How to Use QuickBooks Online: A Beginner's Complete Guide

QuickBooks Online runs the books for 6.5 million American small businesses. I’ve worked with Spring, Katy, and Pearland contractors, consultants, and shop owners for the last decade, and nearly all of them use QuickBooks.

Here’s the problem I see constantly: owners sign up, connect the bank, and think QuickBooks does the work for them. Then six months pass. The dashboard looks decent. Then tax time hits and I’m looking at 8,000 uncategorized transactions labeled “Misc” and cash flow reports that don’t match reality.

QuickBooks is a tool. It only works if you actually use it. This guide takes you from day one through the daily habits and monthly tasks that keep your books clean.

Choosing the Right Plan

QuickBooks Online offers four main tiers as of early 2026:

Simple Start — $35/month (1 user)
Essentials — $65/month (3 users)
Plus — $99/month (5 users)
Advanced — $235/month (25 users)

Intuit always has a 50% off deal running on the first three months. Check their pricing page before you sign up.

Simple Start at $35/month handles everything a solo owner needs: invoicing, expense tracking, receipt photos, and basic reports. I’ve had Spring freelancers and Midtown consultants run their whole business on this tier for years.

Essentials at $65/month adds bill tracking and multi-user access. You need this if you’re paying a bookkeeper or your spouse is logging in.

Plus at $99/month brings inventory tracking and project profitability. Any Katy contractor managing multiple jobs or a Pearland retailer with stock needs Plus.

Advanced at $235/month is overkill for 99% of small businesses. Skip it.

Start with Simple Start. You can upgrade anytime without losing any data. Every business I’ve worked with has nailed their plan choice after running on their first tier for 60 days.

Setting Up Your Account

Accounting Method

QuickBooks needs to know if you’re running cash or accrual accounting. The difference matters. Our cash vs. accrual guide has the details.

If you’re under $25 million in annual revenue (and you are), cash basis is simpler, legal, and what I recommend to most Houston owners. Pick cash.

Chart of Accounts

Your chart of accounts is everything. Every number on every report comes from this list.

QuickBooks auto-populates a starting chart based on your industry. Then you customize it. Keep the basics like Checking and Accounts Receivable. Rename the generic stuff. A contractor needs “Truck Maintenance” not just “Supplies.” Add accounts for anything you spend money on regularly.

Keep it lean. 15 to 25 expense accounts is the sweet spot. Go over 40 and nobody wants to categorize transactions anymore. Our QuickBooks setup guide walks through this in detail.

Connecting Bank Accounts and Credit Cards

Bank feeds are what actually make QuickBooks work. Transactions download automatically instead of you typing each one.

How to Connect

Navigate to Banking (or Transactions in newer versions) in the left menu
Click Connect Account
Search for your bank or credit card company
Enter online banking credentials
Select which accounts to connect
Choose a start date for downloads

Choosing a Start Date

Don’t download five years of history. You’ll get 10,000 transactions and give up halfway through.

Pick one: current month (if you’re hiring a bookkeeper to clean up the rest) or beginning of the fiscal year (for a fresh start). That’s it.

A Note on Security

QuickBooks uses bank-grade encryption. Turn on two-factor authentication right now. If your office is in Midtown and three people share one login, that’s even more critical.

Daily and Weekly Tasks

QuickBooks is not set and forget. The only way it works is if you actually use it.

Categorizing Transactions

Every time the bank downloads, transactions land in your review queue. You categorize each one. QuickBooks suggests categories based on past transactions, but don’t blindly accept them. Review each one.

Set up rules for recurring stuff. Your $1,200 monthly rent, $50 software subscriptions, loan payments. Create the rule once and QuickBooks handles it automatically forever.

Invoicing Customers

If you bill clients, go to Sales > Create Invoice. Pick the customer, add what you’re charging for, set terms (Net 30 is standard), and email it.

QuickBooks tracks what’s outstanding, overdue, and paid. One glance at the Sales dashboard tells you who owes money and how long they’ve owed it.

Turn on online payments. Let customers pay by card or bank transfer right from the invoice. You get paid faster.

Recording Bills and Expenses

Expenses hit your books two ways. Either they come through the bank (most of them) or you enter a bill manually before you pay it.

