QUICKBOOKS ONLINE ADVANCED CERTIFICATION COURSE

Supplemental Guide
Module 1: Complex Conversions
Copyright

Copyright 2016 Intuit, Inc. Intuit, Inc.

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Supplemental Guide Table of Contents

Table of Contents

About the Author .................................................................................................................................... 2

Supplemental Guide Overview ................................................................................................................ 3

Purpose of this Guide ................................................................................................................................ 3

Google Chrome ......................................................................................................................................... 3

Learning Objectives ................................................................................................................................... 3

Training at a Glance ................................................................................................................................... 4

QuickBooks Accountant Test Drive ............................................................................................................ 4

Topic 1: Contemplating a Conversion to QuickBooks Online .................................................................... 5

Data Limits................................................................................................................................................. 5

QuickBooks Desktop Data Conversion Tool ............................................................................................... 7

Feature Comparison ................................................................................................................................ 15

Subscription Users................................................................................................................................... 19

Topic 2: Advanced Conversions to QuickBooks Online .......................................................................... 20

Best Practices Using the QuickBooks Desktop Conversion Tool .............................................................. 20

Post-conversion Work.............................................................................................................................. 28

Starting with Beginning Balances ............................................................................................................. 38

Guide Conclusion ................................................................................................................................. 46

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Supplemental Guide About the Author

About the Author

Laura Redmond

QBO Pro | Redmond Accounting Inc.

Aero Workflow

Laura Redmond is a QuickBooks Online user since 2005, Advanced Certified QuickBooks ProAdvisor, member of
the Intuit Trainer / Writer Network, and co-author of the QuickBooks Online training and certification courses for
ProAdvisors.

Laura runs QBO Pro | Redmond Accounting Inc., an outsourced client accounting and consulting firm. Selected as a
Top 20 Firm of the Future by Intuit, their focus is on cloud accounting; all clients are on QuickBooks Online plus
various integrated apps in the QBO ecosystem. Laura co-created the AERO Workflow app used by accounting firms
to manage their service delivery with staff performing recurring tasks for multiple clients. The Aero Library includes
step-by-step instructions and procedures for many of today’s most popular apps in the QBO ecosystem.

A special thank you to the team of accounting professionals and product specialists that reviewed the material in
these five courses and enriched this content with their knowledge and experience: Stacy Kildal, Woody Adams, M.B.
Raimondi, Victoria Cameron, Heather Satterley, Cathy Iconis, Kaydee Peterson and Michelle Long.

Module 1: Complex Conversions 2

Supplemental Guide Overview

Supplemental Guide Overview

PURPOSE OF THIS GUIDE

Welcome to the advanced certification training program for QuickBooks Online. As trends continue to show
businesses moving to the cloud, you’ll want to be familiar with the internet and with web-based services. QuickBooks
Online with its ecosystem of apps is both an accounting solution and platform for supporting your small business
clients now and into the future. Your expertise with QuickBooks Online will enable you to determine when and how to
convert your clients. For clients with existing historical data, your knowledge of advanced conversion scenarios
ensures a successful transition. In this first module, we will explore what you need to know when contemplating and
performing a conversion to QuickBooks Online. This guide is intended to further help you understand conversion
capabilities and complex scenarios that can occur when converting to QuickBooks Online.

PRODUCT UPDATE NOTIFICATION! QuickBooks Online and QuickBooks Online Accountant are
constantly being improved:

When you log in to qbo.intuit.com, it may look different from the screenshots originally taken for this
supplemental guide
Where to go to learn about the latest product updates:

-https://www.firmofthefuture.com/product-industry-news/product-updates

-http://quickbooks.intuit.com/blog

GOOGLE CHROME

NOTE: Screenshots and instructions included in this guide use Google Chrome as the browser.

LEARNING OBJECTIVES
Identify potential challenging scenarios when converting from QuickBooks Desktop products

Recognize feature differences and data that does not convert from Desktop

Identify when to start a new QuickBooks company by entering beginning balances

Identify post-conversion steps required to set up a company file (in scenarios such as clients with inventory,
banking, payroll and/or sales tax)

Identify the sequence of steps to correctly enter beginning balances

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Supplemental Guide Overview

TRAINING AT A GLANCE
Use this as a guide to selecting specific workflows you want to cover.

Topic Step by Step Workflows Learning Objective

Data Limits Identify potential challenging scenarios and

Contemplating a QuickBooks Desktop data limitations when converting from
Conversion to QuickBooks Conversion Tool QuickBooks Desktop products
Online Feature Comparison Recognize data that does not convert from
Subscription Users Desktop

Best Practices Using Identify post-conversion steps required to

QuickBooks Desktop set up a company file (in scenarios such as
Complex Conversions to Conversion Tool clients w/inventory, banking, payroll and/or
QuickBooks Online Post-conversion Work sales tax)
Start with Beginning Identify the sequence of steps to correctly
Balances enter beginning balances

QUICKBOOKS ACCOUNTANT TEST DRIVE

Exercises contained in this handbook can be completed using a QuickBooks Accountant “test drive” file. The test
drive uses a sample company file called Craig’s Design & Landscaping Services. It can be accessed through the
following link:

Craig's Design & Landscaping

You don’t have to create an account or sign in to access the test drive file; just complete the security validation and
click Continue.

This test drive is designed for you to explore and try out new things without worrying that you will break something or
make a mistake. It is not designed to retain any changes you make. Once you close this QuickBooks Online test
drive company it is completely refreshed, so please remember to allow sufficient time to complete each workflow.
Don’t worry if you have to close the test drive before you are finished, you can always begin again.

NOTE: The link to the test drive company uses QuickBooks Online Accountant. It contains some features that
are not available in QuickBooks Online Simple Start, Essentials or Plus. (You may wish to share the
QuickBooks Online test drive file with your clients for them to practice without seeing Accountant-only
features: https://qbo.intuit.com/redir/testdrive.) In addition, some features (such as in-product Help) are not
enabled inside this test drive file. This is subject to change.

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

Topic 1: Contemplating a Conversion to QuickBooks Online

A certain set of steps are required to start a new QuickBooks Online company for a new business, such as configure
the company settings, connect the bank and create the Chart of Accounts. To start a new QuickBooks Online
company for an existing business involves a more advanced understanding of data limits, conversion tool details and
workarounds to replicate current workflow. This first topic explores the factors to be considered when contemplating
a conversion to QuickBooks Online.

DATA LIMITS
QuickBooks Online does not have a file size limit. However, keep in mind that if you enter huge amounts of data, you
may experience a reduction in response times. For example, if you enter as many as 3,500 transactions per month,
navigation and reports might run slower.

Conversion from QuickBooks Desktop is limited by the conversion tool to 350K transaction targets. Targets are the
distribution accounts, or lines, on each transaction. Press F2 in QuickBooks Desktop to view the total target count.
QuickBooks Desktop files with over 350K targets will get an option to import lists and balances only when converting
to QuickBooks Online.

