Chapter 1. Creating a Company in QuickBooks

A company file is where you store your company’s records in QuickBooks, and it’s the first thing you need to start working on in the program. You can create a company file from scratch or convert records previously kept in Quicken, but the most agreeable approach is to use a file that someone else created. If you’ve worked with an accountant to set up your company, he might provide you with a company file configured precisely for your business so you can hit the ground running.

If you must create your own company file, this chapter tells you how to use the QuickBooks EasyStep Interview to get started and points you to the other chapters that tell you how to finish the job. If you already have a company file, you’ll learn how to open it and modify basic company information.

Opening QuickBooks

Here’re the easiest methods for opening QuickBooks:

The Quick Launch toolbar (no relation to QuickBooks) keeps your desktop tidy.

Figure 1-1. The Quick Launch toolbar (no relation to QuickBooks) keeps your desktop tidy.

  • Quick Launch toolbar. This toolbar (Figure 1-1) is the fastest way to open QuickBooks, and although it requires setup, it’s well worth those few seconds.

Note

The Quick Launch toolbar starts a program when you click its icon on the toolbar.

If you have a QuickBooks desktop shortcut, right-drag (that’s dragging while holding down the right mouse button) the desktop shortcut onto the Quick Launch toolbar and then choose Copy Here to create a second shortcut on the toolbar. (If you’re trying to clean up your desktop, choose Move Here to move the desktop shortcut to the Quick Launch toolbar.) You can also use the right-drag technique to copy or move a shortcut from the Start menu or in Windows Explorer.

Note

If you don’t see the Quick Launch toolbar, in the Windows taskbar, right-click an empty area, and then choose ToolbarsQuick Launch. When a checkmark appears to the left of the Quick Launch menu entry, the appearance of the toolbar in the Windows taskbar should follow.

  • Desktop icon. If you requested during installation that QuickBooks create a desktop shortcut, double-click that shortcut to launch QuickBooks.

  • Programs menu. Without a desktop icon, you can launch QuickBooks from the Windows Start menu. Click Start, and then choose ProgramsQuickBooksQuickBooks Pro 2005.

The first time you launch QuickBooks, you’re greeted by the Welcome to QuickBooks window. Later, if you close a company file, the No Company Open window appears, as shown in Figure 1-2. These two windows are nearly—but not quite—the same. The rest of this chapter tells you when and how to use each one.

Note

You still have to create or open a company file the first time you launch QuickBooks. But after you’ve opened a company file in one session, QuickBooks kicks off your next session by opening the same company file. If you use only one company file, you might never have to actively open a QuickBooks file again.

The No Company Open window includes “Restore a backup file,” which you’ll gladly click should something go terribly wrong with your QuickBooks company file. To reopen a file that you worked on recently, double-click its name on the list. For those of you who are moving your books from Quicken to QuickBooks, the Welcome to QuickBooks window has a “Convert from Quicken” option instead of “Restore a backup file.”

Figure 1-2. The No Company Open window includes “Restore a backup file,” which you’ll gladly click should something go terribly wrong with your QuickBooks company file. To reopen a file that you worked on recently, double-click its name on the list. For those of you who are moving your books from Quicken to QuickBooks, the Welcome to QuickBooks window has a “Convert from Quicken” option instead of “Restore a backup file.”

Creating a New Company

Keeping books requires accuracy, attention to detail, and persistence, hence the customary image of spectacled accountants hunched over ledgers. QuickBooks can help you keep your books without ruining your vision or your posture—as long as you start your QuickBooks file with good information.

The EasyStep Interview tries to make creating a company file as painless as possible, but the process isn’t pain free. Indeed, the EasyStep Interview is much like a family reunion, where you’re asked a lot of questions you don’t know that you want to answer. Unlike the reunion, however, you can skip most of the Interview or return to it when you’re better prepared for the interrogation.

Some parts of the Interview aren’t too helpful; you keep clicking Next but never actually accomplish anything. In many cases, adding information to your company file is more effective using the windows and commands in QuickBooks itself. This section tells you when and how to use the EasyStep Interview as well as when it’s better to bail out to work directly in QuickBooks.

