Setting up the Vendor List

Just as you use a Customer List to keep records on all your customers, you use a Vendor List to keep records on your vendors. Like a Customer List, a Vendor List lets you collect and record information, such as the vendor's address, the contact person, and so on.

To add a vendor to your Vendor List, follow these steps:

1. Choose the Vendors ð Vendor Center command.

   When you do, QuickBooks displays the Vendor Center window, as shown in Figure1.

   Figure1: The Vendor Center window

2. To add a new vendor, click the New Vendor button.

   QuickBooks displays the New Vendor window, as shown in Figure 2.

   Figure 2: The New Vendor window

3. Give the vendor a name in the Vendor Name box.

   As is the case with the Customer: Job List, you use this name to refer to the vendor within QuickBooks. For this reason, an abbreviation is fine. You just want something easy to enter and easy to remember.

4. (Usual Rule) Ignore the Opening Balance and As Of fields.

   Don't do anything with the Opening Balance and As Of boxes. People who don't know better use those boxes to enter the opening balance owed a vendor and the date the amount is owed. But this only creates problems later. At some point in the future, this poor soul's accountant will need to find and correct this error. As when you add new customers, however, an exception to the usual rule exists, as discussed in the tip that follows.

   Tip

   Although the usual rule is that you don't want to set an opening balance for a vendor, this rule has an important exception. You record your accounts payable balance on the conversion date by setting an opening balance for each vendor as of the conversion date. The sum of these opening balances is what QuickBooks uses to determine your total accounts payable on the conversion date.

5. Supply the vendor address information.

   The Address Info tab supplies a bunch of easy-to-understand boxes that you use to collect vendor name and address information. You enter, predictably, the vendor's full name into the Company Name box.

   You can click the Address Details button to display another dialog box called the Edit Address Information dialog box, which lets you enter the address in typical street address, city, state, and ZIP code format.

6. Supply any additional information necessary.

   If you click the Additional Info tab (shown in Figure 3), QuickBooks displays a handful of other boxes that you can use to collect and store information, such as your account number with the vendor, the vendor type, the payment terms that you use when paying the vendor, your credit limit, and the vendor's tax ID number. The tax ID number is actually important if you later send this vendor a 1099 form to report payments to him.

   Figure 3: The Additional Info tab

   Tip

   A good guideline if you're paying a vendor for the first time is to get his tax ID number. If somebody won't give you his tax ID number — thereby making it impossible for you to report payments that you make to him — it's probably a sign of something a bit amiss.

Tip

If you click the Account Prefill tab (the third tab available on the New Vendor dialog box) QuickBooks displays boxes you can use to list the accounts that you want QuickBooks to automatically fill in for you when you record a check to some vendor or when you record a bill from some vendor. For example, if the check to the landlord always pays rent expense and utilities expense, you could tell QuickBooks to "prefill" using these two accounts every time you indicate you're writing a check to or recording a bill from the landlord.

Setting up a Customer List

A Customer List keeps track of all your customers and your customer information. For example, the Customer List keeps track of billing addresses and shipping addresses for customers.

Follow these steps to add a customer to the Customer List:

1. Choose the Customers ð Customer Center command.

   QuickBooks displays the Customer Center window, as shown in Figure 1.

   Figure 1: The Customer Center window

2. To add a new customer, click the New Customer & Job button and then choose the New Customer command.

   QuickBooks displays the New Customer window, as shown in Figure 2.

   Figure 2: The New Customer window

3. Use the Customer Name box to give the customer a short name.

   You don't need to enter the customer's full name into the Customer Name box. That information can go into the Company Name box shown on the Address Info tab. You just want some abbreviated version of the customer name that you can use to refer to the customer within the QuickBooks accounting system.

4. (Usual Rule) Ignore the Opening Balance and As Of boxes.

   You typically don't want to set the customer's opening balance by using the Opening Balance and As Of boxes. That's not the right way to set your new customer accounts receivable balance. If you do this, you're essentially setting up the debit part of an entry without the corresponding credit part. Later, you'll have to go in and enter crazy, wacky journal entries in order to fix your incomplete bookkeeping. But an exception to the usual rule exists, as discussed in the tip that follows.

   Tip

   Although the usual rule is that you don't want to set an opening balance for a customer, this rule has an important exception. You record your accounts receivable balance on the conversion date by setting an opening balance for each customer as of the conversion date. The sum of these opening balances is what QuickBooks uses to determine your total accounts receivable on the conversion date.

5. Use the boxes of the Address Info tab to supply the company name, including contact information, billing and shipping addresses, contact name, contact phone number, fax number, and so on.

   I'm not going to tell you that you should enter somebody's first name into the First Name box, or that the phone number of your customer goes into the box labeled Phone. I figure you don't need that kind of help.

