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Managing customers and vendors in QuickBooks Online

Management steps

Here’s a detailed step-by-step guide for managing customers and vendors in QuickBooks Online:

Adding a Customer

  1. Log in to QuickBooks Online
  2. Navigate to the Customers Section
    • On the left-hand menu, select Sales.
    • Click on Customers.
  3. Add a New Customer
    • Click the New customer button in the upper-right corner.
  4. Fill Out Customer Details
    • A form will appear. Fill in the following fields:
      • Display name as: This is how the customer will appear in QuickBooks.
      • Company name: If applicable, add the customer’s business name.
      • Email: Enter the customer's email for invoicing or communications.
      • Phone: Add their contact number.
      • Billing address: Input their billing details.
      • Terms: Set the payment terms (e.g., Net 30).
      • Tax info: Add a tax-exempt ID if they are exempt from taxes.
  5. Save the Customer
    • Once all fields are filled out, click the Save button at the bottom of the form.

Adding a Vendor

  1. Navigate to the Vendors Section
    • On the left-hand menu, select Expenses.
    • Click on Vendors.
  2. Add a New Vendor
    • Click the New vendor button in the upper-right corner.
  3. Fill Out Vendor Details
    • A form will appear. Complete the following fields:
      • Vendor display name: How the vendor will appear in QuickBooks.
      • Company name: The vendor's business name, if applicable.
      • Email: Enter the vendor's email for communications or purchase orders.
      • Phone: Add their contact number.
      • Billing address: Input the vendor's address details.
      • Account number: Optional field to add an account number provided by the vendor.
      • Tax ID: Add the vendor’s tax identification number, if required.
  4. Save the Vendor
    • Click the Save button at the bottom of the form to save the vendor details.

Tips

  • Ensure that the Display name is unique for both customers and vendors to avoid confusion.
  • Use the Notes section in both customer and vendor forms to record additional details.
  • Attach relevant files or documents (e.g., agreements, tax forms) for better record-keeping.

Advanced features of managing customers and vendors

Here’s a step-by-step guide to the advanced features when of customers and vendors in QuickBooks Online:

Advanced Features for managing Customers

Customizing Customer Details

  • Go to Sales > Customers and click New Customer.
  • In addition to basic details, use these advanced fields:
    • Preferred Delivery Method: Select between email, print, or none for invoice delivery.
    • Attachments: Upload files (e.g., contracts, agreements, or supporting documents).
    • Payment Method: Save default payment methods like credit card, ACH, or check for the customer.
    • Default Currency: Assign a specific currency for customers who transact in foreign currencies (if multi-currency is enabled).
    • Notes: Add internal notes to record specific preferences or details about the customer.

Assigning Price Levels or Discounts

  • Set up custom price rules for customers:
    • Navigate to Gear Icon > Lists > Price Rules (ensure the feature is turned on).
    • Create a price rule and assign it to specific customers.

Adding Sub-Customers

  • When a customer has multiple accounts or branches:
    • Check the box for Is a sub-customer.
    • Choose the parent customer from the drop-down.
    • Set the billing method: Bill this customer or Bill with parent.

Tracking Tax Information

  • Add customer-specific tax details:
    • Enter their Tax Resale Number or ID if they are exempt from taxes.
    • Assign specific tax rates or exemption status under Sales Tax settings.

Assigning Tags for Organization

  • Use Tags to group or organize customers for reports and tracking:
    • Set up tags in Gear Icon > Tags.
    • Assign relevant tags (e.g., "VIP", "Wholesale") while adding a customer.

Advanced Features for Managing Vendors

Customizing Vendor Information

  • Go to Expenses > Vendors and click New Vendor.
  • Advanced fields include:
    • Payment Terms: Set default terms like Net 15 or Net 30.
    • Track 1099: Enable this option for vendors who require 1099 reporting.
    • Tax ID: Add their Employer Identification Number (EIN) or Social Security Number (SSN).
    • Attachments: Upload contracts, tax forms (e.g., W-9), or other relevant documents.
    • Opening Balance: Enter an opening balance for vendors who have outstanding payables.

Setting Up Vendor Categories

  • Organize vendors into categories for easier management:
    • Go to Gear Icon > Expenses Settings > Categories.
    • Assign categories (e.g., "Suppliers", "Consultants") when creating or editing a vendor.

Assigning Payment Accounts

  • Set a default Payment Account for the vendor:
    • Link their payments to a specific checking or credit card account.
    • Add vendor-specific payment instructions in the notes section.

Tracking Vendor Transactions

  • Use Tags for tracking and organizing vendor transactions (e.g., "Urgent", "Long-term Supplier").
  • Assign these tags while creating or editing the vendor.

Recording Tax Information

  • For vendors involved in tax-deductible transactions:
    • Select the option to Track taxable payments.
    • Ensure accurate reporting for 1099 forms and year-end tax filings.

Creating Purchase Orders

  • Link vendors to specific purchase orders:
    • Go to Expenses > Purchase Orders.
    • Create and associate the purchase order with the selected vendor.

Additional Advanced Features (Common to Customers & Vendors)

Multi-Currency Transactions

  • If your business deals in multiple currencies:
    • Enable Multi-Currency in Settings > Advanced.
    • Assign the appropriate currency when creating a customer or vendor profile.

Custom Fields

  • Create custom fields to capture additional information:
    • Go to Gear Icon > Custom fields > Add field.
    • Assign these fields (e.g., "Contract ID", "Referral Source") to customers or vendors.

Audit Log Tracking

  • Review all changes made to customer or vendor profiles:
    • Go to Gear Icon > Audit Log to track modifications for compliance and accountability.

Tips

  • Use Reports to generate summaries based on advanced fields like tags, tax settings, or multi-currency.
  • Enable Automation for recurring transactions like invoices (for customers) or bills (for vendors).
  • Regularly update customer and vendor profiles to ensure data accuracy.

Effectively using the advanced features for customers and vendors

Here’s a detailed guide on setting up and effectively using the advanced features for customers and vendors in QuickBooks Online:

Advanced Features for Customers

Setting Up Multi-Currency

Multi-currency allows transactions with customers who use foreign currencies.

Steps:

  • Go to Settings (Gear Icon) > Account and Settings > Advanced.
  • Locate the Currency section and click Edit.
  • Turn on Multi-Currency and confirm the activation.
  • When adding a customer, select the appropriate currency from the Currency drop-down.

Notes:

  • Multi-currency cannot be turned off once enabled.
  • Reports and transactions involving multi-currency will include exchange rate adjustments.

Custom Fields for Customers

Custom fields help capture additional information such as contract IDs or preferred communication methods.

Steps:

  • Go to Settings > Custom Fields.
  • Click Add Field and configure:
    • Field name: Specify the custom data you want to track.
    • Data type: Choose between text, number, or date.
    • Apply to: Select Customer to use the field in customer profiles.
  • Save the custom field, and it will appear when creating or editing a customer.

Examples:

  • Referral Source: Track how the customer found your business.
  • Customer Tier: Label customers as Gold, Silver, or Bronze for pricing or service levels.

Assigning Price Levels

Price rules allow you to set custom pricing for specific customers.

Steps:

  • Enable price rules: Go to Settings > Account and Settings > Sales > Products and Services and turn on Price rules.
  • Create a price rule:
    • Go to Gear Icon > Lists > Price Rules.
    • Click New Price Rule and define:
      • Name: Name the rule (e.g., "VIP Discount").
      • Customers: Select specific customers or customer groups.
      • Products/Services: Choose the items the rule applies to.
      • Discount: Set percentage or fixed discount.
  • Save the rule, and it will automatically apply to eligible transactions.

Sub-Customers

Sub-customers are used for billing multiple accounts under a single parent customer.

