QuickBooks 2018 All-in-One For Dummies book cover

QuickBooks 2018 All-in-One For Dummies

By: Stephen L. Nelson Published: 11-23-2017

QuickBooks is known for helping their users effectively handle their financial and business management tasks, and QuickBooks 2018 All-in-One For Dummies is the go-to guide for anyone looking to gain insight into the latest version of the software. It gets you up to speed on the key features of QuickBooks and small business accounting and makes managing finances a breeze. This book will help you learn all the skills you need to know, like how to invoice customers, pay vendors, manage cash and bank accounts, use activity-based costing, and write a business plan.

Articles From QuickBooks 2018 All-in-One For Dummies

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How to Use Classes for ABC in QuickBooks 2018

Step by Step / Updated 10-15-2020

Activity-based costing (ABC) in QuickBooks 2018 requires the use of classes. When you record an expense, you also identify the class into which the expense falls. Using classes that correspond to your activities — well, you can see that’s all it takes, right? After you turn on Class Tracking, using classes is really straightforward. You set up classes for the product lines or service lines for which you want to measure profitability. You classify transactions as fitting into a particular class either as they’re recorded (if you can) or after the fact (if you need to fiddle with the activity and cost driver math).

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How to Record or Create a Budget in QuickBooks 2018

Article / Updated 03-28-2018

You probably already have a budget created, but you need to record it in QuickBooks 2018. To create a new budget in QuickBooks 2018, follow these steps: Choose the Company→Planning and Budgeting→ Set Up Budgets command. This opens the Create New Budget dialog box, shown here, which you use to create a new budget. (Bet you wouldn’t have guessed that.) Note: If you have previously set up a budget, QuickBooks displays the Set Up Budgets window rather than the Create New Budget dialog box. If QuickBooks displays the Set Up Budgets window, you need to click its Create New Budget button to display the Create New Budget dialog box. Select the fiscal-year period. Identify the fiscal year you’re budgeting for. To do that, enter the fiscal year in the provided text box, shown here. If you’re budgeting for fiscal year 2019, for example, you use those buttons to change the year to 2019. Choose whether to create a profit and loss or balance sheet budget. To create a profit and loss budget, select the Profit and Loss radio button, click Next, and proceed to Step 4. To create a balance sheet budget, select the Balance Sheet radio button, click Finish, and skip to Step 5. Note that you use a different approach for profit and loss budgets and balance sheet budgets. For profit and loss budgets, you budget the amount of revenue or expense expected for the account for the month. For balance-sheet budgets, you budget the ending account balance — that’s the ending account balance expected for the asset, liability, or owner’s equity account at month’s end. In the Additional Profit and Loss Criteria dialog box (shown), specify additional profit and loss budget criteria, and click Next. If you chose to create a profit and loss budget in Step 3, select the Customer:Job radio button to further extend your budget to include Job details; select the Class radio button to include classes in your budget; or simply select the No Additional Criteria radio button. Note: To budget by class, you must first turn on class tracking. In the Create New Budget dialog box, choose whether to create the budget from scratch or previous data. To create a budget from scratch and start with a clean slate, select the Create Budget from Scratch radio button, shown here. To create a budget based on your actual data from last year, select the Create Budget from Previous Year’s Actual Data radio button. Click Finish when you’re done. QuickBooks displays the Set Up Budgets window (shown).

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How to Work with an Existing QuickBooks 2018 Budget