Steps to Take Before You Create Your Company File

If you’ve just started a business and want to inaugurate your books with QuickBooks, your prep work will be a snap. On the other hand, if you have existing books for your business, you have a few small tasks to complete before you jump into QuickBooks’ setup. Whether your books are paper ledgers or electronic files in another program, gather your company information before you open QuickBooks. Then, you can hunker down in front of your computer and crank out a company file in no time. Here’s a guide to what you need to create your company file in QuickBooks.

A start date

To keep your financial history at your fingertips, you need every transaction and speck of financial information in your QuickBooks company file. But you know that you have better things to do than enter years’ worth of checks, invoices, and deposits, so the comprehensive approach is practical only if you started your company quite recently.

The more realistic approach is to enter account balances and transactions that are open (unpaid invoices or bills you haven’t yet paid) as of a specific date and from then on, add all new transactions in QuickBooks. In QuickBooks, the date you choose is called the start date and you shouldn’t choose it arbitrarily. Here are your start date options and the ramifications of each:

  • The first day of the year. If you’re setting up QuickBooks during the first half of the year, bite the bullet and choose the first day of the company’s fiscal year as the QuickBooks start date.

    Yes, you have to enter checks, credit card charges, invoices, and other transactions that occurred since the beginning of the year, but that won’t take as much time as you think. You’ll regain those hours when tax time rolls around and you nimbly generate the reports you need to complete your tax returns.

  • Any other day of the year. You can choose any other date during the year as your QuickBooks start date.

When you produce hundreds of invoices, bills, and paychecks each month, data entry takes time no matter how helpful QuickBooks is. So if your company churns out transactions, a mid-year start date might be the only sane thing to do. If you’ve made it to the last few months of the year, you can always postpone your QuickBooks setup a few more weeks and start fresh with the next fiscal year.

Note

Using a mid-year date reduces your data entry–you enter opening balances and create any open transactions (such as unpaid bills and invoices). You won’t have a full year’s detail in your reports and you might have to dig into your fling cabinet to research pre-start date transactions.

Finding account balances and open transactions

Unless you begin using QuickBooks when you start your business, you have to enter opening balances to get things rolling. For example, if your checking account had $342 at the end of the year, that value becomes the opening balance for your QuickBooks checking account. Here are the balances you need to know 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 for your QuickBooks file. The ending balance from a statement becomes the opening balance for that account in QuickBooks.

    Check deposit slips and your checkbook register for transactions that haven’t yet cleared in your bank accounts. Then enter those as transactions (as described in the rest of this book) so your company file is up-to-date with your real-world bank account. If you have petty cash lying around, count it and use that number for the opening balance for 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. If you didn’t keep copies, you’ll have to figure out how much you sold in services and products, the discounts you applied, what you charged for shipping and other charges, and the amount of sales tax. As a last resort, you can ask your customers for copies of the invoices they haven’t paid.

  • Vendor balances. If your company considers handing out cash more painful than data entry, find the bills you haven’t paid and get ready to enter them in QuickBooks. If you’d rather reduce the transactions you have to enter, pay those outstanding bills.

  • Asset values. When you own assets such as buildings or equipment, the value of those assets depreciates over time. If you’ve filed a tax return for your company, you can find asset values and accumulated depreciation on your most recent tax return. If you haven’t filed a tax return for your company, the asset value is typically the price you paid for the asset and you won’t have any depreciation until you file that first return.

Note

You don’t have to enter an opening balance for the Accounts Receivable asset account. QuickBooks calculates it for you using the opening balances for each of your customers.

  • Liability balances. Unpaid vendor bills that you enter in QuickBooks generate the balance for your Accounts Payable liability account. However, you must find the current balances you owe on any loans or mortgages.

Tip

If you have outstanding payroll withholdings such as employee payroll taxes, send in those payments so you don’t have to enter those open transactions in QuickBooks.

  • Inventory. For each product you stock in inventory, find the records that show how much you paid for those products. You also need to know how many items you had in stock as of the start date.

Note

QuickBooks isn’t very good at working with inventory that you assemble from components or raw materials. The QuickBooks Premier Manufacturing Edition offers inventory assembly that’s a start.

  • Payroll. Payroll services offer great value for the money, which you’ll grow to appreciate as you collect the information you need for payroll (including salary and wages, tax deductions, benefits, pensions, 401(k) deductions, and other stray payroll deductions you might have). You also need to know who receives withholdings, such as tax agencies or the company handling your 401(k) plan. Oh yes, you need payroll details for each employee. Chapter 11 explains the ins and outs of payroll using QuickBooks.

Starting the EasyStep Interview

You can create a brand new company file from either the Welcome to QuickBooks windowor the No Company Open window by clicking “Create a new company.” The EasyStep Interview window opens to the Welcome screen with a charming digital rendition of a spiral bound notebook to put you at ease. As the number of tabs you can see in Figure 1-3 suggests, each step in the EasyStep Interview might be easy, but navigating through them could be a challenge. This section explains how to survive.

Each main section contains several subsections and each subsection contains several screens. As you click Next, QuickBooks takes you to the next screen, the next subsection, and the next section without you having to worry about where you are. The EasyStep Interview is meant for beginners who need instructions and explanations, so many of the screens contain information rather than questions. If you don’t need assistance, click Next until you reach the screen with an actual Interview question. The instructions on the following pages of this book focus on the screens that require action on your part, but you’ll also learn the things that are significant on the intervening instructional screens.

Tip

When a company file is open, you can open the EasyStep Interview by choosing FileEasyStep Interview. When you do so, QuickBooks fills in the fields in the EasyStep Interview with the information for the current company, which is great if you want to review and edit your company file information.

The tabs that hang off the right edge of the digital notebook are the main sections of the EasyStep Interview. In each main section, the tabs along the top of the notebook are subsections. As you click Next to move from screen to screen, you’ll navigate across the top tabs from left to right. For example, in the General section, you progress from Welcome, through Company Info, Preferences, finally to Start Date.

Figure 1-3. The tabs that hang off the right edge of the digital notebook are the main sections of the EasyStep Interview. In each main section, the tabs along the top of the notebook are subsections. As you click Next to move from screen to screen, you’ll navigate across the top tabs from left to right. For example, in the General section, you progress from Welcome, through Company Info, Preferences, finally to Start Date.

The Welcome tab

On the initial Welcome screen, click Next to get started. The first thing that QuickBooks does is give you a chance to hire professional help. The “Do you need assistance in setting up QuickBooks?” screen includes the “Find a Certified QuickBooks Professional Advisor” link. If you click that link, QuickBooks opens your browser to the Web page for Intuit’s Certified QuickBooks ProAdvisor Referral Database.You can search for an advisor by location and additional characteristics.

Tip

If a decision you make in the Interview is hard to reverse, QuickBooks highlights it with a warning icon: a yellow triangle with a black exclamation point in the middle.

“Setting up a new QuickBooks company” is a pivotal screen—it’s your chance to skip the rest of the EasyStep Interview. Here are the two paths you can take and why you might prefer one over the other:

  • Skip Interview. If you would rather create a company file with the bare minimum of information and perform most of your setup using QuickBooks features, click Skip Interview. This route is ideal if you already know how to use QuickBooks and don’t want handholding or hints. You still have to enter basic company information, but QuickBooks gets to the point with fields assembled in a few compact dialog boxes and little or no instruction.

  • The Company Info tab. You can skip the remaining Welcome screens of instructions and start entering company information by clicking the Company Info tab. In the Welcome screens you skip, what you really need to know is that you must complete the General section before you can progress to other main sections.

The Company Info tab

In the EasyStep Interview,QuickBooks asks you for a few bits of company information on each screen, as you can see in Figure 1-4.

Top: For some companies, the legal company name is not the same name that the company uses in conducting business. For example, United Airlines’ legal nameLegal nameis UAL, Inc. In the Company Name field, type the name that you want to appear on invoices, reports, and other forms. In the Legal name field, type the company name as it should appear on contracts and other legal documents. If you own a corporation, the legal name is what appears on your Certificate of IncorporationCertificate of Incorporation. Fill in both fields even if the company name and Legal namelegal name are identical. Bottom: The second screen of company information includes basic 411: company address, telephone numbers, email, and Web site.

Figure 1-4. Top: For some companies, the legal company name is not the same name that the company uses in conducting business. For example, United Airlines’ legal nameis UAL, Inc. In the Company Name field, type the name that you want to appear on invoices, reports, and other forms. In the Legal name field, type the company name as it should appear on contracts and other legal documents. If you own a corporation, the legal name is what appears on your Certificate of Incorporation. Fill in both fields even if the company name and legal name are identical. Bottom: The second screen of company information includes basic 411: company address, telephone numbers, email, and Web site.

