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By Nancy Smyth, on September 1st, 2010. The “List” is another basic QuickBooks feature. You will fill out most QuickBooks forms by selecting entries from a list. Lists save you time and help you enter your information consistently and correctly.
 QuickBooks Lists are the backbone of the entire process of keeping your books. Each and every transaction that you enter in QuickBooks will work with multiple lists in order to provide you with job costing and accounting functions.
You will find yourself always using these standard lists:
- Chart of Accounts
- Item (Cost Code)
- Fixed Asset
- Price Level
- Billing Rate Level
- Sales Tax Code
- Payroll Item
- Class
- Workers Comp Code
- Other Names
When you select any of these Lists, they display various information, arranged in columns. Did you know that these columns can be customized to display additional information that would be valuable to you and your company?
A good example of customizing information that is displayed in the Chart of Accounts List would be to automatically know, just by looking at the Chart of Accounts, which accounts had been flagged as being 1099 accounts – without having to go into the 1099 Preference and determining which accounts had been selected.
To display a 1099 flag in your Chart of Accounts, you would:
- From the Lists menu
- Choose Chart of Accounts
- Click the Account button at the bottom of the window
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- This displays a Customize Columns – Chart of Accounts window which displays a list of Available columns on the left and Chosen columns on the right. Click on the 1099 Account option to select it, then click the Add button.
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- The 1099 Account option is now displayed in the Chosen Columns on the right. Click Ok to save your changes.
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- Now, when you display your Chart of Accounts List, any accounts that have been selected for 1099 reporting will be flagged and display the type of 1099 required.
 Righ click image to enlarge it. Customizing the columns displayed in the Chart of Accounts listing to display 1099 flag provides a productivity boost all year long – not just at year end.
Go ahead and experiment with the information displayed in various lists by selecting available columns on the left and adding them to chosen columns on the right.
Simple customization such as this will help you get more done in less time – because you don’t have to constantly search for information.
By Nancy Smyth, on August 31st, 2010. Using the Open Window List in QuickBooks is a huge productivity booster as it will allow you to quickly and easily go back and forth between tasks. It will also allow you to see just how many and which forms and reports you do have open.
 Using the Open Window List is MUCH faster than opening and closing window or forms that you often use.
If you aren’t currently using the Open Window feature, you either close each form when you are done with it, or you always have a lot of windows open and don’t realize it. When you exit QuickBooks at the end of the day you may think that you only have one window open, but in reality you have maybe 8 or 10 – so when you start QuickBooks the next morning it has to load all of those open windows – quite possibly including several reports; this only adds to the amount of time that it takes before you can actually get to work.
Here’s how to activate the Open Window feature:
From the View menu -> click on Open Window List.
When you are working in QuickBooks on an average day, your Open Window List could show that you are working on Creating Estimates, viewing a Balance Sheet, Receiving Payments, working with your Chart of Accounts, working with your Item List, using Weekly Timesheets, entering Vendor Bills, viewing a Payroll Summary Report, looking at the Profit & Loss Report, working with your Payroll Item List, and even looking at an employee record. Each of these normal day to day activities creates a open window.
By utilizing the Open Window option, you can easily identify just how many form, report, and task windows you have open at the end of the day. A good habit to get into is to close all of these items before you exit QuickBooks. Close your open forms and reports by going to the Windows menu -> and choosing Close All. The next morning when you start QuickBooks you may find that it will load faster if you start with a “clean slate”.
By Nancy Smyth, on August 27th, 2010. Many companies fail to set up their charts of accounts correctly in QuickBooks. Over the years I have seen charts of accountants that look like a collage of accounts in helter skelter format without any logical order, containing duplicate if not triplicate accounts, inconsistent protocols, and even inappropriate, if not undecipherable, names.
 At tax time, when their CPA receives either a backup or Accountants copy of the file like OR reports that have been created from the file, it becomes an even bigger mess. The trial balance that must be created by the tax preparer requires countless hours of reclassifications and groupings to mesh and coordinate the amounts within the file to the classifications required on tax returns and financial statements. Business owners then bear the costs of needless and expensive clean ups, often tacking on an additional $500 to $1000 per year to their annual accounting bills.
