Barry Allen is an entrepreneurial pilot who files regional charter flights. His airline is a small operation, employing only a handful and pilots and supporting staff. To keep track of his growing business revenues and expenses, Barry compared the different versions of QuickBooks Online, to see which version was right for him. Next, Barry purchased QBO and completed the initial setup phase. But now Barry had a problem – he didn’t know what to do next. Until now, Barry had never used QuickBooks Online or any other version of QuickBooks. And, when he logged into QBO, he was met with a menu of buttons and strange terminology that he’d never seen before. Barry was afraid to try anything because he thought that one wrong click could send his QuickBooks crashing down. Barry recalled his first day at flight school, when he stepped into the cockpit of an airplane for the first time. Back then, Barry still had no flight experience. Worse yet, he was still unfamiliar with the aircraft’s controls. And now, history was repeating itself. Well, today Barry is in luck, because I’m going to show him how to set up QuickBooks Online. Now, let’s fly right in.
#1: Add bank and credit card accounts to the Chart of Accounts
First, we know that Barry uses his bank and credit card accounts on a daily basis, so let’s add them to the Chart of Accounts in QBO.
To add a bank or credit card account:
- Click the Gear Icon on the upper right.
- Select Chart of Accounts.
Click New in the upper right-hand corner of your Chart of Accounts.
Now, enter the bank account/credit card information.
- Select Bank or Credit Card from the Category Type.
- Select the appropriate Detail Type – in this case we will select Checking for a bank checking account.
- Enter the account name in the Name field.
- Click Save.
You can leave the description and Balance fields blank.
#2: Connect the Bank and Credit Card Account to QBO
Now that Barry set up his bank and credit card accounts in QBO, he needs to connect them to his actual bank and credit card accounts, so that he can pull his transactions directly into QBO.
From the Left Navigation Bar:
- Select Banking from the left-hand navigation section.
- Click Add Account on the upper right.
Enter the name of your Financial Institution or click the Logo of your Financial Institution.
Login to your financial institution.
- Enter your Online ID or User Name.
- Enter your Passcode or Password.
The connection process may take a few minutes. A window will appear asking you to map the bank accounts from your financial institution to the bank accounts in your chart of accounts list.
#3: Learn to work with Banking transactions
Every transaction will pass though the Banking section of QuickBooks online at one time or another. Users new to QBO make most of their mistakes while working with Banking transactions. It’s no surprise then, that the most popular blog post here on 5MinuteBookkeeping deals specifically with banking transactions. I suggest that Barry read though our post to get familiar with in ins and outs of banking transactions in QBO.
#4: Develop routine habits
One of the biggest headaches that business owners have is getting ready for tax time. The reason for this headache can be summed up in one word: P-R-O-C-R-A-S-T-I-N-A-T-I-O-N. Don’t wait for tax season to work on QuickBooks; do it proactively. That means that Barry is going to need to develop some routine habits.
We all know that it’s much more efficient to spread work evenly throughout the year, rather than working on everything all at once.
And, to help Barry develop good habits, we’ve provided him with some handy resources:
- The free cheat sheet and mini-course shows Barry the essentials for working with banking transactions in QBO.
- The Daily 5-in-5 checklist will show Barry the most essential tasks that he should be doing in just 5 minutes a day.
#5: Get Training
If you’re not a pilot, then chances are, the cockpit of an airplane will look unfamiliar and overwhelming. After all, who but a pilot could possibly understand what all those switches, dials, and knobs are used for? Since Barry is a pilot, he’ll never have to worry about this. But, like an airplane, QBO has its own set of switches, dials, and knobs. Fortunately, we have a brief tour to showcase the essential features of QBO so that Barry can get up to speed. And, once Barry knows how to get around, he’ll want to know how to work in QBO, Luckily for Barry, there are plenty of resources that he can use:
- Our own 5MinuteBookkeeping blog has over 50 free QBO tutorials and videos with step-by-step instructions.
- There also our free mini course, 5 Essentials for Reconciling Banking Transactions in QuickBooks Online.
- Also, remember our premier course, Mastering QuickBooks Online Banking Transactions in 7 days.
- And, don’t forget about our newest course, Get Started With QuickBooks Online in 7 easy steps.
Because QBO is used for bookkeeping, some users new to QBO may jump to some hasty conclusions, like assuming that bookkeeping is just data entry. Nothing could be further from the truth – to learn more, check out our blog post: 5 Lies Entrepreneurs Believe About Bookkeeping.
Looks like Barry has some homework to do. It’s no secret that getting started with QBO can be a challenge, especially for those who have no previous experience with QuickBooks. But, when done correctly, getting started with QBO is easy. Take each step one-by-one and watch your business take shape in QBO. At least now, Barry doesn’t feel overwhelmed anymore because he knows how to set up QuickBooks Online.