Don't forget that QuickBooks Online integrates seamlessly with BQE CORE, the award-winning project accounting platform built for professional services firms. CORE offers business intelligence, project management, time and expense tracking, billing, accounting, and reporting together in one intuitive package. You can integrate CORE with QuickBooks, or handle your accounting within CORE so it's right alongside all of your other essential business processes.
Last time we looked at the chart of accounts in QuickBooks for engineers and we specifically looked at how transactions affect the various financial statements based on which accounts we post our transactions to. This time we’re going to take a deep look at Items in QuickBooks to see how they link to accounts and how, based on using items, we can derive income, expenses, and even customer deposits from the use of items and what we call “double sided items” in QuickBooks.
The item list is really the list of products and services that you sell. If you had a grocery store, your item list would consist of things like milk, eggs, produce, and meat. As an engineer, you are selling the services of, say, a civil engineer or architectural design. You can increase the list of course and I’m sure you will. My goal here is to get you thinking about how you might set up and use your items in QuickBooks for your engineering firm. Once you see the concept of how this works, you will know much better than me, what to set up and where to point the items. Items have to be pointed or mapped to accounts. The natural thing is to link an item for a service that we sell to an income account that describes that income accurately. Often they will be one for one, meaning that the architectural design item might link to an income account called architectural design, but it doesn’t have to be that way. The idea here is that it can be detailed in the item list while keeping the chart of accounts simple.
What if I am paying someone for one of these same services that I am selling in my item list? There’s a video for that and it’s right above! Hint - we have to create a two-sided item so we can point it to an expense account and an income account.
What if I get deposits from customers and I want to invoice my client for that? That isn't income, so I can’t link my item to an income account. It has to go to a liability account. There’s a video for that and it’s right above.
Items will provide a powerful way to account for and report on our services. Make sure you understand what’s covered here and then check back for next week’s look at QuickBooks for Engineers!