To enjoy the features and benefits of QuickBooks, you will need to set up your QuickBooks account properly. Below are the necessary steps to take if you want QuickBooks to handle your accounting processes—you can edit the settings and information as you run your business.
Step 1. Prepare Your Company Information and Documents
Before setting up QuickBooks for your business, you need to compile the basic information and documents you’ll need during the setup process. While you can always return to complete the sign-up or edit your company information, having these details handy will save you a lot of going back and forth.
Below is some of the information you will need to set up QuickBooks for LLC:
- Business type, such as proprietorship or partnership
- Business address
- Email address
- Website address
- Digital company logo
- Tax identification number (TIN)
- Federal employer identification number (FEIN)
- Accounting method (cash or accrual)
- Bank statements
- Credit card statements
Step 2. Set Up Your Company Information
Log in to your QuickBooks account. Then, click on the gear icon to get to your account settings. Select “Account and Settings.” The next thing is to click on the “Company” tab.
You will be asked to enter the following information. Make sure you enter the correct information—double-check where necessary.
- Company and legal name: Enter your registered company name and the name you want to appear on invoices, sales forms and other documents you intend to share with clients.
- Company logo: Import your company logo to reflect on documents and forms.
- EIN or Social Security number: Enter your assigned EIN or Social Security number. However, we recommend you apply for an EIN by filling out Form SS-4, even if you are a self-employed taxpayer. Otherwise, you’ll need to disclose your Social Security number to vendors and employees when it’s time for them to file their taxes.
- Business industry: Enter the type of industry in which your business operates.
- Company type: Enter your company type, such as sole proprietorship or LLC.
- Contact information: Enter your “Company email” for communication with the QuickBooks administrator and the “Customer-facing email address” as you want it to appear on forms and documents. Then, enter your “Company phone number,” the one you want on invoices and sales forms. Also, enter your “Website” details.
- Company address: Enter the physical location of your business, which QuickBooks will use to calculate your taxes and subscriptions. Then, enter your “Legal address,” which should match the address on file with the Internal Revenue Service (IRS). Your “Customer-facing address” appears on forms and documents.
Step 3. Define Your Fiscal Year Start Date
From the “Account and Settings” tab, click on “Advanced,” then “Accounting.” January is the usual start of a fiscal year since it is the beginning of the income tax year. However, since your business tax schedule might differ, QuickBooks enables you to designate its start date on your account. You can also select the time of the year when you want QuickBooks to close your books for the year.
Designating your fiscal year calendar organizes your tax process and records your data so that someone does not change your data by error.
Step 4. Choose Your Accounting Method
To tell QuickBooks what your accounting preference is between cash and accrual, click on the same “Accounting” menu. You can then select “Cash” or “Accrual.” Many businesses choose the cash-basis accounting method since it immediately tracks income and expenses.
While it is possible to change from cash to accrual accounting or vice versa, it can be challenging. So, ensure you know the difference between cash and accrual accounting methods before filling in this section.
Step 5. Select Your Accounting Currency
QuickBooks offers a multicurrency feature that allows you to run bank accounts and manage payments with vendors and customers that do not use your home currency. Activate the multicurrency feature to make and accept payments from various currencies on the “Accounts and Settings” tab. To do that, click “Advanced” and select “Currency.” Next, select your “Home Currency” before enabling the “Multicurrency” feature.
Step 6. Set Your ‘Net Payment’ Terms
On the “Account and Settings” tab, select “Sales” and then “Sales Form content.” This setting will tell customers when you expect them to pay you. Your selected duration will become your default net payment term, within which your customers must pay you.
You can always adjust payment terms on QuickBooks. However, if you choose to be paid right away, select “Due on receipt.”
Step 7. Set Up Sales Tax
If you sell products and your state requires that you collect sales taxes, you will need to set up your sales tax. QuickBooks guides users through the sales tax setup process, which includes entering information about your products and where you sell them. It will also help you identify customers and items that are tax-exempt. You can also set up QuickBooks’ automated sales tax feature, which calculates sales taxes on invoices and receipts and notifies you about taxes due.
To set up sales tax on QuickBooks, select “Taxes” on the menu list at the left side of your dashboard. Then, click on “Set up sales tax.” It will show you your business address to review. Later on, you can edit your settings to tell QuickBooks about tax agencies that pertain to your business operations.
Next, choose the number of tax filing reminders you want by selecting “Filing Frequency.” Then include your “Start date” and “Save” your entries.
Step 8. Turn On Inventory Tracking
QuickBooks helps businesses with inventory management. It tracks what’s in your inventory, alerts you when you’re running low on items and gives reports on your sales and purchases. You can set up QuickBooks inventory features if you paid for QuickBooks Online Plus or Advanced.
Go to “Account and Settings.” Then, select the “Sales” tab. There, you can enable QuickBooks’ inventory tracking feature.
Step 9. Use the QuickBooks Test Drive
We recommend you use the QuickBooks Test Drive to see what QuickBooks for LLC looks like when it is up and running. You can start by clicking “New” on the left side of your dashboard. Then, select the “Invoices” tab. Input data to see how QuickBooks’ Online invoicing works.
Bottom Line
QuickBooks makes bookkeeping and accounting easy for businesses because of how well it organizes expenses and income. It allows you to focus more on getting your services or products to your customers. However, you need to set it up correctly to enjoy its solutions.