Use the Bills feature if you’re juggling vendor invoices with different due dates. You can track what’s owed to who and when it’s due. Helps when you’re managing cash flow.

Receipt Capture

Use the mobile app to take a photo of receipts as you spend money. Much better than a shoebox full of crumpled paper. The IRS expects proof of what you deducted, and digital receipts in QuickBooks work.

Check our receipt guide for the details.

Monthly Tasks

Bank Reconciliation

Reconciliation is the one monthly task you cannot skip. It catches duplicates, missing transactions, wrong amounts, and fraud.

Go to Settings > Reconcile. Pick the account. Enter the ending balance from your bank statement. Check off each transaction that matches. When the difference hits zero, you’re done.

If you reconcile every month, your books will be clean. If you skip months, you’ll eventually have a nightmare on your hands. Our reconciliation guide has the full walkthrough.

Reviewing Accounts Receivable and Payable

At month-end, run Accounts Receivable Aging. It shows who owes you money and how long they’ve owed it. Anything past 90 days needs a phone call.

Run Accounts Payable Aging too. It shows what you owe vendors and when it’s due. Miss a deadline and you lose the relationship or get a late fee.

Reports That Actually Matter

QuickBooks generates dozens of reports. Most collect dust. These three tell you nearly everything you need:

Profit and Loss (P&L)

The P&L shows revenue, expenses, and profit over a time period. Is the business making money? That’s the question the P&L answers.

Run it every month and compare it to last year. Revenue up but profit flat? You’ve got a problem. I once worked with a Katy restaurant owner whose food costs climbed from 28% to 35% of revenue. That number jumped out immediately. He dug in and found a supplier was cheating him.

Our P&L guide walks through reading it properly.

Balance Sheet

This report shows what you own (assets), what you owe (liabilities), and your equity at one moment in time. Assets equal liabilities plus equity. Period.

Every bank will ask for this before they lend you money. A Spring construction company pulling together a $300,000 SBA application will need a clean balance sheet.

Cash Flow Statement

The Statement of Cash Flows tracks money moving in and out. A business can look profitable on the P&L and still run out of cash. This report shows why.

It breaks cash into three buckets: operating (day-to-day business), investing (buying equipment, selling assets), and financing (loans, your contributions, distributions you take out).

To run any report: click Reports, find the name, pick your dates, and run it. Takes 30 seconds.

Common Beginner Mistakes

Ignoring the bank feed queue. Three weeks of uncategorized transactions is where accuracy goes to die. Check the queue daily or weekly.

Throwing everything into “Misc.” The IRS wants specificity. Check our expense categories guide and use real accounts.

Mixing personal and business. Never connect a personal credit card to business QuickBooks. Keep them separate.

Skipping reconciliation. Skip one month and you’ll miss errors. Skip three and you’re looking at a disaster when tax time hits.

Trusting the dashboard. The QuickBooks dashboard looks nice but it’s not a report. Run actual P&L and balance sheet reports. The dashboard can hide serious problems underneath.

Tips for Getting More Out of QBO

Use the mobile app. Photograph receipts the day you spend the money. Log your mileage in real time. Much faster than playing catch-up.

Set recurring transactions. Your $1,500 office rent, $99 software subscriptions, loan payments. Set them up once and forget them.

Customize your invoices. Add your logo, your branding, professional payment terms. You’re charging real money. Make it look professional.

Use Projects if you’re on Plus. If you’re tracking profit by job or client, Projects ties income and expenses together automatically.

Export reports to Excel. Any report can go into a spreadsheet for deeper analysis or sharing with your accountant or business partner.

When It Starts to Feel Like Too Much

QuickBooks is powerful. It’s also a lot of work.

Categorizing transactions, chasing unpaid invoices, reconciling every month, running reports. Most Houston owners I work with spend 6 to 10 hours monthly on their books.

At some point, that time starts eating into the work that actually makes money. When that happens, hand it off to a professional. A good bookkeeper catches errors fast, keeps you consistent, and usually spots deductions and problems that pay for themselves.

At EZQ Group, we set up QuickBooks correctly for Houston businesses, stay on top of the daily work, and run reports that actually tell you what’s happening. Whether you’re starting from scratch or cleaning up a mess, we handle accounting software services so you run your business. Contact us.