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

The digit limit in a transaction or report amount field is 99 billion (99,999,999,999.99). The journal entry line limit is
100 lines. Character limits in fields:

Email address field when sending an invoice to customers allows 100 characters

Custom fields have a 30-character limit

The customer message field on sales forms has a 1,000-character limit within six lines; if you use more than six
lines, only the first six will show

The name field on an account in the Chart of Accounts allows 100 characters but no colons (colons are used to
denote subaccounts in QuickBooks Online reporting)

The Description field on a voucher check may be cut off if it contains more than 42 characters

The maximum file size you can attach to a transaction or upload to the Attachments screen is 25MB

The following description fields have a 4,000-character limit

− Item description field (everywhere the product/service item description can be used: estimates, sales
receipts, invoices, purchase orders, bills, checks, expense, etc.)

− Customer notes field (in the Customer Center)

− Description field on a single activity time sheet

Technically there is no limit on the name lists, but large lists can impact performance. It is suggested to keep the
combined number of names in your company below 10,000, including customers, vendors, employees and products
and services. This includes deleted names from those lists since they are never truly deleted in QuickBooks Online,
only marked inactive. This also includes names merged with another name, since the duplicate is marked as inactive
once merged in QuickBooks Online. Once you reach this number you may see an impact on your performance. To
determine the number of names in a list, export a list report to Microsoft Excel® and note the number of rows in the
spreadsheet, minus the header row(s). Be sure to include inactive list names in this export.

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

QUICKBOOKS DESKTOP DATA CONVERSION TOOL

Businesses that use QuickBooks Desktop for Windows (Pro or Premier), QuickBooks Desktop for Mac, and
QuickBooks Enterprise can use the built-in conversion tool to easily and effectively convert data to the cloud. You
must be an Admin user on the QuickBooks Online account. QuickBooks Online Accountant users are Admin users
by default. You can import your QuickBooks Desktop data to QuickBooks Online repeatedly within the first 60 days
(unless you have run Direct Deposit or filed/paid payroll taxes electronically in the QuickBooks Online company). If
you don’t like the results of your conversion, you can try it again. This 60-day limit has been extended to 1,060 days
for the QuickBooks Online Accountant Your Books firm subscription. Existing data in QuickBooks Online will be
completely replaced by the latest import from Desktop. Be careful with this once third party apps are connected as
this will send data to them also. Run QuickBooks Desktop and QuickBooks Online in parallel during this grace period
to make sure the data is giving you the same results in both software solutions.

The QuickBooks Desktop conversion tool sends lists and transactions, including non-posting transactions like
estimates, purchase orders and time entry to the new QuickBooks Online company. However, not all data is
exported by the QuickBooks Desktop conversion tool. Existing QuickBooks Desktop users should recognize the
following details and limitations of the data conversion process.

Lists

There are many things to consider about the way your list information will convert to QuickBooks Online. You need to
be aware of and familiar with the changes that may occur:

All Lists

− Inactive list records are imported as inactive — customers, vendors, classes, accounts, etc. A list record that
is inactive in QuickBooks Desktop could be made active in QuickBooks Online if there is an outstanding
balance or other event blocking it from being marked inactive.

− Once imported to QuickBooks Online, list records can never be deleted, only made inactive. If you have list
records to delete, do this type of cleanup work before you convert.

− There are no custom fields on customers, vendors, employees or products and services. Custom fields in
the customer, vendor, employee or item lists will not convert to QuickBooks Online.

Account List

− In addition to account type in the Chart of Accounts, QuickBooks Online also uses detail type. The detail
type will be assigned automatically during conversion.

− Non-posting accounts are not converted to QuickBooks Online

− Bank account numbers are not converted

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Customer List

− Jobs are converted to QuickBooks Online as sub-customers

− The following fields are not converted: additional contacts, customer type, rep, price level, account number,
credit limit, job status, start date, projected end, end date, job description, job type

Employee List

− Businesses using QuickBooks Desktop payroll at any point in time will find that employees who were paid in
the current year will move over to QuickBooks Online as active. All other employees will be converted as
inactive so you don’t have to provide information for employees who were not paid in the current year during
QuickBooks Online payroll setup.

− Payroll items are activated for each employee in QuickBooks Online Payroll. If there is an incompatible item
or rate brought over to QuickBooks Online, it won’t import any of the payroll items. The payroll migration will
fail and the customer will need to set up payroll manually, inputting all items and amounts for YTD.

− Most information about employees is converted, including employee name and address, phone, email, social
security number, hire and release date, deductions, pay rate or salary and payroll schedule. QuickBooks
Online Payroll will notify you if there is missing information.

Product & Service List

− Items in QuickBooks Online are one of three types:

• Inventory item you buy and/or sell and for which you track quantities
• Non-inventory item for which you don’t track quantities
• Services

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

− If you elect to turn on inventory and convert to FIFO, item types in QuickBooks Desktop convert to the
following item types in QuickBooks Online:

QuickBooks Desktop item type QuickBooks Online item type

Inventory Assembly Inventory

Inventory Part Inventory

Non-inventory Part Non-inventory

Service Service

Other Charge Service

Discount Service

Payment Service

Subtotal Not imported

Group Not imported

− If you elect not to turn on inventory, item types in QuickBooks Desktop convert to the following item types in
QuickBooks Online:

QuickBooks Desktop item type QuickBooks Online item type

Inventory Assembly Non-inventory

Inventory Part Non-inventory

Non-inventory Part Non-inventory

Service Service

Other Charge Service

Discount Service

Payment Service

Subtotal Not imported

Group Not imported

− In addition, when you elect not to turn on inventory, QuickBooks Desktop inventory parts are imported to
QuickBooks Online with two sub-product/service items called COGS and Inventory Asset

− Fixed Asset Item list does not exist in QuickBooks Online. These items are imported to QuickBooks Online’s
Product and Service Item list as type Service.

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Memorized transactions do convert; you will not need to set these up again in QuickBooks Online as recurring
transactions

The customer message list table containing various options to add to sales forms does not exist in
QuickBooks Online

Price level data does not convert as there is no price level table in QuickBooks Online

There is no Other Names list in QuickBooks Online; Other Names are converted to the Vendor list

Sales tax rates and historical sales tax activity do convert to QuickBooks Online. They are managed in the Sales
Tax Center, not in the Products and Services list. QuickBooks Online supports multiple single and combined
sales tax rates. QuickBooks Desktop sends items of type Sales Tax Item to QuickBooks Online as single sales
tax rates. QuickBooks Desktop sends items of type Sales Tax Group to QuickBooks Online as combined sales
tax rates.

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Transactions

Some activity and templates are recorded differently in QuickBooks Online than in QuickBooks Desktop. Knowing
exactly what comes over and how it looks once in QuickBooks Online is essential to completing successful
conversions.

Reconciliations and reconciliation reports are not converted, however the R reconciled status on reconciled
transactions is converted

Sales Forms

− QuickBooks Online sales forms have three custom fields. These fields are used by the conversion tool to
push data that doesn’t have its own field in QuickBooks Online. Data in a QuickBooks Desktop invoice’s PO
Number field will be converted to QuickBooks Online’s custom field #1. Data in the Sales Rep field will be
converted to custom field #2.

