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Chapter 1: Creating a Company in QuickBooks

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A company file is where you store your company's records in QuickBooks, and it's the first thing you need to work on in the program. You can create a company file from scratch or convert records previously kept in Quicken or other small business accounting programs. The easiest approach is to use a file that someone else created. If you've worked with an accountant to set up your company, she might provide you with a QuickBooks company file configured precisely for your business so you can hit the ground running.

If you have to 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 explain how to finish the job. If you already have a company file, you'll learn how to open it, update it to a new QuickBooks version, and modify basic company information.

Here are the easiest ways to open QuickBooks:

• Desktop icon. If you told QuickBooks to create a desktop shortcut during installation (), double-click the shortcut to launch QuickBooks.
• Quick Launch toolbar. The fastest way to open QuickBooks is to 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 instead.) You can also use the right-drag technique to copy or move a shortcut in Windows Explorer or from the Start menu.
  

  Figure : Windows' Quick Launch toolbar keeps your desktop tidy. It's easy to reach, because program windows don't hide the Windows taskbar the way they do desktop shortcuts.
  If you don't see the Quick Launch toolbar, in the Windows taskbar, right-click an empty area and then choose Toolbars → Quick Launch. When a checkmark appears to the left of the Quick Launch menu entry, the toolbar should appear in the Windows taskbar.

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Opening QuickBooks

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Here are the easiest ways to open QuickBooks:

• Desktop icon. If you told QuickBooks to create a desktop shortcut during installation (), double-click the shortcut to launch QuickBooks.
• Quick Launch toolbar. The fastest way to open QuickBooks is to 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 instead.) You can also use the right-drag technique to copy or move a shortcut in Windows Explorer or from the Start menu.
  

  Figure : Windows' Quick Launch toolbar keeps your desktop tidy. It's easy to reach, because program windows don't hide the Windows taskbar the way they do desktop shortcuts.
  If you don't see the Quick Launch toolbar, in the Windows taskbar, right-click an empty area and then choose Toolbars → Quick Launch. When a checkmark appears to the left of the Quick Launch menu entry, the toolbar should appear in the Windows taskbar.
• Programs menu. Without a desktop icon, you can launch QuickBooks from the Start menu. Click Start. If QuickBooks isn't already listed on the menu, choose All Programs → QuickBooks → QuickBooks Pro 2008 (or QuickBooks Premier Edition 2008).

The first time you launch QuickBooks, you're greeted by the "Welcome to QuickBooks" window. You have to create or open a company file, and then you're ready to dive into bookkeeping. Later, if you close a company file, the No Company Open window appears (). The rest of this chapter tells you how to create or open company files, no matter which window is open.

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Creating a New Company

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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 company 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. The EasyStep Interview is kind of like a family reunion, where you're asked lots of questions you don't want to answer. But unlike the reunion, you can skip parts of the Interview, leave it at any time, or return to it when you're better prepared for the interrogation.

In QuickBooks 2008, the Interview is relatively short and sweet; it takes about 30 minutes. All it wants to know is some company information, the industry you're in, and the features you want to use. The Interview sets your preferences and creates a few accounts (like basic income and expense accounts and your checking account), but you have to do the bulk of the setup work later.

The proud owners of brand-new businesses face a dilemma: They have more important things to do than muddle around setting up a company file in QuickBooks, but money is usually as short as free time. If you don't know much about bookkeeping or accounting, the price of a few hours of your accountant's time is a valuable investment. You'll not only save untold hours of tedium and confusion, but you'll also feel confident that your books are set up properly. Accountants well-versed in QuickBooks can create a flawless company file without breaking a sweat.

If you plan to do without an accountant but you want some help setting up your company file, choose Help → Find A Local Expert. By answering a few questions on the QuickBooks Find-a-ProAdvisor Web site, you can locate someone in your area to help you get started.

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Steps to Take Before You Create Your Company File

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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. That way, you can hunker down in front of your computer and crank out a company file in record time. Here's a guide to what you need to create your company file in QuickBooks.

QuickBooks comes with two sample files: one for a product-based business and another for a service-based business. To experiment with QuickBooks features before you put them in production, in either the "Welcome to QuickBooks" window or the No Company Open window, click "Open a sample file", and then choose either "Sample product-based business" or "Sample service-based business." If you botch your experiment, you can always reinstall the sample files from the QuickBooks CD.

