How to Use QuickBooks Online: A Step-by-Step Guide for Beginners

 

Matthew Scott, CPA / September 5, 2023

 

 

QuickBooks Online is a cloud-based accounting software that helps you manage your small business finances. With QuickBooks Online, you can:

 

  • Create and send invoices and estimates
  • Track income and expenses
  • Connect your bank and credit card accounts
  • Reconcile transactions and bank statements
  • Run reports and statements
  • Prepare and file taxes
  • Pay employees and contractors
  • Manage inventory and projects
  • And more!

 

But how do you use QuickBooks Online effectively? In this guide, we will show you the basic steps to set up and use QuickBooks Online for your small business.

 

Step 1: Sign up for QuickBooks Online

 

The first step to use QuickBooks Online is to sign up for a subscription plan. You can choose from four plans: Simple Start, Essentials, Plus, and Advanced. Each plan offers different features and benefits, depending on your business needs and budget. You can compare the plans and pricing here.

 

To sign up for QuickBooks Online, you need to:

  • Visit the QuickBooks website and click on “Buy now” or “Free trial”
  • Choose your country and the plan you want
  • Enter your email address and create a password
  • Fill in your business information and payment details
  • Confirm your subscription and start using QuickBooks Online
  • You can also sign up for QuickBooks Online through a certified QuickBooks ProAdvisor or accountant (that's us!), who can help you with the setup and training and provide you with a subscription discount.

 

Step 2: Set up your company file

 

The next step to use QuickBooks Online is to set up your company file. This is where you store all your business data and settings. To set up your company file, you need to:

 

  • Click on the gear icon at the top right corner of the dashboard
  • Select “Account and Settings” under “Your Company”
  • Go through each tab (Company, Billing & Subscription, Usage, Sales, Expenses, Payments, Advanced) and fill in or update the relevant information, such as:

    • Company name, logo, address, phone number, email, website, tax ID, industry, legal entity, etc.

    • Billing information, subscription plan, payment method, etc.

    • Usage limits, such as chart of accounts entries, classes and locations, billable users, etc.

    • Sales preferences, such as invoice customization, online delivery, sales form content, products and services, messages, statements, progress invoicing, etc.

    • Expense preferences, such as bills and expenses tracking, purchase orders, vendor credits, etc.

    • Payment preferences, such as bank transfer and credit card options, deposit speed, customer types, etc.

    • Advanced preferences, such as accounting method (cash or accrual), chart of accounts, categories (classes and locations), automation (pre-fill forms, automatically apply credits), currency (multi-currency), time tracking (time sheets), projects (project profitability), etc.

 

You can also access other settings from the gear icon menu, such as:

 

  • Manage users: Add or remove users who can access your QuickBooks Online account
  • Custom form styles: Create or edit custom templates for your invoices and estimates
  • All lists: View or edit your lists of customers, vendors, products and services, chart of accounts, recurring transactions, etc.
  • Tools: Import data from Excel or other sources, export data to Excel or PDF, reconcile accounts, budgeting, etc.

 

Step 3: Connect your bank and credit card accounts

 

The third step to use QuickBooks Online is to connect your bank and credit card accounts. This will allow you to download your transactions automatically and categorize them in QuickBooks Online. To connect your bank and credit card accounts, you need to:

 

  • Click on “Banking” in the left menu bar
  • Click on “Connect account” or “Add account”
  • Search for your bank or credit card provider
  • Enter your login credentials for your online banking
  • Select the accounts you want to connect
  • Choose the date range for the transactions you want to download
  • Click on “Connect”

 

You can also manually import transactions using CSV files if your bank or credit card provider is not supported by QuickBooks Online. To do this, you need to:

 

  • Click on “Banking” in the left menu bar
  • Click on the drop-down arrow next to “Update”
  • Select “File upload”
  • Browse for the CSV file on your computer
  • Select the account you want to import the transactions into
  • Map the columns in the CSV file to the fields in QuickBooks Online
  • Click on “Next”
  • Review the transactions and click on “Next”
  • Click on “Let’s go”

 

Step 4: Import your business data

 