Steps:

  • Go to Sales > Customers > New Customer.
  • Check Is a sub-customer.
  • Select the parent customer from the drop-down list.
  • Choose the billing method:
    • Bill this customer: Invoices are issued separately.
    • Bill with parent: Charges are grouped under the parent account.

Use Case:

  • A client with multiple branches or departments billed through a central account.

Customer Tags

Tags help you organize and report on customer activities.

Steps:

  • Go to Settings > Tags and create tag groups.
  • Assign tags to customers when adding or editing them.
  • Run reports by tag to analyze trends or activities by customer segments.

Advanced Features for Vendors

Setting Up 1099 Tracking

For vendors requiring 1099 reporting, enable tracking during vendor setup.

Steps:

  • Go to Expenses > Vendors > New Vendor.
  • Check the box for Track payments for 1099.
  • Enter the vendor’s Tax ID (EIN or SSN).
  • Save the vendor profile.

Notes:

  • Use the 1099 Wizard (under Taxes) at year-end to generate and file 1099 forms.

Custom Fields for Vendors

Similar to customers, custom fields allow extra details for vendors.

Steps:

  • Go to Settings > Custom Fields > Add Field.
  • Name the field (e.g., “Supplier Rating” or “Vendor Type”).
  • Apply it to Vendors.
  • Use the field when creating or editing vendor profiles.

Examples:

  • Payment Preferences: Record the vendor’s preferred payment method.
  • Contract Expiry: Track expiration dates for vendor contracts.

Purchase Orders Linked to Vendors

Link vendors directly to purchase orders for better tracking.

Steps:

  • Go to Expenses > Purchase Orders > New Purchase Order.
  • Select the vendor from the drop-down.
  • Enter the details (e.g., items, quantities, and rates).
  • Save and send the purchase order to the vendor.

Notes:

  • Purchase orders provide clear documentation for vendor transactions.
  • Enable purchase order tracking under Settings > Expenses.

Vendor Tags**

Similar to customer tags, tags can also be used to organize vendors.

Steps:

  • Go to Settings > Tags > Create Tag Group.
  • Assign tags to vendors during profile setup (e.g., "Preferred Supplier", "Seasonal").
  • Use tag-based reports to analyze vendor performance or category spending.

Setting Default Payment Terms

Set default payment terms for each vendor to streamline bill management.

Steps:

  • Go to Expenses > Vendors > New Vendor.
  • Select the default Payment Terms (e.g., Net 15, Net 30).
  • Save the vendor profile.

Notes:

  • Payment terms automatically apply to new bills for the vendor.

Multi-Currency for Vendors

Enable multi-currency for vendors who invoice in foreign currencies.

Steps:

  • Turn on Multi-Currency in Settings > Advanced.
  • Select the vendor’s currency during setup.

Notes:

  • Multi-currency tracks exchange rate gains or losses for vendor payments.

Using Reports to Maximize Advanced Features

  1. Customer and Vendor Detail Reports
    • Go to Reports > Search for Customer Contact List or Vendor Contact List.
    • Customize the report to include custom fields, tags, or tax information.
  2. Tags Report
    • Go to Reports > Tag Summary.
    • Analyze data segmented by customer or vendor tags for actionable insights.
  3. Expense by Vendor Summary
    • Go to Reports > Search for Expenses by Vendor Summary.
    • Track spending trends with tagged or categorized vendors.

Setting up a specific advanced feature or running reports based on above features

Let's walk through setting up a specific advanced feature in QuickBooks Online and how to run reports based on it. I’ll cover two advanced features: Custom Fields for Customers/Vendors and Tags. These features help you organize and analyze your customer and vendor data.

Advanced Feature 1: Setting Up Custom Fields for Customers and Vendors

Custom fields allow you to capture additional information, like contract numbers or specific payment preferences, and can be used for reporting and analysis.

