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In this introduction

Using QuickBooks Every Day

How to Use This Book

Conventions Used in This Book

Welcome to Special Edition Using QuickBooks 2002!

This book is the most comprehensive and useful reference available for QuickBooks 2002, an Intuit program. With this book you will learn how to put the nation’s top-selling business accounting software program to work for you, how to keep track of all the financial activity of your business, and how to produce useful information that will help you with budgeting, planning for the future, and meeting important deadlines such as tax return filing dates, financial statement reporting dates, and so on.

Having learned to do bookkeeping on a manual system—using large ledger pages and lots of erasers—I have a vast appreciation for many of the important timesaving elements of this program.

With QuickBooks, you can

  • Produce professional-looking financial statements and reports and be assured of their accuracy.

  • Quickly customize and revise reports to include just the information you need.

  • Produce reports for any time period you want.

  • Easily compare data from one year to the next.

  • Prepare tax forms.

  • Create a budget and monitor your performance.

  • Cross-reference numbers on reports to the documents in which the original numbers were entered.

This is just a short list of the major changes you will see when moving to a computerized program. The following section presents you with a sample of all the day-to-day transactions you can perform, effortlessly, with QuickBooks.

Using QuickBooks Every Day

Whether you enter your business transactions daily or catch up on a weekly or less-frequent basis depends on many factors. These factors include how many transactions you have, how organized you are, how much time you have to devote to computer data entry, and how important it is to you to have up-to-the-minute reports at your fingertips.

Just look what you can do, as frequently as you want, with QuickBooks at your side:

  • Create and maintain a Customer list— You can keep an up-to-date list of all your customers: name, address, shipping address, phone, e-mail, fax, contact name, favorite color (really!), not to mention accounting information such as the terms you usually apply to a particular customer’s order and whether the customer is subject to sales tax.

  • Create and maintain a Vendor list— Keep information handy on all your vendors: name, address, phone, fax, e-mail, contact name, your account number, hours of business, and items you normally order from each vendor.

  • Write and print checks— Enter checks on an onscreen form that looks just like your own checks, and then print the checks on actual paper checks. All you have to do is sign the check! Check amounts are automatically deducted from your bank account balance and charged to the appropriate expense account.

  • Write and print invoices— Prepare invoices for your customers on an onscreen form that looks just like a real invoice. If you prepare estimates in QuickBooks Pro, you can generate invoices right from the estimates. Print the invoice on a form that you design yourself—one that conforms to your own business needs.

  • Write and print purchase orders— Fill out a purchase order onscreen, entering the items that you want to purchase. Choose a vendor name, and the address fills in automatically. Print the purchase order on a form that you design yourself (or use one of the standard forms that come with QuickBooks).

  • Reconcile your checking account— All right, so you probably won’t do this one every day—but when you’re ready to reconcile, the process is easier than you can imagine. Just check off every check and deposit that appears on your bank statement, and you’re finished!

  • Record payments from your customers— Enter amounts received from your customers by simply checking off items from a list of amounts owed to you. Your accounts receivable balance is updated automatically.

  • Enter and pay bills from vendors— Update your accounts payable immediately as you enter each bill you receive. Cross-check bills against purchase orders and records of merchandise received. Then make bill payments by checking off which bills you want to pay. Checks are prepared automatically.

  • Create and print numerous reports— Use the standard reports that come with QuickBooks—reports for nearly every situation—or customize your own reports to reflect just the activity you want to show. Prepare QuickReports with a simple mouse click, displaying the details behind the numbers on your reports or showing all the activity for any one of your customers or vendors.

  • Create a budget— Use QuickBooks to style a budget that helps you stay in touch with your company’s potential. Know how to plan the future performance of your company.

  • Generate payroll tax forms— Prepare all your federal payroll tax forms in QuickBooks: Form 941, Form 940, W-2, W-3, and W-4.

  • Prepare income tax reports— Create quarterly and annual reports to help you in the preparation of your business income tax returns. Export tax information to TurboTax software for computerized tax return preparation.

  • Use QuickBooks for more than one company— You can keep records for as many companies as you want with a single copy of QuickBooks software.

  • Record separate financial activity for different locations of your business— Use the Class feature of QuickBooks to identify separate divisions or locations of the same business. Then you can generate reports for each class individually or for the company as a whole.

  • Produce sales tax reports— Always know how much you owe in sales tax by preparing a sales tax payable report.

