Using General Ledger Codes in QuickBooks Desktop
Using General Ledger (GL) codes
in
QuickBooks
Desktop
ensures
that
your
that
financial
transactions
are recorded in the correct accounts, enabling accurate
financial
reporting.
Once you’ve set up your
Chart of Accounts
with specific
GL codes
, you’ll
need
to
assign
them to transactions such as
invoices,
bills, journal entries, and bank deposits. Here’s how you can use GL codes in QuickBooks:
Step 1: Enable Account Numbers (GL Codes) in QuickBooks
Before using GL codes, make sure that account numbers are enabled in your QuickBooks Desktop. Follow these steps:
– Go to Edit in the top menu.
– Select Preferences.
– Click on Accounting on the left sidebar.
– Click the Company Preferences tab.
– Under the Accounts section, check the box that says Use account numbers.
– Click OK to save.
This will allow you to assign unique GL codes (account numbers) to each account in your Chart of Accounts. Once account numbers are enabled, you can use GL codes when entering financial transactions. The income account (e.g., Sales Revenue) will be linked to the appropriate GL code (e.g., 4000), ensuring the transaction is recorded in the right place in your Chart of Accounts.
1. Invoicing Customers
When you create an invoice to bill a customer, you’ll choose the appropriate GL code for the
income or revenue account.
– Go to the Customers menu and select Create Invoices.
– In the Create Invoice screen, select the customer you’re invoicing.
– Under the Item column, choose the products or services sold.
– Select the correct income account for the transaction. The income account should have the associated GL code, such as 4000 Sales Revenue.
– Once the invoice is complete, click Save & Close.
2. Entering Bills
(Payables)
(Payables)
When you enter a bill for an expense, you’ll assign the appropriate expense GL code to each item on the bill.
– Go to the Vendors menu and select Enter Bills.
– Choose the vendor from whom you received the bill.
– Enter the bill details (amount, due date, etc.).
– Under the Account column, select the appropriate expense GL code for each line item. For example, if the bill is for rent, choose an account like 6000 Rent Expense.
– After entering the details, click Save & Close.