The fourth step to use QuickBooks Online is to import your business data, such as your customers, vendors, products and services, chart of accounts, etc. This will help you save time and avoid errors when creating transactions and reports. To import your business data, you need to:

 

  • Click on the gear icon at the top right corner of the dashboard
  • Select “Import data” under “Tools”
  • Choose the type of data you want to import, such as customers, vendors, products and services, chart of accounts, etc.
  • Download the sample file and use it as a template to format your data
  • Upload your file and map the columns to the fields in QuickBooks Online
  • Review the data and click on “Import”

 

Step 5: Customize your invoices

 

The fifth step to use QuickBooks Online is to customize your invoices. This will help you create professional and consistent invoices that reflect your brand and business. To customize your invoices, you need to:

 

  • Click on the gear icon at the top right corner of the dashboard
  • Select “Custom form styles” under “Your Company”
  • Click on “New style” and choose “Invoice”
  • Give your invoice template a name and click on “Design”
  • Choose a template from the gallery or create your own
  • Customize the appearance, layout, content, and email message of your invoice
  • Click on “Done”

 

Step 6: Create and send an invoice

 

The sixth step to use QuickBooks Online is to create and send an invoice. This will help you bill your customers for the products or services you have provided. To create and send an invoice, you need to:

 

  • Click on the plus icon at the top right corner of the dashboard
  • Select “Invoice” under “Customers”
  • Choose a customer from the drop-down list or add a new one
  • Fill in the invoice details, such as date, due date, terms, product or service, quantity, rate, tax, etc.
  • Click on “Save and send” or “Save and share link”
  • Review the email message and click on “Send”

 

Step 7: Track income and expenses

 

The seventh step to use QuickBooks Online is to track your income and expenses. This will help you monitor your cash flow and profitability. To track your income and expenses, you need to:

 

  • Click on “Banking” in the left menu bar
  • Review the transactions downloaded from your bank and credit card accounts
  • Categorize the transactions by choosing an account from the drop-down list or adding a new one
  • Add any additional details, such as customer, vendor, project, class, location, etc.
  • Click on “Add” or “Match” to record the transactions in QuickBooks Online

 

Step 8: Reconcile transactions and bank statements

 

The eighth step to use QuickBooks Online is to reconcile your transactions and bank statements. This will help you ensure that your books are accurate and complete. To reconcile your transactions and bank statements, you need to:

 

  • Click on “Banking” in the left menu bar
  • Click on the account you want to reconcile
  • Click on the drop-down arrow next to “Update”
  • Select “Reconcile”
  • Enter the ending balance and date from your bank statement
  • Click on “Start reconciling”
  • Match the transactions in QuickBooks Online with those on your bank statement
  • Click on “Finish now” when the difference is zero

 

Step 9: Run reports and statements

 

The ninth step to use QuickBooks Online is to run reports and statements. This will help you analyze your business performance and financial position. To run reports and statements, you need to:

 

  • Click on “Reports” in the left menu bar
  • Choose a report from the list or search for one using keywords
  • Customize the report by changing the date range, filters, columns, etc.
  • Click on “Run report” or “Refresh”
  • Save, print, export, or email the report as needed
  • Two of the most common reports in QuickBooks Online are:
    • Profit and Loss: Shows your income, expenses, and net income (profit or loss) for a specific period
    • Balance Sheet: Shows your assets, liabilities, and equity (net worth) as of a specific date

 

If you are looking for a professional help setting up your QuickBooks Online file and/or do your bookkeeping, book a consult today! We are Advanced Certified ProAdvisors and have the skills and experience to help you manage your finances with ease and accuracy.

 

Whether you need a one-time setup or ongoing bookkeeping, we'll handle it all. We will customize your QuickBooks Online file to suit your business needs and preferences, ensure that your transactions are recorded correctly and your reports are up to date.

 

By hiring Matthew Scott CPA, you will save time and money, avoid errors and penalties, and have peace of mind knowing that your books are in good hands. You will also have access to timely and relevant financial information that will help you make informed decisions for your business.

 

Contact me today and let's get started.