  • Generate aging reports— Find out how much is owed by your customers, and find out how much of that is overdue, by producing an aging report.

How to Use This Book

Special Edition Using QuickBooks 2002 is divided into seven parts, including six appendixes.

Part I, “Getting Started in QuickBooks”

Chapter 1, “QuickBooks Overview,” contains general information about the QuickBooks program and about bookkeeping. Chapter 2, “Accounting 101,” includes basic rules for first-time QuickBooks users and tips for setting up a new bookkeeping system. In Chapter 3, “Using the QuickBooks Chart of Accounts,” you’ll find information about the standard chart of accounts that comes with your program as well as information about assigning account numbers and adding and deleting accounts. Chapter 4, “Scheduling Periodic QuickBooks Activities,” includes tips for scheduling periodic and recurring transactions in QuickBooks, and Chapter 5, “Going Online with QuickBooks,” provides information about using the online banking and bill-paying features of QuickBooks.

Part II, “Setting Up Your Business”

Chapter 6, “The EasyStep Interview,” and Chapter 7, “Setting Up Accounts, Inventory, Fixed Assets, and Payroll,” cover the entire QuickBooks EasyStep interview with detailed descriptions of the screens you’ll encounter and explanations of the type of data you should enter in these screens. In Chapter 8, “Entering Historical Information,” you’ll find a checklist and plenty of tips that will help you organize the material you’ll need when you work your way through the process of entering company data from the past. Chapter 9, “Setting Up Services, Customers, and Suppliers,” provides information on how to set up new accounts and enter information about your customers and vendors. Chapter 10, “Using Classes to Separate Your Company into Logical Divisions,” discusses the QuickBooks Classes feature that enables you to prepare reports based on different company locations, different types of businesses, activity of your sales staff, and more.

Part III, “Daily Business Activities”

In Chapter 11, “Job-Cost Estimating and Tracking,” you’ll learn about QuickBooks Pro features for using estimates and tracking the cost of individual jobs. Chapter 12, “Invoicing, Monthly Statements, Accounts Receivable, and Collecting Income,” provides descriptions of how to enter your income transactions in QuickBooks. Chapter 13, “Recurring Transactions,” offers a discussion on how to memorize a transaction so you can repeat it in the future without having to reenter the entire transaction, and you’ll also learn how to set up scheduled transactions that QuickBooks will perform for you. In Chapter 14, “Collecting and Paying Sales Tax,” you’ll learn how to account for sales tax, and in Chapter 15, “Keeping Track of Your Inventory,” you’ll learn about the QuickBooks inventory features and alternatives that are available for businesses that can’t use QuickBooks for their inventory.

Chapter 16, “Making Purchases and Recording Payments,” provides information about using all of the purchase and payment forms in QuickBooks. You’ll learn about accounting for your assets in Chapter 17, “Managing Assets.” You can read all about recording your cash activity in Chapter 18, “Entering Cash Transactions.” Chapter 19, “Equity Accounts,” provides an introduction to the equity accounts that are used in different forms of business. Find out how to enter payroll and pay your payroll taxes in Chapter 20, “Paying Employees and Contractors” and Chapter 21, “QuickBooks and Payroll Taxes.” Find out what you need to know about using QuickBooks for calculating income taxes in Chapter 22, “Income Taxes.” Finally, learn about the QuickBooks security and password features in Chapter 23, “Security.”

Part IV, “Making QuickBooks Work for You”

By the time you get to Part IV, you should be pretty familiar with your QuickBooks program. Now you’re ready to start making the program work the way you want it to. In Chapter 24, “Producing Financial Reports,” you learn about how to extract the information you need from QuickBooks to help you make business decisions. Chapter 25, “Customizing QuickBooks Forms,” shows you how to create input forms that are specifically designed for your company.

Part V, “Getting the Most from QuickBooks”

Chapter 26, “QuickBooks Pro and Time Tracking,” includes an in-depth analysis of the timekeeping features of QuickBooks Pro. In Chapter 27, “Budgeting,” you’ll learn about budgeting techniques that will help you stay on course. Chapter 28, “Forecasting Your Financial Future with QuickBooks,” explains the fundamentals of financial forecasting so that you can intelligently predict how your business will fare in the future.

