QuickBooks: Setting up Customers and Vendors

The first step to keeping accurate accounting records in QuickBooks is to start with properly using Customers and Vendors. There are many benefits to doing so including, but not limited to:

  • Utilizing an accrual basis of accounting (if you don’t know what this is, don’t worry, we can always touch on it later!)
  • Tracking payments due from customer
  • Tracking upcoming bills due to vendors
  • Tracking 1099-eligible vendors for year-end reporting

Today I will go over how to set up a Customer and a Vendor and how to change QuickBooks settings so they better suit your company’s needs. Keep in mind, my examples will be done through QuickBooks Online, so QuickBooks Desktop may be slightly different. Feel free to email me for personal help with the Desktop platform.

Setting up a new Customer

Customers are those whom you do business with that pay you for your product or service. You may have the need to invoice customers for payment and track ones that are past-due.

To set up a new customer click on “Customers” on the left-side menu, then click on the green “New Customer” button at the top right of the screen. A new window will pop up and this is where you enter the customer’s information, as shown in figure 1. This information will be used to populate fields on an invoice.

Figure 1 – QuickBooks Customer setup screenshot – CLICK TO EXPAND

A likely secondary tab you will want to fill in is the “Payment and Billing” tab. This is where you can set the preferred invoice delivery method or terms that payments are due, shown in figure 2.

Figure 2 – QuickBooks customer setup tabs screenshot – CLICK TO EXPAND

Setting up a new Vendor

Vendors are those whom you do business with that you pay for their product or service. You may have the need to record bills for payments to vendors and track when they are coming due.

To set up a new vendor click on “Vendors” on the left-side menu, then click on the green “New Vendor” button at the top right of the screen. A new window will pop up and this is where you enter the vendor’s information, as shown in figure 3. This information will be used to populate fields on a bill. Note that you can mark the vendor to be tracked for 1099-MISC reporting, which makes the process a breeze after year-end!

Figure 3 – QuickBooks vendor setup screenshot – CLICK TO EXPAND

QuickBooks Settings for Customer and Vendors

Click on the gear icon in the top-right corner from any screen and click on “Company Settings” in the far-left column. To change settings for customers, go to the Sales section. Here you can change how your invoice looks and set default messages when emailing customers. If you refer to your customers as something else, go to the Company section and change the customer label (option include things like Clients and Patients).

To change settings for vendors, go to the Expenses section. Here you can choose to use purchase orders and set the default message when emailing vendors, among other things.

 

If you have a particular sticky point or module in QuickBooks that you’d like featured in one of my future blogs, comment with your question below!

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