These sample files aren't suitable as your company file because they come with accounts, customers, vendors, and transactions such as checks, invoices, and purchase orders. Besides, QuickBooks sets the date in these files to 12/15/2011, which makes transactions later than you or your vendors would like.

To keep your entire financial history at your fingertips, you need 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 state as of a specific date and from then on, add all new transactions 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:

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Starting the EasyStep Interview

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You can create a brand-new company file by clicking "Create a new company" from either the "Welcome to QuickBooks" window or the No Company Open window. What Intuit considers an "easy" interview seems to change with every new version of QuickBooks. Although the EasyStep Interview wizard doesn't provide hints about which step comes next, the interview covers the basics of creating and customizing a company file to fit your business. After you start the Interview, click Next or Back to move from screen to screen.

The Get Started screen assures you that you'll be ready to start using QuickBooks in about 30 minutes. Start by choosing one of the following three buttons:

• Convert Data. If you have existing records in Quicken or another accounting program, you're in luck. Converting your books is easier than starting from scratch.
• Skip Interview. If you're something of a QuickBooks expert, this option lets you set up a company file without a safety net. It opens the bare-bones Creating New Company window, followed by a few screens of data entry. If you need help during the process, you can always click the Help button. (Choose Help → Learning Center Tutorials for some fast and effective training on accounting with QuickBooks.)
• Start Interview. If you don't fit into either of the previous categories, this one's for you.

The first setup screen asks you for the basic 411 about your company, as you can see in . If any of the fields are confusing, try clicking "Get answers" in the upper-right corner. Click Next when you're done.

After you complete the basics, the EasyStep Interview walks you through several screens of questions. Here's what the EasyStep Interview wants to know before it creates your company file:

• Your industry. Choose carefully on the "Select your industry" screen. The list of industries is robust, so chances are good you'll find one that's close to what your company does. Based on your choice, QuickBooks adjusts its settings and the Chart of Accounts it creates to match how your business operates. For example, the program creates income and expense categories for your type of business or turns on features like sales tax and inventory if your industry typically uses them. If QuickBooks makes assumptions you don't like, you can change preferences () and accounts () later.

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Modifying Company Information

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In the EasyStep Interview, QuickBooks gets the basic information about your company in small chunks spread over several screens. But after your company file exists, you can edit any of this information in one dialog box, shown in . Remember, the legal name and address are the ones you use on your federal and state tax forms. To open this dialog box, choose Company → Company Information.

Figure : QuickBooks places a checkmark in front of the accounts that are typical for your industry. Click the checkmark cell for an account to add one that the program didn't select, or click a cell with a checkmark to turn that account off. You can also drag the pointer over checkmark cells to turn several accounts on or off.

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

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What's Next

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The EasyStep Interview doesn't tell you what to do next. The Interview completes quite a bit of setup for you, but you may need guidance for the rest. Look no further than the book in your hands. Here are the ways you can flesh out your company file:

• Set up your users and passwords. See "Assigning the Administrator User Name and Password" on .
• Review and/or change the preferences that QuickBooks set. See "An Introduction to Preferences" on .
• Set up or edit the accounts in your Chart of Accounts. If you didn't set up all your accounts in the EasyStep Interview, you can create them now. See "Viewing Account Names and Numbers" on .
• Create a journal entry to specify account opening balances. See "Creating General Journal Entries" on .
• Create items for the products and services you sell. See "What Items Do" on .
• Set up sales tax codes. See "Taxing Decisions" on .
• Set up your 1099 tracking. See "Tax: 1099" on .
• Sign up for Intuit Payroll Service if you want help with payroll. See "Choosing a Payroll Service" on .
• Enter your historical transactions. For invoices, see ; for bills, see ; for payroll, see .
• Create a backup copy. See "Backing Up Files" on .
• Customize your forms. See "Customizing Forms" on .

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Opening an Existing Company File

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After you've opened a company file in one session, QuickBooks kicks off your next session by opening the same company file. If you keep the books for only one company, you might never have to manually open a QuickBooks company file again.

For irrepressible entrepreneurs or bookkeepers who work on several companies' books, you don't have to close one company file before you open another. You can open a company in QuickBooks any time you want. Here are the different ways to open a company file:

• Open a company you've worked on recently. If you work on more than one file, you may frequently switch between them. The easiest way to open a recent file is to choose File → Open Previous Company, and then choose the file you want to open on the submenu, as shown in .
• Open a company file that's not on the recent file menu. Sometimes, a company file you want to open falls off the recent file list. Say your bookkeeping business is booming and you work on dozens of company files every month. Or maybe you want to upgrade a file from a previous version (see the box on ). To open one of these files, choose File → "Open or Restore Company". (If you're in the No Company Open window, click "Open or restore an existing company".) In the "Open or Restore Company" dialog box, select the "Open a company file" option and click Next. Then, in the "Open a Company" dialog box, navigate to the folder with the company file you want and double-click the filename.
  

  Figure : If the No Company Open window is visible, you can open recent files by double-clicking one of the filenames in the list of recently opened files. (Opening a sample file is the only task that the No Company Open window performs that you can't do from the File menu.)
  If you work on several sets of company books at the same time, choosing File → Open Previous Company is the quickest way to hop between company files. Out of the box, QuickBooks shows up to four companies on the Open Previous Company submenu. If you work on more than four companies, you're always looking for a company that's no longer on the menu. On the other hand, if you work with fewer companies, the submenu may have company files that you'd rather forget.

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Converting from Another Program to QuickBooks

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If you launched your small business from your basement and kept your records with Quicken Home & Business Edition, your accountant has probably recommended that you make the leap to using QuickBooks. On the other hand, you may have used another accounting program like Peachtree or Microsoft Small Business Accounting and have decided to move to QuickBooks. Regardless of which other program you used, the command to convert your records to QuickBooks is the same. Choose File → Utilities → Convert. Then, choose From Quicken, From Peachtree, or From Microsoft Small Business Accounting or Microsoft Office Accounting.

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 record overdue scheduled transactions and send online payments before you convert your Quicken file. Make sure that customer names are consistent and unique. QuickBooks doesn't support repeating online payments, so you also have to send an instruction in Quicken to delete any repeating online payments you've set up. In addition, you need complete reports of your past payroll because Quicken payroll transactions don't convert to QuickBooks.

Intuit publishes a detailed guide to help you prepare for a Quicken conversion. The easiest way to find this info is to point your browser to http://quickbooks.com/support. Below the support tabs, you'll see search boxes for your product, version, and search terms. In the search terms box on the right side of the page, type Quicken convert, and then click Go. Click the "Convert Quicken data to QuickBooks (overview)" link.

If you run into problems converting from Quicken to QuickBooks, Intuit technical support just intensifies your headache. You're likely to get bounced back and forth between Quicken and QuickBooks technical support, with neither one being particularly helpful. If you've already cleaned up your Quicken file, check the file for errors by choosing File → Utilities → Verify Data, described on . Another potential solution is to remove transactions prior to the current fiscal year and then try to convert the file. If nothing you try works

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Chapter 2: Setting Up a Chart of Accounts

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If you've just started running a business and keeping books, all this talk of credits, debits, and accounts might have you flummoxed. Accounting is a cross between mathematics and the mystical arts that records and reports the financial performance of an organization. The end result of bookkeeping and accounting is a set of financial statements (), but the starting point is the chart of accounts.

In accounting, an account is more than an account you have at a financial institution; it's like a bucket of money. When you earn money, you document those earnings in an income account, just as you might toss the day's take at the lemonade stand into the jar on your desk. When you buy supplies for your business, that expense shows up in an expense account like the receipts you stuff in your briefcase. If you buy a building, its value ends up in an asset account. And if you borrow money to buy that building, the mortgage owed shows up in a liability account.

Accounts come in a variety of types to reflect whether you've earned or spent money, whether you own something or owe money to someone else, as well as a few other financial situations. The chart of accounts isn't actually a chart; it's a list of all the accounts you use to track money in your business.

Neophytes and experienced business folks alike will be relieved to know that no one has to build a chart of accounts from scratch in QuickBooks. This chapter explains how to get a ready-made chart of accounts for your business and what to do with it once you've got it. If you want to add or modify accounts in your chart of accounts, you'll learn about that, too.

The easiest—though probably not the cheapest—way to obtain a chart of accounts is to get one from your accountant. Accountants understand the accounting guide-lines set by the Financial Accounting Standards Board (FASB—pronounced "faz bee"—a private-sector organization that sets standards with the SEC's blessing). When your accountant builds a QuickBooks chart of accounts for you, you can be reasonably sure that you have the accounts you need to track your business and that those accounts conform to accounting standards.

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Obtaining a Chart of Accounts

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The easiest—though probably not the cheapest—way to obtain a chart of accounts is to get one from your accountant. Accountants understand the accounting guide-lines set by the Financial Accounting Standards Board (FASB—pronounced "faz bee"—a private-sector organization that sets standards with the SEC's blessing). When your accountant builds a QuickBooks chart of accounts for you, you can be reasonably sure that you have the accounts you need to track your business and that those accounts conform to accounting standards.

Don't worry—getting an accountant to build a chart of accounts for you probably won't bust your budget, since your accountant won't start from scratch either. Many financial professionals maintain spreadsheets of accounts and build a chart of accounts by importing a customized list of accounts into QuickBooks. Or, they may keep QuickBooks company files around to use as templates for new files.

If you've opted to work without an accountant, QuickBooks tries to help you do the right thing accounting-wise. If you use QuickBooks'EasyStep Interview () to create your QuickBooks file, you can tell the program to create income, expense, and bank accounts for you. As you learned on , when you choose an industry during the Interview, QuickBooks selects accounts typical for that industry, which you can use as a starting point for your chart of accounts. The box on suggests a few other ways to get a chart of accounts.

What's not to like about a chart of accounts built by experts and available at no charge? A quick search on the Web for "QuickBooks chart of accounts" returns links to sites with pre-defined charts of accounts. For example, one company that provides QuickBooks training and support has a sample chart of accounts that you can download from its Web site, www.qbalance.com/chart_of_accounts.htm.

A chart of accounts for the construction industry is available at no charge from www.powertoolssoftware.com/QBManualChartofAccounts.html.

In the not-for-profit world, the National Center for Charitable Statistics Web site (nccs.urban.org/projects/ucoa.cfm) includes downloadable QuickBooks files that contain the Unified Chart of Accounts for nonprofits (known as the UCOA). You can download a QuickBooks backup file, an .iif file that you can import () into QuickBooks, or a backup file for the Mac version of QuickBooks.

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Account Naming and Numbering

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Accountants and bookkeepers tend to refer to accounts by both numbers and names. This section explains why you should set up naming and numbering conventions—and suggests some rules you can follow—but it won't explain the meaning of all the different names you'll find in your chart of accounts. If you accept the accounts that QuickBooks recommends in the EasyStep Interview, your accounts already have assigned account numbers, as shown in . You might think that lets you off the hook. But by taking the time to learn standard account numbers and names, you'll find working with accounts more logical, and you'll understand more of what your accountant and bookkeeper say.

Figure : Accounts that QuickBooks adds to your chart of accounts during the EasyStep Interview come with account numbers assigned. If you don't see account numbers in the chart of accounts window, choose Edit → Preferences. In the Preferences window, click Accounting and then click the Company Preferences tab. When you turn on the "Use account numbers" checkbox and click OK, the numbers appear in the Chart of Accounts window.

Companies reserve ranges of numbers for different types of accounts, so you can identify the type of account by its account number alone. Business models vary, so you'll find account numbers carved up in different ways depending on the business. Think about your personal finances: You spend money on lots of different things, but your income derives from a precious few sources. Businesses and nonprofits are no different. You might find income accounts from 4000 to 4999 and expense accounts using numbers anywhere from 5000 through 9999 (see ).

Table : Account numbers

Number Range	Account Type
1000–1999

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Creating Accounts and Subaccounts

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Different types of accounts represent dramatically different financial animals, as described in the box on . The good news is that accounts of every type share most of the same fields, so you have to remember only one procedure for creating accounts.

If QuickBooks' account types are unfamiliar, rest assured that they're standard types used in finance. Here's a quick introduction to the account types and what they represent:

• Bank. An account that you hold at a financial institution, such as a checking, savings, money market, or petty cash.
• Accounts Receivable. The money that your customers owe you, such as outstanding invoices or goods purchased on credit.
• Other Current Asset. Things you own that you'll use or convert to cash within 12 months, such as prepaid expenses.
• Fixed Asset. Fixed assets are things your company owns that decrease in value over time (depreciate), such as equipment that wears out or becomes obsolete.
• Other Asset. If you won't convert an asset to cash in the next 12 months, and it isn't a depreciable asset it's—you guessed it—an Other Asset. A longterm note receivable is one example.
• Accounts Payable. This is a special type of current liability account (money you owe in the next 12 months), in which QuickBooks calculates the balance from the amounts you owe each of your vendors.
• Credit Card. A credit card account.
• Current Liability. Money you owe in the next 12 months, such as sales tax and short-term loans.
• Long-term Liability. Money you owe that you'll pay over several years, like a mortgage.
• Equity. The owners' equity in the company, including the original capital invested in the company and retained earnings. (Money that owners withdraw from the company shows up in an Equity account, but the values are negative.)

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Modifying Accounts

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If you stick to your account numbering and naming conventions, you'll have few reasons to edit accounts. In the Edit Account dialog box, you can tweak an account name or description, adjust an account number to make room for new accounts, or change an account's level in the chart of accounts hierarchy.

You're not likely to change the Type field unless you chose the wrong type when you created the account. If you do want to change the account type, back up your QuickBooks file first (see ), in case the change has effects that you didn't anticipate. QuickBooks has several restrictions on changing account types. You can't change account types under the following conditions:

• An account has subaccounts.
• You try to change an Accounts Receivable or Accounts Payable account to another account type, or vice versa.
• QuickBooks automatically created the account, like Undeposited Funds.

To modify an account, in the "Chart of Accounts" window, select the account you want to edit and press Ctrl+E. In the Edit Account dialog box, make the changes you want and then click OK when you're done. You can also open the Edit Account dialog box by clicking Account at the bottom of the "Chart of Accounts" window and then choosing Edit Account from the drop-down menu.

Figure : Top: QuickBooks combines the name of the parent account and the name of the subaccount as one long name in Account fields and drop-down lists. In many instances, only the top-level account is visible unless you scroll within the Account field.
Bottom: When you turn on the "Show lowest subaccount only" checkbox, the Account field shows the subaccount number name, which is exactly what you need to identify the assigned account.

If your company owns multiple copies of QuickBooks Pro, Premier, or Enterprise, no one else can access the QuickBooks file while you're editing accounts. To switch QuickBooks to single-user mode, ask others to exit QuickBooks. When everyone has logged off, choose File → "Switch to Single-user Mode". After you complete your account changes, choose File → "Switch to Multi-user Mode". Don't forget to tell your coworkers that they can log into QuickBooks again.

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Hiding and Deleting Accounts

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If you create an account by mistake, you can delete it. However, because QuickBooks drops your financial transactions into account buckets and you don't want to throw away historical information, you'll usually want to hide accounts that you don't use anymore instead of deleting them. For example, you wouldn't delete your Nutrition Service income account just because you've discontinued your nutrition consulting service to focus on selling your new book, The See Food Diet. The income you earned from that service in the past needs to stay in your records.

When I add an account to my company file, can I just type the balance I want to start with in the Opening Balance field? That seems the most logical place for it.

You can, but your accountant may not be too happy about it. Filling in the Opening Balance field in the Add New Account dialog box (or the Edit Account dialog box, for that matter) automatically adds the opening balance to the Opening Bal Equity account, which accountants consider sloppy bookkeeping. Instead, they usually recommend creating a general journal entry from your trial balance for most of your accounts. The only exceptions are your Accounts Receivable (AR) and Accounts Payable (AP) accounts. Because QuickBooks requires customer names and vendor names in journal entries that contain AR and AP accounts, you're better off creating invoices and bills to define your AR and AP opening balances. If you work with an accountant, ask her how she'd like you to enter opening balances—or better yet, have her do it.

Whoa! What's a general journal entry? What's a trial balance?

Here's the deal: general journal entries () are a mechanism for moving money between accounts—on paper, that is. A trial balance () is a report that lists all your accounts with their balances in either the Debit or Credit column. In the days of paper-based ledgers, bean counters totaled the Debit and Credit columns. If the totals weren't equal, the accountant had to track down the arithmetic error. QuickBooks' digital brain does the math automatically, and without error. But it's up to you to set up the journal entry properly in the first place.

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Merging Accounts

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Suppose you find multiple accounts for the same purpose—Postage and Mail Expense, say—lurking in your chart of accounts. Rather than punishing your QuickBooks experts, it's more productive to merge the accounts into one and then remind everyone who creates accounts in QuickBooks about your account naming conventions. If you haven't gotten around to setting up account naming conventions, see for some guidelines.

Before you merge accounts, see what your accountant thinks. There's no going back once you've merged two accounts—they're merged for good. And the QuickBooks audit trail () doesn't keep track of this kind of change.

When you merge accounts, QuickBooks sweeps all the transactions from both accounts into the account that you keep. Each type of account has a distinct purpose, so you can merge accounts only if they're the same type. As an experienced manager, you can imagine the havoc that merging income and expense accounts would cause in your financial statements.

If you find two accounts with similar names but different types, those accounts might not represent the same thing. For instance, a Telephone Ex. expense account probably represents what you pay for your monthly telephone service, while the Telephone Eq. asset account might represent the big telephone switch that your mega-corporation owns. In this situation, the accounts should be separate, although more meaningful names and descriptions would help differentiate them.

Here's how to eliminate an extraneous account:

1. Switch to single-user mode ().
   You have to be in single-user mode to merge accounts. Be nice to your fellow QuickBooks workers by making these changes outside of working hours. If you have to merge accounts during the workday, remember to tell your co-workers they can log into the program after you've switched the company file back to multi-user mode.
2. To open the "Chart of Accounts" window, press Ctrl+A. Then, in the chart of accounts list, select the name of the account that you want to

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Chapter 3: Setting Up Customers and Jobs

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You may be fond of strutting around your sales department proclaiming, "Nothing happens until somebody sells something!" As it turns out, you can quote that tired adage in your accounting department, too. Whether you sell products or services, the first sale to a new customer can initiate a flurry of activity, including creating a new customer in QuickBooks, assigning a job for the work, and the ultimate goal of all this effort—invoicing your customer (sending her a bill for your services and products and how much she owes) to collect some income.

The people who buy what you sell have plenty of nicknames: customers, clients, consumers, patrons, patients, purchasers, donors, members, shoppers, and so on. QuickBooks throws out the thesaurus and applies one term—customer—to every person or organization that buys from you. In QuickBooks, a customer is a record of information about your real-life customer. The program takes the data you enter for customers and fills in invoices and other sales forms with your customers' names, addresses, payment terms, and other information. If you play it safe and define a credit limit, QuickBooks even reminds you when orders put customers over their limits.

To QuickBooks, a job is a record of a real-life project that you agreed (or perhaps begged) to perform for a customer—remodeling a kitchen, designing an advertising campaign, or tracking down the safety deposit box that matches your customer's key. Regardless of how your organization works, customers and jobs are inseparable in QuickBooks. Both the New Customer dialog box and the Edit Customer dialog box, which you'll meet in this chapter, include tabs for customer information and job information. When you create a customer, in effect, you get one job built in automatically.

Some organizations don't track jobs, and if your company is one of those, you don't have to create jobs in QuickBooks. For example, retail stores sell products, not projects. Even consultants who usually work on projects sometimes work on retainer, which provides a steady income that isn't related to one specific project. In these situations, you simply create your customers in QuickBooks and move on to invoicing them for their purchases without assigning the income to a job.

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Before You Create Customers and Jobs

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QuickBooks doesn't care if you create customers and jobs without any forethought, but it pays to take the time to set them up properly. If you want to report and analyze your financial performance to see where your business comes from and which type is most profitable, categorizing your QuickBooks customers and jobs is the way to go. For example, customer and job types help you produce a report of kitchen remodel jobs that are in progress for residential customers. With that report, you can order catered dinners to treat those clients to customer service they'll brag about to their friends.

Spending a few minutes up front planning your customers and jobs in QuickBooks can save you hours of effort when you want to get information about your business. You can add customer and job categories (as well as customers and jobs) at any time. If you don't have time to add categories now, come back to this section when you're ready to learn how. You can add categories to customers and jobs you've already created.

Categorizing your customers and jobs is one way to slice and dice your business reports to show what parts of your business are doing well and what parts need closer attention. For a construction company, knowing that your commercial customers cause fewer headaches and that doing work for them is more profitable than residential jobs is a strong motivator to focus your future marketing efforts on commercial work. Organize your customers and jobs by type, and you'll easily get some insightful analysis. The box on explains how you can analyze business even more.

The Class Tracking feature, explained in detail on , is a powerful and often misunderstood way to categorize business. When you turn on Class Tracking, classes appear in an additional field in your transactions so you can classify your business in various ways. Their power derives from their ability to cross income, customer, and job boundaries. Say you want to track how much each sales region actually sells to figure out who gets to host your annual sales shindig. If each region sells products and services, your income accounts show sales by products and services—not by region. Customer types won't help if some large customers buy products from several of your sales regions. The same goes if a job requires a smorgasbord of what you sell.

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Creating Customers in QuickBooks

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If bringing in business were as easy as creating customers in QuickBooks, sales of QuickBooks would propel Intuit past Microsoft as the largest software company. Face facts—you still have to convince customers to work with your company. But once you've cleared that hurdle, creating those customers in QuickBooks is easy. The box on provides some hints on keeping customers straight in QuickBooks.

QuickBooks is quite accommodating when it comes to creating customers. If you run a mom-and-pop shop and don't add new customers very often, you can create a customer when you create the customer's first invoice. The handy <Add New> menu command in every drop-down list of customer and job types is your ticket to just-in-time customer and job type creation. For larger outfits that sign new customers up all the time, creating customers in batches is much more efficient: Without closing and reopening the New Customer dialog box, you can create several customers in one session. Then, when it's time for billing, you create an invoice and choose the customer you want from the Customer:Job drop-down list. The box on tells you how to prevent your QuickBooks' customer list from growing out of control.

In QuickBooks, the Customer Name field isn't the name that appears on invoices; it's a code that uniquely identifies each of your customers and makes it easy to tell them apart.

If you own a small company with only a few customers, you're not likely to create multiple records for the same customer. Your customer list is short, so you know which ones you've created and you can see them without scrolling in the Customer Center. Even so, it's a good idea to define a standard for customer names. Perhaps you hide customers you haven't worked with in a while, or you have so many customers that it takes all day to scroll through the list.

Consistent naming can help you avoid multiple records for the same customer by preventing you from creating slightly different values in the Customer Name field for that customer. For example, you could end up with three customers in QuickBooks, such as Cales's Capers, Cales Capers, and CalesCapers, all representing the same events organizer.

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Importing and Exporting Customer Information

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Chances are you store customer information in other applications besides QuickBooks, such as a customer relationship management program to track customer interactions or a word processing application to produce mailing labels. Entering the same information more than once is not only mind-numbingly tedious, it also wastes time you should spend on more important business tasks, such as selling, managing cash flow, or finding out who has the incriminating pictures from the Christmas party. If the other programs you use support delimited text files, you can avoid data entry grunt work by transferring data to or from QuickBooks. Delimited text files are nothing more than files that separate each piece of data with a comma, space, tab, or other character. The same kind of information appears in the same position in each line, so other programs can pull the information into the right places.

Salespeople learn a lot about companies long before they become customers. For example, knowing who the decision makers are and what they want is at the heart of most sales strategies. If your sales team stores contact names, phone numbers, email addresses, and other information in a program that exports data to delimited files or Excel spreadsheets, why not just import the relevant data into QuickBooks when that company finally decides to buy from you?

You don't have to import every field you've captured so far. Salespeople build relationships with clients by remembering spouses' and kids' names or favorite sports teams, but much of that information doesn't belong in QuickBooks.

To import data into QuickBooks, you first have to export a delimited text file or a spreadsheet from the other program (). The data is compartmentalized by separating each piece of information with commas or tabs, or by cubbyholing them into columns and rows in a spreadsheet file.

An exported delimited file isn't necessarily ready to import into QuickBooks. Headings in the delimited file or spreadsheet might identify the field names in the program that held the information, but QuickBooks has no way of knowing the relationship between the other program's fields and its own.

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Creating Jobs in QuickBooks

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Project-based work means that your current effort for a customer has a beginning and an end, although it sometimes seems like your project will last forever. Whether you build custom software programs or apartment buildings, you can use QuickBooks' job tracking to analyze financial performance by project.

If you sell products and don't give a hoot about job tracking, you can simply invoice your customers for the products you sell without ever creating a job in QuickBooks. On the other hand, suppose you want to know whether you're making more money on the mansion you're building or the bungalow remodel. What's more, you want to know the percentage of profit you made on each project. These financial measures are the reason you create jobs for each project you want to track.

In QuickBooks, jobs cling to customers like baby possums to their mothers. A QuickBooks job always belongs to a customer. In fact, if you try to choose the Add Job command before you create a customer, you'll see a message box telling you to create a customer first.

Because jobs belong to customers, you have to create a customer before you can create any of that customer's jobs. Follow these steps to add a job to an existing customer:

1. In the Customer Center, right-click the customer you want, and then choose Add Job from the shortcut menu.
   You can also click New Customer & Job in the Customer Center icon bar and then choose Add Job.
   The New Job dialog box appears.
2. In the Job Name box, type a name for the job.
   The name that you type appears on invoices and other customer documents. You can type up to 41 characters in the Job Name box. The best names are short but easily recognizable by both you and the customer.
   QuickBooks fills in most of the remaining job fields with the information you entered for the customer who owns the job. Unless the information on the Address Info, Additional Info, and Payment Info tabs is different for the job, you can skip the fields on these tabs. For example, if materials for the job go to a different shipping address than the one stored with the customer, type the job shipping address in the fields on the Address Info tab.