Part VI, “Networks and Sharing”

Chapter 29, “Sharing QuickBooks on a Network,” describes the networking capabilities of your QuickBooks program. In Chapter 30, “Transferring Data Between QuickBooks and Other Applications,” you learn how to transfer information to and from QuickBooks and other programs.

Part VII, “Appendixes”

There are six appendixes to help answer questions you may have about your QuickBooks program. Appendix A, “Installation of QuickBooks,” explains how to install QuickBooks. First-time users may find this will come in handy. Appendix B, “Getting Help,” describes many sources you can turn to if you need additional help with QuickBooks. Go to Appendix C, “Setting Preferences,” if you need to instruct QuickBooks about how your program should be set up for your particular business. Appendix D, “Working with an Outside Accountant,” describes the features you will find useful if you use an outside accounting professional to help you with your program. Appendix E, “Internet Features for QuickBooks Users,” explains how you can take advantage of resources on the Internet. Finally, Appendix F is a glossary of important terms used in this book.

Conventions Used in This Book

With more than a decade of experience writing and developing the most successful computer books available, Que has learned what special features help users the most. Look for the following special features throughout Special Edition Using QuickBooks 2002.

Chapter Roadmaps

Each chapter begins with a roadmap, a list of topics that are covered in the chapter. This way you can tell at a glance what you will find in each chapter.

Stepped Procedures

When you’re learning a new computer program, many features are most easily explained in a step-by-step process. The procedures explained in this book are presented with numbered steps that don’t leave out any instructions. Follow along with the steps as you perform tasks at your own keyboard. Following is an example of a numbered procedure.

To set up a new income account, complete the following steps:

Be sure that Yes is selected, and then click Next. The Adding an Income Account screen appears.

Enter the name of an income account that you want to add (for example, Catering or Lumber Sales or Machine Rental).

Choose a tax line for the account if you plan to use QuickBooks to help you summarize information for your income tax return.

Click Next, and you see that your new income account has been added to the list of income accounts for the company.

Notes, Tips, and Cautions

Notes point out key features, warnings, and examples, as well as technical, nonessential, or interesting information that you might not otherwise pick up from using the program. You can learn the program without reading the notes, but you’ll find that they can greatly enhance your experience with QuickBooks. Following are examples of notes, tips, and cautions:


You can print a report to a file instead of a printer. By doing so, you can open the file in another program (such as a spreadsheet program) and further manipulate the numbers. Choose File, Print, and then click File. Enter the name that you want to give the file, and then click Print.

Tip from

Keep a copy of last year’s tax return nearby to use as a reference for assigning tax lines. If this is the first year that your company will file a tax return, use a blank tax form as a reference.


You get an error message if you try to enter a credit card statement date that falls after your start date. The implication is that there was a balance due on your start date that is not being properly reflected. If there was no balance due on your start date, go ahead and set up the credit card, entering zero in the Statement Ending Balance area. If you can’t find the credit card statement from just prior to your start date, you can back into the amount that was on that statement by looking at the beginning balance on the first statement from after the start date.


Throughout the book you will find cross-references, which are designed to take you to other places in the book that include information that might be helpful to the topic at hand. A cross-reference looks like this:

→ To learn more about security, see Chapter 23, “Security,” p. 393.

In addition to the features listed previously, there are several other conventions designed to help you find your way through the program.


This section appears at the end of each chapter, providing you with a quick question-and-answer session for problems that arise frequently among QuickBooks users.

Underlined Hot Keys, or Mnemonics

Just like the onscreen menus that contain underlined letters as keyboard alternatives to the mouse, the menu and screen references in this book contain underlined letters. To activate a feature using an underlined letter, press the Alt key, and then press the underlined letter. You do not need to (and often should not) hold down the Alt key while pressing the underlined letter. For instance, to choose the Next button, press Alt, and then press the letter N. The N does not need to be capitalized.

Shortcut Key Combinations

Shortcut key combinations are presented with plus signs joining the keys. For example, Ctrl+Z means hold down the Ctrl key while you press the Z key.

Menu Commands

Instructions for choosing menu commands are presented as follows: Choose Activities, Lists.

This example means open the Activities menu and select Lists, which in this case opens the box displaying all the types of lists for your company.

This book also uses the following typeface enhancements to indicate special text, as indicated in the following table:

Typeface Description
Italic Italic is used to indicate new terminology.
Computer Type This type is used to indicate text or numbers that you type.

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