− Statement charges transfer to QuickBooks Online as invoices

− When you convert existing activity from QuickBooks Desktop to QuickBooks Online:

• If you elect to turn on inventory in QuickBooks Online, sales transactions with inventory parts dated
before the FIFO start date record the sale only, no adjustments to inventory asset or cost of goods sold.
A separate adjustment is created at the time of conversion to record the historical QuickBooks Desktop
weighted average inventory valuation for each inventory product outside of the individual sales
transactions. These sales transactions dated before the FIFO start date cannot be updated.
• If you elect to turn on inventory in QuickBooks Online, sales transactions with inventory parts dated after
the FIFO start date record the sale and the cost of the products sold via the FIFO method
• If you elect not to turn on inventory in QuickBooks Online, sales transactions with inventory parts show
three lines for each inventory part to account for the sale of the product, the removal from inventory and
the cost of the sale. Be aware of this and notify your clients not to re-send these invoices if they do not
want to share this sensitive cost information with customers.

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

− Transactions using group items in QuickBooks Desktop transfer as individual line items. The top and bottom
lines are zero amount lines with group name at top and description at bottom. Resending these invoices to
customers from QuickBooks Online will show all previously-hidden line items in the group.

− Progress invoices based on estimates in QuickBooks Desktop have extra fields that are not converted to
QuickBooks Online, including Est Qty, Est Rate, Est Amt, Prior Qty, Prior Avg Qty, Prior Avg Rate, Rate, Prior
Amt, Prior %, Curr % and Total %

Sales tax activity on transactions is converted to QuickBooks Online. Summary information of taxable sales, sales
tax liability amounts and payments is available in the QuickBooks Online Sales Tax Center.

− Sales tax liability calculated on historical invoices and sales receipts converted from QuickBooks Desktop will
be posted to the balance sheet to an Other Current Liabilities account named Agency_Name Payable

− Historical sales tax remittance payments to this agency are also posted to this Agency_Name Payable
Balance Sheet account

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

Payroll

− Paychecks and liability payments convert as regular checks

− Liability refunds, adjustment transactions and opening balance transactions that affect accounts convert to
journal entries

− Individual paychecks will not convert to the QuickBooks Online Payroll module; however, they will show in
QuickBooks Online’s general ledger as individual checks. Instead, payroll summary data, YTD and QTD data
import to the QuickBooks Online payroll module. Also, direct deposit and e-filing information do not covert to
the QuickBooks Online Payroll module.

Sales orders are not converted; there are no sales orders in QuickBooks Online

While purchase orders do convert to QuickBooks Online Plus, the link to the bill does not convert

TIP: All journal entries are converted; however, a journal entry’s billable status is not. You can’t mark a line
item on a journal entry billable in QuickBooks Online. You can use Transaction Pro Importer to import sales
orders into QuickBooks Online as estimates.

Settings

Basic company information is converted, but most company settings are not converted, including sales form
customizations. Once your data is transferred to your new QuickBooks Online company, you should review and
update all settings to add missing information, properly activate features, customize sales forms and connect existing
QuickBooks payments accounts if applicable.

Other considerations for settings include:

Profit and loss budgets are converted

Audit Trail – Your Desktop file and QuickBooks Online will each contain their respective audit log of work
performed, but the Desktop file’s audit log does not convert to QuickBooks Online. You can print the Desktop
file’s audit log or retain the data file as an archive.

The closing date is converted to QuickBooks Online; however, the closing date password and accumulated
closing date exceptions will not convert. QuickBooks Online will begin to track new exceptions from the date of
conversion.

The bank connection and the downloaded bank activity linked to transactions do not convert to QuickBooks
Online

QuickBooks users and permissions do not convert

Memorized reports in QuickBooks Desktop do not convert to QuickBooks Online; you will need to recreate these
in QuickBooks Online

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

The connection to your QuickBooks Payments merchant service account does not convert

Some third party apps connected to QuickBooks Desktop will require that you create a new third party app
subscription and integrate to QuickBooks Online

If the QuickBooks Desktop file has the multicurrency feature turned on you can convert the data file to
QuickBooks Online

− The home currency will remain the same. The import process will prompt you for your home currency, if it
cannot be determined.

− If multicurrency was turned on in QuickBooks Desktop but not used, then multicurrency will automatically be
turned on in QuickBooks Online during conversion. You may consider not converting the data file if you do
not want multicurrency activated in QuickBooks Online.

− Learn more about this conversion here: http://quickbooks.intuit.com/blog/how-to-convert-a-quickbooks-

desktop-multicurrency-file-to-quickbooks-online/

International versions of QuickBooks Desktop cannot be converted to the U.S. version of QuickBooks Online.
Canada and UK versions of QuickBooks Desktop can be converted to their respective international version of
QuickBooks Online.

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

FEATURE COMPARISON
Businesses have varying workflows involved in tracking their financial data and accessing their business intelligence.
The onset of the computer age allowed us to optimize and automate much of the manual work. As we move to a
web-based platform, we must explore new methods to bring efficiency to our business processes. In many cases,
QuickBooks Online will act as platform and not attempt to replicate functionality from QuickBooks Desktop, opting
instead to open its doors for app developers to provide solutions. You will find many solutions in Intuit’s Apps.com
marketplace that are designed to work with QuickBooks Online.

Your knowledge of how to use QuickBooks Online like a pro combined with your familiarity with integrated apps will
enable you to support your clients better in this exciting new frontier. Throughout the five modules of this training
course, we will discuss features, workarounds and apps as solutions. Many of the features offered by QuickBooks
are available in both the desktop and online product. Here is a list of features and solutions offered by QuickBooks
Desktop and QuickBooks Online. This matrix will help you know which features are provided by the different
QuickBooks software solutions so you know when to convert clients to QuickBooks Online based on available
solutions. There is no suggestion of price parity; only features and solutions are compared. This list can change as
new features are built in to both software solutions and as new apps arrive in the marketplace.

Feature QuickBooks Desktop QuickBooks Online

Customers & Sales

Price levels Pro, Premier, Enterprise Create multiple products and services items;
Apps.com: SOS Inventory, customize
Method:CRM

Delayed charges and credits Essentials, Plus

Billing rate levels Premier, Enterprise

Auto price markup Enterprise

Create invoices in batch Pro, Premier, Enterprise

Group items Pro, Premier, Enterprise, Mac

Change orders on estimates Premier, Enterprise Create product / service item or separate
estimate with similar reference number

Clear up undeposited funds Premier Accountant, Enterprise

Accountant

Progress invoicing Pro, Premier, Enterprise, Mac Copy estimate for each progress point and copy
to invoice

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Supplemental Guide Contemplating a Conversion to QuickBooks Online

Feature QuickBooks Desktop QuickBooks Online

Auto-send sales form Simple Start, Essentials, Plus

Auto-send invoices for Plus

billable charges

Vendors & Expenditures

Online bill pay Pro, Premier, Enterprise Apps.com: multiple solutions such as Bill.com

Preferred vendor Pro, Premier, Enterprise

Mileage tracking Pro, Premier, Enterprise, Mac Apps.com: multiple solutions such as Expensify

Fix unapplied vendor Premier Accountant, Enterprise

payments and credits Accountant

1099-Misc reporting Pro, Premier, Enterprise, Mac Plus

Employees & Payroll

Unlimited time tracking only Plus

users Apps.com: multiple solutions such as TSheets

Payroll labor costing Pro, Premier, Enterprise calculate and enter manually,
Apps.com: multiple solutions such as Knowify

