How To Set up Advanced Settings in QuickBooks Online

hi this is tim yoder with fit small business welcome to our quickbooks online tutorials today i'm going to teach you how to set up your advanced options in quickbooks online you can view all 46 of our free quickbooks online tutorials by googling fit small business quickbooks online tutorials so let's start setting our advanced options at our dashboard in quickbooks online if you don't have a subscription to quickbooks online you can get a free 30-day trial by clicking the link below this video so from our dashboard let's go to our cogwheel in the upper right corner click that and then under your company let's go to account and settings in the left menu bar scroll down and we can click the advanced settings so here's where we're going to work today there's nine different categories of these advanced settings that need to be set so let's start with the first category of accounting options the first two are our first month of our fiscal year and the first month of our income tax year this is almost always january however if you know that your fiscal year starts at a different time this is where you would input that so for instance if you're a june 30th fiscal year then that means the first month of your year would be july so you can set those two options according to your company again almost everybody is january and almost everybody has an income tax year the same as their fiscal year accounting method you can choose from either accrual or cash i recommend accrual here even if you are on the cash basis for your tax return because you're able to print your financial statements on either a cash or accrual basis regardless of what you select here but this would also allow you then to track accounts payable which are amounts owed to you as well as accounts receivable which are amounts sorry i said that backwards lets you track accounts payable which are amounts you owe to your vendors or accounts receivable which are the amounts your customers owe you so i recommend selecting accrual in your accounting method the next option is to close your books the reason you want to close your books is so that you don't accidentally make an entry to a period in which the tax return has already been filed the only exception would be if the if the entry is going to be large enough that you're willing to file an amended tax return then you can go ahead and make an entry in a prior year otherwise run any new changes through the current year so here i've selected to close the books the closing date is 2019 this option will just give me a warning but allow me to make the change and that's usually sufficient if you're the only user however if there are other users and you want to prevent them from making changes you actually can require them to enter a password okay so we'll set it back here good so those are your accounting options i'm going to you would want to click save i'm just going to cancel the next type of options are our company type the first thing we need to do actually the only thing we need to do in this section is to list the type of company that we are so this would be the type of tax form that you file you should know what that is if you don't know what that is just click not sure um really has very little effect obviously when you go to file your tax return you're going to need to know which form to file but as far as the bookkeeping the the company type makes very little difference so um i'm going to change this back to we are a corporation here but i'm going to cancel okay great next we need to deal with your chart of accounts so within your chart of accounts our first option is whether or not we want to enable account numbers this is purely a preference so you can just list your accounts out by name or you can have an account number followed by the name traditionally accounts have numbers accountants like account numbers one of the big benefits is it helps you organize your accounts so even within say assets you could have one thousand accounts you know you could have accounts starting with one thousand as your revenue accounts accounts starting as 2 000 could be your other income accounts and so forth so the numbers can be used to kind of organize your accounts the other advantage of using account numbers is that you can quickly call up the account instead of having to type in an entire account name you could just type in the four digit account number or however many digits you choose to use and the account will pop up so it can be a little bit faster if you memorize the account numbers so purely purely a a user preference there so i'm going to go ahead and leave show account numbers marked your shipping account so if you charge shipping on your invoices quickbooks needs to know which i can't which income account you would like that revenue to be placed in here we're just going to choose the default of shipping income same thing with discounts given if you give a discount for prompt payment on your invoices where do you want that discount showing up on your income statement we're just going to stick with the default discounts given and then the tips account if you collect tips that are later distributed to your employees then that's a current liability and so you need to tell it where on your balance sheet would you like to record this current liability and we're just going to stick with the default undistributed tips now if these three accounts are not showing up in your advanced settings it's because you haven't turned on these options in your sales settings so i don't want to click away from this screen just yet but under your sales settings here you can turn on all of these options and finally your markup income account so if you if you pass through expenses to customers on their invoices and you mark those expenses up so let's say if you spend a hundred dollars on supplies you're going to charge the customer 120 dollars for supplies that twenty dollar markup has to go somewhere on your income statement and so here is where you designate the account and again i'm just going to stick with the default of markup account so these are all pretty good defaults if you want to get fancy if you want to have a little bit better tracking this is where you can set that up good so you'd want to hit save i'm just going to hit cancel next section we need to look at are your category options so if we click near categories here we can see the main options relate with tracking expenses and revenue by classes and by locations this is really one of the great things about quickbooks online all your transactions can be tracked by both class and location at the same time so an example of classes if you're a a retailer might be you know groceries might be one class and perhaps cookware might be another class you might have multiple locations and so you could put in each multiple location so when you print financial statements you could actually separate them by cookware at x location or cookware at z location so it's a really powerful way to be able to get a lot more insight from your financial statements so in my case here paul's plumbing we have both the track classes and the track locations turned on if you're using classes it's really important that every single transactions gets labeled to a class if you want to you could make just you could even make a class called unclassified or generic or something for things that that you don't know where they fit exactly but i would make sure everything's assigned somewhere and so click this box and that'll warn you if you try to save a transaction that isn't assigned to class okay so here you can choose do you want to assign a class to an entire transaction or to each row in a transaction and i would recommend a row because i could see instances where you purchase supplies and maybe that one purchase goes to multiple classes and so you need to be able to to assign each line in that transaction a class versus the transaction as a whole track locations again if you have multiple locations you could turn on locations here a location label so a lot of times the location is a physical location but you could also use this to track different divisions department businesses property stores territory so we're going to keep our label as location but you track locations doesn't have to be physical locations you could have some other kind of definition of how you want to divide your company up so i'm going to keep this as a location okay so you'll want to hit save here i'm just going to hit cancel now a little bit off topic here but i want to show you how to actually set up your classes and location all this does is turn them on you still have to set them up so let's cancel out of our account settings here go to our cogwheel and lists and within our lists we have our classes so these are all the different classes that we have set up for paul's plumbing this is where you would come and you could add new classes go back to our lists and here are our locations let's see go back to all lists and here are our locations okay here we actually only have one location we could add more if we wished okay so again a little bit off topic but that's after you activate the classes and the locations you go to these lists in order to actually input additional classes and locations so let's go back to our advanced settings cogwheel your company accountant settings and advanced and yes i'm going to switch without saving the next set of options we need to look at are automation options so these are things that quickbooks can do to help you save time so click in the automation area open up the options so the first is the pre-fill forms with previously entered content that is extremely helpful so generally if you select a particular vendor it'll pre-fill whatever you did for that vendor last time oftentimes it's exactly what you want save you a lot of time certainly recommend keeping that one on automatically apply credits so if your vendor gives you a credit for some items returned you want to automatically apply that against any invoices i'm going to turn this off that's a personal preference but i like to keep more control over what's happening within quickbooks so i know exactly what's happening and and i don't have to try to go back and figure out what quickbooks did so i'm going to turn off the apply credits automatically i'm also going to turn off the automatically invoice unbilled activity again that's something i want to have complete control over i don't want to have to try to figure out what quickbooks did and automatically apply bill payments so a bill payment is once you you've entered a bill and then later on you write a check to pay the bill um it'll automatically apply that again i try to to keep control so again this is really personal preferences some people like to automate everything i like to do it myself so that i have a clear understanding of what's happening in quickbooks again purely personal preference so i'm going to click save the next set of options will be in our project so let's click in the projects area and we actually only have one option to deal with so organize all job related activities in one place so this is where you turn on if you want to do project accounting so if you're something like a roofing company or any kind of construction company really landscaping company where you have big projects for clients and you want to track your income and expense by project this is where you turn that on so very very hopeful for that type of business so again this is not this you don't want to confuse class reporting with project reporting so classes are different types of products or services that you provide to a number of different clients projects are work you're doing for a particular client so you might have multiple projects for a particular client and you want to see which projects are making you money and which are not so again depending on what your company is you want you can turn that on or off right here so i'm going to cancel out of this next set of advanced options are time tracking click anywhere in the time tracking area to open up your options essentially if you're going to track employee time and bill it to customers then you need both of these options turned on so this is going to add a service field to your timesheets so when you fill out a timesheet for your employee or they fill out their own timesheet they can actually enter a service item so that you know exactly how they spent their time and you can set up these service items with different billable rates and so if you're billing your employees time or your time to your customers then you absolutely need to have this option activated the second option to make a single time activity billable to customers yes again if you're billing time to your customers you absolutely want this option turned on this allows you to have multiple activities in your timesheet without this you can only bill one client for that employee's time so if that employee works for multiple customers which is most likely the case then you need to have this single time activity billable to your customer so they can bill each single activity they do differently to different customers show the billing rate to users entering time perhaps if you're the only user you would want to show this if you have employees i doubt you want to show this but again personal preference whatever your business prefers first day of work week again personal preference and typically our weeks start on sunday but sometimes people like to show work week starting on monday again personal preference so i'm going to go ahead and hit save next option deals with our currency in quickbooks online's ability to use multiple currencies for your books so multiple currencies this would be if you're dealing internationally this is not regarding uh cryptocurrencies they are not treated as a real currency in the united states so this would be if you're dealing with other currencies outside the united states um you need to select your home currency if you're in the united states and that would be the us dollar you can then turn on multiple currencies and it gives you a really important warning here tells you that once you turn on multiple currency you can't turn it off you can't change your home currency so make sure your home currency is correct it's going to add some extra fields and quickbooks and some features are no longer going to be available so turning on multi-currency is not undoable so don't turn this on simply because oh someday we might be dealing with another currency if you have a current need for it you're currently working in multiple currencies then you have to turn it on but make sure your home currency is correct first if you're not currently dealing with it then don't turn this on so i'm going to turn it back off and in fact i'm just going to cancel out of here and that's the currency finally we have some other preferences at the bottom our date format purely personal preference how would you like your dates formatted number format is just personal preference a customer label if you'd rather call your customers clients so a lot of times professional service firms like bookkeeping firms will call their customers clients if you're a non-profit you might want to call them donors or guests if you're some sort of member organization you have members or you can be patients for medical providers tenants for for real estate companies so you can change the name of what customers are called uh warren if the duplicate check number is used i think this is always a good warning to have so if you accidentally enter two check numbers it'll warn you of that if you try to to enter a bill number that's already been used for that vendor so this is actually a really important one so i'm going to turn that on if you receive a bill from a vendor and you type in the number if you've already typed in that number before it's going to warn you because you may have already entered that vendor bill not uncommon i've had instances where vendors will tax me a bill and i enter it and then they put a bill in the mail and i go to enter it again and it catches it and it says oh you've already entered this bill without that option it's possible i would have paid it twice probably would have caught it but this gave me a heads up warn if you have duplicate journal numbers i use so if you make journal entries you want to keep them all separate numbers probably not as big a deal but another good warning and if you're inactive for how long um how do you when you want to be signed out i say for an hour again so if somebody comes by your computer you're logged out okay and we can save those and that's setting up all your advanced preferences in quickbooks online i know that this has been a fairly long uh a fairly long session compared to the other sessions but this is really important information and this is really where you can set some of the options to make quickbooks online very powerful so please google fit small business free quickbooks online tutorials and you can view our other 46 free tutorials i hope this was useful and i appreciate your time you have a great day

This transcript was generated automatically from the video's captions and may contain errors.