Any accounting system needs to be flexible enough to allow the user to create new accounts on the chart of accounts from time to time. Today, we want to look at the process of doing that and some of the options that exist when creating accounts in QuickBooks Online (QBO).
Access the account list by navigating to Transactions in the panel along the left side of the screen, then select Chart of Accounts.
Let’s start by selecting the New button in the upper right part of the window. When we make that selection, we see the following window.
The first selection required is what type of account you want to create. There are several types. The type of account most often created is Expenses, so that’s what we have chosen for our example.
You want to get the type correct. In some cases you may find you don’t have the capabilities you thought you would have if you use the wrong type. If you wanted a credit card account but chose expenses for instance. The credit card features like bank feeds would be unavailable for that account.
QBO requires a Detail Type as well. Often, you will see just the detail type you need right on the list. If you don’t see an exact match, choose the closest option. The detail type helps determine the appearance of reports. Usually, it won’t be a critical part of how you use the account.
Name the account. There is a field for description if you feel you need more description than what the name of the account affords.
Last, you can make the account a subaccount if you like. In this case, we made Meals a subaccount of Travel. This helps group like kinds of accounts together. Since the list of accounts is in alphabetical order within account type, Meals would be in the M’s and Travel in the T’s if we didn’t use the subaccount capability.
There are several things you can do with existing accounts from the account list. From the above screenshot, you can see the options available on the dropdown menu for each account.
You can run a report that will show all the transactions posted to that account for a certain time period. You can change the date on the report to see the time period you would like.
You can edit the account. Perhaps the name can be improved. Or, you didn’t make it a subaccount and now you would like to, or vice versa.
You can also Delete the account. Actually, the account won’t be deleted. It will become inactive so that you can’t access it when entering transactions. If it has a balance that should show on reports, it will still be there.
From the gear icon (settings) on the account list, you can customize what information QBO will show. One of the options is to show inactive accounts.
By showing inactive accounts, you will make them available to edit so you can activate them again if you wish.