Your efforts here will greatly help to get your client’s QBO company file organized. Do you see a lot of duplicate categories in the QBO file that just don’t belong? Sometimes business owners make new accounts on the fly when they can’t find what they’re looking for.
The steps below will have you on your way to delivering a nice and tidy set of books!
Merging Two Accounts
If the business has two accounts that contain the same type of transactions, but two different names were used, or if you no longer want the same itemized level of detail, you can Merge them.
First, Edit the account you want to keep. Highlight the name of the account and copy it. Make note of the Detail type and Subcategory. Cancel the window.
Then Edit the account you want to merge. Highlight the name of the account, and paste the preferred account’s name into the field so that it replaces the old name. Make sure the Detail Types and Subcategories are the same.
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When you save the account, it will recognize that the names are the same, and ask if you want to Merge them. Say Yes!
All the transactions in the second account are moved into the first account. The second is inactivated, disappearing off all Lists.
This technique also works to merge any two Customers, Vendors, or Products & Services. This is great for typos, names entered incorrectly, and correcting redundant payees created by the Banking Feeds.
Using the Register
To see the business’s transactions in a Balance Sheet account, double-click on it or click the Register action link on the right.
This allows for viewing the transactions in a familiar checkbook-register style list. From here you can view, edit and delete transactions by clicking on them.
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Use the Filter button to narrow down the transactions list by date, Payee, Type, or Reconciliation Status.
Click the Date button to sort from newest to oldest, or oldest to newest.
You can also record transactions right in the register by clicking the Add drop-down arrow, then selecting the type of transaction. Enter the Payee, the amount of the Payment or Deposit, and the Account. There’s also a place for a Memo describing the transaction, as well as a place to specify Classes.
To change a transaction in the register, click on the transaction, then the Edit button to open the transaction in its own window. Make the changes, and save the transaction.
PEBCAK! While many people instinctively want to enter transactions here in the register, you’re usually better off using the Quick Create + button and choosing the actual type of transaction. This will reduce data entry errors.
Setting up a COA
Go through your Chart of Accounts and set up general “bucket” categories for:
- Bank Accounts: Checking & Savings Accounts, Petty Cash, Till
- Credit Cards
- Income accounts for the distinct categories of goods and services you offer
- Cost of Goods accounts for materials you purchase to deliver your products
- Fixed Assets for Equipment, Furniture, and Vehicles.
- Liability accounts for Loans
- Expense accounts for costs that are not already listed
- Equity accounts for Owner Contributions and Distributions
Take time to review your COA so that you’re familiar with the accounts. This will make it faster when you’re deciding what to do with various transactions!
Follow-up
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Organizing your business owners will not only help them be better prepared for things like payroll and taxes, but allows them to have more room for growth in ALL aspects of the business.
If you would like a deeper look at all the terminology used in a Chart of Accounts, including a tour of the Profit and Loss Statement and Balance Sheet, please take my next QuickBooks Online® Fundamentals Class.
Next time we will look at the QBO Products and Services list along with how to create a Service item and a Non-inventory Product item. Until then, happy bookkeeping!