Bookkeeping with QuickBooks (Lesson 27)


QuickBooks is the popular accounting software for small business.  The makers of QuickBooks have a vast knowledgebase and training program for users.

QuickBooks by Intuit is by far the best all around accounting software for small business. Intuit even creates industry specific versions of QuickBooks. The author personally endorses the Pro version due to the payroll feature and class accounting abilities.

There are multiple positive benefits of QuickBooks for the business and directly for the bookkeeper too. In addition many of the various issues covered in Lessons One through Twenty-Five are distinguishable in the features offered in QuickBooks. Finally, the report section of QuickBooks allows the bookkeeper the opportunity to present easy to read and understandable information. This lesson explains and illustrates each these positive benefits with QuickBooks.


Business Benefits

The best attribute of QuickBooks is the universal acceptance by small business as the accounting software to use. There are more bookkeepers trained to use this accounting software than any other. In addition, it is pretty much a requirement for accountants and Certified Public Accountants to understand the in’s and out’s of this software. Intuit, the developer of QuickBooks uses a vast network of experts and knowledge bases to educate and solve problems related to this software.

QuickBooks solves the accounting software problem for any business operation with revenues as high as $10 Million. Intuit produces auxiliary software such as their retail version which integrates with the regular software. The retail version has a perpetual inventory system, purchase order system and accounts receivable schedule.

The value of all these attributes is really the overall cost effectiveness of utilizing QuickBooks. No other software can approach the value QuickBooks brings to the small business owner as an instrumental component of the accounting department.

QuickBooks’ Features

This lesson is not going to get into the details of the software. It is going to cover the major features that allow a bookkeeper to perform their job well.


Once the software is installed and initiated the bookkeeper can control many of the accounting functions depending on the nature on the business. Once the company data file is opened the bookkeeper simply selects ‘File’ from the toolbar and opens ‘Edit Preferences’. In preferences there is a long list of major operational sections to address. The list includes the following:

  • General – Identifies how fields are maneuvered between with the keyboard by selecting the appropriate key (tab or enter).
  • Accounting – Select cash or accrual, will you use ‘Class Accounting’, which account is the primary checking account?
  • Payroll – Select the payroll account, identify how vacation and sick time accrues.
  • 1099’s – Select the types of payments made for Form 1099-M issues and printing thresholds.
  • Job Costing – Indicate the desire to use this feature (desirable for construction or project driven business companies).
  • Invoicing – Are you using estimates and percentage of completion methods of accounting?

There are about a dozen different operations that require decisions. Some are for management purposes but most can be made by the bookkeeper.


Lists in accounting are similar to the old fashion roll-a-deck used back in the 60’s and 70’s. It is simply a card that identifies a name, legal name, address(es), communication information and more. The four most often accessed lists include:

  1. Employees – The software acts very similarly to the human resources employee file.
  2. Customers – Similar to employee cards, the customer lists have shipping, mailing and invoicing addresses.
  3. Vendors – The vendor list works just like the other two lists, it includes all outside suppliers, subcontractors and service providers. In addition, any economic activity is preset for the respective ledgers based on the vendor’s function.
  4. Items – A particular list used for a limited focused inventory or service code to report on sales based on the respective item. In project accounting, the bookkeeper can create phase codes.

There are three other lists used. The difference is that these three lists control the accounting function for reporting information. These are:

  • Chart of Accounts – Each account is assigned one of six types of accounts (Lesson 1) and the corresponding group. This list allows the bookkeeper to organize the information in a well laid out trial balance and ultimately reports. The bookkeeper can set up parent-child structures, control accounts and temporary accounts.
  • Class Accounting – If class accounting is turned on in preferences class accounting allows the bookkeeper to assign profit centers for the business. This is very beneficial to management in identifying performance from the respective divisions within the company.
  • Jobs – This is a mirror image of customers except the purpose isn’t to invoice the job, the purpose is to identify costs incurred for the respected project. This list provides the base identifier for a whole group of reports.

One final list item is called ‘Other’. Most often this isn’t used but I encourage bookkeepers to list the following important groups:

Owners – This allows for easier capital account balance tracking and as a source of information for contacts and legal name for check writing.

Locations of Facilities – A list of business owned facilities and their respective addresses, phone numbers and head managers

Pseudo Names – Names created for the purpose of temporary purposes. A good example is a nickname for the owner to write checks to for petty cash withdrawals or advanced cash for purchases.


