QuickBooks 2020 For Dummies book cover

QuickBooks 2020 For Dummies

By: Stephen L. Nelson Published: 11-12-2019

The perennial bestseller—now in a new edition

QuickBooks allows small businesses to manage their own accounting and financial management tasks—without needing to hire expensive financial professionals. This perennial bestseller is here to show you step by step how to build the perfect budget, simplify tax return preparation, manage inventory, track job costs, generate statement and financial reports, and every other accounting-related task that crosses your desk.

Written by CPA Stephen L. Nelson, it shows you how to get the most out of the software that helps over six million small businesses manage their finances.

  • Handle your financial and business management tasks more effectively 
  • Get the most out of QuickBooks’ features
  • Create invoices and memos with ease
  • Pay bills, prepare payroll, and record sales receipts

If you use QuickBooks at work—or want to implement it in 2020—this book has you covered.

Articles From QuickBooks 2020 For Dummies

5 results
5 results
How to Track Vehicle Mileage in QuickBooks 2020

Article / Updated 12-14-2019

QuickBooks supplies a business-vehicle mileage tracker that you can use to track and tally business mileage. As you may already know, you need to know both your total miles and your business miles to accurately deduct vehicle expenses on your tax return. (If you’re not sure how this works, confer with your tax adviser.) Identifying your vehicles By law, you’re required to track your mileage by vehicle. QuickBooks 2020, accordingly, provides a Vehicle list. To add items to the Vehicle list, follow these steps: Choose Lists→ Customer & Vendor Profile Lists → Vehicle List. QuickBooks displays the Vehicle List window, as shown. Initially, because you haven’t yet added any vehicles, the list shows no assets. Click the Vehicle button (bottom-left corner), and choose New from the drop-down menu that QuickBooks displays. QuickBooks displays the New Vehicle window. Enter a name for the vehicle in the Vehicle text box, and enter a description of the vehicle in the Description text box. Identify the vehicle by its make and maybe the year of manufacture. I suppose that if you have a fleet of cars or trucks, you may want to provide more identifying information than this. Save the vehicle description by clicking OK. Recording vehicle miles After you add your business vehicles to the Vehicle list, you record each trip by using the Enter Vehicle Mileage window. To do this, follow these steps: Choose Company → Enter Vehicle Mileage. QuickBooks displays the Enter Vehicle Mileage window. From the Vehicle drop-down menu, choose the vehicle in which you took the trip. Provide the starting and ending dates of the trip. Enter the starting date of the trip in the Trip Start Date field and the ending date of the trip in the Trip End Date field. Note that you can click the little calendar buttons at the right ends of these two text boxes to display the QuickBooks pop-up calendar. Enter the starting mileage of the odometer in the Odometer Start field and the ending mileage of the odometer in the Odometer End field. After you enter the two mileage readings, QuickBooks calculates the total trip miles. (Optional) Identify the customer and job. If the trip’s miles should be billed to or associated with a particular customer or job, choose the customer or job from the Customer:Job drop-down menu. (Optional) Associate the trip miles with a particular invoice item. If you bill the trip miles on an item, choose the invoice item that should be used from the Item drop-down menu. Provide additional information as necessary. Use the Notes text box to collect or store any additional information needed for the vehicle mileage record keeping. Save the trip information by clicking the Save & Close button. Using the vehicle reports If you click the Reports button at the bottom of the Vehicle List window, QuickBooks displays a drop-down menu that lists four vehicle mileage reports: Mileage by Vehicle Summary, Mileage by Vehicle Detail, Mileage by Job Summary, and Mileage by Job Detail. You can access another menu of commands that produce these same reports by clicking the Mileage Reports button that appears at the top of the Enter Vehicle Mileage window. To produce a particular vehicle mileage report, choose one of the reports from either of these menus. Updating vehicle mileage rates If you click the Mileage Rates button at the top of the Enter Vehicle Mileage window, QuickBooks displays the Mileage Rates dialog box. The Mileage Rates dialog box lists Internal Revenue Service (IRS) mileage rates and their effective dates. You can enter a new mileage rate by clicking the next open row of the mileage rate schedule and then entering the effective date in the Effective Date column and the standard rate in the Rate column. You can find the current year’s business mileage rate at the IRS website. Note: In 2019, the standard mileage rate equaled 58 cents a mile, but the IRS usually updates this figure once and sometimes twice a year. So, you want to check for the rate that’s current when you do your calculations. In other words, don’t use one of the old, out-of-date standard mileage rates. Please.

