Deleting special and default accounts in the Chart of Accounts
QuickBooks Help
There are many accounts created by QuickBooks at the time the company is created, and others that appear when features are turned on in preferences. Some can be deleted or edited and others cannot…
Accounts that cannot be deleted or used for anything else:
Credit Card Receivables
Undeposited Funds
Opening Balance Equity
Retained Earnings
Inventory/Stock Assets
Cost of Goods Sold/Cost of Sales
Reconcile/reconciliation Discrepancies
Unapplied Cash Payment Income
Cannot be deleted or merged but can edit the name:
Changes to your QuickBooks Payments account beginning in October 2016.
Beginning in October, all keyed transactions will require card verification value (CVV) in order to process.
What is changing?
All transactions where the credit card number is keyed will require CVV. The CVV for Visa or MasterCard are the last three digits of the number printed on the signature strip on the back of the card. CVV for American Express appears as a separate 4-digit code printed on the front of your card.
What you need to do
When processing a transaction where you need to key in the credit card number, please be sure to enter in the CVV.
If you have any questions, please contact Intuit QuickBooks at (800) 558-9558.
IMPORTANT: If you already have recurring transactions template setup credit card data with CVV for sales receipts, it should be working fine. There is no need to going back and manually updating CVV again. However, if you’re creating a new recurring transactions template for sales receipts then, you will need to add credit card data with CVV to make this work.
QuickBooks Forum Discussions: CVV1CVV2CVV3 See also
Currently, there is no option to reconcile undeposited funds account. The undeposited funds account is not on the listing of accounts that can be reconciled like for bank, credit card and other assets and liabilities accounts.
Interestingly, it’s sort of automatically reconciled when existing payments from the undeposited funds transferred to the bank account. What’s left in the account is treated as unreconciled status. To get the unreconciled status data, you can get the information directly from the undeposited funds register, you will need to follow these steps:
From the home page screen > left navigation bar > transactions > chart of accounts > select undeposited funds account and click view register under action column > once you’re on the asset register, click little funnel icon arrow down > select ” Not Reconciled” under reconcile status > select all dates > apply
All the items remaining on top without “R” sign (payment and sales receipt) represents “Not Reconciled” status. The total amount should match with the shown “Ending Balance” on top of the register. You can print or download to excel this report.
reconcile undeposited funds
The only problem with this report is, there is no way to get the running balance that they took it out on their last update. When sort, you will see “n/a” only with no balance or grand total. If you think you need running balance or grand total instead of “n/a” only, send them your feedback request here:
Year-end is quickly approaching. Be prepared for the year-end. Here is a 10-point checklist you should go through to keep your QuickBooks Online accounts in order and plan for the year-end processing.
Helpful Checklist:
Bank Reconciliations
Make sure all bank reconciliations are up to date. This includes credit card accounts as well. Review any unmatched items (both deposits and payments) that you would not expect to be outstanding. This may be the result of a duplicate entry.
It is important these banks reconciliations are printed (or saved) at year-end.
Click on the screenshots below to enlarge them
Undeposited Funds
Make sure all the customer payment items in Undeposited Funds account have not yet been deposited to the bank account. If all the deposits are already posted to the bank account, this account should show zero balance. Any balance in Undeposited Funds account (even after bank accounts are already reconciled) may be the result of a duplicate entry. Review income and account receivable accounts and resolve it.
A/R and A/P Balances on Cash Basis
Run the Balance Sheet on the cash basis accounting method. If the transactions were properly recorded, these two accounts should not show a balance in the Balance Sheet.
Employee Advances
Make sure Employee Advances account is reconciled. This account should include the advances that are yet to be repaid or have not been deducted from the payroll.
Payment to Independent Contractors (1099s)
Make sure you have IRS Form W-9 on file and they are up to date.
You can google 1099 and W-9 for all the handy information you need.
Other Balance Sheet Accounts
Review all other balance sheet accounts. Make sure all assets and liabilities are shown properly. It is also time to make adjustment entries if necessary.
