How to Setup Chart of Accounts in QuickBooks Desktop? As our previous article dealt with the better understanding about of Char of Accounts and its benefits; here we will get to know a bit more about how to set up the same on your QB desktop.
So let is take a look at the steps one needs to follow in order to set up the Chart of Accounts in the QuickBook Desktop:
Steps to Setup Chart of Accounts in QuickBooks Desktop
- Launch QuickBooks by clicking on the QB icon on your desktop.
- Go to the ‘COMPANY FILE’ ( Accountingpro QBW in the example below)that has been created previously by you.
- This will take you to a Window that says ‘NO COMPANY OPEN’. This comprises of the number of Company files that have been stored within.
- It is here that you can select the company file you wish to work for. This is to be done by clicking on the COMPANY FILE NAME as and when required.
- Select the COMPANY FILE and click on the OPEN logo situated on the right-hand side to do so.
- This will activate the MENU options within as shown in the image above.
- This is the HOMESCREEN, where the various icons are visible: THE CUSTOMER MENU, EMPLOYEE MENU, COMPANY MENU are clearly available.
- The left side of the home screen comprises of the SHORT-CUT bar. This allows you to easily jump into any icon.
- Likewise the Top most section comprises of the regular MENU options as also seen in any other software: FILE, EDIT, LISTS, FAVORITEs, COMPANY, CUSTOMERS among others.
- Go to the LIST MENU AND click on it to activate a DROP-DOWN menu.
- You will find a CHART OF ACCOUNTS section within the drop down menu, the very first option in the list, as seen below:
- The same can also be done by clicking on the COMPANY MENU, where the CHART OF ACCOUNTS is visible on the drop down menu, as shown below:
- The other option is the direct CHART OF ACCOUNTS icon located at the RIGHT SIDE OF THE screen as shown below:
- Once the QuickBooks Chart of Accounts has been launched, you will see the below image:
- The CHART OF ACCOUNTS window comprises of NAME, TYPE, BALANCE TOTAL and ATTACEMENT
- Now inorder to better understad the Chart of Accounts, we need to better understand how to manage the MODULE. Here you will see that there is no ACCOUNT CODE VISIBLE, this is because the ACCOUNT CODE are TURNED OFF in QB by default and the user needs to TURN it ON.
How to Switch on The Account Code/Number in The QuickBooks Desktop
- Go to the EDIT menu to activate the drop down menu
- Locate the PREFERENCES with in the drop down list
- Under the Preferences you will locate the various/miltiple preferences types
- Click in the ACCOUNTING preferences
- You will get two different preferences types: MY PREFERENCES AND COMPANY PREFERENCES
- Let us understand further about the tow different preferences types:
- MY PREFERENCES: This comprises of the changes that one needs to make within the MODULE. The impact of the changes made will directly effect or influence the user who needs to ‘customise’ the QB software according to their requirements. This includes changes like the appearance of the screen or the color of the desktop.
- COMPANY PREFERENCES:These are the changes that are directly done by the ADMINISTRATOR OF THE SOFTWARE. These changes are reflected through out the network in the software multi-user environment.
- Here on top of the module you will also locate the USE ACCOUNT NUMBERS check box. CLick on this in to OK.
- Click on OK box on the lfet hand side as shown above.
- Once done, you will be shown the list of the ACCOUNTS CODE , like below:
How to Create New Entry in Chart of Accounts in QuickBooks
The next step is to be able to create a new entry within the CHART OF ACCOUNTS.
For this you will need to follow the steps below:
- Go to the bottom left side of the Module to ACCOUNTS box
- Click to have a Menu list emerge up. Within this you need to click at the NEW as shown below:
- You will receive a dialogue box stating ‘CHOOSE ONE ACCOUNT TYPE AND CLICK CONTINUE’:
- This is for the nature of the account you need to create or hold for the HEAD OF ACCOUNT. Each of these categories will display the details related to the account type that you can categorize into.
- Likewise you will also see the OTHER ACCOUNTS TYPE for the more diverse or exceptional account type that you need to categorize under.