Enter timesheets in batch Pro, Premier, Enterprise Apps.com: multiple solutions such as TSheets

Accounting

Auto download bank activity Simple Start, Essentials, Plus

Batch enter transactions Premier Accountant, Enterprise

Multicurrency Pro, Premier, Enterprise Essentials, Plus

Troubleshoot prior account Premier Accountant, Enterprise

balance Accountant

Additional AR/AP accounts Pro, Premier, Enterprise, Mac

Multiple AR/AP lines in Simple Start, Essentials, Plus

journal entries

Working trial balance Premier Accountant, Enterprise QuickBooks Online Accountant

Create period copy Premier Accountant, Enterprise Apps.com: SafetyNet

Accountant

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Feature QuickBooks Desktop QuickBooks Online

Restore backup Pro, Premier, Enterprise, Mac Apps.com: SafetyNet

Condense file Pro, Premier, Enterprise, Mac

IIF import Pro, Premier, Enterprise, Mac Apps.com: multiple solutions

Location tracking Plus

Multiple budgets per year Plus

Reporting

Audit log Simple Start, Essentials, Plus

Audit trail Pro, Premier, Enterprise, Mac Simple Start, Essentials, Plus
* included in Audit Log

Management Reports Simple Start, Essentials, Plus

Unlimited reports-only users Plus

Collections Center Pro, Premier, Enterprise Apps.com: multiple solutions

Calendar View Pro, Premier, Enterprise Apps.com: multiple solutions

Multiple vendor shipping Pro, Premier, Enterprise

address

Item Profitability report Pro, Premier, Enterprise, Mac Simple Start, Essentials, Plus – run Profit & Loss
report customized with columns by item

Industry specific reporting Premier, Enterprise

Business Planner Premier, Enterprise Apps.com: multiple solutions such as LivePlan

Forecasting Premier, Enterprise Apps.com: multiple solutions such as LivePlan

Balance Sheet by Class Premier, Enterprise

Balance Sheet by Location Plus

Statement Writer Premier Accountant, Enterprise

Estimate vs. Actual reporting Pro, Premier, Enterprise, Mac Create budget for job and run Budget vs. Actual
report for job

Auto-send reports Simple Start, Essentials, Plus

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Feature QuickBooks Desktop QuickBooks Online

Inventory

Weighted average cost Pro, Premier, Enterprise, Mac Apps.com: multiple solutions such as SOS
inventory valuation method Inventory

Set and maintain inventory Pro, Premier, Enterprise, Mac Apps.com: multiple solutions such as DataQlick
re-order points

Partial purchase orders Pro, Premier, Enterprise, Mac Apps.com: multiple solutions such as Exact
Online

Sales orders Premier, Enterprise Apps.com: multiple solutions such as

Method:CRM

Track current stock available Premier, Enterprise Plus

Apps.com: multiple solutions such as All Orders

Inventory Center Premier, Enterprise Apps.com: multiple solutions such as 7th Stage

Build assemblies or Premier, Enterprise Apps.com: multiple solutions such as SOS

manufacturing Inventory, Exact Online

Unit of measure Premier, Enterprise Apps.com: multiple solutions such as SOS

Inventory, Exact Online

Other

Letters (collection, credit, Pro, Premier, Enterprise Apps.com: multiple solutions such as
etc.) Method:CRM, Legrand CRM

Layout Designer Pro, Premier, Enterprise, Mac Apps.com: multiple solutions such as
Method:CRM

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SUBSCRIPTION USERS
With QuickBooks Online Plus, in addition to Accountant, Reports-only and Time Tracking only users, you can have
many active billable users work in QuickBooks Online simultaneously.

The billing levels are one to five users, 6 to 10 users, 11 to 25 users and 25+ users. Once you have reached the
maximum users for a particular billing level, the next time you add a new user you will have the option to upgrade
your subscription to the next billing level. Upgrading your billing level will cause a one-time charge to occur. The one-
time charge will be prorated by the day to your next billing date.

If you added a user who has bumped your subscription up to the next billing level and you want to return to the lower
billing level, you can delete user(s). When you delete a user that would make you eligible for a lower billing level,
QuickBooks Online will ask you if you want to delete the user and invite another user in their place or delete the user
and downgrade the subscription.

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Topic 2: Advanced Conversions to QuickBooks Online

You’ve decided to transition to QuickBooks Online. Now what? For businesses with existing historical financial data
there are two options: use the QuickBooks Desktop conversion tool or enter beginning balances. Let’s learn about
the steps involved in both of these situations.

BEST PRACTICES USING THE QUICKBOOKS DESKTOP CONVERSION TOOL

You can use the automated conversion tool in QuickBooks Desktop to push data to QuickBooks Online. Follow
these guidelines for best results:

Step-by-Step: Use the Automated Conversion Tool

1. In QuickBooks Online Accountant create the new QuickBooks Online subscription. Specify whether to add the
QuickBooks Online subscription to your firm’s QuickBooks Online Accountant wholesale billing plan or whether
the client will pay.

2. In QuickBooks Desktop make a backup of the QuickBooks Desktop data file: File Back Up Company 
Create Local Backup.

3. In QuickBooks Desktop, press F2 to verify total target count.

− Current data limit is 350K targets to import historical transactions

− If target count is too large, consider using the Condense utility to reduce the target size. Familiarize yourself
with the impact of this tool:
https://community.intuit.com/articles/1145321-condensing-your-quickbooks-desktop-file-for-import-to-
quickbooks-online
http://support.quickbooks.intuit.com/support/articles/HOW12161

− QuickBooks Desktop files with over 350K targets will get an option to import lists and balances only

4. In QuickBooks Desktop, verify data: File  Utilities (or Maintenance)  Verify Data. Do not convert a corrupt data
file to QuickBooks Online. If needed, or even if you just want to make the data file as whole as possible, perform
the following file maintenance activities:

− Re-sort lists

− Create/restore portable company file to fix data integrity issues

− Rebuild data

5. In QuickBooks Desktop confirm you have the most recent conversion tool then convert to QuickBooks Online.

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Step-by-Step: QuickBooks for Windows — Pro or Premier

1. Open QuickBooks Pro/Premier and navigate to Help  Update QuickBooks in order to use the most recent
conversion tool. Select all updates in the Update Now window. Click Get Updates. Exit and reopen QuickBooks
Desktop then finish installing the updates when prompted.

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2. Navigate to Company  Export Company File to QuickBooks Online.

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3. Follow the onscreen instructions to sign in with your Intuit ID and select the online company into which you want
to import your data.

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Step-by-Step: QuickBooks for Windows — Enterprise

Converting a QuickBooks Enterprise data file to QuickBooks Online is not officially supported due to the advanced
features available in Enterprise that are not available in QuickBooks Online. However, some companies do not need
the advanced features in Enterprise and may be candidates for conversion to QuickBooks Online. The conversion
tool is accessed from QuickBooks Enterprise via keystroke which brings up the import process.

