<Tips & Tools \ Business Management & Productivity \ QuickBooks \\ Section2 Business Set-up & Customization

Section 2 | Business Set-up & Customization

Once the fundamentals are in place, the next step is customizing QuickBooks to match how your business operates. Proper setup in this section ensures accurate reporting, organized categories, and secure access for your team.

What It Is

The Chart of Accounts is the backbone of your financial system. It’s an organized list of all the categories where your income, expenses, assets, liabilities, and equity are tracked. Every transaction you record is assigned to an account within this structure.

The Chart of Accounts determines how your financial statements (Profit & Loss, Balance Sheet, Cash Flow) are built.

Adding a New Account

1. Go to Settings (Gear Icon)

2. Select Chart of Accounts

3. Click New

4. Choose:

   • Account Type (e.g., Income, Expense, Asset)

   • Detail Type (more specific category)

   • Name & Description

5. Save

When to add accounts:

• You have new income sources

• You want to track certain expenses separately

• You need custom categories for reporting

1. From the Chart of Accounts, locate the account

2. Click the dropdown beside “View register”

3. Select Edit

4. Change the name, detail type, or description

Important notes:

• You cannot change the Account Type once transactions exist.

• Instead, you may need to make the account inactive and create a new one if the category is incorrect.

If you don’t want an account cluttering your list:

• Edit → Make Inactive

• The account will not appear in dropdowns but remains on historical reports for accuracy.

Products & Services represent everything you sell. Setting these up correctly ensures accurate invoicing, inventory tracking, and income categorization.

Creating Product/Service Items

To Add a New Item:

1. Go to Sales → Products & Services

2. Click New

3. Choose the correct type:

   • Service – labor, consulting, fees

   • Non-inventory item – products you sell but don’t track individually

   • Inventory item – items you track quantity/cost for

   • Bundle – grouped products/services

4. Enter:

   • Name

   • SKU (optional)

   • Description

   • Sales price or rate

   • Income category (very important for reporting)

   • Expense account (for items you purchase)

Categorizing Items Correctly

Each item must be mapped to the correct Chart of Accounts category:

For Services

• Usually mapped to Service Income

For Products

• Mapped to Sales of Product Income

• COGS category must be selected if tracking inventory

For Inventory

• Requires 3 accounts:

• Inventory Asset

• COGS

• Sales of Product Income

Correct categorization ensures your Profit & Loss and inventory valuation reports are accurate.

Setting Sales Tax Preferences

When creating each product/service, you must choose whether it is:

• Taxable

• Non-taxable

QuickBooks applies sales tax based on:

• Your location

• The customer’s location

• The product/service’s taxability

This helps prevent tax filing errors and ensures invoices calculate tax correctly.

QuickBooks lets you bring your team in with controlled access so they can complete tasks without compromising sensitive financial information.

Adding Team Members

1. Go to Settings (Gear Icon)

2. Select Manage Users

3. Click Add User

4. Choose a user type:

   • Standard user

   • Company admin

   • Time tracking user

   • Reports-only user

5. Enter their email and set permissions

They’ll receive an email invite to create their login.

Custom Access Roles

Standard roles come with preset permissions, but you can customize what a user can:

• View

• Create

• Edit

• Approve

• Delete

Examples of role setups:

• Bookkeeper: full access except payroll & bank settings

• Sales rep: invoice-only

• Staff: time tracking only

• Manager: view reports but cannot change settings

Role-based access keeps your financial data secure and organized.

Audit Logs

The Audit Log tracks everything that happens inside your QuickBooks account:

• Logins

• Created/edited transactions

• Deleted entries

• Changes to settings

• User activity

• Historical versions of edited items

To access:

• Gear Icon → Audit Log

This is especially useful for:

• Team oversight

• Fixing mistakes

• Identifying incorrect edits

• Tracking down deleted/voided transactions

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