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How to Set Up a Fixed Asset List in QuickBooks 2020

Article / Updated 12-14-2019

If your business owns a lot of stuff with long-lasting value, either you or your accountant needs to keep track of the items. If you need to track the items, you can do so by using the Fixed Asset list in QuickBooks 2020. Adding items to the Fixed Asset list To add a piece of furniture, some bit of equipment or machinery, or another item of long-lived value to the Fixed Asset list, follow these steps: Choose Lists→Fixed Asset Item List to display the Fixed Asset list. QuickBooks displays the Fixed Asset Item List window. Initially, because you haven’t yet added any assets, the list shows no assets. Have assets you’ve purchased already? You can edit the original purchase transaction and add the fixed asset to the list during editing. Tell QuickBooks that you want to add an item to the Fixed Asset list. Click the Item button (lower left) and then choose New from the menu that QuickBooks displays. QuickBooks displays the New Item window. Name the asset. Give the asset a unique name. You might give a piece of furniture a name like Leather couch, a computer a name like HP Pavilion, and a vehicle a name like a 2017 Ford F-150 pickup truck. Select the appropriate fixed asset account. From the Asset Account drop-down list, select the fixed asset account in which the asset you’re describing should be placed. A leather couch used in your opulent reception area, for example, might be placed in a furniture and equipment fixed asset account. A delivery truck might be placed in a vehicles fixed asset account. QuickBooks, as you might guess, supplies a bunch of accounts automatically, but you may not see the account you need or want in the Asset Account drop-down list. You can add a new asset account on the fly by entering a new account name and pressing Enter. When QuickBooks sees that the fixed asset account isn’t yet set up, it prompts you to set up the new fixed asset account. Describe the purchase terms. Use the Purchase Information area to describe the item that you purchased and the purchase terms. For example, you want to indicate whether the item is new or used by selecting either the New or Used radio button. You can provide a purchase description, purchase date, purchase cost, and even identify the vendor by using the other, self-explanatory boxes in the Purchase Information area. (Optional) Describe the asset in further detail. The Asset Information area at the bottom of the New Item window provides additional text boxes that you can use to describe the asset. The area provides a humongous field in which to place a lengthy asset description, for example. You also have fields you can use to identify the asset location, the original purchase order (PO) number, the asset’s serial number, and the warranty expiration date. If these fields aren’t adequate, heck, QuickBooks even supplies a Notes area that you can use to write a small ode to your asset or record some other bit of relevant asset information. Save the asset item description. Click OK to simultaneously save the new asset item description and close the New Item window. Or, click Next to save the new asset item description but leave the New Item window displayed. Adding fixed asset items on the fly You can add items to the Fixed Asset list, as described in the preceding paragraphs. Alternatively, you can add an item to the Fixed Asset list when you record the bill that records the vendor invoice for the asset or when you record the check that pays the vendor invoice for the asset. Here’s how this works: If you told QuickBooks that you want to maintain a Fixed Asset list, QuickBooks prompts you to add a fixed asset item when you categorize, or debit, a fixed asset account while entering a bill or recording a check. To collect the information required to set up the fixed asset item, QuickBooks displays the same New Item window. The steps for filling in the New Item window also work when adding fixed asset items on the fly. Editing items on the Fixed Asset list To edit a fixed asset item — say you made a mistake entering some bit of information — follow these steps: Choose Lists→Fixed Asset Item List. QuickBooks displays the Fixed Asset Item List window. Double-click the item that you want to edit. QuickBooks displays the Edit Item window. Update the asset description. As necessary, update the information shown in the Purchase Information and the Asset Information areas. Note, too, that if you want to record the disposal of an asset, you can select the Item Is Sold check box. Then QuickBooks enables the Sales Information area’s text boxes. You can use these to identify the sales date, price, and amount of selling expenses. QuickBooks doesn’t do any bookkeeping with the purchase and/or sales information shown in the New Item and Edit Item windows. It doesn’t add an asset to the balance sheet because you set up a fixed-asset item, for example. And QuickBooks won’t calculate the gain or loss on disposition of the asset because you enter sales information. You need to do that yourself — or have your accountant do that — by using either standard QuickBooks transactions or traditional journal entries.

