quickbooks simple start for dummies

by Stephen L.Nelson, MBA, CPA, MS in Taxation QuickBooks ® Simple Start ™ FOR DUMmIES ‰ 01_574620 ffirs.qxd 9/7/04 3:08 PM Page iii QuickBooks ® Simple Start  For Dummies ® Published by Wiley Publishing, Inc. 111 River Street Hoboken, NJ 07030-5774 Copyright © 2004 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permis- sion of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600. Requests to the Publisher for permission should be addressed to the Legal Department, Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, (317) 572-3447, fax (317) 572-4355, e-mail: brandreview@wiley.com. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission. [Insert third party trade- marks from book title or included logos here]. All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book. LIMIT OF LIABILITY/DISCLAIMER OF W ARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REP- RESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CRE- ATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CON- TAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCE OF FUR- THER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ. For general information on our other products and services or to obtain technical support, please contact our Customer Care Department within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Control Number: 2004107899 ISBN: 0-7645-7462-0 Manufactured in the United States of America 10 9 8 7 6 5 4 3 2 1 1O/SS/QZ/QU/IN 01_574620 ffirs.qxd 9/7/04 3:08 PM Page iv About the Author Stephen L. Nelson, MBA, CPA, MS in Taxation has a simple purpose in life: He wants to help you (and people like you) manage your business finances by using computers. Oh, sure, this personal mandate won’t win him a Nobel Prize or anything, but it’s his own little contribution to the world. Steve’s education and experiences mesh nicely with his special purpose. He has a B.S. in accounting, an MBA in finance and a Master of Science in taxation. He’s a CPA in Redmond, Washington. He used to work as a senior consultant and CPA with Arthur Andersen & Co. (er, yeah, that Arthur Andersen — but hey it was 20 years ago). Steve, whose books have sold more than 4 million copies in English and have been translated into 11 other languages, is also the bestselling author of Quicken 2004 For Dummies (from Wiley Publishing, Inc.). 01_574620 ffirs.qxd 9/7/04 3:08 PM Page v Author’s Acknowledgments Hey, reader, lots of folks spent lots of time working on this book to make QuickBooks easier for you. You should know who these people are. You may just possibly meet one of them someday at a produce shop, squeezing cantaloupe, eating grapes, and looking for the perfect peach. Those folks include my acquisitions editor, Bob Woerner, and my project editor, Beth Taylor, copy editor Christine Berman, and technical editor David Ringstrom. Thanks to all for a job well-done! 01_574620 ffirs.qxd 9/7/04 3:08 PM Page ix Publisher’s Acknowledgments We’re proud of this book; please send us your comments through our online registration form located at www.dummies.com/register/. Some of the people who helped bring this book to market include the following: Acquisitions, Editorial, and Media Development Project Editor: Beth Taylor Acquisitions Editor: Bob Woerner Copy Editor: Christine Berman Technical Editor: David Ringstrom Editorial Manager: Leah Cameron Media Development Manager: Laura VanWinkle Media Development Supervisor: Richard Graves Editorial Assistant: Amanda Foxworth Cartoons: Rich Tennant ( www.the5thwave.com) Production Project Coordinator: Adrienne Martinez and Maridee Ennis Layout and Graphics: Lauren Goddard, Joyce Haughey, Stephanie Jumper, Barry Offringa, Jacque Roth, Heather Ryan Proofreaders: John Greenough, Charles Spencer, Brian H. Walls, TECHBOOKS Production Services Indexer: TECHBOOKS Production Services Publishing and Editorial for Technology Dummies Richard Swadley, Vice President and Executive Group Publisher Andy Cummings, Vice President and Publisher Mary C. Corder, Editorial Director Publishing for Consumer Dummies