How to (Quickly) Use QuickBooks Online

Today, we're going to do a quick overview of QuickBooks Online, the industry gold-standard software for anything bookkeeping-related. This article is written for new users to QuickBooks who want a bare-bones overview with minimal digression, just to get a simple understanding of how QuickBooks works and how to do some common transactions.

However, if you want to get into the details and watch a full, free course on how to use QuickBooks to record everything your business does, then be sure to subscribe to the Profit Logic Youtube Channel because in the coming weeks, I'm going to launch a free course on YouTube on how to use QuickBooks. By the end of this article, you're going to know what QuickBooks Online looks like, how to use it for some basic transactions, and basically understand how to streamline your bookkeeping and stay on top of your business's finances.

Alright, let's jump on the computer and get started.

This is your QuickBooks Online dashboard. You’ll get a quick overview of your bank account balances, a snapshot of your profit and loss for a specific month, any open invoices, total expenses, a list of tasks, and a few shortcut buttons. Now, there are two very useful buttons that will cover 90% of your tasks and transactions on QuickBooks. These are the New button, where you can create invoices, receive payments, record bills, and expenses, and the Gear icon, where you can access settings, your chart of accounts, and bank reconciliation.

The first thing you'll want to do when setting up your QuickBooks Online account is to go into Settings. Here, you can add your company name, type, contact info, and addresses. You can also set up payments to send and receive transactions through QuickBooks. Once you’re done in settings, go to your Chart of Accounts. QuickBooks automatically generates a chart of accounts for you, but you can update it by selecting New and adding new accounts.

Your chart of accounts categorizes all of your business's transactions. It includes accounts like bank accounts, credit cards, fixed assets, and others that represent transaction types. If you want to delete an account, select it and make it inactive.

Next, add your customers, vendors, and products. You can add customers under Sales > Customers, vendors under Expenses > Vendors, and products or services under Sales > Products and Services. Enter relevant information such as contact details and payment terms, then save.

To create an invoice, go to Invoices or use the New button, add a customer, invoice date, and due date, and include the product or service. You can add tax, review, and send it as an email with an invoice link for payment. Once payment is received, click Receive Payment and match it to the correct invoice.

For vendors, if you purchase something that hasn’t been paid for yet, create a bill under Expenses. Add the vendor, bill date, due date, items or services purchased, and save it. When paid, mark the bill as such.

To record immediate payments, use Expense to add details like the vendor, payment method, and what was purchased. Remember, bills and expenses relate to vendors, while invoices and sales receipts relate to customers.

Another key step is connecting your bank account. Under Transactions > Bank Transactions, you can link your bank account for automatic updates or upload statements. Regularly reconcile your accounts by comparing QuickBooks records with bank and credit card statements. Go to Transactions > Reconcile or use the gear icon to reconcile, selecting the account, statement balance, and ending date.

Lastly, review your Reports monthly, such as your profit and loss and balance sheet. Accounts receivable and payable aging summaries are also helpful to monitor customer payments and outstanding vendor bills.

That was a basic overview of QuickBooks Online. These steps—connecting your bank, managing customers and vendors, creating invoices and bills, running reports, and reconciling accounts—are key to staying on top of your business's finances. If this feels overwhelming, I'd be happy to be your bookkeeper.

Thank you for reading!