QuickBooks Forms – Definitions, Shortcuts & Tips

There are no less than nine different forms in QuickBooks.  Each of these forms serve a variety of purposes from recording sales and purchases, to soliciting orders and encouraging collections.  Used properly, these forms can help in the operations of your business:

  • Organize Bookkeeping paperwork all in one place by utilizing the file attachment feature.  For example,  attach a catalog page to your vendor purchase order for easy access to their product information.   Attach a copy of the original bill from your vendor to the bill payment window.  Attach a work order or other document to be signed to an estimate, sales order or invoice.
  • Continue market branding consistency by incorporating your logo,  choosing your company color scheme, and changing fonts.
  • Improve workflow processes through template customization by adding custom fields such as; size, color, quality inspector, tracking data or special instructions to each form.
  • Enhance contractual obligations, thereby reducing risk exposure by using estimates and purchase orders with expiration dates and signature lines.
  • Lower Accounts Receivables by sending out monthly statements.
  • Decrease shipping errors by utilizing packing slips and pick lists.

The following graphic can be used as a quick reference to maximize the use of forms within QuickBooks.

Forms in QuickBooks

Learning how to properly set-up and utilize these forms in QuickBooks can help you streamline processes and work more efficiently internally, as well as portray a professional image to your customers.

Optimize QuickBooks for Maximum Profits in 4 Easy Steps

Business is about numbers.   That’s the bottom line (pun intended).   If you are using QuickBooks in your business, here are four simple strategies to optimize your software for maximum benefits and profitability.

1. Learn the basics about how QB operates

It’s important to understand the basic functions of QuickBooks including your chart of accounts, items and services, income tracking, sales tax reporting, expenses and cost of goods purchases, and inventory.  Many times the problems in a company’s bookkeeping stems from not understanding the proper method of recording transactions in QuickBooks.  If you are the one entering the data into QuickBooks, it’s critical to understand the proper way of recording each transaction.

Did you know, for example, that purchases you make on a debit card are entered in the Write Check window, but purchases you make with a credit card need to be entered in the Enter Credit Card Charges window – unless you use the Enter Bills/Pay Bills system or the Purchase Order/Items Receipt/Pay Bills method.

One of the biggest problems I run across with small businesses that sell taxable items, is not setting up Sales Tax Groups (if needed) properly and not using the Sales Tax manager under the Vendor window to pay their sales tax.Sales Tax

Learn each of the basic functions in QuickBooks.

2. Enter transactions daily

I constantly remind clients that if they are doing business on a daily basis, they should be entering transactions on a daily basis.  It is far easier to set aside a small amount of time daily than to dread the future prospect of getting caught up at month end or year end.   I suggest trying an online bookkeeping service or hiring a part-time person to enter transactions – just make sure they are familiar with and understand QuickBooks.

3. Reconcile all financial accounts monthly

Reconciling all your financial accounts (checking, savings, payroll, PayPal, merchant accounts) on a monthly basis will give you a better understanding of where you are,  catch errors while they are still current and make year end tax preparation go much smoother.

4. Learn to read financial statements

You will make wiser business decisions by understanding what your Profit & Loss statement and Balance Sheet is telling you each month.

A Profit & Loss statement (P&L), also called an income statement, tells you if you are making money from the products or services you are selling.  Here is a very basic explanation of a typical P&L statement.   You can change the numbers on your P&L by:  increasing sales (more raw leads, more conversions, etc);  decreasing the cost of making your product (negotiating raw material or production costs,  adjusting labor rates…); or cutting back on what your company spends (helps to have a budget for each expense category).

P&L Explained

A Balance Sheet, on the other hand, is a snapshot, as of the time you review it, of what your company “owns” (assets), what your company “owes” (liabilities) and the owner’s equity stake in the company (could be single owner, partner, or shareholder).   If you add up all the assets and subtract all the liabilities,  it equals the owner’s equity.  The equity section of a balance sheet show what the owner or owners invested in the company and any remaining profits the company owes the owners (this is an extremely simplified explanation).