This section allows the bookkeeper the opportunity to properly identify the business information such as legal name, trading name, Federal Identification Number (EIN), tax status and more. In addition, the software has a users section identifying the master administrator and the various allowed users. A bookkeeper should never act as the master administrator, only the owner performs this duty.

Vendors, Customers and Employees

These three separate functions basically record the day to day activities of the business using the names from the lists from above. The bookkeeper enters the data via these three functions for sales, expenses and labor. All three functions allow the bookkeeper to edit the respected lists from within the function.


A separate function allows the bookkeeper access to the bank ledgers via registers for the respected accounts. Reconciliations are performed with this function as well as voiding and deleting checks. This section even has a transfer function between accounts mimicking the physical transaction.


The absolute best part of any accounting software are reports. QuickBooks has a built-in set of reports for each of the major functions of operations. In addition, there is a set of financial reports including the standard balance sheet and income statement.

The one area of reports preferred is the accountant’s section. It is here a bookkeeper can create highly customized reports and memorize them for future use. At first glance customizing a report looks daunting. But once you play with the control features (usually about one hour of time), it gets real easy to generate highly detailed and informative reports. One of the most important reports within the accountant’s group is the trial balance. This report verifies dual entry balance in the aggregate, confirmation of an error free ledger list and good organization related to the chart of accounts.

Other reporting attributes include the ability to export information to a spreadsheet for further data sorting or organizational presentation.

Summary – QuickBooks

QuickBooks is by far the best software for small business in the market. Intuit, the maker of QuickBooks, has developed a vast support system to help owners, accountants and bookkeepers use the software. Overall, the software is the best bang for the buck due to its economy of scale.

Not only is the software cost effective, the software uses a functional interface with the user. All daily activity is conducted via the vendor/customer/employee input screens. The best attribute of the software is the report writing abilities. No other software gives so much discretion to the bookkeeper in preparing reports. ACT ON KNOWLEDGE.

Value Investing

Do you want to learn how to get returns like this?

Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

There are four key principles used with value investing. Each is required. They are:

  1. Risk Reduction – Buy only high quality stocks;
  2. Intrinsic Value – The underlying assets and operations are of good quality and performance;
  3. Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
  4. Patience – Allow time to work for the investor.

If you are interested in learning more, go to the Membership Program page under Value Investing section in the header above. 

Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each member goes through three distinct phases:

  1. Education – Introduction to value investing along with terminology used are explained. Key principles of value investing are covered via a series of lessons and tutorials.
  2. Development – Members are taught how pools of investments are developed by first learning about financial metrics and how to read financial statements. The member then uses existing models to grasp the core understanding of developing buy/sell triggers for high quality stocks.
  3. Sophistication – Most members reach this phase of understanding after about six months. Many members create their own pools of investments and share with others their knowledge. Members are introduced to more sophisticated types of investments and how to use them to reduce risk and improve, via leverage, overall returns for their value investment pools.

Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth. Joining entitles you to the following:

  • Lessons about value investing and the principles involved;
  • Free webinars from the author following up the lessons;
  • Charts, graphs, tutorials, templates and resources to use when you create your own pool;
  • Access to existing pools and their respective data models along with buy/sell triggers;
  • Follow along with the investment fund and its weekly updates;
  • White papers addressing financial principles and proper interpretation methods; AND
  • Some simple good advice.

Value Investment Club

Please Signup
Username can not be left blank.
Please enter valid data.
This username is already registered, please choose another one.
This username is invalid. Please enter a valid username.
First Name
First Name can not be left blank.
Please enter valid data.
This first name is invalid. Please enter a valid first name.
Last Name
Last Name can not be left blank.
Please enter valid data.
This last name is invalid. Please enter a valid last name.
Website (URL)
Website (URL) can not be left blank.
Invalid URL
Invalid URL
Email Address
Email Address can not be left blank.
Please enter valid email address.
Please enter valid email address.
This email is already registered, please choose another one.
Password can not be left blank.
Please enter valid data.
Please enter at least 6 characters.
    Strength: Very Weak
    Select Your Payment Gateway
    How you want to pay?
    Payment Summary

    Your currently selected plan : , Plan Amount :
    , Final Payable Amount: