Creating and Editing Categories in QuickBooks Online Chart of Accounts
The link for setting up categories in QuickBooks Online has been improved. Previously if you were not an accountant it was quite confusing!
Thankfully, it is now a lot easier to create categories and edit where they show up in your reports.
Here’s a video that shows you how to set up a new category, or scroll down for step by step instructions!
Step by Step Tutorial:
1. From the Navigation Bar go to the chart of accounts in your QuickBooks Online file
2. Select “New” on the top right
3. This wonderful new “drawer” opens to the right:
4. Select the account (category) type that you would like to set up:
A wonderful new feature is the ability to scroll down and see where your new account category will show up in your reports.
Not only does this reduce the likelihood of you making an error – it also ensures that you can set up your chart of accounts to be more useful to you and your business reporting.
By changing the “Save account under” section you can create sub accounts with ease!
….and scroll down to see how this change will show up in our reports before we even save it!
5. When you are satisfied with how your new category will be displayed in your reports click “Save” on the bottom right.
6. After we save the new category, or changes, we will be able to view it in the Chart of Accounts list:
After you run your reports if you decide you would like to change where this information is included you can simply open the “drawer” again and edit the account category.
Don't hesitate to reach out if you have any further questions, and check out further options below:
Download a free Month End Checklist to help ensure your books are accurate and up to date!
Additional video support: Chart of Accounts Category and Bank Connection Setup
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Let's go!Video transcript:
Hi, Kerry here from My Cloud Bookkeeping. I work with small businesses and entrepreneurs to help them get set up in QuickBooks Online. One of the main questions I'm asked is how to categorize things properly and I made a video in 2017 walking through the chart of accounts and how to add and change categories. Recently the interface in QuickBooks Online has changed and I'd like to show you how you can add and edit your categories in the new chart of accounts section. This is a change I like I hope it'll make things easier for business owners and those who don't have an accounting background and are using QuickBooks Online. Be sure to watch right to the end and I'll show you how to run reports to ensure things show up as you'd intended. Now previously when you wanted to add a new account you would see this screen and select add new and the default above was for a bank account. Now many times I saw expenses and all sorts of other types of accounts added as bank accounts the results for those companies were a mess and were totally not usable! I think this is why QuickBooks Online has made this change so it'll be easier for you to make the correct choices and more importantly less likely you'll make a mess! So let's check out the new format in the sample company. If you are in the sample company and we'll pop across to this new navigation menu which most of you know. I do not like pop down to bookkeeping here because this is where they've hidden the chart of accounts it looks much the same as the previous one and then we're going to pop a crop to new on the top right hand corner so we click new and we have this wonderful new page come up so this pop up on the right hand side is where you need to set up any new categories now for this exercise I'm going to add credit card fees so I can track the fees charged by stripe and the other processes separately so the first thing to ask myself is which category across the top is where this cost belongs now these costs are clearly not going to be put into income it's not a bank account a credit card account it's not something we own an asset or this cute little truck it it's not a liability definitely not Equity so obviously most of you knew this already it was an expense it's something the business pays select expenses here now let me show you a great new feature that's down below so if we scroll down here you can see the words new account preview and what it does is it shows you where on your profit and loss anything you change above is going to show up so this is super helpful so let's pop up to here and there's a new button here that says save account under it also helps you to choose the correct correct section and this is where you can select to have a category be a subcategory so I could choose to put credit card fees under expenses so let's do that we'll pop into here we'll type credit card fees
and I'm going to go back to this tax form section I'm going to choose a category I don't want any of you to waste too much time thinking about this it's not unless you're going to use QuickBooks Online to prepare your taxes it's not really something we need to spend a lot of time on so just choose the thing that makes the most sense so now I've created an account called credit card fees and I've put it under expenses we can pop down to our profit and loss and have a look and see what that looks like so here are credit card fees showing up under expenses isn't that really cool we didn't have that before so now what I'm going to do is I'm going to pop up here and I'm going to change it because I would like it to go under Bank charges so we're going to save this account under it's still under expenses under Bank charges now if we scroll down and have a look let's see what we've got we can see that credit card fees is now a sub-account of Bank charges I'm going to save this and add the new category to my chart of accounts so let's add an expense to this new category and have a look in the profit and loss statement so I'm going to pop up into here I'm going to create an expense I'm going to pop it back a couple of months just to make sure that it does show up if we pop it back into here and we're going to take it out of our our checking account and we're going to put it into credit card fees now keep in mind this is highly unlikely that you would be recording an expense in this manner for credit card fees but for the purpose of our example I think it's a it's a good way to do it so we're going to say 15 with no tax and just save it from here save and close as you know I always like to run a report to see where things show up so have a look in here at our profit and loss and oh it is showing up for this year that's okay we're going to put last year
I never quite know what this sample company we'll scroll it down - here we go there are credit card fees showing up under Bank charges for the fifteen dollars now you might have a lot of categories showing up under a sub category if you have a look at Job materials down here there are quite a few and this is probably very useful or you wouldn't have done that but there is also a way to collapse the report or summarize it somewhat so if you're Distributing it more widely and someone doesn't need that information you can do that so if we Pub collapse here you can see we have Bank charges the 15 shows up but not as credit card fees if we scroll down further our job materials or are just all together under job expenses so it's just another view of the profit and loss for when you are using sub accounts if you kind of want a nice tidy summary this could also be useful for providing to your tax accountant for example now if we were going to add an income category we would go through exactly the same steps we'd choose income here and we would select where we wanted to go under it would either just go directly under income or you can see here there are different landscaping services that this particular company provides and we could pop things in under any of them pest control services I don't know about you I have raccoons near my house we could make a different section for raccoon control or whatever you want and then you have the option to see all of the detail broken down or you can summarize that report for distribution to the bank management or just even for a higher level review I hope that helps this is a change I like I hope it will make things easier for business owners and those who don't have an accounting background into using QuickBooks Online let me know if you have any questions also reach out if you would like to understand more about how these categories show up for the balance sheet accounts I can definitely make another video the balance sheet is super important so be sure to click like subscribe and I'd love to read your comments so please don't be shy. Cheers.