Steps to Set Up Custom Fields:

  1. Go to Settings
    • Click the Gear Icon in the top-right corner.
    • Under Lists, select Custom Fields.
  2. Add Custom Fields
    • Click Add Field.
    • Choose the type of field:
      • Text: For free-form information (e.g., "Customer Priority").
      • Number: To record numeric data (e.g., "Account Number").
      • Date: For date-specific data (e.g., "Contract Expiry Date").
    • Enter the Field Name (e.g., "Customer Tier" or "Vendor Type").
    • Set visibility preferences for Customers or Vendors depending on where you want the field to appear.
    • Click Save when done.

Assign Custom Fields to Customers/Vendors:

  1. For Customers:
    • Go to Sales > Customers > New Customer or select an existing customer to edit.
    • Scroll down to the Custom Fields section and fill in the custom data.
    • Save the customer details.
  2. For Vendors:
    • Go to Expenses > Vendors > New Vendor or edit an existing vendor.
    • In the Custom Fields section, enter the relevant information.
    • Save the vendor profile.

Advanced Feature 2: Setting Up Tags for Customers and Vendors

Tags are a powerful tool for categorizing customers and vendors for reporting, such as "VIP Customer" or "Seasonal Supplier."

Steps to Set Up Tags:

  1. Go to Settings
    • Click the Gear Icon in the top-right corner.
    • Under Lists, select Tags.
  2. Create a Tag Group
    • Click Create Tag Group.
    • Give the group a name (e.g., "Customer Segments").
    • Add tags to the group (e.g., "VIP", "Regular", "Wholesale").
  3. Assign Tags to Customers/Vendors
    • When creating or editing a customer/vendor, scroll to the Tags section.
    • Select the relevant tag (e.g., "VIP" for a customer).
    • Save the customer or vendor profile.

Running Reports Based on Custom Fields and Tags

Now that you have set up custom fields and tags, you can run detailed reports that leverage this data for deeper analysis.

Running a Report Based on Custom Fields (For Customers/Vendors)

  1. Go to Reports:
    • Click on Reports in the left navigation panel.
  2. Custom Contact List Report:
    • For Customers, search for Customer Contact List.
    • For Vendors, search for Vendor Contact List.
  3. Customize the Report:
    • Click Customize in the top-right corner.
    • In the Rows/Columns section, choose to display the Custom Fields you created (e.g., "Customer Tier" or "Vendor Type").
    • You can also apply filters, like Active Customers or Vendors with 1099.
    • Click Run Report.
  4. Save or Export the Report:
    • Once the report is ready, you can save the customization for future use or export it to Excel or PDF.

Running a Report Based on Tags

  1. Go to Reports:
    • Click on Reports in the left navigation panel.
  2. Tag Summary Report:
    • In the search bar, type Tag Summary or Tag Detail.
    • This report will show data organized by tags, such as customer or vendor segments.
  3. Customize the Report:
    • Click Customize to filter by tag (e.g., "VIP Customer", "Wholesale Vendor").
    • You can also group or sort data based on Tag Group.
    • Click Run Report.
  4. Save or Export the Report:
    • Once the report is ready, you can save it or export it to Excel or PDF.

Example Use Cases:

  • Customer Report: You can run a report to see all VIP customers tagged with "VIP" and analyze their purchase patterns.
  • Vendor Report: You can use tags like "Seasonal" to track vendors who supply goods during certain seasons.

Other Advanced Reporting Features

If you're using Multi-Currency or 1099 Tracking, you can also apply these filters when running reports to monitor foreign currency transactions or vendor payments for 1099 purposes.

  1. Currency Reports:
    • Go to Reports > Profit and Loss by Currency to analyze income and expenses across different currencies.
  2. 1099 Reports:
    • Go to Taxes > 1099 E-File to run the 1099 Contractor Report and track vendors for tax filing.

Summary of Steps for Setup and Reporting

  1. Set up Custom Fields and Tags under Settings.
  2. Assign custom fields and tags to Customers and Vendors.
  3. Run customized reports from Reports > Customer Contact List or Vendor Contact List.
  4. Use Tag Summary Reports to organize and filter data based on tags.
  5. Save, export, and analyze the data for better business insights.
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