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How to Share QuickBooks 2020 Files

Article / Updated 12-14-2019

Okay, here’s a cool deal: Within QuickBooks, you can set up user permissions, which enable you to specify who has access to which areas of your QuickBooks files. In fact, you can also work with your QuickBooks file on a network and in a multiple-user environment by using a powerful feature called record locking. If you work on a network and need to use or just want to find out about the QuickBooks network features, read this article. If you’re the only one using QuickBooks, you can skip this article. Sharing a QuickBooks file on a network Two important features power the QuickBooks multiuser network capability: user permissions and record locking. The user permissions feature gives multiple users of a QuickBooks file unique permissions settings to access different areas of QuickBooks. Record locking, the second feature, enables more than one person to simultaneously log in to and work with a QuickBooks file. User permissions QuickBooks enables you to set user permissions so that you can give different QuickBooks users different privileges. Jane Owner may be able to do anything she wants because, metaphorically speaking, she’s Da Man. Joe Clerk, though, may be able to enter only bills. Joe, a lowly clerk of perhaps dubious judgment and discretion, may not have the capability to view the company’s profit and loss statement, print checks, or record customer payments. This idea makes sense at a practical level, right? In a situation in which a bunch of people access the QuickBooks file, you want to make sure that confidential information remains confidential. You also want to make sure that people can’t intentionally or unintentionally corrupt your financial records. You don’t want someone to enter incorrect data (perhaps because he stumbles into some area of the QuickBooks program where he has no business). And you don’t want someone fraudulently recording transactions — such as fake checks — that she can go cash. I think that if you reflect on this user-permissions stuff, you’ll realize that “Hey, yeah, that makes sense!” So I’m not going to talk a bunch more about it. Let me conclude by throwing out a couple of general observations about how you decide which user permissions are appropriate: Data confidentiality: This issue probably has the most to do with your management philosophy. The more open you are about stuff, the less you probably have to worry about people snooping for stuff. I want to point out, however, that payroll is always a touchy subject. If everybody knows what everyone else is paid, some interesting discussions occur — but you already knew that. Data corruption: Regarding data corruption, you need to know that people usually apply two general rules: Don’t give people access to tools they don’t know how to use. That’s only asking for trouble. Make sure that no one person can muck around unsupervised in some area of the accounting system — especially if that person records or handles cash. If at all possible, employ a buddy system whereby people do stuff together so that people always double-check other people’s work — even if only indirectly. Maybe Joe records a bill, but Jane always cuts the check to pay the bill. Maybe Raul records customer invoices, but Chang sends them out. Maybe Saul records cash receipts, but Beth deposits them. You see the pattern, right? If two people deal with a particular economic event — again, especially one that involves cash — it’s a really good idea for Joe and Jane, Raul and Chang, and Saul and Beth to look over one another’s shoulders. Record locking The easiest way to understand record locking is to compare it with the other variety of locking: file locking. Most other programs use file locking. File locking means that if one person on the network has, say, a word processing document open, nobody else on the network can open and then edit that document. Others may be able to open a copy of the document that they can save on their computers, but they can’t edit the original document. The operating system locks the original document (the file) so that only one person can fool around with the file at a time. This locking ensures the integrity of the data and the changes that people make to the data. (If this business about ensuring integrity seems weird, think about the difficulty of making sure that both people’s changes end up in a word processing document that both people are editing simultaneously.) Record locking works differently. With record locking, more than one person on the network can open and edit the same file at once, but only one person can work with a specific record. A record is a part of a file. In a file of bills