Depreciation on Fixed Assets
If you have posted your depreciation on fixed assets entry, make sure these are up to date. If not, consult your Accountant.
Uncategorized Income & Expense / Ask your Accountant
If you have any uncategorized income and expense in P&L that have been used to post entries that you aren’t sure what to do with, now is the time to have a look. If needed, ask your Accountant and resolve it. Also, review all income and expense accounts and make sure it makes sense.
Retained Earnings
Keep a separate spreadsheet Account Analysis of Retained Earnings account. This account should include income or loss from prior years. It may also include reclassifying transactions within equity type accounts. Consult your Accountant if it involves any entry posted from outside of equity accounts.
Close the books
Close the books once you have submitted final numbers to your Accountant for review and tax preparation. Consult your Accountant in case there is a need to make changes.
Case: A customer bought $105.00 worth of product and paid $80.00 in cash. You need to send an invoice to the customer for the balance. How would you handle this in QBO?
First, create a new invoice using product/service item code for $105.00. Use deposit field to post $80.00 as the prepayment on that invoice. Deposit field is located right below the total. Now, the invoice will show $25 balance due.
If you do not see “DEPOSIT” field on your invoice, go to “Company Gear” settings to enable deposit field: Gear icon (upper right corner) > Settings > Company Settings > Sales > Deposit > ON > save. See screenshot below for reference.
Click on the screenshots below to enlarge them
Once you enter deposit amount, your invoice screen will expand to show the following three fields added to the invoice form. Fill out the information appropriately:
a) Payment method
b) Reference no.
c) Deposit to
You will need to select “Deposit to” field depending on your situation. If you are depositing this deposit (prepayment) to the bank along with other payments as a batch deposit, then you should select Undeposited Funds Account. On the other hand, if you are depositing just $80.00 as a single deposit to the bank, you should select the appropriate bank account.
The snapshot below shows what accounts are affected by this transaction:
1. Accounts Receivable: $25
2. Sales Income: $105
3. Undeposited Funds or Bank Account: $80
In QBO Essentials and Plus, you can create a Recurring Sales Transaction to be used at the end of each day to record your daily sales transactions.
This YouTube video will show step by step instructions on how to record daily sales in QBO. We highly encourage you to watch the entire video. You do not want to miss a step!
Views: 80,000 | Video Duration: 35:02 |
You will need to create a few new accounts in the Chart of Accounts:
Clearing Account (Category Type = Banking)
Income Account (Category Type = Income)
Overage/Underage Expense Account (Category Type = Expense)
To create new accounts (left blue navigation bar > transactions > chart of accounts > new)
You will need to create Products/Services associated with the following account types:
Sales categories = Sales Income account (make it taxable if your charge sales tax)
Cash= Undeposited funds
Checks= Undeposited funds
Visa/MasterCard = Undeposited funds
American Express = Undeposited funds
Discover = Undeposited funds
Overage/underage (for drawer shortages) = Expense account
To create products/services list (from the home page screen > company gear (upper right corner) > lists > products/services > new (upper right corner)
You will also need to enable sales tax settings (if needed).
Sales tax = (left blue navigation bar > sales tax > add/edit tax rates and agencies). QBO will automatically create a Sales Tax Liability account. You do not need to create sales tax account in the Chart of Accounts separately.
Now you need to create recurring Sales Receipt template (from the home page screen > company gear (upper right corner) > lists > recurring transactions > new (upper right corner).
Now you are ready to create a Sales Receipt for each day based on end of the day Cash Register run (from the home page screen > company gear (upper right corner) > lists > recurring transactions > use under action column).
Note: By recording all of the Sales as positives and all of the Payments (Expenses & Cash Shortage) as negatives, the net amount of the Sales Receipt should be Zero.
In this example, at the end of the day, you have $1,000.00 in Sales, $80.00 in Sales Tax. The cash register count for Cash is $200.00, ‘Checks’ is 300.00, Visa/MasterCard is $390.00, American Express is $80.00, Discover is $80.00 and Cash Shortage is $10.00. The sales report that day shows $1,080.00 in Sales ($1,000 sales income plus $80 sales tax).
