QuickBooks Online makes it very easy to start — and very easy to start wrong. Most of the cleanup projects we take on trace back to decisions made in the first week, before anyone knew what the settings actually did.
This is the setup checklist we use. Follow it before you enter a single transaction, and your books will stay clean from day one.
1. Get the company settings right first
Before anything else, confirm your legal business name, EIN, address, fiscal year start, and accounting method (cash or accrual). These flow into every report and every form, and changing them later is harder than setting them once.
If you're not sure whether cash or accrual fits your business, ask your CPA before you pick — your bookkeeper and your tax preparer should be looking at the same basis.
- Legal name, EIN, and address exactly as registered
- Correct fiscal year start month
- Cash vs. accrual method confirmed with your CPA
2. Build a chart of accounts you'll actually use
The chart of accounts is the skeleton of your books. QuickBooks gives you a default list, but the default is generic — it won't match how your business really spends money.
Keep it simple: one account per real category of income and expense, no duplicates, no 'miscellaneous' catch-alls. A chart of accounts with 40 well-named accounts beats one with 200 vague ones every single time.
- Rename or remove default accounts that don't fit your business
- One account per real expense category — no 'Miscellaneous' bucket
- Separate accounts for owner draws, loans, and credit cards
3. Connect bank feeds — but don't let them auto-post
Connecting your bank and credit card accounts is the best feature in QuickBooks Online. The danger is the 'auto-add' setting, which posts transactions with guessed categories before anyone reviews them.
Turn auto-add off. Let transactions flow into the For Review queue, and categorize them yourself (or have your bookkeeper do it) with rules for your recurring vendors.
- Connect every business bank and credit card account
- Auto-add OFF — everything goes through review first
- Set up bank rules for recurring vendors only after review
4. Set up sales tax tracking (if you collect it)
If your business collects sales tax, turn on sales tax tracking and configure your agencies and rates before your first invoice. QuickBooks will then track what you've collected so the numbers are ready when it's time to file.
A note on scope: we set up the tracking and keep the entries clean and reconciled, but we don't file sales tax returns — your CPA or tax provider handles the filing itself, with accurate numbers behind it.
5. Decide on classes and locations before you need them
Classes and locations let you track profitability by service line, project, or branch. They're powerful — but only if you turn them on at the start. Retrofitting them onto a year of transactions is exactly the kind of work that turns into a cleanup project.
If you have more than one revenue stream, turn classes on now and require them on every transaction.
6. Bring in opening balances the clean way
If you're switching from another system (or a shoebox), enter opening balances as of a specific date — ideally the first day of a month or quarter — and make sure they match your bank statements exactly.
Every account's opening balance should be verifiable against a statement. If you can't verify it, don't enter it yet.
7. Invite your bookkeeper as an accountant user
QuickBooks Online includes free accountant access. Invite your bookkeeper through the accountant-user option rather than sharing your own login — you keep full control, they get the tools they need, and every change is tracked by user.
Never share your master admin password. Not with us, not with anyone.
The setup mistakes we fix most often
If any of these sound familiar, your setup needs a second look — and the sooner, the cheaper:
- Auto-add left on, with hundreds of wrongly categorized transactions
- Personal and business spending mixed in one connected account
- Duplicate income accounts created by bank-feed guesses
- Opening balances that don't match any bank statement
- Sales tax collected but never tracked as a liability
Already set up — and not sure it's right?
If your QuickBooks has been running for a while and you're not confident in what it's telling you, that's exactly what our QuickBooks Cleanup service is for. We review the setup, fix the chart of accounts, reconcile everything back to the statements, and hand you books you can trust.
And if you'd rather have it set up correctly from day one, we do that too — as part of getting your monthly bookkeeping started.