that you owe to vendors, for example, the file is the entire collection of bills. The individual bills are records within the file, and more than one person can open the file of bills. Individual bills, though — the individual records that make up the file — are locked when a person grabs a record. This information may sound like too much confusion, but differentiating between files and the records within a file is what makes sharing files possible. In QuickBooks, for example, if Jane is entering one bill for Alpha Company in a file, Joe can edit a bill for Beta Corporation because the two bills are different records. Because of record locking, however, Jane can’t fool around with the Beta Corporation bill that Joe is editing. And Joe — again, because of record locking — can’t fiddle with the Alpha Company bill that Jane is entering. Restated more generally, no two people can edit the same record in a file at the same time. Record locking enables employees to use a file in a multiuser environment because it lets more than one person work with a file. Installing QuickBooks for network use To install QuickBooks for network use, you must first install QuickBooks on all the computers on the network that need to access and work with the QuickBooks file. This task isn’t tricky. You don’t need to install QuickBooks in any fancy way to be able to share QuickBooks files. You need to purchase a copy of QuickBooks for each computer that’s going to run the program. If you have three computers on which you want to use QuickBooks, you need to buy three copies of QuickBooks. Or you could buy a special multiple-seat license version of QuickBooks. If you attempt to install a single copy of QuickBooks (with a single key code) on multiple computers, QuickBooks won’t allow two computers using the same key code to share a file in multiuser mode. When you create the file that you want to share, you need to make sure that you store the file in a location where the other QuickBooks users can access it. That is, you may need to store the file on a server. You can also store the file on a client computer as long as you designate sharing permissions for either the folder or the drive on which you save the QuickBooks file. Another important thing: Whoever creates the QuickBooks file automatically becomes the file administrator. The file administrator has access to all areas of the file and sets up the other file users, so you don’t want just anybody setting up the QuickBooks file. Either the business owner or the head of accounting is well suited for this job. In any case, the person who sets up the file should be a trustworthy regular around the office who’s easy to reach for any questions or problems that arise. Also, this person probably should have a strong background in accounting. See the following section for more details. Setting User Permissions You can tell QuickBooks who else will use the file and set permissions for these other people during QuickBooks Setup or later. User permissions in Enterprise Solutions To set permissions in Enterprise Solutions, follow these steps: 1. Tell QuickBooks that you want to set user permissions. Choose the Company→Users→Set Up Users and Roles command. QuickBooks displays the Users and Roles dialog box (not shown). 2. Indicate that you want to set up a new user. Click the New button so that QuickBooks displays the New User dialog box (not shown) which lists a variety of accounting roles that a QuickBooks user might fill. These roles give a user the capability to perform appropriate accounting tasks with the QuickBooks program. The Description box at the bottom of the dialog box summarizes the tasks that someone in a given role might be expected to perform. 3. Select the role that best matches the user you’re describing and then click Add. Owners, by the way, should have the Full Access role so that they can do anything they want. Note that you can give a user more than one role. If you want to change an existing user’s permissions, select the user on the User List tab and then click the Edit button. QuickBooks displays the Edit User dialog box (not pictured), which resembles the New User dialog box and allows you to change a user’s role or roles. 4. Click OK to return to the Users and Roles dialog box. You can review the permissions (basically, the list of capabilities that QuickBooks allows) for a particular person or a predefined role. To see the permissions that a user has, select the User List tab of the Users and Roles dialog box, click the View Permissions button, select the user in the list box, and then click the Display button. QuickBooks displays a large dialog box that specifically identifies what the user can do. To see the permissions that a particular role has, select the Role List tab of the Users and Roles dialog box, click the View Permissions button, select the role, and then click the Display button. User permissions in QuickBooks Pro and Premier To set permissions in QuickBooks Pro or QuickBooks Premier, follow these steps: 1. Choose the Company→Set Up Users and Passwords→Set Up Users command. QuickBooks displays the User List dialog box (refer to the figure). 