Article / Updated 03-28-2018

Just so you know, in large companies with hundreds or thousands of employees, two or three people spend much of or even all of their year working with the budgeted data. To edit an existing budget in QuickBooks 2018, follow these steps: Choose the Company → Planning & Budgeting →Set Up Budgets command. QuickBooks displays the Set Up Budgets window — the same one shown here. You use this window to record the amount that you expect for each revenue and expense for each month during the year in which you’re budgeting. Select a budget, or create a new one. Select the budget you want to work with from the Budget drop-down list at the top of the window. To create a new budget (you can have as many budgets as you want), click the Create New Budget button. For help with creating a new budget, see the preceding section. (Optional) Choose a customer. You typically budget by account. If you want to budget in finer detail by also estimating amounts for customers, jobs, or classes, you can use the Current Customer:Job drop-down list to identify specific customers from whom you expect revenue or for whom you expend costs. Note: The Customer:Job drop-down list box doesn’t appear unless, when you created the budget you’re now working with, you indicated that you wanted to budget by customer. Record the budgeted amounts for each month of the fiscal year. Type the amounts you want to budget for each account in the appropriate month columns. Again, remember that revenue and expense accounts are budgeted as the amount expected for the month. Asset, liability, and owner’s equity amounts are budgeted as the ending account balance expected for the month. To copy the budgeted amount for one month into the text boxes for the succeeding months, click the Copy Across button. (Optional) Adjust row amounts. If you find that the yearly total for an account isn’t what you want it to be, you can go back and change the amounts for each month so that they add up to the correct total, or you can click the Adjust Row Amounts button. Clicking this button displays the Adjust Row Amounts dialog box, shown here. Use the Start At drop-down list to select the month you want to start with (either the first month or the currently selected month). Then choose whether you want to increase or decrease the amounts budgeted, and by how much (by entering either a dollar amount or a percentage). Click OK when you finish; QuickBooks closes the dialog box. Repeat as necessary. Repeat Steps 3 through 5 for each of the accounts for which you want to record budgeted amounts.

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Managing with a Budget in QuickBooks 2018

Article / Updated 03-28-2018

After you record your budget in QuickBooks, you can compare your actual financial results with budgeted amounts by choosing commands from the Budgets & Forecasts submenu that QuickBooks displays. When you choose the Reports → Budgets & Forecasts command, QuickBooks provides several budgeting reports, described in the following list: Budget Overview: This report summarizes your budgeted amounts. You can use it to look at and error-check your budget. Budget vs. Actual: This report lets you compare budgeted income statement information with actual income statement information. The report, therefore, lets you compare your expected revenue and expenses with actual revenue and expenses. Profit & Loss Budget Performance: This report lets you compare your actual income, expenses, and profits with your budgeted income, expenses, and profits. Budget vs. Actual Graph: This graph isn’t a report. It’s a chart that shows budgeted and actual information. Forecast Overview: This report summarizes a QuickBooks forecast. A forecast is basically a prediction about your future revenue and cash flow. You use forecasts to do “what if” planning. Forecast vs. Actual: This report compares a forecast with what actually happened. The way that you use a budgeting report’s information is key — and also the secret to getting value from your budgeting efforts. With a well-constructed, common-sense budget, you can look for variances between your budget and your actual financial results. You want to use your budget to spot situations in which, for example, an expense item is too low, an asset item is too high, or some revenue number is trailing what you expect. Variances between expected results and actual results indicate unexpected results. Unexpected results often suggest problems . . . or opportunities. Think about the following examples of variance and what the variances may indicate: Monthly revenue is $40,000 instead of $50,000. Monthly revenue that’s 20 percent less than expected may indicate problems with your product, problems with your sales force, or problems with your customers. In any case, if sales represent only 80 percent of what you expect, you probably need to implement immediate corrective action. Inventory balances are averaging $50,000 at month’s end rather than $100,000 at month’s end. Having a lower-than-expected inventory balance may be either good or bad. The ending inventory balance that’s half what you expect may indicate that you’re selling products much faster than you expected (and, therefore, you should increase your inventory investment and purchasing of inventory). Having a low inventory investment may also mean, however, that you’re simply not getting materials from your vendors as fast as you need them, and as a result, you’re at great risk of losing sales because of inadequate stock levels. Research and development expenses equal $50,000 a year instead of $25,000 a year. Research and development expenses that are twice what you expect seem to be bad. How can it be good to spend twice as much on an expense as you expect? Doubling your research and development expenditures may be good, however, if you’re unexpectedly investing in some promising new product, idea, or technology. Sales to a particular class of customer are 50 percent higher. Suppose that you used classes to track sales to customers inside the country and outside the country. If you see that, quite unexpectedly, sales to customers outside the country are 50 percent above what you expect, that variance may indicate an opportunity to sell even more outside the country. Maybe with more effort and energy, outside-the-country customers can become an even larger part of your business. Sometimes, variances identify opportunities that you’d otherwise miss.

