietors that don't have the payroll or that have a fairly limited payroll. And if they have limited payroll we may want we could. One option is to look at the payroll within the system and see if we want to take that on or another option would be to work with the CPA firm or payroll professionals. There's a lot of companies that just do payroll. And again that could be a very good relationship.

Payroll is another area that could be a lot of liability in place and it can get complex really quick even with very few employees payroll can start to get somewhat complex and therefore it may be worthwhile for us to start working with a payroll company that will basically take on those needs outside of our system and we then will just enter the payroll checks into the system from what they give us so that we can still be on a cash basis just entering the data on a very simplified cash basis and the payroll can be taken care of by payroll professionals and we can get any adjusting entries needed at the end of the time period for tax preparation as we work with the CPA firm.

So their goal here is to make things basically as simple as possible for an easy bookkeeping process whether it be us first simplify clients or us in terms of our own books and work with other professionals for those specialized needs in order to make that happen. So to do that then we need to define exactly what it is we do exactly what we're looking for the others to do and then we can define how to work with that system and put together a system that's very efficient in that format. Note what payroll involves. We have to not only pay the employees and track that but we have to take withholdings for federal as is the U.S.

withholding federal income tax social security medicare state taxes if there's multiple states or regions very. That gets very complex very quickly so we want to, you know, probably avoid that if we're not aware of the state taxes that we're in. Then again that's another area we would probably want to stay away from and less where we're really getting like the full service type of front for our software. But it's probably something we want to work with someone else for.

We have to pay the payroll taxes to the Fed or the state or the client's going to have to have that system to determine how much to pay the Fed or the state and with the 1940s and the 9:41 Quarterly and yearly forms as well as state forms would need to be generated. So even with a few employees this could start to get fairly complex to process and may be worthwhile under a simplified system for us to just work with it with another professional to basically take on the payroll.

Outline Of Service We Provide

In this chapter we will go over an outline of the surface we provide and go over the broad steps that we would go through with a customer file as we enter the data into the Quick Book system and provide the reports from it. We're proposing a cash basis bookkeeping system and what we're doing here is just entering transactions based on the bank statement. So what we will do is get the bank statement in some format from the client or if it's our own books we will have the bank statement that will be provided typically at the end of the month but not always at the end of the month depends on the bank that we are using but we'll typically have at the end of each month.

And it will have a definite ending time period. So we will then have definite transactions that will stop at the beginning or start at the beginning and stop at the end of a definite time period and we can then take those transactions and enter that into our system. We're going to reconcile the bank statements. Once we do so the reconciliation process isn't going to give us as much verification as it would for full service bookkeeping processes because we won't have outstanding checks and deposits but it will give us verification that we have entered this information into the system correctly. So our normal process will be we get the bank statements from the customers that are directly from the bank.

We enter those bank statements data deposits and checks directly into the system which would be a cash basis process and then we reconcile the bank statements in the cookbook system to better verify that we don't have a data entry error as we have entered the data will now go through the process of entering the data for a new customer. So if we had a new client and we're just going to start this process of entering the data we would first then start a new quick books file. This is after we've done the negotiation in terms of an engagement letter and all that kind of business which we'll discuss at a later time. The actual data input into the