ACC 204 LECTURE
TOPIC:
QUICKBOOKS ACCOUNTING PACKAGE
BY:
BG. M. ABATCHA , PhD,FCNA
INTRODUCTION
QuickBooks is a popular accounting software used
by businesses to manage their financial
transactions. It is user-friendly and allows
companies to track sales, manage expenses,
generate reports, and simplify tax preparation.
There are different versions of QuickBooks, such as
QuickBooks Online, QuickBooks Desktop, and
QuickBooks Self-Employed.
Key Features of QuickBooks
• Tracking Income and Expenses: You can easily record income and
categorize expenses.
• Invoicing: QuickBooks allows you to create and send professional
invoices to customers.
• Managing Bills: You can track bills and their due dates, and also
manage payments.
• Payroll Management: For businesses with employees, QuickBooks
provides payroll processing capabilities.
• Generating Reports: QuickBooks can generate financial reports like
profit and loss statements, balance sheets, and cash flow statements.
• Tax Preparation: It helps organize your finances for tax season.
Setting Up QuickBooks
1. Sign Up and Choose a Plan:
For QuickBooks Online, visit the QuickBooks website, sign up, and choose a subscription
plan that fits your business size.
2. Company Setup:
Upon sign-up, QuickBooks will ask you to input company details such as business name,
type (e.g., sole proprietorship, LLC), and industry.
Enter the fiscal year start date and your accounting method (cash or accrual).
3. Customize Your Chart of Accounts:
QuickBooks automatically creates a chart of accounts, which is a list of all accounts where
transactions are recorded (e.g., bank accounts, revenue, expenses).
You can customize this by adding specific categories that suit your business.
Recording Transactions in QuickBooks
A. Entering Income:
Create Sales Receipts or Invoices: For services or products sold, you can either record sales receipts
(for immediate payments) or create invoices (if payment will come later).
- Steps for Creating an Invoice:
• - Go to the "Sales" tab, click "Create Invoice," select the customer, and enter the product or
service.
• - Add the amount, due date, and any other details.
• - Send the invoice to the customer via email directly from QuickBooks.
•
B. Recording Expenses:
Expenses like rent, utilities, and office supplies can be entered through the "Expenses" tab.
- Steps for Entering an Expense:
• - Select "New Transaction" > "Expense."
• - Choose the vendor, enter the amount, date, and the category (e.g., office supplies, rent).
• - Attach any receipts or documents.
Managing Bank Accounts
A. Connecting Bank Accounts:
You can link QuickBooks to your bank accounts to import transactions automatically.
- To do this, go to the "Banking" section, select "Link Account," and follow the instructions.
B. Reconciling Accounts:
- Reconciling ensures that your QuickBooks records match your bank statements.
- Steps:
- Go to the "Accounting" tab and select "Reconcile."
- Choose the bank account, enter the statement ending balance, and check off transactions that
match the statement.
- QuickBooks will tell you if everything matches or if there’s a discrepancy.
Running Reports in QuickBooks
A. Common Reports:
• Profit and Loss (P&L) Report: Shows your total income, costs, and expenses over
a specific period.
• Balance Sheet: Displays your assets, liabilities, and equity at a specific point in
time.
• Cash Flow Statement: Tracks the flow of cash in and out of your business.
B. How to Run a Report:
• - Go to the "Reports" tab, choose the report you want (e.g., P&L), set the date
range, and generate the report.
• - Reports can be exported to Excel or PDF for easy sharing.
CONCLUSION
QuickBooks is a powerful tool for
managing your business finances, from
invoicing and tracking expenses to
generating essential reports. By following
these steps and tips, beginners can get a
good grasp of using QuickBooks for their
accounting needs.