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How to Turn On Class Tracking in QuickBooks 2018

Article / Updated 03-28-2018

Activity-based costing (ABC for short) may be the best new accounting idea in the past three decades. The approach is actually really straightforward if you’ve already been using QuickBooks. In short, all you do to implement a simple ABC system in QuickBooks is what you’re doing right now. In other words, just keep on tracking your operating expenses by using a good, decent chart of accounts. That’s 90 percent of the battle. First, you turn on the QuickBooks Class Tracking feature. Class Tracking lets you categorize income and expense transactions as falling not just into income and expense accounts, but also into particular classes. To turn on Class Tracking in QuickBooks, follow these steps: Choose Edit --> Preferences. QuickBooks displays the Preferences dialog box. Tell QuickBooks you want to work with the accounting preferences. To tell QuickBooks that you want to change one of its accounting preferences — Class Tracking, in this case — click the Accounting icon, which appears in the list box along the left edge of the Preferences dialog box. The figure shows the Company Preferences tab for the accounting preferences. (If the Company Preferences tab doesn’t appear on your screen, simply click the tab name.) Select the Use Class Tracking for Transactions check box to turn on Class Tracking. You may as well also select the Prompt to Assign Classes box so that QuickBooks reminds you to use the classes. Click OK. From this point forward, QuickBooks adds a Class drop-down list or field to the windows that you use to record revenues and expenses (such as the Create Invoices window, the Write Checks window, the Enter Bills window, and so on). All you do is tag transactions as they fit into a particular class.

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Producing a QuickBooks 2018 Report

Article / Updated 03-28-2018

QuickBooks provides more than 100 financial statements and accounting reports. You get to these reports by opening the Reports menu. The Reports menu arranges reports in roughly a dozen categories, including Company & Financial, Customers & Receivables, Sales, Jobs, and Time & Mileage. To produce just about any of the reports available through the Reports menu, you first select the Report category. If you want to produce a standard financial statement, such as a profit and loss statement, you choose the Reports →Company & Financial command. QuickBooks displays the Company & Financial submenu, which lists the various types of financial statements available. You pick the submenu command that describes the financial statement that you want. If you want a standard profit and loss financial statement, you choose the Reports→ Company & Financial → Profit & Loss Standard command. After you choose the command, QuickBooks displays the Report window for the report that you selected, as shown.

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Working with the QuickBooks 2018 Report Window Buttons