- For example if you select the BANK account category, you need to click on the desired box and to get the CHART OF ACCOUNT FORM.
- Here you once again have the chance to change and re-select the ACCOUNT TYPE under the box at the top right as shown above:
- The ACCOUNT NUMBER needs to be entered onto the NUMBER box at the right side. This is a seven-digit account number in the QuickBooks.
- Likewise the ACCOUNT NAME is that name you need to state according to the account type you have.
- Similarly you need to fill in the required fields of DESCRIPTION, BANK ACCOUNT NO., ROUTING NUMBER as required.
- Next, you need to SAVE AND CLOSE, after all the required fields have been rightfully filled-in.
- Thus, ONE ACCOUNT HEAD has been created as such, by following the above process.
- The next steps involves the creation of the SUB-ACCOUNTS, this is the tree under the HEAD ACCOUNT THAT YOU need to create.
- For this you need to go to ACCOUNT on the left bottom side once again > click on BANK> ACCOUNT NUMBER> DESCRIPTION as required in the appropriate field.
- It is here that you need to create the SUB ACCOUNT TYPE. For this go to the SUB ACCOUNT and click to see the original HEAD ACCOUNT name as entered by you in the previous steps.
- Hence you will be able to create the sub-account under the HEAD ACCOUNT or the PARENT ACCOUNT as a result.
- At this point you will receive a dialogue box that states SET UP BANK FEED as shown below:
- If you are residing in the USA, you will need to click on YES. This is because factors such as one can eaily link the BANK ACCOUNT with the QB. However, there are countries where this facility is not available, hence you need to select accordingly.
- Now, you need to create the other braches of the PARENT OR THE HEAD ACCOUNT in the similar manner. This needs to be done in the similar process as the previous. However, be sure to bear in mind the ACCOUNT NUMBER. Here the first two digits needs to be of the PARENT ACCOUNT NUMBER, the next two digits needs to be of the SUB ACCOUNT NUMBER and the third two digits needs to be of the CURRENT THIRD CATEGORY you are creating.
- Now once again fill in the relevant details accordingly: ACCOUNT NAME, DESCRIPTION, BANK ACCOUNT NO., and others as shown below:
- Finally SAVE AND CLOSE. Once again you will receive the dialogue box of SET UP BANK FEED.
- Click yes if you are residing in the USA and if your bank is affiliated to the USA.
- Like wise create as many SUB ACCOUNTS as required for your needs by repeating the above steps for the number of times, as shown in the example below:
- Now, to create a SECOND HEAD ACCOUNT, you need to go to ACCOUNT> NEW> LEAVE THE SUB ACCOUNT blank > FILL IN THE DESCRIPTION AS AND WHERE REQUIRED> SAVE AND CLOSE.
- Here you need to bear in mind that the ACCOUNT NUMBER should be well-specified. For example if the first head account number starts with ‘0101’ the second HEAD ACCOUNT NUMBER MUST be ‘0102..’as shown in the image below:
- Now, we need to create the SUB ACCOUNT under the SECOND PARENT/ HEAD ACCOUNT. Here once again one needs to create the unique ACCOUNT NUMBER according to the current sequence.
- Now, if you have two different account types; SAVINGS ACCOUNT, AND CURRENT ACCOUNT. Hence both these need to be created accordingly and separately.
- Accordingly fill-in the BANK ACCOUNT NUMBER and the ROUTING NUMBER. The routing number is the International routing number that needs to be filled-in accordingly.
- Here you will need to fill-in the other blank: ENTER OPENING BALANCE. This is the bank balance you have the day the BOOK has been implemented on.
- The date needs to be filled-in of the day the account was being opened at.
- Now, you need to SAVE AND CLOSE.
- This balance will be displayed and reflected on the BALANCE TOTAL of the module as shown below:
- Now you need to create another account for the CURRENT ACCOUNT category. For this, you need to follow the same steps as those done for creating the SAVINGS BANK ACCOUNT.
- The only difference here is that under the ACCOUNT NAME you need to fill-in the CURRENT ACCOUNT.
- Click the Sub account category likewise. Also, fill-in the ROUTING NUMBER AND THE BANK ACCOUNT NUMBER.