There is no excuse for not having a QuickBooks chart of accounts set up in a format compatible with what is reported on a company’s tax return as well as their financial statement. Once set up, a simple click in QuickBooks prints a readable and well-organized financial report for internal management, bankers, other creditors, bonding companies, shareholders, etc. In addition, with some mapping to an Intuit tax software program, the client’s trial balance amounts can be exported to the company’s tax return by the tax preparer with another click of the mouse.
In order to minimize the costs associated with having their tax returns prepared, as well as interim and year-end financial reports, businesses owners would be well advised to adopt account names, groupings, and an overall format required by their tax returns. A good chart of accounts can accommodate the requirements of both internal and external financial reporting, since subaccounts would provide any necessary detail required by management and interested outside parties – while a simple click of the Modify Report button in QuickBooks re-arranges the expense accounts in alphabetical order – often the desired presentation for banks.
Many Certified Public Accountants (CPA’s) and Certified Public Bookkeepers (CPB) prefer to have their clients set up the chart of accounts using account numbers. Many clients do not want to use numbers because they find them cumbersome.
 Right click on the image to enlarge it. A compromise is to turn on the “Use account numbers” preference (Edit menu -> Preferences -> Accounting -> Company Preferences tab -> Use Account Numbers) when setting up the chart of accounts. Then, turn off the account numbers preference. When the preference is off, account numbers are not eliminated, simply hidden from view. At the end of the year, the CPA can turn the preference back on and add account numbers to any accounts created by the client during the year.
When the “Use account numbers” and “Reports-Show accounts by Name only” preferences (Edit menu -> Preferences -> Reports & Graphs -> Company Preferences tab -> Reports – Show Accounts by: Name Only option) are activated, account numbers appear next to the account name in QuickBooks financial reports.
 Right click on the image to enlarge it Many users prefer not to have account numbers display on financial reports. If, instead, the preference “Reports-Show accounts by Description only” is activated, the account description entered when the account was setup is used. Therefore, when using account numbers, enter an account description. (This description can be identical to the account name.)
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By Nancy Smyth, on August 26th, 2010. Setting up or modifying an existing Chart of Accounts is not an overwhelming task in QuickBooks.
If you are new to QuickBooks, when you create your company file (File menu -> New Company), the EasyStep Interview provides you with a “wizard”, industry specific templates, and example accounts are even suggested. If you need a starting point, grab your tax return or financial statement compiled by your outside accountant, and enter the accounts you find there, turning summary accounts from the financial statements into subaccounts in QuickBooks.
If you have already started using QuickBooks you can easily add, edit, or merge accounts in your Chart of Accounts for your business with a matter of a few clicks of your mouse by selecting the Lists menu -> Chart of Accounts OR Company menu -> Chart of Accounts.
By creating a more organized and efficient chart of accounts, you will not only save on accounting fees but you will improve your in-house reporting as well.
Always BACKUP your company’s QuickBooks file before making ANY changes (File menu -> Save Copy or Backup) – just in case, you wish to reverse the process.
Adding accounts:
To add an account, click the Account button at the bottom of the Chart of Accounts list and choose New. QuickBooks prompts you to choose what type of account you want to create – Income, Expense, Fixed Asset, Bank, Loan, Credit Card, Equity, Accounts Receivable, Other Current Asset, Other Asset, Accounts Payable, Other Current Liability, Long Term Liability, Cost of Goods Sold, Other Income, or Other Expense. As you select an account type to create, QuickBooks even includes a suggestion box on the right-hand side of the window, listing common accounts under each account type.
 Right click on the image to enlarge it Editing accounts:
To change an account name or type, right click on the account that you wish to work with and choose Edit Account, and simply type in the new name or select a different account type.
Merging accounts:
If you have duplicate accounts, Edit the duplicate, and in Account Name, enter the name of the account you wish to keep; all of the information in the previously separate accounts become merged into the one remaining account. As a precaution, before merging accounts, it would be prudent to make a copy of your QuickBooks file in the event that you discovered later that a merge was inappropriate.
Creating subaccounts:
Subaccounts are a critical feature of structuring your Chart of Accounts and ultimately your reports in QuickBooks. For example, on a tax return, rather than report separate totals for electricity, natural gas, and water, it is more efficient to combine their amounts under a heading, “utilities”. It is also true for the various kinds of insurance, professional services, taxes, etc. By grouping such related accounts in QuickBooks, its reports appear more organized and readable, especially since QuickBooks provides subtotals for each grouping.
Creating a subaccount is easy in QuickBooks. Go to the Lists menu -> Chart of Accounts OR Company menu -> Chart of Accounts, highlight the account that you want to turn into a subaccount, click the Account button -> choose Edit Account, click “Subaccount of” and select its parent account.
Note – Accounts may be added to or deleted from the chart of accounts at any time, but an account cannot be deleted once a transaction has been posted to it. Consequently, ensure the chart of accounts is complete and unnecessary accounts have been deleted or merged with another account before recording any transactions.
Account Numbers:
You are allowed up to 7 digits for an account number in QuickBooks; a minimum of 5 is recommended if you require numerous accounts and subaccounts. Unfortunately, QuickBooks preconfigured their numbering system using 4 digit – which is rather limiting. I often use, and recommend, a 5-digit account numbering system for construction companies:
10000 – 19999: Assets
10000 – 14999: Current Assets
- 10000 – 10999: Cash
- 11000 – 11999: Receivables
- 12000 – 12999: Inventory
- 13000 – 14999: Other Current Assets
15000 – 19999: Noncurrent Assets
- 15000 – 15999 – Fixed Assets
- 16000 – 19999 – Other Assets
20000 – 29999: Liabilities
20000 – 25999: Current Liabilities
- 20000 – 20499 – Accounts Payable
- 20500 – 20999 – Credit Cards
- 21000 – 25999 – Other Current Liabilities
- 21000 – 21999 – Accrued Expenses
- 22000 – 22999 – Payroll Liabilities
- 23000 – 23999 – Debt, Current Portion
- 24000 – 24999 – Capitalized Leases, Current Portion
- 25000 – 25999 – Other
26000 – 29999: Noncurrent Liabilities
- 26000 – 26999 – Debt, Noncurrent Portion
- 27000 – 27999 – Capitalized Leases, Noncurrent Portion
- 28000 – 29999 – Other
30000 – 39999: Equity
- 30000 – 30999 – Capital Stock
- 39000 – 39999 – Retained Earnings
Revenue: 40000 – 49999
50000 – 59999: Cost of Goods Sold
- 50000 – 50999 – Materials
- 51000 – 51999 – Labor
- 52000 – 52999 – Subcontractors
- 53000 – 53999 – Equipment
- 54000 – 59999 – Other Direct Costs
60000 – 89999: Expenses
- 60000 – 69999 – Selling Expenses
- 70000 – 89999 – General and Administrative Expenses
90000 – 99999: Other Income (Expenses)
Of course, there could be an endless variety of accounts under all of the above categories particularly under Expenses: Selling as well as General and Administrative. If there were an insufficient number of accounts required under Selling, you may omit the distinction and lump all under Expenses. If you apply overhead to your jobs reported in Cost of Goods Sold later than posting, you may even wish to add an Overhead grouping under Expenses for those amounts to be allocated to jobs. I find this especially convenient and timesaving, alleviating a frantic search through a mass of expense accounts containing thousands of transactions.
By Nancy Smyth, on August 25th, 2010. The Chart of Accounts is the most important QuickBooks list. It is the backbone for a company to track how much money it has, how much money it owes, how much money is coming in, and how much money it is spending.
 Right click on the image to enlarge it. It is not necessary to have a chart of accounts that provides for every conceivable transaction. Instead, the chart of accounts should include the minimum number of accounts necessary to capture the appropriate financial information and be flexible enough to allow for future growth. The chart of accounts should be designed to include the accounts necessary for both financial and income tax reporting.
