Creating a Company File

A company file is where you store your company’s financial records in QuickBooks, so it’s the first thing you need to work on in the program. You can create a company file from scratch or convert records that you previously
kept in a different small-business accounting program, Quicken, or even another edition of QuickBooks like QuickBooks for Mac.
If you’re new to bookkeeping, another approach is to use a file that someone else created. For example, if you’ve worked with an accountant to set up your company, she might provide you with a QuickBooks company file already configured for your business so you can hit the ground running.
This chapter starts by explaining how to launch your copy of QuickBooks. Then, if you need to create your company file yourself, you’ll learn how to use the QuickBooks Setup dialog box or the Easy Step Interview to get started (and find out which other chapters explain how to finish the job). If you’re converting your records from another
program, this chapter provides some hints for making the transition as smooth as possible. Finally, you’ll learn how to open a company file, update one to a new version of QuickBooks, and modify basic company information.

Choosing a Start Date

To keep your entire financial history at your fingertips, you need to put every transaction and speck of financial information in your QuickBooks company file. But you have better things to do than enter years’ worth of checks, invoices, and deposits, so the comprehensive approach is practical only if you just recently started your company.
The more realistic approach is to enter your financial data into QuickBooks starting as of a specific date and, from then on, add all new transactions to QuickBooks.
The date you choose is called the start date. (The start date isn’t something that you enter in a field in QuickBooks; it’s simply the earliest transaction date in your company file.) You should choose it carefully. Here are your start date options and the ramifications of each one:

• The last day of the previous fiscal year. The best choice is to fill in your records for the entire current fiscal year. To do that, use the last day of your company’s previous fiscal year as the company file’s start date. That way, the account balances on your start date are like the ending balances on a bank statement, and you’re ready to start bookkeeping fresh on the first day of the fiscal year. Yes, you have to enter checks, credit card charges, invoices, payments, and other transactions that have happened since the beginning of your fiscal year, but that won’t take as much time as you think. And you’ll regain those hours when tax time rolls around, as you nimbly generate the reports you need to complete your tax returns. If more than half of your fiscal year has already passed, the best approach is to be patient and postpone your QuickBooks setup until the next fiscal year. (Intuit releases new versions of QuickBooks in October or November each year for just that reason.) But waiting isn’t always feasible. In cases like that, go with the next option in this list.

Account Balances and Transactions

Unless you begin using QuickBooks when you start your business, to get things rolling, you need to know your account balances as of your selected start date. For example, if your checking account has $342 at the end of the year, that value goes into QuickBooks during setup. You also need every transaction that’s happened since
the start date you chose—expenses you’ve incurred, sales you’ve made, payroll and tax transactions, and so on—to establish your asset, liability, equity, income, and expense accounts. So dig that information out of your existing accounting system (or shoebox). (If you don’t want to record individual transactions.
Here are the balances and transactions you need and where you can find them in your records:

  • Cash balances
    • For each bank account you use in your business (checking, savings, money market, and so on), find the bank statements with statement dates as close to—but earlier than—the start date of your QuickBooks company file. Hop onto your bank’s website to identify the transactions that haven’t yet cleared; you’ll need them to enter transactions, unless you download transactions from your bank. If you have petty cash lying around, count it and use that number to set up your petty cash account.
  • Customer balances
    • If customers owe you money, pull the paper copy of every unpaid invoice or statement out of your filing cabinet (or find the electronic versions you saved on your computer) so you can give QuickBooks what it needs to calculate your Accounts Receivable balance. If you didn’t keep copies, you can ask your customers for copies of the invoices they haven’t paid or simply create invoices in QuickBooks to match the payments you receive.
  • Vendor balances
    • If your company thinks handing out cash before you have to is more painful than data entry, then find the bills you haven’t yet paid and get ready to enter them in QuickBooks so you can generate your Accounts Payable balance. (Or, to reduce the number of transactions you have to enter, simply pay those outstanding bills and then record the bill payments in QuickBooks.)
  • Asset values
    • When you own assets such as buildings or equipment, their value depreciates over time. If you included a balance sheet with the tax return you filed for your company, you can find asset values and accumulated depreciation on your most recent tax return (yet another reason to start using QuickBooks at the beginning of your fiscal year). If you haven’t filed a tax return for your company yet, an asset’s value is typically the price you paid for it.
  • Liability balances
    • Find the current balances you owe on any business loans or mortgages.
  • Inventory
    • If you stock products that you sell and track them as inventory, you need to know how many items you had in stock as of the start date, how much you paid for them, and what you expect to sell them for
  • Payroll
    • Payroll services are a great value for the money, which you’ll grow to appreciate as you collect the info you need for payroll (including salaries and wages, tax deductions, benefits, pensions, 401(k) deductions, and other stray payroll deductions you might have). You also need to know who receives with holdings, such as tax agencies or the company handling your 401(k) plan. Oh, yeah—and you also need payroll details for each employee.


