QuickBooks is great at small business accounting, which is largely why millions of people use it each year. However, it’s not a be-all-and-end-all solution as most owners still run sales follow-ups and service work somewhere else.
That “somewhere else” often becomes spreadsheets, email threads, and manual handoffs. When that happens, follow-ups can slip, customer history can get scattered, and teams may find themselves repeating the same admin tasks. 🤯
Here at Method CRM, we’ve been supporting QuickBooks-based businesses since 2010. Method is loved by small and medium-sized businesses across a range of industries for its real-time, two-way QuickBooks sync, customization services, and end-to-end sales automation.
In this article, you’ll learn how to set up QuickBooks Online step-by-step, then see where Method fits once QuickBooks is in place. 🧩🧩
Table of Contents
- Why getting your QuickBooks setup right matters 👨💻
- QuickBooks Online vs. Desktop: which one should you use? 🤔💭
- Step-by-step guide to setting up QuickBooks for small business ✅
- 1. Create your QuickBooks Online account 👤
- 2. Add your business details 🏢
- 3. Set up your chart of accounts 📒
- 4. Connect your bank and credit card accounts 💳
- 5. Customize sales tax settings 🏛️
- 6. Set up products and services 🛒
- 7. Add customers and vendors 🙋♂️
- 8. Set up invoice templates and payment methods 💵
- 9. Run your first report 🧑💻
Why getting your QuickBooks setup right matters 👨💻
Good bookkeeping is less about fancy reports and more about clean inputs.
With that in mind, if your chart of accounts is messy, it’s exceedingly difficult to categorize transactions consistently, even with bank feeds.
That spills into financial reporting, since reports pull directly from how you record income, expenses, assets, and liabilities.
Tax prep is another reason to take the initial setup seriously.
The Internal Revenue Service says your record system should clearly show income and expenses, and your books typically summarize business transactions.
And as for businesses filing in Canada? When the Canada Revenue Agency outlines recordkeeping expectations and common retention rules, it lists “six years from the end of the last tax year” in many cases.
Setup errors often stay hidden until month-end or year-end. That’s when reconciliations fail, balances look wrong, or your CPA asks for rework.
A cleaner QuickBooks setup now usually means fewer corrections later and better data for decisions.
QuickBooks Online vs. Desktop: which one should you use? 🤔💭
Let’s start with a quick overview of each platform:
- QuickBooks Online (QBO) is cloud-based. It supports browser access, multi-user collaboration, and use from a mobile app.
- QuickBooks Desktop installs locally. Some businesses prefer it for specific Desktop workflows and feature depth.
They’re both good platforms, but the right choice will ultimately depend on business needs like inventory complexity, user count, and integration plans.
Your long-term plan should also account for Intuit’s product direction, which is leaning heavily toward the cloud.
In the United States, Intuit states that new subscriptions for most non-Enterprise Desktop products stopped after September 30, 2024, while existing subscribers can renew, and Desktop Enterprise isn’t part of that stop-sell change.
In Canada, Intuit has also published guidance about Desktop sale discontinuation plans for certain products starting on or after April 2025 for new Canadian subscribers.
A simple rule of thumb works for many small business owners:
- Choose QuickBooks Online if you want anywhere access, simpler third-party apps, and easier collaboration.
- Choose QuickBooks Desktop if you already rely on Desktop workflows and can’t replace them yet.
Step-by-step guide to setting up QuickBooks for small business ✅
Next, we’ve broken down the QuickBooks setup process into nine critical steps. We cover everything you need to consider from the jump, so you’re set up for success.
1. Create your QuickBooks Online account 👤
First up, you’ll need to select a plan that makes sense for your business needs. If you have a small team, QBO Plus might be the way to go. If you’re a growing business, Advanced may be more suitable.
2. Add your business details 🏢
- Add company information in Account and settings, and confirm the accounting method you’ll use.
- Set your fiscal year, tax year, and any closing date policy early.
- Will you run payroll? If so, flag that now so you gather the right business and tax details before you feel rushed.
- Input details related to sales tax handling (i.e., where you collect sales tax and what you sell).
- If you sell online, also note where nexus or filing obligations may apply, then confirm with your tax pro.
3. Set up your chart of accounts 📒
Now we’ve come to your chart of accounts, which should be treated as the backbone of your bookkeeping.
Intuit describes it as the complete list of accounts and balances, and it’s where transaction categories come from.
Those categories feed your financial information and shape financial reporting in every report you run.
QuickBooks Online can auto-create a chart of accounts based on your industry and business type when you create the file.
Add bank accounts, loan accounts, and fixed assets carefully, because opening balances and mis-tags show up on the balance sheet.
If you plan to use account numbers, turn them on early for consistency across the whole QuickBooks setup.
4. Connect your bank and credit card accounts 💳
Connect each business bank account and any business credit cards. Then, you can import transactions through bank feeds.
QuickBooks says linked accounts can automatically download recent transactions and help you categorize them for review. This supports cash flow visibility, and it can reduce manual entry once it’s configured well.
Pick a clean start date for imports to avoid duplicate cleanup later. If a bank isn’t compatible, QuickBooks also supports manual import options.
After connection, use bank rules and consistent categories so your “For Review” tab doesn’t become a backlog.
If you use PayPal for e-commerce payments, decide how it should appear in QuickBooks Online.
Intuit’s Connect to PayPal feature supports importing PayPal transactions so you can match and categorize them like other bank transactions.
Note that PayPal bank transaction syncing is separate from enabling PayPal as an invoice pay link in QuickBooks.
5. Customize sales tax settings 🏛️
Intuit’s sales tax setup uses a guided workflow for the state/province you need, and it supports adding more rates when needed. You’ll want to complete this set up early on, before you’re sending out invoices, or you may risk missing out on collecting sales tax.
6. Set up products and services 🛒
Build your Products and Services list right away so sales forms post to the right income accounts.
Intuit lists four common item types:
- Inventory items
- Non-inventory items
- Services
- Bundles
Inventory tracking is plan-dependent, and Intuit explains that inventory features are only available in QuickBooks Online Plus and Advanced.
Item setup affects your balance sheet and your profit reporting.
Inventory items can post through an inventory asset account (when inventory tracking is enabled), while service items usually post straight to income. This is a common line where product businesses should slow down and verify the setup.
7. Add customers and vendors 🙋♂️
Add customers and vendors (suppliers) before you enter invoices, bills, and purchase orders.
You can create customer profiles for future invoices and reports, or vendor profiles for bill and purchasing flows.
If you already have an Excel list, the bulk add feature can save time versus manual entry. Additionally, if you have historical balances, it’s important to ensure you record them carefully.
8. Set up invoice templates and payment methods 💵
Customize your invoice templates so customers see the fields that matter, like due dates, payment terms, and item detail.
You can customize invoices, estimates, and sales receipts without changing how transactions post to accounting. That being said, you might want to personalize things or add a logo if brand consistency matters.
Set up payment methods next, since payment friction can slow cash flow.
Intuit provides steps to sign up for QuickBooks Payments and connect it to QuickBooks Online.
If you want PayPal in your workflow, decide what role it plays.
For many teams, PayPal works best as a transaction source that downloads to QBO, after which you categorize it as a bank account.
For invoice pay links, confirm whether you’ll use QuickBooks Payments, another processor, or a third-party app.
9. Run your first report 🧑💻
Now it’s time to run your first report. Do this early, even if your first month hasn’t wrapped up yet.
Reports are integral when it comes to tracking performance, and your Balance Sheet will act as a useful snapshot of a specific date.
Use that real-time snapshot to your advantage: if balances look wrong, you can fix them before errors repeat across weeks.
Start with three basics: Profit and Loss, Balance Sheet, and A/R and A/P views if you invoice and pay bills.
Then compare totals to bank statements and run a first reconciliation once the period closes.
This is one of the most straightforward ways to confirm that your setup process works.
What QuickBooks can’t do and where Method comes in 🤝
QuickBooks is clearly strong accounting software, but it wasn’t built as a full CRM or operations hub.
That gap is why many small business owners track follow-ups in spreadsheets, store customer context in inboxes, and use separate tools for project management.
Once QuickBooks is set up correctly, adding an operational layer can connect sales and service workflows to the same accounting source of truth.
Method is built for QuickBooks users and offers a real-time, two-way sync, ensuring updates flow nicely between systems when users add or change QuickBooks-related records. Because everything stays in sync, teams can work from customer-focused screens while QuickBooks stays the accounting system of record.
With that foundation in place, Method can introduce features that QuickBooks doesn’t provide on its own:
- Fully customizable CRM
- Customer portals
- Sales pipeline tracking
- Automated emails and reminders
- Lead and customer management with full history connected to estimates, invoices, and payments
The result is one system where sales, service, and billing all stay aligned with QuickBooks, so your team spends less time fixing data and more time getting work done.
4 best practices to maintain your QuickBooks account 🌟
If you set up QuickBooks correctly from the get-go, you’re in a great spot!
But over time, there are a number of best practices to stick to that will position you for ongoing success:
- Reconcile monthly—no exceptions!
- Categorize consistently and write down your rules
- Complete a year-end prep run with your CPA or tax pro
- Use audit trails and backups, (this is increasingly important as more and more people interact with the data)
Conclusion 💬
A clean QuickBooks setup gives you clearer cash flow, cleaner tax prep, and better financial reporting.
Start with the steps above, then keep the routine simple: bank feeds, consistent categories, and monthly reconciliation.
When your business outgrows spreadsheets and manual follow-ups, Method can connect your CRM workflows to QuickBooks in real time while QuickBooks stays the source of truth.
Frequently asked questions
Do I need a CPA to set up QuickBooks?
Many small business owners can handle initial setup themselves. Over time, leaning on the help of a CPA or bookkeeper can help confirm taxes, opening balances, and reporting structure.
What’s the difference between QuickBooks Online and Desktop?
QuickBooks Online supports cloud access and collaboration, while QuickBooks Desktop runs locally and may support certain Desktop workflows.
Intuit also stopped selling new U.S. subscriptions for certain Desktop products after September 30, 2024, which affects long-term planning.
Can I use QuickBooks for inventory management?
Yes, if you have the appropriate plan: inventory features are available in QuickBooks Online Plus and Advanced.
If your inventory is complex, compare options carefully, including Desktop Enterprise where applicable.
What does Method CRM add to QuickBooks?
Method adds CRM and workflow automation features like portals, pipeline views, lead tracking, and automated reminders. The CRM keeps QuickBooks as the accounting source of truth through real-time, two-way sync.
