 QuickBooks Desktop 2023. Create a new company file. Let's do it within 2-its QuickBooks Desktop 2023. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are on our desktop. We're going to be creating a new company file. Remembering that this icon represents the QuickBooks software. I'm going to open up the file where we're going to be putting our company file. We've got two major categories of files that will be QuickBooks files. One will be the data file. The other will be the backup files. Now within the data files I'm going to go into the data files. We've been working in a prior presentation with the sample file. I don't need the sample file anymore so I'm going to remove all of this information for the sample file. I'm just going to delete the sample file information and put our current information which will be the data file. I'm going to go ahead and skip that. It won't let me delete that. Okay. Whatever. Skip that. And so there we have it. So now let's go to the first tab. We might want to rename this. You could say I want a location for my data file per company file name for example. So I might right click this and say we're going to rename it data file. And we're going to call this new company that will be working on the practice file and get great guitars which I'm just going to put GGG here. So now we have the location where we want to put the actual data file. I've got the backup files which in practice we would typically be saving the backup files after we enter new data into the system. Usually those backup files would not be on the same drive as your data file unless you're putting it there for a specific reason. But for practice problems purposes we're going to put those here so we can see where they are located. So now I'm going to be opening up the software so that we can create a new company file double clicking on it. This would be similar to kind of like creating a new Word document for example. Now as you go into it it might open the prior company file that you had open. If it does you could go to the drop down up top and say that you want to close the company file. So you hit the drop down and say close the company. That will take you into this intro screen which will show you the prior company files that you have been working with. If you don't know where your prior company files are located it's a good idea to hover here see the mapping that these company files are located in. Find those make sure you have them where you want them to be so that if there's any problems you can locate those company files without a problem. So then what we're going to do is create a new company file. We can do so by going to create the new company file down here or you could do it up top in the drop down. I tend to prefer going to the drop down. We're going to make a new company file meaning I'm not going to restore a backup file. I don't have any backup file. I don't have any company file. This would be if we're starting a new company file from scratch in practice. You might start a new company file from scratch if you started a new company of course and now you're entering the data for the first time. Or if you're transferring data for example from a prior company file and this is the first time you're entering that data into say the QuickBooks system. Now before we do this note that I'm kind of zoomed in in my windows settings and we could find that here if I hit this and I go to my settings. I'm in the display settings here and I've zoomed in on the screen I'm working on to 150. I'll try to do that for most of the data input into the course but for this particular part it kind of distorts the first screen that we see. So I've got to bring it back to my recommended 100% so it's going to get a lot smaller and then I'll zoom it back in once we do the setup process. So I'm going to close this back out so you can see it's a little bit smaller here it's a little bit smaller up top we'll try to zoom in so you can kind of see everything. I also restarted the software so it can get used to the new settings which you don't normally need to do but it's just this first screen that has kind of a problem when you zoom in. So if I go to the file tab and I go to the new company file it's this pop-up window that kind of has an issue when you kind of zoom into the screen. So what does creating a company file require for creating a company file? You need to have an Intuit account which would provide you better control of your data, superior fraud protection, one account for all Intuit products. We've talked about in prior presentations how you might get access to the software if you don't have it already. If you already have the software then you can create multiple company files with the desktop version that's the beauty of it. You might be able to then get access to a free 30-day trial which you can do possibly by typing into your favorite browser free 30-day trial for a QuickBooks desktop. Just make sure you're looking at the desktop version that might be another way that you can get access to the software. Once you have access to the software then you should be able to set up multiple practice files basically with it. That's one of the beauties of the desktop version. So who are you creating the company file for? Myself, if you're the admin, so if it's your own company file then that might be the one that you would use that would of course link to your account. My email will be used to create an Intuit account which will be used to access all Intuit products. For someone else, I'm creating the company file on behalf of the admin. I'm going to try to use this second one here in an attempt to make it easier to be able to provide