In case of additional expense payments from the cash register, create new products/services mapped to appropriate expense category of Chart of Accounts.
Finally, go to Undeposited Funds and record the deposit for the amounts actually deposited in the bank.
To do this (from the home page screen > create + sign > other > bank deposit). Select deposit date in QBO based on bank posting date.
Note to Simple Start users: since there is no “Recurring Transactions” feature available in Simple Start, you will need to follow all the setup instructions and create a Sales Receipt for daily sales. Transactions will be recorded the same way in QBO.
There are certain accounts QBO automatically creates when a new company is created. These certain accounts can be deleted or edited and there are certain specific accounts cannot be deleted. They are integral part of QBO company account setup.
These are specific accounts that cannot be deleted or used for anything else. Here are specific accounts that cannot be deleted or used for anything else:
Undeposited Funds
Inventory Assets
Opening Balance Equity
Retained Earnings
Cost of Goods Sold
Credit Card Receivables
Reconcile Discrepancies
Unapplied Cash Payment Income
All of these specific accounts are integral part of QBO special accounts. They cannot be changed into regular accounts. It is highly recommended not to delete it even though you may never use these certain accounts.
These accounts cannot be deleted or merged but can edit the name if needed:
(Sales tax agency name) Payable
Services
Owner’s Equity
Uncategorized Expense
Uncategorized Income
Uncategorized Asset
Services income account is the default income type account for the QBO file. It actually operates the same as any income account, but this one can’t be deleted, nor can the corresponding product service item. However, they can both be changed to the main income account you will be using.
Edit the name of Services to the name you call your income:
From the home page screen, go to the Company Gear (upper right corner) and select Chart of Accounts under Settings heading
Click once on Services to highlight it.
Click Edit button.
Change the name to your preferred name of income.
Click Save.
Accounts that can be deleted by merging:
Billable Expense Income (Income Category Type)
Markup (Income Category Type)
To merge the accounts:
From the home page screen, go to the Company Gear (upper right corner) and select Chart of Accounts under Settings heading
Click once on the account to highlight it.
Click Edit button.
Change the name to Services, or the exact name that Services has been changed to.
Click Save.
The program will ask if you want to merge; click Yes.
Accounts that can be deleted, but are associated to a company settings. (Since the below accounts are associated to a preference setting the only way to delete them is to disassociate them from the setting .)
Shipping Income (Income Category Type)
Discounts Given (Income Category Type)
To disassociate the account you want to change:
Want to change Shipping Income?:
From the home page screen, Go to the Company Gear tab (upper right corner) and click Company Setting under Settings heading.
In the left column, click on Advanced.
In the Chart of Accounts section, click on Shipping Account.
From the drop down list, select shipping account you will be associating this preference to income type account.
At the bottom right, click Done.
Want to change Discount Income?:
From the home page screen, Go to the Company Gear tab (upper right corner) and click Company Setting under Settings heading.
In the left column, click on Advanced.
In the Chart of Accounts section, click on Discount Account.
From the drop down list, select discount account you will be associating this preference to income type account.
Chart of Accounts can be also used many ways in new QuickBooks Online.
How to go to Chart of Accounts?
From the home page screen > select Company Gear (upper right corner) > select Chart of Accounts under Settings
From here, you can ADD New account, edit existing account and delete account with certain exception (certain account cannot be deleted).
Wait, you can do more…
From here, you can go the Register for all the Balance Sheet Accounts. Just highlight account and select Register.
From here, you can generate ACCOUNT QUICKREPORT for all accounts listed here on the Chart of Accounts. Just highlight account and select Report. It is also a quick way to run a report for specific General Ledger Account.
At this time, there is no way to select all from “Receive Payment” screen deposit to Undeposited Funds account. But I see huge advantage of having “Select All” button and “Clear All” button like currently available in “Bank Deposit” form.
To add this new feature request, add your voice here: