Overview

Transactions are the DNA of your profit and loss report. This report is analyzed to provide quarterly estimated tax payment instructions, file taxes, and review reasonable compensation. To create this DNA you must import and categorize business transactions into QuickBooks Online (QBO).

Please have all business transactions categorized within 7 days of your QBO training.

Action - Import Transactions

  1. Write down all the checking and credit accounts, business or personal, that contain any business activity as of your current (or anticipated) S Corp election effective date. Ask us if you don't know that date.
  2. The business accounts stay connected to QBO. The personal accounts are only temporarily connected to import business transactions. Run all your business income and expense activity through the business accounts. If you haven't already, make it a top priority to update your customers and vendors with your business checking and credit account details.
  3. Follow these steps to connect each of those accounts. This will import transactions. Select This Year (01/01/2021) for the "import as of" date. This will be a drop-down at the bottom left of the screen towards the end of the process. If your S Corp started last year, you may select Last Year (01/01/2020).
  4. Categorize business activity and exclude personal activity.

Action - Categorize Transactions

  1. Categorize business activity and exclude personal activity.
  2. Short video by QuickBooks on categorizing business transactions.
  3. Longer guide by Collective on categorizing business transactions.
  4. Longer guide by QuickBooks on categorizing business transactions.
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