1. Open QuickBooks Enterprise and navigate to Help Update QuickBooks in order to use the most recent
conversion tool. Select all updates in the Update Now window. Click Get Updates. Exit and reopen QuickBooks
Enterprise then finish installing the updates when prompted.

2. Press F2 to open the Product Information window.

3. Press Ctrl + b followed by Ctrl + q then click OK to close the Product Information window. Now you should see
the Export to QuickBooks Online window.

4. Follow onscreen instructions.

5. If you have trouble with QuickBooks freezing during import, reference this article for help:

https://community.intuit.com/articles/1145447-import-into-quickbooks-online-from-quickbooks-enterprise

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Step-by-Step: QuickBooks for Mac

1. Open QuickBooks Mac and navigate to QuickBooks  Check for QuickBooks Updates to use the most recent
conversion tool. Close and reopen QuickBooks Desktop to install update.

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2. Navigate to File  Export  To QuickBooks Online.

3. Follow the onscreen instructions to export the data to QuickBooks Online.

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NOTE: If you have an older version of QuickBooks Desktop or for some other reason need a trial version of
QuickBooks Pro/Premier, Enterprise or Mac in order to convert to QuickBooks Online, download it here:
https://community.intuit.com/articles/1207255-quickbooks-desktop-trial-links

If you experience errors during conversion, reference this help site for possible solutions:
https://community.intuit.com/articles/1145583-errors-importing-to-quickbooks-online

Once you have sent the QuickBooks Desktop data to QuickBooks Online, wait for a confirmation email that the data
has been successfully imported to QuickBooks Online. This generally takes 10 minutes or less, but could potentially
take up to six hours; usually the conversion is very quick and email confirmation is received almost immediately.

Best Practices Using the QuickBooks Desktop Conversion Tool with Inventory

QuickBooks Online uses the FIFO method to value inventory and record the cost of products when they are sold.
This method can reflect costs more accurately, especially if prices change over time. For most businesses, the FIFO
method produces the biggest gross profit and highest ending inventory value on the balance sheet. It also shows
how inventory flows through your business more accurately. This is why QuickBooks Online uses FIFO.

Businesses which use a different inventory method and convert to QuickBooks Online inventory should consult their
accountant first to discuss the change in inventory methods. For those converting from QuickBooks Desktop,
understand that QuickBooks Desktop uses the weighted average cost method to calculate inventory value and cost,
so you would be changing inventory valuation methods by using QuickBooks Online for inventory tracking. Those
who plan to use QuickBooks Online with QuickBooks Point of Sale powered by Revel should understand that Revel
also uses the weighted average cost method to calculate inventory value and cost, so do not switch to FIFO if you
will need to switch back to weighted average cost later.

When a QuickBooks data file is converted from Desktop to Online, you will be asked whether you want to bring your
inventory.

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Turn on Inventory

If you answer Yes, turn on inventory and calculate using FIFO as of: you will need to specify a date. It is
recommended that you use the first day following the company’s last tax filing period to avoid filing amended forms.
Once you set the inventory start date, you won’t be able to change it in QuickBooks Online, and any transactions
prior to this date cannot be edited. Next, QuickBooks Online will search for any errors with inventory. If errors are
found, the import will fail. The user will receive an email with instructions on how to fix the items that caused the
problem.

Do Not Turn on Inventory

If you plan to use QuickBooks Point of Sale powered by Revel in the future, or if you prefer not to use FIFO or enable
inventory in QuickBooks Online, then when the QuickBooks Desktop conversion tool asks whether to bring your
inventory to QuickBooks Online, select No, don’t turn on inventory and don’t track quantity on hand.

POST-CONVERSION WORK
Once you've received email confirmation that your QuickBooks Desktop data is available in QuickBooks Online, there
are several steps to take to get started. We’ll start here with general post-conversion work then explore the more
complex post-conversion work associated with banking, inventory, sales tax, payroll and payments.

General

Verify reports – Run accrual-based BS & PL, all dates in both QuickBooks Desktop and QuickBooks Online.
Compare the totals at the bottom of the two reports to make sure they match. Also run reports relevant to the
business such as open invoices, unpaid bills, sales tax liability and payroll tax liability.

Review Company Settings to set global preferences such as

− Activate features
− Define custom sales and/or purchase order fields
− Customize sales forms

− Set closing date password

Perform initial reconciliation of all previously reconciled transactions. From the gear icon select Reconcile.

− Use final reconciliation ending date and balance from QuickBooks Desktop
− You should not have to check off any transactions as they are already marked as reconciled and will not
show as open reconciling items.

− Your difference should already be zero

− Click Finish Now.

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Create and save custom reports

Set up users and permissions

Banking

QuickBooks Online’s banking feature supports zero data entry by downloading the activity from your bank and credit
card accounts for you to enter or match to existing transactions. When you connect QuickBooks Online to your bank
and enter your online bank credentials, you will be asked to map your bank or credit card account at the banking
institution to your Chart of Accounts. Be sure it is type bank or credit card. If it is some other type, then you could
experience errors when you try to add financial activity such as a new transaction on the Banking screen. You could
get the error message. You need to select a different type of account for this transaction. You or your client may
assume that the distribution account you are trying to enter is causing the error, when in fact it is the QuickBooks
account type of the bank or credit card that is causing the error. To fix this, simply go to the Chart of Accounts and
change the type of the account to bank or credit card.

The default setting for the initial bank connection is to download the last 90 days of activity. You can click the option
for a shorter date range to select zero, seven or 30 days instead. If you have several months of data that has not
been entered into QuickBooks Online, you may want to use the 30- or 90-day download. If the books were already
up to date, you may want to select the zero or seven-day option. If you need to enter transactions farther back than
90 days, use the File Upload option found on the Update button on the Banking screen. In this situation you may also
find it helpful to temporarily turn off the company advanced setting to automatically apply credits so that you may
carefully control which invoices the customer payments are applied to.

Once connected, if the QuickBooks Online account has no transactions posted to it prior to the connection, then
QuickBooks Online will record the opening balance per the bank’s balance on the oldest date imported. View the
register to find the transaction with an offset to the Opening Balance Equity account. Best practice is to delete this
transaction, since it is preferable to use historical activity or journal the beginning balances at the proper start date (as
covered later in this module) to arrive at the bank balance.

Next, review the downloaded activity on the Banking screen.

If the activity represents transactions that have not been recorded in QuickBooks Online, then add the
transaction

If the activity represents transactions that have already been recorded in QuickBooks Online but have not yet
been marked as reconciled, then match the bank activity to the transaction

If the activity represents transactions that have already been recorded in QuickBooks Online and are already
marked as reconciled, then QuickBooks Online will not suggest a match and you should exclude the bank
activity

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Downloaded activity cannot match to reconciled transactions, so QuickBooks Online would not have found and
suggested a match and therefore a novice may assume the transaction needs to be entered. It is a common mistake
for businesses new to QuickBooks Online to enter this activity into QuickBooks Online again, thereby creating a
duplicate. This initial downloaded activity into QuickBooks Online must be carefully reviewed to determine whether it
should be added as a new transaction or excluded as a duplicate that was unable to match to its reconciled
transaction.

Mistakes can occur when duplicate bank activity is imported. If your client has downloaded (via the direct connection)
or uploaded (from a file) duplicate bank activity via the QuickBooks Online Banking screen then added these
duplicate transactions to the general ledger, you do not need to delete these transactions individually. Perform a
careful bank reconciliation for the periods in question to identify which transactions should remain and which are
duplicate, then delete the duplicate transactions.

Step-by-Step: Delete Duplicate Transactions

1. From the Banking screen, select the In QuickBooks tab to find and select the duplicate transactions.

2. From the Batch Actions button, click Undo. This puts the downloaded banking activity back on the New
Transactions tab.

3. To exclude this duplicate bank activity select it and click Batch Actions  Exclude.

4. From the Excluded tab you may select the duplicates and click Batch Actions  Delete.

It is a best practice to reconcile the account after the initial connection between online banking and QuickBooks
Online to look for these kinds of errors, make sure all transactions are recorded, and determine whether open,
unreconciled transactions are appropriate.

Inventory

Turn On Inventory

When you convert a data file from QuickBooks Desktop Windows (2012+) with inventory to QuickBooks Online and
elect to turn on inventory, the conversion process will activate tracking quantity on hand for inventory in QuickBooks
Online. It will also post an adjustment to record the historical QuickBooks Desktop weighted average inventory
valuation for each inventory product as of the date specified in the conversion. Any existing transactions on or after
this date are recalculated in QuickBooks Online under FIFO.

NOTE: QuickBooks Mac does not support inventory import. Mac users would need to convert their Mac file to
Windows in order to convert inventory to QuickBooks Online.

It is likely that QuickBooks Online’s accrual-basis reports (not cash-basis) for all dates will not match QuickBooks
Desktop since the inventory is restated in QuickBooks Online per the FIFO method as of the start date specified
during conversion. However, you can run an accrual-basis balance sheet that ends before the inventory start date to
compare QuickBooks Online and QuickBooks Desktop and make sure the values just before start date match.

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The IRS requires you to commit to an inventory costing method the first year you file a business tax return. You can
apply to change you cost method by filing Form 3115 for the tax year you first implement your new inventory cost
method – this is the inventory start date you set on the QuickBooks Desktop conversion tool. IRS consent for this
change is automatic when you file a correctly completed Form 3115, and there is no review or approval process. This
does not constitute tax advice. Please contact a tax professional to discuss any consequences, questions and action
steps.

Do Not Turn on Inventory

When you convert a QuickBooks Desktop data file with inventory to QuickBooks Online and elect not to turn on
inventory, items in QuickBooks Desktop that are type Inventory Part are imported to QuickBooks Online as a Non-
inventory items with two sub-items called COGS and Inventory Asset. You will now have three inventory items for
every one you had.

Historical sales transactions (invoices and sales receipts) with inventory parts now show three lines for each part to
account for the sale of the product, the removal from inventory and the cost of the sale. Be aware of this if re-sending
historical invoices to customers from QuickBooks Online, as a business may not want to share this cost information
with its customers.

Purchase transactions posted to Inventory Asset will have converted to QuickBooks Online using accounts instead of
items on the purchase transaction screens. The rate and quantity are copied to the line description. Drill down into
the inventory asset balance on the balance sheet and customize to group by Product/Service if you want to find the
grouping of Not Specified purchases. These are the purchases that are posted directly to accounts instead of items.

To ensure the Inventory Asset and COGS transactions were converted properly, run the Inventory Valuation
Summary report in QuickBooks Desktop and run the Balance Sheet report in QuickBooks Online. Both reports
should be run for All Dates. Compare the QuickBooks Desktop Inventory Valuation report’s total asset value to the
QuickBooks Online Inventory Asset account balance. If the two amounts don’t match exactly, there may be rounding
differences or differences related to inventory valuation adjustments. In such cases, drill down to explore items in
detail to determine whether the conversion of historical inventory was acceptable or not.

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Payroll

If using QuickBooks Desktop with Payroll turned on, the conversion tool will activate payroll service in QuickBooks
Online for you and import the data, including payroll items. All payroll-related financial transactions are posted to the
general ledger and much of the employee data is imported. To complete payroll setup post conversion, you’ll review
and complete employee information, year-to-date and current quarter information.

Step-by-Step: Complete Payroll Setup

1. Navigate to the Employee Center in QuickBooks Online.

2. In the Paid in [Year] column, make sure each employee who received a paycheck this year is switched to Yes.

3. Click Complete payroll setup.

4. Add or click each row to verify and update existing employee pay information and year-to-date net pay for each
employee paid this year. Click Continue.

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5. Review payroll tax tips. Continue.

6. Review and update employee birth and hire dates. Continue.

7. Review and update business details needed to fill out payroll taxes and forms. Continue.

8. Review and update federal tax details. Continue.

9. Review and update state tax details. Save.

10. Activate electronic services to e-file tax forms and e-pay tax remittance.

11. Gather payroll reports for earlier this year. Continue.

12. Add summary totals for each column for all pay dates in current quarter. Continue.

13. Add summary totals for each quarter. Continue.

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Now you are ready to create paychecks and manage your payroll through QuickBooks Online Payroll.

If you convert your QuickBooks Desktop data to QuickBooks Online and were not using QuickBooks Desktop
Payroll, perhaps using another payroll service, you’ll want to decide which QuickBooks Online payroll service to use
— QuickBooks Online Payroll to process paychecks, tax payments and forms yourself, or QuickBooks Full Service
Payroll for Intuit to process paychecks, tax payments and forms for you. You will be prompted to make your selection
between these two payroll options either in the three-step getting started wizard when you first create the
QuickBooks Online company…

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or after you convert your data from QuickBooks Desktop when you navigate to the Employee Center to turn on
payroll by clicking Get started with payroll.

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If you selected QuickBooks Online Payroll, the do-it-yourself option, a setup interview will walk you through the steps
to set up payroll and payroll preferences, including employees, payroll items and tax information. You will be asked if
you paid employees in the current year. If you are starting mid-year and have issued paychecks using another payroll
service, answer yes.

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This will allow you to enter year-to-date information for each employee and report any previous liability payments. You
will then be ready to create paychecks and manage your payroll through QuickBooks Online payroll.

If you chose QuickBooks Full Service Payroll, the Intuit payroll support team will help you set up payroll. If you do not
see the option for QuickBooks Full Service Payroll, contact QuickBooks Online Support to turn it on for you.

Payments

When you convert from QuickBooks Desktop, the connection to GoPayment or Intuit Merchant Services is not
converted. You need to connect your existing payment account to your new QuickBooks Online company. From the
gear icon select Company Settings  Payments. Click Connect and follow the on-screen instructions. When the
account has been successfully linked, you’ll receive a confirmation message. Best results occur when the person
performing this step is the Master Admin of the QuickBooks Online company and the merchant account.

Review the list of recurring transactions that converted from QuickBooks Desktop. Look for any sales transactions
that were previously charged to the customer via the Merchant Service Center and recorded in QuickBooks Desktop
via this recurring transaction. Add or edit each recurring transaction to update it to a sales receipt with a payment
method scheduled to charge the credit card automatically, directly via QuickBooks Online.

If the business was using Intuit Merchant Service’s recurring payments feature, delete the recurring payment in the
Merchant Service Center so you do not process duplicate charges to your customers.

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When scheduling a recurring transaction in QuickBooks Online that will charge a customer’s credit card, if you use
the Days in advance to create option, the charge to the customer will process on the date the transaction is created,
not on the transaction date. For example, a sales receipt that is scheduled to recur on and be dated on the 15th of
each month, if created 10 days in advance, will process the credit card on the 5th of each month.

Whether you want QuickBooks Payments to help you get set up, or if you have trouble connecting the merchant
service account to QuickBooks Online, or need assistance deleting recurring payments in the Intuit Merchant Service
Center, contact the QuickBooks Payments team at 800-558-9558.

STARTING WITH BEGINNING BALANCES

Businesses not converting their accounting data file from QuickBooks Desktop may choose to kick-start QuickBooks
Online for an existing business by importing lists and entering beginning balances. These businesses may be using
other accounting software, no accounting software, or possibly using QuickBooks Desktop but don’t want to convert
the data file.

Import Lists Only

Existing businesses have lists of accounts, products and services, customers and vendors. Just because you’re not
converting an existing QuickBooks Desktop file to QuickBooks Online doesn’t mean you have to manually enter your
lists. There are two options for importing lists only into QuickBooks Online. In both cases, you’ll want to clean up
these lists before importing them.

Microsoft Excel or CSV Upload

This method works well for companies that do not have accounting data already in a QuickBooks Desktop file. You’ll
perform the following steps for each list you want to import. Imported lists do not replace data already in these lists in
QuickBooks Online. They add new records. (The Products and Services list is an exception to this rule; see below for
more information about overwriting existing records in this table.)

Step-by-Step: Excel or CSV Upload

1. From the gear icon select Import Data.

2. Click the name of the list you want to import.

3. Download the sample file to see what can be imported and to use as your mapping template. The proper field
names are already created on the first row in this file.

4. Delete the sample data and highlighted notes.

5. Enter or paste your list information into the appropriate column.

6. Save.

7. On the Upload screen, follow instructions to browse and locate the file you want to upload. Next.

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8. On the Map Data screen, approve the field matches between QuickBooks Online and your data file, which
should be automated since you copied the sample file and used those headers for your field names. Next.

9. On the Import Screen make any adjustments needed.

a. If importing customer and vendor lists, the address, city, state and Zip are separate fields. If your list of
existing customers or vendors is coming from QuickBooks Desktop the address may be all in one field. You
will need to break this data into separate fields for each record.

b. If importing customers and vendors, it is suggested you use $0 opening balance. Otherwise, QuickBooks
Online will create an invoice for the customer or bill for the vendor for the opening balance amount. It is
preferred that customers and vendors are imported then the individual transactions with details that make up
the balance due be entered using the proper item or account details.

c. If importing accounts, the account type and detail type must match QuickBooks Online’s pre-defined options
for each field. If you don’t enter this information on your Excel spreadsheet, you can upload the data to
QuickBooks Online then select the account type and detail type from a dropdown field on the Import screen.
Account names have a maximum of 100 characters, including alphanumeric and special, but cannot contain
a colon.

d. If importing products and services, be sure to properly select or deselect products and services as single- or
double-sided items by checking or unchecking the boxes in the Sell and Buy columns on the Import screen
after you upload the data file before importing it. Also properly select or deselect products and services for
inventory tracking by checking or unchecking the box in the Track column. (Learn more about importing
inventory later in this module associated to entering beginning balances.).

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e. If importing products and services, be sure to properly select the type: Service, Non-inventory or Inventory.
You must check the box Track to select type Inventory. You must uncheck the box Track to select type
Service or Non-inventory.

f. When importing products and services, if there is no matching name in the existing list the new items will be
added. If there is a matching name, you can check the box Overwrite all values for each product or service
that you import with the identical name. (This can’t be undone.) If you overwrite inventory items and you have
added or changed quantities, then inventory adjustments will be entered to update the Inventory Asset
account accordingly. Any records / rows that have no data in the other columns will be ignored.

10. Click Import.

If any of the records do not import, you will be notified and given the opportunity to correct it and re-import.

The QuickBooks Online sample company file can be used to test this import tool. Your data is not saved when you
exit the QuickBooks Online sample company.

IIF to QuickBooks Desktop Conversion

This method works well for businesses that have an existing QuickBooks Desktop file and have chosen not to
convert the historical transactional data, but do want to convert the lists only. This eliminates the need to specify
account types and detail types and break up customer and vendor city, state and Zip address fields. This technique
converts all lists at the same time.

Step-by-Step: IIF to QuickBooks Desktop Conversion

1. In QuickBooks Desktop select File  Utilities  Export  Lists to IIF Files...

2. Select the lists you want to export from QuickBooks Desktop to IIF. Not all of these lists will convert to
QuickBooks Online.

3. Create a new QuickBooks Desktop company data file (from scratch or from existing company file).

4. In the new QuickBooks Desktop data file select File  Utilities  Import  IIF Files.

5. Review all lists and delete any names you do not want to import to QuickBooks Online. Inactive names will
import to QuickBooks Online. Deleted names will not.

6. Convert QuickBooks Desktop file to QuickBooks Online. Remember that this will replace all data in QuickBooks
Online, so do this before entering beginning balances or other information into QuickBooks Online.

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Enter Beginning Balances

Sometimes there are reasons to start a new QuickBooks Online company for an existing business by entering
beginning balances without importing historical data.

To ensure the opening balances are correct you will need the following:

Trial balance – Determine the start date for the new QuickBooks Online company. Obtain the trial balance for the
prior period

Open transactions – Compile all outstanding checks, deposits, accounts receivable, accounts payable, sales tax
payable

Inventory detail – Gather all information about inventory items, including quantity on hand, sales price, taxable
status and cost

Unbilled billable time and charges – Assemble a list of time and charges that are billable to customers that have
not yet been billed and are not included in the lists above of open checks/deposits or open AR/AP

If the prior period’s ending balances which are being used as the beginning balances for the QuickBooks Online start
date were a year-end, be sure the adjusting entries were recorded in the old accounting system to match the tax
return, less any non-book adjustments, before using the year-end trial balance to record the new beginning balances
in QuickBooks Online. If the conversion is mid-year, then enter month-end balances for income and expense in order
to run comparative trend reports to these periods in the future. Be sure to keep a copy of the detailed transactions
for these monthly balances for supporting documentation.

The overview of the procedure is that you will post a series of transactions with offsetting amounts to the Opening
Balance Equity (OBE) account. The OBE account acts as a clearing account and must end with a zero balance.

Step-by-Step: Enter Beginning Balances

1. Use a journal entry transaction to enter the balance sheet balances. For bank accounts, enter the ending bank
statement balance as of the prior period. Post prior year retained earnings and prior year net income to the
retained earnings account. Exclude accounts receivable, accounts payable, inventory, sales tax payable and
payroll taxes payable, as these will be entered in a later step. Use the OBE account as the offset account.

2. Enter outstanding checks and deposits as the original dates and amounts using the proper check or deposit
transaction type. Select the proper bank account for the outstanding transaction and post these transactions to
the OBE account, since you have already recorded the income and expense for the prior year to the retained
earning account in the previous step. These transactions will net with the bank balance you entered in step 1’s
journal entry to arrive at the prior period’s ending book/register balance.

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3. Enter open accounts receivable transactions with the original dates and amounts using an invoice transaction. If
accrual basis, add an item to your Products and Services list named Beginning Balance (or similar) that posts to
the OBE account to offset any duplicate sales you are now recording against the retained earnings you posted to
OBE in step 1 above. If cash basis, recreate the original transaction using your regular list of Products and
Services items that post to income accounts, so that once payment is received, income will be reported
appropriately.

4. Enter open accounts payable transactions with the original dates and amounts using a bill transaction. If accrual
basis, post the bill to OBE to offset any duplicate purchases you are now recording against the retained earnings
you posted to OBE in step 1 above. If cash basis, recreate the original transaction using your items or accounts
so that once payment is made, the expenditure will be reported appropriately.

5. Enter details for non-posting activity, such as estimates and purchase orders.

6. Enter non-posting unbilled billable time activity using the Single or Weekly Timesheet. These time entries will not
post to the general ledger but will be available for pulling on to customer invoices. Use the original dates the work
was performed and original hours and mark as billable.

7. Enter non-posting unbilled billable charges using the Delayed Charge screen. Like the time entry activities, these
charges will not post to the general ledger but will be available for pulling onto customer invoices. Use the original
dates the expense was incurred and original amount and mark as billable.

8. Enter mid-year income and expenses, if applicable. Even if you are entering beginning balances for the end of a
year, the business may still want to be able to run historical comparative reports by month. Use a journal entry
dated for each month to record the total of that month’s P&L account activity, with offsetting amounts to the
Retained Earnings account, so you don’t duplicate the income and expense you already posted to retained
earnings in step 1.

9. Adjust sales tax payable and payroll taxes payable.

10. Set up your products and services (if not already imported). Establish inventory balances by adding products,
entering initial quantity on hand, price and cost. We’ll cover importing this in the next section.

11. Verify the OBE account is zero. If it is not zero, explore the balance sheet to confirm that all other beginning
account balances are proper and determine which component in the OBE account is not washing properly. You
may need to adjust duplicate retained earnings or reclassify to other equity accounts.

Once your balances have been entered and verified, you can then continue setting up the QuickBooks Online
company. Connect bank and credit card accounts to online banking. If the initial sync pulls in transactions with bank
posting dates before your start date, exclude these bank downloads.

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Import Beginning Balances for Inventory

QuickBooks Online inventory uses the FIFO method for recording the cost of products when they are sold.
Businesses that use a different inventory method and convert to QuickBooks Online inventory should consult their
accountant first to discuss the change in inventory methods.

If you start QuickBooks Online with beginning balances and intend to track inventory in QuickBooks Online, you can
import inventory to QuickBooks Online. These import steps were discussed in general in the importing lists section
earlier. We’ll discuss them in particular relating to importing inventory here.

Step-by-Step: Turn on Inventory in Company Settings

1. From the select Company Settings.

2. On the left menu click Sales.

3. Click the pencil next to Products and Services and make sure all the boxes are checked, including Quantity on
Hand (Inventory tracking). This will automatically turn on double-sided items and activate the setting to Show
Items table on expense and purchase forms.

4. Click Save.

Step-by-Step: Import Products and Services

1. From the gear icon select Import Data.

2. Click Products and Services.

3. Download the sample file to see what can be imported and to use as your mapping template. The proper field
names are already created in this file.

4. Delete the sample data and highlighted notes.

5. Enter or paste your inventory

− Be sure the Inventory Asset account you are using is type Other Current Asset and detail type Inventory, the
Income account is type Income and detail type Sales of Product Income, and the Expense account is type
Cost of Goods Sold and detail type Supplies and Materials

− Be sure to include the quantity on hand and purchase cost as this will calculate the inventory asset value

− Be sure the cells in the amount columns do not contain formulas as the import tool will try to import the
formula instead of the calculated amount. If the amount is calculated via formula, copy the cells in Excel then
Paste Special and select Values.

6. Save the Excel data.

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7. In QuickBooks Online on the Upload screen, follow instructions to browse and locate the file you want to upload
then click Continue.

8. On the Map Data screen approve the field matches between QuickBooks Online and your data file, which should
be automated since you copied the sample file and used those headers for your field names.

9. On the Import screen make any adjustments needed. Be sure to properly select or de-select products and
services as single- or double-sided items in the Sell and Buy columns on this screen. Likewise, select inventory
items that you track quantity on hand in the Track column. This Track column will designate products for which
QuickBooks Online will record an inventory asset value adjustment upon import.

10. Be sure to update the Qty As-Of-Date column on the far right. The inventory adjustment will be recorded to the
Inventory Asset account as of this date, which affects your balance sheet.

11. If you want to update existing products, check the box to Overwrite all values for each product or service that
you import with the identical name. (This can’t be undone.) if applicable. If you want to add new products,
uncheck this box.

12. Click Import.

If any of the records do not import, you will be notified and given the opportunity to correct and re-import.

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13. Columns with no data will be ignored. If you have added or changed product quantities, inventory adjustment
transactions will be entered to update your inventory account accordingly.

a. The amount of the inventory adjustment on each product is the quantity multiplied by the purchase cost.

b. You can calculate the expected inventory adjustment using your Excel spreadsheet of inventory that you
imported. On the far right empty column, make a formula to multiply the quantity on hand for each row by
the purchase cost to calculate the new inventory asset. Sum the total of this column to calculate the increase
to Inventory Asset.

c. New products added to inventory will add an inventory adjustment to increase Inventory Asset with an offset
to Opening Balance Equity.

d. If you overwrite existing products, an inventory adjustment will increase/decrease Inventory Asset with an
offset to Inventory Shrinkage (COGS) for only the difference between the original quantity on hand and the
newly imported quantity on hand.

14. Navigate to Chart of Accounts  Inventory Asset to view the register. Confirm the inventory adjustment posted
for each of the inventory items imported.

Convert Inventory to a Third Party App

Another option is to start QuickBooks Online with beginning balances and import inventory details using a third party
inventory app with integration to QuickBooks Online. Click on the App Center from the left side navigation bar in
QuickBooks Online or visit www.Apps.com.

TIP: You can save time and further customize the data you import to QuickBooks Online by using an app like
Transaction Pro Importer which imports both lists and transactions.

Module 1: Complex Conversions 45

Supplemental Guide Guide Conclusion

Guide Conclusion
You have just completed Module 1, Complex Conversions. This Supplemental Guide, in tandem with its recorded
module, has been provided to help prepare you for the QuickBooks Online Advanced Certification Exam. Continue
on to the remaining modules and their related guides and then proceed to the certification exam.

By completing this module, you should be able to:

Identify potential challenging scenarios when converting from QuickBooks Desktop products

Recognize feature differences and data that does not convert from Desktop

Identify when to start a new QuickBooks company by entering beginning balances

Identify post-conversion steps required to set up a company file (in scenarios such as clients w/inventory,
banking, payroll and/or sales tax)

Identify the sequence of steps to correctly enter beginning balances

Module 1: Complex Conversions 46