The “Other company information” screen has a bunch of required fields: the federal tax ID number you’ll use when you file your taxes, the first month of your fiscal year, the first month of your income tax year, and the tax form you file. If you don’t know the difference between fiscal and physical, click More, as shown in Figure 1-5.

Note

If you don’t know how to fill in the fields on the “Other company information” screen and you click Leave to exit the EasyStep Interview, QuickBooks won’t create your company file or save the information you’ve already entered. Consider clicking through the rest of the screens in the Company Info section to identify all the questions you need answered. Then, when you run the EasyStep Interview the next time, you’ll be able to create your company file.

Top: Corporations and partnerships obtain a Federal Employer Identification Numberfederal employer identification number from the federal government. If you run a sole proprietorship, you can use your social security number as your federal tax ID, but getting a business federal tax ID is the better approach. Using a federal tax ID is one way to separate your business from your personal finances, which protects your personal assets from a business lawsuit. Besides, you’ll need a Federal tax ID numberfederal tax ID number if you plan to pay Employeesemployees or Subcontractorssubcontractors for their work.Bottom: When you click More, QuickBooks displays more information about the fields you must fill in. If these explanations leave you scratching your head, your best bet is to ask your accountant. If you decide that you need some help before you go on, click Leave to exit the EasyStep Interview.

Figure 1-5. Top: Corporations and partnerships obtain a federal employer identification number from the federal government. If you run a sole proprietorship, you can use your social security number as your federal tax ID, but getting a business federal tax ID is the better approach. Using a federal tax ID is one way to separate your business from your personal finances, which protects your personal assets from a business lawsuit. Besides, you’ll need a federal tax ID number if you plan to pay employees or subcontractors for their work. Bottom: When you click More, QuickBooks displays more information about the fields you must fill in. If these explanations leave you scratching your head, your best bet is to ask your accountant. If you decide that you need some help before you go on, click Leave to exit the EasyStep Interview.

The “Your company income tax form” screen includes only one field: the tax form you file to report income. When you select a tax form, QuickBooks links the lines on the tax form to the accounts you will create a few steps later in the interview.

Don’t take the “Select your type of business” screen lightly. When you choose an industry on this screen, QuickBooks can do great things such as recommend accounts and preferences, and link your accounts to lines on your tax form. Some of the industries in the list are generic. For example, Answering Service isn’t one of the industries on the list, but the Service Business industry encompasses it. Choose Other at the bottom of the list if the most generic of industries still falls short. After you choose an industry, QuickBooks displays tips for creating a company file specifically for your type of business.A green left-pointing triangle identifies these industry-specific tips throughout the rest of the EasyStep Interview screens.

Note

Be careful choosing an industry. You can’t change the company type after QuickBooks creates the company file. If you make the wrong choice, you could spend hours trying to correct what QuickBooks added to the file–or you could just start the EasyStep Interview from the beginning.

When you see the “We’re ready to create your company file now” screen, you’re on the verge of actually creating your company file.Here are the steps to complete this significant milestone:

  1. Click Next to open the File name for New Company dialog box.

  2. Navigate to the folder in which you want to store the new company file.

    QuickBooks tries to store company files within the Program File QuickBooks folder. To ensure that you back up your company file, consider storing it in a folder with the rest of your company data. For example, if you use Shared Folders in Windows, you could store your company file in C:\Documents and Settings\All Users\Documents\QuickBooks.

  3. QuickBooks fills in the File name field with the company name that you entered earlier in the Interview. Keep this name or type one that better identifies the company’s records that lie inside.

  4. Click Save to create the company file.

    QuickBooks can take a minute or so to create the new file, and in the meantime, the “We’re ready to create your company file now” screen reappears. If you’re not paying attention, you might think that QuickBooks didn’t create your file. If the mouse pointer is an hourglass, be patient. When the company file is ready, the “Your income and expense accounts” screen appears.

    QuickBooks displays a list of accounts suitable for the type of business you chose. You can also see an industry-specific tip that tells you that the accounts are for that industry only. Scroll through the list to make sure that the accounts are at least close to what you want. You can use the accounts that QuickBooks suggests or create your own, as shown in Figure 1-6.

Note

With the company file created, you can click Leave to exit the Interview without losing the information you entered so far. When you’re ready to pick up where you left off, make sure that the correct company file is open. If it isn’t, choose FileOpen Previous Company and select the file name on the list. Then, choose FileEasyStep Interview. Click tabs or Next to navigate to the field where you left off.

After QuickBooks adds accounts to your file, the next screen is “Accessing your company.” In the “How many people (besides yourself) will have access to your QuickBooks company?” box, type the number of other people who will work on this company file. Regardless of the number you type in that box, QuickBooks reacts the same way when you click Next: it opens the “Accessing your company: users and passwords” screen. Type the login name you want for the QuickBooks administrator (that’s someone with all-encompassing power to set up other users and access any area of the company file), and type (don’t cut and paste) the administrator passwordin both the Administrator’s Password and Confirm Password boxes. Write down the login and password in a safe but memorable place.

If the accounts are close enough, choose Yes to start with this list of accounts. Later, when you’ve finished the EasyStep Interview,EasyStep Interviewyou can edit, add, or delete accounts (Chapter 2). If you want to create your own accounts, choose “No, I’d like to create my own.” You don’t actually create the accounts in the EasyStep Interview. Instead, exit the Interview and create them from the Chart of Accounts window (Chapter 2). By doing so, you can include account numbers and other fields.

Figure 1-6. If the accounts are close enough, choose Yes to start with this list of accounts. Later, when you’ve finished the EasyStep Interview,you can edit, add, or delete accounts (Chapter 2). If you want to create your own accounts, choose “No, I’d like to create my own.” You don’t actually create the accounts in the EasyStep Interview. Instead, exit the Interview and create them from the Chart of Accounts window (Chapter 2). By doing so, you can include account numbers and other fields.

In the EasyStep Interview, QuickBooks doesn’t prompt you for the logins and passwords for the other people. After you leave the Interview, you can specify the logins and passwords for employees and your accountant, as described on page 549.

If you make it this far in the EasyStep Interview and you click Next one more time, you’re finally rewarded with the “Company Info completed” screen. A milestone, but not the end of the EasyStep Interview! At this point, all but the newest of newbies might prefer to set up features without the EasyStep Interview’s help, as you’ll learn in the remaining chapters of Part 1. This section explains what the EasyStep Interview covers—and identifies which chapter to read if you want to set up the rest of your company file manually.

The Preferences tab

As illustrated in Figure 1-7, the EasyStep Interview looks like it’s holding your hand. But the assistance is often no more than a pretty wrapper. On many screens, when you answer a question, QuickBooks turns on the feature and abruptly tells you to finish the job after the Interview is complete.

Here’s how you set preferences in the EasyStep Interview with cross-references to the pages in this book that tell you how to accomplish the same things outside the Interview:

  • Inventory. In the Interview, QuickBooks asks if you want to turn on the inventory feature (see page 145 to turn on inventory on your own), but the screens for creating individual inventory items occur later in the interview. If you have heaps of inventory items, it’s faster to create them in the Item List, as described on page 87.

  • Sales tax. If you say yes to collecting sales tax, QuickBooks asks if you collect one sales tax or several (for instance, for your state, city, and special tax districts). You can set up only one sales tax within the EasyStep Interview. If you do charge sales tax, set up sales tax items outside of the Interview, as described on page 82.

  • Invoice format. QuickBooks comes with invoices for different types of businesses. You can choose one of these templates or choose Custom if you plan to create your own. Chapter 22 tells you everything you need to know about creating your own forms, while page 186 describes how to apply a template to an invoice.

  • Payroll. You can turn on the payroll feature in the EasyStep Interview, but you must choose the rest of the payroll preferences and set up payroll after the Interview is complete. See page 305 to learn how.

  • Estimates. QuickBooks asks if you prepare estimates for customers and whether you use progress invoicing,which means you invoice customers based on the percentage you’ve completed on a job. To learn why you might use these features and how to turn them on, see page 203.

  • Time tracking. This feature lets you track the hours that people work. You can turn it on in the Interview, but you’ll need the instructions on page 414 to set it up properly.

