Welcome to the Fit Small Business QuickBooks Online training course!
In this lesson, we’re going to cover how to set up expenses in QuickBooks.
To follow along with me, log into your QuickBooks Online account now, or click the link below
this video for a free 30-day trial of QuickBooks Online.
You can also click this link to access our full Quickbooks online course and other helpful
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Let’s get started!
Setting up expenses is important because it allows you to customize how you will track
your expenses and manage bills thru accounts payable on QuickBooks Online.
For the purposes of this video, we will use a fictitious company called Paul’s Plumbing
to demonstrate some concepts.
As you view this video, think about how the information might differ for your business.
To begin, after you sign into your QuickBooks Online account, click on the Gear icon located
to the left of your company name.
Select Account and Settings.
Click on the Expenses tab.
The Show items table on expense and purchase forms feature adds a Product/Service table
on expense and purchase forms so you can itemize products and services that you have purchased.
Paul likes details.
He is going to activate this feature because he wants to be able to easily see the details
of what he has spent his money on when he looks at his checks and purchase orders in
QuickBooks.
If you purchase an item on behalf of a customer and want to link this item to that customer,
then the track expenses and items by customer feature will add a Customer column on expense
and purchase forms.
While Paul typically bills his customers a rate that will include any materials and parts
he uses for the job, there are occasions when his customers make special requests.
For example, a customer may want a specific brand for their kitchen sink.
Paul will purchase the item on behalf of the customer and bill them back for the cost of
the sink.
This feature works well for these types of situations so Paul will activate it.
The Make expenses and items billable feature will add a billable column on expense and
purchase forms so you can add billable expenses and items on sales forms to charge customers
for items purchased on their behalf.
This feature complements the track expenses and items by customer feature.
It will add a column next to the customer column so that Paul can place a checkmark
in it to mark it as a billable item.
QuickBooks will keep track of all billable items and when Paul is ready to create an
invoice for a customer who has billable items, QuickBooks will provide him with an alert
that he has billable items to add to the invoice.
The Set up a default markup rate feature is only available if you have turned on the make
expenses and items billable feature that we just discussed.
It allows you to set a default markup rate for items you plan to bill your customers
for.
In general, Paul prices his services such that he does not need to markup items that
he bills back to his customers.
However, there are occasions when he has to go out of his way for specialty items that
customers might ask for.
In those cases, having the ability to markup items is helpful.
So he will his default markup at 30%.
The Track billable expenses and items as income feature is only available if you have turned
on the make expenses and items billable feature previously discussed.
You can choose to track this income in one account or in multiple accounts.
Click this link to watch our video tutorial on how to set up the chart of accounts to
learn how to create new accounts.
Since Paul does markup specialty items, he will go ahead and select Track billable expenses
and items as income in a single account.
The Charge sales tax feature should be activated if you need to charge your customers sales
tax.
Set up default payment terms allows you to set default payment terms for all bills that
you enter into QuickBooks.
If the payment terms vary by vendor, you can adjust them in the vendor profile when you
set up your vendors in QuickBooks.
By setting up payment terms in QuickBooks, you will receive reminders when a bill is
coming due.
Paul has established good rapport with all of his suppliers.
As a result, he’s got 30 day terms with all of his suppliers so he will set the default
at Net 30 for his payment terms.
Let’s go ahead and save our changes.
Purchase orders - if you need to send purchase orders to your suppliers, you can activate
the purchase order feature on here.
Let’s go ahead and save our changes.
That wraps up the section on Setting Up Expenses.
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