Video transcript:
Hi, Kerry here from My Cloud Bookkeeping. I work with small businesses and entrepreneurs to help them get set up in QuickBooks Online. One of the main questions I'm asked is how to categorize things properly and I made a video in 2017 walking through the chart of accounts and how to add and change categories. Recently the interface in QuickBooks Online has changed and I'd like to show you how you can add and edit your categories in the new chart of accounts section. This is a change I like I hope it'll make things easier for business owners and those who don't have an accounting background and are using QuickBooks Online. Be sure to watch right to the end and I'll show you how to run reports to ensure things show up as you'd intended. Now previously when you wanted to add a new account you would see this screen and select add new and the default above was for a bank account. Now many times I saw expenses and all sorts of other types of accounts added as bank accounts the results for those companies were a mess and were totally not usable! I think this is why QuickBooks Online has made this change so it'll be easier for you to make the correct choices and more importantly less likely you'll make a mess! So let's check out the new format in the sample company. If you are in the sample company and we'll pop across to this new navigation menu which most of you know. I do not like pop down to bookkeeping here because this is where they've hidden the chart of accounts it looks much the same as the previous one and then we're going to pop a crop to new on the top right hand corner so we click new and we have this wonderful new page come up so this pop up on the right hand side is where you need to set up any new categories now for this exercise I'm going to add credit card fees so I can track the fees charged by stripe and the other processes separately so the first thing to ask myself is which category across the top is where this cost belongs now these costs are clearly not going to be put into income it's not a bank account a credit card account it's not something we own an asset or this cute little truck it it's not a liability definitely not Equity so obviously most of you knew this already it was an expense it's something the business pays select expenses here now let me show you a great new feature that's down below so if we scroll down here you can see the words new account preview and what it does is it shows you where on your profit and loss anything you change above is going to show up so this is super helpful so let's pop up to here and there's a new button here that says save account under it also helps you to choose the correct correct section and this is where you can select to have a category be a subcategory so I could choose to put credit card fees under expenses so let's do that we'll pop into here we'll type credit card fees
and I'm going to go back to this tax form section I'm going to choose a category I don't want any of you to waste too much time thinking about this it's not unless you're going to use QuickBooks Online to prepare your taxes it's not really something we need to spend a lot of time on so just choose the thing that makes the most sense so now I've created an account called credit card fees and I've put it under expenses we can pop down to our profit and loss and have a look and see what that looks like so here are credit card fees showing up under expenses isn't that really cool we didn't have that before so now what I'm going to do is I'm going to pop up here and I'm going to change it because I would like it to go under Bank charges so we're going to save this account under it's still under expenses under Bank charges now if we scroll down and have a look let's see what we've got we can see that credit card fees is now a sub-account of Bank charges I'm going to save this and add the new category to my chart of accounts so let's add an expense to this new category and have a look in the profit and loss statement so I'm going to pop up into here I'm going to create an expense I'm going to pop it back a couple of months just to make sure that it does show up if we pop it back into here and we're going to take it out of our our checking account and we're going to put it into credit card fees now keep in mind this is highly unlikely that you would be recording an expense in this manner for credit card fees but for the purpose of our example I think it's a it's a good way to do it so we're going to say 15 with no tax and just save it from here save and close as you know I always like to run a report to see where things show up so have a look in here at our profit and loss and oh it is showing up for this year that's okay we're going to put last year
I never quite know what this sample company we'll scroll it down - here we go there are credit card fees showing up under Bank charges for the fifteen dollars now you might have a lot of categories showing up under a sub category if you have a look at Job materials down here there are quite a few and this is probably very useful or you wouldn't have done that but there is also a way to collapse the report or summarize it somewhat so if you're Distributing it more widely and someone doesn't need that information you can do that so if we Pub collapse here you can see we have Bank charges the 15 shows up but not as credit card fees if we scroll down further our job materials or are just all together under job expenses so it's just another view of the profit and loss for when you are using sub accounts if you kind of want a nice tidy summary this could also be useful for providing to your tax accountant for example now if we were going to add an income category we would go through exactly the same steps we'd choose income here and we would select where we wanted to go under it would either just go directly under income or you can see here there are different landscaping services that this particular company provides and we could pop things in under any of them pest control services I don't know about you I have raccoons near my house we could make a different section for raccoon control or whatever you want and then you have the option to see all of the detail broken down or you can summarize that report for distribution to the bank management or just even for a higher level review I hope that helps this is a change I like I hope it will make things easier for business owners and those who don't have an accounting background into using QuickBooks Online let me know if you have any questions also reach out if you would like to understand more about how these categories show up for the balance sheet accounts I can definitely make another video the balance sheet is super important so be sure to click like subscribe and I'd love to read your comments so please don't be shy. Cheers.
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