Because of the tax treatment options involved, setting up an LLC on Quickbooks can be a bit daunting. Depending on your initial election, an LLC can be treated as a sole proprietorship, partnership, S corporation or C corporation for federal tax purposes. This election must be determined before you can be set up your LLC on Quickbooks. There is also a fair amount of other important business information you will need to have on hand to set up your business correctly.
Things You Will Need
Quickbooks accounting software
Tax identification number
Company bank statements
Company credit card statements
Company chart of accounts (if you have one)
Beginning account balances (if the company is not a start-up)
Gather the needed records. In order to set up an LLC on Quickbooks, you will need your bank statements (for beginning account balances), your company’s Employee Identification Number and asset/depreciation schedules. If you use a business credit card or have business debt, you will also want the credit card numbers and current balances. If you already have a chart of accounts or know of custom accounts you will want to set up, have that list handy as well.
Open the Quickbooks software and click on the option to set up a new company. When asked what the business structure of the company is, choose the tax structure that you have elected (or plan to elect) for your LLC to be treated as. For example, if your LLC will be treated as a partnership, tell Quickbooks that your company is a partnership (rather than an LLC). This will ensure that the default chart of accounts provided for your company, and tax line mapping, match your company’s business structure as closely as possible.
Follow the Quickbooks “Easy Step” interview to set up an LLC on Quickbooks. If you want to track revenue or sales by more than one category, set up additional revenue accounts. For example, if you sell widgets, you might have accounts for Blue Widget Sales and Red Widget Sales. New accounts will need a tax-line mapping, and any additional sales would be mapped to “Gross Receipts and Sales.” Follow the same process in setting up your expense, asset and liability accounts. Set up new accounts as needed, map them to the appropriate line on the tax return and enter beginning account balances (unless your business is a start-up).
Review your work. Once you have entered all the new account names and account balances, print out a general ledger, a balance sheet or even an income statement (if you have entered income and expenses) and review the numbers. The goal here is to look for errors or obvious things you might have missed.
Begin entering your daily business transactions as they take place. Quickbooks is an extremely powerful program, able to track every function within the accounting system. If you are not familiar with it, there will be a learning curve. Quickbooks is designed for you to input your sales, bank deposits, checks written, payroll and other accounting information. It’s up to you to learn the nuances of the program and apply them most effectively to your LLC. There is plenty of help on the Quickbook forums, and if needed, you may also get outside professional guidance. With Quickbooks, as with any other accounting software, it is much better to set things up properly at the start than to try to shift gears somewhere down the road.