QuickBooks makes it easy for you to set up a chart of accounts.
When you create a company file in QuickBooks (File menu -> New Company), an EasyStep Interview is launched to guide you through the process. Follow its “wizard” to initially setting up your company in QuickBooks, selecting the appropriate legal structure and select a predefined chart of accounts for your industry.
If you are unable to find your precise industry, you can:
- select the industry closest to yours
- copy a chart of accounts from another company in QuickBooks
- import a chart of accounts from another source
- or if you are adventurous, start from scratch
No need to fear: virtually everything can be undone, which is one of the reasons QuickBooks is so very popular; it is all so forgiving.
Always use account numbers.
You have to enable the use of account numbers, from the Edit menu -> choose Preferences -> select Accounting -> and click on the Company Preferences tab, and then selecting “Use account numbers”.
Right click on the image to enlarge it. Using account numbers allows your company the most freedom of organization and arrangement of your account format in your financial reports. By using numbers, you can arrange reports into meaningful sections, groups, or categories. By default, QuickBooks orders all financial accounts in financial reports in numerical order. If you wish to change the account order in the report, just change the account’s number. This flexibility is not available when you use just using account names. Additionally, it is a simple process to rearrange these same reports in alphabetical order, if and when desired: simply select Modify Report -> Display -> Sort in Ascending order/Descending order.
You are allowed up to 7 digits for an account number in QuickBooks; a minimum of 5 is recommended if you require numerous accounts and subaccounts. Unfortunately, QuickBooks preconfigures their numbering system using 4 digit – which is rather limiting. I often use, and recommend, a 5 digit account numbering system for construction companies:
10000 – 19999: Assets
10000 – 14999: Current Assets
- 10000 – 10999: Cash
- 11000 – 11999: Receivables
- 12000 – 12999: Inventory
- 13000 – 14999: Other Current Assets
15000 – 19999: Noncurrent Assets
- 15000 – 15999 – Fixed Assets
- 16000 – 19999 – Other Assets
20000 – 29999: Liabilities
20000 – 25999: Current Liabilities
- 20000 – 20499 – Accounts Payable
- 20500 – 20999 – Credit Cards
- 21000 – 25999 – Other Current Liabilities
- 21000 – 21999 – Accrued Expenses
- 22000 – 22999 – Payroll Liabilities
- 23000 – 23999 – Debt, Current Portion
- 24000 – 24999 – Capitalized Leases, Current Portion
- 25000 – 25999 – Other
26000 – 29999: Noncurrent Liabilities
- 26000 – 26999 – Debt, Noncurrent Portion
- 27000 – 27999 – Capitalized Leases, Noncurrent Portion
- 28000 – 29999 – Other
30000 – 39999: Equity
- 30000 – 30999 – Capital Stock
- 39000 – 39999 – Retained Earnings
Revenue: 40000 – 49999
50000 – 59999: Cost of Goods Sold
- 50000 – 50999 – Materials
- 51000 – 51999 – Labor
- 52000 – 52999 – Subcontractors
- 53000 – 53999 – Equipment
- 54000 – 59999 – Other Direct Costs
60000 – 89999: Expenses
- 60000 – 69999 – Selling Expenses
- 70000 – 89999 – General and Administrative Expenses
90000 – 99999 : Other Income (Expenses)
There is no excuse for not having a chart of accounts set up in a format compatible with what is reported on one’s tax return as well as one’s financial statement. Once set up, a simple click in QuickBooks prints a readable and well-organized financial report for internal management, bankers, other creditors, bonding companies, shareholders, et al.
This format need not be inconsistent with that used for internal and external financial reporting, since subaccounts would provide any necessary detail required by management and interested outside parties; while a simple click under report modification in QuickBooks re-arranges the expense accounts in alphabetical order, often the desired presentation for banks.
Important – Accounts may be added to or deleted from the chart of accounts at any time, but an account cannot be deleted easily once a transaction has been posted to it. Consequently, ensure the chart of accounts is complete and unnecessary accounts have been deleted before recording any transactions.
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