The balance sheet can indicate the health of the company. An “upside down” company is one that owes more than it owns.   So, if your liabilities are more than your assets, you definitely want to formulate a plan for paying down bills and loans,  collecting money from your customers quicker, or building up cash.

Sample Balance Sheet There are other reports that should be run every month such as  A/R (Accounts Receivable) Aging, A/P (Accounts Payable) Aging, and Statement of Cash Flow, but if you can learn to use the main two financial statements – the P&L and Balance Sheet – you’ll be on your way to optimizing QuickBooks and maximizing your profits.

QuickBooks, like Life, can be complicated…

and like life, there are ways to simplify it.

First, know what it is that you need QuickBooks to do. Small business owners usually need a way to log income, track inventory and purchases, and record expenses to see if their company is profitable and to give the IRS and State agencies the information they require on income tax returns. To determine your QuickBooks needs, it helps to make a visual representation of the workflow processes that take place within your company. 

QuickBooks Work Flow

It doesn’t have to be as fancy as the one above.. scribbling it on a napkin or a white board will do just fine.   Better yet, gather key employees and go through this exercise as a team.

For most QuickBooks transactions, you can ask yourself:

  • Is this entered manually?
  • Is there an integration to save time entering this transaction?
  • What happens after the transaction is entered?
  • Where does the paperwork go (either physical or digital copies)?

Take each part of the workflow process and break it down.   For example: Order Entry – how do the orders get into QuickBooks (ask the four questions above);  How are payments received (as the four questions above); what happens to those payments – do they go into undeposited funds or right into a bank account in QuickBooks?….

Understanding the workflow processes that happen in your company, then breaking them down into QuickBooks related steps, will help you simplify and streamline your day-to-day tasks so you can become more efficient and more productive.

The Importance of Proper Preferences

Setting up your preferences in QuickBooks to properly reflect the way you do business is important, in fact critical, to accurate transactions which lead to accurate financial statements.

I encourage you to make time to review your preferences in your QuickBooks company file.

Preferences are located under the Edit Menu.  They are broken down by two tabs – My Preferences and Company Preferences.

My Preferences are your personal preferences that affect how QuickBooks works for you, but not for other users.

Company Preferences are company-wide and affect all users. Only the QuickBooks Administrator can change them.


There are up to 23 different Function categories listed in the left hand column.   I’m going to go through only a few of the most important and most common preferences, but I encourage you to go through each category and review both the My and Company Preferences. Also, the Preferences are mostly the same in all versions of Pro, Premier and Enterprise from 2009 to 2014. The Preferences for Point of Sale are different and not covered in this blog.

Accounting/Company Preferences/Use class tracking for transactions – this feature is extremely useful for tracking special circumstances without expanding or complicating your chart of accounts.   For example, if you want to track the income and expenses related to all the events you go to, you could create a class for each event (say a specific trade show or networking event).  Whenever you enter income or expense related activities, you select the appropriate class.  Then when your event is done or you are reviewing your financials for next year’s budgeting, you can run a report by class that shows all the transactions.

Class Tracking

Desktop View/Company Preferences –  here is where you can turn on and off features which ultimately appear on your Home Page.   If you don’t collect Sales Tax, or use Time Tracking, for example, you can turn them off so they do not appear on your desktop.

Desktop View FeaturesThere are many potentially annoying features in the General/My Preferences tab that can be unchecked if they are a nuisance.   If you do not want to here a beep every time a transaction is entered, make sure that box is unchecked under the My Preferences tab.   Also, if you do not want Intuit to tell you about its products and services, place a check-mark in the box to turn off these pop-up messages.

General Preferences

One last feature I want to mention in Preferences is the Tax:1099 which is were you let QuickBooks know whether or not you file 1099-MISC forms, and if you do, where you map out your accounts to be included on the 1099 forms.

If you do file 1099’s – remember they are due out by January 31st.   We have partnered with Onlinefiletaxes.com, is an IRS approved tax e-filing provider for all your 1099 and W-2 filing needs, to offer you a 10% discount on your order.

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As mentioned earlier, there are many other important preferences in QuickBooks to help make using QuickBooks a little easier so check out your Preferences today.

