I’ve noticed a lot of recent activity on my QuickBooks posts. Rather than write a new post that may or may not meet your needs, how about if you feel free to ask me your five most pressing QuickBooks questions? I’ll create posts that answer those questions. While I’m at it, I’ll create a FAQ.
Why ask me? I’m QuickBooks Pro Certified. I also teach a QuickBooks online class at the local woman’s business center, have an MBA in Finance, and have taught business courses at the local community college. I’m a writer who has used QuickBooks for my own writing business for years.
This Getting Started, Creating a Company and Chart of Accounts Post is the first in a series on QuickBooks for Writers.
The first thing you’ll need to do is create a company in QuickBooks:
Ignore the first pop-up box and and click File – New Company on the Menu Bar.
Now you have a pop-up box that says Create New Company. It will ask for the Company Name, the Legal Name. Usually these are the same. If you’re a sole proprietor and you call your business something else and have a dba account (you know who you are), use the dba for the Legal Name. Otherwise, just use the Company Name in both places.
Enter your Address, Country, and the Start Date for your company.
Income Tax Form for a sole proprietor is Form 1040 (Sole Proprietor) on this list. If you’re not sure what you need, leave it blank and continue.
Federal ID is the ID you are using for your business. It’s either your SSN or the number you got for your company.
Next you’ll need to create a chart of accounts. For your purposes, QuickBooks has several Industries for you to choose from. For a writing business, you can start with the General Service-based Business. There are accounts here for most of what you need. You may want to check Merchant Account Fees if you take payment by credit card or have direct deposit that charges a fee per transaction. If you’re not sure. Just use it as is until you have reason to add or delete additional accounts.
[By the way, a chart of accounts is a list of the accounts you need for your business. (NOT the names of the vendors or clients. The names of the accounts in the chart of accounts. They’re related but not the same.) The accounts will be asset accounts – things that are in your favor – such as your checking account and the money that is due to you from your customers. The accounts will also be liability accounts – things that are not in your favor – such as money you owe to loans or bills you need to pay. That’s pretty much the big picture of the Chart of Accounts – except you also have a section that shows the equity – the accumulated profit and loss – as one number. That shows up on the Liabilities side, too. (If you’d like a longer explanation of any of this, just let me know and I’ll do another post.)]
This is a lot of information to digest. I’ve been walking small business through this process and using QuickBooks for my own business for years. I’m putting a form here for you to submit questions if you have any, so ask away!