Diane Graves Steele, Vice President and Publisher Joyce Pepple, Acquisitions Director Composition Services Gerry Fahey, Vice President of Production Services Debbie Stailey, Director of Composition Services 01_574620 ffirs.qxd 9/7/04 3:08 PM Page x Contents at a Glance Introduction 1 Part I: Getting Simple Started 7 Chapter 1: Preparing to Use QuickBooks Simple Start 9 Chapter 2: A Quick Tour of QuickBooks Simple Start 31 Chapter 3: Creating Lots of Lists 49 Part II: Daily Chores 67 Chapter 4: Invoicing Your Customers 69 Chapter 5: Paying Bills 91 Chapter 6: Reeling in the Dough 117 Chapter 7: Cash Management 135 Part III: Month-End and Year-End Routines 153 Chapter 8: The Balancing Act 155 Chapter 9: Paying Sales Taxes 167 Chapter 10: Measuring Your Profits 179 Chapter 11: Assessing Your Financial Condition 193 Chapter 12: More Reporting on Reporting 201 Chapter 13: Housekeeping Matters 219 Part IV: Real-Life Examples 235 Chapter 14: Accounting for Fixed Assets 237 Chapter 15: Processing Payroll 253 Chapter 16: Bookkeeping in a Service Business 269 Chapter 17: Retailing with QuickBooks Simple Start 277 Part V: The Part of Tens 293 Chapter 18: Ten Tips for Business Owners 295 Chapter 19: Tips for Handling (Almost) Ten Tricky Situations 301 Chapter 20: (Almost) Ten Little Ideas for Saving Big on Business Taxes 309 Part VI: Appendix 319 If Numbers Are Your Friends 321 Index 341 02_574620 ftoc.qxd 9/2/04 2:46 PM Page xi Table of Contents Introduction 1 Introduction 1 About QuickBooks Simple Start 1 About This Book 1 What You Can Safely Ignore 2 What You Shouldn’t Ignore (Unless You’re a Masochist) 3 Three Foolish Assumptions 3 How This Book Is Organized 4 Part I: Getting Simple Started 4 Part II: Daily Chores 4 Part III: Month-End and Year-End Routines 4 Part IV: Real-Life Examples 4 Part V: The Part of Tens 5 Part VI: Appendix 5 Conventions Used in This Book 5 Special Icons 6 Part I: Getting Simple Started 7 Chapter 1: Preparing to Use QuickBooks Simple Start . . . . . . . . . . . . .9 Eenie, Meenie, Minie, Moe, Chose an Entity, and You’re Ready to Go 9 For single-owner businesses 10 General rules for single-owner businesses 17 For multiple-owner businesses 18 General rules for multiple-owner businesses 21 Installing QuickBooks Simple Start 21 Running through the Setup Interview 24 Step-by-step help for the Setup Interview 24 Should you get your accountant’s help? 28 Chapter 2: A Quick Tour of QuickBooks Simple Start . . . . . . . . . . . . . .31 Poking Around the Program Window 31 Working with the Traditional Menus 32 Using the icon bar 36 A Few Words about Document Windows 36 02_574620 ftoc.qxd 9/2/04 2:46 PM Page xiii Understanding the Home Window 38 Touring the Money In, Your Business, and Money Out areas 38 The Home page basement 39 Using the Navigation Bar 42 Help on Help 43 The Search Help command 44 The Help Index command 44 The Support Center command 45 The Tutorials command 45 The Internet Connection Setup command 46 The Buy QuickBooks Pro command 46 The Update QuickBooks command 46 The QuickBooks Privacy Statement command 48 The About QuickBooks command 48 Chapter 3: Creating Lots of Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 The Magic and Mystery of Items 49 Adding items you might include on invoices 50 Editing the discount item 53 Editing other items 54 Customers Are Your Business 55 Adding Vendors to Your Vendor List 59 Working with the Other Names List 61 Noodling with the Chart of Accounts List 62 Adding accounts 62 Editing accounts 64 Deleting accounts 64 Working with the Terms List 64 Working with the Payment Method List 65 Part II: Daily Chores 67 Chapter 4: Invoicing Your Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Making Sure That You’re Ready to Invoice Customers 69 Preparing an Invoice 70 Fixing Invoice Mistakes 75 If the invoice is still displayed on-screen 76 If the invoice isn’t displayed on-screen 76 Deleting an invoice 77 Issuing a Refund 78 Fixing Credit Memo Mistakes 81 Printing Invoices and Credit Memos 81 Loading the forms into the printer 81 Setting up the invoice printer 82 Printing invoices and credit memos as you create them 84 QuickBooks Simple Start For Dummies xiv 02_574620 ftoc.qxd 9/2/04 2:46 PM Page xiv Printing invoices in a batch 85 Printing credit memos in a batch 87 Sending Invoices and Credit Memos via E-Mail 88 Customizing Your Invoices and Credit Memos 89 Chapter 5: Paying Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Recording Your Bills by Writing Checks 91 Writing checks the slow way 92 Writing checks the fast way 97 Recording Your Bills by Charging a Credit Card 99 Paying Your Credit Card Bill 103 Editing Checks and Charges 104 Printing Checks 106 Getting the Printer Ready 106 Printing a Check 109 Printing a check as you write it 109 Printing checks by the bushel 111 What if I make a mistake? 113 Oh where, oh where do unprinted checks go? 114 Expense Recordkeeping Suggestions 114 Chapter 6: Reeling in the Dough . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117 Recording a Sales Receipt 117 Printing a Sales Receipt 122 Special Tips for Retailers 123 Correcting Sales Receipt Mistakes 124 Recording Customer Payments 126 Correcting Mistakes in Customer Payments Entries 129 In the Bank 130 Tracking What Your Customers Owe 132 Chapter 7: Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 Writing Checks 135 Writing checks from the Write Checks window 136 Recording a check into the Checking register 137 Changing a check that you’ve written 139 Packing more checks into the register 140 Depositing Money into a Checking Account 141 Recording deposit transactions 141 Changing a deposit transaction that you’ve already entered 142 Adding New Bank Accounts 143 Transferring Money between Accounts 145 To Delete or to Void? 148 The Big Register Phenomenon 149 Moving through a big register 149 Finding that darn transaction 150 xv Table of Contents 02_574620 ftoc.qxd 9/2/04 2:46 PM Page xv Part III: Month-End and Year-End Routines 153 Chapter 8: The Balancing Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155 Balancing a Bank Account 155 Giving QuickBooks Simple Start information from the bank statement 155 Marking cleared checks and deposits 158 Eleven Things to Do if Your Offline Account Doesn’t Balance 162 A Few Words about Online Banking 165 Chapter 9: Paying Sales Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167 How Sales Tax Works 167 Calculating sales tax 168 Accounting for sales tax 172 Paying the Sales Tax Bill 174 Payment mechanics 174 Sales tax returns 177 Chapter 10: Measuring Your Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . .179 Closing the Accounting Period 179 Step 1: Get caught up on your invoicing 180 Step 2: Get caught up on your bill paying 180 Step 3: Reconcile the bank accounts 180 Step 4: Record any special transactions 181 Producing the Profit and Loss Statement 181 Reviewing Profit and Loss Statements 186 Auditing the numbers 186 QuickZooming individual numbers 187 Benchmarking 189 Chapter 11: Assessing Your Financial Condition . . . . . . . . . . . . . . . . .193 Explaining What a Balance Sheet Is 193 A Few Words About Closing the Accounting Period 195 Producing the Balance Sheet 195 Reviewing Balance Sheet Summary Reports 199 Chapter 12: More Reporting on Reporting . . . . . . . . . . . . . . . . . . . . . . .201 Reviewing the Other Reports 201 Reports menu commands are self-descriptive 202 Tax reports and accountants reports are for accountants (mostly) 202 Summarizing reports 203 QuickBooks Simple Start For Dummies xvi 02_574620 ftoc.qxd 9/2/04 2:46 PM Page xvi [...]... do with this book or with QuickBooks Simple Start Quite a lot, actually The whole purpose of this book is to make it easier for you to run or work in a small business by using QuickBooks About QuickBooks Simple Start Let me start off with a minor but useful point QuickBooks comes in several different flavors: QuickBooks Simple Start, QuickBooks Pro, QuickBooks Premier, and QuickBooks Premier: Accountants... talks about QuickBooks Simple Start QuickBooks Simple Start is a skinny-ed down version of QuickBooks that’s easier to use The Simple Start version of QuickBooks isn’t as powerful as, say, QuickBooks Premier But that’s okay The big challenge with accounting software is figuring out how to get the program to work And a simpler program — like QuickBooks Simple Start — will be much, much easier for you to... as Small Business Windows 98 For Dummies, which I wrote; or Windows 98 For Dummies, Windows 2000 Professional For Dummies, Microsoft Windows Me For Dummies, or Windows XP For Dummies by Andy Rathbone (all published by Wiley) 3 4 QuickBooks Simple Start For Dummies How This Book Is Organized This book is divided into five mostly coherent parts Part I: Getting Simple Started Part I covers some upfront... Use QuickBooks Simple Start In This Chapter ᮣ Choosing an appropriate entity form ᮣ Installing the QuickBooks Simple Start software ᮣ Running through the Setup Interview I know you’re eager to get started You’ve got a business to run But before you can start using QuickBooks Simple Start, you need to perform some up-front work You need to install the software and set up the containers you’ll use for. .. way After you see the first QuickBooks Simple Start window, click its Start button 5 Tell QuickBooks how you want to get started After you click the Start button, QuickBooks Simple Start asks how you want to get started But what it’s really asking is whether you want to install the Simple Start software on your desktop computer — you would make this choice by clicking the Get Started with Desktop Edition... install QuickBooks Simple Start right now Just follow these steps: 1 Get the QuickBooks Simple Start CD Rip open the QuickBooks package and get out the CD (which looks exactly like the ones that play music) 2 Insert the CD in your CD-ROM drive If you have any amount of luck, Windows recognizes that you’ve inserted the QuickBooks Simple Start CD and displays a window that thanks you for purchasing QuickBooks. .. purchasing QuickBooks Simple Start and asks if you want to start. ” You do, so click the Start button and skip to Step 6 3 If nothing happened when you inserted the QuickBooks Simple Start CD, open the Control Panel window 21 22 Part I: Getting Simple Started In Windows XP, click the Start button and then choose Control Panel In most versions of Windows, including Windows 2000, you click the Start button and... much easier for you to figure out If you’re using one of the other versions of QuickBooks, you use the regular QuickBooks For Dummies book For example, if you’re working with QuickBooks 2005 and you want a book, you should use the QuickBooks 2005 For Dummies book and not this one Maybe you can return this book to the bookstore for an exchange About This Book This book isn’t meant to be read from cover... upfront stuff that you need to take care of before you can start using QuickBooks Simple Start For example, this part explains how to install and setup the program I promise I won’t waste your time here I just want to make sure that you get off on the right foot Part II: Daily Chores The second part of this book explains how you use QuickBooks Simple Start for your daily financial recordkeeping: preparing... appropriate edition of Windows For Dummies by Andy Rathbone (Wiley) Eenie, Meenie, Minie, Moe, Chose an Entity, and You’re Ready to Go You know what’s weird? Most people seem to start businesses without spending any time thinking about what form the business entity should use For example, people start businesses as simple sole proprietorships because 10 Part I: Getting Simple Started they don’t have the . about QuickBooks Simple Start. QuickBooks Simple Start is a skinny-ed down version of QuickBooks that’s easier to use. The Simple Start version of QuickBooks isn’t as powerful as, say, QuickBooks Premier System 298 If QuickBooks Simple Start Doesn’t Work for Your Business, Upgrade 299 If a QuickBooks Upgrade Doesn’t Work, Look Around a Bit More 299 QuickBooks Simple Start For Dummies xviii 02_574620. Stephen L.Nelson, MBA, CPA, MS in Taxation QuickBooks ® Simple Start ™ FOR DUMmIES ‰ 01_574620 ffirs.qxd 9/7/04 3:08 PM Page iii QuickBooks ® Simple Start  For Dummies ® Published by Wiley Publishing,