- Fill in the ‘enter opening balance’ and the date of the entry
- SAVE and CLOSE.
- The various account balances will be displayed accordingly on the main module as shown below:
- This way a sensible and well-sorted CHART OF ACCOUNTS is created that is both easy to read and refer to for future use.
- One needs to bear in mind that there are a maximum of five sublevels that can be created in the QuickBooks Desktop.
How to Edit An Existing Account in QuickBooks
Now that we know how to create the Head account, the sub accounts and the groupings, let us understand on how to edit the existing CHART OF ACCOUNTS. This is all the more necessary, if in case you need to rectify and error or make changes once the chart of accounts has been created.
For this you will need to:
- Go to the main module and right click on the Account that needs to be edited:
- Go to EDIT ACCOUNT that emerges at the drop-down list
- This will take you into the relevant page where you will be enabled to make the required changes as and where required.
- Make the required changes and edit as required
- SAVE and CLOSE
- Thus, the required changes will be shown and reflected on the main module of the CHART OF ACCOUNTS.
HOW TO DELETE AN EXISTING ACCOUNT
Now, if you need to be able to delete the existing account, how do you do so? Well this can be done in the following manner:
- Go to the main module
- Click on the name of the account you wish to DELETE
- Right click to have a drop-down list emerge.
- Here you fill find an option for DELETE ACCOUNT
- Right click in this option to have a dialogue box emerge:
- Click on OK if you are sure you need to delete this account.
- Once done, the required changes will be reflected and displayed on the main module as required.
- One needs to bear in mind that, only those accounts can be deleted where in no transactions have yet taken place.
- Likewise, any account where in any transactions has already taken place cannot be deleted.
- In case you still wish to ‘do something’ about the account that you don’t wish to use, you do have the option to make it INACTIVE.
- What you can do is activate this option and get the required result.
HOW TO MARK AN EXISTING ACCOUNT ‘INACTIVE’
Incase you need to mark an existing account as INACTIVE, this can be done in the following manner:
- Go to the ACCOUNT HEAD that you wish to make INACTIVE.
- Considering that this account has been used for the prior transaction, when we wish to DELETE, it, a dialogue box will appear that states that :
- The dialogue box states that ‘this estimate account cannot be deleted while the estimates are enabled’. This implies to the fact that the QB has created a NON POSTING ACCOUNT FOR ESTIMATES. Hence, this account cannot be deleted.
- However one can easily mark it as INACTIVE. For this you will need to follow the below steps:
- Go to the required ACCOUNT HEAD and right click on it. This will allow a drop-down menu list to emerge.
- Go to the option of MARK ACCOUNT INACTIVE and right click on it.
- This will reflect by that particular HEAD OC ACCOUNTS disappearing from the Module, hence will not be reflected as such. This implies to the fact that the account is very much available, but has been pushed behind the scenes.
- Now, if in case you need to ACTIVATE the INACTIVE account once again, you can do so by navigating all the way down to the bottom left hand side.
- Here you will find INCLUDE INACTIVE. Once you click on this, you will discover that all the INACTIVE ACCOUNTS are displayed once again on the module and marked by a STAR sign.
- In order to ACTIVATE the INACTIVE account, you simply need to click the specified account name and you will discover that it has become ACTIVE once again.
- Now, if you need to VIEW or change the View of your chart of accounts, you need to click on ACCOUNTS located on the bottom left side > Hierarchal view or flat view as required
- Under the FLAT VIEW, one will be able to see the entire accounts tree: THE HEAD ACCOUNT, THE SUB ACCOUNT AND THE GROUPINGS in a single line view.
- Next is the CUSTOMIZE COLUMN. This helps the user customize the manner in which we wish to view the CHART OF ACCOUNTS.
- This allows the user to ADD or REMOVE the required columns as needed. This helps in you being able to modify the CHART OF ACCOUNTS as you would like them to be.
So, there you have it friends, these are some of the facts, features and aspects of how to setup chart of accounts in QuickBooks Desktop. These steps will help you to be able to customize, create, and do a lot more with your chart of accounts.
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