QuickBooks 2021 For Dummies. Stephen L. Nelson

set up the QuickBooks payroll feature. I don’t want to scare you, but collecting this information is probably the most tedious part of setting up QuickBooks.

       If you’re converting retroactively as of the beginning of the year, a list of all the transactions that have occurred since the beginning of the year (sales, purchases, payroll transactions, and everything and anything else): If you do the right-way conversion retroactively, you need to reenter each of these transactions into the new system. You actually enter the information after you complete the QuickBooks Setup process, which I describe later in this chapter, but you might as well get all this information together now, while you’re searching for the rest of the items for this scavenger hunt.

      

If you take the slightly awkward way, you don’t need to find the last item that I describe in the preceding list. You can just use the year-to-date income and expense numbers from the trial balance.

Stepping through QuickBooks Setup

      After you decide when you want to convert, prepare a trial balance as of the conversion date, and collect the additional raw data that you need, you’re ready to step through QuickBooks Setup. You need to start QuickBooks and then walk through the steps.

      Starting QuickBooks

      To start QuickBooks 2021 in Windows 10, click the QuickBooks 2021 icon on the Windows desktop, or click the Windows Start button and then click the menu choice that leads to QuickBooks. (I choose Start ⇒ All Apps ⇒ QuickBooks ⇒ QuickBooks Enterprise Solutions 21.0.)

      

QuickBooks comes in several flavors. The most common flavors are

       QuickBooks Pro: The Pro version includes the job-costing and time-estimating features, which I briefly describe in Chapter 16. It also includes the capability to share a QuickBooks file over a network, as I describe in Appendix C.

       QuickBooks Premier: The Premier version adds features to QuickBooks Pro and also comes in a variety of industry-specific flavors, including an Accountant edition that mimics most of these other flavors.

       QuickBooks Enterprise Solutions: This version is nearly identical to QuickBooks Premier but allows for very large QuickBooks files, including much larger customer, vendor, and employee lists.

I use the Accountant edition of QuickBooks Enterprise Solutions, so some of the figures in this book may differ a wee bit from what you see onscreen. But know this: Aside from minor cosmetic differences, all the various versions of QuickBooks work the same way. You can use this book for any of these program versions.

If you’ve started QuickBooks for the first time, QuickBooks tells you how it plans to use your Internet connection to update the QuickBooks software regularly. After you click the button that indicates “Okay, yeah, I’m good with that,” QuickBooks displays the No Company Open dialog box (not shown). Then you click the Create a New Company button so that QuickBooks displays the QuickBooks Setup dialog box with a welcome message (see Figure 2-1).

      FIGURE 2-1: The first QuickBooks Setup window.

      

If you’ve been using an earlier version of QuickBooks, QuickBooks should prompt you to open (and possibly convert) an existing file — and you don’t need to be reading this chapter.

      

If you aren’t starting QuickBooks for the first time but want to step through QuickBooks Setup to set up a new company anyway, choose File ⇒ New Company.

I should mention that the first QuickBooks Setup dialog box (the one shown in Figure 2-1) identifies some other setup options you can use to get started. The dialog box gives you the Detailed Start option, for example, which lets you control the setup and fine-tune the company file. The dialog box also gives you the option to create a new file from an old file. It also suggests that you may want to upgrade from Quicken or some other accounting system. (Basically, that upgrade means that you want QuickBooks to try using your existing accounting system’s data as a starting point.)

      Two simple bits of advice: Don’t fiddle with Detailed Setup unless you’re an accounting expert, and don’t attempt to “upgrade” Quicken or some other accounting program’s data. It’s just as easy and usually considerably cleaner to work from a trial balance.

      

The one group of new QuickBooks users who probably should try upgrading their old accounting system’s data are people who’ve done a really good job of keeping their books with the old system, including complete balance sheet information. No offense, but you probably aren’t in this category. Sorry.

      Using the Express Setup

      QuickBooks 2021 provides a very fast setup process compared with that of other accounting software programs and even with some older versions of the QuickBooks software. Basically, you fill in some boxes and click some buttons, and voilà — you’ve largely set up QuickBooks. Because I can give you some tips, identify some shortcuts, and warn you of some traps to avoid, I’m providing these step-by-step instructions:

      1 In the first QuickBooks Setup dialog box (refer to Figure 2-1), click the Express Start button.QuickBooks displays the Glad You’re Here dialog box, shown in Figure 2-2.

      2 Specify the business name.The name you specify goes on QuickBooks reports and appears on invoices you send customers. Accordingly, you want to use your “real” business name. If your business is incorporated or formed as a limited liability company (LLC), you want to use the right suffix or acronym in your name. Don’t use Acme Supplies, for example; use Acme Supplies, Inc., or Acme Supplies LLC.Note: QuickBooks also uses the company name for the QuickBooks data file.

      3 Identify your industry.If you’re in the construction business, for example, type construction. When you type something in the Industry field, QuickBooks turns the box into a drop-down menu showing the industries that it recognizes. You can choose an industry from this menu (or choose the industry that’s closest to your business).FIGURE 2-2: The Glad You’re Here dialog box. Be thoughtful and cautious about the industry you specify. QuickBooks sets up a starting chart of accounts for you based on the industry. A chart of accounts lists the asset, liability, income, and expense accounts (or categories) that QuickBooks will use to categorize your business’s finances.

      4 Identify the tax return you file.Use the Business Type field to specify the tax return that your business files. You can click that field and then make a choice from the menu that QuickBooks provides. The QuickBooks menu of tax return options includes only two options for LLCs: single-member LLCs that file their taxes with the LLC owner’s 1040 tax return, and multiple-member LLCs that file their taxes as a partnership by using a 1065 tax return. An LLC, however, can also file its taxes as an S corporation or regular C corporation (part of the reason why accountants love LLCs). If you’re running an LLC that files its taxes as an S corporation, do select the S corporation tax return option. And