5 Essential QuickBooks Online Setup Tips for Small Businesses
Getting started with QuickBooks Online? These essential setup steps will save you time, prevent costly mistakes, and ensure accurate bookkeeping from day one.
Setting up QuickBooks Online correctly from the start is crucial for maintaining accurate financial records and making tax time a breeze. As certified QuickBooks ProAdvisors, we've helped hundreds of small businesses get their books organized. Here are the five most important steps you should never skip.
1. Choose the Right QuickBooks Online Plan
Before diving into setup, make sure you're on the right plan. QuickBooks Online offers several tiers, and choosing the wrong one can limit your functionality or waste money on features you don't need.
Our Recommendation:
- • Simple Start: Solo entrepreneurs with basic needs
- • Essentials: Small businesses with employees or multiple users
- • Plus: Growing businesses needing inventory tracking or project profitability
- • Advanced: Established businesses requiring advanced reporting and workflows
2. Set Up Your Chart of Accounts Properly
Your Chart of Accounts is the foundation of your financial tracking. QuickBooks provides a default chart, but customizing it for your specific business type is essential for meaningful reports.
Pro Tip:
Don't create too many accounts initially. Start with the basics and add more specific accounts as your business grows. You can always merge accounts later, but splitting them is more complex.
3. Connect and Categorize Your Bank Accounts
Connecting your bank accounts to QuickBooks Online is one of its most powerful features. This automation saves hours of manual data entry and reduces errors.
What to Connect:
- • Primary business checking account
- • Business savings accounts
- • Business credit cards
- • Business loan accounts
Initial Categorization:
- • Review and categorize the first 30 days
- • Create rules for recurring transactions
- • Split transactions when necessary
- • Mark personal expenses as owner draws
4. Configure Your Sales Tax Settings
If your business collects sales tax, setting this up correctly from the beginning will save you countless headaches. QuickBooks can automatically calculate and track sales tax for you.
Important:
Sales tax requirements vary significantly by state and locality. Consult with a tax professional or your state's department of revenue to ensure you're collecting the correct rates and filing properly.
5. Set Up Your Customer and Vendor Lists
Creating organized customer and vendor lists from the start will streamline your invoicing, expense tracking, and reporting. Include all the information you'll need for tax reporting.
Essential Information to Include:
For Customers:
- • Complete contact information
- • Tax ID numbers (for 1099 reporting)
- • Payment terms
- • Billing and shipping addresses
For Vendors:
- • Business name and contact details
- • Tax ID or SSN for 1099s
- • Payment terms and methods
- • Account numbers
Bonus Tips for Success
Start with Clean Data
Enter your starting balances as of a specific date (like the beginning of your fiscal year) and work forward from there.
Set a Regular Schedule
Plan to review and categorize transactions at least weekly. This prevents the overwhelming backlog that many business owners face.
Learn the Basics
Invest time in understanding QuickBooks fundamentals, or consider working with a ProAdvisor to ensure proper setup.
Need Help with Your QuickBooks Setup?
Setting up QuickBooks Online correctly is crucial, but it doesn't have to be overwhelming. Our certified ProAdvisors can handle the entire setup process for you, ensuring everything is configured properly from day one.