Article / Updated 03-28-2018

The Report window typically provides ten buttons: Customize Report, Comment on Report, Share Template, Memorize, Print, E-mail, Excel, Hide Header, Collapse, and Refresh. You can find out what these command buttons do by experimentation. If you don’t have time for that, read the following sections. Customize Report button The Customize Report button displays the Modify Report dialog box. Comment on Report button Clicking the Comment on Report button displays the Comment on Report window (shown). To use the Comment on Report dialog box, you click a report value you want to annotate with a comment. QuickBooks then opens a comment box at the bottom of the window, you type your comment, and then you click the Save button. When you’re done commenting on the report, you need to save the annotated report. Do so by clicking an OK button when QuickBooks asks whether you want to save the commented report. Later on, when you print the report, you can include your comments. (This is a great tool for accountants and bookkeepers who want to explain what numbers mean to other readers of the financial statements.) You print a saved commented report by choosing the report from the Reports→Commented Reports menu. Share Template button The Share Template button, which QuickBooks enables after you’ve customized a report in some way, lets you share your customized report settings (not the data) with other QuickBooks users. When you click this button, QuickBooks displays the Share Template dialog box (not shown). Use the dialog box to give your report template a name (ideally a clever name, please), describe your customized report with a few choice words, provide your name and email address, and use the option buttons provided to indicate whether you want to remain anonymous. When you click Share, QuickBooks uploads your report template to an Intuit website where other people can grab the template and use it. Memorize button The Memorize button displays the Memorize Report dialog box, shown here. The Memorize Report dialog box lets you memorize, or permanently save, a particular set of report creation settings. After you memorize these settings, you can produce the exact same report by choosing the memorized report from the Reports→ Memorized Reports submenu. You can save a memorized report in the Memorized Report Group. To do this, select the Save in Memorized Report Group check box. Then use the Save in Memorized Report Group drop-down list to select the report group in which the memorized report should be saved. Print button The Print command button in the top menu bar displays a drop-down list with two options: Report and Save As PDF. If you click Report, QuickBooks (sometimes after a bit of annoyance) displays the Print Reports dialog box, shown here, which lets you choose how the report should print and where it should print. The Settings tab, for example, lets you choose the printer, select a page orientation (either portrait or landscape), specify whether you want to print only a range of the report’s pages, control page breaking, and adjust the dimensions (width and height) of the report. If you click Save As PDF, QuickBooks displays the Save Document As PDF dialog box, which lets you create a PDF of report document. The Margins tab of the Print Reports dialog box, shown here, lets you specify the margins that QuickBooks should use on the printed report pages. You specify the top, right, bottom, and left margins in inches. Click the Preview button, provided on the Print Reports dialog box, to display the Preview window. The Preview window shows what your printed report pages look like. The window also includes buttons that let you page to the previous and next pages of the report, zoom in and out on the report, and print the report. After you’ve used the Settings tab and the Margins tab to specify how QuickBooks should print a report, click Print. QuickBooks sends the report to your printer. Email button The E-mail command button lets you email either an Excel workbook version of a report or a PDF version of a report to someone else as an email attachment. Excel button If you click the Excel button, QuickBooks displays a submenu from which you can choose Create New Worksheet or Update Existing Worksheet. Choose Create New Worksheet to display the Send Report to Excel dialog box, shown here. The Send Report to Excel dialog box lets you take the information in a report and copy it to a file that a spreadsheet program, such as Microsoft Excel, can easily open. You can send the copy to a new Excel spreadsheet, to an existing Excel spreadsheet, or to a .csv (comma-separated values) file, which can be opened by just about any spreadsheet or database program. To copy the report to a new workbook, select the Create New Worksheet radio button. From there, you have the option to create a whole new Excel spreadsheet (click the In New Workbook option) or create a new sheet in an existing file by using the In Existing Workbook radio button; then enter the path and name of the workbook in the text box that QuickBooks opens after you select the radio button. (If you don’t know the path and name of the workbook, click the Browse button and then use the dialog box that QuickBooks displays to locate the workbook file.) If you want to copy the report to an existing Excel spreadsheet, select the Update an Existing Worksheet radio button. QuickBooks causes Excel to refresh the previously exported workbook. If you want to replace an existing Excel spreadsheet with the new report you’re sending to Excel, select the Replace an Existing Worksheet radio button. Then, when QuickBooks opens a text box and adds the Browse button, either enter the path and name of the workbook in the text box or click the Browse button, navigate to the workbook, and select it. Finally, if you want to copy the report information to a .csv file (a file format that can be opened by any spreadsheet or database program), select the Create a Comma Separated Values (.csv) File radio button. If you click the Advanced command button on the Send Report to Excel dialog box, QuickBooks displays the Advanced Excel Options dialog box, shown here. This dialog box allows you to control what formatting QuickBooks copies to Excel (do this with the QuickBooks Options check boxes), turn certain Excel formatting features on or off (do this with the Excel Options check boxes), and set up some preliminary workbook printing information in Excel (do this with the Printing Options radio buttons). All this stuff relates to how Excel works. If you’re comfortable working with Excel, go ahead and make the changes that you want. If you aren’t comfortable working with Excel, go ahead and accept QuickBooks’s default suggestions. You can change all this stuff later, and rather easily, in Excel. If you’re working with QuickBooks, know that Excel is a wonderful tool for digging deeper into your data. Also note that next time you buy a PC, you may have the option of getting Microsoft Office as part of the purchase price. Microsoft Excel comes with Microsoft Office. Hide Header button The Hide Header button and the Collapse button change the way that the report appears in the Report window and, if printed, on the page. You click the Hide Header button to remove the header information, such as the company name. If you hide the header, you can click the Hide Header button again to replace the header. Collapse button The Collapse button collapses detail in a report. QuickBooks doesn’t show subaccounts in a collapsed report — only accounts. To uncollapse a report that you previously collapsed, click the Expand button. QuickBooks replaces the Collapse button with the Expand button when the Report window shows a collapsed report. Don’t spend any time trying to figure out what the Hide Header and Collapse/Expand buttons do. If you have a question, simply display a report in the Report window and click the command button about which you have a question. The changes in the Report window show you what the command button does. Refresh button The Refresh button tells QuickBooks to update a report’s information for changes in the QuickBooks data file. This sounds crazy at first, but you can actually leave report windows open. This means that a report window may show a profit and loss statement from a week ago, for example. If you’ve entered several transactions in the past week, the report data may no longer be correct. When you click the Refresh button, QuickBooks knows that it should update the report with the most recent changes. QuickBooks typically prompts you to update a report for changes to the QuickBooks data file. If you don’t follow QuickBooks’s suggestion to update, however, you can later click Refresh to update.

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The QuickBooks 2018 Report Window Boxes

Article / Updated 03-28-2018

The Report window in QuickBooks 2018 provides five boxes: Dates, From, To, Columns, and Sort By. These boxes also enable you to control the information shown in the Report window and the appearance of the information. Dates, From, and To window boxes The Dates, From, and To boxes, for example, let you tell QuickBooks what reporting interval you want to show in the report. In other words, you use these boxes to tell QuickBooks the month, quarter, year, or whatever period for which you want to prepare a report. Columns drop-down list The Columns drop-down list displays a set of column choices. By default, QuickBooks displays a single total column for a report based on the time period you select. If you produce a report that summarizes annual income and expense data, for example, you can use the Columns drop-down list to tell QuickBooks that you want to see monthly columns. In this situation, QuickBooks shows an annual income statement, but it also shows columns for January, February, March, and so forth, providing some more detail on a certain time period, customer, or vendor. To see how this works, take a look at the figure. The profit and loss statement in the window is composed of only a Total column. Now take a look at the following figure; it shows the same profit and loss statement, except this time, the Columns drop-down list shows Customer:Job. In this case, QuickBooks shows you a breakdown of your income and expenses by Customer and Job, as well as the total. The Columns drop-down list gives you a bunch of column options. Typically, some options make sense for the report that you’re working on; others won’t. Nevertheless, you should occasionally experiment with this tool. The Columns drop-down list often gives you a neat way to further segregate and refine your data. Sort By drop-down list The Sort By drop-down list enables you to choose how information should be ordered in a report. For many types of reports, the Sort By drop-down list doesn’t provide any meaningful options. For other types of reports, however, the Sort By drop-down list provides handy ways to organize report information. Report Basis option buttons A newly added feature for this year is the ability to toggle directly between accrual basis and cash basis on the report. The Report Basis option buttons — Accrual and Cash — let you specify whether you want QuickBooks to prepare a report on a cash basis or on an accrual basis. Now, quite honestly, you can’t simply convert between cash-basis accounting and accrual-basis accounting by clicking these buttons. Cash-basis accounting and accrual-basis accounting are too complicated for QuickBooks to figure out on its own. If you use accrual-basis accounting, for example, you must use the QuickBooks Accounts Payable feature, and you must record revenue and expense transactions when you earn revenue and incur expenses. Nevertheless, these Report Basis buttons enable you to quickly flip between cash-centric profit statements and accrual-like financial statements. And that’s pretty handy. In a nutshell, cash-basis accounting counts income and expense when cash moves into and out of a business. Accrual-basis accounting counts income when it’s earned and counts expense when it’s incurred.