6. Supply a bit of additional information about the customer.

   If you click the Additional Info tab, shown in Figure 3, QuickBooks displays several other boxes that you can use to collect and store customer information. For example, you can use the Type drop-down list to categorize a customer as fitting into a particular "customer type." Use the Terms drop-down list to identify the customer's default payment terms. Use the Rep drop-down list to identify the customer's default sales rep. Finally, use the Preferred Send Method to select the default method for transmitting the customer's invoices and credit memos. You can also record a resale number, specify a default price level, and even click the Define Fields button to specify additional fields that you want to collect and report for the customer.

   Figure 3: The Additional Info tab
   
   

7. Click the Payment Info tab to display the set of boxes shown in Figure 4. You can record the customer's account number, his or her credit limit, and the preferred payment method.

   Figure 4: The Payment Info tab

8. (Optional) Click the Job Info tab to describe the customer job.

   The Job Info tab lets you describe information associated with a particular job being performed for a customer. You use the Job Info tab if you not only set up a customer but also set up a job for that customer.
   

Setting up Classes

QuickBooks lets you use classes to segregate or track financial data in ways that aren't possible by using other bits of accounting information, such as the account number, the customer, the sales rep, the item, and so forth. A firm can use classes, for example, to segregate business units for product lines or geographical territories.

To set up classes, follow these steps:

1. Choose the Lists ð Class List command.

   QuickBooks displays the Class List window, as shown in Figure 1.

   Figure 1: The Class List window

   Tip

   If you don't see the Class List command, Choose Edit ð Preferences, click the Accounting icon and then the Company Preferences tab, and select the Use Class Tracking check box.

2. To create a new class, click the Class button and choose New from the Class menu.

   QuickBooks displays the New Class window, as shown in Figure 2.

   Figure 2: The New Class window

3. To name the new class, enter a name or abbreviation into the Class Name box.

   Note that you enter the class name whenever you record a transaction that falls into the class. For this reason, you don't want to create lengthy or easy-to-mistype class names. Keep things short, simple, and easy.

4. If the class that you're setting up is actually a subclass of a parent class, select the Subclass Of check box and then select the parent class from the Subclass Of drop-down list.

   After you describe the new class, you can click OK to save the class. Alternatively, you can click Cancel to not save the class. Or you can click the Next button to save the class and redisplay the New Class window.

   Tip

   If you don't want the class to be used any more, you can select the Class Is Inactive check box.

   The Class menu, which appears when you click the Class button, also supplies commands for editing the information of the selected class, for deleting the selected class, for making the selected class inactive, for printing a list of classes, and several other useful commands as well. These commands are all pretty straightforward to use. Go ahead and experiment with them to find out how they work.

Setting up a Payroll Item List

The Payroll Item List identifies items that appear on employee payroll check stubs. If you're using an outside payroll service bureau to handle your payroll — and this isn't a bad idea — you don't even need to worry about the Payroll Item List. If you're using the QuickBooks Assisted Payroll Service, again, don't worry about the Payroll Item List. (In either case, the QuickBooks folks set up the payroll items that you use for recording payroll.) And in the case of the QuickBooks Premier Payroll Service, you don't even need to track payroll inside QuickBooks because the QuickBooks people do it at their office location on their computers.

If you do need to add payroll items, follow these steps:

1. Choose the Lists ð Payroll Item List command.

   QuickBooks displays the Payroll Item List window.

2. To add a new Payroll Item, click the Payroll Item button and then choose New from the Payroll Item menu.

   QuickBooks displays the Add New Payroll Item dialog box. You can choose to set up a new payroll item either by using the EZ Set Up Method or the Custom Set Up Method. If you want QuickBooks to help you and you're setting up a common payroll item, click the EZ Set Up button, click Next, and then simply follow the on-screen instructions.

   If you want to perform a custom setup of a payroll item, click the Custom Set Up button and then Next. QuickBooks walks you through a multiple-screen interview — that asks you about the payroll item to set up. For example, the first dialog box that QuickBooks displays asks you to identify the type of payroll item that you want to create. You answer this question by selecting one of the radio buttons and then clicking Next.

3. Name the payroll item.

   After you identify the type of payroll item, you name it. QuickBooks provides another version of the Add New Payroll Item dialog box that includes a field you fill in to give the new item a name.

4. To finish the payroll item setup, click the Next button to move through the remaining payroll item setup questions.

   You identify the name of the government agency to which the liability is paid, the taxpayer identification number that uniquely identifies you to the taxing agency, the liability account that you use to track the items, the tax form line that you use to report the item, the rules that QuickBooks should use for calculating the item (such as whether the item is subject to taxes), and a couple of other miscellaneous pieces of data. After you supply all this information and click the Finish button (which appears on the last version of the Add New Payroll Item dialog box), QuickBooks adds the new payroll item to the Payroll Item List.

   Tip

   The Payroll Item menu supplies commands that are useful for working with the Payroll Item List. In addition to the commands that you use to add an item to the list, the menu supplies commands for deleting payroll items, renaming payroll items, making payroll items active, and printing the list of payroll items.