2. Click the Add User button. QuickBooks displays the Set Up User Password and Access dialog box, which you use to add new users and specify passwords. 3. Type a username and password of the additional person whom you want to be able to use the QuickBooks file; then type the password again in the Confirm Password text box. Re-entering the password confirms that you typed the password correctly the first time. From this point, when someone opens the QuickBooks file, QuickBooks asks for a username and password. So, for another person to access the QuickBooks file, she must enter the username and password that you set. 4. Specify the user’s access. QuickBooks displays a dialog box asking whether you want the person to have access to all areas of the QuickBooks file or only some areas. If you specify that you want to give access to only some areas — the usual case, probably — QuickBooks displays a series of dialog boxes that enable you to set permissions for each area. You select the No Access option button to make a particular area (such as banking stuff) off limits for the user, select the All Areas of QuickBooks option button to give the user permission to create and print transactions and reports in the area, or select the Selected Areas of QuickBooks option button to give the user partial access to the area. If you choose the Selected Areas option, you need to specify the limited access by stepping through the wizard’s pages and describing in rigorous detail the access you want the user to have. You can also specify whether other applications (such as TurboTax) get access to the QuickBooks data. 5. Review the user’s access. After you finish stepping through the Set Up User Password and Access dialog boxes, QuickBooks shows a summary of the permissions for a user. Click the Back button if you need to go back and change permissions for an area, or click Finish to indicate that you’re done specifying what the particular user can do. QuickBooks displays the User List dialog box again, with the new user added. Click Add User to add another new user, click Edit User to edit the selected user, or click Close to close the dialog box. A user can log on and open a QuickBooks file from any computer on the network as long as the computer has QuickBooks installed and has network access to the QuickBooks file. If a person attempts to open a restricted area or perform an unauthorized action, however, QuickBooks displays a message box indicating that the person lacks the permissions necessary to perform the action. Specifying and working in multiuser mode For more than one person to work with a QuickBooks file at once, users must work with the QuickBooks file in multiuser mode. The first person who opens the file needs to specify multiuser mode for others to be able to open the file. To specify multiuser mode, choose File-->Switch to Multiuser Mode. You can tell that you’re working in multiuser mode because the QuickBooks title bar indicates so. When other people open the QuickBooks file, it automatically opens in multiuser mode. For another user to work in single-user mode, the other users must close the QuickBooks file, and the user who wants to work in single-user mode needs to choose File-->Switch to Single-User Mode. Sharing a QuickBooks file over a network involves a couple of tricks. First, you need to make sure that no one who is in single-user mode is using the file that you want to open. If someone is using the file, and you try to open it, QuickBooks displays a message indicating that someone is using the company file in single-user mode. Tell the person to switch to multiuser mode and then click the Try Again button. As soon as you begin creating or editing a transaction, QuickBooks locks the transaction. This way, no one else can edit the transaction while you work on it. You can tell whether you have a transaction open in edit mode by what QuickBooks displays in the title bar at the top of the form: Editing Transaction. Other users can open the transaction while you edit it in edit mode, but they can’t make changes in it until you’re finished. If you attempt to edit a transaction that your co-worker Harriet already has open in edit mode, for example, QuickBooks displays a message that reads (and here, I paraphrase) Excuse me, Bubba. Harriet is working with that transaction. You need to come back later.

