QuickBooks is arguably the most popular accounting software package for small-business owners. Especially for new small-business owners, such as local landscape businesses. It is not necessary to have a broad knowledge of accounting, but an understanding of basic terms and tools of accounting will help ensure an accurate setup of a landscaping business with QuickBooks.
- Install QuickBooks on your computer. Choose the easy step interview, which will prompt a series of questions about your company. The important part here is the type of business you are opening. Landscaping is one of the options and will automatically fill the chart of accounts with landscaper-business related income and expense accounts.
The chart of accounts is a list of income, expense, and equity accounts. Rarely does the sample chart of accounts fill all your needs.
- Separate income and expense accounts. Remember that you will be earning income in a few different ways. You will need to have an income account for each method of earning income whether it is landscape design, labor, tree trimming or other methods. In the same manner, you will have expenses for different jobs. When entering a bill for the expenses of doing a job, make sure you assign the expenses to a particular job in the Customer/Job box in the right-hand box. Doing so will allow an accurate examination of where most of your profits come from. If most of your profits come from landscape design you will be able to plan to promote more of that type of work.
- Enter beginning balances. If you invested $5,000 to start your landscaping business, double-click on the “Equity Account,” “Owner’s Investment” or “Shareholder Contribution” and enter the $5,000 on the right column. In the account box beneath this, use the bank account into which you deposited the money. The equity account will read a negative $5,000, but the bank account will read $5,000.
- Enter fixed assets. Go to the chart of accounts and hit “CTRL” plus “N” to create a new fixed asset account. Create a separate account for each mower, truck, trailer or other high ticket items. The opening balance should be the amount you paid for that fixed asset. Groups of items, like tools and weed trimmers, can be entered as one group of tools with a single cost. Use of the Fixed Asset Manager, on QuickBooks’ help menu, can help you with the more difficult calculations.
- Create Customer types. A seldom used feature of QuickBooks is selecting the type of customer. In the landscaping business you may categorize the customers as “one-time maintenance,” “regular maintenance” or “landscape design.” If you are consistent with the “typing” of your customers, it will allow you to track trends in advertising and sales.
- Use the Sample Company. Under the sample company files you will find the service-based sample business, which is named Sample Larry’s Landscaping. Inspect or print out the chart of accounts to see how it’s done. Copy what you like to your file.
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