Back to QuickBooks 2015 

What’s New in QuickBooks 2015

Despite the fluctuating size of the tax code, accounting and bookkeeping practices don’t change much each year. The changes in QuickBooks 2015 are mostly small tweaks and subtle improvements, but some of them might be just what you’ve been waiting for:

Insights tab in the Home window

In previous versions of QuickBooks, the Home window contained, well, the Home Page, which shows bookkeeping workflow and helps you access the QuickBooks features you use most often. In
QuickBooks 2015, the Home window has two tabs at its top left. As you might expect, the Home Page tab displays the Home Page you’re familiar with. When you click the new Insights tab (page 44), you see a dashboard that highlights your company’s financial status and activity. Initially, the tab’s top panel displays a colorful Profit & Loss graph: green bars represent your monthly income, blue bars indicate your monthly expenses, and a black line graphs your profit by month. But that’s not all! You can click the arrows on either side of this panel to view other high-level graphs, such as a comparison between the current year and the previous year, top customers by sales, and trends in income and expenses.

Insight Tab in Quickbooks 2015
Insight Tab

The bottom half of the Insights tab displays more details about your income and expenses. On the left, the Income section is like a mini Income Tracker (described next, and covered in detail on page 338); it lets you quickly scan totals for unpaid invoices, overdue invoices, and customer payments received
in the past 30 days. And the Expenses list and pie chart on the right help you identify where you spend the most money.

Income Tracker

Income Tracker (page 338) boasts a couple of helpful
enhancements. In addition to colored boxes for estimates, open invoices (that is, invoiced income that isn’t due yet), overdue invoices, and recent customer payments, Income Tracker now also displays a box for unbilled time and expenses.

Income tracker in Quickbooks 2015
Income tracker

In QuickBooks 2015, you can specify the unbilled categories you want to see by clicking the Settings icon at the window’s top right (it looks like a gear), and then clicking the checkboxes to turn unbilled categories on or off.

Reminders window

The Reminders window (page 483) has a new look. On the left side of the window, you now see to-dos and transactions that are due as of today, so you know what’s on deck for your workday. The list on
the window’s right shows to-dos and transactions that are coming up soon.

Reminders window in Quickbooks 2015
Reminders window

If a category is collapsed, click the flippy triangle next to its heading to show each reminder in that section. To collapse a category, click the flippy triangle to hide its individual reminders.

Pinned notes

QuickBooks’ various centers have a new twist: You can now select a note associated with a vendor, customer, or employee and “pin” it so it appears at the center’s top right when you select that name in the center’s name list (page 481). For example, say you create a note about an issue a customer has with an order.

Pined notes in Quickbooks 2015
Pined notes

You can pin that note in the Customer Center so that, whenever you select that customer in the Customer Center, the note is easy to spot

New report formatting

QuickBooks’ reports sport new formatting that makes them much easier to read (page 583). The rows for top-level categories are shaded gray, lower-level category rows are shaded beige, and rows with totals
are shaded light gray.

Updated online payments

If you install QuickBooks 2015 when it’s first released (this version of the program is called R1 and usually comes out in September), you won’t see online payment links and settings. Big changes for online payments were still in the works when this book was written.

Back to Quickbooks 2015