Bill Payment Options within QuickBooks

There are a few options for paying bills and expenses within QuickBooks:


Cash purchases can be entered through the Write Check window using a petty cash bank account.   Make sure to reconcile Petty Cash at the end of every year.

Handwritten Checks

Companies that are small and do not have many bills to pay can manually write out paper checks from their business account and record the check in QuickBooks using the Write Check or Pay Bills Window.

Check writing

Printed Checks

Pre-printed checks for both laser, ink-jet and continuous printers are available from office supply stores and other online paper supply companies.  Checks can be printed immediately one at a time or in a batch later. Checks can be printed using the Write Check or Pay Bills Window.

Pre-printed checks come in a variety of styles:


Pay with Credit Card

Another option for paying bills that many companies are choosing is to use a company credit card that earns reward points.

If you use Enter/Pay Bills, make sure to select Credit Card under “Method” in the Pay Bills Window.

If you do not use Enter/Pay Bills, make sure to enter all credit card purchases using the Enter Credit Card Charges, after setting up the credit card in your Chart of Accounts.   Reconcile the Credit Card as you would your bank statement each month.

Use QuickBooks Bill Pay Feature

Write checks as you normally would in QuickBooks. Instead of selecting “To be Printed”, select “Online Bank Payment” and choose the date on which you would like the payment to be delivered.


Pay bills as you normally would in QuickBooks. Select “Online Bank Payment” and choose the date on which you’d like the payment to be delivered. 

THEN Send the payments from the Online Banking Center within QuickBooks, and the payments will be made by the delivery date.

Intuit charges a monthly fee for this service.

Use Third-Party Software

There are many cloud based software programs to automate your Accounts Payables (and Receivables). These programs are ideal for companies who want to automate their A/P process and have separate people to enter the bills and authorize the bills.

These programs send out the payments for you and sync the information with your QuickBooks. This is a great option for reducing paperwork, reducing officer/management time and protecting against fraud and errors.

Most programs charge a per transaction fee and/or a monthly fee.

Inventory Management 101 – the critical component of your business and taxes

Generally, if you produce, purchase, or sell merchandise in your business, you must keep an inventory.  This inventory, and the management of it, directly impacts the profitability of your company and is recorded on your income taxes in terms of Cost of Goods and Inventory Valuation.

Inventory Management is Critical to your Business

Inventory Management is Critical to your Business

Many small business who sell products do not  manage their inventory properly or utilize all the features in QuickBooks for doing so.  This can result in over or under estimating profits, over or understated inventory values at year end and consequently over or under payment of taxes.  I am going to briefly discuss some of those QuickBooks features and the most common mistakes I see in inventory management.

To understand how important inventory is to your business, you only have to perform a simple calculation:    Gross sales (the revenue generated by selling your product) minus the cost to make those items you sold (Cost of Good Sold or COGS) equals Gross Profit.    This basic financial formula tells you whether or not you are making money selling your product.

From the Gross Profit, you subtract all the other costs of running your business (operating expenses) and you have your Net Profit.

The cost for ALL the components that go into making your products, and any unsold products are totaled and kept in an account on your Balance Sheet called Inventory Value (or Raw Materials and Finished Products).

The inventory component in the above calculation is the Cost of Goods Sold.    This is not the total cost of all the components that go into making your product – only the cost of the components for the items you sold, which is transferred from the total (Inventory Value) when you sell it.

For any of you who are not following me… the good news is that QuickBooks automatically does all of that for you IF you use QuickBooks properly.

There are two important parts in QuickBooks to set up properly:   the Items & Services (or Products & Services in QBO) and your Chart of Accounts.  The best QuickBooks software for handling Inventory and Assemblies is QuickBooks Premier and QuickBooks Enterprise.   You can track inventory in both QuickBooks Pro and QuickBooks Online, but not Inventory Assemblies (two or more components you assemble to sell).

You need to set up an item for each component you purchase that goes into the finished product.   In QuickBooks Desktop, you want to make sure that you set them up as double-sided Inventory Parts with the Purchase side pointing to the correct COGS account the the Sales side to the proper Income account.