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How to Install QuickBooks 2020 in 10 Easy Steps

Article / Updated 12-14-2019

If you haven’t already installed QuickBooks 2020, get it over with right now and follow these ten easy steps: 1. Turn on the PC. Find and flip on the computer’s power switch. Depending on which version of Windows you’re using (Windows 7, 8, or 10), your screen may look a little different from the figures here. I’m using Windows 10, by the way. (Not that you care or that it matters.) If you’re installing QuickBooks on a computer running a professional or business edition of Windows, you may need to log on as either the administrator or a user with administrator rights. In the business flavors of the Windows operating systems, Windows security features require an administrator to install the QuickBooks program. 2. Download the QuickBooks software and then click Next. You probably purchased QuickBooks directly from the Intuit website. If so, after you download the software, Windows prompts you to run the InstallShield Wizard (another program), which starts the QuickBooks installation program. Eventually, Windows displays a little message box that tells you Welcome to QuickBooks Desktop. Alternatively, you may have purchased the QuickBooks program someplace like an office-supplies store. In that case, you need to rip open the QuickBooks package and get out the CD (which looks exactly like the ones that play music). Next, you insert the CD into your CD-ROM drive. Windows recognizes that you inserted the QuickBooks CD, eventually starts the QuickBooks installation program, and displays a little message box that tells you Welcome to QuickBooks Desktop. Click Next in the message box to really get things started. (You may need to click Next again.) 3. Indicate that you accept the QuickBooks licensing agreement and then click Next. After the QuickBooks installation program starts, QuickBooks asks whether you agree to play by its rules, as outlined in tedious detail in the licensing agreement displayed onscreen. Assuming that you do — and you have to agree to install the software — select the check box labeled I Accept the Terms of the License Agreement (But Only Because I Have No Other Choice) and then click Next. 4. Provide the License and Product Numbers and then click Next. When the License and Product Numbers window appears, enter these two bits of licensing information (they should be printed on a yellow sticker on the back of the CD sleeve or displayed on the purchase receipt window if you downloaded the software) and then click Next. 5. Describe any network sharing you plan. When the Custom and Network Options window appears, specify whether you’ll share the QuickBooks data file over a network. Most small businesses don’t. If your business is in this situation, when asked, simply indicate that you’ll use QuickBooks only on the computer on which you’re installing the software. You may have a couple of other options, however, depending on the version of QuickBooks you install. You can install QuickBooks on the computer and make the QuickBooks data available to other computers on the network, or you can skip installing the QuickBooks software but store the QuickBooks data file on the computer. 6. Select the installation location and then click Next. When the Upgrade or Change Installation Location window appears, click the Next button to use the Intuit default installation location. (The default installation location is fine for 999 of 1,000 users.) You don’t have to choose the suggested installation location. You can instead choose to have the QuickBooks program and data files stored in some other location. I don’t talk about this option here because most people won’t want to (and shouldn’t) make this customization. What’s more, if you’re someone who can safely customize the QuickBooks installation location settings, you don’t need my help figuring out how this change works. 7. Begin the installation by clicking Install. The installation program tells you, at long last, that it’s ready to begin as soon as you click Install. Click Install. The program begins installing QuickBooks Desktop. While the installation program runs, a little bar shows your progress. If you need to cancel the installation at any time, just click Cancel. QuickBooks warns you that the setup is incomplete. That’s okay; just start the setup from scratch next time around. 8. Take a few minutes or so to contemplate the meaning of life or get a drink of water. 9. When the Install program finishes, click Open QuickBooks. Congratulations. You’re finished with the installation. You have a new item on the Programs menu and probably new shortcuts on your desktop. 10. Activate QuickBooks. The first time you open QuickBooks, the program prompts you to activate QuickBooks. Essentially, activation means telling QuickBooks who you are. If QuickBooks can guess your identity by using the old product-registration information that it finds on your computer, it simply asks you to confirm that its guess is correct. Otherwise, you need to jump through some hoops and provide additional identifying information. You’ll probably want to register QuickBooks before you begin using it. If you work on a network and want to share a QuickBooks file stored on one computer with another computer on the network, you need to install QuickBooks on all the other computers that you want to use to work with the file. Note: You need a separate copy of QuickBooks (such as from the five-pack version) for each computer on which you want to install QuickBooks. By the way, running QuickBooks on a network with multiple QuickBooks users isn’t super-tricky or terribly complicated. QuickBooks takes care of the hard stuff. If you have more than one person using QuickBooks, you owe it to yourself (and your business) to set up a network and then purchase and install multiple copies of QuickBooks.

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How to Use Express Setup in QuickBooks 2020

Step by Step / Updated 12-14-2019

QuickBooks 2020 provides you a very fast setup process compared with other accounting software programs and even with some older versions of the QuickBooks software. Basically, you fill in some boxes and click some buttons, and voilà — you’ve largely set up QuickBooks.

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