When you set up your company file, Quickbooks sets up certain accounts for you automatically. However, as your business grows or changes, you might need to add new accounts to your chart of accounts to better organize your finances. Or, you might need an account that was not provided during setup. For example, you might want to create expense accounts to track office supply purchases separately from advertising costs.
To add an account, follow these steps:
- Go to the Lists menu and click Chart of Accounts (see image of pop-up window above).
- Click the Account button and then click New.
- In the Add New Account: Select Account Type window, select the type of account you want to create and then click Continue.
- Enter the account’s name in the Account Name field. This name will appear on your company financial statements.
- If you want to make this account a subaccount of another account, select the Subaccount of checkbox. From the drop-down list, select the account that will be the higher-level account for this subaccount.
- (Optional) Enter a short description, note, bank account number, or credit card number, depending on the type of account you are adding.
- For income and expense accounts. From the Tax-Line Mapping drop-down list, select the appropriate tax line or >.
- For balance sheet accounts. Enter an opening balance based on the account’s balance as of your Quickbooks start date. Generally, you should enter any balance sheet balances as of the day before your start date. That way it’s all exactly correct at the opening of your start date. If you’re putting money into the account with a transaction, do not use the opening balance field, since this will create an additional transaction. If you’re not sure of the balance, you can leave the field blank and enter the information later. Click OK when finished.
- Click Save& amp; Close or Save & New to add another account.
- Accounts – there are two (2) types of accounts – balance sheet accounts, such as bank accounts, inventory, accounts receivable, equipment, etc., and income and expense accounts, which are used to group transactions for reporting purposes.
- Chart of Accounts – a complete list of your business’ accounts and their balances. You use a chart of accounts to track how much money your company has, how much money it owes, how much money is coming in, and how much is going out.
Did You Know?
The Internal Revenue Service (IRS) recommends opening a business checking account as one of the first steps when starting a new business.
Intuit highly recommends associating your income and expense accounts with the appropriate tax lines for your tax forms. Consult with your accountant if you need additional information about which tax forms to use and to which tax lines to map each account.