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Use the Display Tab to Modify a QuickBooks 2018 Report

Article / Updated 03-28-2018

The Display tab of the Modify Report dialog box in QuickBooks 2018 lets you control the report interval date, the report basis, the columns, and some other formatting. The Report Date Range boxes — Dates, From, and To — do the same thing as the Dates, From, and To boxes in the Report window. These boxes let you control the reporting interval or accounting period. You can choose one of the date descriptions from the Dates drop-down list, or you can use the From and To boxes to specify a particular range of dates. The From and To boxes, shown here, accept dates in mm/dd/yyyy format. The Columns area enables you to control or specify how many columns a report should display. The Display Columns By drop-down list is analogous to the Columns drop-down list in the Report window. The Columns area also lets you choose a Sort By option. Again, this is analogous to the Sort By drop-down list in the Report window. In addition, the Columns area allows you to add subcolumns (you do this with the Previous Period, Previous Year, and Year-to-Date check boxes) and add percentages. The neat thing about these percentages is that you’re actually adding financial ratios to your financial statement when you do this. To show each line item of an income statement as a percentage of total income, select the % of Income check box. For more report formatting options, click the Advanced button. QuickBooks displays the Advanced Options dialog box, as shown here. Use the Display Rows radio buttons to tell QuickBooks when it should or shouldn’t display rows of information in a report. Similarly, use the Display Columns radio buttons to tell QuickBooks when it should or shouldn’t display columns in a report. You can use the Reporting Calendar radio buttons to select the default annual reporting period. The default year can be a fiscal year (you set this option when setting up QuickBooks), a calendar year, or an income tax year. Click OK to activate these selections. To revert to the default display settings, click the Revert button on the Display tab.

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Use the Filters Tab to Modify a QuickBooks 2018 Report

Article / Updated 03-28-2018

The Filters tab in QuickBooks 2018 is probably the most interesting and useful tab provided by the Modify Report dialog box. The Filters tab enables you to set up filters that you can use to specify what information gets summarized in the report. To use the Filters tab, shown here, you first select the field on which you want to base a filter from the Filter list box. If you want to filter information based on the account, for example, select Account in the Filter list box. After you identify the piece of data on which you want to base your filter, open the drop-down list next to the filter. If you selected an account filter, for example, QuickBooks names this drop-down list the Account box. When you open the drop-down list, QuickBooks displays a set of filtering choices. The following figure shows common filtering choices available when you’re creating an account filter: All Income/Expense Accounts, All Ordinary Income/Expense, All Ordinary Income/COGS, and so forth. You can pick a standard account filter from this list. Alternatively, you can pick, for example, the multiple accounts entry from the drop-down list. In this case, QuickBooks displays the Select Account dialog box, as shown in the following figure. This dialog box lets you select, on an individual basis, which accounts you want to appear on the report. If you want to create a report based purely on a checking account, an accounts receivable account, and an inventory asset account, you use the Select Account dialog box to select these accounts. To select the accounts that you want, click them. QuickBooks identifies selected accounts with a check mark. Other fields and boxes on the Filters tab are pretty self-explanatory. The Include Split Detail? option buttons, available for account-based filters, let you tell QuickBooks whether it should include split transaction information. The Current Filter Choices list identifies what report filters are used for the report. You can remove a filter by selecting it from the Current Filter Choices list and then clicking the Remove Selected Filter button. You can also revert to the default filter by clicking the Revert button. Note that different boxes appear on the Filters tab for different filters.

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