Inventory Part in QuickBooks Desktop Versions

Inventory Part in QuickBooks Desktop Versions

Inventory Part QBO

Inventory Part QBO

In QuickBooks Desktop, there are 12 different Item Types you can set up so it’s important to know how each one works.  Inventory Parts and Inventory Assemblies are the only types that have a count associated with them.

Non Inventory Parts can be used to track inventory COGS… BUT you need to make sure to check the box to make it a “double-sided” item.

Non Inventory Parts

Non Inventory Parts

Important Things to Know about Inventory

  • You need to physically count your inventory at least once at year at the end of your fiscal year.
  • You need to account for any changes in inventory including sales, returns, damaged goods, donated items, items pulled for personal use and spoilage.   There is a procedure for handling each of these in QuickBooks.
  • Inventory management is the process of efficiently overseeing and recording the constant flow of units and dollars into (purchasing, assembly, stocking and returned goods) and out of (sales, invoicing, donations) existing inventory.
  • QuickBooks uses Cost Averaging to determine the value of your inventory unless you purchase additional inventory modules (Premier & Enterprise).

Inventory can be easily managed in QuickBooks, including direct labor costs, landed costs and other components of your true Cost of Goods.  If you are not managing your inventory properly in QuickBooks, please get training on how to do so – the result could be tax saving and profitable!

Credit Card Transactions

If your company uses credit cards to make purchases,  learning how to use the QuickBooks credit card feature is easy and effective.

I have heard all kinds of other ways credit card purchases have been entered such as using Bill Pay, Write Checks, or Journal Entries.  Don’t use these methods!   Here is why you should use the credit card feature:

  • A liability is created and appears on the Balance Sheet until you pay it.  This accurately reflects what actually happens.
  • The purchase date and the date you pay the credit card bill are different – you can log them both using the credit card feature.
  • Reconciling the credit card statement is a good thing.   Just like reconciling a bank statement – it catches errors, and allows you to enter interest income or finance charges.
  • Can be used effectively for employee or owner reimbursable expenses.
  • It is much easier to track expenditures if you have more than one credit card.

Here is the basic procedure for setting up and using the Credit Card feature.

1.  Create a Credit Card account by selecting New in the Chart of Accounts, then Credit Card as the type, in either QBO (QuickBooks Online) or Desktop versions.

2013Pro;COA;Credit Card

2.  Name the Credit Card and enter any opening balance and the date from the credit card statement you are going to start with.   I usually recommend starting with a new year if possible but any month is okay.

2013Pro;COA;Credit Card Opening Balance3.  Once a credit card account is set up, QuickBooks adds an icon in the Banking area of the Home Page called “Enter Credit Card Charges”.   This is almost identical to the Write Check feature, but you choose the credit card you used rather than a bank.  By using this window, you are capturing the real vendor and can charge the correct expense account, item account and even make it a billable charge similar to the write checks).

2013Pro;Credit Cards;Homepage

4.  These charges go into a liability account on the balance sheet until the credit card bill is paid, which can either be done through write check or through the reconcile account.

5.  When you receive the monthly credit card statement, you use the Reconcile window, just like you would a bank statement, only you choose the appropriate credit card.    This way you ensure all the charges on the statement are correct, and you can enter any finance charges at that time.


QuickBooks is often Underutilized and Misunderstood

QuickBooks is a powerful tool.    Used properly, it can not only track your income and purchases for easier tax preparation, but it can help you make better business decisions through the understanding of financial reports to grow your company more quickly.   These reports are based on the invoicing and purchasing transactions that are entered through the Chart of Accounts via the Items & Services (Products & Services online).

While most QuickBooks users figure out how to enter invoices and expenses, many struggle with utilizing the features and understanding the basic functions, that can most help them save time and frustration.  Some of the most common underutilized and misunderstood features include

  • Credit Card Transactions
  • Inventory Management
  • Financial Reports
  • Sales Tax Managementquestion mark
  • Third-Party Merchants (PayPal, Square, etc.)
  • Two-sided Inventory Items (pointing to an Expense and an Income account)

My first few posts will be dedicated to answering questions regarding these features.