Dealing with the Pre-Interview Jitters

After you install QuickBooks, you run an interview to set up QuickBooks for your firm's accounting. In the next sections, I explain what you need to do before you run the QuickBooks setup interview so that you work in an efficient manner. I also give you an overview of what you'll do as you go through the interview.

Preparing for the Interview

By running the interview, you provide quite a bit of information to QuickBooks. As a practical matter, the EasyStep Interview and the post-interview cleanup require that you have the following:

• Accurate financial statements as of the conversion-to-QuickBooks date

• Detailed records of your accounts payable, accounts receivable, inventory, and fixed assets

• A complete or nearly complete list of employees, customers, vendors, and inventory items (if you buy and sell inventory)

You want to get all this stuff together before you start the EasyStep Interview because you're asked about this stuff as part of the interview. Don't try to scurry around, looking for a particular piece of data while you're running the interview; collect this data up front. Then stack all the necessary paperwork on your desk next to your computer.

Let me also note that you're going to make several accounting decisions as you go through the EasyStep Interview. For example, you decide whether you want to use an accounts payable system. You tell QuickBooks whether you want to send customers monthly statements. You're also asked whether you want to prepare estimates for customers. And you're asked whether you want to use classes to further track your income and spending.

In general, when you're asked one of the accounting questions, you can simply accept the default answer. However, you're required by law to be consistent in your accounting for tax purposes. If you want to change your accounting — technically called a change of accounting method by the Internal Revenue Service — you must request permission to make the change from the IRS. How to do this and the ramifications of doing this are beyond the scope of this book, but be forewarned: The IRS insists that you be consistent in your accounting. If you've been treating particular items of income or expense in a certain way, the IRS says, "Hey, dude, you must continue to treat them that way unless you get permission from us to change."

One final note: You should have your tax return from last year handy because it supplies a bunch of information that you need for running the EasyStep Interview. For example, last year's tax return supplies your taxpayer ID number, your legal business name, and your method of accounting.

What Happens during the Interview

As you walk through the interview, you work with QuickBooks to set up the QuickBooks preferences (which determine how QuickBooks works and which features are initially available) and to set up a chart of accounts and your bank accounts.

The chart of accounts, just so you know, identifies those income, expense, asset, liability, and owner's equity accounts that appear on your financial statements.

After you complete the EasyStep Interview, you're almost ready to begin using QuickBooks. In fact, in a pinch, you could (after the EasyStep Interview) limp along with QuickBooks.

Warning

An important point of clarification: You might think that you should be ready to rock and roll after installing QuickBooks and running through the EasyStep Interview. However, you have two other QuickBooks setup tasks to complete after the EasyStep Interview: identify your starting trial balance and load your key master files. The trial balance identifies your year-to-date income and expense numbers; and your asset, liability, and owner's equity numbers as of the conversion date. The master files store information that you repeatedly use about customers, vendors, employees, and inventory items. For example, the customer master file stores a customer's name and address, phone number, and the contact person.