the backup files for practice backup files. So this is the one I'm going to be using. Notice you also have some options down below. So you've got the open existing file which you probably wouldn't use because if I was to do that I would have opened the file in the prior screen so I'm not sure why they really have it. Convert quick end data, convert other accounting software. Note that if you would have started a new company file in QuickBooks you might be moving, it might not be a new company. In other words you might already have data files from a prior accounting system and you kind of have two options when then starting a new company file. Number one, you can take that data file, try to convert it into the QuickBooks software. That could be great because it can give you that past data and help you to run comparative reports like an income statement this year compared to the prior year and that kind of stuff. But you might say, hey look what I would like to do is start the new company file from this point going forward. In other words the data from the prior company file, anything that I want to go back to prior to that date, I will look at the prior accounting system and I want to start the new accounting system here going forward. So even though this isn't the first time I started entering data, my business isn't new, I'm just using new software, maybe I want to start the new software as of this point in time going forward. And in that case you would take basically the balance sheet from the prior period in the prior company software and enter that as your beginning balances into the current system. We'll kind of take a look at that method, that's basically what we'll do in the practice problem so you can see the two. Now if you're going to use that method then typically what you would want to do is start your company file at the beginning of the year. So if you're using a calendar year company, you don't want to start your new data file like in the middle of the year and have half of your data in the prior data file. Meaning what if it's June and you want to convert to another software? So what you would like to do is recreate the data for the first six months in the system, possibly using the bank transactions or something like that. So that you can plan to have a whole year in the current system, that's the easiest thing to do, otherwise it's going to get kind of messy. So we'll talk more about that as we enter the data, that's kind of the process that we're using. Or again if you have the data file in Quicken or some other accounting software then you can try to convert that data file into this system. The conversion process isn't perfect, it depends on the software you're using, how complex the software is, are you tracking inventory that will often complicate things as well. And then you've got your advanced setup down here. So we're just going to start a new company file, nothing in it as we started set up the company file. We've got the required fields up top with the asterisks to be setting up. And then the ones that do not have asterisks of course are not the required fields and we're going to just enter data into here. We're going to set up a practice company file called Get Great Guitars. Now if you're following along you probably want to enter the exact same data as I'm entering here so that you can follow along with the practice problem. And then I can say the industry, this is a great tool within the desktop version because it gives you a chart of accounts that's kind of geared towards the industry that you are in. This is more aligned the chart of account is to your industry than the online stuff. So this is one of the things that I think they're doing better on the desktop version. So you can choose your industry and they give you the chart of accounts that they think is as close to that industry as possible. So that's a great tool to kind of start out with. You might not like their chart of accounts for multiple reasons. You might say, hey, I'm going to choose the option down here, which is none. You have none, which again, that's not an option. I don't think you have that option in the online. They just give you kind of one big chart of accounts that you have to pick no matter what industry you're in or you don't want any chart of accounts. So I think that's a great option to because you might say, hey, look, I'm in a unique industry. So I don't I want to make my own chart of accounts as I go or you might say, look, I do my own personal bookkeeping. So there is no industry because I'm going to use this for my personal bookkeeping or I'm using it for both my business and personal. I'm going to use class tracking or something like that. And so therefore I want to make my own chart of accounts. So you might say, hey, my business is small. So even though you have a chart of accounts, it has way too many accounts. I don't need that many accounts. I'm going to make my own accounts or possibly you don't like the way they do the sub accounts. People will get all picky about the sub accounts. So you want to do it yourself. But in general, especially if you don't have any accounting background, you typically want to find. I would suggest the industry that you are in and let QuickBooks create the chart of accounts for that particular industry. And then as you enter the data into the system, use the accounts that they have. If you don't like the accounts they have, change the name of that particular account that you don't like, or if there's not an account at all, then you just create a new account at that point in time. Then after you enter a couple months of data input, go into the chart of accounts, the accounts that you're not using, the excess accounts, the accounts that don't apply to you, you can go in and delete them or make them inactive so that you can kind of trim down and make things easier. That's the method I would suggest. Also note it's really important that if you're using inventory or not having inventory, you got the general accounts down here, general product-based business. Notice it has income, sales, and a cost of goods sold, cost of goods sold representing expenses related to inventory versus a service business which doesn't have any cost of goods sold because it's not going to be tracking inventory. So those are two major distinctions when you're dealing with inventory or not. We're going to be used just a general product-based business so that we have our income accounts, our cost of goods sold, it'll turn on inventory basically automatically. So we're going to pick that one okay, and then we're going to say type of business. Now when you look at the type of business, you're really thinking kind of like tax information for it and the structure of the business, meaning is it a corporation, a partnership, an LLC, and so on. So just to recap this quickly, this clearly will generally be applied to when you set up for tax purposes. So most businesses when they set up, if it's a small business, you might just set up as a sole proprietorship. If it's just you and you don't do anything else, then typically your sole proprietorship, you would be reporting your taxes generally on a schedule C. If you have two or more people that are partnering together, then if you don't do anything else and you're just making money, the IRS wants their share, they're going to basically call you a partnership. For taxes, partnerships become more complicated, same with the bookkeeping, because now you've got to split the income between the different partners. You typically need to file a separate tax return and then have a flow through to your individual 1040s. So just be aware that if you are a sole proprietorship, if it's your business, then you really want to be careful just from a business perspective in terms of if I'm growing, do I want to take someone else on as a partner, which means they have decision-making purposes in the business and so on and so forth and taking on liability and that kind of stuff, or do I want to hire them as a contractor or an employee, which means you still have kind of the ultimate kind of say or control over what's going to happen in the business. If you do take someone on as partners in a business, then you want to make sure that you outline the partnership agreement so that everybody is on board and knows what is expected from each other in a partnership, otherwise things get messy. You've got the LLC, which is kind of like a partnership situation, but it's an attempt to get the best of both worlds of a partnership and a corporation. Let's go back to that. Let's first go to the normal corporation. A corporation is a separate legal entity, so typically that kind of business, you would be filing a separate tax return. The corporation itself is thought of as basically owning the assets and owning the liabilities as opposed to the individuals. You have a corporate shield, there's liability protection, often the reason for a corporation. However, the corporation has a problem typically for small businesses and large businesses, but particularly the small business taking a leap from a sole proprietorship or partnership to a corporation is difficult because of the double taxation kind of issue, meaning it's hard to take money out of the company because it becomes dividends and dividends are taxable, so now the corporation pays tax and then when you take the money out it pays tax. So that's when you get these other kind of hybrid things, an LLC and an Escorp. These two things are kind of like a partnership in that for taxes you have to file a separate return for the partnership, but they don't get taxed at that level, the partnership level or the Escorp level if it's an LLC or Escorp, it still flows through similar to a partnership called flow through entities to the individuals 1040s and basically gets taxed at that way. The main benefit or one main benefit is that you kind of try to get the benefit of a corporate shield kind of thing for liability protection and you can avoid the double taxation of the dividends, the distribution from the corporation to the individuals. That's the general kind of outline. There could be other tax consequences as corporations. You might set one up in order to try to try to lower your payroll taxes and like social security and Medicare and so on, but this isn't when we won't get into that. Well, we got not for profit and then other down here as well. So I'm just going to pick sole proprietorship for our purposes. We're going to say, okay, now also just realize that the actual data input for these will be much the same. Accounting is going to be the same. It's going to differ in the equity section, meaning the equity section representing a sole proprietorship will be something like a capital account or the owner's equity for a partnership. It would be called partners equity and we'd have to allocate the business ownership between the two or more partners for a corporation. It would be shareholders equity, which means that we're kind of divvying up the ownership of the company in the equity section evenly in accordance to the shares. So every share represents an even level of ownership. Okay, so then an email account so we can enter an email account. I'll do that last. It's a required field. An EIN number. This could be, this is something that's not required because you might not