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Modifying Customer and Job Information

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As long as you enter a customer name when you create a new customer, it's fine to leave the remaining customer fields blank. You can change customer information at any time to add more data or to change what's already there. Similarly, you can create a job with only the job name and come back later to edit or add more. To modify a customer or job, open the Customer Center and then double-click the customer or job you want to edit.

If you don't like double-clicking, select the customer or job you want to edit and then press Ctrl+E. If you can't remember keyboard shortcuts, right-click the customer or job and then choose Edit Customer: Job on the shortcut menu. Or, on the right side of the Customer Center, click Edit Customer (or Edit Job).

In the Edit Customer dialog box, you can make changes to all customer fields— except for the customer balance, that is. QuickBooks pulls the customer balance from the opening balance (if you provide one) and shows any unpaid invoices for that customer. Once a customer exists, creating invoices () is your only way of reproducing the customer's current balance.

Similarly, all the fields in the Edit Job dialog box are editable, except for the customer balance. Remember that the changes you make to fields on the Address Info, Additional Info, Payment Info, and Job Info tabs apply only to the job, not the customer.

Unless you've revamped your naming standard for customers, don't edit the value in a customer's Customer Name field. Because this field uniquely identifies your customers, you might customize QuickBooks based on that field. For example, if you created a customized report filtered by a specific customer name, the report isn't smart enough to take on the new customer name. If you do modify the Customer Name, make sure to modify any customization to use the new name.

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Adding Notes About Customers

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Attention to detail. Follow through. These are a few of the things that keep customers coming back for more. Following up on promises or calling if you can't make your meeting is good business. But sending reorder brochures after customers have made purchases can just make them mad. If you use another program for customer relationship management, you can track these types of details there. But if you prefer to use the smallest number of programs, QuickBooks' notes can help you stay in customers' good graces by tracking personal information and customer to-do lists.

To add a note to a customer record, follow these steps:

1. In the Customers & Jobs tab in the left pane of the Customer Center, select the customer to which you want to add a note.
   The customer's information appears in the right pane of the Customer Center.
2. In the right pane, click Edit Notes.
   The Notepad window appears and displays all the notes you've added for the selected customer, as shown in . The insertion point is at the beginning of the text box, ready for you to type.
3. To keep track of when conversations occur, click Date Stamp before you begin typing a note.
   If you're adding a note about something that happened on a day other than today, you have to type in the date.
4. Type the note you want to add.
   If you want to add information somewhere else in the notes, first click to position the insertion point where you want to type.

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Merging Customer Records

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Suppose you remodeled buildings for two companies run by brothers: Morey's City Diner and Les' Exercise Studio. The brothers conclude that their businesses have a lot of synergy—people are either eating or trying to lose weight, and usually doing both. To smooth out their cash flow, they decide to merge their companies into More or Less Body Building and All You Can Eat Buffet. You have to figure out how to create one customer in QuickBooks from the two businesses, and you also want to retain the jobs, invoices, and other transactions that you created when the companies were separate.

Figure : To add a reminder of what you want to do for a customer and when, in the Notepad window, click New To Do. In the New To Do dialog box, type your to-do item. Choose a date in the "Remind me on" box. Then, the to-do item shows up on the QuickBooks Reminder List on the date you asked QuickBooks to remind you. Of course, QuickBooks reminders work only if you open QuickBooks on that day and you remember to look at the Reminders List.

If you don't use a standard naming convention as recommended on , you could end up with multiple customer records representing one real-life customer, such as Les's Exercise Studio and LesEx. You can merge these doppelgangers into one customer just as you can merge two truly separate companies into one.

Merging customers in QuickBooks results in one customer that retains the entire transaction history for the two original customers. You don't so much merge two customers as turn one customer's records into those of another's.

Merging customers in QuickBooks won't win any awards for best intuitive process. You merge two customers by renaming one customer to the same name as another. But that's not all: The customer you rename can't have any jobs associated with it. If your customers have jobs associated with them, you have to move all the jobs to the customer you intend to keep