If you setup your accounting system right, it will make the work going forward so much easier. In QuickBooks and QuickBooks Online, here are some important things to be aware of in the Account Settings.
Chart of Accounts: Using account numbers
I like having numbers in my Chart of Accounts. A lot of times I might have similarly named accounts, but the numbers help me keep the names short but still tell them apart. Here’s my template that can be uploaded to QuickBooks Online.
In a future post, I’ll go more into the details of how I like to setup my Chart of Accounts. If you don’t like the account numbers, this is also where you turn them off…or at least hide them from reports.
Other Preference: Changing Customers to Donor; Avoiding Duplicates
I mainly work with Nonprofits. We rarely call those that financially support us “Customers.” In Other Preferences, you get a range of options including Donors, Members, and Clients. All those sound a lot better than Customers.
There are also a bunch of options to have QuickBooks Online warn you if you’ve entered in a transaction for the second time. The one that is the most important is if you accidentally enter in a bill twice. If you’ve ever paid a bill twice, you know the extra work this causes. This one switch could save you a lot of trouble.
Accounting: Setting Fiscal Year and Closing the Month
Some churches and nonprofits use a different fiscal year than the calendar year. You also have the option between choosing between Cash and Accrual Accounting. These are important settings.
I cannot encourage you enough to use Close the Books. After you issue reports, you should go to this to close the books. What this does is give you a warning if you try to post a transaction to a closed period. You even have to enter in a password to post the transaction. This will protect you from accidentally posting to the wrong year.
- Sample Chart of Accounts: https://jctaccounting.com/wp-content/uploads/2023/03/quickbooks_online_coa_sample_file.xls
- Webinar on Chart of Accounts: https://youtu.be/WnEhvVd5Xws
- QuickBooks Online: https://quickbooks.intuit.com