have an EIN number, but that's an employee identification number. Even a sole proprietorship will typically want an EIN number because if you're doing work for somebody else, they might have to 1099 you and you don't want to have to give them your social security number. So you'd want to give them an EIN number. Even if you don't have employees, you might have one. You can find an EIN number on IRS.gov, IRS.gov. It would be pretty easy to set one up and it would be formatted something like that. That's generally, you know, a 99 dash or something, something dashed. Something, something, something would be the general layout of an EIN number. We've got the phone number, not a required field, but it might be something that populates on some of your forms. So you might want to add that so that it can populate your address, not a required field, but you might want the address on some of your forms and voices, especially if you've got shipping stuff and billing stuff, then you want those address in there to be populating on the forms for that. So I'm going to just pick an address 9530, Suckler, Brook Drive. This is in Beverly Hills, 90210, 90210. I think that house used to be for sale. It might be sold now. But, you know, it's like 40 million or something. You can get it. So California, this is going to be in the United States. And that's the required field. I'm going to add an email and then go forward. So there it sets it up. So you've got QuickBooks Desktop. Keep everything in one place. So now it's trying to upsell a couple things, get paid faster, make recording checks similar, easier, and so on, get more money, get a loan. I'm not going to set any of this stuff up now. I'm going to close this back out, discover your QuickBooks features. So you could go through that. I'm going to close that out at this point. It opens up the home page. We're in Get Great Guitars. That looks good. Now notice what it did not do. It did not tell me where to put the file. It didn't ask me where do you want to put the file. So one way you can find the file is I like to do it this way. I go to File and then close the company. It's a little risky because I'm going to close the company file. And then that takes me into this intro screen again. And then I hover over the intro screen and I can see, okay, there it is. So I might take a screenshot of that location. I'm going to say there is the location. So for some reason it put my file there. Okay. And sometimes it just puts it where it had it last. It might try to put it under an Intuit account if you've never, if you've never put any file anywhere else before. But there it is. So I'm going to say, okay, now I'm going to go find that QuickBooks file. And I'm going to put it where I want to put it, which is going to be on our desktop in our company file where I set my folder up right here in this get great guitars folder. So you want to make sure you know where the file is. I don't know why QuickBooks doesn't ask you where to put it, but that's the thing. Now if I'm going to move the file, you can have the QuickBooks software open, but you can't be in the file to move it because you have to, because then you won't be able to, move a file, a word file when the word file was open. So you got to make sure that you're in this screen and then find the file and then I'll, then I'll move it. Okay. So I located the file. There it is. Now all this other junk kind of came along with the file, but I don't think it's required to move all the other junk. So there's, I'm just going to take that file. I'm going to say control X or cut it or you can right click and cut it. And then I'm going to put it where I want to put it, which is going to be right here in my QuickBooks data file. That's where I want it QuickBooks. Why didn't you ask? Why don't you ask before you put it somewhere crying out loud? How hard is it? How hard is it to ask? Whatever. So now if I was to open up my QuickBooks file, then notice it's not going to go to the right location because it doesn't know where it is because I just moved it. So if I try to open it from here, it's going to say I don't know where it is. Now I'm going to have to open it from my new location. So I'm going to just say open the file. I'm not going to restore. I'm opening a file that's a QBW file. It's now on my desktop and I put it under my QuickBooks and then my data file. Data file boom. And there it is. So there it is. I'm going to open that one back up and hopefully it opens up cleanly even though I didn't copy over any of that other junk and whatnot with it. Although it's still made more junk, you can see, no matter what, it just has to put a bunch of junk in there with the data file. Note it might ask you or require you to put in a password. So you've got the username. I'll just put the password. It's going to be GGG, capital GGG. I need seven, one, two, three, four. So I'll do that here. GGG, one, two, three, four. Confirm. You might need that if you're restoring some of our backup files. So I will add that for security purposes. I don't want anyone messing with our get great guitars file. So there it is. Looks good. And now if I was to close this again, just to test it out one more time, if I was to say let's close this company file, now it should be in that open windows. If I hover over it and I look at the mapping, it looks like it's going to the right place. And then if I opened it up from this open window, this is what I'm going to do going forward. It should open and don't give me any problems. It's going to ask me the password GGG, capital, one, two, three, four. GGG, one, two, three, four. Boom. Opens up. That's the process we're going to be doing going forward.