Top: QuickBooks displays different screens depending on how you answer the questions it poses. Bottom: Even if you turn on a feature, QuickBooks doesn’t ask all the questions about that feature at the same time. For example, if you answer Yes to turning on inventory, QuickBooks still moves on to the Sales Tax screen. Later Setting preferencesin the EasyStep Interview Classessetting preferencesin the Interview, QuickBooks gives you a chance to set up your inventory items. Notice the industry-specific tip that QuickBooks provides about restaurants usually charging sales tax.

Figure 1-7. Top: QuickBooks displays different screens depending on how you answer the questions it poses. Bottom: Even if you turn on a feature, QuickBooks doesn’t ask all the questions about that feature at the same time. For example, if you answer Yes to turning on inventory, QuickBooks still moves on to the Sales Tax screen. Later in the Interview, QuickBooks gives you a chance to set up your inventory items. Notice the industry-specific tip that QuickBooks provides about restaurants usually charging sales tax.

  • Classes. This feature lets you track company performance in different ways. For example, you can use classes to track the performance of business units within your company without creating gazillions of separate income and expense accounts. You can turn on classes during the Interview, but you’re better off waiting. Unless you already know that you need classes to generate your company reports, run QuickBooks for a while. If the reports you generate don’t meet your needs, you can turn on and configure classes for more detail, as described on page 107.

  • Bills and payments. QuickBooks asks whether you enter bills and then pay them later or write checks directly. You’ll find bill and payment preferences described on page 25.

Tip

Collecting unpaid bills in a desk drawer and writing checks when you’re ready to pay them requires fewer transactions than entering bills in QuickBooks and then writing checks. But when you go that extra step and enter bills, QuickBooks can remind you when bills are due or qualify for timely payment discounts, and tell you how much you owe.

  • Reminders. During the Interview, QuickBooks merely asks you when you want to see the Reminders list, but there’s a lot more to reminders than that. To set your Reminders preferences and choose the Reminders you want, see page 146.

The Start Date tab

On the Start Date tab, QuickBooks recommends the start date by automatically choosing the “I want to start entering detailed transactions as of: 01/01/2005” option. The date in this option’s label is always January first of the current calendar year. If you want to choose a different start date, select the second option and type the date you want in the calendar box.

When you click Next at this point, you reach the end of the General section. If you answered all the questions that QuickBooks requires, you’ll notice that a checkmark appears in front of the General tab, indicating the first main section of the EasyStep Interview is at long last complete. When you click Next, you begin the Income & Expenses section of the Interview.

Income & Expenses

Perhaps you remember that several dozens of screens ago, QuickBooks created a Chart of Accounts. That Chart of Accounts is a framework based on the type of industry you chose. In this section of the EasyStep Interview, you can review the accounts that QuickBooks created for you and add more accounts if you need them. However, if you want to add more accounts—and you probably will—it’s much easier to create accounts in the Chart of Accounts window, as you’ll learn in Chapter 2.

In the Income & Expenses section, shown in Figure 1-8, you can type a name and choose a tax line, but you can’t enter an account number. Creating accounts is much faster and more thorough in the Chart of Accounts window, as explained on page 31.

Tip

If you do decide to create accounts during the Interview, when you get to expense accounts, consider bypassing the More Details options and choosing the No Thank You option. If you choose More Details, QuickBooks displays several screens of information about expense accounts. Unfortunately, these screens waste your time if you know what you’re doing and don’t tell you enough if you’re lost.

The EasyStep Interview asks you for an account name and a tax line. If you create accounts in the New Account dialog box as described on page 37, you can also enter a description, a note, a QuickBooks account number, a bank account number, and more.

Figure 1-8. The EasyStep Interview asks you for an account name and a tax line. If you create accounts in the New Account dialog box as described on page 37, you can also enter a description, a note, a QuickBooks account number, a bank account number, and more.

Income Details

The Income Details section asks you questions about how you receive payments and whether you issue statements, and then immerses you in creating items (the grist that feeds the contents of your invoices and other sales forms). Do yourself a favor and answer No each time QuickBooks asks if you want to set up some type of item.

Your best way to create items is from the Item List, and it’s described in detail starting on page 87.

Opening Balances

The Opening Balances section asks you about how much your customers owe you, how much you owe your vendors, and how much money you have in accounts that appear on your balance sheet (credit cards, loans, bank accounts, and so on). Unless you desperately need to pass the time, choose No when QuickBooks asks if any customer owed you money or you owed money to any vendors as of the start date. Like creating accounts, creating customers and vendors is much easier and more thorough outside the EasyStep Interview. To learn how to create customers, see page 47. For information on setting up vendors, see page 104.

Note

If you enter a customer balance during the EasyStep Interview, QuickBooks creates one invoice for the entire customer balance. Then, when you receive a payment, QuickBooks deducts the payment from that one invoice. You can’t tell if the customer missed a payment, paid an invoice late, or paid the wrong amount. Unless you’ve got stacks of invoices to enter, consider skipping this section of the EasyStep Interview and recreating each unpaid invoice, as described on page 221. By creating invoices with details such as dates and items sold, you can apply payments to the correct invoices and track what you’ve sold in the past.

QuickBooks also gives you an opportunity to set opening balances for asset accounts (things you own), liability accounts (money you owe), and equity accounts (the difference between how much you own and owe). If you collected all the paperwork for your company as described on page 14, you can create these accounts with their opening balances in the Chart of Accounts window, as described on page 37.

After the last What’s Next screen, you’ll see the Finishing Up screen. At long last—the final page of the EasyStep Interview. Before you click Leave to exit the EasyStep

Interview, make sure that each main tab on the right side of the window includes a checkmark. If one doesn’t, you missed a question somewhere. Click that tab and scan for missing checkmarks in the tabs along the top of the window.

Open an Existing Company File

“Open an existing company” appears in both the Welcome to QuickBooks window and the No Company Open window. When you click this button, the Open a Company dialog box appears and you can double-click the name of the company file you want to open. However, the fastest route to opening your company file is (in the No Company Open window) double-clicking one of the file names in the list of recently opened files, as shown in Figure 1-9.

When you select a file name in this list, QuickBooks tries to display its folder path. But unless you store your company files in a top-level folder, you won’t likely see the entire pathname. QuickBooks tries to store company files in the same folder as the software. But backups are much easier if you store your company files in dedicated folders.

Figure 1-9. When you select a file name in this list, QuickBooks tries to display its folder path. But unless you store your company files in a top-level folder, you won’t likely see the entire pathname. QuickBooks tries to store company files in the same folder as the software. But backups are much easier if you store your company files in dedicated folders.

Convert a Quicken File to QuickBooks

If you’re like many small business owners, your accountant probably recommended that you make the leap from tracking your business in Quicken to using QuickBooks. Quicken doesn’t report your business performance in the way that most accountants want to see, nor does it store your business transactions the way QuickBooks does. If you want the conversion to proceed as smoothly as possible, do some cleanup in your Quicken file first.

For example, you have to make sure that your accounts, memorized transactions, online banking accounts, and customer names are consistent and unique. In addition, you need complete reports of your past payroll because Quicken payroll transactions don’t convert to QuickBooks. Intuit has published a detailed guide to preparing for a Quicken conversion, which is available at www.quickbooks.com/support/pdf_files/quickenconversion2004.pdf.

When your Quicken file is ready for QuickBooks prime time, in the Welcome to QuickBooks window, click Convert from Quicken. This option doesn’t appear in the No Company Open window.

Restore a Backup File

In the No Company Open window, you’ll see “Restore a backup file.” Backup files are the answer to the adrenaline rush you get when you do something incredibly stupid with your company file or your hard drive crashes. To learn how to create backup files in the first place as well as how to restore them, see page 160.

Modifying Company Information

In the EasyStep Interview, QuickBooks extracts the basic information about your company in small chunks spread over several screens. After your company file exists, you can edit any of this information in one dialog box, as illustrated in Figure 1-10. Remember, the legal name and address are the ones you use on your federal and state tax forms. To open this dialog box, choose CompanyCompany Information.

Some company information changes more often than others. For instance, you might relocate your office or change your phone number, email, or Web site. However, information such as your legal name and address, the Federal Employer Identification Number, and your choice of business type (corporation, sole proprietor, and so on) usually remains the same.

Figure 1-10. Some company information changes more often than others. For instance, you might relocate your office or change your phone number, email, or Web site. However, information such as your legal name and address, the Federal Employer Identification Number, and your choice of business type (corporation, sole proprietor, and so on) usually remains the same.

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